The Riso Report – November 20, 2015

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Riso Report

November 20, 2015

“One of the most important things PHCC does is to represent our member’s best interests on Capitol Hill and we are recognized there as a key player now”

Mark Giebelhaus (President, Marlin Mechanical Corporation – Phoenix, AZ)
PHCC Government Relations Committee Chairman

Mark Giebelhaus is a Past National President and Chairman of PHCC’s Government Relations Committee – which studies federal legislation and regulations that may affect the plumbing, heating and cooling industry, and makes recommendations to the Board of Directors as to what positions, if any, should be taken by the Association.  When you get a chance, please thank Mark for all the hard work he does for PHCC and the industry.

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I’m not a contractor and in fact, I can’t fix anything around my apartment (I do own a hammer and a screwdriver – though I don’t know where they are).  But this nation is all about people who can fix things…who can install and service equipment in homes and buildings that Riso can’t.  Soooooo….In thirteen words recently, Senator Marco Rubio (R-FL) sent a message to America…”I get it” (this is not an endorsement of Marco Rubio for President).  BTW – the plumbing-heating-cooling industry gets it too Senator…welcome aboard.  If you missed it during the recent Presidential debate – Senator Rubio said, “Welders make more money than philosophers. We need more welders and less philosophers” (he could have easily said plumbing and HVACR contractors).  Which set-off a chain reaction of fact checking nerds who thought it more important to pick apart the statement, rather than embrace its meaning and adopt its principle and vision.  Again, we get it, the nerds don’t.

In fact, before you sit down at the Thanksgiving table, feed on this from the legislative table – directly following Thanksgiving, Michael Copp, EVP-PHCC and Cindy Sheridan, COO-PHCC Educational Foundation (accompanied by Riso), have a series of meetings with Congressional leaders on career and technical education.  Committee and Caucus Chairs who are tasked by Congress (the American people…OUR NATION) to solve the crisis of workforce development.  The meetings will be about how we can assist Congress in solving the problem and how they can assist the industry. Materials and information as to the great opportunities of this industry (our story) will be conveyed directly to national leaders.  This is good stuff – and the members need to know about it.

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We hear a lot about Regulatory Accountability – bridge the issue for us PHCC National.  OK…we live in the land of checks and balances…some are well known, some not.  Here’s one of the most important checks to achieve policy balance…APA.  The Administrative Procedures Act is one of the most important statutes on the books.  Is this important?  Absolutely critical in advocacy.  In essence it does two things.  1. It provides a process by which an agency proposes and establishes a rule, and 2. It structures the process by which federal courts review agency actions and decisions.  The second component is very important as it means that we (the American people and industry) have the ability to sue the government when a violation of the system takes place.  This is exactly what happened with Waters of the US and the Furnace-Air Conditioner-Heat Pump rule.  The ability to litigate is one of the most important dynamics in the development of public policy in a democracy.  Yes, it’s the last line of defense, but perhaps the most powerful.  PHCC supported a bill (triggered by the awesome participation of PHCC members through grassroots) to help strengthen the APA earlier this year – it passed the House and awaits Senate consideration.

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What’s the story with Tax Reform?  I’ll admit, I was one of those who truly believed Congress was going to take a serious shot at tax reform this year – and I was very excited last year when House Ways and Means released a proposal regarding a comprehensive tax reform package (naïve-but excited).  The promise was that the House and Senate were going to form task forces in early 2015 that would tackle a series of issues that would eventually be combined into a piece of tax reform legislation (I bought into it).  The task forces were formed – the issues were discussed – even a series of tax related bills were considered and passed by the House…but, no comprehensive tax reform package.  And being that we’re wrapping up the year and next year is an election year…tax reform won’t happen…we will see piecemeal tax bills (extenders) but nothing coordinated…such a disappointment.  Quick update on tax bills in Congress (these were all to be included in a tax reform package).

  • Permanent Sec. 179 expensing (America’s Small Business Tax Relief Act of 2015). This bill makes permanent the $500,000 expensing and $2 million threshold amounts for expensing business property, also indexing them for inflation. Software and qualified real property, as well as air conditioners and heaters, would now be Sec. 179 property, and taxpayers can revoke a Sec. 179 election without IRS consent.  We’ve talked about this one…be ready for a legislative alert (first or second week of December) as it’s ready to pop.
  • Permanent sales tax deduction (State and Local Sales Tax Deduction Fairness Act of 2015). This bill passed the House and makes permanent the option to claim an itemized deduction for sales tax rather than state income tax, which has existed in temporary form since 2004.  Awaits Senate consideration.
  • Estate “Death” tax repeal (Death Tax Repeal Act of 2015). Passed the House and awaits Senate consideration.  This bill repeals the estate tax for those dying on or after the date of enactment. It also repeals the generation-skipping transfer tax (GST), modifies the gift tax, and reduces the rate from 40% to 35%.
  • Tax gap (Contracting and Tax Accountability Act of 2015). Passed the House and awaits Senate consideration.  It includes measures to prevent a taxpayer from obtaining a government contract or grant if that individual or business has “seriously delinquent federal tax debts.”
  • Taxpayer Bill of Rights (Taxpayer Bill of Rights Act of 2015). Passed the House.  This bill adds 10 rights to Sec. 7803, which provides the responsibilities of the IRS commissioner and other officials, including rights to quality service, privacy, and confidentiality.
  • Ensuring Tax Exempt Organizations the Right to Appeal Act.  Passed both the House and Senate.  This bill would require regulations that allow a tax-exempt organization to request an administrative appeal upon receiving an adverse determination of tax-exempt status.
  • There are many more in the hopper – but haven’t moved in either the House or Senate.

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DOE Releases Proposed Rule on Enforcement of Regional Standards for Central Air Conditioners.  The Dept. of Energy (DOE) has released a pre-publication version of the much anticipated Notice of Proposed Rulemaking on the Enforcement of Regional Standards for Central Air Conditioners (I highlighted it because we aren’t talking policy development – we’re now talking how the policy is to be enforced – this is dangerous…in other words, who will be responsible for reporting info).  PHCC was a voting member of a special working group of contractors, distributors, manufacturers, utilities, and energy efficiency advocates that submitted a proposal to DOE last fall. This version appears to closely mirror that proposed plan.  Much more to come on this – stay tuned.

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