On March 25, the U.S. Senate passed the largest economic aid package in our nation’s history. On a 96 to 0 vote, the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act passed the Senate and is expected to be approved by the House and signed into law.
The Associated General Contractors of America’s (AGC) government relations team worked day and night for weeks fighting to ensure the best possible outcome for the construction industry in this package. Although not everything we fought for made it into the final legislation, there are significant construction industry priorities that we successfully secured, including, but not limited to:
✓ Establishing loan programs that will help many construction businesses pay employees and overhead costs, while continuing operations, if possible;
✓ Advanced-refundable tax credit for employers implementing new federal paid leave mandates in the Families First Coronavirus Response Act;
✓ Delaying the payment of employer payroll taxes through January 1, 2021, which will provide relief for businesses’ cash flow during this crisis;
✓ Allowing companies to “carry back” their net operating losses for up to 5 years, which would inject much needed cash into struggling businesses;
✓ Suspending the limitation on pass-through business losses, which will allow owners of pass-through businesses to fully deduct any losses they incur this year;
✓ Suspending the application of the limitation on interest expense deductions, which will avoid penalizing businesses for borrowing during this crisis; and
✓ Fixing the so-called “retail glitch” from the 2017 tax reform law entitled the Tax Cuts and Jobs Act, which unintentionally increased the cost of many construction projects, such as improvements for restaurants, retail establishments, or commercial office property.
Yet the industry will need additional measures from Congress over the coming weeks to recover from the many economic impacts of the coronavirus pandemic. Specifically, Congress must:
• Provide financial compensation to construction contractors for projects losses because of COVID-19 related delays and cancellations;
• Increase investments in infrastructure and pass needed multi-year funding measures for surface transportation and waterways; and
• Protect the retirement and health plans of millions of construction workers who participate in multiemployer pension programs, among other things.
For more information, please contact AGC of America Vice President for Government Relations Jimmy Christianson.