NRCA’s President, Nelson Braddy, Responds to Proposed Legislation to Reform Cost Recovery Provisions of the Federal Tax Code

Senate Finance Chairman Max Baucus (D-Mont.) recently released a discussion draft of proposed legislation to reform the cost recovery provisions of the federal tax code. This draft would repeal the current depreciation system, referred to as Modified Accelerated Cost Recovery System, and replace it with a new system that pools assets into separate categories. The draft also instructs the Congressional Budget Office (CBO) to analyze the economic depreciation rates of tangible assets and authorizes the U.S. Department of Treasury to review CBO’s findings to determine whether assets should be reassigned depreciation schedules or whether new ones should be created.

Under the Baucus proposal, the changes in these depreciation schedules would generate nearly $700 million in revenue for the government during the next decade. This would be used to offset cutting the 35 percent corporate income tax rate. Unfortunately, Baucus’ proposal cuts tax rates for only C-corporations but not for pass-through businesses that pay income taxes at the individual rate.

The Rosemont, Ill.-based National Roofing Contractors Association supports comprehensive tax reform that boosts economic growth by substantially lowering individual and corporate tax rates. Roughly 75 percent of its members are S-corporations, limited liability companies and other pass-through entities. Cutting taxes for entrepreneurs that file at the individual rates and as large corporations is essential for the roofing industry. NRCA is disappointed Baucus’ discussion draft does not include reductions in individual income tax rates.

In addition, NRCA supports reforming the depreciation schedule for commercial roof systems. The current 39-year depreciation schedule is an obstacle to economic growth and more than double the average life cycle of a commercial roof system, which is 17 years. Baucus has proposed extending the depreciation schedule for real property, including commercial roof systems, to 43 years, which does nothing to remove the incentive for building owners to forego a full retrofit to a failing roof in favor of making only piecemeal repairs. In addition, extending the depreciation schedule will further complicate business owners’ tax decisions; do nothing to promote economic growth; and fail to advance greater energy efficiency within the commercial building sector. Baucus has stated the goal of this proposed legislation is to “establish a system of cost recovery that better approximates the decline in the economic value of an asset.” However, 43 years to depreciate a commercial roof system does not accurately represent its economic value.

NRCA is pleased to see Baucus included higher Section 179 expensing limits in his discussion draft, which would permanently increase the expensing limits to $1 million and be indexed for inflation.

Baucus has requested comments regarding the discussion draft be submitted by Jan. 17, 2014. NRCA will submit its comments to the tax code in a comprehensive manner. The association remains committed to working with lawmakers to pass progrowth tax policies that benefit the roofing industry and the economy.

NRCA Releases 2014 Roofing Manual and Boxed Set

With the changing nature of technical information in the roofing industry, the National Roofing Contractors Association (NRCA) has released an updated volume of The NRCA Roofing Manual: Architectural Metal Flashing, Condensation and Air Leakage Control, and Reroofing — 2014. The new volume updates the 2010 version under the same title, serving as a reference for contractors, architects and roof consultants.

The 2014 manual provides best industry practices and standards for the design, materials, installation and repair of roof systems through information gathered by NRCA from knowledgeable, practicing roofing contractors throughout the U.S.

It is best used with other currently applicable volumes of The NRCA Roofing Manual: The NRCA Roofing Manual: Steep-slope Roof Systems — 2013, The NRCA Manual: Metal Panel and SPF Roof Systems — 2012, and The NRCA Manual: Membrane Roof Systems — 2011. All four volumes can be purchased in a boxed set. A CD version is also available to complement the print editions.

The changing science of roof systems, which has primarily been prompted by technological innovations, contractor experience and new product development, requires roofing contractors to stay updated on the latest industry advances. NRCA’s 2014 manual and boxed set gives the industry the most up-to-date, authoritative technical reference concerning the design, materials and installation of quality, long-lasting roof systems.

Purchase the 2014 manual boxed set. The NRCA Roofing Manual: Architectural Metal Flashing, Condensation and Air Leakage Control, and Reroofing — 2014 is also available for separate purchase. The NRCA Roofing Manual CD — 2014 also is available.

NRCA Member Kulp Elected to Wisconsin State Assembly

The National Roofing Contractors Association (NRCA) is pleased to announce that long-time member Bob Kulp of Stratford, Wis., has been elected to the state’s 69th Assembly District. He was sworn into office Dec. 5, 2013.

Kulp is the founder and co-owner of Kulp’s of Stratford LLC. He has been an active member of NRCA since 1992 and currently serves as a vice president on the association’s Executive Committee.

“I believe taking my business experience to the political process will be an asset,” Kulp says. “When businesses thrive, people thrive.”

Kulp defeated Democrat opponent Kenneth Slezak, receiving 67 percent of the vote, and will replace former Assembly Majority Leader Scott Suder, who resigned his position in September 2012. Kulp will serve out the remaining 13 months of Suder’s term.

Be Recognized for Excellence in Roofing Design

The Center for Environmental Innovation in Roofing, Washington, D.C., is accepting entries for its 2013 RoofPoint Excellence in Design Award. The Excellence in Design Award was established in 2003 by the National Roofing Contractors Association, Rosemont, Ill., to recognize professionals who design long-lasting, energy-efficient, environmentally friendly roof systems. In 2008, the center began awarding the Excellence in Design Award.

With the launch of RoofPoint, the center now recognizes design excellence through the RoofPoint program. A description of last year’s award-winning projects is available here.

This year’s deadline for entries is Oct. 31. Roofing contractors, architects, specifiers, manufacturing reps and roof consultants are encouraged to submit a project. Roof systems must have been installed after Jan. 1, 2012, and only RoofPoint Registered Projects are eligible to receive the award.

A panel of roofing industry experts selected by the center will judge applicants. Award winners will be notified by Nov. 30.

Download the award application at roofpoint.org/excellence-design-award-application. For more information about the award, contact Justin Koscher at (202) 380-3371. To find out how you can participate in the RoofPoint program, email Dr. Jim Hoff, the center’s vice president of research.