It’s officially election season,which means that Congress has little appetite for passing substantive policy issues, which could give President Trump “wins” in the run up to his reelection.
This is not new. Every two years we have an election,because the House of Representatives and 1/3 of the Senate stand for re-election every two years. And, with a presidential election and an impeachment thrown in this year, it is monumental!
In an election year,Congress typically focuses on passing legislation that is merely messaging bills. For instance, the Republicans in the Senate will want to pass legislation that their base will support, that will help the President, and will serve as a platform of what is to come if Republicans maintain control of the Senate and increase their majorities. The Democrats in the House will pass legislation that they will use as a messaging platform showing voters what they will do if they win the presidency and the Senate in 2021.
Therefore, we should not expect great things coming out of Congress this year! However, there are a few bipartisan issues that are very important to the contracting industry and have the potential to be signed into law.
ACCA remains focused on advancing the Home Energy Savings Act, which would expand and extend the residential efficiency tax credits. Specifically, this legislation would:
- Extend the energy efficiency tax credits in section 25C of the tax code through 2026;
- Establish higher goals for energy efficient home upgrades by modernizing the product specific efficiency standards in section 25C of the tax code;
- Increase homeowners’ incentives to make energy efficiency upgrades by:
- Increasing the credit from covering 10% to 15% of the cost of efficiency upgrades;
- Raising the lifetime cap on the credit from $500 to $1,200 to encourage multiple efficiency projects; and
- Increasing incentive caps for individual product categories, e.g. raising the credit for a high-efficiency air conditioner investment from $300 to $600
- This legislation would also require systems to be installed according to ACCA’s Quality Installation standards if consumers want to claim their tax credits.
The Home Energy Savings Act has broad bipartisan support in Congress and the Trump Administration has already signed legislation that reinstated the 25C tax credits for 2018-2020. It’s good policy with champions on both sides of the aisle and would not give one party messaging opportunities over the other. This legislation would be a win for consumers, our efficiency goals, and contractors.
ACCA also sees a path forward for the AIM Act, which would establish a federal framework for the HFC refrigerant phasedown. ACCA is focused on preventing a California-led patchwork of state refrigerant phasedown schedules and regulations. The AIM Act would give the EPA the authority to create a federal HFC phase down and establish strong safety and certification programs for the handling of refrigerants, which will include ASHRAE-designated A2L mildly flammable refrigerants in the near future.If the AIM Act passes it would likely discourage states from establishing their own phasedown schedules. The reality in many state governments is that they lack the manpower and technical knowledge to establish refrigerant phasedown programs. It would also give the EPA more authority to regulate the sale of refrigerants to non-certified individuals. Failure to give the EPA this authority could lead to the open-sale of non-ozone-depleting (ODS) refrigerants,because EPA’s authority to regulate R410A and other non-ODS is uncertain.The AIM Act also enjoys strong bipartisan support in Congress;however,the Trump Administration has not signaled its position on the bill. If improvements are made to the AIM Act, like including federal pre-emption, I suspect the Administration would be more likely to sign it. Federal preemption would prevent, not just discourage, states from establishing HFC phase-down schedules on their own. If federal pre-emption is included it would create a single national phasedown. This is good policy for our industry.Politically, the federal preemption issue would give President Trump a win over California. He wants to restrict California’s ability to force other states,and the entire nation,to adopt California’s environmental policies.From now until the end of the year, ACCA will be focused on these issues,because we believe they are the two priorities we can move across the finish line in what is proving to one of the most hyper-partisan election seasons that I can recall.