By Mark Valentini, Director of Legislative Affairs
The COVID pandemic has not yet subsided, yet as states focus on recovery and Americans adjust to what will be a “new normal” for the foreseeable future, PHCC’s federal advocacy is likewise beginning to refocus on issues that were important to the industry prior to March. Nevertheless, with some states seeing a rebound in COVID cases and governors reversing or stalling decisions to reopen their economies, we must remain vigilant until this storm subsides and the skies clear.
The key to reinvigorating the economy lies in putting people back to work. This is where rebuilding our nation’s infrastructure comes into play, an issue that has long been a PHCC priority. The House of Representatives recently passed the Moving Forward Act (H.R.2), a 2,000+-page comprehensive bill that proposes rebuilding our surface transportation, school, bridge, energy, broadband and water infrastructure. The new construction spurred by the $1.5 trillion investment provides potential opportunities for PHCC members to compete for contracts. However, it is a highly partisan bill with a primary focus on Green New Deal and climate change provisions that simply make it unpalatable for Senate Republicans and President Trump, and it serves more as a list of Democratic priorities assuming they take complete control of the legislative and executive branches of government after the November elections.
Energy Efficiency Tax Credits
Nonetheless, there are several policy proposals in H.R.2 that PHCC supports, particularly energy-efficient tax credits for residential and commercial HVAC upgrades. Tax credits under sections 25C and 179D of the U.S. tax code were reinstated at the end of 2019 for one year, allowing residential customers a tax credit worth 10% (not to exceed $500) of the cost of upgrading their HVAC system, and for commercial customers $1.80 per square foot. For PHCC’s HVACR contractors, these tax provisions play an important role in both increasing equipment sales during an economic downturn while modernizing dwellings with energy-efficient HVAC equipment. However, this tax provision expires at the end of the year. H.R.2 proposes extending these tax credits through tax year 2025 and increasing the credit to 15% (capped at $1,200) for residential and $3.30 per square foot for commercial customers. PHCC is pushing for inclusion of these provisions in any must-pass legislation between now and the end of the year.
During negotiations at the end of June on the National Defense Reauthorization Act (legislation to authorize funding for the military through FY2021), an attempt was made by Senators Mike Crapo (R-ID) and Sherrod Brown (D-OH) to include the ILLICIT CASH Act as an amendment. It is not new for special interests to attach non-germane legislation to a must-pass bill, however PHCC has concerns over the Crapo-Brown amendment. The ILLICIT CASH act is an anti-money laundering bill that, while pure in its intentions, has some major flaws that will violate the privacy rights of small business contractors by requiring the reporting of any person who has a beneficial ownership interest of at least 25% to the Financial Crimes Enforcement Network (FinCEN). Furthermore, the legislation defers to FinCEN the definition of “beneficial ownership” and also allows law enforcement access to a beneficial ownership database without a warrant. PHCC does not oppose law enforcement efforts to crack down on money laundering activities, though Congress must take into consideration the privacy rights of small businesses while minimizing burdensome reporting requirements – neither of which are accomplished by the ILLICIT CASH Act.
Keeping Small Business Afloat During the Pandemic
As much as we want to move on, we are still in the midst of a pandemic, and Congress still has work to do to help our nation’s economy recover. So far, Congress has passed three major comprehensive bills, in addition to three supplemental bills worth almost $3 trillion combined. These bills include:
- R.6074 (March 4, 2020): $7.8 billion in immediate response to the pandemic, provided funding for testing, research and initial response efforts;
- The Families First Coronavirus Response Act (FFCRA, March 14): $200 billion legislation establishing family and medical leave guidelines with which small businesses must comply, and federal funding to supplement state unemployment benefits;
- The Coronavirus Aid, Relief and Economic Security (CARES) Act (March 27): $2 trillion legislation establishing the Paycheck Protection Program (PPP) and funding SBA Economic Injury Disaster Loans (EIDLs), which were critical in keeping small businesses afloat and mitigating the economic damage caused by the pandemic;
- The Paycheck Protection Program Enhancement Act (H.R. 266, April 23): with the initial $360 billion allocated for the PPP completely exhausted, Congress allocated another $320 billion to keep the program afloat;
- The PPP Flexibility Act (H.R.7010, June 4): provides more flexibility for how small businesses use PPP loans; and
- The PPP Extension Act (S.4116, July 2): extends the June 30 deadline for a PPP loan to August 8, 2020.
Upon its return from the Independence Day recess, Congress is expected to negotiate a legislative package providing additional relief to small businesses that include PHCC policy priorities such as:
- Extension of the PPP through December 31;
- A liability shield against COVID-related torts for businesses that adhere to federal, state and local guidelines regarding the use of personal protective equipment and other measures to protect employees and customers; and
- Reversing IRS guidance from April 30 to ensure that no forgivable portion of a PPP loan is subject to federal taxes.
PHCC continues to advocate vigorously on behalf of plumbing and HVAC contractors to ensure they have immediate access to economic relief during this period of unprecedented tumult. Contact PHCC’s Government Relations team at email@example.com for further information.
Director of Legislative Affairs , PHCC-National Association