WASHINGTON - The Senate today voted 68 to 29 to pass a $17.6 billion jobs bill that would allow municipal issuers to sell four types of tax credit bonds and receive a Build America Bond-style payment from the federal government instead of the bonds providing tax credits to investors.
The bill will now be sent to President Obama for his signature.
Municipal bond market participants applauded the action, saying this will spark more interest in these bonds, which have not been widely used as tax credit bonds.
Under the bill, the Treasury would make direct payments to issuers of qualified school construction bonds, qualified zone academy bonds, new clean renewable energy bonds, and qualified energy conservation bonds. The payments would be close to the tax credit rates for the bonds.
For QSCBs and QZABs, issuers would get payments up to the credit rates that would apply if the bonds had been sold as tax-credit bonds. For CREBs and QECBs, issuers would receive payments roughly equal to 70% of interest costs.
The bill also would extend authorizations for highway and transit programs through the end of the calendar year and provide $19.5 billion to the Highway Trust Fund to keep it solvent into next year. It would restore in this fiscal year $8.7 billion in highway contract authority to the states that had been rescinded at the end of fiscal year 2009.
