Episode 11 – Government Relations Overview

Welcome to the TRSA podcast. Providing interviews and insights from the linen, uniform, and facility services industry. Most Americans might not realize it, but they benefit at least once per week from the cleanliness and safety of laundered, reusable linens, uniforms, towels, mats and other products provided by various businesses and organizations. TRSA represents the companies that supply, launder, and maintain linens and uniforms. And in this podcast, we will bring the thought leaders of the industry to you.

 

Welcome again to another episode of the Linen Uniform and Facility Services podcast, interviews and insights by TRSA. I’m your host, Jason Risley. TRSA is senior editor of digital and new media. In this week’s episode, we’ll take a look at TRSA’s government relations strategy on a federal level as well as specific issues of concern to the linen uniform and facility services industry in states such as California, Indiana, and New York. The slides from today’s presentation are available for viewing on TRSA’s on demand learning website, which is free to TRSA members.

 

You can access this area online at www.trsa. Org/ondemand. Without further ado, let’s turn it over to TRSA’s vice president of government relations, Kevin Schwab, TRSA’s federal legislative council, Bill Spencer, and TRSA’s California legislative council, RJ Cervantes, for a deeper dive into these policy issues. Today, we’re gonna be discussing a quick out, the quick outcomes of those elections, then we’re gonna talk about the the folks that we’ll be working with at the federal level. We’re gonna talk about more specifically some, state issues, especially in California that, we’re gonna be dealing with and watching on behalf of the industry, and then I’m gonna wrap up with some, other state, issues that we’re dealing with.

 

But first, I would like to turn it over to Bill Spencer, our federal legislative counsel, to discuss the, federal elections and what it means to us moving forward. Bill, thank you. Thanks, Kevin, and thanks for everybody joining today. And I know that this has been a crazy, last 2 years and, especially the last couple of months. And with so many media outlets and TV channels and bloggers and everything else, I know you get all the information and some of it’s good and some of it’s bad and some of it’s fake.

 

But, hopefully, today, we can just give you maybe a couple of tidbits that, you don’t hear about all the time. So, obviously, we did pretty well in the senate. We kept the majority there, and, Republicans have a 53 seat majority now. Well, if they had a 53 seat majority in the we’ll have that in the 116th congress, which is the next congress coming up for the next 2 years. And the Democrats will have 45 Democrats and 2 independents.

 

So the independence caucus with the Democrats, so it’s basically a 53, 47 split. And before the last election, it was 5149. So, senator McConnell and his leadership team have a little better cushion, but not a lot going into that. So we will, see how that all, comes out. And we had some good people win and some good people lose, so that’s the way it happens in these elections.

 

But, we will be working obviously very hard with the senate on all our t r TRSA issues. The, senate map for 2020 is very interesting compared to this last election because there’s, so many more seats up. And so, you know, this is gonna be a big election year in the senate with 22 Republican seats up and 12 Democrat seats up. Some of these people will not run. Some are gonna have an easy, election, and there’s gonna be a number of very much contested elections.

 

And so I just put this up here with the PRSA pack. We’re gonna really need to be, active and raising more money this year to make sure that we can play in all the races that we wanted because there’s so many more senate seats and, obviously, the senate is very important. The, house of representatives obviously went to the Democrats this time. And, you know, a lot of people are blaming, Trump, and a lot of people are saying Trump helped people win. And you saw it in your area depending on where you live.

 

You know, I I know that number of our friends lost because of Trump and a number of our friends won because of Trump. And so we will see how that all plays out. And so now, it pretty much just split it switched the numbers. There was a 40 seat pickup by the Democrats, and so now it’s 236 Democrats, a 199 Republicans. And before this last election, that’s what it was.

 

236 to 199 controlled by the Republicans. And I think the, Republicans need to look at some of the playbook that the democrats use because there’s couple of numbers that struck me as interesting. Out of the new members in the house, there are, well, first of all, to say there’s, a 100 new members in the house. 66 of those are democrats, 44 of those are republicans. The women turned out very heavily this time.

 

And in the Democrat side, there’s 42 new women. In the senate, there’s 3 Democrat women, 2 Republicans who came in in the house, 36 Democrats, and one Republican who came in. Another thing that we found out from this election was that the women’s number one priority in voting was health care. And so the Republicans really need to look at that and figure out what’s going on with that. The other thing there was the number of CIA and military people who ran.

 

There’s 22 members, 1 in the senate, 1 Republican in the house. There was 10 new military Democrats, 11 Republicans. And then the other thing that’s interesting is the people of color, 23 new members in the house, 22 democrats, but only 1 republican. So the Republicans need to figure out how to, you know, reach out to these people better. And, of course, it’s gonna be a whole new election cycle next year with a presidential race, and we’ll see how that all comes about.

 

So now that we have the new, makeup of congress, we have our new leadership. Chuck Schumer will be the new majority or the, leader in the senate, and his whip will be Dick Durbin. And they are very partisan and, tough to work with on some business issues. But the thing is is that with and for all of this, we talk about you know, the the good thing about TRSA is that TRSA is a very easy industry to understand because people know they can they can understand what it is all about because they go to restaurants, they go to hotels, they go to hospitals, they they go to mechanics, they they go to retail places. They understand everything that you guys all do.

 

And the other thing is that even though the Democrats will be controlling the house, then a couple of the big issues are, of course, infrastructure since we have the 3rd largest fleet of trucks on the road behind UPS and FedEx, and then also environment and the water resources and, preservation, the way you guys do your laundries. So the Democrats like that, and so we just need to reach out more of the Democrats on all of this. With Mitch McConnell still being in charge of the senate, he, his stock rose with the Kavanaugh hearing. And our good friend, John Thune, will be second in command as whip in the senate. So we still have McConnell and Thune as two good friends that’ll be leading the senate, and we will obviously be working with them on all of our priority issues for t r s a.

 

In the house, we now have speaker Pelosi back and Steny Hoyer. Now I know a lot of people think it’s weird that the house has the same three people as their top leadership over and over and over for, it seems like, forever. The Democrats, they they have a few people who rise up and say, we we want a new speaker. We need new blood, but they never find anybody to run against her. And she’s very strong politically.

 

And, you know, some of these freshmen who won that said they would not vote for Pelosi because that’s what they ran on on their campaign agenda, and they come in here and they they’re not gonna vote for Pelosi, they’re gonna, find that they’re not gonna be getting very good committees and not being able to do much because, Pelosi, if you’re not if you’re not with her, then you’re out. And so, we’ll see how that all works with, some factions in the Democrat party. Of course, on the house leadership now that Ryan retired, we have Kevin McCarthy as the minority leader and Steve Scalise as minority whip. And Scalise is obviously very strong, more conservative than McCarthy, but McCarthy is very good on working with a number of people across the aisle and with Trump and everybody else. Some people said the same thing about that.

 

Why did they reelect McCarthy or why did they keep McCarthy in leadership and as the minority leader when the Republicans lost 40 seats in the house. Well, you know, McCarthy and Scalise did a very good job of raising a lot of money. They worked very hard traveling all around the country, helping these people with their elections. And so I think they they gained a lot of, goodwill for that, and the people realize that, you know, right now, they’re probably the 2 best people to lead the Republicans at this point. Now there’s a number of other, lower leadership positions in the house and for Republicans and Democrats, and those are all newer people.

 

And so we’ll see how they come about, and, obviously, we need to, work with them also and and figure out what’s gonna happen with this. In the last 100 years, only 20 years of those have had a house, senate, White House that was all controlled by the same party. So this is not unusual, and it’s something we’ve dealt with before. And it’s just a matter of, you know, working on what we need to work on with the correct people in either the House, Senate, or White House to make sure we either move our agenda or stop things that are gonna hurt our agenda. And so we will, obviously, be doing all of that.

 

The committee assignments are have, obviously, switched too. You know, we then the senate, the 4 main committees we work with, even though we work with a lot most of them on depending on the issue. But with the commerce science and transportation issue, John Thune has been chairman of that for a number of years. He still has some time left on his term to be there. But since he’s moving up to the 2nd in command of the senate leadership, he may step down as that for that with that chairmanship.

 

And then Roger Wicker from Mississippi is a good friend of TRSA will also will become chairman. And then Bill Nelson was the ranking. He was defeated in Florida in that tough Florida senate race, and so that positions to determine who’s gonna be on that. In environment and public works, which deals with all of the roads and infrastructure, John Barrasso, who’s also in leadership but is remaining as chairman of that committee in the senate is a very close friend of TRSA also and a great guy, and we will be working very strongly with him. This committee is really great because Tom Carper, who’s the ranking member from Delaware, he’s more of a moderate democrat, and he loves t r s a also.

 

So we’ve got a great relationship with the 2 head people on that committee, and that’s gonna be one of the the big issues that’s gonna be coming up that, you know, both the house and the senate can work on is infrastructure. So that’s important. With the labor issues, it’s always tough even if we control all three places, the house, senate, and and the White House to move labor issues. Right now, we have chairman Lamar Alexander, will be chairman still from Tennessee. He will not run again, so this will be his last term, but we will work with him as we have in the past.

 

And that committee not only deals with labor issues, but also education, apprenticeship, health issues, which I know are all important to you guys. And then, the ranking member, Patty Murray, sometimes she’s okay to work with, sometimes not, but she’ll be still be ranking. Then on the government affairs committee, which is actually homeland security and government governmental affairs, that is another issues that we always wanna work with on oversight and government relations on what’s going on with all the agencies. And so Ron Johnson, who’s spoken to TRSA at a couple of our events, very, very strong TRSA supporter. And then Claire McCaskill was defeated also, and so that’ll be determined who will take over that position.

 

In the house, Energy and Commerce has a number of jurisdictional issues for TRSA. And Greg Walden, who was the chairman, is he’s still every time I see him, he’s still so upset. He’s he just looks like a beaten dog because he, you know, was so upset that a lot of his good friends were defeated and also that he is now not gonna be able to be chairman and do what he would like to do on the energy and commerce committee. So we will need to work very hard and, you know, strong with chairman Bobby Rush from Illinois, and I feel that he will understand the g r s a issues are important. And so we will keep moving forward on that.

 

And then we’ll see who’s on the subcommittee chairmanships on and ranking on those. The transportation infrastructure committee, chairman DeFazio has already said that, infrastructure is his main thing, and he’s gonna get something done. And he’s saying that it it’s so important because 40% of the national highway system can’t even be resurfaced anymore. It’s in such bad shape, and it needs to be replaced. So, you know, between that and then the the roads that besides those roads you drive on, then then all the roads through the cities and everything else you drive on every day.

 

You know, it’s a mess, and you guys know that. And so, the Democrats realize that in the house, and so we will, obviously be working with them on that. The, education workforce committee, that’s the same as the one in the the senate that, you know, deals with health care and and apprenticeship and the labor issues. And so, that’s just switched from the last time. Virginia Fox from North Carolina was the chairman.

 

Now she’s ranking, and Bobby Scott is the chairman. That’s a contentious issue on labor issues. Some of the other issues, they work better on, and so we will just keep working hard with them and see what happens. And then, the oversight government affair government reform committee, which we also have issues regarding regulations and how the agencies interact with us. And so we’ll just see how, chairman Cummings, is on that.

 

And then, ranking member, Jim Jordan, he’s one of the Tea Party very, very staunch conservative people, but he will not have control of investigations and all of that. That’ll be the democrats who decide how that is gonna be done. So we’ll see how it all works out. That is, I think, end of my part, and I will turn it over to Kevin. Thank you, Bill.

 

I appreciate your time. So when we take everything Bill said and try and encapsulate it as to what does it actually mean as far as actions on the in the capital, We do have a lot of opportunities for our issues to be heard and to be acted on because of some similarities that we have by what by, environmental sustainability issues as well as infrastructure. Those are issues that gain, excuse me, pretty much universal support. However, what are we looking for? Well or what do we what do we think is going to be happening?

 

Well, in the near future, the Democratic caucus has already come out and mentioned the issues that they wanna work for in the house, and they’ve already said that they’re gonna start investigating administrative actions. They were going to be looking into, certain issues and how some decisions were made in all the administrative agencies, all the way from, the Department of Energy to Interior to the EPA to the Department of Labor. They are gonna be investigating how the administration is making decisions and what the process is. And then a point of possible opportunity is infrastructure. Everyone like Bill said, everyone agrees that there needs to be some sort of infrastructure, spending and some sort of infrastructure, support in this next congress.

 

That’s something that the president has said that he wants to support. Both parties have said that they wanna support. So, hopefully, we’ll see some sort of infrastructure, process go through. And then, political reform. The Democratic majority in the house has mentioned that, as a matter of fact, they’ve already dropped their first bill.

 

And HR one, which has already been introduced and numbered, is, a political reform bill, and it’s going to have to do with, the amount of money in the political process. It will have an impact you know, they’re they’re looking to have an impact on soft money. And the good new if if something like that was to occur, the fact that we have Trisapac is going to be, even more important tool than it is now. So, please, if you have an opportunity to support our political action committee for the industry, you should do so because if this political reform bill goes through, it’s gonna be one of the few avenues we have to have solid access to both parties in both party leadership. And then the other thing that I just wanna mention, Bill touched on in the senate before this last election, the Republican party had 51 votes.

 

And of that 51 votes, there were 22 senators that you always had to take into account when you nominated a, judge. And if you lost, one of them, it brought it to a 5050 tie, then the vice president would, break that tie. So in doing so, they were, while they while the administration still appointed conservative judges, they had been moderated by the need to address a couple of moderate senators on the Republican side. Well, with the new expanded majority that the Republicans have, those votes have kind of been nullified. And so, the judicial nominations, they don’t have to worry as much about how conservative a judicial nomination is.

 

So that’s gonna be a lot of what we see. It’s gonna be a lot of not much going on in Washington unless there’s some sort of, unless well, not much on Capitol Hill unless there’s some sort of agreement on infrastructure. But a lot of the issues that we’re gonna be dealing with are gonna be coming from the administration and done by administrative actions. Now I wanna move forward with this we’ve been discussing a lot of the federal what what we look forward what we are looking forward to here in Washington, DC. But a lot of what we do here in in, TRSA is doing state issues.

 

And I wanted to call the, governor’s races that occurred in the last election cycle, bring that to everyone’s attention due to all the state issues we do. The Democratic party picked up 7 gubernatorial seats or go, you know, gubernatorial houses, and Republicans still, maintain control of 27. That makes some of our state issues a little bit of more of a higher climb. So with that being said and the issues that we deal with the state, one state that we do a lot of, act we have a lot of activity in is in California. And I’m gonna turn now turn it over to RJ Cervantes, who is our California legislative representation, to discuss, what happened and what to look forward to as we move forward.

 

So, RJ, please, step in. Thank you, Kevin, and, thank you, everyone, for joining the webinar today. And as Kevin mentioned, you know, due to federal dynamics and and what Bill mentioned as well with the, split governance that we’re seeing on the federal level. There’s some expectation that the states are gonna become more and more important from a government relations standpoint. And, whether we like it or not, California happens to, come up with some crazy, policy ideas that happen to to move east.

 

So if you’re doing business in California already, you’re feeling those effects. You’re probably spending a lot of time keeping up with legislative and regulatory, updates that are coming out of here. But if you’re not doing business in California, it’s important to just have some elementary understanding of what they’re thinking about here because what we’ve seen and the historical precedent, is that some of those issues, other states pick up on as as they move east, especially on the environmental and water conservation front, which I know is is so important to PRSA. So what I thought what we could do today is just review some of the fundamentals of the politics in California, talk a little bit about both houses of the legislature, what happened in the election, and and how that’s gonna affect us, moving forward. Also, the US house races up here, just, kind of a microscope on on those in California.

 

And then also talk about kind of a crystal ball of what to expect in 2019 because there’s gonna be so many issues developing in California that are gonna have an impact on TRCA’s membership. So let’s go ahead and and start with the fundamentals. So on, here in California in the 2018, midterm election, what we saw was 90% of, what we typically see in a in a general election, turnout actually came out in a midterm, which is a huge, huge number. Millions of Californians came out to vote, and that was, you know, thanks to, I think, couple of things. One was the national, you know, hype with the election and and Californian’s feelings towards, the Trump administration and what’s happening in Washington DC.

 

But also the legislature the past few years made it incredibly easy for folks to come out and and vote in California. And I think we’re gonna see this in other states moving forward, But California decided to, do some experiments on, getting increased voter participation, vote by mail expansion, motor voter, where now when you go and get a driver’s license in the state, you are automatically registered to vote. And so what we saw was a huge huge turnout that came out especially late. So, you know, if you’re paying attention to the news, there were so many races, left to be called in California even days after the election because there was a huge late vote that came in. Thanks to, what was going on.

 

So though that impacted the races that we saw in the legislature to to a high degree. So before the 2018 midterms, the Democrats dominated. They had every constitutional office in California. They had 55 seats of a total of 80. They expanded that majority, to to quite a great degree, adding 6 additional seats for a total of 61, which is complete democratic dominance, in the state.

 

Leaving the republicans to some degree having less of a, an available impact on on legislation, which I’ll get into in a minute about what we’re gonna see in 2019 and how that affects us. But what’s important to note here is that with, 80 total seats in the assembly, 99% of those votes that we see only require a simple majority vote. So last year, we worked on, AB 2679, which was a reform of, title 22, California’s regulations on medical linen laundering. That bill only required a simple majority vote. And so so much of what we deal with, the Democrats can easily pass, what they want.

 

Taxes, it becomes a little more difficult. In in California, a, tax vote requires a 2 thirds super majority in which they clearly have with 61 votes in the assembly. But it it does create some interesting dynamics, and we’ll get into a couple slides later some of the tax threats that PRSA, can expect in in 2019. Moving on to the senate, similar dynamic there with just a simple majority needed to pass the the vast majority of of pieces of legislation. Before the 2018 midterms, democrats had a 26 seat majority.

 

After the midterms, they added 3 additional seats in, traditionally conservative strongholds such as Orange County and the Inland Empire. They were able to pick off seats there. Thanks to some of the national, demographics. And so if you have, facilities, in Orange County, and you’ve relied on conservative, elected officials in the past, that is now completely changed. In fact, Gavin Newsom, the newly elected governor, is the 1st Democrat since, 19 forties to win a majority of Orange County, votes.

 

So a vast transformation of California’s political landscape and and, whether you like it or not, it’s it’s moved, to the left. US house, before the 28 midterms, there were 39 Democrats and 14 Republicans. It was a complete blowout on the federal level where the Republicans lost half of their seats. It’s the lowest number of Republicans since 1947 when Richard Nixon, won, his first US house seat, coming from the Orange County, area. And so quite a substantial majority, for the Democrats in California and the US House and and their delegation.

 

In California, when you when you break down, the power structure of the house, we have the speaker of the house, 5 of 17 leadership posts within the democratic caucus are in the hands of Californians. 4 of the 22 major, committees, are chaired by, California members and then dozens of subcommittee chairs. And so California, moving into, the next congress is gonna hold substantial, sway. So, again, highly encourage you all to to pay attention to what’s what’s happening out here out west. What to expect moving forward?

 

Probably the the single biggest, issue that, TRSA members can expect within 2019 and and perhaps even into 2020 is potential tax increases. And I’ll get into one in particular, here in a moment, which we call the split roll, property tax, which would be a substantial property tax increase on on businesses. But beyond taxes, what we are gonna see is a substantial focus on health care. And so I know that, many of you, on the webinar do a lot of business with health care partners. Health care will be, one of the top three issues in California.

 

We’re gonna see a number of reform whether that’s on title 22 issues or, health care cost savings. And so things for us to to look out for are most likely on a defensive front, because we wanna make sure that we have strong business partners so we can continue to, serve them well. But again, thanks to that majority vote threshold of only needing a simple majority to pass those those easy bills, we’re gonna expect to see a number of of bad pieces of legislation. Last year, one thing that we saw was a, polyester microfiber ban, which at first when it was introduced, I’ll get into this in a minute, would have banned the use of polyester, above a 50% threshold in linens and and clothing, which would have greatly affected our industry and also, mentions of, encouraging consumers to only hand wash, those those items. We can expect to see that bill, and its cousins, come back to to affect us in in 2019.

 

But the good news is is that TRSA, due to our geographic diversity in California, we are in every district in this state, including the leadership post. We have a presence in those districts. And I think that, you know, similar to the federal level that Phil was saying, there’s a great understanding of of the need of our industry. And so we are actually one of the few industries, that I would say could really go on offense for policy changes that we wish to see in between 2019 and 2020. Not every industry is like that.

 

And so Kevin and I have been talking about ways that we can funnel, ideas on on ways that TSA can go offense, on offense in in 2019 and 2020. So please be on the on the lookout, with that. But looking ahead to 2020, though, you know, we don’t expect, republicans to pick up any steam with the president, being on the top of the ticket and some other, major issues that will be on the ballot in California that will really drive democrats to the polls. There is the possibility that, which is crazy to think about, but there is a possibility that democrats could expand even further on their majorities, in the legislature. Getting into, the the one tax increase that I think, we’ll wanna mention today, and that is the split roll property tax.

 

Split roll here in California, if you’re not familiar with the property tax structure, thanks to proposition 13, which passed, in the 19 seventies, property taxes are capped, and assessed at the value of the property as it was purchased in the original year that it was purchased. So if you have an industrial commercial property in California, that property is assessed at a base value of what that property cost back when you purchased it. So if you have a property that you bought in the 19 sixties or seventies or your company did, it’s a pretty substantial, decrease as as compared to if it were to be assessed at today’s property tax, values in California, with with the increases that we’ve seen in the state. So unions such as SEIU and AFSCME, some of the municipal unions who, thanks to some supreme court decisions, are very concerned about their ability to keep their membership levels up in California and and other states. They’re looking for ways to increase revenues for the state to continue, having their union membership roles, either stay the same or even grow in some respects.

 

And so one way that they decided to pursue revenue, increases is by increasing property tax values on commercial properties and industrial properties in California where they would be assessed at today’s property tax, level and then reassessed every 3 years, to capture any potential increases that the property has gained and and value. And then on top of that, have a 3% increase, each each year as it as that property gets older and older. And so altogether, it’s been estimated that this will be an $11,000,000,000 tax increase if it’s successful on businesses in California. So for those of you who have property in California, this is a huge issue for us to pay attention to. We need to have a seat at this table because if we don’t, you know, we’re gonna be on the menu.

 

We need to be at the table because if not, we’re gonna find ourselves in a very precarious situation with this tax increase. And so the hope is that we can strike some type of deal, where we will not get hit, substantially with this tax increase or, get, in a political situation where we’re able to defeat this in the legislature and preempt it from going to the 2020 ballot. Unfortunately, the unions have already gathered the necessary signatures that they need to refer this issue to the ballot. So, they have us in a in a corner, and we need to make sure that we can cut this deal to prevent this tax increase from from going through. Highly recommend that, on an individual basis that you take a look at your potential exposure, for your property taxes in California if you’re doing business here, and then assess that and perhaps, funnel that information to to Kevin because it’s gonna be, absolutely necessary that we have our story to tell as well on this on this issue.

 

California Title 22. So just a quick refresher, on this. We were able, to RSA last year with the 1st year that we had a registered lobbying presence in the state of California, and we went on offense immediately to try to reform title 22, which, led us to use a very outdated, medical linen processing, standard in California where we were wasting, substantial energy by having to to launder, medical linens at a 160 degrees for 24 minutes. We now have complete flexibility where we can follow, a federal standard, CDC standards. We were able to get that passed through both houses of the legislature and gain the support of governor Brown and his administration to get this through.

 

So it’s an example of how when you can, you know, have a presence in a state like California and and get to know, legislators here in in other states, that that’s hearsay is working in, you can deliver on results. And so that was a very, very successful result for us in 2018. Next on the polyester, and I mentioned this, we did see a b 2379, which would have banned initially polyester materials or clothing that had more than 50% makeup of of, a polyester material in in clothing. The bill got amended where it it wasn’t an outright ban, but would have encouraged individuals through, advertising and also through labeling on the material. It would have required a a mention that handwashing was recommended for those items in order prevent in order to prevent microfibers from entering into the water system.

 

And so, we, were able Kevin and I, walked the halls. We were able to talk to our allies and get that bill defeated last year, but I’ve already received word from, Assemblymember Bloom’s office that they’re expecting to reintroduce this measure in in 2019 and 2020. And so it’s something for us to watch out for and make sure that that our voices, are heard. On the regulatory level, one of the most costly regulatory, burdens that our industry has faced has been, over the past 10 years has been, the California Air Resources Board and their desire to, transition fleets of medium duty and heavy duty trucks, to 0 emission away from diesel and gasoline and fossil fuels and more towards, battery electric or hydrogen fuel cell models. And so those of you who have fleets operating in California, you’re probably well aware of the regulatory burdens that your companies have had to face just to make sure you were in compliance with the, Air Resources Board, over the past 10 years.

 

They are currently, writing and adopting what I call, CARB rules 2.0. And, when you count them up, there are 19 rules in development right now, all of which have some impact on TRSA’s membership, But probably the greatest threat is what they are labeling as the last mile delivery rule, which would require that every single delivery truck that makes deliveries, to any business in California would need to start phasing in 0 emission technologies, starting in 2020 and then a timeline moving to 2030. They are having high level discussions right now, about how to implement that. Very important that TSA has a seat at that table. In addition to watching the regulatory measures, though, California has set aside roughly a $1,000,000,000 annually in incentives for early adoption of these technologies.

 

There are very, substantial in fact, they actually have a set aside for, the, linen industry to adopt these, measures as quickly as possible. And so they have a set aside of funds and earmark, if you will, directly for our industry. And so if you are interested in, participating and getting that those incentives early, highly suggest that you reach out to Kevin, and we can figure out a way to get you in contact, with the appropriate folks. The risk is, though, that if you do not take advantage of the incentives that are available early, once these rules are adopted in 2020 where you have to phase in 0 emission trucks, which if you’re looking into these technologies, they’re very expensive. If you wait until, the rule comes into effect, California law dictates that you cannot take advantage of incentives.

 

Incentives are only available for early adoption. And so highly recommend that, you know, if you have fleets in California, you pay attention to, what’s what’s happening out here with with the air resources board, and we’re gonna continue to update our members. So, Kevin, I’ll I’ll pass it back over to, to you. Thank you, RJ. I appreciate, your time and all your efforts.

 

So, RJ, just spent a lot of time, dealing with several issues in California because there are a lot of issues to deal with. I wanna briefly touch on some other states that we’re gonna be involved with in the new year that has an impact on, on our industry. In Indiana, they, back in 2015, there was a bill passed called the Indiana Wage Assessment Act of 2015, which lays out what deductions are allowable from a worker’s paycheck. And in that, it said that, one of the deductions that was allowed is the purchase of a uniform needed for a job. The one thing it left out was the rental, the purchase or rental of a uniform due to some lawsuits that have been going on, for folks who are actually providing a rental program to their employees through one of our members, several of our members.

 

We are gonna be involved with Indiana. We’re trying to update that and amend and amend the Wage Assignment Act to, allow for it to say the purchase and rental of uniforms needed. So we’ll be in Indiana trying to clarify that legislation. The, key is the government already accepts perch rentals of the the government wage and hour website says that rental is allowed. However, the statute does not.

 

And anytime a a case goes to court, they look at the statute, not the interpretations. So we need to get that statute amended to add rental. Texas. We were in Texas last year, and, we were just a few days short of being able to get a tax break for any Texas, provider. Currently, Texas has 2 tax rates, franchise tax rates.

 

One set at 0.75%, and then there’s a retail wholesale rate that is 375. Currently, our industry is under the 0.75% rate. We are working to get it under the 0.375. We had a bill that was passed out of the their committee unanimously, and it made it to the Texas house floor. However, once it got to the Texas house floor, it got bogged down in some, issues that had nothing to do with any type of industry.

 

It had, other issues, and they were, they ran out the clock. So we are going to be going back to Texas to get involved with that Texas franchise rate. We’re also gonna be in, New York. Currently, the state legislature is looking at ways to provide money to the New York City transit, more specifically, the subway system. It because the subway system, even though it’s run by the city, is funded by the state.

 

So, they’re looking at ways to raise money. One of those ways is to add a price to any delivery that occurs within, the Manhattan area. And there are a lot of our members, whether they are uniform providers, health care providers, hospitality, or f and b providers that do deliver into that zone. And it would add an extra $25 per delivery, to the industry that goes there. So, while, yes, there would be a possibility to pass that on to the consumer, it also allowed for hours of delivery, which would change the times that you would be able to live to deliver into the zone.

 

And it would make it difficult if you were trying to deliver to a a restaurant or maybe some sort of shop that wants uniforms. They would have to stay until 3 o’clock in the morning. And that would be, 1, hard for you guys to schedule, and 2, people wouldn’t want to be waiting that long. We were in Albany last year to talk to the state legislature and the governor’s office, and we will be doing it again, to make sure that our industry is left out. Congestion pricing was passed last year, but it was passed onto the livery industry, meaning Uber and Lyft.

 

They they were, they fell under the congestion pricing, scheme, but, we’re trying to protect the industry from falling under that. A lot of other and other things that we deal with, we talked about the federal legislation. We’ve talked about state legislation. There’s been some city legislation we’ve been involved with, but there are also some non government organizations that also have an impact on our industry. And real quick, I’m gonna talk about 2 that set standards, and the problem is while the standards themselves do not have the rule of law behind them, if a locality picks them up and accepts them to get permits, it then does and has an impact on our industry.

 

1, that, one of the standards that we’re working with is US Pharmacopeia. It’s a 797 standard that has they’re, looking at changing the types of materials that can be worn in compound drug manufacturing facilities. Right now, there’s a concern that they’re trying to get rid of reusable clothing that, and only go to disposable. So we’re working with USP to make sure that, we’re represented and that the unintended consequences of disposable only uniforms are gonna be enacted. Another standard that we’re working with is NSF 350 that has to do with water reuse systems, which it would increase the cost of any water reuse system you would buy.

 

This is more specifically out in California, but it has been picked up by the Unified Plumbing Code. So if your locality is abiding by the United, the Unified Plumbing Code, any type of water reuse system would have to be required to be NSF 350, certified. So we’re making sure that that rule does not bother us. And lastly, RJ talked about getting involved. There are plenty of opportunities to get involved in the legislative and the policy process.

 

Last year or this year, 2018, we had 2 legislate we had our federal legislative day in March. We had a California legislative day to help us with our title 22, effort as well as the carb effort, and then we’ve also held a legislative conference in Albany to fight the congestion pricing issue. We will be having our annual our 9th annual legislative conference, March 27th this year. And, hopefully, everyone can put that on their calendar and look forward to, seeing you there. So please put that on your calendar.

 

Please do not hesitate to reach out to me if there’s something going on that you think we need to be aware of, whether it’s at the federal legislative process or the federal regulatory process or in an individual state, please reach out to me. It’s very hard to it’s very hard to follow all 50 states and then the federal. And a lot of times, we get involved because they have members that reach out to us. So please do not hesitate. A strong united message on government policy issues is important in order to have a voice in Washington DC and in state capitals across the United States.

 

This helps policymakers enact legislation that is not overly burdensome or potentially harmful to the linen uniform and facility services industry. TRSAs Political Action Committee or TRSAPAC helps the industry present a united front on the important legislative and regulatory issues at both the Federal and State levels. For more information on contributing to the TRSAPAC, contact TRSAs Vice President of Government Relations Kevin Schwab at kschwalb@trsa.org. That’s ksch walb@trsa.org. Also, don’t forget to mark your calendars for TRSA’s 9th Annual Legislative Conference scheduled for March 27th through 28th 2019 in Washington DC.

 

For more information, visit www.trsa.org/ledgecon. We’ll be back 2 weeks from now with another episode of the linen uniform and facility services podcast. I hope everybody is having a happy holiday season. And if you’re in a particularly giving mood, don’t forget to subscribe, rate and review our podcast on Apple Itunes, Google Play and Stitcher.