What’s Going on in Washington?
COVID-19 Vaccine Mandates Paused—For Now
Earlier this year President Biden issued two vaccine mandates for employers that would affect contractors. The first was a mandate covering federal contractors while the second covered all employers with 100 or more employees. As we expected, these policies were met with challenges in court almost immediately. It was not long before injunctions were issued in both cases, pausing the mandates while they work their way through the courts. We don’t know exactly when these cases will be resolved, but for the time being, employers are not legally required to ensure their employees are vaccinated.
Build Back Better
What would Build Back Better (BBB) mean for contractors? I’m glad you asked. The House-passed version included several contractor priorities, like the extension and expansion of all major energy efficiency tax incentives, the HOPE4HOMES energy rebate and training program, as well as additional money for HVACR improvements in schools. This version also included a change to energy efficiency tax incentives that would require the technicians installing equipment to be paid a prevailing wage. Regardless, though, there is roughly $320 billion included in the House passed BBB legislation for energy efficiency improvements which would undoubtedly drive business for contractors.
Looking ahead, no one knows exactly what the final bill will look like, or how many of those contractor priorities will be included. Moreover, we aren’t exactly sure how this all would be paid for. There have been a number of tax increases discussed, including, but not limited to the following: limiting the Small Business Deduction (IRS Section 199A), raising the corporate tax rate from 21%, raising the top income tax rate on individually and family-owned businesses from 37% to 39.6%, expanding the estate tax’s reach, increasing the top capital-gains tax rate, and imposing the 3.8% tax (NIIT, SECA) on all business income earned by S corporations partnerships and LLCs. Other items that lawmakers have considered including in BBB which could raise operating costs for contractors include enacting elements of the Protecting the Right to Organize (PRO) Act, mandating that employers provide paid sick leave and retirement accounts, and establishing a complicated and inflexible new federal-government-run family and medical paid leave program.
At the time of writing this, there is no clear path forward for the passage of BBB. Since the House of Representatives passed its $2.2 trillion version of the bill in mid-November, there have been no substantive developments. It now must pass the Senate, where Democrats hold a 50-50 majority with the Vice President’s tie-breaking vote. As such, unanimous party support is needed to pass the bill. Senator Joe Manchin (D-WV) has expressed serious concerns about the price tag of the bill, as well as how it will be paid for. It has been reported that he is not willing to go over $1.5 trillion in total spending on BBB and has shown no signs that he’s willing to move off this number. This means there’s a $700 billion difference between what the House passed, and what the price tag needs to be to have a realistic shot at being made law. Majority Leader Schumer set a target of passing BBB by the end of 2021, though this goal is widely viewed as impossible. A more realistic timeline for passage (or bill death) is the middle of March.
ACCA, HARDI, PHCC File Litigation to Overturn Cylinder Ban
You might recall that ACCA opposed the EPA’s ban on disposable cylinders for HFC refrigerants. Based on our feedback, the ban was moved from a 2023/2025 implementation schedule to 2025/2027. While this is better than nothing, it’s not what we hoped for. Since then, we’ve partnered with fellow HVACR industry associations HARDI and PHCC to oppose the ban through litigation. The basis for our suit is that the EPA exceeded the authority granted to it under the AIM Act by banning disposable cylinders and implementing an invasive tracking system. Our petition was filed in early December 2021 and will make its way through the courts in 2022. We are hopeful that this burdensome policy will ultimately be overturned.
ACCA Meets with Congressman Mike Carey to Discuss Legislative Priorities
Last month, I had the pleasure of meeting with Congressman Mike Carey (OH-15) and his staff in his D.C. office to discuss issues affecting the HVACR industry. Issues discussed include workforce, taxes, the AIM Act, and the EPA’s ban on refillable cylinders.
Congressman Carey is the newest member of the House of Representatives. He was sworn into office into office on November 4th, 2021, after winning a special election to fill the seat of Congressman Steve Stivers, who retired to lead the Ohio Chamber of Commerce.
Congressman Carey represents Ohio’s 15th Congressional District, which includes a portion of Columbus, in addition to several counties in central Ohio. He serves on the House Budget Committee as well as the Science, Space and Technology Committee. ACCA appreciates Congressman Carey and his staff taking the time to meet and looks forward to working with them on the issues that affect contractors.
- Capitol Insights: New Federal Regulations Affecting Contractors: EPA, OSHA, and DOL - February 12, 2024
- Senator Cruz and Representative Fischbach Introduce Resolutions to Overturn DOE’s Ban on Non-Condensing Furnaces - February 6, 2024
- House Passes Tax Legislation, Sending it to Senate - February 1, 2024
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