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American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act of 2009 is already creating new jobs in America by making sweeping investments in rebuilding our country, providing tax relief, and promoting alternative energy and green manufacturing. The package provides critical support for families, businesses and communities during this economic crisis. The recovery package is estimated to create over 100,000 Michigan jobs.

As a member of the Senate Finance Committee, Senator Stabenow won important victories for Michigan with this legislation. A few important highlights for Michigan include:

Creating jobs by rebuilding Michigan’s roads, bridges, harbors, water systems and international borders.This bill provides Michigan with over $847 million to maintain and improve state highways, as well as over $134 million to invest in public transportation.

Investing in Michigan’s auto industry by providing incentives for advanced battery technologies. The recovery package includes a new tax deduction so consumers can deduct state and local sales tax for the purchase of new autos, expansion of a $7,500 consumer tax credit for hybrid vehicles, and the elimination of a $7-$10 billion tax liability for General Motors.

Monetizing previous tax credits and creating new incentives to supply needed capital for manufacturers. The extension of the Stabenow AMT/R&D Tax Credits will help our manufacturers modernize their facilities. The creation of a new Advanced Energy Manufacturing tax credit will help manufacturers build new facilities to manufacture renewable energy products.

Helping families affected by this economic crisis including a 33-week extension of unemployment benefits for an additional 162,000 laid-off Michigan workers, expansion of COBRA health care coverage for the unemployed, an $8,000 tax credit for first time homebuyers, and tax cuts for working families.

Increasing job training resources to transition to the new economy and expanding Trade Adjustment Assistance to provide job training and benefits to more workers who lost their jobs due to unfair trade policies.

Modernizing our health care system with electronic medical records modeled on the Stabenow-Snowe Health Information Technology legislation to lower health care costs and improve the quality of health care.

Investing in Advanced Energy Manufacturing and Energy Efficiency

Advanced Energy Manufacturing Tax Credit ($1.65 billion)
For the first time ever, companies that domestically manufacture advanced technologies used for the production of renewable energy (including batteries) will receive a manufacturing tax credit of 30% for the cost of building factories. This credit was co-authored by Senator Stabenow and will create new green manufacturing jobs.

Energy Efficiency and Conservation Block Grants ($6.3 billion)
We also need to make critical investments in our cities, counties, and states, so we can help get locally driven alternative energy projects off the ground. The recovery package provides $6.3 billion in energy efficiency and conservation block grants to reduce fossil fuel emissions and create thousands of jobs.

Weatherization Assistance Program ($5 billion)
Weatherization has helped spawn an energy efficiency industry for residential housing. The industry today employs 8,000 people who work in low-income weatherization alone. Michigan is expected to receive over $245 million in Weatherization Assistance Program funds.

Clean Renewable Energy Bonds ($1.6 billion)
The recovery package provides an additional $1.6 billion for Clean Renewable Energy Bonds (CREBs) to allow investment in renewable energy facilities.

Energy Conservation Bonds ($2.4 billion)
The recovery package provides an additional $2.4 billion in energy conservation bonds for government programs that reduce greenhouse gas emissions and promote energy-reducing technologies.

Production and Investment Tax Credit Extension ($14 billion)
The production tax credit (PTC) is extended for three years through 2013 (2012 for wind property) for qualified property. Companies are also allowed the option of utilizing the investment tax credit (ITC) instead of the production tax credit through the same time period. This allows for more immediate financing and helps companies deal with the uncertainty of long-term financing that renewable energy projects typically face. For wind and solar projects, companies will be allowed to receive a grant for the amount of the credit.

Investing in the Production of Electric Vehicles

U.S. Production of Advanced Batteries ($2 billion)
As domestic automakers are retooling for new hybrid vehicles, they currently have to use foreign-made batteries. Investing $2 billion in grant funding will encourage domestic production of advanced battery technologies, such as lithium ion batteries, hybrid electrical systems, and component and software design. Batteries, a key component in the new, green economy, must be made here at home to preserve jobs and maintain a strong supplier industry.

Alternative Refueling Stations ($54 million)
It is also important to provide incentives for businesses that supply alternative fuels for the advanced vehicles already on the road. The recovery package increases the business credit for alternative refueling stations, from 30 percent to 50 percent (up to $50,000 and up to $200,000 for hydrogen stations) and extends the credit through 2010.

General Motors Tax Fix
Companies with a federal loan agreement could have been forced to pay billions in tax liabilities under an ownership change scenario. Last year, GM received $9.4 billion under the Troubled Asset Relief Program (TARP) and could have been subject to between $7 billion and $10 billion in tax liabilities. Senator Stabenow eliminated this liability with an amendment to the recovery package.

Promoting the Sale of Vehicles

Mikulski-Stabenow Sales Tax Deduction for Auto Purchases ($1.7 billion)
With auto sales at a 27-year low, we must do more to encourage consumers to purchase new cars. Providing a state and local sales tax deduction for purchasing a new car is the first step in revitalizing auto sales across the country. When people are able to buy a new car, we keep American autoworkers on the job and innovation moving forward.

Expanded Consumer Tax Credit for Plug-In Electric Vehicles ($2 billion)
To help consumers move to newer technologies and advance the production of alternative vehicles, a $7,500 consumer tax credit will be available for the first 200,000 vehicles per manufacturer. In addition, consumers will also receive a 10% tax credit toward the purchase of two- and three-wheeled electric vehicles on the market today.

Energy Efficient Federal Motor Vehicle Fleet Provision ($300 million)
The federal government has already announced plans to purchase up to 17,600 new fuel-efficient vehicles to modernize the government fleet. These vehicles may only be purchased from domestic automakers, and will help drive demand for hybrid and plug-in vehicles while keeping American autoworkers on the job.

Creating Jobs by Rebuilding Michigan

Transportation Investments ($48 billion)
Putting people to work on transportation projects is a win-win for all Americans. The recovery package includes $27.5 billion for highways, $8.4 billion for public transportation, $9.3 billion for investments in rail transportation, particularly high speed rail corridors, $1.5 billion in grants to state and local governments for transportation investments, and $1.3 billion for investments in our air transportation system. The recovery package provides Michigan with over $847 million to maintain and improve state highways, as well as over $134 million to invest in public transportation.

Public Lands Funding ($3.1 billion)
We also have an opportunity to create jobs by improving our parks and public lands. This bill provides funding for the repair, restoration, and improvement of public facilities at parks, forests, refuges, and other public and tribal lands.

Department of Homeland Security Infrastructure Investments ($2.8 billion)
Rebuilding America must include investing in our security here at home. The recovery package provides $2.8 billion to reduce the $6 billion construction backlog for points of entry on our borders, as well as millions to secure high risk, critical infrastructure such as dams, tunnels, and bridges.

Investing in Clean Water

Clean Water ($6 billion)
Investing in our water infrastructure ensures a safe supply of drinking water throughout the country. Michigan will receive over $169 million from the Clean Water State Revolving Fund and over $67 million from the Drinking Water State Revolving Fund to finance local water infrastructure improvements.

Harbors & Waterways ($4.6 billion)
It is time to make a real investment in dredging federal harbors and waterways, rehabilitating inland waterway locks and dams, improving coastal navigation, and restoring coastal environments. Funding for the Army Corps of Engineers is anticipated to create as many as 37,000 direct new private sector jobs and restore our harbors and waterways.

Tax Assistance for Business

Stabenow AMT/R&D Tax Credits ($805 million)
Many of our manufacturers require assistance to modernize their facilities so they can create jobs and stay competitive globally. The recovery package extends Stabenow legislation that passed last July, allowing companies to utilize built-up tax credits to stimulate the economy, make capital investments, and create new jobs through 2009. In today’s credit crisis, monetizing previous tax credits is even more important to the future of the industry.

Net Operating Loss Carry Back Period for Small Businesses ($947 million)
There is no question that small businesses have been hit particularly hard by the economic recession and credit crunch. This recovery package allows start-up companies and struggling firms to receive capital for losses incurred in the past in order to make new investments in the economy.

Tax Relief for Debt Restructuring ($1.6 billion)
Certain businesses will be allowed to spread out cancelled debt income over 10 years. This is done for businesses that cancel or repurchase their own debt at a reduced cost in 2009 and 2010. Instead of immediately recognizing that amount as income and paying taxes on it, those companies will have more money available earlier than they normally would, allowing them to use it for company investments now.

Small Business Expensing ($829 million)
This provision extends the small business expensing provision. This allows businesses to continue to expense double the normal amount for property placed in service in 2009, instead of doing it over time, thus allowing them to pay less in taxes and free up money for other uses.

Bonus Depreciation ($5.1 billion)
This extends the first year 50% depreciation deduction for businesses through 2009 for qualified property placed in service during 2009. It allows businesses to write-off more of their expenses in the first year instead of over a long period of time.

Assistance for Local Communities

Redevelopment of Abandoned and Foreclosed Homes ($2 billion)
Many areas have been hit hard by a growing number of foreclosures. This legislation allows states, cities, and nonprofits to compete for funding, which will be used to support the communities suffering the most from the foreclosure crisis.

Law Enforcement Support Initiatives ($4 billion)
Our communities rely on law enforcement when emergencies arise. This package will provide additional resources to law enforcement to keep our communities safe.

Build America Bonds ($4.3 billion)
It is imperative that our state and local governments have access to capital for local projects. Because the market for tax credits is currently small given current economic conditions, the recovery package would allow state or local governments to elect to receive a direct payment from the federal government equal to the subsidy that would have otherwise been delivered through the federal tax credit for bonds issued in 2009 and 2010.

New Markets Tax Credits ($815 million)
The New Markets Tax Credit Program provides an incentive to invest in low-income communities across the country. This package includes $5 billion for unfunded 2008 projects and $5 billion more for 2009 projects.

Help for Housing and Homeowners

Refundable Tax Credit for Homeowners ($6.6 billion)
For families and individuals looking to buy their first home, this package provides an $8,000 tax credit for first-time home purchases made before December 1, 2009. The credit will be subject to a phase-out for taxpayers with an adjusted gross income of $75,000 (or $150,000 if filed jointly). This is a critical step to rebuilding the housing market.

HOME Investment Partnerships Program ($2.25 billion)
The housing crisis has left many low-income families without a place to call home. This bill provides $2.25 billion through the HOME Investment Partnerships Program and the Low Income Housing Tax Credit program to fill financing gaps caused by the credit freeze and get stalled housing development projects moving. Michigan is estimated to receive over $64 million in HOME block grant funding.

Providing Assistance to Help Put Americans Back to Work

Job Training Initiatives ($4 billion)
The recovery package includes critical funding to help put Michigan back to work. Senator Stabenow secured $4 billion in job training initiatives to meet the training and employment needs of workers across the country. Michigan will receive millions for worker grant programs, some of which will focus specifically on green job training.

Green Job Training ($500 million)
Through competitive grants to non-profit and private partnerships, the recovery package will train workers for activities such as retrofitting buildings, green construction and manufacturing, and the production of renewable power. This $500 million investment will create thousands of green jobs for Michigan workers.

Improving Unemployment Insurance for American Workers ($40 billion)
With Michigan's unemployment rate the highest in the nation, the need to address unemployment insurance has never been more important. The recovery package extends unemployment benefits another 33 weeks and modernizes the program by increasing benefits for recipients with dependents, creating more training resources, offering part-time options while full time jobs are scarce, and improving the formula for insurance payments. Economists estimate that for every $1 spent on unemployment benefits, the economy is stimulated by $1.64. Michigan will receive $90 million in immediate assistance.

Trade Adjustment Assistance ($1.6 billion)
Many workers across our state have lost their jobs due to unfair trade policies. The new Trade Adjustment Assistance (TAA) reauthorization expands eligibility to service workers, increases funds available for training programs by nearly 160 percent, increases the Health Care Tax Credit from 65% to 80%, triples funding for TAA for firms to help struggling businesses, and authorizes $230 million for TAA for communities hardest-hit by unfair trade. The recovery package also extends the TAA for Workers program by two years.

Expanding and Improving Access to Health Care

COBRA Continuation Coverage for Unemployed Workers ($24.7 billion)
No one who loses their job should have to worry about whether or not they will be able to afford the health care they need. By making temporary changes to subsidize 65% of an individual’s COBRA benefit, 7 million Americans will maintain their health insurance. The recovery package provides $24.7 billion to temporarily cover the cost of COBRA premiums for individuals and families.

Modernizing our Health Care System ($19 billion)
Adopting secure, electronic medical records improves the quality of care, increases efficiency, and helps prevent medical errors. The recovery package invests $19 billion in the adoption and use of electronic systems modeled after the Stabenow-Snowe Health Information Technology legislation. By investing in electronic medical records, we can save lives while creating new technology jobs.

Investing in Biomedical Research and the Life Sciences ($10 billion)
To secure America’s role as a world leader in cutting-edge medical research, the recovery package includes $10 billion in additional funding for the National Institutes of Health (NIH). NIH grants for biomedical research will expand good jobs in the life sciences, renewing America’s investments in basic research and development, provide additional training opportunities for young scientists and students, and help deploy new technologies into the marketplace.

Veterans Health Initiatives ($1.2 billion)
We must keep our promise to America’s veterans by providing them with the care they need. The recovery package funds the construction and renovation of VA hospitals and medical facilities and long-term care facilities for veterans.

Medicaid Assistance ($87 billion)
In 2000, 64% of Michigan’s private employers offered health coverage to their workers, but now only 53% of companies offer health insurance. In 2007, 11.6% of Michigan's total population, or 1.1 million people were uninsured. The recovery package directs $87 billion in targeted assistance to state Medicaid programs. Public programs such as Medicaid and the Children’s Health Insurance Program prevent a greater increase in the uninsured. In its August report, the Census Bureau specifically attributed the drop in uninsured people to an increase in the number of children enrolled in the Children's Health Insurance Program and Medicaid. Michigan will receive nearly $2.3 billion in additional assistance.

Helping Families through this Economic Crisis

Making Work Pay Credit ($116.2 billion)
The recovery package puts money into the pockets of families who need it most. 90% of American workers will receive $400 in extra cash, and married couples who file jointly will receive $800. Over 3.9 million Michigan workers and families will receive this tax credit.

Tax Cuts for Families ($19.5 billion)
Hardworking parents with three or more children will receive additional funding through an expansion of the Earned Income Tax Credit, a refundable child tax credit, and marriage tax penalty relief.

Alternative Minimum Tax Relief ($69.8 billion)
The recovery package helps provide relief for up to 26 million Americans from the Alternative Minimum Tax (AMT). At a time when families are faced with job loss and rising costs, the recovery package ensures that middle class families receive tax relief from the AMT in 2009.

One-time Payments to Seniors, Disabled Veterans, and Others ($14.2 billion)
Those who may not qualify for the Making Work Pay credit, such as seniors, disabled veterans, and others, will receive a one-time payment of $250.

Supplemental Nutrition Assistance Program ($19.9 billion)
Families across our country should not have to worry about putting food on the table. The recovery package increases funding for the SNAP program, which provides food stamps for those in need. Every $5 billion invested in SNAP triggers $9.2 billion in economic activity.

Community Services Block Grant ($1 billion)
We need to make sure services are available to assist families during these tough times. The recovery package provides funding to local community action agencies (CAAs) for services to low-income families hurt by the economic crisis, especially in the areas of housing and mortgage counseling, job skills training, food pantry assistance, and outreach and enrollment initiatives.

Child Care Development Block Grant ($2 billion)
Many families across Michigan cannot afford quality day care for their children. The recovery package provides quality child care services for an additional 300,000 children in low-income families. Michigan will receive over $58 million in funding, covering an additional 12,860 children.

Meal Service Programs for Seniors ($100 million)
Many of our seniors live on a strict fixed income and have difficulty paying for their meals in this economy. The recovery package provides funding to help senior meal programs cope with steep increases in food and fuel costs. The funding will also provide 30 million additional meals, and help prevent further reductions in meal deliveries.

Investing in Schools and America’s Competitiveness

National Science Foundation Funding ($3 billion)
Investing in our scientific infrastructure is critical to growing our economy. The recovery package provides funding for scientific infrastructure, to help America compete globally, and for competitive grants to improve the quality of science, technology, engineering, and mathematics (STEM) education.

Tax Cuts for College Tuition and Education ($14 billion)
Individuals in need of financial assistance to attend college will receive a $2,500 higher education tax credit available for the first four years of college. Up to $1,000 of the credit is refundable. The credit is subject to a phase-out for taxpayers with an adjusted gross income of $80,000 ($160,000 if filed jointly).

Qualified Zone Academy and School Construction Bonds ($23.4 billion)
Our schools and communities are also strapped for funding. The recovery package allocates $23.4 billion in loans to qualifying schools and communities to borrow at little or no cost to modernize classrooms and create 21st-century schools.

Title I Funding ($13 billion)<br>All of our children deserve the best possible resources in public schools. Michigan will receive Title I funding to help close the achievement gap and enable disadvantaged students to reach their potential.

Special Education Funding ($12.2 billion)
Children with special needs and learning disabilities cannot be left behind. This recovery package increases the federal share of special education services to its highest level ever.

For more detailed information, please visit stabenow.senate.gov/recovery