The American Jobs Act

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Michael Bird
Jeff Hurley

SUMMARY
AMERICAN JOBS ACT PROPOSAL – POTENTIAL STATE IMPACT

 September 14, 2011 
This document will be updated as more details become available. 

Direct State Aid / Employment

  • EDUCATION. Provides $30 billion for state and local governments to rehire, retain or hire early childhood, elementary and secondary educators (includes teachers, guidance counselors, classroom assistants, afterschool personnel, tutors and literacy and match coaches). 
  • PUBLIC SAFETY/FIRST RESPONDERS. Provides $5 billion to hire or retain public safety and first responder personnel.
  • SUMMER YOUTH JOBS. Provides states with funds for summer job programs for low-income youth in 2012 and year-round employment for economically disadvantaged young adults.
  • SUBSIDIZED EMPLOYMENT. Allows states to subsidize private-sector employment opportunities for low-income individuals.
  • DISCRIMINATION. Makes it illegal for business to refuse to hire applicants solely because they are currently unemployed or to include in job posting and advertisements provisions that specify that unemployed individuals will not be considered.

Click here for more information on education provisions in the jobs bill.

 Infrastructure

  • K-12 EDUCATION. Provides $25 billion for school construction and repair projects, with priority designation for rural schools and Bureau of Indian Education-funded schools and further set-aside of 40 percent of funds for the 100 largest high-need public school districts. States determine the allocation of the other 60 percent. Permissible uses: emergency repair and renovations, greening and energy efficiency upgrades, asbestos abatement and removal, new science and computer labs, technology upgrades, outdoor learning and play areas and shared spaces for adult vocational education and job development centers.  
  • COMMUNITY COLLEGES. Provides $5 billion for community college facilities modernization. 
  • TRANSPORTATION. Provides $50 billion for immediate investments for highway, highway safety, transit, passenger rail, and aviation activities. This includes $27 billion for highway systems, $9 billion for transit and trail, $2 billion for airport improvement grants and $10 billion for innovative investment financing, which includes $5 billion for TIGER and TIFIA grants. 
  • INFRASTRUCTURE BANK. Establishes an independently operated National Infrastructure Bank (NIB). Eligible projects would include transportation, water, and energy infrastructure, for projects of at least $100 million in size.

 

Public Safety 

  • D-BLOCK. Provides a nationwide interoperable communications network for first responders. The proposal would reallocate the D-Block for public safety and support the deployment and development to meet public safety requirements at a cost of $10 billion.               

 

Tax 

  • PAYROLL TAX FOR EMPLOYERS. Temporarily reduces the 6.2 percent payroll tax for employers to 3.1 percent for 2012. State, local and federal governments are specifically excluded from this reduction. 
  • PAYROLL TAX FOR EMPLOYEES. Continues and expands existing policy that temporarily reduces employee payroll taxes from 6.2% to 3.1% (current reduction is to 4.2%) for 2012. 
  • TAX EXPENDITURES; TAX EXEMPT-FINANCING; DEDUCTIBILITY. Allows individuals with taxable income of $200,000 ($250,000 for joint filers) or more to deduct no more than 28 percent of the value of all tax expenditures .These include state and local income and property tax deductibility, optional sales tax deductibility and exemption of interest on state and local government securities.
  • SMALL BUSINESS EXPENSING. Continues through 2012 authority for businesses to deduct the full value of their investments from their annual tax obligations. By virtue of state tax law, some states must decide whether to couple or de-couple from this provision as it does have a negative revenue impact (potentially offset by positive economic effects). 
  • 3% WITHHOLDING. Supports a delay of an existing regulation requiring state and local governments to withhold and send to the Internal Revenue Service 3% of payments made to contractors.

 

Unemployment 

  • BENEFITS. Extends unemployment benefits for those actively seeking work. 
  • REEMPLOYMENT ASSISTANCE. Requires states to provide re-employment assistance to all new emergency unemployment compensation (EUC) claimants, requires these claimants to report to one-stop career centers for various reemployment services and provides states with funds to conduct reemployment and eligibility assistants for all new EUC claimants. 
  • WORK SHARING. Allows workers to receive pro-rated unemployment insurance (UI) benefits as compensation for a reduction in hours worked at businesses that would otherwise lay off these workers. 
  • LONG TERM UNEMPLOYED. Allows states to operate programs that give long-term unemployed individuals the opportunity to take temporary, voluntary employment to maintain skills or learn new skills while still receiving UI; allows states to establish wage insurance programs for older workers who take a loss of pay to return to work; allows states to use federal UI funds to provide self-employment assistance programs that enable unemployed workers to create their own jobs by starting their own small businesses. 
  • TAX CREDITS. Provides businesses with a $4,000 credit for hiring the long-term unemployed.

 

Grant Aid / Preemption

  • 11th AMENDMENT. Any state that receives federal financial assistance from this proposed legislation shall constitute of sovereign immunity under the 11th amendment of the Constitution.

 

Mortgage / Housing 

  • REFINANCING. Eliminate impediments in the current federal refinancing program (HARP) in order to qualify more borrowers for low interest rates available through refinancing mechanisms. 
  • PROJECT REBUILD. Provides $15 billion to: (1) allow grant recipients to rebuild and repurpose distressed commercial real estate, (2) support for-profit development as part of redevelopment strategies involving collaborative efforts among non-profits, local governments and developers, (3) allow grantees to establish property maintenance programs for abandoned/vacant properties, and (4) expand land bank models which permit communities to buy, hold and redevelop distressed properties and leverage increased private sector investment.