January 2023 Government Affairs Update

Congress Passes FY 2023 Government Funding Bill

At the end of the 117^th Congress in December, Congress passed a $1.7 trillion bipartisan appropriations bill which fully funds the federal government through the remainder of fiscal year (FY) 2023. The bill includes funding for workforce development initiatives, infrastructure, small business programs and more. Below is an outline of key provisions in the bill. A full summary from the House Appropriations Committee can be found here.

• Workforce Development:

• $2.2 billion for Career, Technical and Adult Education, an increase of $100 million above the fiscal year 2022 enacted level.
• $65 million to continue and expand Strengthening Community College Training Grants to help meet local and regional labor market demand for a skilled workforce by providing training to workers in in-demand industries at community colleges and four-year partners. This is an increase of $15 million over the fiscal year 2022 enacted level.
• $285 million for Registered Apprenticeships, an increase of $50 million above the fiscal year 2022 enacted level.
• $7,395 for the maximum Pell Grant, an increase of $500 above the fiscal year 2022 enacted level.
• $2.9 billion for Workforce Innovation and Opportunity Act State Grants, an increase of $50 million above the fiscal year 2022 enacted level.

• Small Business Administration (SBA): $1.2 billion for the SBA, an increase of $188 million above the fiscal year 2022 enacted level, to support investments in programs to help underserved entrepreneurs access capital and contracting opportunities. In addition, the bill provides $858 million in emergency supplemental funding for SBA’s Disaster Loans Program to support requirements for Hurricanes Fiona, Ian, and other disaster loan programs administered by SBA.
• Infrastructure: Fully funds and implements the infrastructure investments in the Infrastructure Investment and Jobs Act (Bipartisan Infrastructure Law passed in 2021).

House Passes Bill to Rescind New IRS Funding

The new Republican majority in the House of Representatives recently passed H.R. 23, the Family and Small Business Taxpayer Protection Act, which would rescind $72 billion in funding to the IRS. Last year, President Biden signed the Inflation Reduction Act into law which included $80 billion in new IRS funding to improve taxpayer services and increase tax enforcement activities.

The Republican bill would allow the IRS to keep $8 billion in new funds dedicated to improving taxpayer services and interactions with the IRS, including $3.2 billion dedicated to taxpayer services and $4.8 billion dedicated to business systems modernization. The bill would rescind $72 billion in new funding dedicated to tax enforcement activities, such as audits, asset monitoring, criminal investigations, and litigation, and IRS funding for operations support, such as offices and facilities, agency vehicles, and other agency-wide or headquarter-specific administrative activities and programs. 

The bill passed the House on a party-line vote and is unlikely to be taken up by the Democratic-controlled Senate in its current form.

Biden Administration Releases Semiannual Regulatory Agenda

The Biden Administration recently published its Fall 2022 Regulatory Agenda. Required by Executive Order 12866, the semiannual agenda lists all regulations under active consideration in the one-year period ahead as well as longer-term regulatory actions, and ensures public engagement in the process of establishing regulations. Although aspirational in nature, the agenda provides insight into the Administration’s upcoming regulatory activities and priorities. BSCAI continues to track all regulations impacting building service contractors and will keep members updated on the latest developments. Below is a summary of key regulatory timelines. 
 

• Improve Tracking of Workplace Injuries and Illnesses: A final rule is targeted for March 2023.
• Overtime Rule/White Collar Exemptions: A proposed rule is targeted for May 2023.
• Classification of Independent Contractors: A final rule is targeted for May 2023.
• Infectious Disease: A proposed rule is targeted for September 2023.
• Heat Illness Prevention in Outdoor and Indoor Work Settings: The Administration will be initiating a Small Business Regulatory Enforcement Fairness Act (SBREF) panel in January 2023.

OSHA Announces Increases to Maximum Penalties

The U.S. Department of Labor (DOL) recently announced changes to Occupational Safety and Health Administration (OSHA) civil penalty amounts based on cost-of-living adjustments for 2023. OSHA’s maximum penalties for serious and other-than-serious violations will increase from $14,502 per violation to $15,625 per violation. The maximum penalty for willful or repeated violations will increase from $145,027 per violation to $156,259 per violation.

Under current law, agencies are required to publish “catch-up” rules that adjust the level of civil monetary penalties and make subsequent annual adjustments for inflation no later than January 15 of each year. Visit the OSHA Penalties page for more information.

IRS Issues Standard Mileage Rates for 2023

At the end of December, the Internal Revenue Service (IRS) issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are as follows:

• 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
• 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
• 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.

These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles. Guidance from the IRS can be found here.

California Storm Victims Qualify for IRS Tax Relief

The Internal Revenue Service (IRS) recently announced that California storm victims now have until May 15, 2023, to file various federal individual and business tax returns and make tax payments,

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). The current list of eligible localities is available on the Tax Relief in Disaster Situations page on IRS.gov. The tax relief postpones various tax filing and payment deadlines that occurred starting on January 8, 2023. As a result, affected individuals and businesses will have until May 15, 2023, to file returns and pay any taxes that were originally due during this period. This includes 2022 individual income tax returns due on April 18, as well as various 2022 business returns normally due on March 15 and April 18. For more information, visit the IRS website here.

Fatal Work Injuries Up Nearly 9% from 2020

According to a recent report from the U.S. Bureau of Labor Statistics, there were 5,190 fatal work injuries recorded in the United States in 2021, an 8.9% increase from 4,764 in 2020. The fatal work injury rate. There was 3.6 fatalities per 100,000 full-time equivalent (FTE) workers, up from 3.4 per 100,000 FTE in 2020 and up from the 2019 pre-pandemic rate of 3.5.

Transportation incidents remained the most frequent type of fatal event in 2021 with 1,982 fatal injuries, an increase of 11.5 percent from 2020. This major category accounted for 38.2 percent of all work- related fatalities for 2021. To read the full report, click here. 

IRS Reminds Employers of W-2 Deadline

The Internal Revenue Service recently reminded employers and other businesses to file Tax Year 2022 Form W-2 and other wage statements by January 31, 2023.

Employers must file their copies of Form W-2, Wage and Tax Statement and Form W-3, Transmittal of Wage and Tax Statements with the Social Security Administration by January 31. Additional information on how to file can be found in Topic No. 752, Filing Forms W-2 and W-3.

The January 31 deadline also applies to Forms 1099-NEC, Nonemployee Compensation filed with the IRS to report non-employee compensation to independent contractors. For more information on this and for other due dates, see the Instructions for Forms 1099-MISC and 1099-NEC.