Category: Legislation

Ontario’s Employment Laws: Several Significant Changes Coming Under Bill 27, the Working for Workers Act, 2021

On November 30, 2021, the Government of Ontario passed Bill 27, the Working for Workers Act, 2021. Bill 27 amends a number of statutes, including the Employment Standards Act and the Occupational Health and Safety Act.

According to the government, this legislation achieves a number of goals, including improving employees’ work-life balance, prohibiting noncompete agreements to increase competition in business and labour markets, facilitating the registration of internationally trained professionals, and implementing a licensing regime for temporary help agencies and recruiters.

Amendments to the Employment Standards Act, 2000

Right to Disconnect from Work

The Working for Workers Act, 2021requires that employers with 25 or more employees at the beginning of the year implement a written “disconnect from work” policy regarding disconnecting from work during nonworking hours. Under the act, the term “disconnecting from work” is defined as “engaging in work-related communications, including emails, telephone calls, video calls or the sending or reviewing of other messages, so as to be free from the performance of work.” Once an employer prepares or amends a policy, employers will have 30 days to share copies of this policy with employees. Employers must also provide new employees this policy within 30 days of being hired.

Once the act receives Royal Assent, employers will have six months from that date to develop their written policies. Following this initial year, employers will have to prepare their policies by no later than March 1 of each year.

The regulations that will be promulgated to establish the content of the policy have not yet been published. As such, it is not yet known what specific steps employers must take to prohibit after-hours work and whether they will be restricted in terms of which employees may or may not be permitted or required to perform after-hours work, in addition to other unsettled issues.

Prohibition of Noncompete Agreements

The act prohibits employers from including noncompete clauses in any agreement they form with an employee. If this provision is violated, the noncompete agreement will be void.

There are two exceptions to this rule.

  1. Employees in an executive role are excepted from this provision. An “executive” is an employee who holds the office of a chief executive position, including that of president, chief executive officer, and chief administrative officer.
  2. There is also an exception when there has been “a sale of a business or part of a business” (which includes a lease). If the purchaser and seller enter into a noncompete agreement, and the seller becomes an employee of the purchaser immediately after the sale, this prohibition will not apply.

Once Royal Assent is received, the noncompete prohibition is deemed to come into force on October 25, 2021.

With the passing the act, Ontario has become the first province to require “disconnect from work” policies and to prohibit noncompete agreements outright.

Licensing Requirements for Temporary Help Agencies

The act specifies that temporary help agencies and recruiters must now apply for a license. Anyone wishing to engage with a temporary help agency or recruiter must ensure that they are licensed, as knowingly doing business with an unlicensed agency or recruiter is prohibited under the act.

Temporary help agencies or recruiters may be refused a license and may have their licenses revoked or suspended for a number of reasons, including:

  • using recruiters that charge fees to foreign nationals;
  • providing “false or misleading information in an application”; and
  • situation in which the director of Employment Standards has reasonable grounds to believe that “the applicant will not carry on business with honesty and integrity and in accordance with the law.”

If applicants dispute the refusal, revocation, or suspension of their licenses, they can seek a review at the Ontario Labour Relations Board.

These amendments will come into force on a day to be proclaimed by the lieutenant governor.

Amendments to the Employment Protection for Foreign Nationals Act, 2009

Prohibition on the Collection of Recruitment Fees

To protect foreign nationals from predatory recruitment practices, the act prohibits employers and recruiters from knowingly using the services of recruiters that charge foreign nationals for their services.

A recruiter that charges a fee, and an employer or recruiter that violates this prohibition will be liable for repaying the fees charged to the foreign national.

These amendments will come into force on the day the Working for Workers Act, 2021 receives Royal Assent.

Amendments to the Fair Access to Regulated Professions And Compulsory Trades Act, 2006

Facilitating the Registration of Internationally Trained Professionals

To facilitate the registration of internationally trained professionals, the act specifies that Canadian experience will not be a qualification for registration in a regulated profession. Regulated professions may apply to be exempted from this rule “for the purposes of public health and safety in accordance with the regulations.” Regulated professions will also be required to develop accelerated registration processes to aid with emergency preparedness.

The fairness commissioner will also evaluate language proficiency requirements to ensure that any French or English testing does not contravene the regulations.

These amendments will come into force on the day the act receives Royal Assent.

Amendments to the Occupational Health and Safety Act

Mandating Washroom Access for Delivery Persons

Under the act, a new requirement is created that if a person requests washroom access in the course of delivering or picking up a package from a business. Business covered by the act must allow use of their washrooms.

Businesses will be exempt from this requirement if:

  • Sharing the washroom is unreasonable or impractical because of health and safety reasons;
  • The context makes sharing the washroom unreasonable or impractical; or
  • The delivery person would have to enter a dwelling to use the washroom.

These amendments will come into force on a day to be proclaimed by the lieutenant governor.

Amendments to the Workplace Safety and Insurance Act, 1997

Distribution of Surplus Insurance Fund

The act includes a provision that specifies that if there is a surplus in the Workplace Safety and Insurance Board’s insurance fund, this surplus may be distributed among eligible employers. The insurance board will have discretion to determine the timing and the amounts to be granted to eligible employers, based on factors such as adherence to the Workplace Safety and Insurance Act. Based on these factors, the insurance board will also be empowered to exclude any eligible employers from the distribution of surplus funds. Employers will not be able to appeal the funding decisions made by the insurance board in this respect.

These amendments will come into force on a day to be proclaimed by the lieutenant governor.

Amendments to the Ministry of Agriculture, Food and Rural Affairs Act

Increasing Information Gathering in Relation to “agriculture, food or rural affairs”

Under the act, the minister of Agriculture, Food and Rural Affairs is granted the authority to “collect information, including personal information, directly or indirectly” related to “agriculture, food or rural affairs” for the purposes of emergency response and public health. Personal information will not be collected, used, or disclosed in cases where other sources of information are available to fulfil the same purpose.

These amendments will come into force on the day the act receives Royal Assent.

Next Steps

Bill 27 passed its third reading on November 30, 2021. At the time of publication of this article, the legislation has not received Royal Assent, but it likely will shortly. Once Royal Assent is received, some amendments come into force immediately, while others follow different timelines. Employers may want to begin reviewing the new legislation, noting any important dates and features relevant to their organizations. In addition, employers may want to review their policies, practices, and contracts to ensure compliance.

Article By Michael Comartin and Gloria Ilunga of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

For more labor and employment legal news, click here to visit the National Law Review.
© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

Colorado Privacy Act: New Protections for Consumers in the Centennial State

On July 1, 2023, the Colorado Privacy Act (CPA) will go into effect as the third state law generally governing consumer data privacy and was the second enacted in 2021.  If you do business with consumers in Colorado, regardless of your location, you should begin familiarizing yourself with the requirements of the CPA now.  While the CPA is similar to the California Privacy Rights Act (CRPA) and Virginia’s Consumer Data Privacy Act (VCDPA), certain elements distinguish the Colorado law from its counterparts.  Unlike the California law, the CPA does not apply to personal data in the employee or business-to-business relationship.  This client alert provides a breakdown of the general requirements and obligations on businesses and key distinctions with other state data privacy laws.

Covered Businesses and Applicability

Covered Controllers. The CPA applies to any business, called a “controller” under the statute, who “alone, or jointly with others, determines the purposes for and means of processing personal data,” and “conducts business in Colorado or produces or delivers commercial products or services that are intentionally targeted to residents of Colorado” and:

  • Controls or processes the personal data of 100,000 consumers or more during a calendar year; or
  • Derives revenue or receives a discount on the price of goods or services from the sale of personal data and processes or controls the personal data of 25,000 consumers or more.

There are a number of exemptions to the applicability provision that should be considered as part of the analysis of applicability.  First, the definition of consumers does not include “individual[s] acting in a commercial or employment context, as a job applicant, or as a beneficiary of someone acting in an employment context.” Second, the Act does not apply to certain types of personal data, as defined by the type of data, such as patient data, or as defined by the statute by which the collection and use of the data is regulated such as Gramm-Leach-Bliley.  Third, the Act does not apply to certain types of businesses, such as air carriers, public utilities (as defined by Colorado Law), or those subject to Gramm-Leach-Bliley. Notably, there is no revenue threshold requirement, meaning an applicability analysis begins by looking at the number of records processed.

Covered Individual.  To reiterate, the CPA does not apply to employee data, which, like the VCDPA means a consumer is a Colorado resident acting only in an individual or household context.

Personal Data. The CPA defines personal data as “information that is linked or reasonably linkable to an identified or identifiable individual,” but does not include “de-identified data or publicly available information,” including data “that a controller has a reasonable basis to believe the consumer has lawfully made available to the general public.”  This definition is similar to the VCDPA.

Controller and Processor Obligations

If the CPA is applicable to a controller then they, and their processors (a person that processes personal data on behalf of a controller) must adhere to a set of obligations.  The CPA sets out an analysis for determining whether a person is acting as a controller or a processor.

Obligations and Duties of Controllers

Under the Act, controllers must:

  • Implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk;
  • Comply with the duty of transparency by providing notice of the sale of personal data and the ability to opt out and by providing “a reasonably accessible, clear, and meaningful privacy notice” that includes:
    • Categories of personal data collected/processed;
    • Purpose(s) of processing;
    • How consumers may exercise rights and appeal controller’s response to consumer’s request;
    • Categories of personal data shared; and
    • Categories of third parties personal data is shared with;
  • Respond to the consumer’s exercise of their rights;
  • Comply with the duty of purpose specification;
  • Comply with the duty of data minimization;
  • Comply with the duty to avoid secondary use;
  • Comply with the duty of care that is appropriate to the volume, scope, and nature of the personal data processed.
  • Comply with the duty to avoid unlawful discrimination;
  • Process sensitive data only with the consent of the consumer. Sensitive data is “(a) personal data revealing racial or ethnic origin, religious beliefs, a mental or physical health condition or diagnosis, sex life or sexual orientation, or citizenship or citizenship status; (b) genetic or biometric data that may be processed for the purpose of uniquely identifying an individual; or (c) personal data from a known child;”
  • Perform data protection assessments before beginning processing activities that present a heightened risk of harm to a consumer – certain situations of targeted advertising or profiling, selling personal data, and processing sensitive data are activities that present a heightened risk of harm; and
  • Engage processors only under a written contract, which shall include the type of personal data processed and other requirements under the CPA.

Obligations of Processors

Under the Act, processors must:

  • Assist controllers in meeting their obligations under the CPA;
  • Adhere to instructions of controller and assist controller in meeting those obligations, including security of processing and data breach notification;
  • Ensure a duty of confidentiality for each person processing personal data; and
  • Engage subcontractors pursuant to a written contract and only after providing the controller an opportunity to object.

Rights of Consumers

Like the VCDPA and CPRA, the CPA includes a suite of rights which consumers may request with respect to their personal data:

  • Right of access;
  • Right to correction;
  • Right to delete;
  • Right to data portability;
  • Right to opt out, including specifically  of targeted advertising or the sale of personal data; and
  • Right to appeal, including the right to contact the attorney general if the appeal is denied.

Within forty-five days of receipt of a request, a controller must respond by (a) taking action on the request, (b) extending the time for taking action up to an additional forty-five days, or (c) by not taking action and providing the instructions for an appeal.  Information provided under a first request within a 12 month period must be at no charge to the consumer.  Controller’s may implement processes to authenticate the identity of consumers requesting rights.

Enforcement of the CPA

There is no private right of action under the CPA with enforcement authority delegated to both the Colorado attorney general and district attorneys.  The CPA doubles the cure period granted to controllers provided under the VCDPA and CPRA to 60 days; however, the entitlement to a cure period will sunset on January 1, 2025.  Under the CPA a violation is a deceptive trade practice under the Colorado Consumer Protection Act, such that while the CPA does not specify a penalty amount, the Colorado Consumer Protection Act specifies a penalty of up to $20,000 per violation.

What’s Next

If the CPA is the first data protection legislation applicable to your organization, the time to transition your team– IT, marketing, legal – is now.  Delays in implementation are likely and could be costly.

 

This article was written by Lucy Tyson, Brittney E. Justice and Matthew G. Nielson of Bracewell law firm. For more articles regarding privacy legislation, please click here.

Given Deadlines Set by Sixth Circuit, ETS Likely Stayed Until At Least December 10, 2021

Earlier this month, the Occupational Safety and Health Administration (“OSHA”) issued its “COVID-19 Vaccination and Testing; Emergency Temporary Standard” (the “ETS”) requiring employers of 100 or more employees to implement policies requiring employee vaccination or enhanced safety measures for unvaccinated employees (including wearing face coverings and weekly COVID-19 testing). Our alert on the ETS is here. The ETS was subject to over 30 petitions for review in the federal circuit courts and was quickly stayed by the United States Court of Appeals for the Fifth Circuit.

Although the petitions for review were consolidated before the United States Court of Appeals for the Sixth Circuit, the Fifth Circuit’s stay remains in place. While OSHA has publically stated that it will comply with the stay, its position has been – and continues to be – that employers should prepare to comply with the ETS and that OSHA will succeed in litigation challenging the ETS. Yesterday, OSHA filed an emergency motion to immediately lift the stay.

With the stay in place, covered employers have been in the difficult position of trying to determine how much preparation to do to comply with the ETS’s requirements, many of which are scheduled to be effective on December 6, 2021. The question has been whether the stay will continue beyond the initial deadlines and, if not, whether deadlines will be extended to account for the period during which the ETS was stayed.

The deadlines set out in the Sixth Circuit’s Scheduling Order, which is available here, provide some insight into the timing of the requirements of the ETS.  The Scheduling Order sets the following briefing deadlines:

  • Tuesday, November 30, 2021 – motions to join OSHA’s emergency motion or to modify, revoke, or extend the stay.
  • Tuesday, December 7, 2021 – responses to motions regarding the stay.
  • Friday, December 10, 2021 – replies to responsive motions.

Given these deadlines, it is likely that the ETS will continue to be stayed until at least December 10th (past the December 6, 2021 deadline) while the Sixth Circuit considers briefing.  However, it is possible that, before December 10th, the Sixth Circuit lifts the stay. If the stay is lifted, the ETS requirements could become effective on the date of the court’s order or on a later date set by the Sixth Circuit.

While the briefing schedule does not provide definitive answers to employers on the potential deadlines for ETS compliance, it suggests that the ETS’s December 6, 2021, deadlines may be extended for at least a few days while the Sixth Circuit considers briefing.

© 2021 Bracewell LLP
For more on OSHA COVID-19 updates, visit the NLR Coronavirus News section.

Biden Signs Largest Climate and Resiliency Infrastructure Bill in U.S. History

Today President Biden signed H.R. 3684, the “Infrastructure Investment and Jobs Act” (IIJA), into law after months of negotiations on both the bill itself and the still pending “Build Back Better Act”. These two measures encapsulate the Biden Administration’s legislative priorities, many of which were rolled out during the campaign. The U.S. Senate passed the IIJA on August 10 by a vote of 69-30. Last week, on November 5, the House of Representatives passed the measure by a vote of 228-206. The months long negotiations resulted in bipartisan support for the IIJA in both the House and Senate.

Broadly, the IIJA:

Provides Funding: The funds provided are appropriated dollars, allowing Executive Branch agencies to distribute funds without further legislative action. The funds provided are for both new and existing federal programs for surface transportation, energy infrastructure, transportation safety, transit, broadband, ports and waterways, airports, drinking water and wastewater. ​

Expedites Permitting: There are several new programs created to support transmission development and streamline the permitting of new energy infrastructure, such as electric transmission

Provides New Authorities and Creates New Programs: Various federal agencies are required to develop new programs and processes, all aimed at deploying clean energy or improving cybersecurity​.

The IIJA represents a monumental investment in all types of infrastructure. However, most significantly, it will provide the largest federal investment since the New Deal in the Nation’s infrastructure and in developing the tools to curb carbon emissions and harden infrastructure to increase resiliency against the current global challenge of climate change. The Department of Energy and other federal agencies will receive $65 billion for power and grid related programs, including grid infrastructure, resiliency investments, clean energy demonstration projects and cybersecurity. An additional $7.5 billion will be available for alternative fueling infrastructure for grants to build public fueling systems, including electric and hydrogen fuels, establish alternative fuel corridors, and find ways to recycle used electric vehicle batteries to be reused as energy storage devices.

In July, our team shared the details of the bill passed by the Senate Energy and Natural Resources Committee. As signed into law, this earlier summary still accurately reflects the details of the funding that will be provided.

Implementation and Timing of Funding: Agencies will now be tasked with standing-up new or expanding existing programs to award federal funds to eligible infrastructure projects. Agency offices will work over the coming weeks to establish grant program parameters, develop, and publish solicitations for applications, set timelines for awards and oversee implementation of awarded funds.

The IIJA included deadlines for some agency actions, requiring that programs be established in 60, 90, or 180 days. Note that many of the agency offices, particularly within the Department of Energy, remain functioning without political appointees. For instance, the Office of Electricity, which will be responsible for issuing $3 billion in grants through the Smart Grid Investment Matching Grant Program, is operating under an Acting Assistant Secretary until the Senate confirms the Biden Administration’s nominee for that post. There are no legal or political impediments to getting funding programs up and running without a political appointee heading any federal office, but political influence on the pace and timing for the process may be limited.

Certain programs will automatically send funds to states through existing formula funding programs. Formula grant programs are non-competitive awards based on a predetermined formula. These programs are sometimes referred to as state-administered programs and are found throughout the federal government. Examples include the Environmental Protection Agency’s Clean and Drinking Water State Revolving Loan program, and the Department of Transportation’s Formula Funds for Rural Areas, and Buses and Bus Facilities formula grants programs. Once the states have received their federal allocations they will then make those funds available through their existing award structure, which may be competitive or formula-based.

How Your Organization Can Apply for Federal Funding Opportunities: As agencies establish parameters for new programs or develop solicitations for existing programs, it is important to engage with the agencies in this process to ensure your project will meet agency program criteria for a funding award, and to ensure solicitations are designed to support your infrastructure projects. Our professionals have had significant success in assisting clients through these processes, and successfully assisted clients in the development of grant applications for awards under both Democratic and Republican Administrations. Contact any of our professionals to learn more about what grant programs your organization may be eligible for, how to engage with the agencies, as well as apply and partner with the federal government to ensure funding is awarded for your project.

What’s Next, Human Infrastructure: The IIJA represents only the provisions in the Biden agenda that were able to earn bipartisan support. The remainder of the President’s priorities are encapsulated in a Budget Reconciliation bill, H.R. 5376, the “Build Back Better Act”, (BBBA) developed by House and Senate Democrats and requiring only a 50-vote threshold in the Senate.

For months, the Build Back Better Act and IIJA and were linked in the legislative process by President Biden and House Speaker Nancy Pelosi (D-CA) who demanded that one not pass without the other. This approach resulted in a rift between the Democratic Party’s moderate and progressive members. While the final outcome for the IIJA resulted in bipartisan votes in both the House and Senate, passage only came after a deal was struck between moderates and progressives within the Democratic Caucus to decouple the IIJA and the “Build Back Better Act”.

House Speaker Nancy Pelosi has publicly said that the “Build Back Better Act” will be brought to the House Floor during the week of November 15. Senate Leadership has made no such promise for timely action. In addition, some House Democrats and some Senators have announced they want to see the details of budget scoring – what individual provisions will cost – from the Congressional Budget Office (CBO) and the Joint Tax Committee – before proceeding. Some limited data has begun to be released by the CBO but not any numbers covering many of the most complex and controversial programs. The schedule may be accelerated if Democrats and Republicans cannot come to an agreement to increase the debt ceiling, a must-pass measure that may need to be included in the Budget Reconciliation process. As negotiations continue, the content of the legislation passed by the House is expected to be altered significantly during Senate consideration. Should that be the case, the House will vote a second time on the measure as amended by the Senate.

Article By: Tracy Nagelbush Tolk and Tiffany Ganthier from Van Ness Feldman LLP

© 2021 Van Ness Feldman LLP

More Circuits Added to the OSHA ETS Lottery

Lawsuits challenging the COVID-19 Vaccination and Testing (the “ETS”) issued by the Occupational Safety and Health Administration (“OSHA”) were filed in three additional U.S. Circuit Courts of Appeals on Wednesday, November 10, 2021. Labor unions filed lawsuits in the U.S. Circuit Court of Appeals for the Second, Fourth, and Ninth Circuits. As a result, there are now ETS-related lawsuits pending in the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Eleventh, and D.C. Circuit Courts.

According to federal rules, the legal challenges to the OSHA ETS will be consolidated and heard by a single U.S. Circuit Court of Appeals. The Judicial Panel on Multidistrict Litigation will conduct a lottery, expected on November 16, to select which U.S. Circuit Court of Appeals will hear the consolidated litigation. The court to hear the litigation will be drawn “from a drum containing an entry for each circuit wherein a constituent petition for review is pending.” Each court only gets one entry, despite the number of petitions pending before each court. Until the Judicial Panel selects the U.S. Circuit Court of Appeals to hear the litigation via the lottery, all the U.S. Circuit Courts of Appeals can proceed with rulings, as the Fifth Circuit did this past weekend.

The labor unions’ move may be a move reflective of an intent by some to increase the odds that the OSHA ETS is upheld. The First, Second, and Fourth circuits all have a majority of Democratic-appointed judges. But it is difficult to predict the future of the OSHA ETS as the panel of judges to hear the case is also selected randomly.

© Polsinelli PC, Polsinelli LLP in California
For more updates on COVID-19, visit the NLR Coronavirus News section.

Don’t Use “Build Back Better” to Sabotage the False Claims Act

Congress is on the verge of setting a dangerous precedent.  As part of the Build Back Better Act, it has added two provisions equivalent to a “get out of jail free card” for Big Banks that violate federal law when they hand out billions in federal mortgage-related benefits.   The two provisions create exemptions to False Claims Act liability by creating blanket immunity from liability when banks fail to exercise due diligence, violate FHA housing regulations, or even directly violate federal laws such as the Truth in Lending Act.

It is obvious why banks want to have their federally sponsored mortgage practices immunized from exposure to the False Claims Act (“FCA”).  The FCA works remarkably well and is widely recognized as “the most powerful tool the American people have to protect the government from fraud.”   The law has directly recovered over $64.450 billion in sanctions from fraudsters since Congress modernized it in 1986.  During the debates on the massive trillion-dollar infrastructure laws enacted or debated this year, corporate lobbyists have been extremely active in successfully preventing Congress from adding any new anti-fraud measures to protect taxpayers from fraud.  As part of these efforts, they targeted the False Claims Act as enemy #1 and already have blocked one key amendment needed to close some weaknesses in that law.

With the Build Back Better Act, these corporate lobbyists have taken their opposition to effective anti-fraud laws to a higher level.  Instead of trying to repeal the FCA, they are simply exempting Big Banks from liability under that law in two new programs.  It is obvious why the Big Banks want the exemption from FCA liability.  As a result of illegal or irresponsible lending and foreclosure practices, such as those that fueled the 2008 financial collapse, banks have had to pay billions in sanctions to the United States.

Two words explain why the FCA is “the most powerful tool” protecting taxpayers from fraud:  Whistleblowers and sanctions.  If you accept federal taxpayer monies, you are required to spend that money according to your contractual agreement or the law.  The FCA’s first secret weapon is whistleblowers.  The law encourages whistleblowers, known as qui tam “relators,” to report violations of the FCA.  Whistleblowers disclosures trigger the overwhelming majority of FCA cases, and the law incentivizes employees to risk their careers to serve the public interest. The second secret weapon is how you prove liability.  Second, when an institution accepts federal monies (such as banks that operate various federally sponsored loan programs), liability can attach if the institution acts in “deliberate ignorance of the truth” when spending federal dollars.  Similarly, if payments are made with “reckless disregard of the truth,” liability can attach.  In other words, corporations (including banks) that accept federal money must ensure that these monies are spent as required by law, regulation, or contract.  Safeguards must be in place to prevent fraud.  If a bank does not have adequate compliance programs to protect against fraud, it cannot plead ignorance when the law is broken and taxpayers are ripped off.

These two key elements of the False Claims Act are precisely what the banking lobby is attempting to undermine through the Build Back Better Act.  The tactics employed by the Big Banks are somewhat devious.  They are doing an end-run around the False Claims Act by exempting themselves from having to engage in any due diligence when spending billions in federal dollars.  The banks are seeking to add language to the Build Back Better Act that will immunize themselves from liability under the False Claims Act when they make payments in “reckless disregard” to the legality of those payments.  The immunities they are seeking legalize “deliberate ignorance” in the use of taxpayer money, in complete defiance of the False Claims Act. Thus, whistleblowers who report these frauds will be stripped of protections they have under the False Claims Act, and the federal government will have no effective way to recover damages from these frauds.

What language in the Build Back Better Act creates an exemption to False Claims Act liability?

Two highly technical provisions are deeply buried within the 2135 pages of the Build Back Better Act’s legislative text. The provisions are sections 40201 and 40202 of the Build Back Better Act.  These two sections establish helpful programs that will provide needed financial support to first-generation homebuyers.  Section 40201(d)(5) would provide $10 billion in down payment assistance. Section 40202(f) would give an interest rate reduction on new FHA 20-year mortgage products to first-time homeowners with a potential value of $60 billion.  But the banking lobby has corrupted these otherwise well-meaning programs. The exemptions obtained by the banks are incubators for massive fraud.  It permits the Big Banks to escape any liability when they abuse the generosity of taxpayers and dole out billions to unqualified individuals.

How do the exemptions work?  To qualify for these taxpayer-financed benefits, an applicant simply has to “attest” that they are first-time/first-generation homebuyers.  That would be the end of the inquiry a bank would need to approve making a payment from the billions allocated in these two programs. Anyone could simply stroll into a bank and “attest” to being such a first-time homebuyer and would thereafter qualify for the federal benefits.  The banks would not be required to do any diligence of their own to confirm the borrower’s eligibility.  Willful ignorance would be legalized.  Reckless disregard in the handling of taxpayer monies would be permitted under this law.  Safeguards, such as requiring banks to adhere to the Truth in Lending Act, which requires verification of a borrower’s statements, would not apply.

Under Sections 40201(d)(5) and 40202(f), banks will not be held liable once they are lied to, even if the bank has reason to know that the borrower is not eligible for the federal payout.  Banks can spend taxpayer money even if the information on an applicant’s loan application directly contradicts the borrower’s attestation that they are a first-time homeowner.  Given the lack of any compliance standards, the temptation to engage in fraud in these programs will be overwhelming.

Permitting banks to escape liability under the False Claims Act opens the door to paying billions of dollars in benefits to unqualified persons.  Such payments rip off the taxpayers and severely hurt all honest first-generation homebuyers denied benefits.  For every fraudster who benefits from this program, an honest homebuyer will be left in the cold due to the reckless disregard of the banks.

Congress should never use a back-door procedure to undermine the False Claim Act, as it sets a dangerous precedent.  It is a devious way to undermine America’s “most effective” anti-fraud law.  Instead of undermining the False Claims Act by granting immunities to Big Banks, Congress should be strengthening anti-fraud laws to protect the taxpayers and ensure that the trillions of dollars spent on COVID-19 relief programs and infrastructure improvement are lawfully spent in the public interest.

Copyright Kohn, Kohn & Colapinto, LLP 2021. All Rights Reserved.
For more articles about banking and finance, visit the NLR Financial, Securities & Banking section.

H.R. 3684: Infrastructure Investment and Jobs Act

On November 5, the U.S. House of Representatives approved a $1.2 trillion infrastructure spending bill that will make historic investments in core infrastructure priorities including roads and bridges, rail, transit, ports, airports, the electric grid, and broadband.

The legislation, titled the Infrastructure Investment and Jobs Act (“IIJA”), will have major implications for states and municipalities of all sizes, as well as the entities involved in responding to governments’ needs for hard and cyber infrastructure.

Improvements to roadways, ports and mass transit are the focus of the legislation and the majority of the funding is targeted at these traditional hard infrastructure projects. U.S. Senator Rob Portman (R-OH) has championed the massive infrastructure bill and pushed for its passage.

This weekend, Senator Portman noted the massive impact the IIJA will have on Ohio, highlighting the bill’s bridge investment program which will award competitive grants to certain governmental entities to improve the condition of bridges. “This additional federal funding means we are one step closer to a solution for the Brent Spence Bridge,” Portman said.

The Brent Spence Bridge, which connects Cincinnati, Ohio with Covington, Kentucky has one of the busiest trucking routes in the nation. Questions about its safety and long shutdowns for repair have long concerned area residents as well as the business owners responsible for the more than $400 billion of freight which passes over the bridge every year.

While hard infrastructure priorities like bridge maintenance, port modernization, freight rail, and highway improvements account for a majority of the new spending appropriated by the bill (which totals $550 billion over five years), a sizable portion is dedicated to the expansion of broadband networks and the improvement of cybersecurity.

The new cybersecurity grant program and record-setting investments in broadband development could be game changing for state and local leaders wishing to modernize and protect their communities in these ways.

The U.S. Senate approved the IIJA in August 2020. Friday’s vote means the infrastructure bill will now move to the desk of President Joe Biden, who has indicated a bill signing ceremony will happen soon. Answers to questions about the billions of dollars in new infrastructure grants and programming are below.

Question: How will the money be distributed? 

Answer: The IIJA contains formulaic allocations of funds as well as earmarks and competitive grants. Some categories and sub-categories contain both non-competitive and competitive grants.

  • NON-COMPETITIVE FUNDING ALLOCATION PROCESSES
    • Formulas dictated by the bill are based on criteria like state population, or, potentially for specific items, users (ex: transit funds potentially determined by ridership)
    • Once the money is directed to the states, the local bureaucrats are able to make the important decisions about which projects deserve the funding.
    • States can also decide to allocate some of the funding to the county or city governments within their state
  • EARMARKS AND COMPETITIVE GRANT PROCESSES
    • Earmarks override state plans for how infrastructure funds should be spent. “Earmarks come out of the money that the state was going to get anyway.”
    • Localities must compete for Competitive Grants via an application process. The U.S. Department of Transportation’s Discretionary Grant Process is officially outlined on their website.
    • Generally, the award of competitive grants can be influenced by advocates who confer with decisionmakers in the Executive Branch about the merits of certain proposals.

Question: Which projects will qualify for funding?

Answer: The bill details specific funding streams for the specific projects included in its provisions. Categories of projects included in the $550 billion in new spending are below.

  • Roads, Bridges, & Major Projects: $110B — Funds new, dedicated grant program to replace and repair bridges and increases funding for the major project competitive grant programs. Preserves the 90/10 split of federal highway aid to states.
  • Passenger and Freight Rail: $66B — Provides targeted funding for the Amtrak National Network for new service and dedicated funding to address repair backlogs. Increases funding for freight rail and safety.
  • Safety and Research: $11B — Addresses highway, pedestrian, pipeline, and other safety areas (highway safety accounts for the bulk of this funding).
  • Public Transit: $39.2B — Funds nation’s transit system repair backlog, which includes buses, rail cars, transit stations, track, signals, and power systems. This allocation also includes money to create new bus routes and increase accessibility to public transit for those with physical mobility challenges.
  • Broadband: $65B — Funds grants to states for broadband deployment and other efforts to address access issues in rural areas and low-income communities. Expands eligible private activity bond projects to include broadband infrastructure.
  • Airports: $25B — Increases Airport Improvement grant amounts for runways, gates, & taxiways and authorizes a new Airport Terminal Improvement program.
  • Ports and Waterways: $17.4B — Provides funding for waterway and coastal infrastructure, inland waterway improvements, port infrastructure, and land ports of entry through the Army Corps, DOT, Coast Guard, the GSA, and DHS.
  • Water Infrastructure: $54B — Provides a $15 billion for lead service line replacement and $10 billion to address PFAS in water, in addition to other items.
  • Power and Grid: $65B — Funds grid reliability and resiliency projects and support for a Grid Development Authority; critical minerals and supply chains for clean energy technology; key technologies like carbon capture, hydrogen, direct air capture, and energy efficiency; and energy demonstration projects from the bipartisan Energy Act of 2020.
  • Resiliency: $46B — Funds cybersecurity projects to address critical infrastructure needs, flood mitigation, wildfire, drought, coastal resiliency, waste management, ecosystem restoration, and weatherization.
  • Low-Carbon and Zero-Emission School Buses & Ferries: $7.5B — Funds and authorizes the adoption of low-carbon and zero-emission school buses, including through hydrogen, propane, LNG, compressed natural gas, biofuel, and electric technologies. Provides support for a pilot program for low emission ferries and rural ferry systems.
  • Electric Vehicle Charging: $7.5B — Funds alternative fuel corridors and a national build out of electric vehicle charging infrastructure. The federal funding will have a particular focus on rural and/or disadvantaged communities.
  • Reconnecting Communities: $1B — Provides dedicated funding for planning, design, demolition, and reconstruction of street grids, parks, or other infrastructure (funding is especially targeted at infrastructure which is deteriorating due to age).
  • Addressing Legacy Pollution: $21B — Funds to clean up brownfield and superfund sites, reclaim abandoned mine lands, and plug orphan oil and gas wells, improving public health and creating good-paying jobs.

Article By Katherine M. Caprez of Roetzel & Andress LPA

For more legislative and legal news, read more from the National Law Review.

©2021 Roetzel & Andress

Agencies and Regulators Focus on AML Compliance for Cryptocurrency Industry

This year, regulators, supported by a slate of new legislation, have focused more of their efforts on AML violations and compliance deficiencies than ever before. As we have written about in the “AML Enforcement Continues to Trend in 2021” advisory, money laundering provisions in the National Defense Authorization Act for fiscal year 2021 (the NDAA) expanded the number of businesses required to report suspicious transactions, provided new tools to law enforcement to subpoena foreign banks, expanded the AML whistleblower program, and increased fines and penalties for companies who violate anti-money laundering provisions. The NDAA, consistent with Treasury regulations, also categorized cryptocurrencies as the same as fiat currencies for purposes of AML compliance.

In addition, as discussed in the “Businesses Must Prepare for Expansive AML Reporting of Beneficial Ownership Interests” advisory, the NDAA imposed new obligations on corporations, limited liability companies, and similar entities to report beneficial ownership information. Although the extent of that reporting has not yet been defined, the notice of proposed rulemaking issued by FinCEN raises serious concerns that the Treasury Department may require businesses to report beneficial ownership information for corporate affiliates, parents and subsidiaries; as well as to detail the entity’s relationship to the beneficial owner. Shortly after passage of the NDAA, Treasury Secretary Janet Yellen stressed that the Act “couldn’t have come at a better time,” and pledged to prioritize its implementation.

Money laundering in the cryptocurrency space has attracted increased attention from regulators and the IRS may soon have an additional tool at its disposal if H.R. 3684 (the bipartisan infrastructure bill) is signed into law. That bill includes AML provisions that would require stringent reporting of cryptocurrency transactions by brokers. If enacted, the IRS will be able to use these reports to identify large transfers of cryptocurrency assets, conduct money laundering investigations, and secure additional taxable income. Who qualifies as a “broker,” however, is still up for debate but some fear the term may be interpreted to encompass cryptocurrency miners, wallet providers and other software developers. According to some cryptocurrency experts, such an expansive reporting regime would prove unworkable for the industry. In response, an anonymous source from the Treasury Department told Bloomberg News that Treasury was already working on guidance to limit the scope of the term.

In addition to these legislative developments, regulators are already staking their claims over jurisdiction to conduct AML investigations in the cryptocurrency area. This month, SEC Chair Gary Gensler, in arguing that the SEC had broad authority over cryptocurrency, claimed that cryptocurrency was being used to “skirt our laws,” and likened the cryptocurrency space to “the Wild West . . . rife with fraud, scams, and abuse” — a sweeping allegation that received much backlash from not only cryptocurrency groups, but other regulators as well. CFTC Commissioner Brian Quintez, for example, tweeted in response: “Just so we’re all clear here, the SEC has no authority over pure commodities . . . [including] crypto assets.” Despite this disagreement, both regulatory agencies have collected millions of dollars in penalties from companies alleged to have violated AML laws or BSA reporting requirements. Just last week, a cryptocurrency exchange reached a $100 million settlement with FinCEN and the CFTC, stemming from allegations that the exchange did not conduct adequate due diligence and failed to report suspicious transactions.

With so many governmental entities focused on combatting money laundering, companies in the cryptocurrency space must stay abreast of these fast-moving developments. The combination of increased reporting obligations, additional law enforcement tools, and heightened penalties make it essential for cryptocurrency firms to institute strong compliance programs, update their AML manuals and policies, conduct regular self-assessments, and adequately train their employees. Companies should also expect additional regulations to be issued and new legislation to be enacted in the coming year. Stay tuned.

©2021 Katten Muchin Rosenman LLP

New Jersey’s Safe Passing Law Aims to Protect Cyclists and Pedestrians on the Road

The COVID-19 pandemic may have halted or reduced travel for many in New Jersey, but the end of the year also came with a surprising and sobering statistic: the number of fatal accidents involving cars in New Jersey rose in 2020 despite the pandemic.

Last year, 587 fatal accidents were reported across the state, up from 558 in 2019. Fatal accidents involving pedestrians have also risen, and so have fatal accidents involving cyclists. Eighteen cyclists lost their lives on New Jersey roads last year, up from only twelve the year before.

In response to these alarming numbers—and the long-term work of certain local bike safety advocacy groups—the New Jersey state legislature recently passed a bipartisan bill to increase the safety of New Jersey’s bikers and pedestrians. This bill, now known as the New Jersey Safe Passing Law, was signed into law by New Jersey Governor Phil Murphy on Thursday, August 5th.

The New Jersey Safe Passing Law

Under the New Jersey Safe Passing Law, drivers who are passing cyclists or pedestrians must move over one lane if it’s safe to do so. If moving over one lane isn’t possible or safe, drivers must allow four feet of space between their vehicle and the pedestrian or cyclist until they’ve safely passed them. In the event that it isn’t possible to safely allow four feet of space, the driver is required to slow their vehicle to 25 miles per hour.

In addition to cyclists and pedestrians, the bill also covers New Jersey residents with mobility issues who are riding electric scooters or in wheelchairs. Drivers who fail to follow the new law may face fines of $100, while drivers who cause bodily injury by failing to comply may face a fine of up to $500 and have two motor vehicle points added to their driving record.

Struck by a car while cycling? Here are a few next steps

While the Safe Passing Law is certainly a significant step toward making the road a safer place for cyclists, negligent drivers can still present a danger on the road.

If you’ve been injured by a vehicle on the road while biking, you may be wondering what recourse you have for paying medical bills and recovering damages.

Once you’ve carefully documented the accident, spoken to any police dispatched to the scene, and gotten any needed medical attention, the following steps can help ensure you receive the proper compensation and help:

  1. Contact an attorney. Having an experienced attorney on your side can be crucial if you need to pursue damages from the party at fault or need help making an insurance claim.
  2. Since New Jersey is a “no fault” insurance state, medical bills should be covered through your own health insurance or through the Personal Injury Protection benefits included in your auto insurance (P.I.P. benefits may be applicable even if you’re injured while riding a bike).
  3. Depending on the specifics of your auto insurance policy, you may also be entitled to pursue additional damages for pain and suffering or non-economic loss. A skilled attorney can guide you through your options for pursuing damages and help to ensure that you receive what you’re entitled to.
COPYRIGHT © 2021, STARK & STARK

Article By Domenic B. Sanginiti, Jr of Stark & Stark

For more articles on state legislation changes, visit the NLR Public Services, Infrastructure, Transportation section.

Top Ten: What You Need to Know About the Bipartisan Infrastructure Investment and Jobs Act

8/10/2021 Update: On Tuesday morning, Aug. 10, the Senate passed its bipartisan infrastructure plan, H.R. 3684, by a 69-30 margin. A group of ten senators – nicknamed the “G10” and led by Sens. Kyrsten Sinema (D-AZ) and Rob Portman (R-OH) – were the drivers behind this infrastructure framework. Next, the Senate will work through the reconciliation process for a $3.5 trillion budget resolution. When they are back in session later this month or early next, the House plans to act on both the infrastructure bill and the budget resolution.

The Bipartisan Infrastructure Investment and Jobs Act of 2021 comes as an alternative to reauthorizing the Fixing America’s Surface Transportation (FAST) Act, which is set to expire at the end of September. It also incorporates key pieces of the Biden Administration’s domestic policy agenda. This 2,702-page bill – written across the aisle and being offered as a Senate amendment to H.R. 3684 – provides approximately $550 billion in new infrastructure spending over the next five years for surface transportation, including roads, bridges, rail, public transit, and airports; broadband; resiliency; water infrastructure, including for waste water and drinking water, and ports and waterways; and modernization, including low-carbon programs, electric vehicle charging, connecting communities, and addressing pollution. You can read the full bill text here.

It is anticipated that this package will pass the Senate sometime this coming weekend, however, its fate in the House of Representatives is unclear. This package has been tethered to President Biden’s “human infrastructure” plan, which House and Senate Democrats anticipate to pass via the budget reconciliation process to overcome Senate Republican opposition. The process on the budget reconciliation bill will begin next week as soon as the Senate dispenses with the Bipartisan Infrastructure Investment and Jobs Act of 2021.

Among other provisions, this package:

  1. Incorporates four bipartisan bills: (1) the Surface Transportation Reauthorization Act of 2021, (2) the Surface Transportation Investment Act, (3) the Drinking Water and Wastewater Infrastructure Act, and (4) the Energy Infrastructure Act. The Surface Transportation Reauthorization Act passed out of the Senate Committee on Environment and Public Works and the Surface Transportation Investment Act passed out of the Senate Committee on Commerce, Science and Transportation, both with bipartisan support.
  2. Seeks to encourage domestic manufacturing and procurement of materials for public works projects, with the intent to also create more domestic jobs throughout the product supply chain. “Build America, Buy America” ensures that American taxpayer dollars are spent on American-made iron, steel, and manufactured products.
  3. Appropriates for:
    • Surface Transportation Infrastructure:
      • $36B for Federal-State Partnership for Intercity Passenger Rail Grants
      • $27.5B to the Federal Highway Administration for bride repair and improvement
      • $16B for Amtrak’s National Network and $6 billion for Amtrak’s Northeast Corridor Network
      • $15B for Airport Infrastructure grants
      • $9.2B for the Bridge Investment Program
      • $12.5B for National Infrastructure Investments grants
      • $8B for the Federal Transit Administration’s Capital Investment Grants
      • $5B for a National Electric Vehicle Formula Program
      • $5B for an Airport Terminal Program
    • Drinking Water/Wastewater Infrastructure:
      • $10B to address per- and polyflouroalkyl (PFAS) substances
      • $5B for FEMA’s flood mitigation and pre-disaster mitigation programs
      • $618M for the Department of Agriculture’s NRCS Watershed program
      • $75Mfor a WIFIA program to improve dams
      • $8.3B for the Bureau of Reclamation’s water and related resources projects
      • $15B to the Drinking Water State Revolving Fund program
    • Broadband Infrastructure:
      • $42.5B for the Broadband Equity, Access, and Deployment Program
      • $2B for the Rural Utilities Service distance learning, telemedicine, and broadband program
      • $2.8B for Digital Equity
      • $1B for middle mile deployment, among other provisions
    • Energy Infrastructure within Department of Energy:
      • $16.2B for energy efficiency and renewably energy
      • $7.4B for fossil energy and carbon management
      • $2.1B for Carbon Dioxide Transportation Infrastructure Finance and Innovation Program
      • $21.4B for Office of Clean Energy Demonstrations
    • Environmental Infrastructure:
      • $4.6B for an Energy Community Revitalization program
      • $696M for Forest Service wildfire management
      • $3.4B for ecosystem restoration programs at the EPA, FWS, and NOAA
  4. Offsets some of the spending with “Pay Fors”, including but not limited to:
    • $50B in re-appropriated, previously unused funding from 2020 COVID-19 bills
    • $50B in unused savings from the COVID-19 employer retention tax credit
    • $105B in unused savings from COVID-19 Paid and Family Leave tax credits
    • $51B from delaying the Medicare Part D drug rebate rule
    • $28B from requiring cryptocurrency asset reporting to the IRS
    • $21B from extending feeds on Government-Sponsored Enterprises (GSEs)
  5. Does not raise taxes. The goal is for economic growth as a result of efficiency, less costly infrastructure, and more productive workers.
  6. Preserves the 90/10 split of federal highway aid to states, but does not address the user fee for the Highway Trust Fund.
  7. Creates the Advanced Research Projects Agency-Infrastructure (“ARPA-I”) to fund research aimed at improving core infrastructure through innovation and new technology.
  8. Requires federal contracts for the domestic production of personal protective equipment (PPE) to last at least two years.
  9. Has widespread bipartisan support from 100+ associations and organizations like the AFL-CIO, U.S. Chamber of Commerce, National Governors Association, Small Business Roundtable, and National Association of Manufacturers.
  10. Will add a projected $256 billion to the federal budget deficit over the 2021-2031 period, according to the Congressional Budget Office (CBO). This score, which was released August 5, is key information for members deciding whether or not to vote in favor of the amendment to the bill.
© 2021 Foley & Lardner LLP

Article By William Ball, Jared B. Rifis and Kate M. Merrill of Foley & Lardner LLP

For more articles on the Bipartisan Infrastructure Investment and Jobs Act, visit the NLR Utilities & Transport section.