The House and Senate continued their standoff over how many revenue-raising offsets should be included in legislation designed to extend several expiring tax breaks and create tax incentives for renewable energy initiatives, with each chamber pushing its own bills and the clock ticking down to Congress' upcoming adjournment.
Yesterday, Senate Republicans blocked an attempt by Majority Leader Sen. Harry Reid, D-Nev., to bring the House's fully-offset "extenders" package up for a vote. As a result, Senate Finance Committee chairman Max Baucus, D-Mont., one of the authors of the Senate's package, which is only partially offset, called on the House to pass his measure.
"The Senate has now demonstrated the limit of what it can do and what it can't do and the Senate has demonstrated it cannot pass the tax extender bills," he said on the Senate floor. "I hope the House will take [the Senate bill] up."
The Senate package contains more bond-related provisions than the House measure.
In addition to patching the alternative minimum tax, the Senate bill would create a special category of qualified private-activity bonds that local governments in Texas and Louisiana could issue through Dec. 31, 2010, to finance relief efforts in the wake of Hurricane Ike. The Texas counties of Brazoria, Chambers, Galveston, Jefferson and Orange, as well as Calcasieu and Cameron parishes in Louisiana, could issue the bonds in amounts up to $2,000 times their population - up to $2.3 billion of debt, according to 2007 census figures for the counties.
The bonds would be issued by states or municipalities and the proceeds would be allocated to areas based on the areas of greatest need. Interest on the bonds would not be subject to the AMT, and the bonds would not count against the states' volume caps.
The bill also would create a category of private-activity bonds called "Midwestern disaster area bonds" that could be issued by nine states in the Midwest outside of the volume cap over the same time frame to finance relief projects in disaster areas. Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, and Wisconsin could each issue the bonds in an amount up to $1,000 times the portion of their state population that is located in a disaster area.
In addition, the package would authorize Midwestern disaster states to issue debt service tax-credit bonds, which would provide the holders with tax credits in lieu of interest payments.
The House bill instead would create a broad federal tax-relief program for disasters that would authorize the Treasury to permit the issuance of up to $13 billion of private-activity bonds to finance relief and relax mortgage revenue bond rules for disaster areas.
The measure also includes an additional $400 million of state and local qualified zone academy bonds for 2008 and 2009.
The energy portion of the Senate package would authorize $800 million of new clean renewable energy bonds, as well as $800 million in qualified energy conservation bonds, a new category of tax credit bonds that would be allocated to states, municipalities, and tribal governments for projects that would reduce greenhouse gas emissions. In addition, the package would extend existing authority through 2012, for qualified green-building and sustainable-design project bonds, but not provide additional funding.
The House bill would also extend the bonding authority through the end of 2012, but does not contain any additional authority for CREBs or new authority for energy conservation bonds.