Tax

WASHINGTON - A group of bond attorneys specializing in tax matters has offered the Treasury Department several points to consider on forthcoming muni bond tax guidance, particularly how tax credits should be "stripped" from tax-credit bonds and sold separately.

WASHINGTON — Michael Mundaca, the acting assistant secretary for tax policy in the Treasury Department, was officially nominated for the post by President Obama on Wednesday, a move that municipal market participants hope will speed up the release of much-awaited guidance for several bond programs.

The Internal Revenue Service has determined that a nonprofit local development corporation qualifies as an issuer of bonds on behalf of the county that created it.

The clock is ticking for Philadelphia as Pennsylvania House members are set to amend and vote tomorrow on a bill to help the city balance its fiscal 2010 budget. However, the measure may not pass the legislature in time to avoid layoffs of 900 police officers and drastic service reductions.

The Internal Revenue Service granted a student-loan bond issuer a 45-day extension to file the necessary paperwork to carry forward unused private-activity bond volume under its volume cap because it acted "reasonably and in good faith," the IRS said in a private-letter ruling released late Friday.

WASHINGTON - The federal budget deficit is likely to grow to $12.6 trillion in 10 years, $5.5 trillion more than was projected by the Congressional Budget Office last month, because of expected policy or statutory changes that were not considered by the CBO, according to a watchdog group.

CHICAGO - A controversial sales tax increase in Cook County, Ill., will remain in place after county commissioners who were attempting to roll back the tax hike lost a bitter, months-long battle Tuesday.

The Treasury Department has extended a program that allows housing agencies to exchange low-income tax credits for federal cash grants by another year through 2011, provided the projects funded by the grants are significantly underway by the end of 2010.

Rep. Daniel B. Maffei, D-N.Y., has introduced a bill that would allow businesses to use more tax-exempt bonds in empowerment zones and permit some of those bonds to be federally guaranteed.

CHICAGO - After years of struggling with falling sales tax revenue, officials in Hamilton County, Ohio, are facing a looming deficit in the fund that makes debt payments on its two major sports stadiums.

The Internal Revenue Service has ruled that a state conservation and reclamation district can issue tax-exempt bonds to finance the acquisition of a private power plant because its public wholesale customers can be included in its "qualified service area," a geographic designation that dictates when bond proceeds can be used to acquire private entities.

DALLAS - With Arizona mired in an unprecedented budget crisis amid a standoff between the Republican governor and Legislature, Treasurer Dean Martin is preparing to borrow up to $3 billion to cover operating costs.

BRADENTON, Fla. - Debt-laden, cash-strapped Jefferson County, Ala., may immediately have to spend more than $50 million because of Tuesday's ruling by the Alabama Supreme Court, which struck down the county's occupational tax.

The Pennsylvania Senate today is set to vote on a bill that would help Philadelphia balance its fiscal 2010 budget and allow the state to oversee municipal pension funds that are less than 50% funded.

The American Public Power Association is urging the Senate Finance Committee to either remove or significantly increase the $800 million cap on clean renewable energy bonds and ease other tax law restrictions in any tax legislation that accompanies climate and energy bills.

WASHINGTON - Texas and California account for nearly half of the $14.6 billion in direct-pay Build America Bond subsidy payments that the Treasury Department is already committed to paying issuers for the $24.1 billion of BABs they have issued during the past few months, according to a Bank of America-Merrill Lynch research report released yesterday.

State and local governments could issue tax-exempt bonds to finance certain projects involving scientific research and private entities under a bill introduced by Rep. Emanuel Cleaver, D-Mo.

Legislation pending in Congress would allow state and local governments to use tax-exempt private-activity bonds to finance building or refurbishing grocery stores and other fresh produce businesses in 20 cities with "food deserts."

Legislation pending in Congress would expand the exempt facility category of private-activity bonds to include renewable energy and conservation facilities, as well as zero emission vehicles.

Alliance, Ohio, disclosed yesterday that the Internal Revenue Service is conducting an audit of $55 million of hospital revenue bonds it issued in 2003.