NYSDOL’s Model Guidance for Workplace Safety + Violence Prevention Gives Retailers a Starting Point
Takeaways
New York’s Retail Worker Safety Act is now in effect; employers with at least 10 retail employees in New York State must adopt a retail workplace violence prevention policy and provide interactive retail workplace violence prevention training to all employees upon hire.
Retail employers can customize NYSDOL’s Model Policy and Training to include their own store-specific information to meet these requirements.
The NYSDOL guidance recommends that retail employers provide a workplace violence incident reporting mechanism for employees and maintain records of incidents to evaluate and identify any trends.
Related links
Retail Worker Safety (NYSDOL)
Implementing NY’s Retail Worker Safety Act: A New Amendment Means Changes for Employers of All Sizes
What Responsibilities Do Employers Have Under New York State’s Retail Worker Safety Act?
Article
The New York State Department of Labor (NYSDOL) has launched the much anticipated guidance website on the New York Retail Worker Safety Act (RWSA). The guidance answers retail employers’ questions regarding implementation of the RWSA effective June 2, 2025.
The guidance also provides a Model Policy and Training employers can use as a starting point to create their own policy. Retail employers who use this Model Policy and Training are to include their own store-specific information, such as worksite emergency exits, meeting locations in an emergency, and instructions regarding emergency and security-related devices utilized in the workplace. The guidance also dictates that training take place during paid work time.
The RWSA applies to all New York State employers with at least 10 employees working at their retail store(s). Retail stores include any store that sells goods directly to the public at retail. They do not include businesses that primarily sell food to be eaten at the location, such as restaurants.
For employees who do not speak English as their primary language, employers must distribute the policy and training in English and in an employee’s primary language. If an employee’s primary language is not one for which the NYSDOL has provided a translation, employers can distribute the English version of the policy.
Workplace Violence Prevention Policy
The NYSDOL allows employers to develop their own workplace violence prevention policy or adopt the Model Policy after customizing it for their workplace.
Employers wishing to develop their own workplace violence prevention policy must include:
Workplace violence risk factors;
Prevention methods;
Relevant state and local laws; and
An anti-retaliation statement.
Employers revising the Model Policy to suit their needs will likely want the advice of counsel.
Employers that choose to use an entirely customized policy must include a list of situations that might place employees at risk, including but not limited to:
Working during late night or early morning hours;
Exchanging money with the public;
Working alone or in small numbers; and
Operating in locations with uncontrolled public access.
The policy must also contain information on methods the employer may use to prevent incidents of workplace violence, such as establishing and implementing systems for employees to report such incidents. Information about federal and state laws concerning violence against retail workers, remedies available to victims of workplace violence, and a statement that there may be local laws that apply concerning violence against retail workers must be part of the policy. Finally, an anti-retaliation statement must be included. The guidance provides several methods for employees to report retaliation if they are punished, disciplined, or terminated for exercising their rights under the RWSA. While the NYSDOL states that having an internal reporting system for workplace violence incidents and maintaining records of reports is not required, these best practices are valuable in demonstrating compliance.
Workplace Violence Prevention Training
The NYSDOL states that retail employers must provide interactive workplace violence prevention training. An optional written template for that training is available and, as of the date of this article, a training video is pending.
In addition to these Model Training resources, employers can provide their own training as long as it aligns with the law’s requirements. Seeking the support of outside counsel in customizing training could benefit employers in their compliance efforts. Employers must provide employees with a written version of the interactive training at the time of the training, and training must take place during paid work time.
Any training provided to employees on workplace violence prevention must include:
An overview of the RWSA’s requirements;
Tactics for protecting against and de-escalating workplace violence;
Workplace security features and procedures like exits, meeting places, or security alarms;
The roles of supervisors and managers in the reporting and response to incidents of workplace violence; and
Active shooter procedures.
Employers interested in using custom-crafted training should contact an attorney for support or refer to Labor Law Section 27-e for the minimum requirements.
Implications for Employers
The guidance calls for retail employers to distribute their workplace violence prevention policy when employees are first hired, then once a year thereafter.
For workplace violence prevention training, all covered retail employers must train their employees upon hire. Thereafter, employers with at least 50 employees must conduct training annually, and those with 10 to 49 employees must provide training every two years.
Silent response buttons and training on their use will be required for retail employers with at least 500 retail employees statewide by Jan. 1, 2027.
The One Big Beautiful Bill Act (Tax Reform): Employee Benefits and Executive Compensation Breakdown
On May 22, 2025, the House of Representatives passed legislation titled “The One Big Beautiful Bill Act” (the “House Bill”) (available here), which includes several tax reform provisions. The House Bill is now being considered by the Senate.
If passed by the Senate and signed by the President, the House Bill would extend and/or modify a number of provisions from the 2017 Tax Cuts and Jobs Act (“TCJA”), and it would enact a number of new provisions. The following are key provisions from the House Bill related to employee benefits and executive compensation:
Employee Benefits Provisions
Deductions for Tips. Taxpayers earning $160,000 or less in 2025 (adjusted for inflation through 2028) would be allowed to deduct cash tips earned from an occupation that “traditionally and customarily received tips before January 1, 2025,” subject to certain limits. This deduction would be allowed only for tax years 2025 through 2028. To support the deduction, employers would have to report tip income on employees’ Forms W-2 using a special code in Box 12 (in addition to continuing to include this income in Boxes 1, 3, and 5).
Deductions for Overtime Compensation. Taxpayers earning overtime compensation would be allowed to deduct their overtime compensation for tax years 2025 through 2028. To support the deduction, employers would have to report overtime compensation on employees’ Forms W-2 using a special code in Box 12 (in addition to continuing to include this income in Boxes 1, 3, and 5).
Health Savings Accounts (“HSAs”). The House Bill includes several provisions that would expand eligibility to contribute to HSAs and make HSAs more flexible, effective for taxable years beginning after December 31, 2025:
Would allow individuals who are eligible for Medicare Part A to make or receive contributions to HSAs if they are also enrolled in a high-deductible health plan (“HDHP”).
An individual’s spouse being covered by a flexible spending account (“FSA”) would no longer disqualify the individual from eligibility to make or receive HSA contributions (subject to limitations).
Eligibility to receive the following items and services at an employer’s clinic (for both the employee and their spouse) would be disregarded for purposes of eligibility to contribute to an HSA: physical exams, immunizations, certain drugs (but not prescribed drugs), treatment for injuries incurred during the course of employment, and preventive care. This means employers would be allowed to offer these items and services with no deductible, but other items and services at an on-site clinic would continue to be subject HSA minimum deductible requirements.
Would treat certain sports and fitness expenses, such as membership fees and costs associated with physical exercise or activity, as qualified medical expenses that may be reimbursed through an HSA, up to $500 per year for single taxpayers and $1,000 per year for joint or head of household taxpayers (pro-rated on a monthly basis and subject to cost-of-living adjustments beginning in 2027).
An employee who enrolls in an HDHP and becomes eligible to contribute to an HSA would be allowed to transfer unused FSA and health reimbursement arrangement balances to their HSA (subject to a cap based on the FSA contribution limit).
An employee who enrolls in an HDHP that is HSA-eligible could use their HSA for expenses incurred any time after joining the HDHP, if they establish their HSA within 60 days after joining the HDHP.
An individual age 55 or older who is eligible to make their HSA catch-up contributions (up to $1,000) could make their catch-up contributions to their spouse’s HSA.
Would increase (in many cases double) the HSA contribution cap for individuals and families with taxable income less than a certain threshold ($75,000 for single taxpayers and $150,000 for joint filer taxpayers, with phase-outs ending at $100,000 and $200,000, respectively). The threshold would be indexed for inflation.
Health Reimbursement Arrangements (“HRAs”). The House Bill includes the following changes to HRA rules to make HRAs more flexible, effective for taxable years beginning after December 31, 2025:
Would codify the IRS’s final rules permitting employers to offer individual coverage HRAs (which would be renamed Custom Health Option and Individual Care Expense, or “CHOICE” arrangements). This would permit employees enrolled in a CHOICE arrangement through a cafeteria plan to purchase health insurance coverage on the individual healthcare exchange marketplaces with pre-tax dollars.
A credit would generally be available to employers with less than 50 full‑time employees and that have employees enrolled in a CHOICE arrangement. For the first year of the credit period, the credit would be $100 (adjusted for inflation beginning in 2027) per month per employee that is enrolled in a CHOICE arrangement, and, for the second year of the credit period, the credit would be one‑half of the amount determined for the first year.
Tuition and Student Loan Reimbursements. The House Bill would make permanent the ability to reimburse student loan payments under a Section 127 education assistance program (rather than letting that feature of Section 127 programs expire on December 31, 2025). In addition, the House Bill would provide inflation adjustments beginning in 2027 to the $5,250 limit on pre-tax reimbursements for qualifying education expenses (including student loans).
UBTI for Qualified Transportation Fringe Benefits. Tax-exempt organizations would have to recognize UBTI for amounts incurred for qualified transportation fringe benefits or any parking facility that is not directly connected to the organization’s unrelated trade or business. The change is economically comparable to a for-profit entity not being allowed to deduct these expenses (which is the rule under Section 274(a)(4)) and would apply for taxable years beginning after December 31, 2025.
Employer-Provided Child Care Credit. The maximum tax credit employers would be allowed for providing qualified child care would be increased from $150,000 to $500,000 ($600,000 for eligible small businesses), adjusted for inflation beginning in 2027. The change would apply for taxable years beginning after December 31, 2025.
Paid Family and Medical Leave Credit. The House Bill would make permanent the employer tax credit for a percentage of wages paid to qualifying employees while they are on paid family and medical leave (rather than letting it expire on December 31, 2025). In addition, the value of the credit would be expanded to include a percentage of premiums paid for certain insurance policies. The change would apply for taxable years beginning after December 31, 2025.
Reimbursements for Moving Expenses Would Continue to be Taxable. Before the enactment of the TCJA, qualified moving expense reimbursements were excluded from employees’ income and the paying employer could deduct the expenses. The TCJA eliminated that treatment (resulting in employees having to pay tax on moving expense reimbursements), except in the case of active duty members of the armed forces. The House Bill would make the TCJA’s changes permanent (rather than letting them expire at the end of 2025).
Bicycle Commuting Reimbursements Would Continue to be Taxable. Reimbursements of bicycle commuting expenses would continue to be taxable. Before the enactment of the TCJA, certain reimbursements were not taxable.
Executive Compensation Provisions
Deduction for Excessive Employee Compensation. The aggregation rule under Section 162(m), which currently applies for (a) identifying a corporation’s covered employees and (b) determining compensation that is subject to Section 162(m), would be expanded to pick up all members of a covered corporation’s controlled group and affiliated service group under Section 414(b), (c), (m) and (o) (a broader group than under the existing aggregation rule). The amount of deductible compensation would be allocated to each member of the controlled group or affiliated service group based on the pro-rata portion of the total compensation paid by that member. The change would apply for taxable years beginning after December 31, 2025.
Tax-Exempt Organization Excessive Employee Compensation Excise Tax. The excise tax that tax-exempt organizations must pay on compensation in excess of $1 million paid to employees would be expanded to apply with respect to all current and former employees of the tax-exempt organization, even if they were never among the top 5 highest paid. The change would apply for taxable years beginning after December 31, 2025.
Alternative Minimum Tax Exemption. The House Bill would extend indefinitely the increased alternative minimum tax (“AMT”) exemptions that were added by the TCJA and set to expire after December 31, 2025. This is relevant for employees who exercise incentive stock options, which are not recognized for income and FICA tax purposes but are recognized for AMT purposes.
As noted above, the House Bill is currently being considered by the Senate, which is expected to make changes. If the Senate passes a modified version of the House Bill, the legislation would then have to go back to the House for another vote because both chambers must pass the exact same legislation. We are continuing to monitor developments in the legislative process.
New York State Releases Guidance on Retail Worker Safety Act
The New York Retail Worker Safety Act is now in effect as of June 2, 2025. Following months of anticipation and planning, covered employers in New York State will now have to comply with the act’s workplace violence prevention policy, training program, and notice requirements. Just in time for the compliance date, the New York State Department of Labor (NYSDOL) released guidance on some key issues under the law as well a model policy and training program. The NYSDOL also provided an online complaint form where employees can report alleged violations of the act.
Quick Hits
The New York Retail Worker Safety Act took effect June 2, 2025, and requires compliance with workplace violence prevention policies and training.
The New York State Department of Labor (NYSDOL) released guidance and model templates to help employers comply with the Retail Worker Safety Act.
Employees can report violations of the Retail Worker Safety Act through an online complaint form provided by the NYSDOL.
NYSDOL Guidance
The NYSDOL’s guidance clarifies some questions about covered employers under the act as well as translation and training requirements. One key point is that the act applies to employers with employees who work in the retail setting, even if they are not employed by a retail store and are not involved in selling retail goods. For example, a cleaning business with employees who clean retail stores is covered under the act, even though those employees are not employed by the store itself and do not participate in selling retail goods.
The guidance also discusses the act’s requirements for employees who identify a language other than English as their primary language. Covered employers must provide all retail employees with a copy of the workplace violence prevention policy and a workplace violence training template in English. Employees who identify a language other than English as their primary language must be provided with a translated copy only if the NYSDOL has provided a translation. If an employee’s primary language is not one of the languages for which the NYSDOL has provided a translation, an employer can provide an English version. Notably, employers are only required to provide a written template outlining the content of their workplace violence prevention training in the employee’s primary language, not a translated version of the interactive training itself.
Speaking of interactive, the guidance has clarified this requirement. For training to be considered “interactive” it requires an employee to provide input during the training and receive a response to the input the employee provides. “Digital training can be considered interactive,” the NYSDOL guidance states. In-person training is not required.
While this new guidance does provide additional insight on which employers are covered under the act, it does not include any information on how the law defines “retail” and what constitutes a “retail store.”
Model Programs
As promised, the NYSDOL has provided a model workplace violence prevention policy and training templates. The templates are currently only available in English, although it is anticipated that the NYSDOL will provide translated versions at a future date.
The template workplace violence prevention policy outlines the requirements of the act and provides optional sections for an incident reporting system and additional methods to prevent workplace violence. The template policy also provides general information on potential criminal penalties against anyone who assaults a retail worker and employers’ responsibilities under the federal Occupational Safety and Health Act.
The model training program template consists of four units that cover the requirements of the Retail Worker Safety Act, de-escalation tactics, emergency preparation, and active shooter events. To supplement the written template, the NYSDOL has also created four training videos that address these topics. The videos include multiple choice questions to confirm an employee’s understanding of the information presented.
Employee Resources
In addition to providing guidance on the act’s requirements and model templates, the NYSDOL has also provided avenues for employees to file complaints related to workplace violence. Employees who have either been the victim of workplace violence or alleged retaliation related to workplace violence may report this to the NYSDOL by email, phone, or an online complaint form. The form also provides an option for an employee to lodge a complaint against a covered employer if there is no workplace violence prevention policy or training program, or if they have not received the policy or training.
Next Steps
Now that the compliance date for the New York Retail Worker Safety Act has arrived, covered employers will be expected to meet the statutory requirements. The complaint system is active, and it should be anticipated that the New York Department of Labor will begin enforcement.
House Proposes Cutbacks to Clean Energy Tax Credits
On May 14, 2025, the House Ways and Means Committee approved its markup of H.Con.Res.14, 119th Cong., 2025 (House Bill), which includes proposed changes that would modify substantially the clean energy tax incentives expanded by the IRA. The House Rules Committee released a manager’s amendment to the House Bill on May 21, 2025 (Manager’s Amendment). On May 22, 2025, the House passed the combined legislation.
The House Bill, as amended, is the first major step in the budget reconciliation process and is expected to undergo significant changes in the Senate.
The House Bill includes:
Early sunsets for the credits for clean electricity production tax credit (Section 45Y), clean electricity investment tax credit (Section 48E), clean nuclear facilities (Section 45U) and clean hydrogen production (Section 45V);
Transferability is preserved for the Section 48E ITC and the Section 45Y PTC, although these credits now terminate for projects that begin construction more than 60 days after the date of enactment or are placed in service after Dec. 31, 2028; and
Substantial new restrictions based on foreign ownership or influence that could disqualify taxpayers from credit eligibility, and which may introduce uncertainty and compliance difficulties.
Taxpayers should evaluate how the proposed changes could affect planned projects, financing strategies, supply chain arrangements, and the potential for mitigating the proposals’ effects.
This GT Alert summarizes the key energy-related provisions in the final House Bill.
Proposed Terminations
The House Bill proposes to sunset the following credits on Dec. 31, 2025:
Section 25C – Energy Efficient Home Improvement Credit
Section 25D – Residential Clean Energy Credit
Section 25E – Previously-Owned Clean Vehicle Credit
Section 30C – Alternative Fuel Vehicle Refueling Property Credit
Section 30D – Clean Vehicle Credit
Section 45L – Energy Efficient Home Credit
Section 45W – Qualified Commercial Clean Vehicles Credit
The Manager’s Amendment does not modify these proposed termination dates.
Modified Phaseouts and Other Proposals
In addition to the 2025 sunsets, the House Bill proposes accelerated phaseouts and other changes to many of the IRA’s cornerstone credits.
Phaseouts / Other Proposals
Credit
House Bill
Manager’s Amendment
45U Zero-Emission Nuclear Power Production
Phasedown beginning after Dec. 31, 2028; fully terminated after Dec. 31, 2031
Eliminates phaseout; credit ends after Dec. 31, 2031
45V Clean Hydrogen Production
Terminated for facilities that begin construction after Dec. 31, 2025
No change
45X Advanced Manufacturing Production
Wind components ineligible for credits after Dec. 31. 2027
Other eligible components phased down beginning after Dec. 31, 2028; fully terminated after Dec. 31, 2031
No change
45Y Clean Electricity Production
Phasedown beginning for projects placed in service after Dec. 31, 2028; fully terminated for projects placed in service after Dec. 31, 2031
Eliminates phaseout; credit ends for projects beginning construction more than 60 days post-enactment or placed in service after Dec. 31, 2028; exceptions for (i) advanced nuclear facilities beginning construction on or before Dec. 31, 2028, and (ii) expansion of approved nuclear facilities provided the expansion begins on or before Dec. 31, 2028
No credit available for leased wind or solar systems that otherwise qualify for Section 25D credits
45Z Clean Fuel Production
Extended through Dec. 31, 2031; requires that feedstock be grown or produced in the U.S., Canada, or Mexico for fuel sold after Dec. 31, 2025; excludes land use changes from lifecycle greenhouse gas emissions
No change
48 Energy Investment Credit
New phaseout for geothermal heat pump property; fully terminated for geothermal heat pump property that begins construction after Dec. 31, 2031
No change
48E Clean Electricity Investment Credit
Phasedown beginning for projects placed in service after Dec. 31. 2028; fully terminated for projects placed in service after Dec. 31, 2031
Low-income bonus credit sunsets after Dec. 31, 2031
Eliminates phaseout; credit ends for qualified facility or energy storage technology beginning construction more than 60 days post-enactment or placed in service after Dec. 31, 2028; exceptions for advanced nuclear facilities beginning construction on or before Dec. 31, 2028
No credit available for leased wind or solar systems that otherwise qualify for Section 25D credits
The House Bill extends 100% bonus depreciation under Section 168(k) for property acquired and placed in service after Jan. 19, 2025, and before Jan. 1, 2030 (or 2031 for certain long-lead property). The Manager’s Amendment does not make any changes to this extension.
Neither the House Bill nor the Manager’s Amendment would accelerate the phaseout or termination of Section 45Q carbon capture credits.
Repeal of Credit Transferability
The House Bill would significantly curtail the ability to transfer credits under Section 6418.
Transferability Cutoff
Credit
House Bill
Manager’s Amendment
45Q Carbon Oxide Sequestration
Equipment beginning construction more than 2 years after enactment
No change
45U Zero-Emission Nuclear Power Production
Electricity produced and sold after Dec. 31, 2027
Preserves transferability through the full credit period, which extends to Dec. 31, 2031
45X Advanced Manufacturing Production
Components sold after Dec. 31, 2027
No change
45Y Clean Electricity Production
Facilities beginning construction more than 2 years after enactment
Preserves transferability, subject to the sunset of the credits for projects that begin construction more than 60 days after enactment, or that are placed in service after Dec. 31, 2028
45Z Clean Fuel Production
Fuels produced after Dec. 31, 2027
No change
48 Energy Investment Credit:
Geothermal Heat Pump Property
Property beginning construction more than 2 years after enactment
No change
48E Clean Electricity Investment Credit
Facilities beginning construction more than 2 years after enactment
Preserves transferability, subject to the sunset of the credits for projects that begin construction more than 60 days after enactment, or that are placed in service after Dec. 31, 2028
Restrictions on Prohibited Foreign Entities
The House Bill would disqualify taxpayers from claiming certain energy credits where there is foreign ownership, control, or involvement from “prohibited foreign entities.”
Key definitions:
Specified Foreign Entity: Includes foreign terrorist organizations, Chinese military companies, entities identified under U.S. national security laws, and foreign-controlled entities.
Foreign-Influenced Entity: Includes entities with specified foreign entity ownership ≥10% (or ≥25% in the aggregate), significant debt holdings, board appointment rights, or substantial payments made to foreign entities.
Material Assistance: Includes any component, subcomponent, or critical mineral in an energy property that is extracted, processed, recycled, manufactured, or assembled by a prohibited foreign entity, or any design based on such entity’s intellectual property. Limited exceptions apply for non-unique parts or materials not predominantly produced by prohibited foreign entities.
The House Bill uses the above terms to impose restrictions on eligibility for various credits. The Manager’s Amendment does not alter the House Bill’s definition of prohibited foreign entities, specified foreign entities, foreign-influenced entities, or material assistance.
Taxpayers that are controlled by, or make certain payments to, a specified foreign entity may be disqualified from claiming credits in the first taxable year after enactment. Foreign-influenced entities would become ineligible two years after the date of enactment. In some cases, making a payment to a prohibited foreign entity could trigger full recapture of previously claimed credits.
The Manager’s Amendment does, however, modify the effective date of restrictions under Sections 48E and 45Y related to material assistance from prohibited foreign entities. Under the House Bill, qualified facilities and energy storage property that received material assistance from a prohibited foreign entity were disqualified if construction began more than one year after the date of enactment. The Manager’s Amendment replaces this floating one-year deadline with a fixed date: Dec. 31, 2025.
One Big Beautiful Bill Act Has Many Impacts for Nonprofit Health Systems
The US House of Representatives passed its One Big Beautiful Bill Act on May 22, 2025 (the Act), but nonprofit health systems may not find much about the Act that’s attractive. If passed by the US Senate and signed into law, the Act would threaten already thin operating margins at nonprofit hospitals and health systems by expanding the executive compensation excise tax, taxing parking and similar employee benefits, potentially altering funds flow arrangements for academic medical centers, and increasing demand for financial assistance through sweeping Medicaid and Health Insurance Marketplace changes.
In Depth
Nonprofit Hospitals Face Challenging Financial Environment
Nonprofit hospitals have made slow but steady progress in recovering from the financial hangover that COVID-19 induced, exacerbated by increased contract labor expenses and lingering inflation. Fitch Ratings determined that even with this improvement, the median operating margin for nonprofit hospitals was only 1.2% in 2024. Any increase in operating expenses or decrease in reimbursement that results from the Act may push many nonprofit hospitals across the thin line that separates profitability from financial distress.
The Act May Increase Nonprofit Hospital Operating Expenses
The Act would increase nonprofit hospital operating expenses in two primary ways:
Expanding the executive compensation excise tax.
Taxing parking and similar employee benefits.
As part of the Tax Cuts and Jobs Act of 2017 (TCJA), Congress imposed a 21% excise tax on compensation paid by charitable organizations exceeding $1 million and on certain excess parachute payments. The excise tax applies to the organization’s top five highest compensated employees during both the current tax year and any prior tax year beginning after December 31, 2016. The excise tax does not apply to compensation provided in exchange for medical services.
The One Big Beautiful Bill Act would significantly expand the scope of the excise tax by applying it to all employees of a charitable organization who receive compensation exceeding $1 million or an excess parachute payment. The Act would not eliminate the medical services compensation exception, but the reach and financial consequences of the expanded excise tax could be significant for nonprofit hospitals and health systems that compete with privately held or publicly traded organizations for executive or administrative talent.
The Act also threatens to increase nonprofit hospitals’ operating expenses by resurrecting a tax on parking and other qualified transportation fringe benefits made available to employees. Congress first included this so-called “parking tax” as part of the TCJA. The tax requires charitable organizations to treat the amount of qualified parking and transportation fringe benefits as unrelated business income for federal tax purposes. The complexities of taxing a business expense as income led to widespread criticism of the parking tax, and Congress retroactively repealed the tax in 2019.
The Act May Disrupt Funds Flow Arrangements, Charitable Conditions
The Act contains other provisions that may have a direct or indirect impact on nonprofit health system operations or funds flow, such as:
Increasing the tax on net investment of colleges and universities from 1.4% up to 21% (based on endowment value per student). The magnitude of this tax may result in university sponsors of academic medical systems seeking to renegotiate funds flow arrangements to recapture a portion of revenue lost to the tax.
Increasing the excise tax on private foundations up to 10% (based on assets of $5 billion). This tax may decrease the amount of funding that private foundations are willing to contribute to nonprofit health systems.
Medicaid, Health Insurance Marketplace Changes May Increase Demand for Financial Assistance
The Act contains sweeping changes to Medicaid and Health Insurance Marketplaces.. The Congressional Budget Office has not conducted a full analysis of the passed bill but estimated an increase in the number of uninsured by each committee proposal, with 7.6 million uninsured as a result of the Medicaid provisions and, at a minimum, an additional 2.1 million individuals under the Marketplace reforms by 2034. As a result, nonprofit hospitals and health systems can expect to bear the financial burden of caring for those displaced by these cuts.
What’s Not in the Act and What May Come Next
Earlier versions of the Act contained provisions that likely would have resulted in decreased revenue or increased operating expenses for nonprofit hospitals and health systems. For example, the version of the Act that passed the House Ways and Means Committee would have automatically taxed name and logo revenue as unrelated business income.
The Act now moves to the Senate, where notable Republicans, including Senator Rand Paul (R-KY) and Senator Ron Johnson (R-WI) have already called for significant changes to the Act. The goal remains to finish and pass the reconciliation package by July 4, 2025.
May 2025 PFAS Legislative Developments May Legislation Tracking (May 1 – May 31)
Current Trends in Legislation – May 2025
Federal Legislature
One new bill was introduced, which seeks to accelerate the development of PFAS-free equipment for firefighters.
State Legislature
Eighteen bills were introduced across eight states.
Topics include: Health screenings; MCLs in drinking water; comprehensive PFAS bans.
State Regulations
ME 06-096 Ch. 90 was published 5/7/2025. This establishes criteria for currently unavoidable uses of intentionally added PFAS in products and implement the sales prohibitions and notification requirements for products containing intentionally added PFAS but determined to be a currently unavoidable use pursuant to the amended 38 M.R.S. § 1614.
New Bills This Period
PFAS Legislation
Federal
One new bill introduced.
State
Eighteen bills introduced.
Two in ME
One in MA
Four in MI
Two in MN
Three in NJ
Four in NY
One in OH
One in PA
Signed into Law
•HB 167 (NH) signed into law. The bill prohibits the sale of ski, boat, and board waxes that contain intentionally added PFAS.• SB 91 (OR) signed into law. The bill prohibits fire departments from using PFAS firefighting foam in Oregon.• SB 5033 (WA) signed into law. The bill requires local governments to implement biosolid management protocol relating to sludge, with attention to the presence of PFAS.• SP 419 (ME) signed into law. The bill provides certain exemptions from PFAS restrictions, specifically clarifying that the exemption does not apply to any textile article or refrigerant that is included in or as a component part of such products. The exemption applies to certain products containing PFAS, including motor vehicle equipment, off-highway vehicles, specialty motor vehicles and personal assistive mobility devices.• SP 66 (ME) signed into law. This bill requires the Department of Agriculture, Conservation and Forestry to establish the PFAS Response Program for the purpose of abating, cleaning up and mitigating threats and hazards posed by PFAS that affect agricultural producers in the State and the food supply; providing support to affected commercial farms; supporting critical PFAS research; and allowing for the department to strategically and effectively respond to PFAS concerns and issues as they arise.
New York City’s Climate-Focused Local Law 97 Upheld By New York Court of Appeals
On May 22, 2025, the New York Court of Appeals–the highest court in New York State–unanimously upheld New York City’s Local Law 97 against a challenge brought by certain property owners. This law–Local Law 97–is “aimed at reducing greenhouse gas emissions and transitioning to clean energy in order to combat climate change,” and does so by imposing strict restrictions on greenhouse gas emissions for large buildings (25,000 square feet or larger), and assessing penalties for non-compliance. While the trial court had dismissed the lawsuit challenging the law, the intermediate appellate court had reinstated the challenge solely on the grounds of “field preemption,” a legal position which has now been decisively rejected by the courts of the State of New York.
According to the legal doctrine of field preemption, local laws are preempted when a state has indicated its “intent to occupy a particular field”; here, the challengers argued that a certain New York State climate law meant that “the State [of New York] has preempted the field of regulating greenhouse gas emissions.” In rejecting that contention, the Court of Appeals held “that the legislature has neither expressed nor implied any intent to preempt the field of regulating greenhouse gas emissions,” and, indeed, there was no “inten[t] to prevent localities from taking measures that would help the State [of New York] achieve its overall emissions goals.”
While the legal ruling here is closely tied to the specific language at issue in the varying state and local laws, the overall decision is highly significant–not only does New York City’s Local Law 97 survive (an aggressive effort to counter climate change), but the New York Court of Appeals has effectively blessed similar efforts by other localities in New York State in the future. And this decision could encourage similar efforts in other states, providing further impetus to laws seeking to mitigate the effects of climate change.
New York City isn’t preempted by state law from regulating greenhouse gas emissions from large buildings, the state’s highest court said Thursday. The state’s climate law “recognizes that local government plays an important role in this area” and doesn’t “expressly prohibit local regulation of emissions,” Court of Appeals Associate Judge Anthony Cannataro wrote for the unanimous court. The ruling reverses an appellate court order reinstating and remanding to the trial court the preemption claims brought by the board presidents of two co-ops in Queens and the owner of a mixed-use building in Manhattan. The plaintiffs argued the legislature intended for the state’s Climate Leadership and Community Protection Act—which aims to reduce greenhouse gas emissions across the state by 40%—to preempt New York City law that sets limits on building emissions and imposes penalties for exceeding those limits.
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DOD RFI Seeks Information on Certain Chemicals Undergoing TSCA Section 6 Risk Evaluation
On May 27, 2025, the U.S. Department of Defense (DOD) issued a request for information (RFI) to gather information to identify and assess critical applications for DOD and the defense industrial base (DIB) that necessitate the use of existing chemicals undergoing the U.S. Environmental Protection Agency’s (EPA) Toxic Substances Control Act (TSCA) Section 6 risk evaluation process. The RFI states that it will help the Office of the Assistant Secretary of Defense for Energy, Installations, and Environment (OASD (EI&E)) Chemical and Material Risk Management Program (CMRMP) better understand the use of TSCA existing chemicals in products leading into the defense supply chain. The RFI is focused on receiving information related to the following existing chemicals:
1,3-Butadiene (Chemical Abstracts Service Registry Number® (CAS RN®)106-99-0);
1,1-Dichloroethane (CAS RN 75-34-3);
1,2-Dichloroethane (CAS RN 107-06-2);
Butyl benzyl phthalate (1,2-benzene-dicarboxylic acid, 1-butyl 2(phenylmethyl) ester) (BBP) (CAS RN 85-68-7);
Dibutyl phthalate (1,2-benzene- dicarboxylic acid, 1,2- dibutyl ester) (DBP) (CAS RN 84-74-2);
Dicyclohexyl phthalate (DCHP) (CAS RN 84-61-7);
Di-ethylhexyl phthalate (1,2-benzene-dicarboxylic acid, 1,2-bis(2-ethylhexyl) ester) (DEHP) (CAS RN 117-81-7);
Di-isobutyl phthalate (1,2-benzene-dicarboxylic acid, 1,2-bis-(2methylpropyl) ester) (DIBP) (CAS RN 84-69-5);
Di-isodecyl phthalate (1,2-benzenedicarboxylic acid, 1,2-diisodecyl ester) (DIDP) (CAS RNs 26761-40-0; 68515-49-1);
Diisononyl phthalate (1,2-benzenedicarboxylic acid, 1,2-diisononyl ester) (DINP) (CAS RNs 28553-12-0; 68515-48-0); and
Octamethylcyclotetra-siloxane (D4) (CAS RN 556-67-2).
DOD seeks to understand better applications that require the use of these chemicals and the criticality of these chemicals for industry and supply. The RFI notes that DOD will continue to issue RFIs to consider additional TSCA chemicals. Responses are due June 20, 2025.
Recent Nuclear Executive Orders to Accelerate US Nuclear Renaissance
The four (4) nuclear energy Executive Orders issued on Friday, May 23, 2025 (Nuclear EOs), set out a 25-year whole-of-government plan for further development and successful deployment of US nuclear technology—both domestically and internationally, and addressing the full scope of the nuclear industry (licensing, fuel life cycle, reactor technology, supply chain, workforce, spent fuel and waste disposal, financing and international agreements)—ultimately culminating in 400 GW of US nuclear energy capacity by 2050.
The volume of required actions illustrates the Trump Administration’s drive to launch a US nuclear renaissance. Within the first 90 days, the Nuclear EOs address establishing domestic fuel supply, regulatory overhauls, fast-tracking reactor deployments utilizing Department of Defense (DOD) and Department of Energy (DOE) jurisdiction, authorizing financial support via US Export-Import Bank (US Ex-Im), agency finance institutions and multilateral banks, and employing diplomatic tools to promote the US nuclear industry. This article highlights key required activities on a year-by-year basis, along with supporting activities to be undertaken in parallel, followed by a comprehensive timeline of all activities and achievements required by the Nuclear EOs.
Required Activities for 2025
The Nuclear EOs mandate the following key activities and achievements for the remainder of 2025:
designating one or more sites owned or controlled by DOE in the United States for deployment of advanced nuclear reactor technology;
utilizing the Defense Production Act and developing a plan to accelerate the development of low enriched uranium (LEU) and high assay low enriched uranium (HALEU) capabilities and to address management of spent fuel;
reforming DOE’s National Environmental Policy Act (NEPA) compliance regime, including determining DOE functions that should not be subject to NEPA;
expediting intergovernmental agreements on nuclear energy and the fuel supply chain with potential export countries;
promoting adherence to the Convention on Supplemental Compensation for Nuclear Damage (CSC);
directing all executive departments and agencies that provide educational grants to prioritize investment in nuclear engineering and other nuclear energy-related careers; and
leveraging agency finance capabilities toward providing financing for deployment of American nuclear technology.
Required Activities for 2026
The Nuclear EOs mandate the following key activities and achievements for calendar year 2026:
creating a comprehensive report relating to safe management of spent fuel, including storage, transport, recycling and reprocessing capabilities, and permanent storage;
wholesale review and revision by the Nuclear Regulatory Commission (NRC) of its regulations and guidance, and issuance of final rules in respect of the same, including a maximum 18-month final decision deadline for applications to construct and operate new reactors and a maximum 12-month final decision deadline for applications to extend operating licenses for existing reactors; and
submitting recommendations for legislative proposals and regulatory actions regarding placement of advanced nuclear reactors on military installations.
Required Activities from 2027 through 2050
The Nuclear EOs mandate the following key activities and achievements within the years 2027 through 2050:
November 2027: Beginning operation of an advanced nuclear reactor at a DOE-owned or controlled site for the purpose of powering AI infrastructure, other critical or national security needs or on-site infrastructure;
September 2028: Beginning operation of a nuclear reactor at a domestic military base or installation;
January 2029: Completing negotiations of at least 20 new 123 Agreements;
within calendar year 2030: Facilitating 5 GW of uprates to existing reactors and commencement of construction of at least 10 new, large reactors with complete designs;
May 2035: Completing re-negotiation of all 123 Agreements originally set to expire by May 2035; and
within calendar year 2050: Achieving 400 GW of US nuclear energy capacity in operation.
Additional Parallel Activities
In addition to the activities noted above, the Nuclear EOs also require other substantive activities to be undertaken by the NRC, DOE, DOD and Department of State (DOS) on an ongoing basis. We have included another chart below, following the detailed, comprehensive timeline, that lists these parallel activities. These activities range from right-sizing headcounts to continuing regulatory overhauls (particularly within the NRC, as well as environmental regulatory regimes), developing a HALEU fuel bank, expediting decisions on technology transfer export authorization requests, prioritizing issuance of security clearances and supporting diplomatic efforts via 123 Agreements.
Conclusion
The scope and volume of required activities and multi-agency effort under these Nuclear EOs underscore the priority the administration is placing on the accelerated development and deployment of US nuclear technology. As mentioned, we have set out below a comprehensive timeline and list of all activities required by the Nuclear EOs, on a year-by-year and agency-by-agency basis. Hunton plans to issue a series of articles providing more in-depth review and discussion of impacts to the US nuclear industry. We will also continue to monitor any further nuclear energy-related Executive Orders and impacts from pending and newly passed legislation, including impacts to currently available tax credits for the nuclear industry under proposed amendments to the Inflation Reduction Act.
Timeline of Required Activities and Achievements for Calendar Year 2025
By June 2025
DOE to utilize authority delegated by President under the Defense Production Act to seek voluntary agreements with domestic nuclear energy companies for cooperative procurement of low-enriched uranium (LEU) and high assay, low-enriched uranium (HALEU), prioritizing agreements with companies that have achieved objective milestones (e.g., DOE-approved conceptual safety design reports, ability to privately finance their fuel, demonstrated technology capability), including:
consultation on management of spent nuclear fuel, including recycling and reprocessing
establishing consortia and plans of action to ensure availability of nuclear fuel supply chain, with DOE-provided procurement support, forward contracts or guarantees to consortia to ensure offtake for newly established domestic fuel supply
DOE to reform its rules governing compliance with National Environmental Policy Act (NEPA), including determining which DOE functions are not subject to NEPA
By July 2025
DOE to issue guidance on what counts as a ‘qualified test reactor’
By August 2025
DOE to:
revise regulations, guidance, procedures and practices of DOE, the National Labs and other entities under DOE’s jurisdiction to significantly expedite review, approval and deployment of advanced reactors under DOE’s jurisdiction
designate one or more sites owned/controlled by DOE in the US for use and deployment of advanced nuclear reactor technology
identify all useful uranium or plutonium material within DOE inventories that could be recycled or processed into nuclear fuel for reactors in the US
update DOE’s excess uranium management policy, prioritizing contracting for development of fuel fabrication facilities that demonstrate feasibility to supply fuel to qualified test reactors or pilot program reactors within three years
Director of Office of Science and Technology Policy and Assistant to President for Economic Policy to determine a strategy to address:
optimizing value of US International Development Finance Corporation (DFC) to provide equity and other financing for American nuclear technology
expanding US Trade & Development Agency (USTDA) grant financing to US nuclear technology pilots, fuel supplies, project preparation to recently graduated high income economies of national strategic interest
leveraging US Ex-Im and other relevant agencies to increase financing for projects utilizing US civil nuclear technology exports
holding trade missions and reverse trade missions, leveraging other trade promotion tools to remove trade barriers and increase market competitiveness of the US nuclear industry
achieving competitive parity in the global market for high-level advocacy and representation from the Federal Government to foreign governments of potential import countries on nuclear-related bilateral issues, focusing on countries with highest probability of nuclear deployment within next four years
Treasury to determine a strategy that:
leverages US participation in multilateral development banks to support client country access to financial and technical assistance for generation and distribution of nuclear energy and reliable fuel supply
supports assistance at relevant institutions to make financial support available on competitive terms, strengthen capacity to assess, implement and evaluate nuclear energy projects, and support adoption of nuclear energy technologies and fuel supply chains of same or greater quality standards of the US or countries allied with the US
Department of State (DOS) to implement program to enhance global competitiveness of American nuclear suppliers, investors and lenders to compete for nuclear projects around the globe, including:
expediting conclusion of intergovernmental agreements on nuclear energy and fuel supply chain with potential export countries
promoting broad adherence to the Convention on Supplementary Compensation for Nuclear Damage (CSC)
identifying statutory and regulatory burdens on exports of American nuclear technology, fuel supplies, equipment and services not addressed by Executive Orders and recommend remedial action
encouraging favorable decisions by potential import countries on use of American nuclear technology, fuel supplies, equipment and services
By September 2025
DOE to develop a plan to expand domestic uranium conversion capacity and enrichment capabilities to meet projected needs for LEU, highly enriched uranium (HEU) and HALEU
Department of Labor and Department of Education to increase participation in nuclear energy-related Registered Apprenticeships and Career and Technical Education programs
All executive departments and agencies that provide educational grants to consider nuclear engineering and other nuclear energy-related careers as priority area for investment
DOE to take steps to increase access to R&D infrastructure, workforce and expertise at DOE National Labs for (i) college and university students studying nuclear engineering and other nuclear energy-related fields and (ii) DOD personnel affiliated with nuclear energy programs
By November 2025
DOE to coordinate with Small Business Administration (SBA) to prioritize funding for qualified advanced nuclear technologies through grants, loans, investment capital, funding opportunities, etc., with priority to companies demonstrating largest degrees of design and technological maturity, financial backing and potential for near-term deployment
Timeline of Required Activities and Achievements for Calendar Year 2026
By January 2026
DOE to prepare a comprehensive report, providing (among other aspects):
recommended national policy on spent nuclear fuel and high level waste, development and deployment of advanced fuel cycle capabilities, and legislative changes needed to achieve these goals
program (including required legislation) to develop methods, technologies to transport used and unused advanced nuclear fuels and advanced nuclear reactors in safe, secure and environmentally sound manner
recommendations for permanent disposal of recycling and reprocessing waste, and for evaluating the same for isotopes of value to national security, or medical, industrial or scientific sectors prior to disposal
reevaluation of current and existing nuclear reprocessing, separation and storage facilities slated for decommissioning with potential value for fuel cycle and national security purposes if continued or increased
DOD, in coordination with DOE, to prepare and submit to Assistant to the President for National Security Affairs, recommendations for legislative proposals and regulatory actions regarding the distribution, operation, replacement and removal of advanced nuclear reactors and spent nuclear fuel on military installations
By February 2026
Nuclear Regulatory Commission (NRC) to complete wholesale review and revision of regulations and guidance, and issue a notice of proposed rulemaking, including:
maximum 18-month deadline for final decision on application to construct and operate a new reactor of any type
maximum 12-month deadline for final decision on application to extend operating license of existing reactor of any type
By July 2026
DOE to create a pilot program for reactor construction and operation outside the National Labs, and approve at least three reactors with the goal of achieving criticality for each by July 4, 2026
By November 2026
NRC to issue final rules and guidance to conclude its regulatory revision process
Timeline of Required Activities and Achievements for Calendar Years 2027 through 2050
By November 2027
DOE to begin operating an advanced nuclear reactor, following siting, approval and authorization of the design, construction and operation of privately funded advanced nuclear reactor technologies at DOE-owned or controlled sites for purpose of powering AI infrastructure, other critical or national security needs, supply chain items or on-site infrastructure
By September 2028
DOD to begin operating a nuclear reactor at a domestic military base or installation by September 30, 2028
DOE to provide technical advice on design, construction and operation of any advanced nuclear reactor on a military installation
DOS to provide advice on any international legal requirements or any needed modifications to international agreements or arrangements
DOD to prepare and submit recommendations for legislative and regulatory actions regarding distribution, operation, replacement and removal of advanced nuclear reactors and spent nuclear fuel on military installations
By January 2029
At least 20 new 123 Agreements negotiated
Within Year 2030
Facilitate 5 GW uprates to existing reactors and have ten new, large reactors with complete designs under construction
By May 2035
Completed re-negotiation of all 123 Agreements originally set to expire by May 2035
Within Year 2050
400 GW of US nuclear energy capacity in operation
Additional Required Parallel Activities
NRC
In consultation with the Department of Government Efficiency (DOGE), reorganize to promote expedited processing of license applications and adoption of innovative technology by undertaking reductions-in-force (although certain functions may increase in size, including those relating to new reactor licensing)
Create a dedicated team of at least 20 officials to draft new regulations
Reduce personnel and functions of Advisory Committee on Reactor Safeguards (ACRS) to minimum necessary to fulfill ACRS’ statutory obligations, with review of permitting and licensing to focus on issues that are truly novel or noteworthy
Adopt science-based radiation limits; reconsider reliance on the linear no-threshold (LNT) model for radiation exposure and “as low as reasonably achievable” standard
Revise NRC regulations governing NRC’s compliance with NEPA
Establish expedited pathway to approve reactor designs that DOD or DOE have tested and have demonstrated ability to function safely, focusing solely on risks that may arise from new applications permitted by NRC licensure
Establish process for high-volume licensing of microreactors and modular reactors
Establish stringent thresholds for circumstances in which NRC may demand changes to reactor design once construction is underway
Revise reactor oversight process, reactor security rules and requirements to reduce unnecessary burdens and be responsive to credible risks
Adopt revised, determinate and data-backed thresholds to ensure reactor safety assessments focus on credible, realistic risks
Reconsider regulations governing the time period of effectiveness of a renewed license, extending as appropriate based on available technological and safety data
Streamline public hearing process
DOE
Each time a substantially complete application for a qualified test reactor is submitted, establish a team to deconflict, oppose or approve the application and provide assistance to the applicant to ensure expeditious processing
Prioritize qualified test reactor projects for processing
Use all available authorities to eliminate or expedite DOE environmental reviews for authorizations, permits, approvals, leases and any other activity requested by an applicant or potential applicant, including determining which DOE functions are not subject to NEPA
Halt the surplus plutonium dilute and dispose program (except with respect to DOE’s legal obligations to South Carolina) and replace with a program to process surplus plutonium to make it available for the fabrication of fuel for advanced nuclear technologies
Initiate process for designating AI data centers that are located at or operated in coordination with DOE facilities and related electrical infrastructure as critical defense facilities
Release at least 20 metric tons of HALEU into a fuel bank for use by any private sector project authorized to construct and operate at a DOE-owned or controlled site and that is regulated by DOE for the purpose of powering AI and other infrastructure
Implement plans to ensure long-term supply of enriched uranium for continued operation of facilities powering AI data centers on DOE sites, including domestic fuel fabrication and supply chains to reduce reliance on foreign fuel sources
Coordinate with DOD to assess feasibility of restarting or repurposing closed nuclear power plants as energy hubs for military microgrid support, focusing on installations with insufficient power resilience or grid fragility
Approve or deny technology transfer export authorization requests within 30 days of receipt of a complete application and completion by DOE of required accompanying analysis (subject to extensions)
DOD
Establish program for utilization of nuclear energy at military installations for both installation energy and operational energy
DOE and DOD, together
Site, approve and authorize the design, construction and operation of privately-funded nuclear fuel recycling, reprocessing and reactor fuel fabrication technologies at sites controlled by DOE or DOD for purpose of fabricating fuel forms for use in national security reactors, commercial power reactor, and non-power research reactors
With respect to NEPA, consult with Chairman of Council on Environmental Quality regarding:
applying DOE and DOD categorical exclusions, adopting other executive departments and agencies’ exclusions and establishing new categorical exclusions for construction of advanced nuclear reactor technologies on Federal sites within the US for purposes of implementing the Nuclear EOs
utilizing other agencies’ emergency and other permitting procedures for the siting and construction of advanced nuclear reactor technologies
developing alternative arrangements for compliance with NEPA in emergency situations
Prioritize issuance of DOE and DOD security clearances to support rapid distribution and use of nuclear energy and fuel cycle technologies
Department of State
Fully leverage resources of the Federal Government to promote the US nuclear industry in development of commercial civil nuclear projects globally
Lead diplomatic engagement and negotiations for new 123 Agreements
Aggressively renegotiate 123 Agreements set to expire by May 2035
Lead engagement with Congress regarding progress and reporting of negotiating 123 Agreements
Oregon Expands Tax Court Access: HB 2119 Grants Associational Standing to Membership Organizations
On May 28, 2025, Oregon Gov. Tina Kotek signed HB 2119 into law. Having received strong support in the Oregon legislature, the law allows for associational standing in state tax cases—that is, membership organizations now have statutory standing to seek declaratory relief on their members’ behalf in the Oregon Tax Court. Associational standing may be granted for matters involving any number of state and local tax issues, including personal income, property, corporate excise, etc.
HB 2119 codifies Oregon’s requirements for associational standing, which mirror the long-standing federal three-prong test established in the U.S. Supreme Court case Hunt v. Wash. State Apple Advert. Comm’n.1 To have associational standing there must be an adverse impact on at least one of the association’s members, the issue must be germane to the association’s purpose, and the matter must not require the direct participation of the impacted member or members.
HB 2119 is relatively simple, but it brings a significant change to Oregon. Under the prior rule, only affected taxpayers could challenge a tax law for their individual harm and the resolution of a single issue could take more than a decade. Once a challenge reached the General Division of the Oregon Tax Court, the petitioner would also be required to pay the tax they were disputing. This process created an impediment for businesses and individuals to bring otherwise worthy tax challenges. Associational standing may help members share the burdens of litigation and speed up the resolution of tax questions and reduce burdens on the court system.
The passage and implementation of HB 2119 follow several years of advocacy by organizations such as Oregon Business and Industry and the Smart Growth Coalition. The new law may help taxpayers address and seek clarity on Oregon tax issues.
1 432 U.S. 333 (1977).
Update on DHS Efforts to Terminate TPS and Parole Status for Various Immigrant Groups
The U.S. Department of Homeland Security (DHS) has been actively working to terminate Temporary Protected Status (TPS) and Parole status for several immigrant groups, impacting their work authorization and residency status. This update aims to provide human resource professionals with the latest developments and implications for their workforce. Given the whirlwind of activity, employers must constantly monitor the news and the status of their employees on temporary work authorization so they can be sure to not employ individuals who have lost work authorization.
Temporary Protected Status (TPS)
Venezuela: The situation for Venezuelans under TPS has been complex, in part because there were multiple grants of TPS status to Venezuelan nationals at different times with different expiration dates. On May 19, 2025, the U.S. Supreme Court temporarily paused a federal court ruling that had blocked the Trump administration’s attempt to revoke TPS for Venezuelans. The current legal status for this group is murky. Venezuelans under the 2021 TPS designation can remain in the U.S. and retain their work authorization until September 10, 2025.
Afghanistan: DHS announced the termination of TPS for Afghanistan, effective July 2025. This decision affects approximately 12,000 Afghans who will lose their protection from deportation and work authorization.
Parole Programs
CHNV Parole Program: The Supreme Court recently allowed the Trump administration to terminate the CHNV Parole Program, which had provided temporary protection to over 530,000 individuals from Cuba, Haiti, Nicaragua, and Venezuela. This decision means that these individuals are now at risk of deportation and will lose their work authorization. DHS has emphasized that this move is part of a broader effort to enforce immigration laws and prioritize public safety.
Implications for Employers
These changes have significant implications for employers and HR professionals. The termination of TPS and Parole status means that affected employees will lose their work authorization, potentially leading to workforce disruptions. Employers should:
Review Form I-9s: Identify employees who may be affected by these changes and verify their current work authorization status.
Communicate with Affected Employees: Provide clear communication about the changes and determine if those individuals losing one of these immigration statuses have alternative opportunities to retain work authorization.
Plan for Workforce Adjustments: Develop contingency plans to address potential workforce shortages and maintain business continuity.
Get Legal Advice: Work with immigration attorneys to navigate the complexities of these changes and ensure compliance with the rapidly evolving status of the law.
DHS’s efforts to terminate TPS and Parole status for various immigrant groups are creating significant challenges for both the affected individuals and their employers. The legal landscape is literally changing daily. Staying informed and proactive in addressing these changes will be crucial for employers in managing their workforce effectively.
Senator Tillis Introduced a Bill Taxing Proceeds of Litigation Financing Agreements
Senator Thom Tillis introduced a bill (called the “Tackling Predatory Litigation Funding Act”) that would impose additional significant taxes on litigation funding investments. Rep. Kevin Hern (R-OH) introduced a similar bill in the House of Representatives. The bill would apply to taxable years beginning after December 31, 2025, which could include future payments related to existing arrangements.
The following is a summary discussing the key points of such proposed legislation.
General Rule: A tax equal to the highest individual rate plus 3.8% (37% + 3.8%, or 40.8% under current law) would be imposed on any qualified litigation proceeds received by a covered party.
Covered Party: A covered party for these purposes includes any third party to a civil action which receives funds pursuant to a litigation financing agreement and is not an attorney representing a party to such civil action. If the covered party is a partnership, S-corporation or other pass-thru entity, the tax would be imposed at the entity level. If a U.S. corporation is a covered party receiving qualified litigation proceeds, it would be subject to a 40.8% in lieu of the normal 21% tax. The tax also applies to tax-exempt U.S. investors and non-U.S. investors, including investors described in section 892 of the U.S. Internal Revenue Code. The tax apparently applies even if the non-U.S. investor has no connection to the United States, although we are unsure whether this was intended. There is no apparent “treaty override” so investors that benefit from a tax treaty with the United States may be able to rely on the treaty.
Qualified Litigation Proceeds: Qualified litigation proceeds mean, with respect to any taxable year, an amount equal to the realized gains, net income or other profit received by a covered party during the taxable year which is derived from, or pursuant to, any litigation financing arrangement. These gains, income or profit are not reduced by any ordinary or capital losses, which could include losses from another litigation funding investment. This definition is not limited to U.S. source litigation proceeds, so it could include proceeds from non-U.S. litigation funding investments.
Litigation Financing Agreement: A litigation financing agreement is with respect to any civil action, administrative proceeding, claim or cause of action (collectively, a “civil action”), a written agreement (A) (1) where a third party agrees to provide funds to one of the named parties or a law firm affiliated with the civil action and (2) which creates a direct or collaterized interest in the proceeds of such civil action which is based, in whole or part, on a funding-based obligation to the civil action, the appearing counsel, any contractual co-counsel or the law firm of such counsel or co-counsel and (B) that is executed with any attorney representing a party of such civil action, any co-counsel in the litigation with a contingent fee interest in the representation, any third party that has a collateral based interest in the contingency fees of the counsel or co-counsel which is related to the fees derived from representing such party or any named party in the civil action. This term can also include any agreement which, as determined by the Secretary of the Treasury, is substantially similar. We believe this definition will apply to virtually all litigation funding agreements regardless of the form of the agreement (e.g., loan, option, forward, swap etc.). For purposes of these rules, the term “civil action” may include more than one civil action.
Exceptions: Litigation funding agreement does not include: (1) any agreement under which the total amount of funds provided with respect to an individual civil action is less than $10,000, (2) any agreement under which the third party providing funds has a right to receive proceeds from the agreement that are limited to (x) repayment of principal on a loan, (y) repayment of principal plus interest as long as the interest does not exceed the greater of 7% or a rate equal to twice the average annual yield on a 30 year U.S. Treasury security or (z) reimbursement of attorney’s fees, or (3) the third party providing the funding bears a relationship as described in section 267(b) to the named party (e.g. generally includes two corporations that are members of the same controlled group or two entities that have 50% ownership overlap). We believe that these exceptions will be of only very limited use.
Withholding: The parties having control, receipt or custody of the proceeds from a civil action with respect to which such person has entered into a litigation financing agreement must withhold from such proceeds a tax equal to 50% of the applicable percentage (which would be a withholding rate of 20.4% under current law) of any payments which are required to be paid under such agreement. This withholding amount is based on any payments required to be made, which could result in over-withholding because the withheld amount is not reduced by the original amount funded. This withholding obligation appears to apply to any party in the world, even if the party has no connection to the U.S. and is making a payment to another non-U.S. person in respect of litigation that is outside of the United States. We do not know whether this extraordinarily broad scope was intended.