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NRCA issues update about the American Recovery and Reinvestment Act of 2009 (February 2009)

Below is a summary prepared by NRCA of provisions of potential interest to the roofing industry in H.R. 1. If you have questions or need further information about these or other provisions in the legislation, please contact Duane Musser, NRCA's vice president of government affairs, at (202) 546-7584 or dmusser@nrca.net.



American Recovery and Reinvestment Act of 2009 (H.R. 1)

As approved by Congress on Feb. 13, 2009

Tax Provisions

Tax provisions included in the final version of H.R. 1 include the following:
  • Fifty percent bonus depreciation for capital expenditures extended through 2009
  • Enhanced small-business expensing extended through 2009
  • Temporarily extends the carry-back provision on net operating losses from two to five years and limits to firms with revenues of $15 million or less
  • Delays the effective date of the 3 percent withholding law on government contracts for one year (to Jan. 1, 2012)
  • Increases the 50 percent exclusion for capital gains tax on the sale of certain small-business stock held for more than five years to a 75 percent exclusion for stock issues between date of enactment to Jan. 1, 2011
  • Allows companies that buy back their own debt in 2010 or 2011 to recognize any income generated for tax purposes over 10 years
  • Expands the tax credit for energy-efficient improvements to existing homes from 10 percent to 30 percent of the costs incurred and establishes an aggregate cap of $1,500
NRCA is disappointed that the final version of H.R. 1 does not repeal the 3 percent withholding law on government contracts, as contained in the House-passed version of the legislation. NRCA will continue working to have the 3 percent withholding law on government contracts repealed as soon as possible.

Construction-Related Spending Provisions

The bill contains billions of dollars in building infrastructure improvement provisions, including the following:
  • $4.5 billion for "green" energy-efficiency improvements to federal buildings
  • $5 billion for a new Weatherization Assistance Program to improve energy efficiency in "modest-income homes"
  • $1.2 billion for Veterans Administration and medical facility construction and improvements
  • $4.2 billion for U.S. Defense Department facilities sustainment, restoration and modernization, including energy-efficiency upgrades
  • $2.3 billion for other Defense Department facility construction
  • $1 billion for Community Development Block Grants used for economic development projects
  • $4 billion to enable local public housing agencies to address construction backlog, including energy-efficiency upgrades
  • $2 billion for redevelopment of abandoned and foreclosed homes
  • $250 million for energy-efficiency improvements to U.S. Department of Housing and Urban Development-assisted housing projects
  • $8.8 billion may be used for public school modernization, repair and renovation (part of a State Fiscal Stabilization Program to be distributed by state governors)
Small-Business Financing Provisions

Small Business Administration (SBA) provisions in the bill aimed at increasing credit availability to small employers include the following:
    Eliminate fees on SBA-backed loans
  • Raise the percentage of a loan that the SBA may guarantee from 85 percent to 90 percent, encouraging banks to re-enter the market for SBA-backed loans
  • Establish a new "Small Business Stabilization Financing Program" to allow SBA to make no-interest loans to firms struggling to make payments on existing debt
  • Unfreeze the secondary market by allowing "broker-dealers" of SBA-backed loans to take out additional loans from SBA to purchase additional loans off banks' books. This will provide banks with liquidity so they can lend to small businesses again.
  • Allow SBA to guarantee existing debts in loan pools that are currently unguaranteed. This, too, will enable banks to begin lending again;
  • Allow small businesses to refinance existing debts under the SBA's 504 program
  • Streamline the Small Business Investment Company program to provide fast-growing companies with equity capital they need to grow and create jobs
  • Provide $15 million to the SBA's surety bond program, including larger bonding authority, to help small firms obtain construction-related projects;
  • Provide $30 million for the SBA's micro-loan program, which provides loans and technical assistance for low-income entrepreneurs and laid-off workers who are starting their own businesses
E-Verify Program Amendments

NRCA and other business groups were successful in knocking out an amendment by Rep. Jack Kingston (R-Ga.) that was added during House consideration of the bill in January. Kingston's amendment, approved on a voice vote by the entire House Appropriations Committee, mandated use of the U.S. Department of Homeland Security's E-Verify electronic employee work authorization program by any employer who received funding from projects appropriated by the legislation. NRCA worked with Rep. Nydia Velazquez (D-N.Y.), chairwoman of the House Small Business Committee, and the Essential Worker Immigration Coalition, which NRCA co-chairs, to have this amendment stripped from the final bill by House and Senate Democratic leaders.

Another immigration-related amendment added to the bill by Rep. Ken Calvert (R-Calif.) providing for a five-year reauthorization of the existing voluntary E-Verify program was also dropped from the final bill. With the current authorization for the voluntary E-Verify program due to expire March 6, NRCA will continue working to ensure that reauthorization of this program does not include mandates that would impose new costs or unreasonable immigration enforcement burdens on employers.

Davis-Bacon Provision

H.R. 1 includes a Davis-Bacon provision that requires that federal contractors and subcontractors pay no less than the local prevailing wage, as determined under the Davis-Bacon Act, on any project funded by the bill.

Given the enormous size and complexity of this legislation and the unprecedented speed of its development and approval by Congress, it is likely that other provisions of interest to employers will come to light in the coming days. NRCA will provide further information pertinent to the roofing industry as it becomes available.



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