Last week, the United States House of Representatives passed H.R. 2, the Moving Forward Act.  This $1.5 trillion collection of spending programs is intended to address the country’s aging infrastructure while at the same time create jobs to lessen the financial impacts of the COVID-19 pandemic and resulting economic downturn. The fate of the bill is uncertain at best, as both the Senate and the Trump administration have signaled strong disagreement with the legislation. An awareness of key aspects of the bill, however, is important for local government leaders as sections of the massive proposal may find their way into other legislation that does become law.

The vast scope of the 2,000-page bill makes it impossible to summarize every aspect in one article. In fact, published summaries alone are nearly one hundred pages long. Instead, below we highlight some of the more interesting components local government officials may want to monitor within the following key public sectors. 

Economic development

The Moving Forward Act includes significant revisions to federal economic development programs. These changes strengthen the tools available to communities and businesses by providing additional benefits and continuity of programs. Revisions include:

  • New Markets Tax Credit program made permanent as well as increases funding levels for future rounds
  • Historic Tax Credit temporarily increased to 30% from 2020 to 2024
  • Low-Income Housing Tax Credit adjusted to a permanent minimum 4% rate and an increased annual 9% allocation amount
  • Neighborhood Investment Tax Credit established to encourage revitalization efforts of housing in distressed neighborhoods

Financing

The H.R. 2 bill brings back and extends several popular local government financing tools, including:

  • Advanced refundings restored to same status as pre-2017 Tax Cut and Jobs Act
  • Bank qualification limit raised to $30 million and indexed going forward
  • Increases the annual state volume cap on private activity bonds
  • Establishes Qualified Infrastructure Bonds with applicable tax credits similar to the former Build America Bond program.

Schools

H.R. 2 reinstates a popular funding mechanism from the Great Recession era and provides new grant programs for school facilities improvements, such as:

  • Restores and extends the use of Qualified Zone Academy Bonds for construction and retrofitting of public school facilities
  • Authorizes grant funds for replacing or retrofitting school buses to become clean, low or zero emissions buses
  • Directs the Department of Energy to establish a competitive grant program to award funding for energy improvements in public school facilities

Transportation

The Moving Forward Act reauthorizes federal highway funding and establishes several new programs for state and local road infrastructure improvements, including:

  • Establishes a new grant program focused on supporting local community investment in roadways to improve safety, state of good repair, accessibility and environmental quality
  • Establishes new grant programs for deployment of electric vehicle charging stations and alternative fuel infrastructure, gridlock reduction, rural road enhancement and connectivity

Utilities

H.R. 2 identifies billions of dollars for energy, water, wastewater and stormwater infrastructure enhancements, including:

  • $1.5 billion over five years in grants to states to assist in implementing water quality improvement programs
  • $1 billion for municipalities to carry out watershed, wet weather and resiliency projects
  • $600 million in grants to carry out alternative water source projects, including reclaimed stormwater
  • Establishes a program and funding for projects improving resiliency, performance or efficiency of the electricity grid
  • Authorizes the Department of Energy’s proposed Cities, Counties and Communities energy program to provide technical assistance and grants for clean energy solutions in development and redevelopment efforts

As mentioned above, H.R. 2 has likely reached the extent of its legislative life. Various individual provisions of The Moving Forward Act, however, have bipartisan support and may see enactment in other pieces of legislation. We will continue to monitor this bill and provide updates as additional Congressional activity takes place.

For more information on this topic, or to learn how Baker Tilly public sector specialists can help your entity, contact our team.

Scott A. Miller
Partner, CPA
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House passes the Moving Forward Act