WASHINGTON - The Treasury Department cannot prohibit the use of bonds backed by payments in lieu of taxes to finance sports stadiums under current tax law, the Treasury's assistant secretary of tax policy told Rep. Dennis Kucinich in a recent letter.

Kucinich, an Ohio Democrat, has argued that the Treasury should not permit PILOT bonds to be used to finance sports stadiums because stadiums mostly benefit private parties and do not spur economic development in the surrounding areas. The congressman, who chairs the House Oversight and Government Reform Committee's panel on domestic policy, plans to hold a hearing here sometime in September on PILOT bond financing of stadiums, including the new Yankee Stadium that is under construction in New York.

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