WASHINGTON — House Ways and Means Committee chairman Sander Levin plans next week to unveil new jobs legislation that would extend Build America Bonds and other muni bond initiatives that are set to expire at the end of the year.
The Michigan Democrat talked to reporters about the jobs bill late last week. A source said the bill will include many of the same bond provisions in earlier jobs legislation the committee approved March 18. It was passed by the House a week later but never gained any traction in the Senate.
The new legislation will be a more streamlined version of the previous bill, with the hope that it will pick up more support and have a better chance of enactment, the source said.
Municipal market participants have been urging lawmakers to extend the BAB program and other bond provisions originally enacted as part of the American Recovery and Reinvestment Act before their year-end expiration dates.
In the earlier House bill, dubbed the Small Business and Infrastructure Jobs Act, the BAB program would have been extended until April 1, 2013, and the current subsidy rate — 35% of interest costs — would have been lowered annually to 33% in 2011, 31% in 2012, and 30% during the first three months of 2013.
That legislation also would have doubled in size the two recovery zone bond programs to $50 billion. It would have authorized an additional $10 billion and $15 billion of economic development bonds and facility bonds, respectively, with the proviso that each municipality receive an allocation equal to at least its share of national unemployment as of December 2009.
The recovery zone economic development and exempt facility bond programs originally were created as part of the ARRA, with issuers authorized to sell an initial $10 billion and $15 billion of the bonds, respectively, for economically distressed areas.
The bill also would have extended through 2011 a stimulus provision exempting all new private-activity bonds from the alternative minimum tax, including bonds refunding debt sold during and after 2003.
In addition, state and local governments would have been able to sell PABs for water and sewer facilities without being limited by state volume caps.
Further, tribal governments would have been permitted to issue private-activity bonds for sewage and water supply facilities without being subject to PAB volume caps or the “essential government function” test that normally limits a tribe’s use of tax-exempt financing.
The bond provisions in the bill were merged with a legislative package in the Senate that would have extended several other expiring or expired tax breaks. But the legislation stalled after lawmakers repeatedly failed to obtain enough votes to limit debate on it.