Other Initiatives
Build America Bonds
The president proposes to make permanent the Build America Bond program, which was created under the 2009 Recovery Act. The proposal would make the program permanent at a federal subsidy level of 28 percent of the coupon interest on the bonds effective as of January 1, 2011.
The proposal would also expand upon the eligible uses for Build America Bonds.
COMMENT: According to the administration, more than $64 billion in Build America Bonds were issued through December 2009.
New York Liberty Zone
After the 9-11 attacks, Congress enacted a number of tax incentives to help the “New York Liberty Zone” recover from the attacks. The president proposes to restructure some of the Liberty Zone tax incentives. Tax credits would be provided to New York State and New York City for expenditures relating to the construction or improvement of transportation infrastructure in, or connecting to, the New York Liberty Zone. The proposal would be effective on January 1, 2011.
COMMENT: The New York Liberty Zone is that area of lower Manhattan most affected by the 9-11 attacks.
Unemployment Insurance Integrity
The president proposes to allow states to redirect up to five percent of recoveries of overpayments of unemployment insurance benefits to additional enforcement activity. Additionally, the FY 2011 budget would require states to impose a penalty of at least 15 percent on recipients of fraudulent overpayments. Revenue from the proposed penalty would be dedicated to additional enforcement activities. The president also would require employers to report a “start work date” to the National Directory of New Hires for all new hires. The proposals would be effective on the date of enactment.
Source: CCH, a Wolters Kluwer business