The Senate late yesterday signed off on a tax package that, among other bond-related provisions, would authorize the use of qualified private-activity bonds without regard to a state PAB cap for seven counties in Texas and Louisiana hit by Hurricane Ike.

The hurricane provision was added to the package Thursday at the urging of Sen. Kay Bailey Hutchison, R-Tex., and other senators representing the afflicted areas. The bill would create a special category of qualified private activity bonds that Texas and Louisiana could issue through Dec. 31, 2010, to finance relief efforts in the wake of Ike. The Texas counties of Brazoria, Chambers, Galveston, Jefferson and Orange, as well as Calcasieu and Cameron parishes in Louisiana, could issue these bonds in amounts up to $2,000 times their population.

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