The U.S. House of Representatives and U.S. Senate have reached a deal on both the Omnibus spending package and extending certain expired tax provisions commonly referred to as “extenders.”
The FY2016 Omnibus Appropriations bill, a $1.1 trillion spending package, will fund the government through Sept. 30, 2016. The last time Congress passed appropriations bills individually was in 1994. A summary of the bill can be found here
. The House is slated to hold a vote on the Omnibus Friday.
With a president with an anti-business agenda, many issues of importance to ABC members
did not make it past the House and Senate negotiations. We will look toward 2016 to further our agenda.
Congress also made permanent several of ABC’s high priority tax extenders, including several key provisions mentioned by ABC member Rich Shavell in testimony
before a U.S. House of Representatives subcommittee earlier in December
. The currently expired provisions that were made permanent include:
Increased expensing of new property and equipment under Section 179
The research and development tax credit
15-year straight-line cost recovery for qualified leasehold, restaurant and retail improvements
Five-year recognition period for S corporation built-in-gains
In addition, the following construction-related tax provisions were extended temporarily:
Bonus depreciation (five years)
Work opportunity tax credits (five years)
Empowerment/Enterprise Zone tax credits (two years)
179D deduction for energy efficient commercial buildings (two years)
All expired extenders were renewed through at least the 2016 tax year, depending on the specific provision. For more details, click here
Of note to federal contractors, the omnibus bill had a surprising amount of construction spending for federal and federally assisted projects.
The omnibus bill tripled the General Services Administration’s (GSA) construction and acquisition account to $1.6 billion. That total includes $948 million for a portfolio of new courthouses that will be formally announced in late Q1 of 2016. Senate appropriators had called for just $181.5 million for FY16 GSA new construction and House appropriators recommended zero in prior spending bills.
The bill also increases spending for VA’s major construction account, which would more than double, to $1.2 billion.
Highway and transit programs are also preparing for more federal dollars as appropriators increased authorizations in the recently enacted five-year Fixing America’s Surface Transportation Act.
The omnibus increases the federal-aid highway obligation ceiling—the largest federal construction line item—by more than $2 billion, or 5 percent, to $42.4 billion. It also lifts the Federal Transit Administration’s budget by 8 percent, to $11.8 billion. The Federal Aviation Administration’s Airport Improvement Program, which provides infrastructure construction grants, saw its obligation limit freeze at 2015’s level of $3.35 billion. The Dept. of Transportation’s Transportation Investment Generating Economic Recovery grant program keeps its funding flat at $500 million.
Military construction also recorded a strong increase, with funding climbing 16 percent to $7.2 billion and Air Force and Navy-Marine Corps construction posting large double-digit increases.
Appropriators increased the Army Corps of Engineers civil works program account by 10%, to just under $6 billion, to improve waterways.