WASHINGTON — New York Liberty Bond issuers — including the Liberty Development Corp., which planned to sell $2.59 billion of the bonds this month to beat the current deadline — would have another year to put together deals under legislation introduced yesterday by the top tax writer in the House.
The legislation, if passed, also would mean the New York City Industrial Development Agency would not have to forgo issuance of $700 million of Liberty Bonds that had been allocated to the Port Authority of New York and New Jersey for development of the Freedom Tower.
House Ways and Means Committee chairman Charles Rangel, D-N.Y., yesterday unveiled the Tax Extenders Act of 2009, which extends a number of expiring tax provisions, including the ability for Liberty Zone issuers to issue the special private-activity bonds to finance projects designed to revitalize lower Manhattan.
In an effort to approve the bill before the Liberty bond and other provisions expire on Dec. 31, lawmakers plan to bypass the committee level and put the measure immediately before the full House for a vote.
“This bill provides critical tax relief for hardworking families and businesses to help spur economic growth and create jobs,” Rangel said. “Congress must act to give these families and businesses certainty that they can continue counting on this relief to plan their budgets for the coming year.”
New York City and New York State officials have been pressing lawmakers to extend the $8 billion program, which was created following the Sept. 11, 2001, terrorist attacks that destroyed the World Trade Center’s twin towers and other nearby buildings.
With no guarantee that an extension was in the works, the LDC moved toward meeting the existing deadline for development at the World Trade Center site. The bond proceeds were expected to be put into escrow because they could not immediately be applied to construction due to delays.
It was unclear at press time whether the legislation would alter the LDC’s financing plan. A spokesman for the Port Authority, the owner of the site, would only say that the authority hoped the program would be extended another year.
The new legislation also includes a one-year extension of relaxed mortgage revenue bond limitations for federal disaster areas. That provision would allow issuers in designated disaster areas to issue tax-exempt housing bonds to finance the repair or reconstruction of homes or rental housing units that were damaged or destroyed by a federally declared disaster.
The bill also includes a one-year extension of tax incentives for so-called empowerment zones, which are economically distressed areas where businesses are eligible for tax incentives, including tax-exempt bonds, to spur development.
Tax-exempt bonds can be issued in these areas to provide low-cost financing to private businesses, provided that at least 35% of the business’ employees are residents of the empowerment zone for the life of the bonds.
The “extenders” package, which is passed by Congress annually to address tax breaks on the cusp of expiration, usually contains a number of municipal bond provisions. But this year’s version comes only 10 months after the American Recovery and Reinvestment Act was enacted, which already extended some of the expiring tax provisions.
For example, extenders legislation typically includes a one-year “patch” to the alternative minimum tax, but the ARRA exempted from the individual and corporate AMT all new-money bonds issued in 2009 and 2010, as well as all bonds issued to refund debt offered in 2004 through 2008.