A Smarter Approach to Regulation | Business Roundtable

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Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies working to promote sound public policy and a thriving U.S. economy.

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Business Roundtable is an association of chief executive officers of leading U.S. companies working to promote a thriving economy and expanded opportunity for all Americans through sound public policy.

About BRT

A Smarter Approach to Regulation

Business Roundtable conducted a survey of its members to identify regulations that are of most concern across all our business sectors. The majority of these regulations directly and negatively impact economic growth.

While some of the listed regulations in isolation may not appear significant to growth, their cumulative effect has drained resources from innovation and job creation and directed them to non-value adding administrative and bureaucratic activities.

In February, Business Roundtable delivered a letter to the White House underscoring the “Top Regulations of Concern” identified by CEOs along with recommendations for minimizing their economic impact.

Letter to the White House
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Top Regulations of Concern

Ozone NAAQS Implementation Rules Guidance & Policies

In lowering the national ambient air quality standards (NAAQS) for ground-level ozone in 2015, the Environmental Protection Agency hampered economic growth in vast sections of the country without delivering additional, meaningful health benefits. The Administration should delay the final implementation rule to allow a more accurate consideration of the impact of background ozone levels on the ability of states to meet the new standard. It should also consider how such a standard would affect the ability of industry to expand production in the United States.

Clean Power Plan

The EPA has proposed new source performance standards for electric utilities that prevent new coal-fired units from being built unless equipped with carbon capture and control technology; existing plants would also face stringent new limits. Currently blocked by the federal judiciary, the Clean Power Plan should be recrafted to address concerns about EPA overreach infringing on state authority, while providing maximum flexibility for compliance.

Clean Water Rule: Definition of "Waters of the United States"

The EPA’s 2015 “Waters of the United States” rule vastly expanded federal jurisdiction over state waters, with serious implications for local economic development. Currently under review by the federal judiciary, this rule should be pulled back by the EPA.

Employer Reporting Requirements Under the ACA

The Affordable Care Act’s reporting requirements apply to all employers with 50 or more full-time or equivalent employees, imposing significant administrative costs. BRT supports streamlining or eliminating ACA employer reporting requirements. 

EEOC Actions Regarding Wellness Programs

The Equal Employment Opportunity Commission (EEOC) has proposed standards for employer-sponsored wellness plans that differ needlessly from those established under the Affordable Care Act. Business Roundtable supports an Administration-wide, coordinated, consistent policy with respect to ACA-encouraged, employer-sponsored wellness plans.

Excise Tax on Health Care Benefits Under the ACA

Under Section 49801 of the Affordable Care Act, if the aggregate cost of “applicable employer-sponsored coverage” provided to an employee exceeds a statutory dollar limit, which is revised annually, the excess is subject to a 40 percent excise tax. The broad application of the 40 percent excise tax means that, over time, the health benefit plans of all major U.S. employers will be subject to the tax. The impact of the eventual tax liability resulting from this provision is staggering and will distort the employer-sponsored health care marketplace, leading to dramatic changes in the benefits offered to employees. Business Roundtable supports eliminating the excise tax.

Treasury Department’s Debt/Equity Final & Temporary Regulations Under Sec. 385 of the Internal Revenue Code

In 2016, the U.S. Treasury Department issued regulations under Sec. 385 of the Internal Revenue Code that would reclassify certain related-party debt instruments as equity for U.S. tax purposes and impose new documentation requirements on related-party debt. Business Roundtable urges the Trump Administration to withdraw Treasury’s Oct. 13, 2016 final and temporary Sec. 385 regulations. Significant policy changes, such as those proposed in the Sec. 385 regulations, should be addressed via tax reform legislation, not regulation.

Overtime Regulations

The Trump Administration is seeking to reopen regulations that were set to go into effect during the final days of the Obama Administration but did not due to an injunction issued by a federal judge. The delayed regulations, which were issued under the Fair Labor Standards Act (FLSA), would drastically raise the annual salary threshold used to determine which employees are eligible for overtime pay from $23,660 to $47,476. Business Roundtable had expressed concern with the regulations, especially a provision that would give the U.S. Department of Labor (DOL) authority to automatically increase the salary threshold levels. Once a formal Request for Information (RFI) is approved, DOL will seek public comments on the rule, and Business Roundtable plans to make a formal submission with its concerns.

Fair Pay & Safe Workplaces Executive Order (EO 13673)

Federal regulations that would implement a 2014 Executive Order (Fair Pay and Safe Workplaces) unnecessarily burdens the federal contracting process, would add $474 million in regulatory costs, and will increase litigation while pressuring employers to settle meritless claims. BRT requests the President sign H.J. Res. 37, a resolution of disapproval under the Congressional Review Act that would invalidate these regulations.

EEOC's Revised Employer Information Report

The Equal Employment Opportunity Commission’s (EEOC) requirement that employers submit pay data on revised report forms beginning in 2018 imposes sizable compliance burdens on businesses while failing to yield useful information on discrimination. The policy was not established through formal rulemaking, so the new EEOC Chairman should review the policy and the commission should rescind it if warranted.

FCC Open Internet Order

The FCC’s Open Internet Order imposed on the nation’s broadband providers is based on outdated utility regulations that will slow investment and innovation. Business Roundtable supports both congressional and FCC action to protect net neutrality without the unworkable rules designed for the last century’s marketplace and technology.

Export Controls

Executive Branch agencies should expedite the approval process and eliminate unnecessary and onerous administrative requirements for exports to allies and parties in support of U.S. national security policy.

Shareholder Proposal Process

In too many cases, activist investors with insignificant stakes in public companies make shareholder proposals that pursue social or political agendas unrelated to the interests of the shareholders as a whole. BRT released specific recommendations on ways to reform the shareholder proposal process to tighten eligibility and enable more exclusions of proposals and repeat submissions. BRT can accomplish most of its goals through SEC rulemaking, interpretation and guidance but pressure from Congress, including potential legislative action would encourage the SEC to move forward.

CEO Pay Ratio Disclosure

The Dodd-Frank Act directed SEC to promulgate rules that would require companies to calculate and disclose CEO pay as a ratio of average employee pay. The pay ratio rule, which requires chief executives to certify what is an arbitrary and often meaningless number, provides no material information to shareholders or investors. In addition, for global companies with multiple categories of employees, reliable information is difficult to gather. Business Roundtable supports both reconsideration of the rule by the SEC and full repeal by Congress.

Conflict Minerals Disclosure Rule

The Dodd-Frank Act directed SEC to promulgate rules to require public companies to annually disclose if their products contain “conflict minerals” originating in the Congo or adjoining nations. These rules impose extraordinary compliance costs while failing to demonstrate humanitarian benefits in Africa. Business Roundtable supports both reconsideration of the rule by the SEC and full repeal by Congress.

Margin Requirements for Uncleared Swaps

The Dodd-Frank Act directed U.S. regulators to require market participants to exchange margin when transacting in over the counter (OTC) derivatives. Regulators should provide a transitional period for compliance with variation margin requirements taking effect March 1.