There is a general consensus growing that the federal American Recovery and Reinvestment Act is becoming known in some corners as the full employment act for attorneys.
Teams of lawyers from large and small firms are exploring opportunities for clients that may be part of the Recovery Act, or economic stimulus plan, that is pouring $992.5 million into state-managed water infrastructure, highway, energy and low-income housing programs. In fact, many Milwaukee-area law firms are forming groups of lawyers to just work on stimulus issues.
The biggest impact for clients at Godfrey & Kahn SC may be in the renewable energy and energy efficiency programs available for businesses, municipalities and Wisconsin’s Native American Tribal Councils, said Art Harrington, a partner at the Milwaukee law firm.
“We’re tracking funding sources for energy efficiency and renewable energy programs that will finance building efficiency investments,” said Harrington.
The Wisconsin state energy program and weatherization fund have received more than $200 million in the Recovery Act, which is almost 20 percent of the total stimulus money dedicated to infrastructure, highway, energy and housing programs. The highway and infrastructure programs in Wisconsin received $529.1 million with about 30 percent of that total allocated to local municipalities for road and bridge projects.
Bill Cummings, a real estate lawyer with Reinhart Boerner Van Deuren SC in Milwaukee, specializes in affordable, low-income housing programs. He’s upbeat about the stimulus package and its impact on developers and builders who are considering low-income housing projects.
“The equity market for low-income housing is soft because the demand for low-income tax credits has fallen off,” said Cummings.
The Recovery Act has allocated $35.8 million to a program called HOME Funding that will help fill financing gaps on low-income projects, said Cummings.
In addition, the Recovery Act created a tax credit exchange program that will allow the Wisconsin Housing and Economic Development Authority to convert unused federal low-income tax credits into cash that can be given to developers to foster the construction of affordable housing, said Cummings.
While WHEDA is still formulating its plan on how to proceed with the tax credit exchange program, Cummings said the housing agency could receive between $100 million and $110 million in cash that can be given to developers as grants to proceed with projects.
Ray Carey, a partner in Foley & Lardner LLP’s public affairs practice group in Milwaukee, is chasing stimulus money for clients involved in road and infrastructure construction industries. He is also representing companies seeking energy efficiency and low-income housing funding.
“There are significant funding opportunities available for clean water and publicly owned treatment plants,” he said.
Wisconsin’s Drinking Water State Revolving Loan and Clean Water State Revolving Loan funds received an infusion of $145.6 million in federal money through the stimulus act.
One of the lesser known provisions of the Recovery Act includes the expansion of broadband telecommunications services and high-speed Internet services, said Carey. The stimulus bill adds funding to expand broadband into more rural areas of Wisconsin.
“This is an extraordinary piece of legislation, but we also have to look out for new regulations or bureaucracies that may affect our clients,” said Carey.
While lawyers are finding plenty of work unwinding the provisions of the Recovery Act, accountants are finding the stimulus package anything but stimulating.
“There’s nothing in the bill that’s going to cause employers to make private investments to stimulate the economy,” said Rick Taylor, a partner and tax expert with the Wauwatosa office of Wipfli, a certified public accounting and consulting firm.
In fact, Taylor said there are about a dozen tax provisions in the Recovery Act that affect mostly small businesses with revenues of $15 million or less. Most of the tax-related provisions are not new, but extensions of previously enacted bills.
For example, Taylor said the extension of the bonus depreciation provision in the stimulus act was initiated in 2008 to allow small businesses to immediately write off 50 percent of the cost of depreciable property acquired in 2008. The bill temporarily extends the benefit for capital expenditures for 2009.
“There’s not as much in the stimulus bill as we had hoped that will impact the clients we serve,” said Lee Riordan, tax director in Deloitte Services LP’s Milwaukee office.
From Riordan’s perspective, the most positive aspect of the Recovery Act may be the renewable energy tax credits to help more companies invest in “green” technologies.