In the frantic discussion regarding the spending of billions of taxpayer dollars on new infrastructure to stimulate the economy, a simple and painless way to free up $25 billion of currently authorized transportation bonds has been seemingly overlooked.

Under current regulations, interest paid on tax-exempt private-activity bonds for transportation projects is subject to the alternative minimum tax. As a result, these bonds are not marketable and the approved projects intended to be financed are not moving forward. Making private-activity bonds no longer subject to the AMT is one action that would immediately allow for the issuance of billions of dollars of tax-exempt PABs for infrastructure, with virtually no cost to the federal government.

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