Majority of PABs Issued for Nonprofits, Data Show

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WASHINGTON — Total private-activity bond issuance for the five years from 2007 through 2011 was $273.35 billion, with bonds for hospitals, colleges and other nonprofits that meet certain criteria making up more than half of that amount, a tax committee staffer told Rep. Sandy Levin, D-Mich.

Levin, who is from Michigan and is the top Democrat on the House Ways and Means Committee, had asked staff from the Joint Committee on Taxation at a March 13 meeting for information showing how PABs have been used in recent times.

Levin made the request after Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, released a discussion draft tax reform plan that would prohibit tax-exempt PABs from being issued after 2014.

Thomas Barthold, JCT's chief of staff, told Levin in a March 25 letter that 61.5% of the total dollar volume of PABs for the five-year period were qualified 501(c)(3) bonds used for hospital or non-hospital projects.

About $93.32 billion or 34.1% of the total were qualified 501(c)(3) bonds for nonprofit organizations other than hospitals and $74.83 billion or 27.4% were for hospitals.

The JCT letter said $32.77 billion or 12% were qualified mortgage bonds and $23.03 billion or 8.4% were for bonds for qualified residential rental projects. In addition, $17.37 billion or 6.4% of the PABs were for airports, $13.28 billion or 4.9% were for water, sewage, and solid waste projects, $8.7 billion or 3.2% were qualified student loan bonds, $4.99 billion or 1.8% were qualified small issuer bonds and $5.07 billion or 1.8% were other PAB bonds.

The letter did not cite the source for the data, but it has to be the Internal Revenue Service, which collects it from Forms 8038 that state and local governments file when issuing tax-exempt PABs. Even though PAB data is available to the IRS as soon as bonds are issued, the latest that is publicly available is three-years old, according to the Service's web site.

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