For Immediate Release
Monday May 24
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FOR MORE INFORMATION:
Alan Mlynek
Office: 202.225.4961
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Michigan and the American Jobs and Closing Tax Loopholes Act
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Last week Congressman Levin and Senator Max Baucus introduced the American Jobs and Closing Tax Loopholes Act which includes several provisions that are important to the State of Michigan, Michigan businesses and Michigan families.
There are many provisions not listed here that also assist Michiganders but are more general in nature. For example, the fact that the Jobs bill will prevent a 21% cut in payments to Medicare physicians is important to Michigan seniors. The Ways and Means Committee website has full and up-to-date information on all the provisions in the Jobs bill here.
Here are the provisions with particular Michigan relevance divided into Job Supporting Provisions, Business Tax Relief, and Support for Unemployed Workers Seeking New Job Opportunities.
Job Supporting Provisions
Small Business Administration. The bill would extend the American Recovery and Reinvestment Act small business lending program that eliminates the fees normally charged for loans through the SBA 7(a) and 504 loan programs and increases the government guarantees on 7(a) loans from 75% to 90%. Since its creation, the program has supported over $26 billion in small business lending, which has helped to create or retain over 650,000 jobs.
MICHIGAN: From March 1, 2009 through April 30, 2010, SBA guaranteed 1,884 Recovery Act-backed loans in Michigan (7a, 504, and ARC) for a total of $536,123,900 in lending.
Modifications to the Surface Transportation Extension Act of 2010. Corrects a formula in a previous highway funding bill to more fairly distribute the funding.
MICHIGAN: Redistributes $20.6 million to Michigan bringing the state’s total for the Surface Transportation Extension Act to $1.65 billion.
Build America Bonds. The bill will extend the popular Build America Bonds program, which has allowed State and local governments to invest more than $97 billion in infrastructure projects nationwide and has supported more than 1.7 million jobs nationwide.
MICHIGAN: 46 issues of BABs as of April 30, 2010 totaling $1.833 billion. Complete list available here.
Recovery Zone Bonds. The bill will extend the Recovery Zone Bond program, which will help local municipalities raise more than $25 billion of capital for infrastructure and economic development projects and will support more than 450,000 jobs nationwide. The bill would also ensure that each municipality receives an allocation of these bonds equal to at least its share of national unemployment in December 2009.
MICHIGAN: the Recovery Act provided Michigan with $1,932,625,000 in Recovery Zone bonding authority
Extension of tax-exempt eligibility for loans guaranteed by Federal Home Loan Banks. Provision allows bonds that are guaranteed by Federal home loan banks to be eligible for treatment as tax-exempt bonds regardless of whether the bonds are used to finance housing programs. Allowing these bonds to be guaranteed by Federal home loan banks has helped State and local governments obtain financing for necessary projects. The bill would extend this benefit for bonds issued through 2011.
MICHIGAN: $117,970,426 in bonds issued
Low-income housing credit exchange program. The bill extends the low-income housing tax credit exchange program, which has allowed States to encourage the development of over 49,000 low-income housing units nationwide and has supported more than 40,000 jobs nationwide.
MICHIGAN: $285,935,302 awarded in support of 48 projects assisting 4,496 units
Summer jobs. The bill would support over 300,000 jobs for youth ages 16 to 21 through summer employment programs. This age group has some of the highest unemployment levels – 25% unemployment for those aged 16 to 19. This funding will allow local Workforce Investment Boards to expand successful summer jobs programs.
MICHIGAN: the Recovery Act gave MI $74 million (out of $1.2 billion available) for 21,000 jobs. $1 billion total is available in the Jobs bill.
Business Tax Relief
R&D tax credit. The bill will provide $6.6 billion of tax credits to support companies that make research and development expenses. Extending this tax credit will create or save more than 117,000 jobs nationwide.
MICHIGAN: Manufacturers do 70% of private sector R&D
Refundable AMT credits for corporations making domestic investments. The bill would allow corporations to receive a refund of a portion of their AMT credits if they invest during 2010 in capital equipment for use in the United States. This provision is projected to lead to $24 billion in business investment nationally.
Supporters:
• U.S. Chamber of Commerce
• National Association of Manufacturers (NAM)
• The Association For Manufacturing Technology (AMT)
• Association of Equipment Manufacturers (AEM)
• Motor & Equipment Manufacturers Association (MEMA)
Some of the many U.S. employers that support the proposal include American Airlines, Applied Micro Devices, Arch Coal, Associated Builders and Contractors Association, Bosch, Cliffs Natural Resources, CMS Energy, Consul Energy, Delta Airlines, Daimler, General Motors, Goodyear, Micron, National Mining Association, Owens Illinois, Peabody Energy, Qwest, T-Mobile, and Xerox.
Extension of the alternative motor vehicle credit for heavy hybrids. The bill would extend for one year (through 2010) the alternative motor vehicle credit for heavy duty hybrid trucks.
Energy-efficient windows. In order to claim the section 25C tax credit for energy-efficient windows, taxpayers must purchase windows that meet certain specifications. Many have raised concerns that the current specifications fail to account for different climate regions in the United States. Recently, the EPA updated the Energy Star requirements to take these climate regions into account. The bill would link eligibility for the tax credit to the Energy Star requirements.
Direct payment in lieu of energy-efficient appliance tax credit. The bill would allow manufacturers of energy-efficient appliances to elect to receive a direct payment in lieu of the section 45M energy-efficient appliance tax credit. The direct payment would be equal to eighty-five percent (85%) of the tax credit that would otherwise have been allowed under section 45M.
MICHIGAN: According to the Association of Home Appliance Manufacturers the appliance tax credit affects 40,000 jobs in the United States, which accounts for at least 17,000 direct manufacturing jobs and 23,000 jobs that support the manufacturing of the affected products.
US companies that benefits include Electrolux, GE, Bosch, Sub Zero, Viking, Whirlpool
New Markets Tax Credit. The New Markets Tax Credit (NMTC) program uses federal tax credits leverage significant private investment in businesses in low-income communities. The bill would extend for one year (through 2010) the new markets tax credit, permitting a maximum annual amount of qualified equity investments of $5 billion. In order to ensure that the NMTC encourages AMT taxpayers to make qualifying investments, the bill would also allow NMTC to be claimed against the AMT with respect to qualified investments made between March 15, 2010 and January 1, 2012.
MICHIGAN: $280,000,000 in credits to Michigan-based development entities
Support for Unemployed Workers Seeking New Job Opportunities
Extension of Emergency Unemployment Compensation, federally-funded Extended Benefits program, and $25 in additional compensation.
MICHIGAN: Currently there are 540,000 workers receiving unemployment compensation in Michigan. If we were to allow the emergency program to expire, which is set to happen on June 2nd, the number of weeks of benefits available to these individuals would drop dramatically. In Michigan, the weekly number of workers who would drop off their benefits would reach 34,000 by the first week of July. Nationwide, 1.2 million workers would lose benefits by July.
Extension of TANF jobs and emergency fund. The American Recovery and Reinvestment Act created an Emergency Contingency Fund (ECF) within the Temporary Assistance for Needy Families (TANF) program to help States with increasing expenditures on: basic assistance for families in the TANF program; short-term, one-time aid for needy families; and subsidized employment programs.
MICHIGAN: Michigan used these funds to support subsidized jobs programs and the State Earned Income Tax Credit, with $200 million in funding available to the state. A one-year extension of the program will quality Michigan for an additional $100 million in assistance for low-income Michigan families.
Trade Adjustment Assistance for Community Colleges - Career Training Grant Program. This competitive grant program was created under Recovery Act and received $2 billion for 4 years in the Health Care Reform law. In the Jobs bill, we are making an important change by allowing community colleges to use funding for programs designed to assist individuals eligible for unemployment insurance in addition to TAA-eligible workers.
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