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Capitol Hill Update: Major tax reform starting in Congress

by Denise Ladd | Feb 10, 2017
Leaders in the House and Senate have outlined an ambitious tax reform agenda for the first nine months of the 115th Congress and it appears to require two separate reform packages.

capitol hillLeaders in the House and Senate have outlined an ambitious tax reform agenda for the first nine months of the 115th Congress and it appears to require two separate reform packages.

The House Ways and Means Committee has begun the long process of reforming many parts of the Internal Revenue Code by establishing a variety of task groups focusing on code provisions. Once the task groups report to the Committee a reform package will be assembled. SMACNA and its allies have provided input and guidance on key industry provisions to the Committee.

SMACNA Is working to ensure that the energy and related tax incentives will be part of this package, including 179D, waste-heat-to-power, thermal energy, and combined heat and power tax incentives that expired on Jan. 1.

SMACNA and its coalition partners worked all last year to extend energy retrofit and industrial efficiency provisions with the assurances of early action in 2017 by Senate Finance Committee leader Orin Hatch (R-Utah), most tax committee members, and Senate leader Mitch McConnell (R-Ky.). When Congress decided to adjourn early in December they left these provisions on their desks. Leaders of the House and Senate Energy Committees have committed to passing comprehensive energy legislation in 2017.

Davis Bacon and PLAs Under Attack

SMACNA and its allies in the Construction Employers of America (CEA) joined forces to beat back Senate efforts to repeal project labor agreements (PLAs) as part of the Senate Concurrent Resolution (S. Con. Res.) Budget legislation in the first weeks of the 115th Congress. While S. Con. Res. passed the Senate, it did not contain the provisions introduced by Sen. Jeff Flake (R-Ariz.). SMACNA’s position supported the option of considering and utilizing PLAs where deemed in the best economic interest of the project owner on behalf of the taxpayer on public work.

PLA opponents also have begun targeting Executive Order 13502 which allows the federal owner to consider PLAs on federal construction projects but does not mandate their use. SMACNA and the CEA each contacted the White House repeatedly to support Executive Order 13502 and the continued federal consideration of PLAs where appropriate.

As soon as the 115th Congress convened Sen. Jeff Flake (R-Ariz.) introduced legislation to repeal Davis-Bacon on countless billions in federal infrastructure projects yet to be considered or approved. SMACNA contacted Hill offices and media outlets to express strong opposition to The Transportation Investment Recalibration to Equality (TIRE) Act, offered by Sen. Flake.

The TIRE Act would eliminate the Davis-Bacon Act’s prevailing wage language on federal infrastructure legislation, especially bills providing funds for federally assisted infrastructure construction. SMACNA also informed Senate offices that it was ironic that at a time when the Congress, the Trump Administration, and much of the construction industry are expressing alarm over insufficient numbers of skilled construction workers that Congress would debate legislation to undercut wages, training, and standards for those making up much of the infrastructure workforce.

SMACNA has supported prevailing wage laws covering federally assisted projects in housing, energy efficiency, and infrastructure legislation, regardless of political changes to Congress or the executive branch, where construction quality and a national funding role are paramount. The legislation awaits consideration in Senate Environment and Public Works Committees but will most likely be proposed as an amendment to appropriations or infrastructure authorizing bills so it could come up at any time the related legislation is on the floor for debate. SMACNA will continue to closely monitor and oppose the TIRE Act and related attempts to undercut prevailing wage regulations and legislation during the 115th Congress.

House Passes Energy Efficiency Legislation Focusing on Government Data Centers

In its first week of the 115th Congress, the House moved to easily pass legislation to boost energy efficiency, expand performance contracting, and improve cybersecurity for government operation centers.

H.R. 306, the "Energy Efficient Government Technology Act," was introduced by Rep. Anna Eshoo (D-18th-Calif.). It would task agencies with developing a strategy to buy and use energy-efficient information technologies, including those related to data, teleworking, and building management. On the House floor, Rep. Eshoo noted that existing technologies could halve electricity use at the federal government's more than 2,000 data centers. "The federal government is our nation's largest energy user, and we should lead by example in this area," Rep. Eshoo said.

The remainder of last year’s energy package will be reconsidered by mid-year after the new Congress has a chance to complete its reconsideration and after adding some new provisions favored by the new Trump Administration Energy Department.

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