Sheet Metal & Air Conditioning Contractors’ National Association

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Congress considers 2016: Can they keep the momentum going?

Jan 11, 2016

Congress is already signaling that the first half of 2016 will be another active period on important issues for SMACNA. 2016 is an election year and that means fewer days in session for the Congress than in any recent year.

Nevertheless, the leadership in Congress and the White House has a lot planned and that means the first half of the year will be action and legislation packed with opportunities on many fronts important to SMACNA and its membership.

To close out the 2015 session, the President and Congress negotiated a nearly $2 trillion long-term tax and budget package containing dozens of construction and business priorities. The construction industry should get a substantial lift in coming months, thanks to the fiscal year 2016 spending measure that boosts most major federal construction accounts, especially the General Services Administration and Department of Veterans Affairs programs, seeing exceptional increases.

2016 features SMACNA key priorities

Although the industry has many reasons to celebrate the end of 2015, 2016 already has an agenda with many key SMACNA priorities featured. These include:

  • Composite Plan Design for Multiemployer Pensions. With key members of Congress committed to passing the final piece of multiemployer pension reform, momentum has been building for the concept of hybrid plan design as an option for plans. The structure and safeguards of Composite Plans represent a responsible way for construction employers to continue offering a secure retirement for workers without jeopardizing the viability of their businesses.
  • Airport Infrastructure Construction. After the massive 2015 Surface Transportation package was signed into law the next mega construction package awaiting action is the Federal Aviation Administration reauthorization covering all aviation related programs, especially the airport construction program.
  • Tax Incentives. The recent tax package contained a number of construction-related tax credits, incentives, and extensions of existing laws soon to expire. That was a major achievement but only the first part of a process that now focuses on those provisions expiring in 2016 and 2017 as well as provisions seeking their first enactment. (See related article, “New $2 trillion law includes SMACNA’s top tax priorities” in the January SMACNews online edition.)
  • Energy Efficiency Incentives. In December, the President signed a boost to the investment tax credit, allowing solar developers to write off 30 percent of project costs. Under the omnibus deal, the credit is extended and phased down over five years, while also allowing facilities breaking ground before the incentive expires to qualify. However, as written the new law only extends the credit for solar, leaving out other qualifying sources with expiring tax incentives in 2016, including combined heat and power systems, geothermal, small wind, and fuel cells. That is a priority for tax writers and energy efficiency contractors in the first quarter of 2016.
  • Industrial Efficiency. Efforts will continue to pass the Power Efficiency and Resiliency (POWER) Act, currently pending in the House (H.R. 2657) and Senate (S. 1516). The POWER Act would give CHP and WHP the same 30 percent investment tax credit that other low- and zero-emitting technologies receive. The POWER Act enjoys bipartisan support in Congress and odds for passage are positive.
  • Energy Policy. For the first time in eight years Congress is on the verge of passing a comprehensive national energy policy legislative package. Only Senate action and compromise with the President remain for a successful outcome. H.R. 8, The North American Energy Security and Infrastructure Act of 2016, passed the House Dec. 3 and awaits Senate votes early in 2016. The massive legislative package contains long overdue upgrades to the energy transmission, use and efficiency rules and laws to better reflect the energy technology and market transformation occurring since the 2007 Energy Act.
  • Independent Contractor Reform. Congress and the Obama Administration will continue to seek needed reform to the employee misclassification fraud crisis where employees are misclassified as independent contractors by unscrupulous contractors for bidding advantage.
  • Procurement Reforms. Congress has moved to adopt a number of reforms to the bidding and procurement process but has more work planned on change orders, project enforcement, reverse auctions and more.
  • Labor-related Issues. More efforts to repeal Davis-Bacon, project labor agreements (PLAs), and apprentice standards are expected.
  • Infrastructure. School construction, public private partnership funding bills, and other public facility funding bills are on the agenda for the first half of the year.