WASHINGTON — Several municipal bond provisions included in the Senate-passed highway funding bill that have strong support from the muni industry may not survive 11th-hour House-Senate committee negotiations, stakeholders say.
While some lawmakers at midweek were expressing optimism about passage of the first long-term surface transportation legislation in nearly three years, others weren’t commenting.
However, those who support raising the limit on bank-qualified bonds for small muni issuers to $30 million from $10 million through July 2013, as well as exempting private-activity bonds issued this year from the alternative minimum tax, said that those measures are likely to be bundled together with other tax-related provisions and would have to “rise or fall together.”
The House Republican conferees would prefer “no extraneous tax provisions,” one bond lobbyist said.
The bond provisions have generated strong support from market participants, bond lawyers, and state and local governments.
The National Governors Association penned a letter in support of the bond measures last month, urging conference negotiators to “support investments in infrastructure projects through existing and new self-sustaining financing mechanisms.”
“It’s very close to finishing,” another bond industry lobbyist said of the negotiations, “yet there are open issues.”
One of those issues is the authorization of the Keystone XL pipeline, a provision that Senate Environment and Public Works chairwoman Barbara Boxer, D-Calif. who sponsored the Senate highway bill, has not supported.
Senate Majority Leader Harry Reid, D-Nev., has said it is more than possible that the conferees might finish a bill this week.
Reid said that if necessary, he would keep the Senate working through the weekend, when both the current transportation bill and a bill extending low rates on student loans are due to expire.
Even if a bill gets done, however, another short-term extension might be necessary to give both chambers time to thoroughly examine the result, sources watching the negotiations said.
If negotiators remain hopelessly deadlocked, another long-term extension could materialize. That would be problematic, however, as the gas tax-backed highway trust fund would likely require general fund contributions to remain solvent over the course of another multi-month extension.
If no bill materializes and no extension passes, most federally funded road projects would have to shut down and the government would lose the ability to collect gas tax revenue for the trust fund.
Pete Ruane, president and chief executive officer of the American Road and Transportation Builders Association, issued a call Tuesday for Congress to knuckle down and complete the work.
“While the ball has clearly moved down the field into the ‘red zone’ in recent days, there is still a lot of hard work to be done to get it over the goal line,” Ruane said. “Our message to Congress is simple: stay focused and finish the job.”
