[Congressional Record Volume 154, Number 25 (Thursday, February 14, 2008)]
[Senate]
[Page S1067]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER (for himself, Mrs. Dole, Mr. Ensign, Mr. Martinez, 
        Mr. Cornyn, Ms. Stabenow, and Mrs. Hutchison):
  S. 2650. A bill to provide for a 5-year carryback of certain net 
operating losses and to suspend the 90 percent alternative minimum tax 
limit on certain net operating losses; to the Committee on Finance. 
  Mr. SPECTER. Mr. President, I have sought recognition to introduce 
legislation to expand a widely used business tax benefit whereby 
business owners balance out net losses over prior years when the 
business has a net operating gain. Spreading out this tax liability 
helps a business to decrease the adverse impact of a difficult year. 
Specifically, this legislation increases the general net operating 
loss, NOL, carryback period from 2 years to 5 years in the case of an 
NOL for any taxable year ending during 2006, 2007, or 2008.
  I am pleased with the quick passage of H.R. 5140, the Recovery 
Rebates and Economic Stimulus for the American People Act of 2008. It 
provides tax rebates for individuals, capital investment incentives for 
businesses, and important modifications to our housing laws that will 
enable more homeowners to refinance their unmanageable mortgages. 
However, it is my belief that several important items were left behind 
that deserved to be included. The bill I am introducing today is 
identical to Section 113 of a modified Senate Finance Committee 
Economic Stimulus package, Senate Amendment No. 3983 to H.R. 5140. On 
February 6, 2008, the Senate rejected this broader package on a 
procedural vote, leaving it just one vote short of the 60 that were 
required. I am still hopeful that Congress will revisit some of these 
important issues in 2008, either as stand-alone legislation or as part 
of another stimulus package if it is determined to be appropriate.
  One particular industry that would benefit from passage of this 
legislation is the home building industry, which is currently 
struggling due to a huge inventory of new homes under construction with 
few buyers. Under present law, a business loss can only be deducted 
from taxes paid from the previous 2 years. If the loss cannot be 
carried back, it must be used in the future. Many home builders are now 
reporting financial losses when a few years ago they were generating 
jobs, providing local development, and paying taxes. Expanding the NOL 
carry-back provision to 5 years would enable builders and other 
businesses to receive an immediate rebate on taxes paid in previous 
years and provide a much needed infusion of capital to their 
businesses. The inability to do so will result in the need to either 
increase high-cost borrowing or further liquidate land and homes, which 
would only compound the existing inventory problem.
  The Joint Committee on Taxation estimated that passage of this 
provision as part of the Senate Finance Committee Stimulus package 
would have cost $15 billion in 2008 and $5.1 billion over 10 years.
  I urge my colleagues to support this important legislation that will 
help numerous industries that are currently struggling to survive in a 
harsh economic downturn.
                                 ______