2017 Legislative Day & Annual Repair Symposium. arsa.org/symposium

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1 2017 Legislative Day & Annual Repair Symposium arsa.org/symposium

2 2017 Legislative Day & Annual Repair Symposium arsa.org/symposium 121 North Henry Street Alexandria, VA Tel Fax It s All About Your Industry and Your Company Christian A. Klein, ARSA Brett Levanto, ARSA

3 About the Aeronautical Repair Station Association ARSA is devoted to the worldwide civil aviation maintenance industry from its global corporations to the small, independent businesses. ARSA members are located on five continents and in nearly 20 countries. The association s experts create the tools for members to navigate the maze of government mandates while enhancing safety, efficiency and productivity. ARSA is managed by the law firm of Obadal, Filler, MacLeod & Klein, P.L.C., which provides management, government affairs, and legal services to trade associations and transportation-centric companies. 2

4 Overview Administrative issues Staff introductions Agenda overview Policy briefing Tips for meeting with congressional staff Q&A Adjourn by 9am 3

5 Administrative Issues Cell phones on vibrate Materials review Thanks to our sponsors Sonico: legislative priority brochures AEM: congressional directories First Aviation: lanyards HAECO Americas: luncheon 4

6 Staff Introductions Brett Levanto VP of Communications Ryan Poteet Regulatory Affairs Director Caroline Kneip Member Resources Manager Jennifer Kitching Finance Manager Kimberly Dimmick Client Information Manager Zack Perconti Policy Research Intern 5

7 Agenda Overview Adjourn briefing at 9am travel to Hill via cab, ride share, or Metro (Union Station or Capitol South) Lunch at noon at Bullfeathers (410 First Street, SE House side of Capitol Hill, one block south of Capitol South Metro) to release 2017 economic data 3pm meeting with House aviation subcommittee majority staff in Rayburn :30pm meeting with House Education & Workforce Committee Chairwoman Virginia Foxx, presentation of ARSA Legislative Leadership Award in Rayburn

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9 Overview New administration update Policy opportunities and risks FAA reauthorization; infrastructure investment; tax reform; regulatory reform; workforce development Election 2018 preview Impacting the process 8

10 Political Zeitgeist Reality tempers expectations It s a big job and slow process Fractures in GOP (lack of consensus about agenda, mixed constituencies) are undermining progress on major issues (Obamacare, tax reform, infrastructure) Perceptions of disarray in Trump administration (war with the media, Russia story/flynn scandal, Puzder nomination withdrawal, Obama wiretapping accusations) distracting from business of governing, setting up administration 1700 positions require presidential appointment (1200 require Senate confirmation) Trump trails Obama on sending nominations to Senate and getting nominees approved Still awaiting confirmation: Agriculture, Labor, USTR, DNI Party split, concerns about future employment, personalities in administration making it difficult to recruit Slowness staffing up cabinet means can t fill deputy positions and without deputies, can t make and implement policy 9

11 Department of Transportation Appointments Filled positions: Secretary (Elaine Chao confirmed) Nominated: Deputy secretary (Jeffrey Rosen appointment announced) Unfilled positions: General counsel; Assistant secretary for budget and programs and chief financial officer; Assistant secretary for governmental affairs; Under secretary of transportation for policy; Assistant secretary for aviation and international affairs; Assistant secretary for transportation policy; Assistant Secretary for Research and Technology; Administrator, Federal Highway Administration; Administrator, Federal Motor Carrier Safety Administration; Administrator, Federal Railroad Administration; Administrator, Federal Transit Administration; Administrator, Maritime Administration; Administrator, National Highway Traffic Safety Administration; Administrator, Pipeline and Hazardous Materials Safety Administration; Member, Surface Transportation Board (x3); FAA administrator (term ends in 2018) 10

12 About Elaine Chao Sworn in on January 31, 2017 Rapid approval thanks to previous government experience Served for eight years as George W. Bush labor secretary Also served as deputy secretary at DOT, Chairman of the Federal Maritime Commission, Deputy Maritime Administrator Married to Senate Majority Leader Mitch McConnell Major focus will be $1 trillion infrastructure proposal 11

13 The Trump Doctrine Three verticals articulated by Steve Bannon at CPAC: National security and sovereignty Economic nationalism The deconstruction of the administrative state What do those mean for aviation industry? More defense spending but more volatile international relations Changes in trade relations and risks for companies doing business internationally (are bilaterals at risk) Improve rulemaking, better oversight, more selfregulation, reduced regulatory burden 12

14 Most Progress So Far on Regulatory Issues Since taking office, Trump Administration has: Instituted hiring freeze to start reducing size of government Imposed regulatory freeze to give administration time to review pending regs Required that for each new regulation is proposed, agency must repeal two regulations; net zero economic cost of annual regulatory changes Ordered agencies to designate regulatory reform officer and create task forces to recommend regulatory improvements 13

15 FAA Reauthorization Reauthorization law sets agency budget for several years and establishing policy priorities Current authorization extension expires Sept. 30 Both House and Senate are gearing up for full blown reauthorization (not extension) Starting point will be House and Senate FAA bills from last Congress 14

16 FAA Reauthorization cont d Not on fast track: new committee members need to get up to speed and Trump administration needs to weigh in on priorities Air traffic control reform looms as splinter issue House T&I Chairman Shuster and airlines support privatization but general aviation community is aggressively pushing back Process is already underway: House has held three hearings (airports, manufacturing, state of industry) 15

17 FAA Reauthorization cont d Risks: new regulatory mandates, attacks on repair stations, attacks on bilaterals Opportunities: improve FAA efficiency and oversight, provide regulators with necessary resources, shine spotlight on workforce issues ARSA is engaging with aviation subcommittee staff and members to educate about MRO employment, contributions to economy, small business impact, benefits of bilaterals New ARSA study shows impact of bilaterals throughout the United States The ask : Don t impose new mandates on repair stations (domestic or foreign) and don t do anything to screw up BASAs 16

18 New Infrastructure Investment Needs are enormous: Airports Council International says $100 billion in airport needs over next five years (expecting $50 billion shortfall) Trump has talked about $1 trillion investment in all forms of transportation infrastructure Not on a fast track Per Chao at NGA last month: The administration is just getting started, so we are in discussion about various infrastructure plans. We are open and welcome ideas. Broad agreement on needs, but no consensus on how to pay for it: Chao: administration does look forward to PPPs and there are a number of payfors for improving infrastructure Trump to airline execs: I don t like raising fees and taxes Risk of over-reliance on PPPs Tax reform is opportunity to create new user fees to ensure long-term sustainable funding The ask : Look for fiscally responsible ways to increase investment in airport infrastructure 17

19 Tax Reform A major priority for Trump and GOP (Mnuchin: Tax reform is our number one objective. We think it s absolutely critical to getting to economic growth There s trillions of dollars offshore that will come back and this will create jobs [and] this will create investment and we need to make sure our U.S. businesses are competitive. Trump and GOP agree on simplifying the code, lowering the top tax rate from over 39 percent to 33 percent, reducing individual tax brackets from seven to three Trump wants to reduce top corporate rate from 35 percent to 15 percent House GOP blueprint would provide 100 percent expensing for businesses, but eliminate business interest deduction 18

20 Tax Reform cont d But how to pay for it? Need $1 trillion to make it revenue neutral (does it have to be revenue neutral?) House GOP has proposed border adjustment tax (effectively 20 percent tax on imported goods) Trump: too complicated and I don t love it but House GOP hopeful he is shifting (Bannon is apparently enthusiastic ) Hatch has real reservations about BAT National Retail Federation running ads ( The BAT is BAD tax ) 19

21 Tax reform cont d Lack of consensus means timeline has slipped House GOP blueprint is the starting point, but wasn t legislative document Ryan s original plan was to have budget reconciliation package that repeals Obamacare and sets stage for tax reform ready to go by end of February Mnuchin: We re going to get this done by August Bill possible by April Still likely to happen through budget reconciliation, which has lower vote requirement in the Senate Lots of groundwork has been laid, but lots of details still to work out Strong desire to finish in 2017 b/c difficult to do big things in an election year (2018) The ask : Simplify and improve tax code for all types of businesses (corporation, pass-through), be mindful of impact of BAT on companies doing business internationally 20

22 Regulatory Reform on the Hill Regulatory Accountability Act (H.R. 5) passed House on Jan. 11 by 238 to 183 vote: Requires agencies to choose the lowest-cost rulemaking alternative that meets statutory objectives, permitting costlier rules only when cost-justified and needed to protect public health, safety, or welfare Requires greater opportunity for public input and vetting of critical information especially for major and billion-dollar rules Repeals the Chevron and Auer doctrines to end judicial deference to agency statutory and regulatory interpretations Requires agencies to account for the direct, indirect, and cumulative impacts of new regulations on small businesses and find flexible ways to reduce them Prohibits new billion-dollar rules from taking effect until courts can resolve timely-filed litigation challenging their promulgation Forces agencies to publish online, timely information about regulations in development and their expected nature, cost and timing Requires plain-language, online summaries of new proposed rules, so the public can understand what agencies actually propose to do 21

23 Regulatory Reform on the Hill Regulations from the Executive in Need of Scrutiny (REINS) Act of 2017 (H.R. 26 and S. 21) passed House 237 to 187 on Jan. 5: For major rule to take effect, Congress must pass joint resolution of approval within 70 days. A "major rule" is any rule results in: an annual effect on the economy of $100 million or more; a major increase in costs or prices for consumers, individual industries, government agencies, or geographic regions; or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.- based enterprises to compete with foreign-based enterprises. 22

24 Regulatory Reform on the Hill Midnight Rules Relief Act (H.R. 21 and S. 34) passed House on Jan. 4 by vote of 238 to 184: Would amend Congressional Review Act to allow Congress to bundle together multiple regulations finalized in last 60 days of presidential administration and vote to overturn them en masse with a single joint resolution of disapproval Under CRA if Congress adopts a joint resolution of disapproval, it must then submit to the president for consideration. If the president vetoes the joint resolution, the regulations will become effective unless Congress overrides veto effectively means new president must concur with decision to get rid of predecessor s regulations 23

25 Regulatory Reform on the Hill Outlook for Regulatory Reform Legislation Reg reform won t just be general Congress working to overturn specific Obama rules Top priority for many leading business advocacy organizations All three bills passed House in 104th Congress but none passed Senate President Obama had threatened to veto What s different now receptive president but smaller GOP Senate majority in both Houses Bills would still have overcome Senate filibusters (60 vote threshold) The ask : Senators should support regulatory reform bills 24

26 Workforce Development Goal is to improve technical workforce pipeline Perkins Act is primary federal career technical education law House passed Perkins reauthorization in 2016 with large, bipartisan majority, will be starting point for this year s process New House Education & Workforce Chairman Virginia Foxx (R-N.C.), a former community college president, will be a key player Policy goals include improving coordination between businesses, schools, government; better recognition of skills based programs The ask : Support Perkins Act reauthorization 25

27 Looking Towards 2018 GOP needs eight-seat pickup to have filibuster proof Senate majority Dems defending 25 seats in 2018; GOP defending just eight Nine Senate Democrats up for reelection in states Trump won (Nelson-FL, Donnelly-IN, McCaskill-MO, Tester-MT, Heitkamp-ND, Brown-OH, Casey-PA, Manchin-WV, Baldwin- WI) Also in 2018, 39 gubernatorial contests, 46 states have state legislative elections who wins will have big impact on post census redistricting Will GOP be able to deliver on Trump s election promises? Will Dems be able to turn grassroots energy into electoral gains? 26

28 Impacting the Process Many, many new members of Congress and staff who know nothing about our industry Personal engagement is key is key to education ARSA and members must work together to provide local face and economic context Help improve understanding about what your industry does by hosting lawmakers and staff at your company Provide campaign resources to reelect candidates your agree with and who support your industry 27

29 Tips for Hill Meetings Arrive no more than five minutes early (not much waiting area) Assume staff/lawmakers don t know anything about your company, your industry, etc. And remember that you know A LOT more than they do Don t use jargon (they don t even know what part 145 is) pretend you re explaining to your grandmother Use new economic data to illustrate economic impact of industry Stick to your top one or two issues Don t be afraid to say, I don t know I ll get back to you Invite member of Congress, staff for a facility visit Don t discuss campaign contributions Get two cards from everyone with whom you meet (one for us one for you) Engagement is an ongoing process - follow up next week and throughout the year 28

30 Questions? Materials 29

31 2017 Legislative Day & Annual Repair Symposium arsa.org/symposium 121 North Henry Street Alexandria, VA Tel Fax