Peter Schroeder

State and local governments will be able to buy and temporarily hold their tax-exempt bonds, including auction-rate securities, for another year without causing the bonds to be considered reissued for tax purposes, the Internal Revenue Service said yesterday.

The top taxwriters in the Senate promised yesterday that legislation that would extend a number of tax provisions slated to expire at the end of the year, including the New York City Liberty Bond program, will be one of the first things they address in 2010.

Municipal market participants want Congress to provide more assistance for muni bonds next year by extending or expanding many of the bond-related provisions in the American Recovery and Reinvestment Act, especially those authorizing the Build America Bond program.

Guidance issued by the Internal Revenue Service Friday allows the governors of nine Midwestern and Gulf Coast states to determine which natural disaster recovery projects can be financed with special tax-exempt private-activity bonds.

Bond lawyers told the Treasury Department recently that proposed regulations on bond-financed solid-waste disposal facilities are a significant improvement from an earlier 2004 version, but contain some aspects that would be unworkable for issuers.

House Democrats have scuttled plans to include a $1.8 trillion boost to the national debt limit in the upcoming defense appropriations bill, and instead plan to propose separate legislation that would raise the limit by $200 billion and allow the Treasury Department to continue issuing debt for two more months.

WASHINGTON — If Congress does not pass legislation boosting the federal debt limit by the end of the year, the Treasury Department could be forced to close its window for state and local government series securities, which municipal issuers purchase for refunding escrows to avoid earning arbitrage, market sources said yesterday.

The House yesterday approved by a vote of 241 to 181 legislation that extends a number of expiring bond-related and other tax provisions, but it is unclear when or whether the Senate will approve similar legislation.

WASHINGTON — Several small local housing finance agencies will not be participating in the new-issue bond purchase program recently rolled out by the Treasury Department. Instead, they have opted to return their allocations because high fees and the Treasury’s refusal to allow escrowed bonds to be sold at a premium make it economically infeasible for them to do the transactions.

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.

WASHINGTON — The Senate Finance Committee’s top Republican introduced legislation yesterday that would authorize another $2.2 billion of clean renewable energy bonds, while the House Ways and Means Committee is expected to introduce a bill next week that would extend a number of expiring tax provisions.

WASHINGTON — Large local school districts would not be forced to give up their unused qualified school construction bond allocations to states to keep them from expiring at the end of the year under legislation proposed yesterday by the top tax writers in the House.

Rep. Xavier Becerra, D-Calif., has introduced a bill that would create another type of tax-credit bond — clean renewable water supply bonds — and authorize the issuance of up to $6.2 billion of them through 2018.

WASHINGTON — The Treasury Department Wednesday highlighted guidance on tax-credit stripping, Build America Bonds, and other programs stemming from the American Recovery and Reinvestment Act as high priorities in its 2009-2010 priority guidance plan.

WASHINGTON — Alliance, Ohio, disclosed last week that the Internal Revenue Service has concluded an audit of $50 million of hospital revenue bonds it issued in 2003 with no change to the tax-exempt status.

Initial jobless claims decreased 35,000 to 466,000 in the week ended Nov. 21, the Labor Department reported Wednesday.

WASHINGTON – Initial jobless claims decreased 35,000 to 466,000 in the week ended Nov. 21, the Labor Department reported today.

WASHINGTON — Treasury Department officials yesterday touted Build America Bonds as one of the American Recovery and Reinvestment Act’s success stories and a driver of public and private investment, but could not quantify exactly how much the program is costing the federal government.

WASHINGTON — The American Bar Association’s section on taxation has asked the Treasury Department to clarify a number of points in tax-regulatory guidance of Build America Bonds and other new programs under the ­American Recovery and Reinvestment Act to ensure issuers don’t do ­anything when issuing the bonds or ­spending the proceeds that could jeopardize the federal subsidy on the bonds.

WASHINGTON — The Treasury Department this week allocated $29.1 billion to state and local housing finance agencies for temporary new-issue bond purchase and liquidity programs, but some small HFAs are warning the fees they would have to pay to participate in the purchase program are prohibitively expensive.