New federal actions to impact modular industry
More often than not, MBI’s advocacy efforts are aimed at state level regulations and building codes. We don’t often see too many federal bills that directly impact our industry. But within the last week, we’ve seen two such actions.
The first is a new federal law that took effect on December 18th requiring most transportation companies to have electronic logging devices implemented and in place for their vehicles and drivers. This law was passed by Congress in 2012 and became effective in 2016. However, the law allowed for a two-year window for full implementation – a window that is now closed. According to some in the transportation sector, this regulation will increase to cost of module transports in 2018.
The other news out of Washington D.C. is the passage of the Republican tax overhaul plan. Without getting into the rhetoric and talking points of each party, the bill does contain provisions that should be of interest to any business owner, and particularly manufacturers.
Among many other items, the bill allows for an increase in the amount of accelerated (full) depreciation on certain purchases of equipment and assets in the year they were acquired (known as Section 179 deductions). Under the former policy, Section 179 was limited to $510,000 in purchases, or assets were expensed based on their determined useful life (often 3, 5, or 7 years). Companies would now be able to deduct $1 million in purchases, up from the current level of $510,000.
Whether this new increase be enough incentive to tip the scales towards major new purchases to upgrade facilities (or to equip additional factories) remains to be seen. But it does add more fuel to an already hot topic about greater use of prefabrication in construction and the modular industry’s capacity to keep up.
If ever there was a time to consider major investments in modular manufacturing, 2018 seems to be shaping up as that year.
Started on December 20, 2017 by Tom Hardiman