Industrials Regulatory News and Trends - December 15, 2023

Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal, and regulatory landscape.

First IIJA-funded EV charger opens for business. On December 11, the White House announced a federal government-funded electric vehicle charging station has begun operating in Ohio, the first such station financed by a $7.5 billion program created by the 2021 Infrastructure Investment and Jobs Act. The station is in a truck stop at the intersection I-70 and US 42 in London, Ohio, near Columbus. Auto manufacturers and others say that dramatically increasing the number of EV charging stations is crucial to the wide deployment of electric vehicles in the US. The Administration’s goal is to grow the nationwide network of chargers to 500,000, spaced no more than 50 miles apart on the nation's busiest highways and interstates. The charging program aims to address a key concern of potential electric vehicle buyers and users – insufficient supply and availability of EV chargers.

Meanwhile, in Michigan, on December 3, the Michigan Department of Transportation announced an EV charging wireless roadway – a quarter-mile stretch of 14th Street in the Corktown neighborhood near downtown Detroit. The roadway is adjacent to the Michigan Central building, a former train station being restored by the Ford Motor Company to become the centerpiece of a new “mobility innovation district.” The test roadway is a collaboration between the City of Detroit, MDOT, and Israel-based Electron, a provider of software for zero-carbon energy grids. The technology for the street is similar to that of wireless device charging pads: charging coils in the roadbed, which are connected to the power grid, transmit energy to receiver plates that have been installed in a vehicle.

EPA unveils revised estimate of the social cost of carbon dioxide. On December 2, the Environmental Protection Agency unveiled what it called an updated estimate of the “social cost” of carbon dioxide. This is an economic estimate that is used by the government to calculate the benefits of mitigating climate change – or the cost of not doing so – as more global warming means more storms, more heat waves, and more damage to the planet. The new estimate nearly quadruples the estimated cost of carbon dioxide that will be incurred by the world as a whole – a change that, experts expect, will result in stronger climate rules going forward. The update is part of a years-long effort by the Biden Administration to examine and possibly to alter existing calculations for the costs of climate change.

Proposed regulations clarify Foreign Entity of Concern exclusions from Clean Vehicle Tax Credits. On December 4, 2023, the US Department of the Treasury published much-anticipated guidance on key requirements for federal clean vehicle tax credits established by the Inflation Reduction Act. See our alert.

Report on America’s Economic Competition with the Chinese Communist Party. The House Select Committee on Strategic Competition between the US and the CCP has issued its report, Reset, Prevent, Build: A Strategy to Win America’s Economic Competition with the Chinese Communist Party. The complex report sets out a comprehensive policy framework, including nearly 150 action items that affect most business sectors. An important takeaway: geopolitical risk, particularly when it comes to operating in China, is becoming an increasingly necessary factor for companies in all sectors to consider. Our top-line alert and PDF-format analysis tell you more.

Trade groups urge revamped system of employee security screening. On December 6, more than 150 trade and other industrial associations, including those that represent trucking and railroad companies and supply-chain companies, wrote a letter urging Congress to pass the proposed Transportation Security Screening Modernization Act. In a letter to the chair and ranking member of the House Committee on Homeland Security, the groups expressed support of the bipartisan bill. The issue is that railroad workers, shipyard workers, and others now need to obtain multiple security credentials in order to work at ports, maritime facilities, and other locations, leading to considerable delay and expense. The groups said in the letter that they “understand and appreciate the need for security credentials to protect the nation from evolving threats,” but stated that “Congress must take steps to address the harmful impacts that poorly managed programs have on the workers who keep our supply chain running.”

FAA proposes expansion of cockpit voice recorders in planes. The Federal Aviation Administration said November 30 that it is proposing to extend the cockpit voice-recording requirement to 25 hours for all newly manufactured airplanes, a major increase from the current two-hour loop. The National Transportation Safety Board has been pushing for the change since 2018, and the United States is behind much of the world in the requirement for commercial planes. The voice recorder captures transmissions and sounds in the cockpit, including the pilots’ voices and engine noises, and can be crucial in understanding why airplane crashes occur. The move comes after the agency pledged to act this year to make the skies safer following several high-profile close-call incidents at airports around the country. Europe has required new airplanes to collect 25 hours of cockpit voice recordings since 2021.

Defense bill contains provision requiring US-made military hardware. A compromise defense policy bill unveiled December 6 includes a House-passed requirement that more US military hardware be manufactured in America, instead of an even stricter Senate-passed requirement. Negotiators adopted language in this must-pass bill, the National Defense Authorization Act, that would codify into law an executive order by President Joe Biden on domestic content requirements and state explicitly that those requirements cover major defense programs. The language is a win for President Biden, who in 2021 signed an executive order that said 60 percent of any product bought with taxpayer dollars must contain US-made components, up to a final target of 75 percent in 2029. It’s also a win for US allies since it includes an exemption for countries that have agreements with the United States to ease trade barriers between the countries for military equipment. Both houses of Congress are expected to pass the bill quickly.

Bill introduced to ban plastic foam food containers. On December 7, Senator Chris Van Hollen (D-MD) and Representative Lloyd Doggett (D-TX), joined by more than 50 co-sponsors, introduced the Farewell to Foam Act, which would phase out plastic foam food containers, loose fill foam, and single-use foam coolers across the country. “The only foam we should see in the ocean is on the waves, but unfortunately plastic foam ends up on our beaches, along waterways, and in the ocean. Plastic foam’s harmful impacts and persistence in our environment demand immediate attention if we are to effectively combat the growing plastic pollution crisis,” said Oceana, an environmental nonprofit that supports the bill. This summer, Delaware became the 11th state to pass a law to reduce plastic foam, joining California, Colorado, Maine, Maryland, New Jersey, New York, Oregon, Vermont, Virginia, and Washington state as well as the District of Columbia.

Senators tell EPA chief that proposed rules would hurt US steelmakers. On December 6, eight US senators – four Democrats and four Republicans – sent a letter to EPA Administrator Michael Regan asking for reconsideration of aspects of three proposed emissions-related rules concerning steel production. The group includes two senators from Indiana, Ohio, and West Virginia, and one each from Minnesota and Pennsylvania. A statement from Sherrod Brown (D-OH), one of the signers, said that the proposed rules “would dramatically undermine America’s steel industry, hurt Ohio steel manufacturers and steelworkers, and ship Ohio steel jobs overseas.” Instead, Senator Brown said, the EPA should “work with labor and industry to overhaul them in a way that protects American steelworkers.” The letter said, “The irony is that the United States’ steel industry is the world’s cleanest major producer of steel. American steel manufacturers take seriously their commitment to protecting the environment; however, rules that drive production overseas are bad for our economy, bad for national security, and bad for the environment.”

NAM begins push to get Congress to enact pro-business tax provisions. Contending that the current US tax code stifles growth and innovation, the National Association of Manufacturers on November 30 kicked off a campaign to ask federal lawmakers to reinstate immediate expensing of research and development costs on tax returns, full expensing of capital equipment costs, and a pro-growth system of interest deductibility. The NAM led more than 1,300 businesses and associations in calling for these changes. It also launched the Restoring Pro-Growth Tax Policies Action Center, which provides background information on these issues, as well as a digital engagement tool that helps manufacturers and industry advocates contact their senators and representatives. The manufacturers group says that 78 percent of manufacturers believe that the higher tax burden has decreased the funds available to expand core manufacturing activities in the United States.