OVERVIEW
HARDI Advocacy efforts are centered around specific key issues relevant to the HVACR industry, wholesale distribution, and family & small businesses. The primary objective of HARDI Advocacy is to educate elected officials on legislative and regulatory issues that specifically affect HVACR distributor members, their customer base, or the products they supply.
CURRENT FOCUS
Tax Cut Permanence
In December 2017, the Tax Cuts and Jobs Act was signed into law, resulting in major beneficial changes for businesses. Included in the provisions were substantial reductions in the corporate and pass-through tax rates, a doubling of the estate tax exemption threshold, and full immediate expensing of HVAC equipment purchases for businesses. The issue here is that the individual-side provisions like the pass-through tax rate reduction and raised estate tax threshold have an expiration date and are set to sunset in 2025.
Since many HARDI members are small business and pass-through entities, we are pushing for permanence of the individual-side provisions from the Tax Cuts and Jobs Act. This will result in more predictability to allow HARDI members to have more effective business or succession planning for the future.
Tariffs & Trade
The recent tariffs on steel, aluminum, and specific products from China, including HVACR parts and components, have caused uncertainty and price changes across the industry. These prices and uncertainty have a negative effect throughout the HVACR supply chain. These tariffs also put American manufacturers of HVACR products at a disadvantage to foreign competitors exporting to the United States.
HARDI supports continued efforts to reach trade agreements, including an updated NAFTA, that will help keep product prices low for consumers and continue to allow the flow of goods in and out of the United States.
Hydroflourocarbon (HFC) Phase-down/Kigali Amendment
The HVACR industry is heavily invested in the development, distribution, sale, and installation of alternative refrigerants to HFCs. The Kigali Amendment to the Montreal Protocol is a U.N. resolution to phase down the production of HFCs over a scheduled period of years. The Kigali Amendment must be ratified by individual countries, which serves as the agreement to implement the phase-down domestically. Currently, the United States has not ratified the Kigali Amendment, but a wave of ratifications including by Canada, the EU, and 42 countries have given the global initiative momentum.
HARDI supports a regulated phase-down of HFC refrigerants, as it provides predictability for the direction of the refrigerant industry for manufacturers, distributors, and contractors. There are two ways an HFC could be phased down; through an official Senate ratification of the Kigali Amendment, or through legislation that effectively implements a required phase-down.
Relevant Legislation:
American Innovation and Manufacturing Act (S.2448)
Growing the Workforce and Promoting Careers in the Trades
It is a well-known issue in the HVACR industry that there is a shortage of skilled trade labor, and the effects are felt daily. While manufacturing and distribution warehousing jobs fall into this category, a healthy amount of certified contractors is also essential to success throughout the supply chain in our industry.
HARDI members support legislation that will generate an influx of HVACR professionals with the tools and knowledge they need to compete for high-skilled, in-demand jobs in the industry.
Relevant Legislation:
Strengthening Career and Technical Education for the 21st Century Act (Signed into law 7.31.18) PROSPER Act (H.R. 4508)
DRIVE Safe Act
The DRIVE Safe Act is sponsored by Congressman Duncan Hunter (R-CA50) and would offer high school graduates training for interstate commercial drivers licenses that they are currently ineligible to hold. The HVACR wholesale distribution sector facing an upcoming shortage of qualified drivers to move our products through the interstate supply chain. Commercially licensed truck drivers are the linchpin of the entire HVACR logistics network, moving equipment from suppliers to distributors, and from distributors to customers.
One of the primary obstacles to bringing younger drivers into the profession is the requirement that they be at least 21 years old to drive across state lines, despite the fact that almost every state allows for commercial driver’s licenses to be issued at the age of 18. The DRIVE Safe Act would alleviate the current shortage of qualified CDL holders by allowing younger drivers to train with experienced drivers. We believe that this legislation will benefit our economy and make America’s highways safer in the future. HARDI recently joined a letter signed by 42 organizations supporting this bill22
Addressing Online Sales Tax Avoidance
Variable online sales tax laws across jurisdictions have caused issues for HARDI members over the past few decades. The recently overturned Quill case in Wayfair v. South Dakota by the Supreme Court has opened the doors for states and local jurisdictions to begin collecting sales tax on purchases. The issue now is that there is no legislation or regulation that provides uniform guidance for how sales tax from online purchases can be collected.
HARDI supports legislation or regulations that provides a level playing field for businesses who sell products online.
Relevant Legislation:
Remote Transactions Parity Act (H.R. 2193) Marketplace Fairness Act (S. 976)
Estate Tax Repeal
HARDI members believe the estate tax should be repealed because it disproportionately impacts small and family-owned businesses. Compliance costs associated with the estate tax and the substantial burden of the tax itself cause small businesses to forego the hiring of new employees, expansion of businesses, and in many cases, force the sale of the company.
HARDI supports the full and immediate repeal of the Estate Tax.
Relevant Legislation:
Death Tax Repeal Act (H.R. 5422) Death Tax Repeal Act (S. 205)