There is good news and bad news for construction in a revised, expanded Senate version of the tax package worked out earlier between the White House and Republican leaders.
For construction, the positive news among the additions made to the package by Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) is a one-year extension of a tax break for wind, solar and other renewable-energy projects.
The bad news is that the measure does not include an extension for the Build America Bond (BABs) program, which is slated to expire on Dec. 31.
Reid introduced the bill late on Dec. 9 and has scheduled an initial procedural vote on package for the afternoon of Dec. 13. Click here to read the summary of the tax bill.
With the added provisions, the estimated cost of the package is $857 billion over 10 years, according to the congressional Joint Committee on Taxation.
BABs have helped finance public-works projects around the country and totaled $165.4 billion from their launch in April 2009 through November 30 of this year. That equals 22% of the municipal-bond market, the Treasury Dept. says, based on data from Bloomberg.
What has made BABs popular among state and local government agencies is a federal subsidy that cuts the interest rate issuers pay by 35%.
One Washington source says BAB advocates pressed to have an extension included in the Senate tax package but concedes that the push wasn't "to the point of all-out, kind of tearing-the-barriers-down."
The source also says that the cost of the BAB extension--an estimated $2.8 billion over 10 years--was a sticking point for the Senate.
Construction and transportation organizations now are stepping up the campaign. The source says the groups are preparing a letter to House members urging them to include a BAB extension when that chamber takes up the tax legislation in coming days. Those votes would follow Senate action.
The overall bill retains the major provisions in the White House-GOP agreement, including extensions of current income tax rates for all brackets, a change in the estate tax, accelerated depreciation and other items.
Reid and McConnell added extensions for a variety of other expiring tax breaks, including a one-year continuation of the Section 1603 program for renewable energy.
That program, established under the 2009 stimulus act, provides grants in the place of tax credits for companies developing renewable-energy projects.
Also among the additions are extensions through 2011 for the credit for energy-efficient improvements to existing homes and accelerated depreciation for improvements to restaurants, retail facilities and leased properties.