WASHINGTON - Several Senate tax lawmakers say they will push for permanent extensions for two popular bond programs in the final version of the tax bill, even though they endorsed temporary extensions last week.
On Friday, the Senate Finance Committee approved a modified version of President Clinton's budget and tax package in an 11-to-9 party-line vote.
The committee version would renew the tax exemptions for mortgage revenue bonds and small-issue industrial development bonds, but extend them only through June 30, 1994. The extensions would be retroactive to June 30, 1992, the date the exemptions expired.
The panel's proposal, which the Senate may begin debating later this week, is at odds with the House tax bill and Clinton's package. Both of those would make the two bond exemptions permanent.
Several members on the Senate panel said they cut back on the two bond extensions, plus extensions for other expired tax provisions, as a way to offset revenue lost from their decision to scale back Clinton's proposal for an energy tax.
But they vowed to push to make the expired provisions permanent when House and Senate tax conferees meet to resolve differences in their two bills in the next few weeks.
"If we had had enough money, we would have made them permanent" in the committee's proposal, said Sen. John Breaux, D-La., during the committee's drafting session last week.
Another committee member, Sen. John Danforth, R-Mo., said he was adamantly opposed to the short-term extensions, and said it was time to make them permanent once and for all. "This business of short-term extensions is a business we've been in for quite a period of time," he said.
Sen. Donald Riegle, D-Mich., singled out the mortgage bond exemption as a tax provision he strongly supports, saying, "I very much hope we can achieve a permanent extension" of that exemption. "I'm very keenly interested in that."
Senate Finance Committee Chairman Daniel P. Moynihan, D-N.Y., told Riegle during the session that Riegle would personally "have another opportunity with this" because Riegle would be named as a Senate conferee to help work out the final version of the tax bill.
Municipal lobbyists said they were hopeful that the conference would agree to permanent extensions, but that such an outcome is by no means assured.
"I think the odds are still pretty good" for a permanent mortgage bond exemption, said John T. McEvoy, the executive director of the National Council of State Housing Agencies. McEvoy said the Clinton administration's support of permanent extensions may tip the scales in their favor.
But McEvoy and other lobbyists noted that the House and Senate are far apart on other parts of the tax package, most notably on the energy tax. The House bill contains the President's proposal for a tax on energy sources based on their heat content, while the Senate committee bill proposes a 4.3-cent tax on transportation fuels.
"The revenue constraints that the conferees will be subject to will limit their ability to accomplish what they would really like to be able to do," said Guy Land, a lobbyist for the Council of Development Finance Agencies. "It's exceedingly difficult to project what the conferees will do given the wide and controversial differences between the two versions on major elements in the package."
In drafting its bill, the committee declined to add Clinton's enterprise zone plan, which includes a provision that would create a new type of exempt facility bond used to finance zone businesses. The panel also failed to include Clinton's proposal to eliminate the requirement that bonds for high-speed rail projects receive an allocation under the private-activity volume cap for 25% of each issue.
Moynihan said the decision to leave the enterprise zone plan out of the bill was not because the committee opposed it. Rather, he blamed Senate rules governing the overall budget package into which the committee's tax plan will be folded when it reaches the Senate floor. One such rule prohibits extraneous spending items from being included in budget legislation.
"We had an overwhelming obstacle in our own budget rules that would not allow us to take that matter up," Moynihan said during a press conference Friday. He did not explain the absence of the high-speed rail provision.
