WASHINGTON — President Obama’s fiscal 2012 budget proposal would make permanent an expanded version of the Build America Bond program at a 28% subsidy payment rate, simplify arbitrage restrictions, increase the small issuer exception from rebate requirements to $10 million from $5 million and index it for inflation, as well as streamline private business limits on governmental bonds.

The BAB program would be expanded in that BABs could be used for all purposes for which tax-exempt bonds can currently be used. Before expiring on Dec. 31, BABs could only be used to finance capital expenditures and the federal subsidy payment rate was 35%.

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