WASHINGTON — A long-awaited bicameral highway bill agreement does not include the bond-friendly provisions championed by muni market groups and public finance advocates, including a temporary increase of the bank-qualified bond cap and exemption for private-activity bonds from the alternative minimum tax.
House and Senate conferees worked late Wednesday night and into early Thursday morning to finalize the report, a two-year compromise that funds federal surface transportation programs at current levels.
Though largely based on the Senate measure sponsored by Sens. Barbara Boxer, D-Calif., and James Inhofe, R-Okla., the resulting legislation dropped the bank-qualified and private-activity bond provisions.
Also absent from the legislation, which still needs to be approved by both chambers before the current law expires June 30, are Senate bill sections that would have eliminated the PAB volume cap for water and sewer bonds, and authorize state infrastructure banks to issue tax-credit bonds for transportation projects, or TRIPS.
“We are disappointed that the [bank-qualified bond] provision did not make it into the conference package, said Susan Gaffney, director of the Government Finance Officers Association’s federal liaison center.
“We will continue our work to have the limit increased, and appreciate the efforts of the Senate and House sponsors who continue to support this initiative, which will help thousands of local governments,” she added.
The bill does not include language that would have eliminated federal funding for highways leased to the private sector under public-private partnership agreements, a provision that Sen. Jeff Bingaman, D-N.M., said would protect taxpayers from exploitation but which generated backlash from P3 advocates and governors.
Bingaman was also a strong backer of the bank-qualified bond provision.
It does contain authorizations for $750 million in fiscal 2013 and $1 billion in fiscal 2014 for the Transportation Infrastructure Finance and Innovation Act, or TIFIA, program.
The bill keeps the highway trust fund solvent with transfers from the general fund; it had been projected to go bankrupt this year.
House and Senate leaders from both parties lauded the deal.
“This agreement provides stability and flexibility for the nation’s transportation planners, invests in America’s crumbling roads and bridges, and puts people back to work,” said Boxer, who chaired the joint committee.
“The unprecedented reforms in this legislation — cutting red tape, truly making projects 'shovel-ready,’ shrinking the size of the federal bureaucracy, attracting more private-sector participation and giving states more flexibility to address their critical priorities — will ensure that we more effectively move forward with major highway and bridge improvements and put Americans back to work,” said Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee and Boxer’s co-chair on the conference committee.
Chuck Samuels, a partner at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, said House Republicans took a strong stand against tax provisions in the measure.
Samuels represents a variety of trade associations, corporations, local governments and state agencies on legislative and regulatory matters related to public finance.
“We really appreciate the leadership of Sen. Bingaman and others on this issue. We will continue our efforts at every opportunity,” Samuels said.
Bill Daly, director of government affairs at the National Association of Bond Lawyers, expressed disappointment at the loss of the bank-qualified and other positive muni measures.
He said that the next chance to push for those changes would likely come later this year or early next year, and Samuels agreed.
“I would guess that might be the next opportunity,” Daly said. “But who knows?”
Congressional leaders have indicated that votes will occur Friday, avoiding the need for another short-term extension if the compromise wins approval.