Far West

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.

SAN FRANCISCO — California’s gaping budget gap is likely to lead to a legislative impasse that could easily shut the state government down next summer, Treasurer Bill Lockyer said this week.

SAN FRANCISCO – Citing a weak economy, diminished reserves, and the possibility of sizable future budget deficits, Fitch Ratings Tuesday afternoon downgraded Los Angeles general obligation bonds to AA-minus from AA. The city’s outlook remains negative.

SAN FRANCISCO — Moody’s Investors Service downgraded the San Pablo Redevelopment Agency’s Tenth Township Project Area tax-allocation bonds to Baa2 from Baa1, citing a sharp decline in property tax revenue and high exposure to variable-rate debt.

WASHINGTON — Tax revenues continued to fall in the July-to-September quarter of 2009 — the fourth consecutive quarter of decline — for all 44 states that reported their third-quarter results to the Rockefeller Institute of Government, according to its preliminary report released yesterday. Surprising revelations in the report include California’s relatively moderate year-over-year declines.

WASHINGTON — Market participants are increasingly concerned about provisions in Senate and House regulatory reform bills that are designed to address the level of sophistication of states and localities that want to engage in over-the-counter derivatives transactions.

SAN FRANCISCO — San Jose Mayor Chuck Reed proposed a freeze in redevelopment spending in California’s third-largest city to prepare for a $75 million state raid on the local budget.

Build America Bonds have been called the success story of 2009 as issuers rush to take advantage of the 35% interest payment subsidy offered by the federal government. Yet few are flocking to an even better offer — recovery zone economic development bonds, which offer certain issuers a 45% subsidy.

SAN FRANCISCO — The California State Public Works Board abruptly removed more than half a billion dollars from last week’s lease-revenue bond sale after two state lawmakers issued a last-minute letter warning of legal challenges to a project that was slated to receive bond funding.

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.