LIFO is an accounting method that allows distributors to record their most recently produced or shipped items as “sold first.” The procedure allows companies to reduce income taxes in times of inflation.

“Legislators continue to discuss eliminating LIFO through deficit reduction talks,” said Melchi. “This repeal would be a one-time money grab, and if it’s eliminated, it would be devastating to a number of our members.”

The current estate tax levied on business owners who pass away is 35 percent — with an exemption up to $5 million on all assets. If Congress does not act on the measure by midnight, Dec. 31, 2012, the tax will increase to 55 percent, and the exemption will be reduced from $5 million to $1 million.

“Congress may be working up a short-term extension, but we need a long-term solution,” said Melchi. “This has been a real pain for our members. We have always favored the complete repeal of the estate tax and will continue that. We must find a long-term working solution that doesn’t penalize family businesses.”

Melchi is proud of HARDI’s growing reputation in D.C.

“HARDI celebrated several major accomplishments in 2012, and I’m very proud of what our government affairs team accomplished,” he said. “Karen Madonia, co-chair of HARDI’s government and trade relations committee, testified before Congress, asking for a repeal of the estate tax. And our members are becoming very skilled while inside the House and Senate. They’ve learned how to eloquently share the industry’s concerns in an engaging way.”

Regional Standards

One industry issue that Melchi has been involved in regards the Department of Energy’s (DOE) regional standards, which will create three regions with varying minimum efficiency standards for air conditioners, furnaces, and heat pumps.

DOE crafted the regulation and released it for comment on June 27, 2011. The law was approved and set into motion on Oct. 25, 2011.

HARDI filed petitions to intervene in a lawsuit, American Public Gas Association (APGA) v. DOE, on Jan. 20, 2012, alleging that the DOE failed to follow proper procedures in issuing the regulation.

“As written, this regulation is a worst-case scenario for our members,” said Melchi. “In our eyes, there is nothing we can give. We want the whole thing scrapped.”

A reported mediation between APGA and DOE may result in a settlement in the near future. HARDI and Air Conditioning Contractors of America (ACCA) representatives filed paperwork requesting changes they’d like to see in a potential settlement. The parties met on Dec. 7 to discuss the requested alterations. Details of the meeting have not been released.

“There are a lot of parties involved in these talks and coming to a solution which placates everyone is challenging,” said Melchi. “We will continue to push for a solution that best suits our members and the industry as a whole.”

Nine months after announcing its role as an intervener, HARDI continues to garner the support of its members. At its 2nd annual distributor town hall meeting, a room full of HARDI members unanimously pledged their support, agreeing that the organization should move forward in its quest for justice.

“This roar of support reaffirms that our leadership has taken the correct stance on this issue,” said Melchi. “It shows that our members continue to believe in what we’re doing, and it’s great to have that kind of support.”

A Man on the Move

While he lives in Columbus, Melchi spends nearly as much time in Washington, D.C., as he does at home. “The people at the U.S. Airways gate know me by name,” he said. “When things are busy, I’m in D.C. as much as I need to be, and I anticipate being there quite a bit at the start of 2013.”

While on the road, Melchi said he does miss his family — especially now since he and his wife, Amanda, welcomed their first child, Mary Alice Melchi, on Nov. 27.

“I really have the best job around. I get to do something that I love, everyday, and I get paid for it,” he said. “Yeah, I’m busy. And, yes, I get frustrated at times, but I love what I do.

“Sure, reading through 200 pages of regulations is not exciting, but I recognize that my actions have an influence on every one of our members. I love this industry, and I love talking about what makes it tick. There is nothing in the world I’d rather be doing.”

2012 NEWSmaker

Name: Jon Melchi

Title: Director of government affairs

Company: Heating, Air-conditioning, Refrigeration Distributors International (HARDI)

Location: Columbus, Ohio

Notable quote: “Sure, reading through 200 pages of regulations is not exciting, but I recognize that my actions have an influence on every one of our members. I love this industry, and I love talking about what makes it tick.”

Publication date: 12/17/2012