WASHINGTON - Texas and California account for nearly half of the $14.6 billion in direct-pay Build America Bond subsidy payments that the Treasury Department is already committed to paying issuers for the $24.1 billion of BABs they have issued during the past few months, according to a Bank of America-Merrill Lynch research report released yesterday.

Furthermore, the Treasury likely will have to commit to a total of more than $50 billion in subsidy payments over the program's current two-year lifespan, with most of these payments to be made to large states, the report stated. The BAB program is currently scheduled to expire at the end of calendar year 2010.

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