Your One-Stop Source for Federal and State Issues Impacting the Garage Door Industry
The IDA Governmental Affairs Update will post details on federal and state issues and rulemaking of interest to the door and access systems industry. These updates will include information about the issues and why door dealers should be following the issues. For information on IDA’s Advocacy and Public Affairs activities, contact firstname.lastname@example.org.
This IDA program arises from our Board Strategic Plan; the IDA Board recognizes the need for IDA Advocacy efforts to include grass roots efforts, and directed the resources to make that happen. The first step in working together is to keep our members up to date on the issues that affect their businesses. If you have any questions, comments, or if you become aware of any issues in your own local areas, please reach out to email@example.com
Governmental Affairs News Archives
Florida Sales Tax Exemption for Impact-Rated Garage Doors
On March 14, 2022, the Florida Legislature approved a tax package (HB 7071) that included a two-year sales tax exemption for the installation of impact-resistant garage doors.
- Over the past several years, several legislators in Florida have been working on incentivizing “home hardening” through two-week sales tax holidays included in hurricane preparedness programs. IDA has been working with bill sponsors to ensure that garage doors were included in the discussions; our efforts were successful and resulted in bill amendments that included standards for impact-rated garage doors that meet the Florida Building Code. Unfortunately, the COVID-19 pandemic derailed these efforts as the priorities for Florida shifted.
- As Florida emerged from the pandemic, the issue came to the forefront once again. The legislature set a priority for hurricane preparedness as well as hardening the existing building stock. During the current legislative cycle, the idea of extending the sales tax exemption from a “holiday” to a longer term gained support.
- As the session came to a close, the prior sales tax holiday bill was “indefinitely postponed and withdrawn from consideration”; the item was added directly into the tax package bill, HB 7071, which is typically how the legislature works their budget process. During the legislative discussions, the impact-rated garage door sales tax exemption was moved into the tax bill- although the additional details about the Florida Building Code standards were not included.
- The sales tax exemption will run for two years, from July 1, 2022, through June 30, 2024. The bill includes a requirement that the Florida Department of Revenue (DOR) will conduct “emergency rulemaking” to set the ground rules for this sales tax exemption (and all the others). IDA will follow through on this process to ensure that the tax exemption will apply to products qualified under the Florida Product Approval program for resistance from windborne debris impact; that phrase is not included in the bill but must be part of the rules adopted by the FL Department of Revenue. The Florida Building Code provisions are important to ensure a level playing field.
- Here is the language from HB 7071, Section 52:
The tax levied under chapter 212, Florida 1929 Statutes, may not be collected during the period from July 1, 2022, through June 30, 2024, on the retail sale of impact resistant windows, impact-resistant doors, and impact-resistant garage doors.
IDA will work with the Department of Revenue and the Florida Governor’s Office to ensure that the appropriate standards are included in the regulations that will be developed during the Florida Department of Revenue rulemaking. Additionally, IDA will be contacting our members in Florida to educate them on how the sales tax exemption will work, and how they can use it in their promotional activities.
Dynamics of the Current Congressional Balance of Power
Senate Majority Leader Chuck Schumer (D-N.Y.) has an increasingly tenuous hold on power in Congress. He is starting at the prospect of midterm elections in November which could end his tenure leading a Democratic majority in the Senate — a distinct possibility given the history of midterm losses for the president’s party, especially one with sagging poll numbers.
To try to prevent this eventuality, Schumer will look to push through big-ticket must-pass items, including legislation stalled by intraparty differences and Republican opposition. He’ll also seek to confirm as many administration officials and judges as possible to notch wins for his party while it controls both chambers of Congress and the White House.
Trying to keep every member of his tenuous 50-50 majority together is an extremely difficult challenge, as the so-far lackluster record of the Democratic majority aptly displays. Schumer is fighting an uphill battle because his control is so minimal – which gives hold-outs within the Democratic caucus (like Sens. Manchin of WV and Sinema of AZ) much more power than they would have in a situation where the Democrats controlled a larger number of seats. In essence, Majority Leader Schumer is held hostage to the will of political kingmakers like Sen. Manchin. Majority Leader Schumer exercises a notoriously light-touch approach, which, according to Senators and aides in the know, relies on a high degree of accessibility to his caucus members, rather than on ruling with an iron fist.
However, Schumer’s high-profile struggles to pass the more ambitious parts of the Biden agenda have brought significant criticism from the activist wings on his own caucus.
Perhaps because of the challenges that Democratic leaders in Congress are now facing, House Speaker Nancy Pelosi has decided to run for re-election to her San Francisco-area congressional seat. This announcement comes despite a previous indication that this would be her last term as the top House Democrat. In a video released by her campaign, Pelosi (D-CA 12) ticked off a list of unfinished business like “justice for immigrants” and issues related to education, housing, and other goals. She said voting rights and even Democracy itself are under assault, pointing to the Jan. 6, 2021, attack on the U.S. Capitol and its political repercussions.
This announcement delays the widely expected transition of power away from Rep. Pelosi to a younger generation of Democratic lawmakers. Although she is now running for her seat again, Pelosi has not indicated whether she will also seek to keep Democratic leadership as well – but it may be a moot point if the Democrats lose the House majority this fall. Nevertheless, Pelosi is one of the Democrats’ most effective tacticians, and is also a major fundraiser for the party. Many experts believe that Pelosi is effectively irreplaceable – other top Democrats like Reps. Hoyer (MD-5) and Clyburn (SC-6) are also octogenarian veterans of the chamber who are nearing retirement. The name most frequently bandied as a potential successor to Pelosi, Rep. Hakeem Jeffries (NY-8), pales in comparison to Pelosi in terms of legislative experience (he has been in Congress since 2013, Pelosi since 1987) and fundraising ability (last cycle, he raised a mere $4,168,717, a paltry sum next to Pelosi’s mighty $27 million). Pelosi’s decision to stay on for another term illustrates the fact that the Democratic party is entering what will surely be a very challenging election cycle – Rep. Pelosi likely will not wish to add the challenges associated with a leadership shuffle on top of this problem. The party still needs her, in other words.
Unlike her colleague Sen. Schumer, who is widely regarded as a collaborative leader, Rep. Pelosi is known to rule with a hand of iron – a role she has been able to take on because of her many decades of service and tremendous amount of political capital. The power structure of the Democratic party largely relies on Rep. Pelosi’s personal skill and renowned talent for whipping the rank and file into shape. Overall, the dynamics of power within the Democratic party are increasingly tenuous – but the decision of Speaker Pelosi to remain onboard for another season may help to stabilize the situation.
Progress on the Majority’s Economic Agenda
The House yesterday unveiled legislation to bolster U.S. research and development in order to compete with the burgeoning Chinese tech sector. The draft law would include almost $52 billion in grants and incentives for the domestic semiconductor industry. Rep. Ro Khanna (D-CA 17) predicted the House would vote on the bill by mid-February. Sen. Todd Young (R-Ind.) told reporters yesterday that he hoped the bill would pass both houses of Congress by the Memorial Day holiday in late May. However, several Republicans have signaled opposition to the bill.
Although Democrats in the House and Senate appear to be moving past the failed Build Back Better act with an implied understanding that it cannot or will not pass in full, President Biden hasn’t given up on the legislation. Biden has enlisted executives from General Motors, Microsoft and pension giant TIAA, among others, to promote the BBB legislation that stalled in Congress late last year. Biden needs to follow through on his pledge to continue fighting for the legislation, because it will become a serious albatross around his neck come the midterms if the Democrats cannot manage to pass it. Many high priority Democratic policies are nested within the BBB bill, which would direct billions to fight climate change and to social programs including child care and early education.
A group of Senate Democrats is lobbying Biden to keep the expanded monthly child tax credit payment as the “centerpiece” of any revived bill, despite the president’s suggestion it may need to be dropped. The senators, led by Michael Bennet (D – CO), said in a letter to Biden this week that the now-expired tax credit was a “signature domestic policy achievement of this administration” and that it kept 3.7 million children out of poverty in December alone. This plea is another sign that Democrats are still not in agreement on how a new version of Biden’s economic agenda will progress. The new bill will need to be able to secure 50 votes – and Biden last week conceded that he might not be able to get an expanded child tax credit in the package.
Another Senate Democrat said the legislation can be revived around two key areas: reducing prescription drug costs and boosting clean energy tax credits. Senate Finance Chairman Ron Wyden (D-OR) this week told reporters that Democrats agree broadly on expanding access to health care, empowering the government to negotiate with drugmakers, and offering incentives for clean energy. Wyden hopes this can form the nucleus of a new BBB. “The reality is there is a lot of common ground right now,” Wyden said.
Meanwhile, the American public is highly focused on inflation which has reached record levels. According to a recent Gallup poll, nearly 8 in 10 Americans expect inflation to increase in the first half of 2022. Additionally, a two-thirds majority of respondents believe the economy is getting worse. Nevertheless, only 8% of respondents named inflation as the most important problem facing the nation. While this is the highest level of concern over inflation seen in decades, Americans are currently more concerned with general government leadership and Covid-19. Voter concern over inflation and the economy will continue to be monitored and will likely have an impact on the 2022 midterm elections.
The government has started to respond to the increased inflation levels. The Federal Reserve has signaled that it plans to hike interest rates for the first time since 2018. Additionally, the Federal Open Market Committee will likely hold its benchmark rate near zero and taper its asset purchases in order to end them by March. A slew of upcoming data from newer reports on the economy will create further debate on policies aimed at curbing inflation. Fed Chairman Jerome Powell has said that he has been using the employment cost index to help determine policy on inflation. This quarterly report helps determine changes in wages and predict the subsequent changes in consumer prices, enabling experts to make predictions about inflation.
Moving Away from Vaccine Mandates
On January 14, the US Supreme Court blocked the Vaccine and Testing Emergency Temporary Standard (ETS) created by the Occupational Safety and Health Administration (OSHA) that would have required companies with 100 or more employees to either mandate COVID-19 vaccination or weekly testing. The Court simultaneously upheld the vaccination for roughly 10 million health-care workers at Medicare- and Medicaid-participating hospitals and in other health-care settings.
The Supreme Court’s conservative majority ruled 6-3 that OSHA overstepped its authority by attempting to regulate public health generally through the ETS. The ruling allows OSHA to regulate “occupation-specific” risks for COVID-19 but not regulations more generally. The Court’s ruling on the vaccine mandate for healthcare workers, separate from the ruling on OSHA’s ETS, agreed that the Department of Health and Human Services has the power to take steps to ensure safety against a disease.
Another federal mandate is unlikely to be implemented, so vaccination requirements will likely continue to be left for states and businesses to decide. President Biden, in his reaction to the ruling, echoed the sentiment that states and businesses will need to determine their own guidelines and regulations, indicating that the Administration has no immediate plans to re-introduce a vaccine mandate.
The Supreme Court’s ruling does not directly apply to a possible vaccine mandate passed into legislation by Congress. The ruling focused asserted that OSHA has limited authority over workplace safety regulations and not the broader authority to implement public health measures generally.
States have been divided on vaccine mandates along party lines. While 24 predominantly Republican-controlled states have passed laws or executive orders restricting employer vaccine mandates, the other 26 states must adopt rules so that their state agencies comply in a similar manner as OSHA. In light of the Supreme Court ruling, these 26 states must adopt rules similar to OSHA’s standards. Several big business groups also signaled opposition to OSHA’s ETS, arguing that they were burdensome or costly. While some large employers have already implemented a vaccine mandate, approximately 1 in 3 planned to do so only if the OSHA rule survived.
Overall, there is unlikely to be a future federal vaccine mandate, and states are unlikely to change the status quo without major developments in the spread and evolution of COVID-19. The ongoing efforts to treat and prevent COVID-19 (mentioned below) will likely play a major role in the federal and state response to fighting COVID-19.
FDA Authorizes New COVID Treatments
The Food and Drug Administration has granted emergency authorization for two COVID-19 pill treatments, Paxlovid by Pfizer, Inc. and molnupiravir by Merck. Between the two pills, Paxlovid appears to have greater efficacy and safety than molnupiravir. In clinical trials, Paxlovid reduced hospitalization by 89% and has been authorized for patients as young as 12. The clinical studies around molnupiravir have not been fully released. The FDA, whose expert panel voted 13-10 to authorize the drug, has warned that use in pregnancy could cause birth defects and only authorized its use in patients as young as 18.
Regardless of the differences in the drugs, the FDA warns that these treatments are only modestly effective and should be used to avoid hospitalization. FDA has not authorized either of these pills to be given to prevent infection or right after an exposure, nor is it for those who already require hospitalization. The FDA also stressed that they are not a substitute for vaccination, or a booster shot. The treatments will be made available for free to states on a per-capita basis. Officials signalled that Pfizer’s Paxlovid will most likely be given out by doctors writing a prescription for patients in the first three days of symptoms and is considered high-risk. In order to ensure equitable distribution, some treatments will be sent to federally qualified health centers.
Officials announced that it plans to have 3 million courses of Merck’s molnupiravir by the end of January, in addition to the 400,000 courses already available upon its authorization. In comparison, Pfizer announced that it would only produce about 180,000 courses by the end of 2021 but plans to produce over 10 million courses for the US by the end of July, including 265,000 by the end of January. The Biden Administration has also offer Pfizer support if it has production issues, including use of powers under the Defense Production Act.
The authorization and purchase of these pills is part of a wider Administration effort to develop a wider variety of effective treatments against COVID-19. In December the Administration announced that it would allocate another 300,000 courses of GlaxoSmithKline Plc’s monoclonal antibody treatment by the end of January and is looking to purchase 600,000 more. The FDA has also recently authorized AstraZeneca Plc’s Evusheld, a pre-exposure prevention treatment for immuno-compromised patients and others who respond poorly to vaccines.
Nevertheless, access to these therapeutics will be limited as widespread production is still underway. Furthermore, the treatments are only available to at-risk patients and require a physician’s prescription. As we go into 2022, the effectiveness and availability of pills used to treat COVID-19 may become a major tool in ending the pandemic and may represent a shift in the Administration’s strategy to curb COVID-19.
Drug-Pricing and Build Back Better’s Future
President Biden’s Build Back Better was effectively killed in the Senate by Sen. Joe Manchin (W.VA-D) who was against the large spending package given the country’s current debt and inflation rate. Nevertheless, they are major pieces of healthcare legislation from the package that could still move forward in Congress.
The House-passed Build Back Better Act, H.R. 5376, represents a large portion of President Biden’s original plan and serves as a framework for potential smaller packages. A major provision in the bill would create a “Fair Price Negotiation Program” for the Centers for Medicare and Medicaid Services to negotiate the price of 250 covered drugs and insulin.
- Prices could not exceed 1.2 times the average price of the drug in six other countries. They would also be available to private insurance plans.
- Drugmakers that do not negotiate successfully would face an excise tax of as much as 95%. Those that charge more than the negotiated maximum price would pay as much as ten times the difference in prices.
The measure would also:
- Require drugmakers to repay the government their profits if they raise the price of a drug above inflation.
- Cap the cost of prescription drugs under Medicare Part D for beneficiaries.
- Block the drug rebate rule published under former President Donald Trump in November 2020.
The future of the bill is tenuous at best. Although he voted against the final package, Sen. Joe Manchin has signaled that he wants to pass parts of Build Back Better and reduce drug pricing. There is bipartisan support for reducing drug pricing and major pieces of legislation have been introduced over the last several years, as well. However, the pharmaceutical industry has undoubtedly weighed-in on the debate in Congress, as lobbying expenditures have reached an all-time high. The Pharmaceutical Research and Manufacturers of America spent nearly $29.6 million on lobbying in 2021 and biotechnology companies largest representative body, the Biotechnology Innovation Organization, spent nearly $13.3 million in 2021. These are record levels of lobbying that have increased over the past several years, indicating that the debate in Congress over drug pricing will be a heated issue. Nevertheless, the aforementioned policies provide a guideline for a future legislative package focusing on drug pricing.
Provisions in the reconciliation bill would also create a new federal health program for Americans in the “Medicaid gap,” which consists of about 2.2 million able-bodied adults who do not earn enough to qualify for Obamacare exchange subsidies, but earn too much to qualify for state-administered Medicaid programs in the 12 states that haven’t expanded eligibility.
IDA Government Affairs Article – January 2022
Federal Social Safety Net Legislation Falls Flat
The highlight of the final months of 2021 was the ongoing negotiation on the Hill over the Build Back Better Act, President Biden’s ambitious plan to overhaul many aspects of the US social safety net and welfare state. In the closing days of December, Sen. Joe Manchin (D-WV) finally pulled the plug on the bill as passed in the House once and for all by stating finally that he would not vote for the version of the bill written by House Democrats.
Sen. Manchin gave many reasons for this decision. He voiced concerns over rising inflation as a major factor in his decision to put a stop to the negotiations, and in interviews targeted towards his own constituents, he complained about what he perceived as undue pressure from Democratic leadership to fall in line and support their legislative priorities despite his misgivings. Regardless of his motives, the fallout from this choice (which was always the most likely outcome, given Sen. Manchin’s clear and constant announcements about his reservations over the BBB Act) was immediate and severe. Democrats in the Progressive wing of the party lambasted Joe Manchin, voicing frustration at what they perceived to be his stubbornness and outsized influence over their party’s ability to make policy.
Nevertheless, the BBB Act is almost certain to go back to the drawing board. Reports on Tuesday Jan 4th suggested that Senate Democrats expect President Biden to restart talks with Sen. Manchin after a “cooling off” period. The Senate will focus on voting rights legislation and rules reform for the time being, and then President Biden and Democratic leadership will approach Sen. Manchin again. Sources in the Senate Democrat caucus predict that the bill will undergo a “very significant rework” before it can pass. Sen. Manchin has often been cagey about what parts of the bill he would support, speaking much more frequently about the items he opposed. However, Manchin has expressed his approval for portions that would give handouts to fossil fuel companies to pursue greener technology investments.
Whatever shape this legislation finally takes, it seems certain that it will not be nearly so ambitious as the House Democrats, and particularly the Progressives in the House, would want it to be.
OSHA News – Emergency Temporary Standard for COVID-19 Vaccination and Notice of Proposed Rulemaking for Heat Hazards
On November 5, 2021, the Occupational Safety and Health Administration (OSHA) issued an Emergency Temporary Standard (ETS) to enforce a vaccine mandate for employees of private companies. The ETS required private employers with at least 100 employees to either mandate vaccination against COVID-19,or require employees to choose between vaccination or weekly testing and mandatory masking at work.
Under the original ETS, employees needed to be fully vaccinated or undergoing weekly testing, beginning January 4, 2022. All other requirements, including an indoor mask mandate for unvaccinated workers, were supposed to become effective December 5, 2021.
The ETS faced many legal challenges as soon as it was published. On November 12, 2021, the United States Court of Appeals for the Fifth Circuit, following an expedited review of the ETS, issued an opinion which put a halt to the requirements imposed by the ETS, and which barred OSHA from enforcing the standard. The Sixth Circuit Court of Appeals was then handed the case after a lottery was taken to determine where the issue would be decided. On December 17, 2021, the Sixth Circuit Court of Appeals ended the stay issued by the Fifth Circuit. The Sixth Circuit officially reinstated the ETS. However, the Supreme Court is expected to determine whether and when the ETS will actually take effect.
In the meanwhile, covered employers must comply with the ETS, and must act swiftly to ensure compliance. More information about the requirements of this standard can be found on OSHA’s website. Under the ETS, employers may choose to require vaccination or allow covered employees who are unvaccinated to wear a mask and provide proof of a negative COVID-19 test on a weekly basis. Essentially, all requirements except the testing will be enforced by OSHA effective January 10, 2022 (originally December 6, 2021). These include, for example, the requirements that employers determine the vaccination status of each employee and develop a written policy consistent with the mandate of the ETS. The start date for the testing requirement has been extended to February 9, 2022 (originally January 4, 2022). OSHA has also extended the deadline for public comment on its ETS to January 19, 2022.
It is still not known when the Supreme Court will rule on the ETS. The Court only recently began receiving oral argument. Additionally, the Supreme Court refused to stay the ETS again and block its requirements while they make a decision. So, unless the Supreme Court rules before January 10, 2022, the ETS will become effective. OSHA has also argued that the ETS preempts state laws which prohibit employer vaccination requirements. So employers with workforces in States like Montana and Tennessee, which have banned private employers from mandating employee vaccination, will have the difficult task of applying the demands of the ETS while also navigating their own state laws.
While the standard applies only to employers with one hundred or more employees, the way that OSHA counts employees can be complicated if an employer has any kind of particularities about seasonal, temporary, or joint employees. OSHA has released an FAQ document which answers many potential questions about the ETS.
In other OSHA news, the Agency has also extended the deadline for public comment on their Advance Notice of Proposed Rulemaking for Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings. Comments on this proposed rulemaking must now be submitted by Jan. 26, 2022. OSHA is considering publishing a new standard specifically dealing with worker exposure to heat in indoor and outdoor workspaces. “Hazardous heat” has become a new priority for OSHA recently – in addition to their proposed rule on unsafe heat exposure, OSHA plans to undertake more heat related enforcement and safety education initiatives in 2022. Anyone with an interest in submitting a comment to OSHA about this new proposed standard can learn more here.
The proposed OSHA heat rule would undoubtedly impact businesses, like those in the door and access systems industry, that incorporate manual trades which involve strenuous physical activity in outdoor settings. OSHA has historically had a very hard time preventing heat-related illness under its “General Duty” clause – because no set standard exists about how much heat is dangerous, OSHA struggles to go after businesses when workers suffer heat exhaustion or sunstroke. The Agency itself admits in the Notice of Proposed Rulemaking that “Because there are no specific, authoritative exposure thresholds for OSHA to rely on, it has been challenging for the agency to prove the existence of a recognized hazard, even in cases in which a heat-related fatality has occurred.” That would change, were OSHA to produce a new standard framing excessive heat exposure as a recognized hazard. This would be a new avenue of regulation and enforcement for OSHA and would open the way for the Agency to issue many new judgments that it has previously struggled to make “stick”.
IDA Government Affairs Recap: November 2021
As the year draws to a close, the détente on Capitol Hill is increasingly strained. Democrats have managed to pass, and President Biden has signed, a landmark $1 trillion dollar “infrastructure bill” which was the product of significant bipartisan cooperation in both houses of Congress. Originally passed by the Senate in August, the infrastructure bill was delayed in the House by inter-party strife among the Democratic rank and file. Moderate Democrats demanded that the infrastructure bill be passed before a vote on the much larger “reconciliation package”, which contains many of the social spending and safety-net changes that the more progressive Democrats see as more essential to pass. Progressives, for their part, threatened to vote against the bipartisan infrastructure package unless their preferred social spending bill took priority. This logjam, complicated by factors such as the debt ceiling and the need to fund the government, took much of the air from the room during September and October.
At last, however, Speaker Pelosi moved to pass the infrastructure bill in the House, after bringing the progressive wing of the Democratic party to heel by securing promises from moderates that they would vote in favor of the larger $1.75 trillion social spending bill when the time came. Pelosi also had the help of Republican moderates – 13 of whom crossed party lines to vote with Democrats. Without the help of these 13 Republicans, the bill could not have passed, as six of Pelosi’s own caucus voted against the bill. The House vote occurred on Nov. 8th and the bill was signed into law by President Biden on Nov. 15th.
Then, the House turned its attention to the larger and, for those in our industry and others like it across the country, perhaps more important matter of the social spending bill. On Nov. 19th, the House voted to advance this bill via budget reconciliation. All but one Democrat in the House (Rep. Jared Golden – D-ME) voted to pass the bill. Every House Republican voted against it. The bill is being called “The Build Back Better Act”, and the Congressional Budget Office (CBO) on Nov. 18th projected an overall net cost of $1.7 trillion over 10 years for the bill’s package of targeted individual tax relief that includes an expanded child tax credit, clean energy incentives, and increased spending on healthcare, education, childcare, and other programs. The bill as passed by the house still includes many provisions that would likely raise taxes on business owners and businesses, as well as other troubling provisions impacting employment law. More money for IRS enforcement is also being touted by the Democratic party as a revenue driver within this bill. CBO estimated that the bill’s extra $80 billion for IRS tax enforcement efforts would drive up revenues by $207 billion through 2031, whereas the Treasury Department had earlier projected a revenue gain of closer to $480 billion from these stricter IRS policing efforts. The White House has previously asserted that the cost of the Build Back Better legislation would be fully offset by the increased tax revenues, and despite the CBO’s estimate that there will still be $160 billion added to the deficit, House and Senate Democrats have persisted in characterizing the bill as deficit neutral, relying on the Treasury’s higher estimate of the amount that can be squeezed from taxpayers with harsher IRS enforcement.
While the bill has now passed the House, it looks increasingly unlikely that it will be able to pass in the Senate, where two moderate Democrats have been vocal about their inability to support major portions of the bill as written. Sen. Joe Manchin, (D-WV) and Sen. Kirsten Sinema (D-AZ) continue to message their heartburn about portions of the bill. On Sen. Manchin’s end, parts of the bill that would provide legal clemency for the more than 7 million undocumented aliens who have been living here continuously for a decade or more are untenable. Manchin also opposes electric vehicle tax credits for cars manufactured by union workers – while he is ordinarily pro-union, the Toyota plant in Manchin’s home state does not use union labor to manufacture its vehicles. Manchin is also coming down in opposition to methane fees in the reconciliation package, a concern he first raised in October.
On Sen. Sinema’s part, she has been generally more reserved than Sen. Manchin about the problems she has with the reconciliation bill – she rarely gives interviews. However, sources indicate that she opposes two key elements of the plan: raising corporate tax rates and lowering the cost of prescription drugs.
Despite the concerns raised by these two moderates, Senate Democrats are moving forward with a planned vote on the reconciliation bill. Senate Majority Leader Charles Schumer (D-NY) has made known to beltway insiders his plan to proceed with a vote on the bill by the week of Dec. 13th. However, the bill cannot move to a vote without a vote from Sen. Manchin to start debate – and so far the West Virginian Democrat has refused to say whether he would vote with his party or not when the time comes to take a vote to begin debate.
So, despite Sen. Schumer’s accelerated timeline for passage of the bill, it seems the pathway forward for the Democratic party is not exactly clear. Negotiations are ongoing and reaching a fever pitch now, complicated again by the looming debt ceiling issue, which Democrats kicked down the road earlier this year with the help of Senate Minority Leader Mitch McConnell (R-KY). However, after consenting to help the Democrats raise the debt ceiling to stave off a crisis in October, Sen. McConnell has indicated that he will not help the Democrats again.
All this will add up to a very tense and high-stakes environment in Washington, DC over the next few weeks, as we wait to see whether or not the Democrats can achieve the passage of their landmark legislative goal for this session.
Build Back Better Rebuilt: Workforce Issues
The lack of availability of skilled and unskilled labor to fill the door technician worker pipeline is a chief concern for most IDA members. Workforce development including technical education is one of IDA’s chief issues; IDA supports the expansion of trades training- especially for construction related jobs- and we were hopeful that there might be some movement to stimulate training opportunities through federal stimulus packages that are in work in Washington. In fact, the Biden administration released a revised plan for the Build Back Better initiative last week. This plan would increase workforce development spending by the US Department of Labor by 50% over each of the next five years. One aspect of the program is increased access to training programs to fill “good, union, and middle-class jobs”, coupled with the goal of developing “hundreds of thousands of workers”.
Given the state of the labor market, with more than 300,000 open jobs in the construction sector alone, the bar is set a bit low. Another concern about the plan is the Biden administration’s continued focus on union jobs. With much of the building industry workforce working in non-union enterprises -particularly in the residential sector- this effort may be “too little, too irrelevant” to have a meaningful impact on the construction economy, let alone the door industry.
IDA will continue to monitor efforts from Congress on the educational fix to the labor shortage, while also keeping an eye on the administration’s plans for legal immigration that would provide a means for trained workers to enter the country- and the building industry economy. We will continue to seek opportunities to partner with other like-minded groups to urge the federal government to up their game.
Here is an excerpt from the White House communications on the workforce impacts of the plan:
Expand access to affordable, high-quality education beyond high school. Education beyond high school is increasingly important for economic growth and competitiveness in the 21st century, even as it has become unaffordable for too many families. The Build Back Better framework will make education beyond high school – including training for high-paying jobs available now – more affordable. Specifically, the framework will increase the maximum Pell Grant by $550 for more the more than 5 million students enrolled in public and private, non-profit colleges and expand access to DREAMers. It will also make historic investments in Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), and minority-serving institutions (MSIs) to build capacity, modernize research infrastructure, and provide financial aid to low-income students. And, it will invest in practices that help more students complete their degree or credential. The framework will help more people access quality training that leads to good, union, and middle-class jobs. It will enable community colleges to train hundreds of thousands of students, create sector-based training opportunity with in-demand training for at least hundreds of thousands of workers, and invest in proven approaches like Registered Apprenticeships and programs to support underserved communities. The framework will increase the Labor Department’s annual spending on workforce development by 50% for each of the next 5 years.
Infrastructure and Reconciliation
As a reminder – On August 10th, the $1 trillion bipartisan infrastructure bill passed the Senate on a vote of 69-30. Eventually, the two chambers of Congress will have to agree to one overall bill.
On August 12th a group of nine moderate House Democrats threatened to withhold support for the Administration’s planned $3.5 trillion spending package unless their chamber first passes the $1.5 trillion bipartisan infrastructure bill.
However, progressive in the Democratic caucus refused to prioritize the bipartisan infrastructure bill over the $3.5 trillion reconciliation package, which places a much higher emphasis on progressive priorities like healthcare, the social safety net, and climate change mitigation. Progressives demanded that the $3.5 trillion bill be passed first, causing a logjam. Ultimately the Democratic leadership missed the September 27th deadline imposed by the moderate members of their party, choosing to placate the larger progressive wing of the party and pass both bills at once if possible.
However, moderate Democrats in the Senate, like Sen. Joe Manchin (WV) and Sen. Kyrsten Sinema (AZ) have expressed their unwillingness to vote for the $3.5 trillion bill initially worked up in the House. This means that Congress cannot pass the bill as initially drafted – and Democrats have had to go back to the drawing board.
So, the final shape of the bill is yet to be seen, and it’s unclear which program obligations the Democrats will choose to cut back on to reduce the bill’s price tag. However, Speaker Pelosi has said that she expects a final bill will come in at “a couple trillion” dollars and that it “may do fewer things well”. Pelosi suggested that Democrats may cut down the length of time that funding would be allocated to new programs to lower the price tag. Pelosi suggested that the “timing could be reduced in cases to make the costs lower,” while adding the caveat that Democrats would still try to structure these shortened programs in such a way as to maintain their “transformative nature”. The initial time scale of the reconciliation bill was 10 years – with programs funded for the next decade. It remains to be seen which programs could be funded for a shorter period without compromising on the Democrats’ “transformative” ambitions.
Others within the Democratic caucus have also discussed the problem of pay-fors, and the trouble Democrats are having coming to agreement on their collective agenda. Rep. John Yarmuth (D-Ky.), the chair of the House Budget Committee, said in mid-October that he believed there were serious divisions within the House Democratic Caucus about whether to invest a smaller amount in the Democrats’ full range of desired programs, or whether to focus the legislation on fewer programs but provide more significant funding.
“We had a meeting last week of leadership and committee chairs,” Yarmuth said. “And I would say that the discussion came up as to what people thought the better course of action would be … either to try to keep all the elements and pare them down, or to focus on three or four most important elements. And I would say the group was split pretty much in half.”
Yarmuth also indicated that “the half that thinks it might be better to focus on a few couldn’t agree on what the few would mean. And so it’s gonna be difficult either way, but my guess is we’ll probably try to keep all the elements and pare them down.”
This makes sense, given that the implicit objective of this reconciliation bill is a complete overhaul of the US social safety net – and the bill as drafted in September would have done much to change longstanding labor law, tax policy, and environmental programs too. When government programs are put into effect, they are rarely – if ever – repealed later. Democrats know that by passing a sweeping agenda, even if it is supposedly only going into effect for a short time, they can force Republicans to expend political capital to repeal portions of it. And if Republicans are unwilling or unable to repeal these measures, eventually, the programs will almost certainly be continued via rubber-stamp funding when another budget resolution comes around.
So, in the short term, the need to pass a “smaller” spending package may seem like a political roadblock for House Democrats. But in the long term a sweeping agenda funded for a shorter time will have largely the same impacts as the initial $3.5 trillion plan would have had.
Debt Ceiling Issues
The impending debt ceiling crisis was averted on Oct. 8th when Sen. Minority Leader Mitch McConnell agreed to help Democrats raise the debt ceiling enough to push the issue back to December. This helped to buy time for Democrats to come to a consensus within their own caucus about what they will pass via reconciliation. However, Sen. McConnell faced criticism from within his own party for this act of bipartisanship – and he was livid with Sen. Schumer when the Sen. Majority Leader criticized Republicans for trying to “push the country over the cliff’s edge” after McConnell and a number of other Republican Senators had voted to help him by extending the debt ceiling. Sen. McConnell perceived this criticism from Sen. Schumer as a betrayal and has refused any further support from his caucus once the issue comes to a head again in December.
After the vote to raise the debt limit and Sen. Schumer’s comments, Sen. McConnell a scathing letter criticizing Schumer for his ingratitude – and stating that he would not act to relieve pressure on the Democrats again when it comes to this issue. McConnell decried Schumer’s “hysterics” and said he had “grave concerns” about the Democrats $3.5 trillion spending bill. McConnell said he would “not be a party to any future effort to mitigate the consequences of Democratic mismanagement”. While Sen. McConnell may change his mind again (he had previously argued that Democrats needed to raise the debt limit themselves, before agreeing to help them do it), it seems he has staked a relatively strong position on this issue.
Democrats will certainly have a difficult time passing further legislation to extend federal borrowing authority come December. Without GOP support there are few options available to them. They might change Senate rules and shield debt limit legislation from GOP filibusters, but Sens. Manchin and Sinema oppose that course of action, which means a filibuster rule change is unlikely. Republicans said one factor in their decision to give Democrats the two-month debt lifeline was their fear that a debt default would be a serious-enough threat to force Sens. Manchin and Sinema away from their positions on the filibuster – an outcome Republicans are eager to avoid.
Hoping to end the partisan impasse over lifting the statutory debt ceiling, House leaders are now considering taking up legislation designed to relieve Congress of the burden. A two-sentence bill sponsored by Rep. Brendan F. Boyle, (D-PA) vice chairman of the Budget Committee, would give the Treasury Department power to raise the debt limit unilaterally – without the need for Congress to get involved. The measure simply states that the debt limit “shall be treated as being equal to such greater dollar amount as the Secretary of the Treasury may periodically determine.”
Democrats say that this measure is like those enacted as part of a budget agreement in 2011, which was initially proposed by Sen. McConnell himself and used again to end a 2013 debt limit standoff. Dubbed the “McConnell rule,” Speaker Nancy Pelosi said last week that the idea “has merit.” House Majority Leader Steny H. Hoyer, (D-MD)., told reporters on October 19th that the Boyle bill may be the most “viable” path to a debt limit deal to end the partisan gridlock. “The more viable option is to adopt a process that was suggested by Sen. McConnell a few years ago,” Hoyer said. “Now, of course, the fact that he made that does not mean he would support it, which is sad.”
However, the new Boyle bill is different from the prior laws – the past laws were smaller in scope and gave the Treasury more limited authority – along with a chance for lawmakers to block the Treasury’s attempt to raise the debt ceiling via a method called a “resolution of disapproval.”
Hoyer’s reference to the earlier McConnell-backed process signals that Democratic leaders could potentially amend the Boyle bill before it reaches the floor to add a congressional disapproval option. Hoyer said last week that he planned to bring legislation to the House as early as this month, offering a long-term solution to the debt limit. He said he would personally prefer abolishing the debt limit altogether, as proposed in a bill by Democratic Rep. Bill Foster of Illinois. Foster is also a co-sponsor of the Boyle bill.
Hoyer and other Democrats say the debt limit has not accomplished its job, because it has done little to curb rising deficits, and it generates a new political crisis whenever it needs to be lifted, which can shake up financial markets. But many fiscally conservative Republicans oppose abolishing the debt ceiling, saying it forces a useful check on federal borrowing and can lead to spending restraints. While he did not rule out a potential House vote to abolish the debt limit, Hoyer said, “We probably can’t get that through the Senate.” Boyle’s more limited measure to put the process of raising the limit in the Treasury’s hands would perhaps be more likely to pass.
Potential Government Shutdown
Note: This is a dynamic situation- subject to change often during the next few days- make sure to follow the story to understand how the negotiations could impact your business!
The core issues on the table for the appropriations process are spending and taxation- the Biden administration has proposed corporate income tax increases that would impact many in the door business supply chain.
Congress funds the activities of the larger Federal Government via what are called appropriations bills. Appropriations bills generally have an expiration date, and when they expire, it means that the programs they were passed to fund must end. In reality, this never happens, because new appropriations bills are passed to provide continue funding to these government programs.
However, in times of political turmoil, or when DC is particularly gridlocked, the question of the budget can become a political tool. This is when government shutdowns, such as the one that occurred in December of 2018-January of 2019, can become a real threat. Shutdowns lead to furloughs for thousands of federal employees. Some federal employees are deemed “essential”, and these workers must stay on the job without pay. However, federal parks, museums and monuments will likely close, and federal contractors don’t get paid during a shutdown.
The reason why we are now facing another shutdown similar to the one in winter 2018-2019 is because Congress has much to do and very little time to do it. Currently, the appropriations bills keeping the government running will expire on October 1st. The House has passed a bill to extend funding to December 3rd, to buy time. Senate Majority Leader Chuck Schumer (D-N.Y.) filed for cloture on the House-passed continuing resolution on the night of September 23rd, setting a vote for Monday. Because the House-passed legislation includes a provision suspending the debt limit until December 2022, Senate Minority Leader Mitch McConnell and his GOP colleagues have indicated that they will block it from being considered. This means that the Democrats may need to include debt ceiling and appropriations measures in their $3.5 trillion bill, which will have to pass via reconciliation because of the Democrat’s slim Senate Majority, and which has already drawn opposition from within their own caucus.
While Democrats are perhaps justifiably upset by Sen. McConnell’s refusal to play ball on funding the government, they have known about McConnell’s refusal to vote for the debt limit for at least two months. Not putting debt limit increase and funding for existing government programs into their reconciliation bill was a political calculation – and with the clock ticking down now, it seems that Democrats will have to make some concessions to the holdouts within their own party, moderates like Rep. Gottheimer and West Virginia Senator Joe Manchin. Democrat leaders are now working on a so-called “framework” for the reconciliation package that will please both their moderate and progressive party members. This will be a challenge – the progressive wing of the Democrat party is threatening to sink a vote on the $1 trillion infrastructure bill from the Senate unless Speaker Pelosi delays it. In other words – Moderates are demanding that the House prioritize the $1 trillion Senate infrastructure bill. Progressives are demanding that the House prioritize the $3.5 trillion House reconciliation bill – which is still not fully written. To compound it all – the government will shut down in a week if Democrats cannot move quickly to agree upon and pass a continued funding bill. In short – the situation is complex and extremely tense on the Hill going into next week.
Infrastructure and Reconciliation
Infrastructure spending is a key piece of the Biden agenda- while project funding could serve to stimulate the economy, especially within the non-residential construction economy, it comes with a price tag. Income tax rate increases and changes to labor rules as well as highway use tax have the potential to stall growth in the private sector.
On August 10th, the $1 trillion bipartisan infrastructure bill passed the Senate on a vote of 69-30. Eventually, the two chambers of Congress will have to agree to one overall bill. With Democrats’ slim majority in the Senate and President Joe Biden aiming to make infrastructure a signature accomplishment of his first year in office, the Senate will likely be the decisive factor in shaping the coming legislation.
On August 12th when a group of nine moderate House Democrats threatened to withhold support for the $3.5 trillion spending package until their chamber first passes the Senate’s bipartisan infrastructure bill and sends it to Biden for his signature. Nearly all the nine Members of Congress, led by Rep. Josh Gottheimer (D-NJ-05), who also co-chairs the bipartisan Problem Solvers Caucus, are members of the business-friendly Blue Dog Coalition.
Ultimately, a deal was struck and on August 24th all 220 House Democrats voted for a $3.5 trillion budget framework resolution embedded in a House rule. The measure also set a September 27th deadline for a House vote on the Senate’s $1 trillion infrastructure package.
The $3.5 trillion bill originating in the House is now shaping up. It contains many provisions which have raised serious concern in some segments of the economy.
It appears that the House Majority are using the reconciliation bill to pass portions of the PRO Act, a bill which would have imposed significant new burdens on businesses that contract with Independent Contractors as a significant portion of their workforce. The markup out of the House Education and Labor Committee included a provision, detailed below, which would effectively ban the use of Independent Contractors – it would also remove the ability of employers to use arbitration agreements to protect against class action lawsuits.
The provision in question would create new civil penalties (up to $50,000 per violation) for a set of “unfair labor practices” (ULPs), which would now include misclassifying workers as independent contractors. The bill would make it unlawful to “communicate or misrepresent to an employee… that such employee is excluded from the definition of employee”. In other words, the law would make it a crime, punishable by a $50,000 fine, simply to communicate to an employee that they are not an employee. Business executives and directors could be held personally liable for these alleged ULPs. Additionally, the law forbids the use of employee agreements designed to prevent class action lawsuits.
This provision attempts to do the same thing the PRO Act was designed to achieve: it would make the penalty for IC misclassification so high ($50,000 per IC) that employers will fall under an extremely difficult compliance burden if they wish to use ICs. The effect of this law will likely be the same as the nationwide ABC test initially contained in the PRO Act – businesses will have to stop using ICs or face unjustifiable risk. This could cause mass disruptions for the portion of the US workforce that relies on temporary, independent, or contingent work to support themselves, and will certainly cause problems for businesses that dip into this labor pool.
The bill includes an increase to the corporate tax rate, from 21% back up to about 26.5%. Other tax elements of the bill include proposed changes to estate tax laws which have been unpopular with many small businesses owners and farmers. In his initial proposals for this law, the President wanted Congress to remove step-up in basis provisions which help family-owned businesses transition between generations. Ultimately, it appears that this provision is not included in the markup from the House Ways and Means committee. However, other changes to estate tax provisions have remained in the markup – including a proposed reduction in the estate tax exemption from $11.7 million back down to $5 million. Many agriculture and small-business advocacy groups are pushing hard for Congress to preserve existing estate tax measures for inherited assets, claiming that reducing the cutoff back down to $5 million will harm many established family businesses, while having little impact on the extremely wealthy.
While many of the suggested tax hikes in the $3.5 trillion reconciliation bill have been discussed before, there is also a new proposal in the bill for a “$.20 per pound fee on the sale of virgin plastic used to make single-use plastics.” This proposed national plastics tax appears to be a concept drawn from legislation introduced in August by Senator Sheldon Whitehouse (D-R.I.), which would levy a fee on virgin plastic production to push manufacturers towards the use of recycled plastics. These national plastics tax proposals follow trends emerging from certain state regulatory regimes for plastic manufacturers, which are referred to as Extended Producer Responsibility (EPR) rules. These EPR rules have the same ostensible goal as the proposed national plastics tax – to reduce use of virgin plastic and incentivize recyclables. EPR systems seen so far would work similar to cap and trade rules, imposing a fee on plastics instead of emissions. This year, Maine and Oregon became the first states to impose EPR regimes under legislation signed by Governors Janet Mills (D-Maine) and Kate Brown (D-OR) this summer. There are concerns that the costs of these taxes will ultimately be passed along to consumers – one study from York University in Toronto suggests that Maine’s new EPR program will raise the cost of consumer goods in the state anywhere from $99 million to $134 million annually. Using Maine’s own recycling data, the study authors project that the program will raise monthly costs for a family of four between $32 and $59.
Healthcare and Benefits Provisions
House Democrats have also proposed a number of major Medicare reforms in the reconciliation bill. Provisions from the House Energy and Commerce Committee would expand Medicare to cover vision, dental, and hearing benefits. These additions have been considered by Congress before – in 2019, the CBO indicated that these provisions in a House-passed bill would cost approximately $358 billion over 10 years.
Provisions in the reconciliation bill would also create a new federal health program for Americans in the “Medicaid gap,” which consists of about 2.2 million able-bodied adults who do not earn enough to qualify for Obamacare exchange subsidies, but earn too much to qualify for state-administered Medicaid programs in the 12 states that haven’t expanded eligibility.
Additionally, the reconciliation bill would make permanent the increases to Obamacare subsidies which Congress initially expanded under March’s American Rescue Plan until the end of 2022. Under the extension, no one would spend more than 8.5 percent of their income on premiums. These subsidies were largely instituted to provide generous Obamacare subsidies for middle-class Americans, who were mostly ineligible for these subsidies before the passage of the American Rescue Plan in March. The bill would also amend the ACA employer “firewall” rules so that premium tax credits would be available to those who qualify based on their income, regardless of whether their employer offers affordable, minimum value coverage as required by the ACA. In addition, an employer would not be subject to a shared-responsibility penalty with respect to employees who purchase an ACA marketplace plan and receive premium tax credits.
The legislation as written also requires employers with more than five workers to provide access to a retirement plan that automatically enrolls employees by 2023. The automatic contribution percentage would start at 6 percent for qualified employees and would automatically escalate up to 10 percent during the fifth plan year. Employers would not be required to make contributions to the plan.
Employees would be able to opt out and could adjust their investments within the plan. Employers that do not offer an automatic contribution plan or arrangement would be charged an excise tax of $10 per day per employee for noncompliance (with certain exceptions).
Employers could comply by sponsoring a defined contribution plan, being part of a multiple employer plan or participating in a state-facilitated automatic individual retirement account (IRA) program, as long as these options meet the specified requirements.
On September 20th, the Occupational Safety and Health Administration announced that they would be “initiating enhanced measures to protect workers better in hot environments and reduce the dangers of exposure to ambient heat.”
OSHA has said they will crack down on preventable heat illness because climate change is causing increasing heat, which “can cause lost productivity and work hours resulting in large wage losses for workers.” OSHA cites The Atlantic Council’s Adrienne Arsht-Rockefeller Foundation Resilience Center, which “estimates the economic loss from heat to be at least $100 billion annually – a number that could double by 2030 and quintuple by 2050 under a higher emissions scenario.”
OSHA says they will begin implementing an enforcement initiative on heat-related hazards, developing a National Emphasis Program on heat inspections, and launching a rulemaking process to develop a workplace heat standard. In addition, the agency is forming a National Advisory Committee on Occupational Safety and Health Heat Injury and Illness Prevention Work Group “to provide better understanding of challenges and to identify and share best practices to protect workers.”
IDA Regulatory Affairs Update – August 2021
Department of Labor (DOL) Joint Employer Rule Rescinded
The DOL Joint Employer Rule affects companies, including door dealers, that with employees that work at more than one company. The rule change highlighted below could impact companies with technicians installing doors for more than one dealer, or potentially any employee working a “side job”. Door dealers should review the updated rule to understand how it could impact their responsibilities. A final rule from the Biden DOL’s Wage and Hour division was published in the Federal Register at the end of July: https://www.federalregister.gov/documents/2021/07/30/2021-15316/rescission-of-joint-employer-status-under-the-fair-labor-standards-act-rule.This rule rescinded a Trump-era joint employer rule which took effect on March 16, 2020.
The business lobby continues to fight on behalf of the Trump-era regulatory framework, which was already embroiled in a legal battle, as a U.S. district court judge struck down the most significant parts of the rule last year. The U.S. Court of Appeals for the Second Circuit is currently reviewing the legal arguments for and against the Trump rule. As the Biden administration has now repealed the regulation, administration attorneys might seek the dismissal of the case, but many business groups have intervened in the litigation and are seeking to defend the Trump rule. As previously reported, these groups will continue to fight the Biden administration’s effort to undo the changes the Trump DOL instituted.
Republican legislators have also been critical of the Biden DOL’s efforts to reverse the changes – Reps. Virginia Foxx and Fred Keller have been particularly vocal about the issue. Foxx and Keller recently released a joint statement saying: “While we know better than to expect common-sense policymaking from the Biden administration, we strongly urge the DOL to reinstate the four-factor test for determining joint employment and end its crusade against American ingenuity”.
The Department of Labor gave several reasons for its decision to rescind the Trump-era rule. The main reasons all centered around the argument that Trump’s DOL had departed significantly from the DOL’s existing body of guidance on joint employment, and that this departure was a bridge too far.
In their argument, the DOL cited the ruling of the US District Court for the Southern District of New York, which initially struck down the rule, reflecting the court’s concerns with the Trump rule. This included, “that the Rule did not adequately explain the reasons for the significant departure.” DOL also said the rule, “was inconsistent with the FLSA’s text and purpose,” and that its vertical joint employment analysis had, “never before been applied by WHD, was different from the analyses applied by every court to have considered the issue prior to the Rule’s issuance, and has generally not been adopted by courts.” The DOL acknowledged that the Trump rule’s horizontal joint employment analysis was “consistent with prior guidance” but said that it was also “intertwined with the vertical joint employment analysis, and thus the Department is rescinding the entire Rule”.
The DOL also claimed that the Trump rule would have had a “negative effect” on workers’ rights under the Fair Labor Standards Act: “Finally, the Department was concerned that the Rule may not have sufficiently considered the negative effect that it would have on employees by reducing the number of businesses who were FLSA joint employers from which employees may be able to collect back wages due to them under the FLSA”.
The future status of the Trump rule may be determined by the outcome of the legal battle currently underway, but for now the Biden rule officially rescinding it will go into effect on September 28, 2021.
HR 3925 – SHELTER Act
This law would amend the Internal Revenue Code of 1986 to provide a tax credit for disaster mitigation expenditures. It was introduced in the House in June by Rep. Gus Bilirakis (R-FL-12), and a companion bill in the senate was introduced by Sen. Michael Bennet (D-CO). Taking advantage of this credit could help defray the expense of door retrofits or replacements. IDA will follow the bill- and will keep our members updated.
The bill would allow a tax credit to individuals and businesses for disaster mitigation expenditures. The allowable amount of such credit is 25% of the mitigation expenditures, up to $5,000 in any taxable year. The bill has a sizeable list of improvements which classify as, “qualified disaster mitigation expenditures,” including projects which, “protect exterior doors and garages from natural hazards,” and which include, “lateral bracing for wall elements, foundation elements, and garage doors or other large openings to resist seismic loads.” Installation of ignition-resistant, “exterior walls, doors, windows, or other exterior dwelling unit elements that conform to ignition-resistant construction standards,” is also covered, as well as numerous other fire, flood, earthquake and high-wind damage mitigation procedures.
Small Business Administration
The U.S. Small Business Administration (SBA) will host National Small Business Week from Monday, September 13 through Wednesday, September 15, 2021, from 11:00 a.m. – 6:00 p.m. ET for the three days. This free event will spotlight the resilience of America’s entrepreneurs and the renewal of the small business economy as they build back better from the economic crisis brought on by a once-in-a-lifetime pandemic.
SBA Administrator Isabella Casillas Guzman announced National Small Business Week in a video message. “As the voice for America’s 30 million small businesses and innovative startups, it’s my pleasure to announce the SBA’s annual National Small Business Week Summit,” said Administrator Guzman. “Over the last 16 months, we have seen the incredible determination and ingenuity of small businesses across the nation. During NSBW, we will honor and celebrate their impact on our economy and strengthening of communities as we look towards recovery. NSBW is the perfect time for small businesses across the nation to network and learn about the many services and programs at the U.S. Small Business Administration, including our no-cost business counseling and mentoring opportunities available via our district offices and resource partners. We look forward to celebrating with you as we rebuild our economy and help our small businesses build back better.”
For more information, visit the SBA website at: www.sba.gov/national-small-business-week
House Highway Bill Provisions
The House Highway Bill, H.R. 3684, has now passed both House and Senate. Nested among the provisions of this bill are several, “pilot programs,” including one which would provide grant funding to nonprofit organizations looking to install more energy efficient building hardware – including doors, windows, HVAC systems, and roof assemblies. Another more troubling pilot program would examine the institution of a multiyear, “national motor vehicle per-mile user fee.” Fees collected by this program would go into the Highway Trust Fund and would serve to improve and maintain the surface infrastructure transit system.
This bill has wide-ranging consequences for door dealers, including good news about potential credits for installation of energy efficient doors, and possible bad news about transportation costs- including the need for vehicle tracking to determine what fees would be due for business travel including service and installation vehicles.
The mileage fee pilot program was first raised by Democratic Sen. Tom Carper of Delaware and Republican Sen. Shelley Moore Capito of West Virginia in a separate infrastructure proposal introduced in March.
The program itself directs Transportation Secretary Pete Buttigieg and Treasury Secretary Janet Yellen to, “establish, on an annual basis, per-mile user fees for passenger motor vehicles, light trucks, and medium- and heavy-duty trucks, which amount may vary between vehicle types and weight classes to reflect estimated impacts on infrastructure, safety, congestion, the environment, or other related social impacts.”
The Cabinet officers must also provide annual reports to Congress on the program’s progress, and whether complete national implementation is viable. They must, “establish a mechanism to collect motor vehicle per-mile user fees,” with or without the help of third-party vendors.
As written, the pilot program would be funded through 2026 and enlists volunteer drivers, “from all 50 States, the District of Columbia, and the Commonwealth of Puerto Rico,” to test “any of the following vehicle-miles-traveled collection tools,” including:
- Third-party on-board diagnostic (OBD-II) devices
- Smartphone applications
- Telemetric data collected by automakers
- Motor vehicle data obtained by car insurance companies
- Data from the states that received a grant under section 6020 of the FAST Act
- Motor vehicle data obtained from fueling stations
- Any other method that the secretary considers appropriate
Pilot program volunteers will have their data shielded by the federal government and will be compensated out of an initial allocation of $10 million that might be raised in the future. The bill also establishes an Advisory Board to provide, “recommendations related to the structure, scope, and methodology for developing and implementing the pilot program,” and help run a, “public awareness campaign,” about the per-mile fees program.
White House press secretary Jen Psaki and other top administration officials have maintained for weeks that, “any tax on vehicle mileage,” violates Biden’s $400,000 red line, which pertains to his promise that no provision of the infrastructure bill will raise taxes for individuals making less than $400,000 per year. The inclusion of this per-mile fee pilot program in the infrastructure package appears to conflict with the $400,000 red line commitment by President Biden.
Florida Building Commission (FBC) Holds Meeting of the Hurricane Research Advisory Committee (HRAC)
The FBC HRAC met last week to review issues surrounding the performance of existing buildings. The Committee reviewed various local ordinances within Florida, as well as a few outside jurisdictions. The review included discussion surrounding code provisions for existing buildings within the International Codes, and the Florida Building Code. This direction has been given a greater sense of urgency within the HRAC as a result of the Champlain Tower collapse in Surfside, FL, in late June.
The HRAC will be investigating possible improvements to the Florida Building Code provisions for the maintenance of existing buildings. Note that the FBC is in the process of reviewing the 2021 I-Codes for possible amendments to the Florida Buildings Codes. A parallel path is underway at the International Code Council (ICC) with the continued development of Appendix C Existing Building Safety Inspection Guide to the International Property Maintenance Code (IPMC) to provide criteria for the regular inspection of structural elements as well as the building envelope components, electrical system, fire protection systems and mechanical and plumbing systems. The draft inspection guide is available for review from the following link:
We expect there may be some relevant discussions of inspections and mitigation of exterior windows and doors, including garage doors and other exterior overhead door products. The program could serve to provide incentives for building owners to upgrade their doors to meet current codes. IDA will review the draft and provide comments to ICC and will continue to monitor the activities at the HRAC and the FBC. Additionally, ICC will be reviewing structural provisions for existing buildings in 2022 during the development of the 2024 I-Codes.