WASHINGTON — The House Ways and Means select revenue measures subcommittee has scheduled a hearing for May 21 to discuss the new Build America Bonds program and how it may impact the supply and demand of tax-exempt bonds.

Subcommittee chairman Rep. Richard Neal, D-Mass., announced the hearing yesterday and said that while the focus will be on how BABs will affect traditional tax-exempt bonds, other recent legislative changes to state and local financing may also be discussed.

The BAB program was created by the stimulus law, and allows governmental issuers to sell taxable debt and either receive a direct cash payment from the federal government or have the federal government provide investors with a tax credit.

“As we begin to move this economy forward, Congress should review these innovative financing options for state and local governments as well as the impact on their traditional methods of borrowing,” Neal said in a statement. “I look forward to hearing the comments from the government issuers as well as from private sector capital market experts.”

No hearing witnesses have been announced yet. Neal’s hearing is expected to occur at the same time as a House Financial Services Committee hearing where members will consider chairman Barney Frank’s soon-to-be-introduced municipal market legislation. The Massachusetts Democrat is poised to introduce four separate muni bills.

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