Support Provisions to Promote Research, Hiring, Capital Formation and Operating Losses
Uphold the Tax-Exempt Status for Infrastructure Financing
- AGC supports tax-exempt public works financing: as such, AGC views any proposals to reduce or repeal the federal tax exemption on municipal bond interest would have harmful impacts on national infrastructure development, raising costs for state and local borrowers and creating uncertainty for investors.
Infrastructure Financing (Public -Private Partnerships (P3s)
- The P3 model…
Support a Modified Energy Efficient Commercial Building Deduction
- The Energy Efficient Commercial Building Deduction (179D deduction) encourages building owners to increase energy efficiency in new and remodeled buildings by providing an immediate tax deduction for costs incurred which increase the energy efficiency of a building ( i.e. high performance heating, lighting, windows and other systems).
- AGC supports three changes to the underlying 179D provision including: increasing the value of the deduction from $1.80 to $3.00 per square foot; technical fixes to make it more feasible for S corporations to claim the deduction; and expanding the allocation of the deduction from governmental agencies to include non-profit entities (e.g. hospitals and universities).
- Furthermore, building owners are increasing their confiscation of these benefits by requiring a payment from the designing firm prior to assigning the deduction – clearly this was not the intent of the law. Many small businesses are being impacted by this process. AGC recommends that the Finance Committee study a change to this provision that either prohibits or limits the collection of funds by the assigning owner to encourage the design of energy efficient government properties and provide a beneficial tax environment for the firms who engage in the planning and construction.
Support Community Renewal
- The New Markets Tax Credit (NMTC) program provides tax credits to investors in certified Community Development Entities – which provide investment capital for urban and rural low-income and blighted communities. Under the program, construction firms may be engaged in a wide range of activities, varying in size and location (e.g. schools, hospitals, manufacturing facilities, mixed-use developments). These investments totaled $30.8 billion from 2000 through 2012, and it’s expected that $3.5 billion will be allocated to the NMTC program for 2013.
- According to an April 2013 Urban Institute Report prepared for the U.S. Department of the Treasury Community Development Financial Institutions (CDFI) Fund, the NMTC program can be credited with supporting about 151,304 construction jobs in its early years – with a median of 40 construction jobs supported per project. According to the CDFI Fund, a total of $45 billion has been invested in NMTC-financed businesses. NMTC capital accounts of $20 billion of this amount, with the balance coming from other sources. These businesses have created or retained some 300,000 jobs since 2010. AGC supports the extension of the NMTC.
Support Alternative Energy Development
- AGC supports the extension of the Production Tax Credit (PTC) for the development of renewable energy facilities (e.g. wind, geothermal). Construction firms engage high- and low-skilled workers at various phases of the build-out for renewable energy projects including: basic infrastructure, development of access roads, excavation of foundations, assembling of emplacements and erection of turbines.