WASHINGTON — Several bond lawyers on Friday said they were pleased the Internal Revenue Service settled a tax dispute over a $10.2 million of Build America Bonds issued by Half Moon Bay, Calif., in 2009 by reducing its subsidy payment from the federal government to 29% from 35% of interest costs.

Half Moon Bay announced the settlement with the IRS on Thursday — the first publicly reported settlement between an issuer and the IRS over a BAB issue.

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