President Signs Latest Jobs Bill, Includes Highway Funding Extension

Last week, the Senate passed and President Obama signed into law the HIRE Act. This bill offers the American construction sector some good incentives to hire new workers and extends the Highway Trust Fund so states can somewhat continue creating and sustaining transportation construction jobs The bill has many avenues that support the construction industry, specifically the extension of the highway program authorization through December 31, 2010, at current funding levels – although we’d like to see a multi-year funding solution on that highway bill – this will have to do for now. 

By also authorizing the Highway Trust Fund through the end of 2010, this bill guarantees that states will be able to continue to create jobs. The year-end extension means transportation projects employing thousands of workers can continue without the threat of disruption by dreaded furlough episodes like the one we experienced only a few weeks ago — where the DOT furloughed nearly 2,000 employees without pay, shutting down highway reimbursements to states worth hundreds of millions of dollars, thus shutting down construction projects across the country.

The bill includes:

1. Extends highway program authorization through December 31, 2010 at current funding levels.
2. Provides additional revenue to keep the Highway Trust Fund solvent through the first quarter of    2011 by restoring $19.5 billion in interest payments foregone on the HTF’s previous cash balances.
3. Restores $12 billion in highway spending authority that was cut on September 30, 2009 due to an $8.7 billion budget rescission in SAFETEA-LU and a subsequent rescission of $3.2 billion.
4. Alters the way in which long-standing fuel tax exemptions provided to state and local governments are accounted for which are projected to increase HTF balances by about $1.7 billion annually, for a total of $9.8 billion over six years.
5. Provides $4.6 billion in additional authority for Build America Bonds which have been used extensively by state and local governments to fund infrastructure projects, including highway and bridge projects.
6. Extends section 179 expensing thresholds so that taxpayers may elect to write-off up to $250,000 of certain capital expenditures in 2010 in lieu of depreciating those costs over time.

For more information, visit the Department of Transportation’s blog Fast Lane or the Association of Equipment Manufacturers (AEM) — both do a great job of talking about the issue.