Rep. Allyson Schwartz, D-Pa., has introduced a bill that would authorize up to $3 billion of tax-credit bonds that state and local governments could issue each year to finance capital improvements to police and fire departments.
Schwartz, a member of the House Ways and Means Committee, introduced the Police and Fire Station Modernization Act of 2008 on Thursday. The bill has been referred to that committee as well as the House Education and Labor Committee.
"The Police and Fire Station Modernization Act will help local and state governments make badly needed improvements to their police and fire facilities," Schwartz is expected to say in a letter to be sent to colleagues this week, her staff said. "By allocating $3 billion per year in tax credit bonds, we will be able to help state and local governments save money and improve the police and firefighter morale by improving dilapidated and antiquated buildings."
Tax-credit bonds are taxable bonds that provide holders with income tax credits in lieu of tax-exempt interest payments.
Under the bill, the $3 billion of such bonds would be allocated to states each year based on population, with a guaranteed sub-allocation to large local governments with populations of 500,000 or more.
Governments must either spend all bond proceeds on projects within three years of issuance, or redeem the bonds within 90 days of that period.
While the prospects for the bill's passage are unclear, Ways and Means Committee chairman Charles Rangel, D-N.Y. has been a big backer of tax-credit bonds. Rangel supports provisions that would provide $5.6 billion of taxable tax-credit bonds for renewable energy in a bill that is pending before the House.
However, a spokesman for Rangel declined to comment, and no hearings have been scheduled on the measure.