After telling state and local officials that there was nothing they could do to adjust a much-maligned formula used to allocate $25 billion of recovery zone bonds, Treasury Department officials are now referring the governments to legislation pending in the Senate that would allocate another $25 billion of the bonds using new criteria.

Michael Mundaca, the Treasury’s assistant secretary for tax policy, told Tucson Mayor Robert Walkup about the legislation in a two-page letter dated April 20.

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