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ECONOMIC STIMULUS BILL CLEARS HOUSE; HEADS FOR SENATE
In recent issues of this newsletter, we have been reporting to members on attempts by the federal government to stimulate the economy through new legislation. The $219 billion House-passed economic stimulus package, having cleared that chamber by a vote of 244-188 on Wednesday, now heads to the Senate for consideration.

In previous issues, we outlined the provisions of this bill that were of interest to members. Here are the highlights:

Spending measures:

• An additional $1 billion for LIHEAP (for FY2010, available on October 1, 2009)
• $6.2 billion boost to the federal Weatherization Assistance Program (WAP)
• Raises eligibility for the WAP to 200 percent of the federal poverty level and doubles the assistance level from $2,500 per household to $5,000
• $3.5 billion in Energy Efficiency and Conservation Block Grant Funding
• $16 billion to repair public housing and make energy efficiency retrofits
• $6 billion for increasing energy efficiency and conservation at federal buildings
• $600 million for federal fleets to purchase plug-in and alternative fuel vehicles
• $200 million for cleanups under the Leaking Underground Storage Tank (LUST) Fund

Small business loans:

• $426 million for Small Business Administration (SBA) loan guarantee programs
• Allows SBA to temporarily guarantee up to 95 percent of certain qualifying 7(a) small business loans at an exceptionally low rate
• Allows small business to apply directly to the SBA for loans
• Allows businesses to pursue SBA refinancing of existing qualified loans of up to $10 million
• Seeks to break up the “freeze” in the secondary loan market, which has been discouraging some lenders from making new SBA loans

General tax measures

• for tax years 2009 and 2010, a refundable tax credit of up to $500 for individuals making less than $75,000 and $1,000 for families making less than $150,000;
• expansions of the earned income tax credit and child tax credit;
• for first time home buyers purchasing between January 1, 2009 and July 1, 2009, eliminates the repayment obligation of the $7,500 tax credit (under certain conditions);
• an extension through 2009 of bonus depreciation, which allows businesses to immediately write off fifty-percent of their depreciable property purchased in the coming tax year;
• an extension of the current two-year carryback of net operating loses for businesses to a five-year term (denies benefit to bailout recipients);
• an extension of the $250,000 increase for small business expensing while increasing the phase-out to $800,000 for 2008; and
• an employer tax credit equal to 40 percent of the first $6,000 of wages for hiring a veteran or disconnected youth.

Energy tax measures:

• a long-term extension of the renewable energy (wind, solar, geothermal, etc.) production tax credit (a previous energy bill attached to last year’s Wall Street bailout bill had only extended it for one year);
• removes monetary caps for certain wind and solar tax credits;
• extends home energy efficiency tax credits through 2010, increases for 2009 and 2010 the eligible percentage of the amount paid or incurred by the taxpayer from 10 to 30 percent, and eliminates the property-by-property monetary cap and replaces it with a $1,500 aggregate cap;
• for 2009 and 2010, increases the tax credit to fuel station owners who dispense alternative fuels (i.e., E85, biodiesel and natural gas) from 30 percent (cap $30,000) to 50 percent (cap $50,000) and while leaving hydrogen at 30 percent, increases the cap to $500,000;
• for 2009 and 2010, provides an enhanced 20 percent R&D tax credit for the fields of fuel cells, battery technology, renewable energy, energy conservation technology, efficient transmission and distribution of electricity, and carbon capture and sequestration.

The $888 billion Senate stimulus bill was introduced earlier this week. It differs somewhat from the House bill. Summary of the spending portion of the Senate bill. Summary of the tax portion of the Senate bill. The bill is expected to pass the Senate and move onto a House-Senate conference committee, which will work out the differences and send a final bill to both floors for consideration sometime next month. The most likely places for tweaks to the bill, including increases to tax breaks and other measures being called for by Republicans, are by amendment on the Senate floor this week or during the conference committee process, assuming the bill passes the Senate. More information as it comes.