Our final Legislative Update of the year brings a high-level view of the policy landscape shaping construction in Philadelphia, Harrisburg, and Washington. With the state budget finally resolved, major debates over energy reliability and data center regulation unfolding, and the City of Philadelphia revisiting long-standing DEI expectations in contracting, the environment around our industry continues to shift.

This month’s roundup highlights what matters most for sheet metal contractors: permitting timelines, workforce standards, energy policy, tax changes, and the local decisions influencing how projects get built across our region.

At a Glance

• PA budget finally passes, increasing K–12 funding, creating a state Earned Income Tax Credit, and formally withdrawing Pennsylvania from the Regional Greenhouse Gas Initiative.

• Data centers are now a statewide focus, with HB 1834 prompting major debate on grid reliability, renewable power requirements, and rate protections.

• Permitting reform advances as SB 6 moves through the Senate, aiming to standardize timelines, create public tracking systems, and add accountability across state agencies.

• Philadelphia shifts its DEI contracting posture, stepping back from the longstanding 35% participation goal for M/W/DSBE firms.

• Federal tax wins remain favorable for contractors, with bonus depreciation, equipment expensing, and R&D credits extended through national legislation and SMACNA advocacy.

2) Local — Philadelphia & Vicinity

City Reconsiders DEI Contracting Standards

The Parker administration has indicated that it will no longer enforce the long-standing goal that 35% of city contract dollars go to firms owned by women, minorities, or people with disabilities. This change could alter the competitive landscape for city-funded projects and warrants close monitoring as new procurement guidance is developed.

PhillySaves Auto-IRA Proposal

City Council is advancing the creation of PhillySaves, an auto-enrollment retirement savings program for workers without employer plans. Employers would not contribute financially but would need to identify eligible employees and manage payroll deductions once the program is established. A ballot question is proposed for May 2026.

HOME Initiative: $800 Million Housing Strategy

The City released its first-year spending plan as part of the $800M H.O.M.E. initiative, dedicating nearly $200M to home repair, preservation, affordable housing production, and acquisition. This pipeline will support local residential repair and energy-efficiency work tied to municipal funding.

Local Data Center Activity

A major data center project in Fairless Hills is already under construction, with several SMCA member contractors engaged in the work. The outcome of HB 1834 in Harrisburg will directly affect how quickly these large-load projects proceed and how predictably they move through regulatory and utility planning processes.

State — Harrisburg

State Budget and Energy Policy

After months of stalemate, lawmakers passed a $50.1B state budget that increases education funding, establishes a state-level Earned Income Tax Credit, and ends Pennsylvania’s participation in RGGI. This removes uncertainty around carbon-credit revenue but leaves the state without a replacement clean-energy funding mechanism.

HB 1834: Data Center Act Hearing

HB 1834 remains the most significant energy and infrastructure bill of the year. It would place commercial data centers under PUC oversight, require at least 25% renewable electricity, prohibit cost-shifting to other ratepayers, and create a LIHEAP enhancement fund.
Testimony from regulators, utilities, industry, and labor underscored the projected 30–40 GW power shortfall by 2030, and warned that overly prescriptive rules could slow investment. The construction industry continues to highlight the need for grid planning, load forecasting, and reliable permitting.

SB 6: Transparency in Permitting

SB 6 passed the Senate and would overhaul how state agencies handle permits by requiring:

• published permit lists and timelines

• public tracking systems

• third-party review options when agencies miss deadlines

• a new Office of Transformation and Opportunity to coordinate large economic development projects

If enacted, the bill would bring greater predictability to construction timelines.

Prevailing Wage and Broadband

SB 1042 updates prevailing wage classifications for broadband infrastructure projects under the PA Broadband Development Authority, ensuring classifications align with the specialized work involved in fiber and broadband build-outs.

Indoor Air Quality and School Infrastructure

• HR 271 directs a statewide study of indoor air quality for seniors and children, with input from trades and public health experts.

• HB 1701 advances a statewide school facilities inventory and modernization planning effort, potentially shaping future HVAC, ventilation, and IAQ upgrades across Pennsylvania’s school districts.

Accessibility Code Modernization

SB 867 strengthens the Accessibility Advisory Board and requires L&I to adopt updated accessibility code sections recommended by the board—an important step in resolving long-standing delays in Pennsylvania’s accessibility code updates.

Federal

SMACNA Reports Major Federal Legislative Wins

Federal advocacy continues to deliver strong results for contractors, including:

• extended bonus depreciation and Section 179 expensing

• enhanced R&D tax credits

• continued support for CHIPS Act–related construction and grid-enhancement projects

• progress on workforce and apprenticeship funding

These provisions support capital investment, equipment purchasing, and planning for 2026.

OBBBA: “One Big Beautiful Bill Act” and Tax Planning

The new federal tax package includes a broad array of incentives for construction, including changes to depreciation, deductions, and equipment-related write-offs. Contractors are encouraged to review tax planning opportunities before year-end to maximize available benefits.

Redistricting Volatility Affects Industry Advocacy

Congressional maps remain in flux nationally, and several states are still undergoing legal challenges and mid-cycle redraws. This reshuffling affects committee assignments, policymaking priorities, and the stability of federal relationships—making continued engagement with SMACNA’s Government Affairs team increasingly important.

Federal Policy Themes to Watch in 2026

• Infrastructure and semiconductor project funding

• Labor and workforce development appropriations

• OSHA and NLRB rulemaking

• Energy-efficiency and clean-manufacturing incentives

• Federal permitting acceleration

Actions to Take Now

1. Prepare for shifting Philadelphia contracting requirements.
With DEI expectations changing, firms should monitor updates from the Office of Economic Opportunity and reassess bid strategies.

2. Document permitting timelines on current projects.
If SB 6 becomes law, historical permit data will help benchmark improvements and identify ongoing pain points.

3. Follow the evolution of HB 1834 closely.
Data centers are a high-growth sector with heavy mechanical and HVAC demand. Regulatory outcomes will affect project pacing and grid availability.

4. Revisit year-end tax planning.
Federal incentives around depreciation, equipment expensing, and R&D credits remain favorable—contractors should reassess capital and equipment plans accordingly.

5. Watch city and state funding pipelines.
Philadelphia’s H.O.M.E. initiative and the statewide school modernization effort will generate multi-year opportunities in repair, IAQ, and energy-efficiency work.

Sources (Primary)

SMACNA national publications; City of Philadelphia administration and City Council materials; Pennsylvania General Assembly bill text and committee records; October 2025 Pennsylvania Summary of Legislation; Pennsylvania Bulletin regulatory notices; Chamber of Commerce for Greater Philadelphia’s November 7, 2025 legislative roundup; Spotlight PA reporting on budget and energy policy.

Industry Summaries Consulted

General Contractors Association of Pennsylvania — October 2025 Legislative Report;
SMACNA Government Affairs updates;
Chamber of Commerce for Greater Philadelphia — November 2025 policy summaries.

Status as of November 17, 2025.

Legislation, regulations, and agency guidance evolve quickly. For the most current information, consult official state, federal, and municipal sources.