House Poised to Extend Bond-Related Recovery Act and Other Stimulus Provisions
Jul 30, 2010
On Wednesday, July 28, 2010, House Committee on Ways and Means Chairman Sander Levin (D-MI) introduced H.R. 5893, the Investing in American Jobs and Closing Tax Loopholes Act of 2010. The bill contains the extension of certain American Recovery and Reinvestment Act (ARRA) bond-related provisions, including extension of Build America Bonds (BABs) and Section 265 "bank qualified" (BQ) provisions that were originally considered in H.R. 4213. House leadership had initially scheduled the bill for a vote late Thursday, but pulled it from the calendar when a dispute arose over proposed amendments to unrelated provisions of the recently passed health care overhaul. As of this writing, H.R. 5893 is tentatively scheduled for a vote on Friday, July 30. However, it has been reported that some in the House leadership would rather defer action until after the August recess.
If passed, H.R. 5893 would extend:
• The BABs program through 2012, at a subsidy rate of 32% in 2011 and 30% in 2012;
• The Recovery Zone Bond program through 2011;
• The exemption from the Alternative Minimum Tax (AMT) for interest earned on certain private activity bonds through 2011;
• The liberalization of the BQ bond rules that increased the annual BQ limit to $30 million and permitted treatment of each 501(c)(3) borrower as an issuer for Section 265 purposes through 2011 (note that H.R. 5893 does not include the extension of 2% de minimis rule); and
• The program permitting Federal Home Loan Banks to issue letters of credit for non-housing bonds through 2011.
H.R. 5893 also would permanently exclude Water and Sewer Exempt Facility Bonds from state volume caps.
The bill would not extend the ARRA provisions that expanded the definition of manufacturing for Industrial Development Bonds (IDBs), a provision that has been important to small and medium sized manufacturers. The expanded definition, which expires on December 31, 2010, absent congressional action, allows high tech and biotech firms to access IDB financing. Previously, the availability of this form of financing had been confined to more traditional manufacturing. Groups, including the Council of Development Finance Agencies, have been advocating that the expanded definition be extended beyond this year.
H.R. 5893 is available on the NABL web site library under Federal Tax Matters here.