After overcoming a lot of hurdles, the $900 billion pandemic relief bill was finally passed. It includes $600 stimulus payments to qualifying individuals and a new round of Paycheck Protection Program funding for small businesses that were impacted by this pandemic.
An article in Construction Dive states that funds in the bill for transportation and small business loans could help construction according to Stephen Sandherr, CEO of the Associated General Contractors of America.
"The new coronavirus recovery measure ...should provide some needed relief for a construction industry that is coping with project cancellations and job losses in most parts of the country."
CEO of the Associated General Contractors of America | Stephen Sandherr
Sandherr stated that $10 billion in funding would be addressing the shortfalls from state transportation revenue brought on by the pandemic. That funding will help keep many road projects from being cancelled or delayed for a few months anyway and also includes new funding for waterways and ports.
The bill also ensures tax deductibility for business expenses paid with forgiven PPP loans. This was of great concern for many contractors.
"The measure reaffirms the original congressional intent that employers that used Paycheck Protection Program loans to save jobs will not be forced to pay more taxes next year as a result."
CEO of the Associated General Contractors of America | Stephen Sandherr
Elected leaders returning to Capitol Hill this week will face several issues that are affecting the U.S construction industry.
Liability reform, a new highway funding package and Payroll Protection Program forgiveness are all on lawmakers' to-do-list.
"We have this kind of mix between what we want Congress to accomplish and what we expect Congress to accomplish. Neither party wants to give the other party a victory."
Vice president of public affairs & strategic initiatives for AGC | Brian Turmail
Sandherr stated that we have a Republican Senate and we have a Democratic House and they have done nothing on issues of importance for construction.
There is a divide in party lines about the biggest issues facing the country and construction.
The AGC is pushing for liability reform as contractors' concerns grow over potential legal action from workers who contract COVID-19.
Even though contractors can do everything to follow guidelines and protect their workers onsite, workers that test positive for the virus may sue their employer for compensation, even though the exact location where a person contracts it is often unknown. Currently there is no legal language protecting contractors or any employer from a lawsuit.
Liability reform is certainly the biggest issue for the ABC. The organization wants contractors to focus on CDC safety guidelines for their workers rather than trying to avoid potential litigation.
Democrats proposed a new surface transportation bill in the Senate in early June. The bill would last for five years and include $494 billion for building and maintaining highways and would replace the current budget.
Funds from Fixing America's Surface Transportation Act which was originally passed in 2015 and will run out on September 30th.
Ideally, the new bill would get approved quickly and provide security on road infrastructure construction for the next few years. Brian Turmail believes that it is more likely that the bill would get extended although AGC hopes it is for more than just a few months. Making the extension longer or passing new legislation entirely would provide security and assurance for the future.
The Paycheck Protection Program, a part of the CARES Act, helped businesses pay employees during the first months of the coronavirus. Businesses now need to be wary of an IRS ruling that could mean they need to pay more in taxes next year.
A forgiven PPP loan is tax exempt, but using the loan can reduce how much a construction firm can write off on its business taxes according to the U.S. Chamber of Commerce. If there is no decision made by Congress, contractors could see themselves with fewer deductions and more taxes than they'd normally have.
The tax increase could make things difficult for smaller businesses and ABC is specifically looking for an extension of a federal employee tax credit, or some other alternative to PPP, due to the uncertainty most businesses are facing.
During this time, the pandemic has exacerbated the labor shortage. In an AGC survey back in August, 44% of firms who had tried to recall laid-off workers said some staff have shown a preference for unemployment benefits or remained home to care for their families due to the virus.
The future does look brighter when Biden takes office with a new infrastructure bill that would not only help construction in Illinois, but the entire country.
Editor's note: This is, indeed, a confusing time for the construction industry. DataBid is working tirelessly to report and distill the news that can help you and your company make the right decisions and keep you up to date on the constant changes as they are made. We hope our coverage brings some clarity amid all the confusion.
