Rep. Bill Pascrell, D-N.J., has introduced a bipartisan bill that would allow states ravaged by Hurricane Sandy to issue billions of dollars of private activity bonds outside federal and state volume caps to pay for the rebuilding of docks, commuting facilities, multi-family housing and infrastructure facilities.
The Hurricane Sandy Tax Relief Act of 2013 (HR 2137), which is co-sponsored by 28 lawmakers from Connecticut, New Jersey and New York, including eight Republicans, would also waive certain mortgage bond requirements for Sandy-related projects in disaster areas in these states.
Pascrell and four others are members of the House Ways and Means Committee. The bill is somewhat similar to a measure Pascrell introduced last year that failed to gain traction in the Sandy aid package that was ultimately approved by Congress.
"While the Sandy aid we fought so hard for is finally getting to the communities that desperately need it, we know it's not going to be enough to help families and businesses fully recover," Pascrell said in a release. "This legislation will go a long way towards filling this gap by providing immediate tax relief to those impacted by Sandy's devastation."
"Similar tax relief has been passed following some of our country's worst natural disasters, and Sandy victims deserve nothing less than the same treatment," he added.
The bill would allow Hurricane Sandy Bonds, which would be exempt-facility private activity bonds, to be issued in amounts of up to $9.2 billion in each of New York and New Jersey and $3.2 billion in Connecticut from the date of enactment through 2015.
The bonds could be issued by the states or political subdivisions outside of volume caps, for projects in Hurricane Sandy disaster areas. At least 95% of the net proceeds would have to be used for qualified project costs.
These costs would include the acquisition, construction, reconstruction and renovation of multi-family housing, commercial, or public utility property, as well as exempt facilities listed in the federal tax code such as airports, wharves, docks, mass commuting facilities, and water and sewage facilities.
The bill provides incentives for the bonds to be issued quickly. If certain percentages of the allocated amounts are not used in a state this year or next, then the total allocated amount for that state is reduced.
The bonds can be used for current refundings as long as certain conditions are met, such as that the average maturity date of the issue containing the refunding bonds is not later than the average maturity date of the bonds to be refunded and the amount of refunding bonds does not exceed the outstanding amounts of refunded bonds.
The bill contains special rules that would ease limits on acquiring property and for spending specific percentages of proceeds within certain amounts of time to avoid arbitrage rebate requirements.
In addition, the bonds would not be subject to the alternative minimum tax.
The bill also would allow increases in the use of low income housing tax credits for declared disaster areas in these states.