CDFA Legislative Front
November 2008Election Slows Events On Capitol Hill
-Second Stimulus Package and New Administration To Offer Opportunities-
While there has been plenty of talk on Capitol Hill this past month, it has been very hard to move forward with legislation in the current climate. Very little has been voted on since the passage of the rescue package that included many development finance items in October, including many green financing provisions and New Markets Tax Credits reauthorization.
Many development finance issues remain front and center in discussions among lawmakers, even if serious consideration of the legislation may have to wait until next year. Municipal bond ratings, bank deductibility, derivatives regulation and other development finance issues continue to be popular topics in committees and in Congressional offices.
Presidential election years are always odd years in Washington, D.C. With Congress in recess more than in non-election years and members campaigning for their own seats or for the presidential race, it is a very short calendar. With a new Administration entering the White House in January, most new legislative matters are shelved until the next Congress convenes in 2009.
CDFA Legislative Committee Prepares for 2009
The CDFA Legislative Committee will be meeting in November to discuss the current legislative agenda and address top priorities for next year. Committee members and staff will also take time to meet with development finance industry stakeholders and Congressional offices while in Washington, D.C.
The committee and CDFA staff will also be finalizing CDFA’s first Administration transition document that will be presented to the incoming transition team and distributed to key offices on Capitol Hill. The document will offer a brief summary of the state of the development finance industry, the role of the federal government, and recommended policy considerations on a wide variety of topics concerning development finance.
CDFA’s legislation (S. 2885) to expand the definition of manufacturing for industrial development bonds should continue to garner interest the remainder of the year and into 2009 as an easy change that could have a positive impact on job creation.
>>>READ MORE ABOUT CDFA'S LEGISLATIVE AGENDA
Second Stimulus Plan Talks Continue
One bill that may still get passed this year is a second stimulus package. Since the initial stimulus bill passed in early 2008, there has been talk of a second attempt to stimulate the economy.
The on-again, off-again discussion of a new stimulus package remains very fluid, and it is not clear what the priorities and focus of the legislation would be. However, a major theme of many in Washington, D.C. is to provide funding for local infrastructure projects. With many states facing budget deficits, money is tight for infrastructure construction. Representative Jim Oberstar, MN, chairman of the Transportation and Infrastructure Committee has been pushing for this additional funding as way to continue projects that are important to job creation.
Congressional leadership would like to attempt to pass the new stimulus package when they reconvene after the election, but there may not be enough time left on the calendar to reach a consensus.
Earlier attempts at passing this second stimulus have been stopped in the Senate in recent months.
States, Cities Asking for “Bailout” Funds
In recent weeks, many states and local governments have realized that already large budget deficits have increased due to the slumping economy and declining home prices.
Groups of governors and mayors have spoken before Congress to discuss the possibility of getting funds from the federal government to avoid massive reductions in government services. Lawmakers from both sides of the aisle have been receptive to further looking into the issue.
NABL Asks For PAB Clarification
The National Association of Bond Lawyers (NABL) was among industry leaders asking for explanation from the Treasury Department regarding a recent rule change proposal concerning public approval for projects financed with private activity bonds.
NABL is worried that the new rule would force issuers to get issuance reapproved if the final project costs deviate more than 5% from the approved amount of the bonds. NABL would like the rule to be for projects that are 5% above the originally approved amount. NABL wants the clarification to allow issuances that come in more than 5% below the original approval amount not to need to go back for public approval.
>>>READ THE NABL LETTER TO TREASURY