Washington

Legislation passed by Congress last week will allow the Treasury Department to keep open through February its window for state and local government series securities, which municipal issuers purchase for refunding escrows to avoid earning arbitrage.

The amount of private-activity bonds that can be issued by state and local governments nationwide in 2010 will rise to almost $30.857 billion, an increase of 0.8%, according to new population figures released by the Census Bureau and the Internal Revenue Service's formula for state PAB volume caps.

WASHINGTON — The economy will continue to grow next year, municipal bond yields will rise — though not as much as Treasury yields — and the threat of inflation will remain low, according to most economists and market participants.

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.

Now that the first shoe has dropped in the Justice Department's criminal investigation of alleged anti-competitive activities in the municipal derivatives and investment markets, what comes next 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.

Gary Bornholdt, tax counsel for Nixon Peabody LLP and former legislative counsel to the Joint Tax Committee, died Saturday as he was shoveling snow. He was 42 years old.

The Municipal Securities Rulemaking Board on Friday filed with the Securities and Exchange Commission a revised proposal that would temporarily give issuers more time to voluntarily disclose annual financial information to EMMA for special designation.

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.

The House last night was expected to approve a jobs bill that would expand two tax-credit bond programs for school projects to allow state and local issuers to receive direct Build America Bond-style payments from the Treasury Department instead of investors receiving tax credits.

The Securities and Exchange Commission is moving forward with a sweeping but informal inquiry into the manner in which Miami presented its financial condition in offering documents for bonds issued in 2007.

Federal stimulus money is keeping states spending even as most sources of revenue dry up. In its annual report on state expenditures, the National Association of State Budget Officers estimated states spent $1.593 trillion in fiscal 2009, which for most states ended June 30.

The Financial Industry Regulatory Authority has fined Scottsdale, Ariz.-based First Financial Equity Corp. and New York-based Whitaker Securities LLC a total of $25,000 for municipal securities trade reporting violations.

Federal lawmakers will have to become more comfortable with tolling highways, tunnels, and bridges if they want to obtain the revenues needed to create a national infrastructure bank or fund large capital projects in the future, transportation advocates said yesterday.

A coalition of publicly traded, non-bank corporations that own billions of dollars of illiquid student loan auction-rate securities is pushing for a federal liquidity backstop so they can sell the ARS and have money to invest in their businesses.

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.

Public power utilities are facing the prospect of increased costs and riskier credit profiles due to the Environmental Protection Agency's recent movement toward regulation of coal plant and other carbon-based emissions, analysts said yesterday.

Robert Bradbury, the former chairman and chief executive officer of the now-defunct underwriting firm Dolphin & Bradbury Inc., was sentenced by a federal judge in Philadelphia yesterday to a 366-day prison sentence and ordered to pay a $10,000 fine in connection with his pleading guilty to one criminal count of securities fraud.