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/633

This month we write about the various classes of municipal bond investors that dominate the municipal marketplace. Future Learning Corner articles will include a review of other areas of tax-exempt bond finance:
http://www.cdfa.net/cdfa/press.nsf/pages/624

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

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..

Bob von Sternberg of the Minneapolis Star Tribune examines the history of one of Governor Tim Pawlenty's economic growth tools for Minnesota. Sometimes, they're called "enterprise zones," -- or, more grandly, "empowerment zones." More generically, they're called "tax-free zones." Just don't call them an economic development silver bullet, because it's not at all clear how well they work:
http://www.cdfa.net/cdfa/press.nsf/pages/622

St. Louis County Agrees to $45M Loan for New Cardinals Stadium

The Jefferson City News Tribune reports that St. Louis County has agreed to lend the city of St. Louis $45 million to help replace Busch Stadium with a new Cardinals ballpark, putting in place the final piece of the project's public funding puzzle:
http://www.cdfa.net/cdfa/press.nsf/pages/621

Loans Will Aid Struggling Memphis Businesses

A new loan pool is being created in Memphis for small and minority-owned businesses that ordinarily couldn't get a business loan from a bank, officials announced Tuesday. Jermone Obermark reports for the Memphis Commercial Appeal:
http://www.cdfa.net/cdfa/press.nsf/pages/626

New Jersey Seeks to Lock in Low Interest Rates

New Jersey State treasury officials are working on a complex deal that would allow the state to lock in today's low interest rates for billions of dollars in borrowing over the next three years to finance school construction projects. Dunstan McNichol of the Newark Star-Ledger reports:
http://www.cdfa.net/cdfa/press.nsf/pages/620

California Governor Proposes Selling Bonds for Pension Plans

Here's another sign of just how desperate the state's financial position has become: Gov. Gray Davis is proposing to help close the state's budget gap by selling $1.5 billion worth of pension obligation bonds and using the proceeds to make its annual contribution to the giant retirement plans for state employees and teachers. Kathleen Pender of the San Francisco Chronicle details the surprise proposal:
http://www.cdfa.net/cdfa/press.nsf/pages/629.

Ohio Tabulates Business Incentives at $2.2B in 2002

The Ohio Department of Development reports that the State invested more than $2.2 billion in businesses through various programs that assist companies with expansions and relocations, according to this story from Business First of Columbus:
http://www.cdfa.net/cdfa/press.nsf/pages/619

Developer's 7-World Trade Center Building Gets Liberty Bonds

In a move officials said signifies the first step toward rebuilding the World Trade Center site, the New York City Industrial Development Agency yesterday approved $400 million in Liberty bond financing to help finance the construction of 7 World Trade Center. Randy Kaig of the Bond Buyer has the story:
http://www.cdfa.net/cdfa/press.nsf/pages/618

Chicago Agency OKs Subsidy to Reconstruct Mall

David Roeder and Fran Spielman of the Sun Times retail the approved a $26.5 million subsidy for reconstruction of the Brickyard Mall on the Northwest Side, one of the largest tax awards to a neighborhood project ever in Chicago:
http://www.cdfa.net/cdfa/press.nsf/pages/616

Rural Alabama Counties Look for Auto Industry Economic Boost

As their unemployment rates tower above the state and national averages, rural counties in southwest Alabama are pinning hopes on automotive suppliers shopping for sites along Interstate 65, with some announcements expected by mid-January, one development director said. The details from Connie Baggett of the Mobile Register:
http://www.cdfa.net/cdfa/press.nsf/pages/608

Alabama, Louisiana Court Nextel with Incentives

The Montgomery Advertiser reports that Nextel, the communications firm, is narrowing its choices for a new call center, with Muscle Shoals and Shreveport, La., offering packages to lure the project:
http://www.cdfa.net/cdfa/press.nsf/pages/605

Louisville Redevelopment of Waterfront Recognized

Louisville's waterfront district has won the brownfields equivalent of Hollywood's Oscar. Claiming the 2002 Phoenix Award Grand Prize for Excellence, the district edged out finalists from Chicago, New Orleans, Pittsburgh and six other communities. James Bruggers of the Louisville Courier-Journal has the story:
http://www.cdfa.net/cdfa/press.nsf/pages/603

A week later Bruggers wrote that bowing to criticism from industry and others, Kentucky environmental regulators scrapped proposed regulations meant to make it easier to clean up and develop polluted properties:
http://www.cdfa.net/cdfa/press.nsf/pages/615

Twenty-one states with small populations and the District of Columbia will receive a slightly smaller cost-of-living increase in their private-activity bond volume caps than originally expected for 2003, due to a miscalculation in the figures, reports Craig Ferris of the Bond Buyer:
http://www.cdfa.net/cdfa/press.nsf/pages/606

Time-Based Mixed-Use IRS Ruling Lets Arena Debt Be Exempted

In a groundbreaking decision, the Internal Revenue Service has ruled an arena that will be used by a private entity, a university, and a local government can be financed in part with tax- exempt bonds using a time-based method of allocation. Susanna Duff reports for the Bond Buyer:
http://www.cdfa.net/cdfa/press.nsf/pages/631

Issuer Groups Ask Treasury to Ease Tax-Exempt Restrictions

More than a dozen organizations, CDFA among them, that belong to the Public Finance Network have asked the Treasury to grant state and local issuers greater flexibility by easing several long-standing restrictions on tax-exempt bonds as a way to offset potential revenue shortfalls from the Bush administration's 10-year, $674 billion tax proposal. Susanna Duff reports in the Bond Buyer
http://www.cdfa.net/cdfa/press.nsf/pages/623

Here is a copy of the letter written to Secretary Dam:
http://www.cdfa.net/cdfa/press.nsf/pages/625

President's Tax Plan Would Be a Major Shift

The are as many analyses of the consequences of the President's proposed tax program as there are people with reading and writing capability. One useful contribution is that of Floyd Norris of the New York Times:
http://www.cdfa.net/cdfa/press.nsf/pages/610

Wall Street strategists and money managers said today that the centerpiece of President Bush's tax-cut proposal -- eliminating the tax on corporate dividends -- could have a profound impact on how companies finance their operations, on investors of all kinds, and on state and local governments. Ben White reports in the Washington Post:
http://www.cdfa.net/cdfa/press.nsf/pages/611

And Susanna Duff offers this report on the $674 billion economic stimulus package unveiled by the Bush administration, writing that it would likely drive up both state and local borrowing costs and drastically cut state tax revenues, but its full impact is still to be determined, municipal market participants say:
http://www.cdfa.net/cdfa/press.nsf/pages/612

Bonds Bushwhacked As Dividend Plan Hits Treasuries, Munis

The impact on the bond market was evident immediately as Jennifer Alban of Barrons reports treasuries and municipal bonds sold off sharply after President Bush unveiled his plans to cut taxes and increase spending to stimulate economic growth:
http://www.cdfa.net/cdfa/press.nsf/pages/613

Muni Experts to Remain on IRS Panel

The two municipal bond industry experts who serve on the Internal Revenue Service's Advisory Committee for Tax-Exempt and Government Entities will stay put for at least 18 more months. Susanna Duff reports for the Bond Buyer:
http://www.cdfa.net/cdfa/press.nsf/pages/607

Tax Law Logjam Could End; Muni Changes May Get Their Vehicle

Susanna Duff of the Bond Buyer writes that the new year could ring in more for the tax-exempt bond market than an incoming Treasury secretary. With Republicans now controlling the White House, Senate, and House, chances for tax legislation, including municipal bond provisions, are greater than ever in 2003:
http://www.cdfa.net/cdfa/press.nsf/pages/604

SEC Adopts New Auditor Regulations

James Toedtman of Newsday reports on the unanimous adoption by the Securities and Exchange Commission of its first set of post-Enron regulations aimed at preventing the financial fraud and other misdeeds that unleashed a cascade of corporate scandals:
http://www.cdfa.net/cdfa/press.nsf/pages/628

SEC to Consider Rules For Credit-Rating Firms

Federal securities regulators have scrutinized the role that auditors, stock analysts and lawyers played in corporate financial scandals over the last 18 months. Now they are turning their attention to credit-rating agencies, which failed to detect the problems. The story from the Washington Post's Kathleen Day:
http://www.cdfa.net/cdfa/press.nsf/pages/630

Senate Adds Money for SBA's 7(a) Loan Program

Kent Hoover of the Washington Business Journal reports that the Senate has passed legislation to increase the amount of money available for Small Business Administration 7(a) business loans, a popular source of capital for start-ups and early-stage businesses:
http://www.cdfa.net/cdfa/press.nsf/pages/627