This month John McMickle, CDFA lobbyist, provides us with the current view of opportunities in the new congress for the advancement of CDFA's legislative agenda:
http://www.cdfa.net/cdfa/press.nsf/pages/747

Senate, House Bills Target $300M For Brownfields Redevelopment

Two identical bills that would provide $300 million in grants to states and localities to establish revolving loan funds or pay planning and other costs to help redevelop so-called brownfields were recently introduced in the Senate and House, reports Humberto Sanchez of the Bond Buyer:
http://www.cdfa.net/cdfa/press.nsf/pages/734

This month we write about rating criteria for human service providers. Most human service providers qualify for tax-exempt financing due to their nonprofit status under Section 501(C)(3). Future Learning Corner articles will include a review of other areas of tax-exempt bond finance. If you would like to contribute an article to the Learning Corner, please contact me at (501) 760-6000 or provus@hsnp.com. Stan Provus
http://www.cdfa.net/cdfa/press.nsf/pages/708

Do You Have an IRS Question?

If Do you have a burning question that you've always wanted to know the answer to, but were too afraid to ask? Well now you can. Send your tax related questions of a general nature to CDFA and we will submit it, under our name, to the IRS Tax Exempt Bonds Division, who will in turn send us an Information Letter, which we will publish in the next CDFA Updates. It's that simple! To submit your question, please send an email to info@cdfa.net or call 405-848-6059. Please note that an Information Letter is not considered a reliance document, not will it cover the specific aspects of a particular project..

Pennsylvania is still eying $1.5 billion in economic development bonds to jump-start the Keystone State’s ailing economy and fund upgrades to its infrastructure. Speaking at the annual meeting of The Bond Market Association in New York, Governor Ed Rendell said that his state continues to suffer from job loss and a stagnant economy made worse by its lack of diversity, but he maintained that Pennsylvania could grow its way out of the slump. Gillian D'Ambrosio has the story for the Bond Buyer:
http://www.cdfa.net/cdfa/press.nsf/pages/724

Dennis Yablonsky used his first speaking engagement in Pittsburgh since taking over as secretary of the state Department of Community and Economic Development to drum up local support for the governor's $2 billion economic stimulus package.
http://www.cdfa.net/cdfa/press.nsf/pages/736

Maine Lawmakers Approve $60 Million Bond Issue

Maine lawmakers had more to say against a $60 million borrowing proposal than for it during debates that ended Wednesday evening, but they approved the economic development package anyway. With two-thirds votes of approval in both the House and Senate, the bond issue goes to voters next month, reports Glenn Adams in the Portland Press Herald:
http://www.cdfa.net/cdfa/press.nsf/pages/732

Ohio High-tech Jobs Bond Issue Heads for the Ballot

Voters in November will decide whether Ohio should invest more heavily in high-tech jobs and research, reports Sandy Theis of the Cleveland Plain Dealer:
http://www.cdfa.net/cdfa/press.nsf/pages/712

Kansas Bond Bill Could Bolster Wichita Development

Kansas could issue bonds to help revitalize downtown Wichita and other sites throughout the state under a bill on its way to the governor, reports the Lawrence Journal World:
http://www.cdfa.net/cdfa/press.nsf/pages/726

The bill is termed "a very important move," by Kansas Governor Kathleen Sebelius:
http://www.cdfa.net/cdfa/press.nsf/pages/729

The new law will give the Kansas side of the metropolitan area a powerful advantage over Missouri when it comes to recruiting retail developments. "Kansas has just upped the ante," said Gary Sage, senior vice president for business development at the Economic Development Corp. of Kansas City. Brad Cooper and Jim Sullinger report in the Kansas City Star:
http://www.cdfa.net/cdfa/press.nsf/pages/737

Yet lawmakers have plenty of questions about the $500 million in state-backed bonds sought by Boeing Wichita, even as the proposal goes to a scheduled vote in the Senate. They want to know how much the deal, which Boeing Wichita officials say will help them land work on the next-generation 7E7, reports Steve Painter of the Wichita Eagle:
http://www.cdfa.net/cdfa/press.nsf/pages/748

Debate Starts on California Firms' Tax Credit

California lawmakers opened debate a week ago on whether to renew a $400-million annual tax break for California businesses even though it has failed to obtain the kind of manufacturing growth its drafters promised. Evan Halper of the Los Angeles Times reports:
http://www.cdfa.net/cdfa/press.nsf/pages/741


Arizona Seeks Biotech Buildup with $400M of COPs to Pave the Way

Richard Williamson of the Bond Buyer reports that legislative leaders in Arizona are gathering support for the issuance of more than $400 million in certificates of participation to make the state a major research center through the construction of 12 high-tech buildings on three university campuses:
http://www.cdfa.net/cdfa/press.nsf/pages/733

Pfizer Threat Puts Spotlight on Michigan's Job-Retention Efforts

Even as Governor Jennifer Granholm met with Pfizer Inc. officials in a bid to save hundreds of Michigan pharmaceutical-industry jobs last week, state lawmakers proposed slashing millions in funding for state job-retention efforts. Peter Luke of the Ann Arbor News reports:
http://www.cdfa.net/cdfa/press.nsf/pages/745

Divided Supreme Court OK's New Jersey Borrowing without Voter Approval

Voters need not have the final say before the state is allowed to borrow money for construction projects and other public initiatives, a sharply divided state Supreme Court ruled yesterday. Cathy Barrett Carter and Joseph Donohue report for the Newark Star Ledger:
http://www.cdfa.net/cdfa/press.nsf/pages/718

McGreevey Boasts of Camden Efforts

Governor James McGreevey visited Camden yesterday for a waterfront lovefest celebrating a deal to expand the New Jersey State Aquarium and redevelop 30 acres of surrounding land. Elisa Ung of the Philadelphia Inquirer covered the ceremony:
http://www.cdfa.net/cdfa/press.nsf/pages/735

Second Parts Supplier Chooses Opelika

Mike Cason of the Montgomery Advertiser reports that a Korean company that makes automobile brakes, steering and suspension systems will build its first North American plant in Opelika, Alabama. Mando Corp. will supply parts for the Hyundai plant in Montgomery as well as General Motors, Ford and DaimlerChrysler, Mayor Barbara Patton said:
http://www.cdfa.net/cdfa/press.nsf/pages/731

Governor Bob Riley also awarded the city of Luverne a $1 million grant to help the city provide water and sewer services for a $100 million auto parts supply plant. Stamped Metal American Research Technology plans to build a 475,000-square foot plant to manufacture tailgates, hoods and sunroofs to be used at the Hyundai Motor plant, which is under construction in Montgomery. And, last week, Alexander City landed a $53 million Hyundai supplier plant and its 400 jobs, the same day Lowndes County announced a second parts supplier would create 180 more jobs there.

Brightening the Brownfields of the Industrial Wastelands in Oak Creek

Kathy Bergstrom of the Milwaukee Business Journal reports that the nearly forgotten Lakeview Village area of Oak Creek -- a 952-acre tract near Lake Michigan -- could get new attention from a major commercial developer:
http://www.cdfa.net/cdfa/press.nsf/pages/728

Suit Challenges Kentucky Tax on Out-of-state Municipal Bonds

A class-action lawsuit challenging Kentucky's income tax was filed last month in Jefferson Circuit Court. The suit takes issue with the way Kentucky treats income from out-of-state municipal bonds, said David Gray, an attorney with Foley Bryant & Holloway, a Louisville law firm involved in the suit. Ken Berzof reports for the Louisville Courier-Journal:
http://www.cdfa.net/cdfa/press.nsf/pages/722

North Carolina Tax Credits Aren't Hitting Their Mark

More than $70 million in state tax credits were issued for 2001 under the William S. Lee Act, a new Department of Revenue report says. The credits are intended to spur economic growth in North Carolina, but legislators and public policy groups say they are ineffective and reward businesses for expenditures they would have made anyway. Dan Kane of the Raleigh News and Observer reports:
http://www.cdfa.net/cdfa/press.nsf/pages/707

High-tech Tax Breaks Spark Washington State Political Fight

Republicans want to make tax breaks for high-tech and biotech companies permanent despite a debate about their effectiveness and scant evidence the programs have done what the Legislature had hoped: produce jobs for Washington residents, reports David Postman of the Seattle Times:
http://www.cdfa.net/cdfa/press.nsf/pages/743

New Jersey Budget, Business Incentives At Odds

After Governor McGreevey raised corporate taxes last year to balance the budget, businesses were hoping they would be spared in this year's spending plan. But business groups say they feel as if they are being targeted again with the proposed elimination of a tax incentive program that encourages companies to locate in New Jersey. Kathy Hennessey reports in the Philadelphia Inquirer:
http://www.cdfa.net/cdfa/press.nsf/pages/705

Refundings Saved N.Y. State Agencies $500 Million Last Year

Michael McDonald of the Bond Buyer reports that cash-strapped New York reaped $500 million in savings in the last year by finding refunding opportunities among outstanding debt:
http://www.cdfa.net/cdfa/press.nsf/pages/721

UAL's Treatment of Airport Facilities Bonds Raises Concerns

Jerry Hirsh of the Los Angeles Times reports that United Airlines' aggressive bankruptcy strategy could damage airports' ability to finance building projects and threatens the holders of $413 million in special facilities bonds at Los Angeles and San Francisco airports:
http://www.cdfa.net/cdfa/press.nsf/pages/706

Pennsylvania May Pay to Keep US Airways

A Pennsylvania official says the state could assume a portion of Pittsburgh International Airport's $673 million bond debt, as part of an effort to maintain US Airways Group Inc.'s significant presence in the state. The story comes from Christopher Davis of the Triangle Business Journal in Raleigh, NC:
http://www.cdfa.net/cdfa/press.nsf/pages/740

Governor Ed Rendell will meet with officials from Allegheny County and Philadelphia on US Airways' demands for lease concessions and capital improvements at Pennsylvania's two major airports, reports Johnna A. Pro of the Pittsburgh Post-Gazette:
http://www.cdfa.net/cdfa/press.nsf/pages/742

Hawai'i Technology Trade Association Should Re-examine Stance on Act 221

On the surface, Governor Linda Lingle appears to dramatically disagree with Hawai'i technology industry advocates over the high-tech tax incentive known as Act 221. Lingle, reversing a campaign promise, wants to tone down the act; tech advocates, most vocally the Hawaii Technology Trade Association, want the law left alone. John Duchemin of the Honolulu Advertiser reports:
http://www.cdfa.net/cdfa/press.nsf/pages/704

St. Louis, Kansas City Areas Diverge on TIF Philosophy

A new report on Missouri's use of tax increment financing diplomatically depicts two different communities, one particularly reckless, the other relatively more responsible. Kevin Collison reports for the Kansas City Star:
http://www.cdfa.net/cdfa/press.nsf/pages/725

TIF Districts Set to Spur Cincinnati Development

As property values within the city of Cincinnati rise, so do the hopes of those pushing to spur economic development within the urban core.
That's because, thanks to a new city ordinance, any increase in property values makes new funds available for development through a mechanism known as tax increment financing, or TIF, districts. Lucy May of the Cincinnati Business Courier reports:
http://www.cdfa.net/cdfa/press.nsf/pages/715

Business Not United on Minnesota Tax-free Zones

In promoting the creation of almost-tax-free enterprise zones in Greater Minnesota, Governor Tim Pawlenty and other supporters argue that the plan would help businesses compete with out-of-state rivals. But not all business leaders are fans of the zone program. The story from Mark Reilly of the Twin Cities Business Journal:
http://www.cdfa.net/cdfa/press.nsf/pages/719

Shift in Bonds Has States Rethinking Tobacco Plans

State governments from New York to Oregon are pulling back from their plans to borrow directly against future payments of tobacco settlements and are scrambling to find other ways to use the payments to ease their expanding financial problems. An Illinois judgment last month against Philip Morris, the nation's largest cigarette maker, prompted investors to demand higher interest rates on bonds backed by the tobacco payments. Al Baker and Jonathan Fuerbringer of the New York Times teamed up for this story:
http://www.cdfa.net/cdfa/press.nsf/pages/716

Susanna Duff of the Bond Buyer reports that both the Treasury Department and the Internal Revenue Service have released guidance- related documents for tax-exempt bonds:
http://www.cdfa.net/cdfa/press.nsf/pages/744

S&P: IRS Audits Won't Hurt FHLB-Backed Bonds; Illinois Settles

Standard & Poor's yesterday announced that the Internal Revenue Service's audits of industrial development bonds supported by Federal Home Loan Banks' standby letters of credit will not pose a threat to the current ratings on the bonds. Susanna Duff reports for the Bond Buyer: http://www.cdfa.net/cdfa/press.nsf/pages/717

Less than a week later, the Illinois Development Finance Authority approved the conversion of $5.3 million of Coburn Steel Products Inc. tax-exempt industrial revenue bonds to a taxable investment as part of a settlement agreement reached with the Internal Revenue Service, reports Yvette Shields and Susanna Duff:
http://www.cdfa.net/cdfa/press.nsf/pages/720

IRS Trains Spotlight on Three New Potential Abuses

The Internal Revenue Service bond enforcement office has zeroed in on three types of bond transactions that it says are potentially abusive, and has already launched a new series of audits, Mark Scott told the assembled conference of the National Association of Bond Lawyers Fundementals in Philadelphia here last week. Susanna Duff reports for the Bond Buyer:
http://www.cdfa.net/cdfa/press.nsf/pages/746

Lawmakers Want SEC to Step Up Regulations of Credit Rating Firms

Citing the failure of credit-rating firms to protect investors from financial disasters such as the Enron Corp. bankruptcy case, some lawmakers are pushing the Securities and Exchange Commission to step up its oversight of the industry, reports Thomas Mulligan of the Los Angeles Times:
http://www.cdfa.net/cdfa/press.nsf/pages/702

DOT Proposal May Boost Tax-Exempts, Spark Private-Activity Debt

The Department of Transportation is considering asking Congress to change the tax laws to allow private companies to use an unlimited amount of tax-exempt bonds to finance the construction of transportation infrastructure projects as part of the White House's proposal to reauthorize the expiring Transportation Equity Act for the 21st Century. Humberto Sanchez of the Bond Buyer provides more detail:
http://www.cdfa.net/cdfa/press.nsf/pages/710

Small Manufacturers Counting on Relief from Congress

Keith Girard of CBS Marketwatch reports on a story involving thousands of small companies and the nation's largest multi-national conglomerates. And it reaches from Main Street to the far-flung corners of the burgeoning global economy:
http://www.cdfa.net/cdfa/press.nsf/pages/739

National Governors' Group Ousts Shafroth

Craig Ferris and Susanna Duff of the Bond Buyer reports that Frank Shafroth, the colorful, outspoken lobbyist and analyst for the National Governors' Association for the last four years, who is also well known in the municipal market as an aggressive advocate for tax- exempt bonds, has been fired in an apparent dispute with the new Republican leadership of the group:
http://www.cdfa.net/cdfa/press.nsf/pages/738