Republicans on the House Ways and Means Committee quashed a Democrat-backed amendment seeking to revive many muni bond measures from the 2009 stimulus package as they voted Friday to approve a bill that would authorize the transfer of domestic energy development revenues into the Highway Trust Fund.
Rep. Richard Neal, D-Mass., offered the amendment, which amounted to a bid to insert jobs legislation into the GOP transportation bill’s funding measure.
The amendment proposed resurrecting Build America Bonds, originally authorized by President Obama’s American Reinvestment and Recovery Act, through 2013 as a means of spurring transportation infrastructure growth.
Neal said that BABs, which offer issuers a hefty federal subsidy, were responsible for numerous infrastructure improvements in his home district. He also pointed to the enormous popularity of the BAB program, which expired at the end of 2010., as proof that they could be a viable shot of life into the nation’s infrastructure.
“Build America Bonds had a very strong reception from both issuers and investors,” he told committee members.
But Neal proposed dropping the subsidy rate from the original 35% of interest costs to 32% in 2012 and 31% in 2013.
Neal also proposed extending authority for recovery zone bonds through 2012, with an allocation of $10 billion for recovery zone economic development bonds, which are direct-pay like BABs, and $15 billion for recovery zone facility bonds, which are private-activity bonds. The allocation would be based on 2009 unemployment numbers.
The amendment also sought to give banks considerably more purchasing flexibility by raising the limit related to bank-qualified debt to $30 million from $10 million. Banks would be able to deduct 80% of the cost of buying and carrying tax-exempt bonds sold by issuers whose annual issuance is $30 million or less.
In addition, the amendment would have exempted PABs from the alternative minimum tax and allowed states and localities to issue water and sewer PABs, outside state volume caps.
Neal warned members the full House would never pass the transportation funding bill without this amendment. But committee chairman Dave Camp, R-Mich., said adopting Neal’s amendment could possibly “jeopardize the underlying bill,” and urged the panel to vote against it. The committee’s 21 other Republicans obliged, defeating the proposed change by a vote of 22 to 15.
Committee Republicans also rejected an amendment proposed by Reps. Earl Blumenauer, D-Ore., and Charles Rangel, D-N.Y., which aimed to remove one of the GOP transportation bill’s most controversial funding provisions by striking a section that cuts off funding to the federal Mass Transit Account and replaces it with a one-time appropriation.
The Regional Transportation Authority, which funds three public transit operators in Northern Illinois warned Thursday that the cut-off would be “financially perilous to the RTA system.”
The five-year transportation bill pending in the House contains some significant differences from the two-year bipartisan bill pending in the Senate.
Lawmakers hope the bills will be taken up by the full House and Senate next week, in time to hammer out a compromise before the March 31 expiration of the current temporary surface transportation funding law.