All private-activity bonds would be exempt from the alternative-minimum tax under a bill introduced by House Ways and Means Committee member Richard Neal, D-Mass.
The bill, HR 7336, which Neal introduced late Wednesday, has since been referred to his committee for consideration.
Neal's action comes after Senate Finance Committee chairman Max Baucus, D-Mont., said last week that he was considering exempting PABs used for infrastructure from the AMT as part of the upcoming economic stimulus legislation. Housing bonds were permanently exempted from the AMT under the omnibus housing recovery law enacted during the summer.
At an Oct. 29 hearing the committee held to consider ideas for economic recovery and job creation, Timothy Firestine, chief administrative officer for Montgomery County, Md., called for the AMT to be removed from some bonds.
He said one of the first things Congress could do to aid state and local governments struggling with the economic downturn "would be to ensure that [they] have regular access to the capital markets in an economical fashion."
One of the simplest ways to do that, he said, would be "to lift burdensome tax code requirements," such as the AMT and current limits placed on how much banks can invest in tax-exempt debt.
Neal introduced similar legislation in the 108th Congress, but it failed to gain traction. The bill he introduced Wednesday will have to be reintroduced in the new session that begins in January.
Meanwhile, the Senate last night failed to approve an automaker bailout bill, which passed the House and contains a provision that would require the federal government to guarantee 31 transit agency leaseback deals facing technical default because of insurer rating downgrades. The Bush administration is considering bailing out the companies under its economic recovery programs, but is opposed to guaranteeing the "sale-in, lease out," "lease-in, lease-out" deals.