Editors Blog

Kill Bill: The 112th Congress's Impact on the Industry

January 16, 2012

As a member of the HVAC industry, ask yourself, what has Congress done for you lately?

The answer: probably not a lot.

2011 was a discouraging year for HVAC legislation, as the popular 25C tax credit failed to gain an extension, the Home Star program failed to regain Congressional momentum, and the AHRI-supported Implementation of National Consensus Appliance Agreements Act (INCAAA) wasn’t even brought to a vote.

Current and future industry trends focus on increased energy efficiency and cleaner emissions, but is government doing its part to reinforce these goals?

The Existing Home Retrofit Tax Credit, better known as 25C, has rewarded residential energy efficiency improvements since 2005. Congress chose not to extend the measure prior to its Dec. 31, 2011 expiration. Following 25C’s elimination, only geothermal and solar energy HVAC tax credits exist in 2012.

AHRI’s INCAAA would have established regional minimum efficiency standards for central air conditioners, furnaces, and heat pumps. AHRI claimed INCAAA would have annually saved the country as much as 1.2 quadrillion Btu by 2030, and would have saved consumers more than $50 billion in costs. The bill, in theory, would have also replaced inconsistent state requirements with a national standard. Congress – much like a large number of industry contractors and distributors – failed to endorse the bill.

Senate Democrats recently introduced S. 1914, also recognized as 25E, or the Cut Energy Bills at Home Act. The bill, which is gaining steam throughout the industry, would establish a base credit of $2,000 for homeowners who reduce energy use by 20 percent. A $500 stipend would be awarded for each 5 percent energy reduction thereafter. The bill was read twice by senators in November 2011, and is now on the desk of the Senate finance committee.

While several energy efficiency supporters strongly back the measure, pundits are quick to point out the bill lacks adequate funding. Legislative leaders across the industry believe the bill will struggle to pass in the House.

Regardless who plants the seed – whether its contractors, manufacturers, or distributors – Congress is sure to find a way to halt fertilization.

A Congressional summary reveals 2,031 bills originated in the Senate, and 3,755 bills were proposed at the House level. The do-nothing Congress (disguised as the cast of “Kill Bill Vol. 3”) passed only 90 bills that President Obama signed into law.

Of those 90, records reveal three were Smithsonian Institution appointees, one created a military museum in Texas, and 21 granted post offices and federal buildings new names.

The HVAC industry isn’t the only sector fuming over Congress’s lack of performance; a Jan. 1 Rasmussen Reports national telephone survey found that just 5 percent of likely voters rate the job Congress is doing as good or excellent.

And, while 2011 registered as a difficult year — as pessimistic as this may sound — 2012 may prove to be even worse.

It shall be interesting to see how Americans vote in November; and how new or returning leadership may influence the future of our industry. One thing is for sure — while many great tax benefits are being discussed, the likelihood of any of them ever being implemented – in today’s political climate – are slim to none.

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