Tax

WASHINGTON — The Internal Revenue Service’s tax-exempt bond office plans to move full-speed ahead in 2010, now that it has cleared some administrative hurdles in incorporating large new stimulus programs into its workload and put to work newly trained hires that have nearly doubled the size of the TEB unit.

Legislation passed by Congress last week will allow the Treasury Department to keep open through February its window for state and local government series securities, which municipal issuers purchase for refunding escrows to avoid earning arbitrage.

The amount of private-activity bonds that can be issued by state and local governments nationwide in 2010 will rise to almost $30.857 billion, an increase of 0.8%, according to new population figures released by the Census Bureau and the Internal Revenue Service's formula for state PAB volume caps.

State and local governments will be able to buy and temporarily hold their tax-exempt bonds, including auction-rate securities, for another year without causing the bonds to be considered reissued for tax purposes, the Internal Revenue Service said yesterday.

The top taxwriters in the Senate promised yesterday that legislation that would extend a number of tax provisions slated to expire at the end of the year, including the New York City Liberty Bond program, will be one of the first things they address in 2010.

Municipal market participants want Congress to provide more assistance for muni bonds next year by extending or expanding many of the bond-related provisions in the American Recovery and Reinvestment Act, especially those authorizing the Build America Bond program.

The Municipal Securities Rulemaking Board on Friday filed with the Securities and Exchange Commission a revised proposal that would temporarily give issuers more time to voluntarily disclose annual financial information to EMMA for special designation.

Guidance issued by the Internal Revenue Service Friday allows the governors of nine Midwestern and Gulf Coast states to determine which natural disaster recovery projects can be financed with special tax-exempt private-activity bonds.

DALLAS - The Texas Permanent School Fund Bond Guarantee Program, closed since March, will again back bonds issued by school districts in the state to pay for school construction starting next year, the Texas Education Agency announced.

The House last night was expected to approve a jobs bill that would expand two tax-credit bond programs for school projects to allow state and local issuers to receive direct Build America Bond-style payments from the Treasury Department instead of investors receiving tax credits.

WASHINGTON — If Congress does not pass legislation boosting the federal debt limit by the end of the year, the Treasury Department could be forced to close its window for state and local government series securities, which municipal issuers purchase for refunding escrows to avoid earning arbitrage, market sources said yesterday.

WASHINGTON — House Democrats plan to introduce and vote next week on a jobs bill, Speaker Nancy Pelosi said yesterday as the chamber voted 221 to 202 to approve a nearly half-trillion dollar appropriations bill with funding for high-speed rail.

The House yesterday approved by a vote of 241 to 181 legislation that extends a number of expiring bond-related and other tax provisions, but it is unclear when or whether the Senate will approve similar legislation.

WASHINGTON — Several small local housing finance agencies will not be participating in the new-issue bond purchase program recently rolled out by the Treasury Department. Instead, they have opted to return their allocations because high fees and the Treasury’s refusal to allow escrowed bonds to be sold at a premium make it economically infeasible for them to do the transactions.

President Obama’s announcement yesterday of his administration’s job-creation plan added momentum to the push by municipal market participants for any forthcoming jobs bill to include infrastructure spending and aid to states.

WASHINGTON — Federal Reserve chairman Ben S. Bernanke yesterday cautioned lawmakers against pushing for a job-creation bill right now, saying the first federal stimulus law has not fully affected the economy and that it may be “early to do more fiscal actions.”

WASHINGTON — The Senate Finance Committee’s top Republican introduced legislation yesterday that would authorize another $2.2 billion of clean renewable energy bonds, while the House Ways and Means Committee is expected to introduce a bill next week that would extend a number of expiring tax provisions.

WASHINGTON — Large local school districts would not be forced to give up their unused qualified school construction bond allocations to states to keep them from expiring at the end of the year under legislation proposed yesterday by the top tax writers in the House.

House transportation leaders yesterday said they will push for as much as $69 billion of infrastructure grants to states to be included in any job-creation bill that is put forward and approve an extension of the current law.

Rep. Xavier Becerra, D-Calif., has introduced a bill that would create another type of tax-credit bond — clean renewable water supply bonds — and authorize the issuance of up to $6.2 billion of them through 2018.