On Wednesday, Virginia became the first state to enact mandated COVID-19 workplace safety measures.
Virginia's "Emergency Temporary Standard" (16 VAC 25-220) will apply to all Virginia businesses regardless of size and is anticipated to go into effect this week (July 27) (under state procedure it will go into effect when it is published in a Richmond newspaper). Unless further modified, the requirements will remain in effect until six months after the end of the Governor's declared state of emergency.
Many parts of the Temporary Standard reflect and incorporate the advice and best practices being promoted by the Centers for Disease Control (CDC) and other public health agencies and experts - however, in Virginia employers will now face potential penalties for non-compliance.
These provisions include requiring employers to have a system in place to identify and exclude symptomatic employees and to provide for their safe return after a COVID infection, requiring employers to notify certain groups of people after an employee has tested positive for COVID, and requiring employers to enforce specific physical distancing, PPE use and cleaning procedures.
Virginia employers that are operating what are classified as a medium or high risk work environments will also need to develop an infectious disease preparedness and response plan within 60 days of the Standard going into effect. Finally, the Standard prohibits employers from discriminating or taking action against an employee who raises a "reasonable concern" regarding the spread of COVID-19 - whether the concern is raised to the employer or a third party (such as a state or federal agency or the media).
While Virginia is the first state to make this move, it is not anticipated to be the last. Oregon has announced that it has a similar plan is in the works which will be reviewed later this month and other states are likely to follow suit. These efforts are largely seen as a response to the fact that, while OSHA has issued discretionary guidance, it has not answered calls by employee groups to issue any COVID-19 specific mandatory rules.
In the face of state workplace safety mandates, many employers may be concerned about penalties and multi-state compliance issues. However, beyond a general interest in protecting public health and preventing further shutdowns, detailed safety requirements like Virginia's may have a bright side for businesses when it comes to protecting against liability.
An enormous concern for businesses as they reopen has been the potential for COVID-19-related claims by employees and third parties. It is difficult to predict exactly what form these claims may take. However, for a claim like negligence, it easy to imagine how difficult it would be for a claimant to argue that a business failed to take necessary and appropriate measures to reduce the risks of COVID-19 where the business was in full compliance with detailed government requirements intended to do just that.
Further, on the issue of business liability, Senate Majority Leader McConnell said this week that the Senate's next COVID-19 related legislation will include some form of liability shield for COVID-19 claims. This is a priority that TIA has supported and advocated for.
However, it remains to be seen what such shield would look like, whether it would be able to pass both the House and Senate and what role federal guidance or state mandates would play in qualifying businesses for the shield.
TIA will, of course, continue to actively monitor and update our members on this developing issue.
| HR 2513, CTA | S. 2563 ILLICIT CASH Act | S.1889 TITLE Act | |
| Who Has to Report? | All LLC's, and corporations with 20 or less employees, less than $5 million in revenue, and a physical operating presence in the US | Same as House as well as "similar entities" | All LLC's and corporations with 20 or less employees, less than $5 million in revenue, a physical operation presence in the US and less than 100 shareholders |
| How Often Do They Report? | For new businesses at incorporation and annually thereafter. For all businesses within 2 years. The Secretary has the authority to increase the frequency of reporting requirements pending the outcome of a cost benefit analysis. | For new businesses at incorporation, and within 90 days of any beneficial ownership changes. Expired information must be updated within 1 year. For all businesses within 2 years. | At incorporation, updates within 60 days for ownership changes, as well as annually. Existing businesses must comply within 2 years. |
| What Information is Being Reported | Full legal name, date of birth, home or business address, unexpired driver's license or passport number of all beneficial owners | Full legal name, date of birth, current home or business address, unexpired driver's license or passport number, of all beneficial owners (Same as House) | Same as HR 2513. Please note this bill requires individual states to collect and hold the info. |
| Beneficial Owner Definition | A person that exercises substantial control over an entity, owns 25% or more equity in an entity, receives substantial economic benefits from the assets of an entity | Same as House but defines substantial economic benefits as a person having access to 25% or more of the funds of the assets of the entity. Requires a rulemaking on the definition. | A person who exercises substantial control over a corporation or LLC through ownership interests, voting rights, agreement, or otherwise; or has a substantial interest in or receives substantial economic benefits from the assets of a corporation or the assets of a limited liability company. |
| Who Can Access the Database? | Any law enforcement agency at the federal, state, or local level as well as a request made by a Federal agency on behalf of a law enforcement agency of another country under an international treaty, agreement, or convention, or an order under section 3512 of title 18 or section 1782 of title 28; as well as financial institutions with customer consent | Local, State, Tribal, or Federal law enforcement, national security, or intelligence agency, request made by a Federal agency on behalf of a law enforcement agency of another country under an international treaty, agreement, or convention, or an order under section 3512 of title 18 or section 1782 of title 28; as well as financial institutions with customer consent | A local, state, or federal agency, or congressional committee or subcommittee with a subpoena. A written request by FinCEN or Treasury, written request by a bank with customer consent. Federal agency for a foreign gov (same as other two bills) |
| Des law enforcement need a subpoena to access the database? | NO | NO | Everyone but FinCEN, Treasury, foreign governments, and banks need subpoenas |
| Penalties for Violations | Civil penalty of not more than $10,000, and imprisoned for not more than 3 years, or both | Civil penalties of $500 per day up to $10k total and up to 4 years of prison. Negligent violations shall not be subject to civil or criminal penalties. Failure to update expired documentation or addresses shall be considered de-minimis and not result in a penalty if the applicant seeks to remedy the situation. | Up to 3 years in prison and $1 million in fines |
| Public Access to Information | NO | NO | Allows Congressional Chairs and Subcommittee Chairs to access via Congressional subpoena. Allows states to post any information collected publicly. |
Dear Representative,
While we support the goal of preventing wrongdoers from exploiting United States corporations and limited liability companies (LLCs) for criminal gain, the undersigned organizations write to express our strong opposition to H.R. 2513, the Corporate Transparency Act of 2019.
The Corporate Transparency Act would impose burdensome, duplicative reporting burdens on millions of small businesses in the United States and threatens the privacy of law-abiding, legitimate small business owners.
The Financial Crimes Enforcement Network's (FinCEN) Customer Due Diligence (CDD) rule became applicable on May 11, 2018. The CDD rule requires financial institutions to collect the "beneficial ownership" information of legal entities with which they conduct commerce. This legislation would attempt to shift the reporting requirements from large banks - those best equipped to handle reporting requirements - to millions of small businesses - those least equipped to handle reporting requirements.
The reporting requirements in the legislation would not only be duplicative, they would also be burdensome. Under this legislation, millions of small businesses would be required to register personally identifiable information with FinCEN upon incorporation and file annual reports with FinCEN for the life of the business. Failure to comply with these reporting requirements would be a federal crime with civil penalties up to $10,000, criminal penalties up to 3 years in prison, or both.
The Congressional Budget Office wrote, "Because of the high volume of businesses that must meet the new reporting requirements and the additional administrative burden to file a new report, CBO estimates that the total costs to comply with the mandate would be substantial." The Corporate Transparency Act would generate between 25 million to 30 million new reports annually.
This legislation contains a definition of "beneficial ownership" that expands upon the current CDD rule. The CDD rule requires disclosure of individuals with a 25 percent ownership interest in a business and an individual with significant responsibilities to control a business. The Corporate Transparency Act would expand that definition, requiring disclosure of any individual who "receives substantial economic benefits from the assets of" a small business.
The legislation defers to regulators at the Department of Treasury to determine "substantial economic benefits."
In addition, this legislation would impose a "look-through" reporting requirement, necessitating small business owners to look through every layer of corporate and LLC affiliates to identify if any individuals associated with such entities are qualifying beneficial owners.
Ownership of an entity by one or more other corporations or LLCs is common. Corporate and LLC shareholders would already have their own independent reporting obligation under this bill to disclose any beneficial owners, making this provision excessively burdensome.
The Corporate Transparency Act raises significant privacy concerns as the proposed FinCEN "beneficial ownership" database would contain the names, dates of birth, addresses, and unexpired drivers' license numbers or passport numbers of millions of small business owners. This information would be accessible upon request "through appropriate protocols" to any local, state, tribal, or federal law enforcement agency or to law enforcement agencies from other countries via requests by U.S. federal agencies. This type of regime presents unacceptable privacy risks.
The Corporate Transparency Act also introduces serious data breach and cybersecurity risks. Under the legislation, FinCEN would maintain a database of private information that could be hacked for nefarious reasons. As the 2015 breach of the Office of Personnel Management demonstrated, the federal government is not immune from cyber-attacks and harmful disclosure of information. In addition, millions of American companies would be required to maintain and distribute information about owners and investors in the company, thus creating another point of vulnerability for attack. This risk is particularly acute because the Corporate Transparency Act is focused only on small businesses and those entities are often the least equipped to fight off cyber intrusions.
While this letter does not enumerate every concern, it highlights fundamental problems the Corporate Transparency Act would cause for millions of small businesses in the United States.
Because of the new reporting requirements and privacy concerns, the undersigned organizations urge a no vote on H.R. 2513, the Corporate Transparency Act.
Sincerely,
The Tire Industry Association and other trade associations.
Dear Leader McConnell, Speaker Pelosi, and Minority Leaders Schumer and McCarthy:
We are grateful for your continued leadership to provide stability and relief to the American people and the U.S. economy that are reeling from the COVID-19 pandemic. As Congress works to find agreement on additional legislation in response to the pandemic, we, the undersigned organizations, strongly urge you to include an immediate infusion of at least $37 billion to state departments of transportation (DOTs) to ensure the delivery of planned transportation projects whose benefits will extend far beyond this pandemic and forestall further job losses in the public and private sectors.
With millions of Americans following "stay-at-home" orders, many state DOTs are facing severe losses in revenues, including dedicated user fee revenues on which state transportation programs heavily rely. Projections continue to show decreases in state motor fuel tax and toll receipts as nationwide vehicle traffic reduction bottomed out at about 50 percent during the height of the pandemic. As a result, the ability of state DOTs to carry out their core functions, including capital construction programs, is threatened. Since the beginning of the pandemic, many state DOTs have imposed furloughs and delayed or cancelled $8.6 billion in critical transportation projects, putting at risk transportation construction jobs and the timely realization of benefits those projects bring to communities and commerce.
Earlier this spring, many of the undersigned organizations requested that Congress provide $49.95 billion in funding for state DOTs to address estimated state transportation revenue losses over 18 months, composed of a $16.7 billion loss in FY 2020 and $33.3 billion loss in FY 2021. This request was supported by 137 members of the House and 26 members of the Senate through "Dear Colleague" letters sent to your offices. As updated data has become available over the last three months, the American Association of State Highway and Transportation Officials now estimates state transportation revenue losses of $37 billion over five years (through FY 2024), with an estimated loss of $16 billion in FY 2020. This change in estimated loss is mainly due to more optimistic outlook for FY 2021 from state DOTs compared to earlier this year. That being said, the recovery period is now expected to be longer than originally anticipated.
Nonetheless, the need for federal funding for state DOTs remains urgent. It will prevent further disruptions to planned transportation projects and allow state DOT employees and transportation construction workers essential to planning and delivering these projects to remain on the job. The funding will also preserve the core capabilities of state DOTs that are critical to implement a robust, bipartisan surface transportation reauthorization bill, which can serve as a platform for national economic recovery and growth.
Again, we appreciate your leadership during this unprecedented time. We urge you to provide state DOTs with an immediate infusion of federal funding in order to make critical transportation improvements and keep Americans working as our country looks to reopen stronger than ever.
Sincerely, The Tire Industry Association and other trade associations.