Washington

In the realm of muni enforcement, the new year will start with the most high-profile federal criminal trial since the mid-1990s, stemming from the Justice Department's extensive probe of bid-rigging.

Washington maintained its AA-plus rating from Fitch Ratings despite its difficulty in increasing revenue because residents pay no income tax, according to a report from the agency.

The U.S. Department of Housing and Urban Development has launched an investigation into the Los Angeles Housing Authority, according to published reports.

The coming year could herald the most significant regulatory changes in the municipal securities market in more than 35 years.

Federal legislation modeled after the Gulf Opportunity Zone Act of 2005 that would assist states devastated by tornadoes and floods in early 2011 is pending in Congress.

Transportation officials and lobbyists will be watching Capitol Hill early next year, hoping lawmakers pass long-term reauthorization legislation funding aviation and surface programs that would bring much-needed stability to the sectors.

State and local governments will be able to issue a total of $32.821 billion of private-activity bonds under a national volume cap next year — 1.2% or $379.96 million more than in 2011.

GE Funding Capital Market Services Inc. has agreed to pay more than $70 million to settle antitrust, securities fraud, tax and other charges with the Securities and Exchange Commission and other regulators and law enforcement authorities for rigging bids on at least 328 muni bond reinvestment contracts in 44 states and Puerto Rico over five years, officials said Friday.

Gulf and Midwestern states hit by disasters in recent years received a holiday gift from the Internal Revenue Service on Friday.

The Washington Department of Transportation is set to begin tolling on the State Route 520 floating bridge on Dec. 29.

Thirty-four congressmen urged Securities and Exchange Commission chairman Mary Schapiro to exempt broker-dealers and other regulated entities from its proposed municipal advisor definition, warning in a letter Monday that the failure to do so would impose unnecessary regulation and harm issuers by reducing competition.

Washington Gov. Chris Gregoire planned to sign a bill Tuesday that would resolve about one-quarter of the state's $2 billion budget deficit.

The Securities and Exchange Commission has approved Municipal Securities Rulemaking Board changes to Rule G-16 that would require muni broker-dealers that pose more risks to undergo compliance examinations more frequently, possibly as often as every year.

The future of Medicaid, which eats up nearly a quarter of states' budgets, will play a key role in governments' fiscal health over the next several years, Standard & Poor's said in a new report on the federal program.

Having already assigned a negative outlook to Garvees, Fitch Ratings said downgrades could occur for such bonds without a backup pledge of revenues if lawmakers don't approve a longer-term reauthorization of highway and other surface transportation programs by March 31.

Republicans complained about the skyrocketing cost and lack of administrative transparency surrounding the construction of the California high-speed rail project, while Democrats and regulators steadfastly defended the partially bond-financed project as an antidote to gridlock and a way to create jobs.

After an arena in Washington State defaulted earlier this month, investors still got paid, but it is unclear who made the mistake.

Market participants urged the Municipal Securities Rulemaking Board to broaden the definition of "sophisticated municipal market professional," saying it should include individuals with muni or fixed-income assets of $25 million, or $50 million in munis and other assets, not $50 million in munis, as the board had proposed.

Due to ongoing budgetary uncertainties, the Securities and Exchange Commission is seeking to lead its municipal securities office with a director who does not report directly to SEC chairman Mary Schapiro, as was mandated by the financial reform law enacted last year.

Washington lawmakers are considering a bipartisan plan that would reduce the state's $2 billion budget shortfall by about one-quarter.