On Earth Day Vice President Biden Announces $300 Million in Recovery Act Funds for Clean Cities Program

During a visit to the WMATA Carmen Turner Maintenance and Training Facility in Landover, MD, Vice President Joe Biden today announced $300 million in funding from the American Recovery and Reinvestment Act for state and local governments, and transit authorities to expand the nation’s fleet of clean, sustainable vehicles and the fueling infrastructure necessary to support them.

"For city and state governments across this country, every day is Earth Day thanks to the ambitious commitments they are making to green their vehicles and transit systems. Now it’s time for Washington to help them deliver on those promises," said Vice President Biden. "From advanced battery cars to hybrid-electric city buses, we’re going put Recovery Act dollars to work deploying cleaner, greener vehicles in cities and towns across the nation that will cut costs, reduce pollution and create the jobs that will drive our economic recovery."

The Clean Cities Alternative Fuel and Advanced Technology Vehicles Pilot Program will speed the transformation of our nation’s vehicle fleet, help to reduce carbon emissions and increase energy security by helping reduce U.S. dependence to foreign oil. This funding adds to the $11 billion already announced by the Department of Energy to bolster state and local government energy efficiency programs and weatherize low-income homes.

"These funds will give local and state governments the tools to expand the use of advanced technology vehicles in their fleets while at the same time building the infrastructure needed for tomorrow’s clean economy," said Energy Secretary Steven Chu. "This program represents another step toward freeing America from its reliance on foreign oil and lessening our emissions that contribute to global climate change."

Vice President Biden was joined at the event by Maryland Governor Martin O’Malley, who last year committed to convert the entire Maryland Transit Administration bus fleet to hybrid-electric buses by 2014. Earlier this year, the state of Maryland was able to accelerate purchase of the hybrid-electric buses with the help of Recovery Act funds and, as a member of the Clean Cities program, the state would be eligible to apply for additional funds needed to meet their goal through the pilot program announced today. The Vice President was also joined by United States Senator Ben Cardin (D-MD) and Congresswoman Donna F. Edwards (D-MD).

"Sustainability, particularly in terms of stabilizing and reversing Global Climate Change before it is too late, may very well prove to be the defining economic, environmental, and moral issue of our times," said Governor O’Malley. "One of the boldest, most innovative, most forward-looking parts of the President and Vice President’s vision for economic recovery and reinvestment, is their belief that we can fuel our country’s economic engine by revolutionizing the way we fuel our cars, trucks, buses, trains and airplanes. Here in Maryland, where the $610 million in transportation investments we’re receiving from the Obama-Biden Administration are supporting an estimated 17,000 jobs, federal investments are helping us advance toward a goal we’ve set of transitioning a full 40 percent of our state vehicle purchases to alternative fuel or hybrid vehicles by 2010."

The Clean Cities Program offers $300 million to support at least 30 alternative fuels or advanced vehicles projects and requires a 50 percent participant cost share. Technologies eligible to be funded include a number of different light and heavy-duty vehicles, including hybrid, plug-in electric hybrid, hydraulic hybrid, electric, fuel cell, and compressed natural gas vehicles. In addition, projects can support refueling infrastructure for alternative fuels, including biofuels and natural gas. Other efforts eligible for funds include public awareness campaigns and training programs on alternative fuel and advanced technology vehicles and infrastructure.

"We are living in a critical time in our nation’s history. We face an economic crisis, an energy security crisis, and a global climate crisis. The Recovery Act has already begun to put Americans to work undertaking the essential task of reducing our use of energy and our dependence on foreign oil, which will strengthen our economy and security. It will also boost investments in clean renewable energy generation from the wind, sun, and other clean sources," said Senator Cardin. "These funds will allow us to develop new sectors in our economy that will provide high-paying jobs here in America and technologies and services we can export aboard."

"On this Earth Day, I am proud to join Vice President Biden, Gov. O’Malley, and Sen. Cardin in announcing funds from the Recovery Act to be used for the Clean Cities Petroleum Reduction Technologies Project," said Rep. Donna F. Edwards. "This funding exemplifies the dedication of the Obama Administration and this Congress to invest in the development of alternative fuel technology and infrastructure. These efforts will help spur economic development through job creation in Maryland and across the country, and reduce our dependence on fossil fuels."

Applicants to the Clean Cities Program must be state governments, local governments, or metropolitan transit authorities, that partner with a designated Clean Cities coalition. Once awarded, these funds will help local and state government agencies make investments in clean transportation vehicles and fuels that they may not have the resources to do otherwise.

Clean Cities is a government-industry partnership led by the Department of Energy’s Office of Energy Efficiency and Renewable Energy that promotes the growth of alternative fuels and showcases the potential of advanced fuels and vehicles. The existing program has helped put more than half a million alternative fuel vehicles on the road and played a role in the construction of thousands of alternative refueling stations. For more information on Clean Cities, please visit www.eere.energy.gov/cleancities.

The pilot projects will be funded with money appropriated by the American Recovery and Reinvestment Act. The Administration expects these projects will create tens of thousands of U.S. jobs. More information on the Recovery Act and all projects funded by it are available at www.recovery.gov.

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Biden Announces $2.3 Billion in Recovery Act Funds to Help Care for Children, Prevent Disease

Georgia is to receive over $82 million in total childcare funding, and over $6 million for vaccines.

Vice President Joe Biden announced last Thursday that the Obama Administration
will make $2.3 billion available for crucial health and human services
programs that help to provide care for children and prevent disease.
States will receive $2 billion in Recovery Act funding to support child
care for working families. The administration also plans to make $300
million in vaccines and grants available to ensure more underserved
Americans receive the vaccines they need.

The $2 billion in Recovery Act funds for the Child Care and Development
Fund will allow states across the country to support child care services
for more families whose children require care while they are working,
seeking employment or receiving job training or education. The funds
will be used by states to provide vouchers to families for child care or
to provide access to care through contracts with child care centers or
invest in quality improvements. Recovery Act dollars will support a
wide range of child care providers, including child care centers and
home-based programs.

"Parents are worried about finding a job or keeping the job they have
and they shouldn't have to worry about affording quality child care,"
said Vice President Biden. "Safe, affordable, high-quality child care
gives working parents the peace of mind they need to be stable,
dependable employees."

In addition to funding for child care programs, an additional $300
million in Recovery Act funding and grants will help to ensure more
underserved Americans receive the vaccines they need. The Vice
President's announcement came as Americans mark National Public Health
Week.

Funded by the American Recovery and Reinvestment Act, the majority of
these new resources will be used to purchase vaccines, which will be
distributed through the HHS' Centers for Disease Control and
Prevention's (CDC) Section 317 immunization program to all 50 states,
several large cities, and U.S. territories. Funding will also be used to
support national public information campaigns regarding vaccines and
support grants to states that demonstrate innovative new ways to ensure
more Americans receive the vaccines they need.

"Vaccines help keep children healthy, prevent costly stays in hospitals,
and fight diseases that can lead to serious illness or death" added
Biden. "The Recovery Act will help to vaccinate more Americans, cut
health care costs, improve public health and save lives."

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U.S. Mayors React to Governors' Rejection of Stimulus Funding

/PRNewswire-USNewswire/ -- The following is a letter sent by the U.S. Conference of Mayors:

February 23, 2009

The Honorable Barack Obama
President of The United States
The White House

Dear President Obama:

RE: GOVERNORS' REJECTION OF ARRA FUNDS


On behalf of The United States Conference of Mayors, we want to thank you for hosting our delegation in the White House on February 20 to discuss implementation of the American Recovery and Reinvestment Act (ARRA). America's mayors strongly endorsed passage of this critical legislation, and we are 100 percent committed to helping create or save 3.5 million jobs over the next two years. We agree with you that this massive federal investment must be transparent, maximize innovation, and provide lasting environmental and infrastructure benefits.

Mayors know, better than anyone, that there are families suffering because of the recession in every State of this great Nation. And we know that every city has short-term and longer-term needs that can be addressed by the programs funded under ARRA. That is why we are so concerned to hear that some Governors and some States may choose to reject selected funding provided under the new law.

As a Nation, we cannot allow our citizens and communities to needlessly suffer when assistance is available to help them survive and rebuild in these troubling times. That is why we ask you and your Administration to devise a mechanism that will allow cities and our residents to have full access to all programs funded under ARRA in the event that any State chooses to reject such funding. It is not clear to us that Section 1607 of ARRA - which provides a mechanism for state legislatures to accept federal funding if Governors reject provisions under ARRA - will fully protect our cities if those state legislatures also fail to act quickly or attempt to alter the purpose of the federal statute.

For our Nation to recover from this recession, we need to invest in every child, in every family, and in every city. We cannot allow politics as usual in some State capitals to prevent us from accomplishing the mission you have charged us with.

Please contact CEO and Executive Director Tom Cochran or Chief of Staff Ed Somers to further discuss this matter.

Sincerely,

Manuel A. (Manny) Diaz
Mayor of Miami
President

Tom Cochran
CEO and Executive Director

Cc: The Honorable Nancy Pelosi, Speaker of the House
The Honorable Harry Reid, Senate Majority Leader

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CCH Special Tax Briefing: Final Stimulus Plan Provides Tax Breaks for Individuals, Businesses, Environment, Government

/PRNewswire/ -- Senate and House conferees have agreed on the final provisions of The American Recovery and Reinvestment Act of 2009, the major "economic stimulus" measure of the new Obama administration, according to CCH, a Wolters Kluwer business (http://www.cchgroup.com/). The agreement is expected to pass both houses of Congress without further changes this week and be signed into law by the president.

To read the CCH Special Tax Briefing on the significant tax provisions of the Act, go to http://tax.cchgroup.com/legislation/.

"While spending is the largest component of the stimulus plan, this is also a major tax bill," said Mark Luscombe, JD, LLM, CPA, and CCH principal federal tax analyst.

The tax provisions, which affect individuals, businesses, environment and government, are aimed at increasing spending, employment, education and clean energy.

Low, Modest Incomes Benefit

Low and middle-income wage earners; people receiving unemployment benefits; prospective new car and home buyers; and families or individuals with college expenses may all benefit from the changes affecting individuals. In addition, the stimulus legislation provides another temporary "patch" that will keep millions of taxpayers out of the reach of the alternative minimum tax (AMT) for another year.

The provision that will affect the greatest number of people is a "Making Work Pay" tax credit for the 2009 and 2010 tax years. The credit will be figured as 6.2 percent of taxable wages, to a maximum of $400 for single filers or $800 for joint filers. The credit begins to phase out at adjusted gross incomes of $75,000 for single filers and $150,000 for joint filers, diminishing by 2 percent of any amount above those levels. In effect, the credit decreases to zero when adjusted gross income hits $95,000 for single filers; $190,000 for joint filers.

Recipients of Social Security, Railroad Retirement and Veteran's Administration benefits will get a minimum credit of $250, even if they have little or no earned income to qualify for the credit otherwise.

"The credit is refundable, so some people will benefit from the credit, even if they don't owe income taxes," Luscombe noted.

Unlike the "stimulus rebate" credits of 2008, which were delivered in the form of a single check, the "Making Work Pay" credit will be delivered as a somewhat larger paycheck, as a reduction in quarterly estimated tax payments or as part of a tax refund.

"The idea seems to be that if people get the credit through their paychecks, the money is more likely to get into circulation, rather than stuck into a savings account or used to pay down debt," Luscombe said. "Changing people's withholding can be difficult to do automatically, however. It will be interesting to see how it's managed."

Yet Another AMT Patch

The stimulus bill contains another temporary AMT patch to the tax code that will keep millions of taxpayers from having to pay the vexsome alternative levy. For 2009 returns, it sets the AMT exemption at $46,700 for single filers, $70,950 for joint filers. Absent the patch, these amounts were set to revert to just $33,750 for individuals and $45,000 for married couples filing jointly.

"Congress has been applying a one-year patch every year for several years now, usually late in the year," Luscombe noted. "This expected bit of tax help probably won't have a very stimulative effect, but it will lessen uncertainty and help people plan their tax moves earlier in the year."

Expanded Credit for Educational Expenses

Many people paying for college expenses will benefit from a multi- dimensional expansion of the Hope Credit for post-secondary education.

Renamed the "American Opportunity Tax Credit" for the 2009 and 2010 tax years in which it will be available, the maximum credit amount will be $2,500 versus $1,800 under current law. It's figured as 100 percent of eligible expenses to $2,000 plus 25 percent of expenses above $2,000, so someone with total eligible expenses of $4,000 or more would reach the maximum amount.

Unlike the existing Hope Credit, which covers expenses during only the first two years of post-secondary education, the American Opportunity Credit can be used for expenses incurred in up to four years of study. In effect, it will also largely replace the existing Lifetime Learning Credit for college expenses over the next two years.

In addition, the legislation expands the kinds of expenses eligible in figuring the credit to include "course materials."

"Up until now, you haven't been able to include cost of textbooks in computing the credit, yet that cost can be substantial," Luscombe noted. "Some students attending community colleges with modest tuition costs might see a significant increase in the amount of credit they can claim."

The credit can also now be claimed by some people whose incomes made them ineligible to take full advantage of the Hope Credit. It phases out with modified adjusted gross incomes between $80,000 and $90,000 for single filers, or $160,000 and $180,000 for joint returns, as opposed to previous phaseout ranges of $50,000 to $60,000 and $100,000 to $120,000.

Finally, 40 percent of the credit will be refundable, so even if a family owes no income tax due to other credits and deductions, it can receive a check for a portion of the American Opportunity Credit. However, a child cannot claim the credit unless he or she provides more than half his own support.

"These changes provide some help to families struggling with college costs in hard times and may allow some students to stay in school who would otherwise drop out," Luscombe said. "But although a more educated workforce is probably a public benefit in the long run, it's hard to see this providing a lot of economic stimulus right away."

In another education-related tax benefit, the new measure will allow withdrawals from 529 savings accounts to pay for computers, computer-related technology and Internet access for beneficiaries.

"Colleges and universities typically require students to have laptops, so this is an appropriate expansion of permitted withdrawals from qualified tuition savings programs," Luscombe said.

Help with Earned Income, Child Credits

The stimulus measure will benefit people at the lower end of the income scale in a number of ways. Married couples with children entitled to the Earned Income Tax Credit, or EITC, can benefit from a provision that raises the "phaseout" range of the credit, so they retain more of the credit as their incomes increase. Taxpayers with three or more children also see an increase.

Low-income families also benefit from a liberalization of the refundable portion of the $1,000-per-head Child Credit. The new provision takes income above $3,000, rather than $8,500, into account in figuring how much of the credit can be refunded, even if the taxpayer owes no other tax. This expands the number of people who can take full advantage of the refundable credit.

"If these changes are figured into withholding, taxpayers will have a few extra dollars in every paycheck, which they presumably will spend," Luscombe observed.

New Rules for First-time Homebuyer Credit

The plan modifies the first-time homebuyer credit that was signed into law last year by increasing the maximum credit amount to $8,000 and by removing a requirement that the credit be repaid over 15 years, but the waiver applies only to houses purchased in 2009. The credit is also extended until December 1, 2009. However, those who take the credit will have to repay the entire amount if they sell their homes within three years of purchase.

Under current law, those who purchased homes between April 9 and December 31 of 2008 can claim the credit on their 2008 return, but must repay it over 15 years, beginning with their tax return two years after purchase. If they sell the home, they must repay the entire credit, but only up to the amount of their gain on the sale.

Stimulus for New Car Sales

To stimulate new car sales, the Act provides a deduction from gross income for sales tax attributable to the first $49,500 of the purchase price of a new car, motorcycle, light truck or mobile home. The purchase must take place in this year, on or after the date when President Obama signs the legislation. Taxpayers can take the deduction even if they don't itemize -- but they can't take this deduction and also take an itemized deduction for state and local sales tax. The deduction begins to phase out when modified AGI reaches $125,000 for single filers and $250,000 for joint filers, phasing out completely at $135,000 and $260,000 respectively.

People who take mass transit or belong to van pools may also see an increased benefit, since the stimulus increases the current exclusion amount for those benefits from $120 to $250 per month, starting in March 2009, effectively creating parity with employer-provided parking benefits.

Tax Help for the Unemployed

Unemployed workers will benefit from an exclusion of the first $2,400 of unemployment benefits from the reach of the federal income tax for 2009.

"People are often surprised to find that unemployment compensation is considered the same as taxable wages," Luscombe said. "This doesn't completely change the system, but provides some relief from a rule that seems to kick people while they're down."

The stimulus measure also lessens the cost for people who lost their jobs on or after September 1, 2008 and up until December 31, 2009 who want to continue their group health coverage. It uses credits against payroll tax to reimburse employers for subsidizing 65 percent of the premium for COBRA continuing coverage for up to nine months.

Benefits for Businesses

Small businesses experiencing losses in tax years beginning or ending in 2008 can benefit from a provision that allows them to apply the loss to previous years' income for as many as five years before the year in which the loss takes place, potentially producing a tax refund for the prior year. Normally, losses can be "carried back" only to the two previous years. "Small" businesses, for this purpose, are those with gross receipts of less than $15 million.

"This can put cash back into a business quickly, and may keep a struggling business from closing its doors," Luscombe said. "It's not so clear that it will actually increase economic activity."

The legislation also extends two provisions that encourage businesses to invest in equipment. Bonus depreciation, which allows a business to write off an additional 50 percent of the cost of new equipment in the first year, will be extended from 2008 to 2009. Enhanced small business expensing, which allows businesses to totally write off up to $250,000 in new equipment subject to a phaseout when capital expenditures exceed $800,000, will also be extended from 2008 to 2009.

"Many people are doubtful that these provisions actually produce any more spending on equipment than would otherwise take place," Luscombe noted. "They argue that businesses don't buy equipment just to get a tax break; they buy it because they believe they can increase sales and profits. It also won't help businesses that are strapped for cash and unable to borrow. Still, not extending these breaks would probably have sent the wrong signal."

To encourage purchase of certain small business stock, the law increases the exemption for gain on the stock held for five years or more from 50 percent to 75 percent for stock acquired after the date of enactment and before January 1, 2011.

For S corporation conversions, the law temporarily shortens, from 10 to 7 years, the holding period for assets subject to the built-in gains tax imposed after a C corporation elects to become an S corporation. This reduction would apply to C corporations that convert to S corporations in tax years beginning in 2009 and 2010.

"Sometimes, converting to an S corporation is the best way for a C corporation to cope with economic difficulties, and this gives them a little bit more leeway to do that," Luscombe said.

The Act also allows corporations to defer recognition of "income" that is attributed to them when a creditor cancels or reduces their debt temporarily, extends a temporary provision that allows businesses to take a larger portion of AMT or research and development credits in lieu of bonus depreciation and reduces required estimated tax payments for 2009.

Credits for Business to Do Good

The law expands the existing Work Opportunity Tax Credit, which generally gives businesses up to $2,400 to add people in targeted groups to their payrolls. It adds unemployed veterans discharged in 2008, 2009 or 2010 and "disconnected youth" -- those between 16 and 25 who haven't been regularly employed or in school for the last six months to the list of "targeted groups."

"This may induce employers to take on some people they see as 'high risk,' or who need more training than usual," Luscombe said. "But, once again, businesses would probably have to see a genuine need for a larger workforce, not just the opportunity for a tax break, to increase hiring."

A new investment tax credit is now available for investments in broadband technology in underserved rural areas and the use of tax exempt industrial development bonds is expanded to cover facilities used in creating intangible, as well as tangible, property.

"The aim of the credits is to encourage businesses to serve the public good by subsidizing their investments in people, economic development and needed technology," Luscombe said.

Credits to Create "Green Jobs"

The stimulus contains a number of energy-related tax provisions. Among them is removal of dollar limitations on credits for certain small wind property, solar water heating and geothermal heat pumps credits. The cap on solar electricity property had already been removed in 2008 legislation. All would be eligible for an uncapped 30-percent credit. The legislation extends the tax credits for improvements to energy-efficient existing homes through 2010 and increases the credit from 10 to 30 percent. It eliminates item-by- item dollar caps and instead provides an overall $1,500 cap. It also extends a credit for electricity produced from renewable sources, such as biomass, solar and wind -- through 2012 for wind power and 2013 for other types.

A new investment tax credit is provided for "advanced energy" property, including technology for producing renewable energy, energy storage and conservation, efficient transmission and distribution of electricity and carbon capture and sequestration. Projects must be certified by the Secretary of Treasury in consultation with the Secretary of Energy.

"What's being aimed at here is partly pumping money into the economy directly through the credits, but also creating new 'green jobs' that will put people to work and installing energy-efficient systems that will save money in the long run," Luscombe noted.

Plug-in vehicles get an extra boost under the stimulus, as well. The number of four-wheel vehicles that can qualify for the existing credit is doubled, and a low-speed credit is introduced for vehicles sold after December 31, 2009, with a maximum credit of $4,000.

Tax Incentives for State, Local, Tribal Projects

State and local governments will benefit through a wide variety of measures that should make their bonds easier to sell, including exempting "private activity bonds" from the alternative minimum tax. Local governments can also issue "recovery zone" bonds to finance projects in areas experiencing "significant poverty, unemployment or home foreclosures," and Indian tribal governments are given an expanded ability to issue bonds to finance economic development.

"These tax provisions may spur some development at a relatively low cost to the federal treasury, but a greater part of the president's recovery plan relies on direct grants to the states for 'shovel-ready' projects," Luscombe said.

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New National Poll Finds Strong, Bipartisan Demand for Transparency in Economic Recovery Package

/PRNewswire-USNewswire/ -- An overwhelming majority of voters want full and open reporting on how Recovery Act funds are spent at federal and state levels, according to a nationwide survey conducted last week on behalf of the Coalition for an Accountable Recovery. Further, roughly eight in ten voters say that making the U.S. government more accountable and more open to average citizens should be a high priority for the new administration; four out of ten said it is "one of the most important priorities."

The demand for greater transparency in the recovery package reaches across partisan, geographic and demographic divides. Republicans, independents, and Democrats alike strongly support the inclusion of tracking and reporting requirements to ensure federal money is effectively spent and has a positive impact on the economy:

-- Three-quarters of voters (76%) believe that "creating a national website where citizens can see what companies and government agencies are getting the funds, for what purposes, and the number and quality of jobs being created or saved" would have an important impact on the package, including 39% who believe its impact would be extremely important.

Support for state transparency websites to monitor recovery funds received almost equally high marks, again from Republicans, independents and Democrats:

-- Fully 76% of American voters said creating state level websites to track funds was "important," and 34% said it was "very important."

"Whether or not we agree with the stimulus bill's priorities, officials at the federal and state levels must assure taxpayers that their hard-earned money will be used in a responsible manner," said National Taxpayers Union Government Affairs Manager Andrew Moylan. "The best way to do this is to make information on stimulus spending transparent and easily available to the public in a searchable online format."

However, although state governments will have to report to the federal government, the current bill does not demand that states create public websites to show their own citizens how they are spending the money, despite the fact that state governments will be responsible for dispensing over half the funds. Underscoring the breadth of support for this reform, 70% of Republicans, 74% of independents, and 80% of Democrats believe it would have an important impact on the recovery package.

Greg LeRoy, Executive Director of Good Jobs First, remarked, "Transparency is not just necessary policy; it's good politics. No one wants well-intended stimulus funding to become tainted by corruption and waste at the state and local levels. Getting lots of taxpayer eyeballs on the money is President Obama's best bet for keeping governors and mayors from frittering away his Recovery Plan."

The survey was conducted between January 13th and January 20th, 2008 by Lake Research Partners, in collaboration with Topos Partnership. It reached 900 adults, 18 years of age or older, in the United States who are registered and voted in the 2008 General Election.

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