By David Bauer, senior vice president of government relations, ARTBA
President Obama signed a package of $1.1 billion in spending and $650 million in tax breaks Dec. 18 as he and Congress left Washington, D. C. for the holidays. The measure will fund all federal agencies and programs through Sept. 30, 2016, and either make permanent or provide a multi-year extension to a series of tax breaks originally intended to be temporary.
The legislation contains a host of ARTBA priorities, including:
- The first installment of the five years of increased highway and transit investment levels authorized by the recently enacted Fixing America’s Surface Transportation (FAST) Act. Highway investment will grow $2.1 billion to $42.4 billion and transit funding will increase by $800 million to $11.5 billion. The public transportation investment component, however, provides $124 million less than the FAST Act prescribes for the transit capital investment grant program;
- New limitations—sought by ARTBA and AGC of America—on an Obama Administration push to allow state and local government to impose geographic, economic and other hiring preferences on federal-aid highway and public transportation projects. The measure will allow the U.S. Department of Transportation to approve such hiring preferences only if the recipient agency certifies: the existence of a sufficient qualified labor pool in the jurisdiction; that no existing workers would be displaced; and no planned projects would be delayed due to associated cost increases;
- Permanent restoration of the $500,000 annual limit on Section 179 expensing that allows small business to deduct capital purchases. The $500,000 threshold is also indexed to inflation; and
- A three-year extension of the 50 percent bonus depreciation allowing immediate expensing of asset acquisitions. The measure reduces bonus depreciation to 40 percent in 2018 and 30 percent in 2019. ARTBA has long advocated for making permanent both increased Section 179 expensing and the 50 percent bonus depreciation.
The combination of FAST Act enactment with the tax changes signed into law by President Obama provides the transportation construction industry with enhanced certainty about both the transportation market and federal tax landscape. As a result, ARTBA’s focus for 2016 will be on securing a permanent Highway Trust Fund revenue solution, advocating for multi-year reauthorizations of the federal aviation and water resource programs, and representing the industry in the federal regulatory process—and legal arena, as necessary.
Thanks to all ARTBA members and state contractor affiliates who supported and participated in ARTBA’s federal advocacy programs in 2015!