Washington

WASHINGTON — The tax-exemption for the interest paid on all municipal bonds will cost the federal government an estimated $38.7 billion in fiscal 2011, according to President Obama’s proposed budget for that fiscal year, which begins Oct. 1.

WASHINGTON — Members of the Government Finance Officers Association’s governmental debt management committee on Friday unanimously agreed to propose a revised policy on direct-subsidy and tax-credit bonds that acknowledges Build America Bonds have emerged as a significant sector of the municipal market.

Several municipal issuers and their advisers last week criticized efforts by bond attorneys to help the SEC clarify its forthcoming disclosure guidance, complaining that it does not understand the unique sets of challenges confronted by municipal issuers and does not have the personnel to learn about them.

WASHINGTON — High-speed rail proponents rejoiced yesterday after President Obama announced the Federal Railroad Administration has awarded 31 states with a total of $8 billion of high-speed rail grants, the largest of which will go to California, Florida, and the Midwest region.

WASHINGTON — The Senate Thursday approved legislation to raise the debt limit to $14.3 trillion and ensure the Treasury Department will be able to keep open into 2011 its window for state and local government series securities, which municipal issuers purchase for refunding escrows to avoid earning arbitrage.

WASHINGTON — The Securities and Exchange Commission yesterday voted 4 to 1 to approve a series of changes to its Rule 2a-7 on money market funds aimed at boosting the resilience of funds during market crises, and promised to move forward with additional rules in the future.

WASHINGTON — President Obama wants to freeze non-military discretionary spending for three years to save $250 billion over the next decade, but market participants in states, transportation, and other infrastructure sectors are not panicking yet.

WASHINGTON — Build America Bonds will cost $26 billion more over the next 10 years than previously estimated, the Congressional Budget Office said in a report issued yesterday.

WASHINGTON — The Municipal Securities Rulemaking Board today will begin soliciting a broad range of nominees to serve on its board amid signs that Congress is likely to soon require the self-regulator to alter its composition so that a majority of its 15 members are “public” officials.

The National Association of Bond Lawyers yesterday released a long-awaited advisory on the federal securities law issues that arise when stripping tax credits from underlying taxable municipal bonds.

MINNEAPOLIS — The highway trust fund will face another funding crisis by August, House Transportation and Infrastructure Committee chairman James Oberstar warned at a town hall here yesterday.

Dan Gallagher, deputy director of the Securities and Exchange Commission’s trading and markets division, plans to leave at the end of the week to become a partner at WilmerHale here.

WASHINGTON — North Carolina securities regulators plan this week to begin work on a centralized auction-rate securities research center that will collect progress reports on how Wall Street and other dealer firms are fulfilling the “best effort” commitments they made to provide liquidity to institutional investors still holding illiquid ARS.

SAN ANTONIO — Legislation recently introduced in Congress suggests that traditional tax-credit bonds may be replaced by bonds offering Build America Bond-style direct subsidies to issuers, an Internal Revenue Service attorney said last week.

The U.S. Department of Energy has extended its deadline to Jan. 29 from Jan. 15 for receiving responses to a request for information from state development finance agencies that want to participate in a new federal loan guarantee program.

WASHINGTON — Municipal securities dealers, their finance professionals, and political action committees will have to disclose most contributions they make to bond ballot election campaigns under Municipal Securities Rulemaking Board rule changes the Securities and Exchange Commission approved Wednesday.

WASHINGTON — Harvard University has been tapped for one of roughly 40 audits the Internal Revenue Service is conducting this year to examine the financial and business practices of tax-exempt colleges and universities.

WASHINGTON — Market participants worried yesterday that the Obama administration’s plan to limit the size and certain trading activities of banks could adversely affect firms’ tender option bond programs, which provide money market funds with safe municipal investments.

WASHINGTON — The Supreme Court’s ruling allowing corporations to use their own funds for ads to support or oppose candidates does not appear to have implications for the Municipal ­Securities Rulemaking Board’s Rule G-37, which ­restricts municipal dealers’ political ­contributions to issuer officials, lawyers said.

WASHINGTON — A Wells Fargo & Co. shareholder has filed suit against 13 top officials at the bank, alleging they committed a breach of fiduciary duty, abuse of control, and gross mismanagement by permitting the bank to continue to participate in sale-in, lease-out transactions after the federal government warned they were illegitimate tax shelters.