JANUARY 2021 WASHINGTON REPORT
Administration regime change in Washington is usually an interesting time of parlor games over who will be picked for the incoming Cabinet. The election runoff results in Georgia, when finalized later this month, bodes for a second regime change in the United States Senate. Events June 6th with the mob rampage on the Capitol ended the fun and games in Washington. The riot and desecration of the Capitol eclipses the legacy of President Donald Trump.
The House of Representatives again chose Representative Nancy Pelosi (D-CA) to be Speaker for the 117th Congress. She clinches the gavel for the fourth and potentially final time. Informal maneuvering to replace her and her top two deputies is beginning. Pelosi won 216 votes to secure the speakership with five Democrats breaking ranks to support someone else or simply vote present. In the Senate, firebrand Senator Charles “Chuck” Schumer (R-NY) becomes the Majority Leader once Georgia confirms Senators-elect Jon Ossoff (D) and Raphael Warnock (D).
Democrats face narrow majorities in both the House and the Senate. The Ossoff and Warnock victories split the Senate 50-50, with Vice President-elect Kamala Harris able to break ties. The Senate Agriculture Committee is expected to be led by Senator Debbie Stabenow (D-MI) and ranking member Senator John Boozman (R-AR). The Ag Committee traditionally one of the more bipartisan groups, especially on the Senate side, but Stabenow and new House Ag Chair David Scott (D-GA) are expected to lay the groundwork for a more progressive farm bill than previous iterations. Other Democratic policy goals that will get a boost include implementing major climate change reforms within the agriculture sector, as well as reforming the farm labor system to give employees more protections and grant legal status to certain foreign workers. Some of Stabenow’s signature issues, from nutrition and conservation programs to bolstering local food systems and promoting urban farming, are poised to get plenty of attention in the years ahead.
In December, IBA surveyed seventy-five bakeries deemed over a 500,000 cwt/year flour usage, a figure that may be used to set a threshold for revised grain basket bread checkoff program. IBA reached out repeatedly to those who didn’t respond, at least four times by email, and extended the deadline several times. We even telephoned everyone we didn’t hear from, that’s a lot of voice mail. The survey results indicate this is not a program industry supports. Only 24% of respondents said they wish to financially support the program (76% against). More interestingly, only 12% support the industry referendum delay for up to three years after assessments begin (88% support upfront). This means half of the checkoff supporters prefer an upfront referendum. IBA will share these findings with incoming Agriculture Secretary Tom Vilsack and career staff at the Agriculture Marketing Service, Agriculture Promotions Board. IBA Chairman Dan Mulloy said “At the very least if proponents still must continue to pursue a checkoff after such weak industry support, bakers should at enjoy the opportunity to formally vote in a USDA referendum - up or down, before the start of any federally mandated industry assessments. There should be no industry taxation without referendum.”
Congress passes a Coronavirus Relief package before the new year. Pandemic-ravaged small businesses will see an extra $284 billion through the Paycheck Protection Program (PPP). Eligibility is limited to smaller businesses that have had significant drops in revenue. The plan allows businesses that received PPP funds earlier this year to apply for second loans. To obtain the so-called “second draw” loans, businesses have to prove they suffered a 25% revenue loss during the pandemic.
The law specifies that forgiven PPP loans will not be included in taxable income. It also allows businesses to deduct expenses associated with their forgiven PPP loans and rolls over a variety of temporary tax breaks known as “extenders,” some for multiple years. The package also extends a payroll tax subsidy for employers offering workers paid sick leave and boosts the Earned Income Tax Credit.
The package includes $13 billion in increased nutrition benefits, including a 15% bump in monthly benefits for all SNAP households for six months (from January 1, 2021 to June 30, 2021). It provides college students access to SNAP by waiving requirements that apply only to students and giving them access to SNAP similar to impacted workers with reduced work hours due to COVID. The deal also excludes unemployment benefits from counting as income in SNAP eligibility.
The package gives $5 million to add additional retailers to online SNAP, including for farmers markets and direct to consumer sales. Farmers and ranchers will also see another $13 billion round of direct payments to help cover pandemic-induced losses.
It provides $400 million for food banks through the Emergency Food Assistance Program, with up to 20% for distribution of commodities.
The package also includes improvements to Pandemic EBT (P-EBT) that expands access to food benefits for children by allowing all children under age 6 to be deemed “enrolled” in childcare, so they will be eligible for P-EBT benefits. The law clarifies what constitutes a “closure” making it easier to reach school-aged children with P-EBT assistance when schools are shifting between in-person, virtual and hybrid schooling.
Emergency funds will be given to schools and daycares that are facing increased costs and reduced participation due to COVID. Because funding for schools and daycares are tied directly to participation, many are facing budget shortfalls, putting in jeopardy their ability to continue to offer meals to children. The package provides funding to ensure these critical feeding programs may continue.
The package establishes a taskforce to test new technology in WIC to help with online, deliveries, self-checkout and other measures.
Lawmakers were unable to agree on provisions to shield businesses and schools from liability for coronavirus infections, as well as aid for state and local governments.
On January 14, President-elect Joe Biden released his own proposal, dubbed the American Rescue Plan. The proposal would dole out $1,400 aid payments, bump up unemployment benefits by $400 a week and bring the federal minimum wage to $15.
Biden will also ask for $440 billion to provide support for small businesses and communities. And roughly $415 billion will be spent tackling the coronavirus - launching a national vaccine program, expanding testing, standing up a federal corps of public health workers, and helping schools reopen safely.
The proposal also calls on Congress to free up funding for and authorize the Occupational Safety and Health Administration (OSHA) to issue a COVID-19-specific safety rule that employers must follow to protect their workers from the virus - and for it to cover public workers, who are typically not under the agency's jurisdiction.
The plan also includes a suite of policies aimed at tackling hunger during the pandemic. It would extend the Supplemental Nutrition Assistance Program (SNAP) benefit boost through the summer and boost resources for state administration of SNAP. It would give $3 billion to the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) in anticipation of increased enrollment due to both growing need and also increased outreach.
Biden will come back in a few weeks to lay out the second part of his two-pronged plan, a legislative package focused on investing in clean energy and jobs and addressing climate change, among other priorities.
The Center for Disease Control (CDC) recommends that older adults and front-line workers beyond health care should be next to receive a COVID-19 vaccine. Food and agricultural workers are considered “front-line essential workers” and would be included in the “1b” group; the third-priority, or “1c,” group would include food service employees and those in transportation and logistics, among other industries.
The Equal Employment Opportunity Commission (EEOC) issues updated COVID-19 guidance for employers related to administration of the COVID-19 vaccines. The EEOC’s guidance clearly indicates that employers can make COVID-19 vaccination a condition of employment. However, as employers with mandatory flu vaccination programs are already familiar, employers with mandatory programs must consider exemptions for employees who have disability-related or religious objections, as well as any state-specific exemptions. View the full guidance here.
2020-2025 DIETARY GUIDELINES
Updated every five years, the Dietary Guidelines for Americans set nutrition standards for major federal nutrition programs, like school meals, and underpins nutrition messaging for millions of Americans.
The 2020-2025 Dietary Guidelines for Americans (DGA) recognize whole grains as one of the three food groups that are fundamental constituents of a healthy dietary pattern. It recommends Americans consume half of their grains from whole grain sources and the remainder from enriched grains.
For the first time, the DGA also include recommendations for birth to 2 years. In making these recommendations, the DGA had this to say about grains: "Grains, including iron-fortified infant cereal, play an important role in meeting nutrient needs during this life stage. Infant cereals fortified with iron include oat, barley, multigrain, and rice cereals. Rice cereal fortified with iron is a good source of nutrients for infants, but rice cereal shouldn't be the only type of cereal given to infants. Offering young children whole grains more often than refined grains will increase dietary fiber as well as potassium intake during the second year of life and help young children establish healthy dietary practices."
The 2020-2025 DGA did not adopt the advisory committee's suggestion that the guidelines take a harder line against added sugars, instead it kept the Obama-era advice that individuals try to not consume more than 10% of their calories from added sugars (the committee had recommended dropping the limit down even further to 6%). However, the DGA recommends children under 2 years old consume zero added sugars.
DOL PUBLISHES INDEPENDENT CONTRACTOR RULE
The Department of Labor (DOL) publishes a final rule that makes it easier for businesses to classify their workers as "independent contractors" who are not protected under federal minimum wage and overtime law. The rule would create an "economic realities" test to determine whether a worker is an independent contractor or an employee under the Fair Labor Standards Act (FLSA).
IBA commented on the rule in October to voice our support and request several modifications be included in the finalized version. IBA's support stems from the new test articulated in the rule, which allows businesses to more broadly classify their workers as independent contractors under the FLSA compared with under the Obama Administration. The Obama DOL took the position that most workers should be considered employees under federal wage laws.
The final rule quotes from IBA's comments supporting the rule's clarification that requiring an individual to comply with specific legal obligations, typical of business relationships, would not make an individual more or less likely to be an employee. These types of requirements frequently apply to work performed by employees and independent contractors alike, and thus are not probative of whether an individual is economically dependent on a company.
President-elect Joe Biden's incoming press secretary, Jen Psaki, cited the rule as one of the "midnight" rules that would be potentially frozen from taking effect. Last week's release states that the measure won't take effect until 60 days after it's formally published in the Federal Register, on March 8. This would allow the Biden Labor Department to temporarily postpone the effective date, but create more complicated decisions on how to proceed thereafter.
While DOL stated that it can't comment on what another administration is going to do, it seems confident that the rule would not be challenged. In a call with stakeholders last week, a DOL spokeswoman pointed out that independent contractors support the rule on a 20 to 1 basis, and that the rule is firmly grounded in the statutory text and Supreme Court precedent. IBA will continue to monitor the final rule.
The Food and Drug Administration (FDA) announced that January 1, 2024 will be the uniform compliance date for final food labeling regulations that are issued in calendar years 2021 and 2022 (published on or after January 1, 2021, and on or before December 31, 2022).
This action does not change existing requirements for compliance dates contained in final rules published before January 1, 2021. These include the Nutrition Facts Panel Rule and the Bioengineered Food Disclosure Rule. The mandatory compliance deadline was January 1, 2021 for the Nutrition Facts Panel Rule. However, FDA will not focus on enforcement actions for food manufacturers with less than $10 million in annual food sales in 2021. FDA enforcement discretion ended for food manufacturers with more than $10 million in annual sales December 31, 2020. The mandatory compliance deadline for the Bioengineered Food Disclosure Rule is January 1, 2022. Regulated entities can voluntarily comply with the Standard until December 31, 2021.
Additionally, FDA is extending for 45 days the period before it will begin to consider comments on draft guidance regarding voluntary disclosure of sesame as an allergen. The draft guidance, when finalized, will provide food manufacturers with FDA's current views on sesame as an allergen and will provide recommendations to voluntarily disclose sesame in certain circumstances where such disclosure is not currently required. For example, if a term is used for a food that is or contains sesame, the guidance would recommend that sesame should be included in a parenthesis in the ingredient list. The guidance merely represents the FDA's currently thinking on this topic and is not binding on FDA or the public. Comments should be submitted before February 25, 2021 to ensure that FDA considers them before beginning work on the final guidance.
FDA is also extending, for 60 days, the comment period on the Request for Information to receive information about the nutrition labeling of sugars that are metabolized differently than traditional sugars. The comment period is open until February 16, 2021.
FDA also made two updates to its materials for stakeholders regarding the proposed rule, "Requirements for Additional Traceability Records for Certain Foods" (Food Traceability Proposed Rule). First, the agency has made clarifying edits to the Food Traceability List (FTL), which lists the foods for which the additional traceability recordkeeping requirements in the proposed rule would apply. The edits to certain commodity descriptions were made for clarity and do not reflect a change in which foods are on the FTL. Second, the FDA has published an FAQ, addressing questions that the agency has received about the proposed rule (e.g. during the public meetings, through the FSMA Technical Assistance Network, and during other outreach engagements) to assist stakeholders who are considering providing feedback during the comment period, which has been extended until February 22, 2021.
If your company would like to submit comments, please contact IBA General Counsel, Elizabeth Velander.
Finally, FDA issued final guidance to advise food manufacturers of its intent to exercise enforcement discretion for the name “potassium salt” in the ingredient statement on food labels as an alternative to ”potassium chloride” to better inform consumers that it is a salt substitute.
U.S. Department of Agriculture (USDA) announced continuation of the Farmers to Families Food Box Program, its fifth round of food purchases. USDA will purchase an additional $1.5 billion worth of food for nationwide distribution through the program. In total, USDA has distribution more than 132 million food boxes in support of American farmers and families affected by the COVID-19 pandemic.
The additional funding for the program was included in the COVID-19 relief package as part of the Consolidated Appropriations Act passed December 21, 2020. In this fifth round of purchases, USDA will again purchase combination boxes to ensure all involved recipient organizations have access to fresh produce, dairy products, fluid milk and meat products, and seafood products will also be included in this round.
The Farmers to Families Food Box program is part of the Coronavirus Food Assistance Program (CFAP), which was developed in response to the COVID-19 pandemic. Using authority provided by the Families First Coronavirus Response Act, USDA partnered with national, regional and local distributors, whose workforces were significantly impacted by the closure of restaurants, hotels and other food service businesses, to purchase and distribute agricultural products to Americans in need.
Furthermore, USDA released its World Agriculture Supply & Demand Estimates.
NEW PROP. 65 REGULATORY PROPOSAL
The California Office of Environmental Health Hazard Assessment (OEHHA) released without advanced notice a regulatory proposal that would revise Proposition 65's safe harbor warnings - a substantial departure from the current regulations. This is the second time in a year OEHHA has attempted to "clarify" the Prop. 65 warning regulations.
The proposed changes to the short-form warning include, but are not limited to: requiring that all short-form warnings identify at least one chemical for each endpoint (cancer and reproductive toxicity); limiting the use of short-form warnings to products with labels that are 5 square inches or less; eliminating the use of short-form warnings on the internet or in a catalogue; and confirming that the new short-form warning can be used on food products.
This will have substantial implications to companies, forcing them once again to potentially have to revise their warnings under the guise of "clarifying" regulations. IBA is working with the Consumer Brands Association and CalChamber to address these new changes.
IBA Spring Meeting
Sunday morning, March 21, 2021 - Orlando, FL
Prior to ABA Convention
If held virtually: Tuesday afternoon, March 23, 2021
IBA 47th Annual Convention
Tuesday-Thursday, June 22-24, 2021 - Washington, DC
If held virtually: Wednesday - Thursday afternoon, June 23-24, 2021
Independent Bakers Association
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