Today, February 17, 2009, President Obama signed the American Recovery and Reinvestment Act into law at a ceremony at the Denver Museum of Nature and Science. The economic stimulus law is the largest public spending in this country since World War II.
Appropriations in the legislation include a total of over $149.8 billion in funding for various construction projects by federal, state and local government agencies. As finally passed by Congress and signed by President Obama, the bill made a few significant changes from earlier versions passed separately by the House and Senate. Provisions specifically appropriating $20 billion for elementary school, high school and college construction projects were dropped from the law, though states are permitted to use education program funds provided elsewhere in the legislation for modernization of existing school buildings if they choose to do so. Given the threat of program cutbacks and teacher layoffs in so many public school districts, however, such use of these other monies seems unlikely.
The "use it or lose it" clawback provisions in the earlier versions of the legislation were softened in the final law, which now requires half the funds to be appropriated within 120 days, and the other half appropriated within one year, in recognition of the seasonal nature of much construction and the inability of the industry to absorb half the cash by the end of 2009.
The final law as signed by the President also includes three tax provisions important to construction industry businesses, including delaying the effectiveness of the new 3% withholding tax on construction project payouts until 2011, extension of the tax loss carry back period for up to five years for businesses with less than $15 million in annual revenue, and deferral of the recognition of income from discharge and renegotiation of business debts until 2014.
Key dates for government agencies and contractors under the new law are June 17, 2009, when half the money appropriated for state governments must be obligated under contract, and February 17, 2010, when all of the funds must be obligated.
Appropriations in the legislation include a total of over $149.8 billion in funding for various construction projects by federal, state and local government agencies. As finally passed by Congress and signed by President Obama, the bill made a few significant changes from earlier versions passed separately by the House and Senate. Provisions specifically appropriating $20 billion for elementary school, high school and college construction projects were dropped from the law, though states are permitted to use education program funds provided elsewhere in the legislation for modernization of existing school buildings if they choose to do so. Given the threat of program cutbacks and teacher layoffs in so many public school districts, however, such use of these other monies seems unlikely.
The "use it or lose it" clawback provisions in the earlier versions of the legislation were softened in the final law, which now requires half the funds to be appropriated within 120 days, and the other half appropriated within one year, in recognition of the seasonal nature of much construction and the inability of the industry to absorb half the cash by the end of 2009.
The final law as signed by the President also includes three tax provisions important to construction industry businesses, including delaying the effectiveness of the new 3% withholding tax on construction project payouts until 2011, extension of the tax loss carry back period for up to five years for businesses with less than $15 million in annual revenue, and deferral of the recognition of income from discharge and renegotiation of business debts until 2014.
Key dates for government agencies and contractors under the new law are June 17, 2009, when half the money appropriated for state governments must be obligated under contract, and February 17, 2010, when all of the funds must be obligated.
