HVAC Legislative Update: June 2015
WASHINGTON — As he faced a banquet hall full of HVACR distributors, wholesalers, manufacturers and reps at the Liaison Capitol Hill DC, Jon Melchi, vice president of government affairs and business development for Heating, Air-conditioning, and Refrigeration Distributors International (HARDI), had a simple request for attendees of HARDI’s 2015 Congressional Fly-In.
“Please, do me a favor,” he implored. “I want zero ‘House of Cards’ references on Capitol Hill tomorrow — zero.”
Melchi’s lighthearted plea drew laughs from attendees, many of whom have attended HARDI’s annual Congressional Fly-In event since its inception seven years ago. But, despite the jokes, Melchi stressed that the goal of the Congressional Fly-In is a serious one.
Created as a grassroots way for HARDI’s members to have their concerns heard directly by those who represent their own states and districts, the annual event has quickly become a favorite among participants. And, as congressional gridlock slowly loosens up to allow legislation to flow through both chambers again, and regulatory bodies continue to churn out industry-related regulations at record speed, HARDI members recognize the need to be vocal and communicate to their senators and representatives about the issues that directly impact them the most.
A GRASSROOTS EFFORT
Once again, the two-day Congressional Fly-In featured an afternoon orientation and issues briefing, evening cocktail reception, breakfast program and then a full day of meetings on Capitol Hill. At the issues briefing, Melchi explained how HARDI chooses the issues it advocates for each year.
“The No. 1 thing we try to think about when we’re looking at an issue is, does it give our members options?” Melchi said. “Every bill that’s on our list, I hope you can look at as a company and say, well, this gives us an option to do something, whether that’s to become an ESOP [employee stock option plan], whether that’s to utilize LIFO [the last-in, first-out method of accounting] — I want you to have options on how your businesses are structured and how they operate. Will it help your business grow? … And will it help our industry?”
Melchi discussed the seven major legislative priorities for HARDI and its members: passing America’s Small Business Tax Relief Act (HR 636), preserving LIFO, addressing online sales tax avoidance (S 698) and draft legislation from Cong. Chaffetz, repealing the Estate Tax (HR 1105 and S 860), supporting the Promotion and Expansion of Private Employee Ownership Act (HR 2096 and S 1212), supporting the Innocent Sellers Fairness Act (HR 1199) and postponing DOE’s proposed 92 percent furnace rule. Participants also enjoyed presentations from Amber Talley, legislative director for U.S. Rep. Jason Chaffetz, R-Utah, who discussed the Remote Transaction Parity Act — a bill that would help businesses collect owed online sales taxes; Melissa Bonicelli, principal at Venn Strategies LLC, who discussed tax policy for pass-through entities, including S corporations; author, speaker and “Advocacy Guru” Stephanie Vance, who briefed attendees on how to have a successful hill visit; U.S. Rep Pat Tiberi, R-Ohio, who has aligned with HARDI on many issues, including abolishing the estate tax; and Melissa Craig, vice president of member relations at Business-Industry Political Action Committee, who stressed the importance of in-person advocacy.
“The objective is to have fun, because, quite frankly, this should be fun,” Melchi told attendees. “If you’re coming here and you feel like you’re pulling your hair out, that’s not what our goal is. Our goal is to get to know each other and policy a little better, and for you to get to know your legislators better.”
During the breakfast program the following morning, HARDI CEO Talbot Gee lauded the more than 80 distributor members who were scheduled to participate in a combined 175 Hill visits later that day. “Every year, this group brings great energy to this city, brings great passion and really does an excellent job connecting these lawmakers to what’s really going on in your businesses every day,” he said. “That’s what you bring to the table.”
“I’m just really thrilled to see the turnout here,” said HARDI President Bill Bergamini, president and COO at ILLCO Inc. “We’ve made such an incredible difference, and it’s not just the Hill visits, but it’s what you’ve done with them afterwards. … This really does make a difference.”
During the Fly-In, HARDI leadership took the opportunity to recognize two members of Congress with the HARDI Small Business Champion Award, which is given to elected officials who promote and protect the interests of small businesses. U.S. Sen. Tim Scott, R-South Carolina, and Rep. Pat Tiberi, R-Ohio, received the awards.
“Even early in his term, Senator Scott has supported small businesses and entrepreneurs,” said Rick Sanders of McCall’s Supply in Johnsonville, S.C. “As a fellow South Carolina resident, I’m proud to have a representative who knows that small businesses are the backbone of the economy.”
Sen. Scott, who has worked on several bills in support of small business since taking office in 2013, expressed his gratitude and honor in receiving the award. Rep. Tiberi also said he is “honored” to be named a Small Business Champion by HARDI’s members and looks forward to continuing to work with them to ensure small businesses have opportunities to thrive.
“Congressman Tiberi has been a key player in the fight for a fairer tax code,” Melchi said. “Thanks to his efforts in Washington, our members — and all small businesses — can continue to succeed, to grow and to provide jobs for their communities.”
Congressional Fly-In participants and organizers, many of whom had nearly a dozen meetings to attend during the second day of the event, stressed the importance of the event and shared why they chose to participate.
“This is probably, other than the annual convention, the single best HARDI event that the industry provides,” said Oscar Lopez, vice president of sales, JB Industries Inc. “It gives you an opportunity to be involved in the process and to learn about what people in Washington are actually doing and how to influence those policies. It really gives you a platform to make a difference.”
Paul Appler, director of research and development, Cliplight Mfg. Co., and his wife, Linda Appler, director of sales and marketing at Cliplight, both attended the event for the first time this year.
“We are a part of HARDI, and we are Canadians, and one of our largest markets is in the U.S.,” Paul Appler said. “We recognize that we need to understand what our customer is going through and what the politics are that are involved. So we came down here to be part of that and learn some of the mechanics of how things get done. One thing we realized, whether it’s in the U.S. or Canada or anywhere else in the world, is we know that the voice of a person makes a great impact. [Through] HARDI, we all come together, and because of that, we can have a great impact on what gets done.”
“We think we have a very good combination of Canadian technology combined with U.S. manufacturing, and so our supply partners in HARDI are very important us,” Linda Appler added. “It’s important for us to understand the issues they’re dealing with to keep their businesses running and to be more effective in our supply chain. Growing up just outside of Windsor [Ontario, Canada], in the shadow of Detroit and Ohio, I grew up watching American television, so I’ve always been really interested in American politics, and it’s been a real thrill to come here and see the process at work and understand it a little bit better.”
“It really does make a difference,” Bergamini said. “I think it was tough the first year, and we really weren’t sure what we were doing, but the evolution of the Fly-In has been absolutely tremendous. Our wins have been huge, and our voice is really being heard. I can’t stress enough the importance of getting more members to come to this. Not only is it great for our industry, it’s just an incredible experience and something everybody should experience.”
To learn more about HARDI’s Congressional Fly In, visit http://www.hardinet.org/fly-in.
A LOOK AT THE ISSUES
This year’s Congressional Fly-In took aim at seven issues that would benefit HVACR businesses.
• America’s Small Business Tax Relief Act (HR 636) — This legislation improves a crucial part of the tax code for many small businesses. Eliminating the HVAC restrictions from 179d is an enhancement to the tax code, which will allow the HVAC industry to help small businesses save on their energy bills so they can use their capital to invest in their workers and their businesses. Further, this legislation provides all small-business owners with the type of certainty that is needed when they consider investments in their companies.
• Preserving LIFO — HARDI urges Congress to reject any repeal of LIFO and subsequent retroactive taxes upon businesses that use LIFO, which is a proven accounting method. Repeal of LIFO would be devastating to HARDI members whose business model requires that they carry large inventories. Additionally, a retroactive tax on LIFO reserves would significantly harm small businesses.
• Addressing Online Sales Tax Avoidance (S 698 and draft legislation from U.S. Rep. Jason Chaffetz, R-Utah) — HARDI supports this legislation, which empowers states to update their sales and use tax laws to level the playing field for all sellers. Brick-and-mortar stores find themselves at a disadvantage, not through innovation or competition but rather through a tax system that supports tax avoidance to the detriment of small businesses. HARDI believes Congress should act to give states the power to update their laws to reflect a 21st century economy.
• Repealing the Estate Tax (HR 1105 and S 860) — HARDI members believe the estate tax disproportionately impacts small and family-owned businesses, and the threat of the looming tax prevents investment in business. Costs associated with preparation for the tax and the substantial burden of the tax itself cause small businesses to forgo the hiring of new employees and expansion of businesses, and in many cases it forces the sale of the company.
• The Promotion and Expansion of Private Employee Ownership Act (HR 2096 and S 1212) — Many HARDI members are ESOPs, and this bipartisan legislation will address the growing concerns of individual access to ownership in companies that are productive, profitable and sustainable while providing locally controlled jobs.
• The Innocent Sellers Fairness Act (HR 1199) — HARDI supports this act and other liability reform legislation that would preserve victims’ access to courts while holding sellers harmless when they have not acted negligently in the design, manufacture, sale or installation of a legal product.
• DOE’s proposed 92 percent furnace rule — HARDI believes Congress should amend EPCA to postpone the U.S. Department of Energy’s (DOE) proposed rule on efficiency standards for residential, nonweatherized gas furnaces or mobile home gas furnaces to allow for all stakeholder analysis and negotiations to be completed.
Information courtesy of HARDI Advocacy, http://www.hardinet.org/advocacy.