More than 525 state treasurer and their associates, investment bankers, traders, and bond lawyers, will turn out for the largest meeting of the National Association of State Treasurers in that organization's 16-year existence.

"Adversity breeds activism," said one treasurer almost a decade ago, as the organization mobilized to confront federal financial cutbacks and incursions into the tax-exempt market. The same sentiment holds true today, when 33 of the 50 states have had to cut their budgets in the face of deficits.

At first glance, in fact, the agenda of the conference being held this week at Waterville Valley, N.H., seems fairly traditional: "Protecting Public Funds in Turbulent Times," "Active Management of Cash Balances," "Rebuilding America's Infrastructure." These subjects could have been tackled at any state treasurers' group conference in recent memory, whether in Rockport, Maine; Newport, R.I.; Santa Fe, N.M.; or Jackson Hole, Wyo.

"But there's nothing traditional about Congress reforming the banking system," said Stan Smith, treasurer of Wyoming and the current president of the treasurers' group. "And there's nothing traditional about Treasuy and the way they pay money to states and localities." Both topics will be discussed at this year's meeting, which also will feawture a mini-conference on college savings and prepayment programs, Mr. Smith said.

And while there will still be a familiar group of attendees at the meeting -- San Shapiro of Maine, Georgie Thomas of New Hampshire, Mary Ellen Withrow of Ohio, Mary Landrieux of Louisiana -- the group this year includes 17 freshmen.

And as they have for the past 10 years, concerns about the municipal bond market and how states tap it will figure high on the list of topics being discussed, both officially at panels and informally at the numerous receptions, dinners, and staff meetings.

"We have a couple of big issues in the D.C. office," said Milton T. Wells, director of the association's Office of Federal Relations. "The Anthony bill, of course. We'd like to get as much of that as we can in the tax simplification bill," he said, referring first to Rep. Beryl Anthony's legislation to ease a number of curbs on the market and, second, to the tax simplification bill introduced recently by Rep. Dan Rostenkowski, D-Ill.

The Anthony bill would increase to $25 million both the $5 million small-issuer exemption from the arbitrage rebate requirement and the $10 million small-issuer exemption from limits on bank deductibility. The bill also would allow issuers to retain a de minimis amount of arbitrage profits to encourage good investments of bond proceeds; eliminate overlapping yield-restriction requirements in cases where issuers also have to rebate arbitrage; repeal the so-called 5% unrelated-use test; and make the 1989 arbitrage rebate relief law retroactive to Sept. 1, 1986, when the Tax Reform Act of 1986 became effective.

Sen. Max Baucus, D-Mont., and Sen. Christopher Dodd, D-Conn., have introduced to the Senate an identical measure to ease bond curbs. Currently, the measures are in limbo in both Houses, although several of the Anthony bill's provisions have been rolled into the Rostenkowski tax simplification bill.

Mr. Wells also said his group wanted to ease reimbursement regulations.

The rules, proposed by the Internal Revenue Service last April, were supposed to clarify when the proceeds of a reimbursement bond financing can be treated as spent and, therefore, no longer subject to arbitrage restrictions. The treasurers' organization and the Government Finance Officers Association said the rules did not take into account the way state and local governments do business.

The treasurers' group in early July filed comments with the IRS that said, "It is illogical to assume that the states need to change their systems and budgetary practices merely to accommodate compliance with the regulations covering reimbursements."

Such is the Washington agenda -- and the chances of much of it being enacted are not so farfetched as they once might have seemed. "We've grown a lot, as an organization," said Wyoming's Mr. Smith. "We're much more influential."

Ohio's Ms. Withrow, who is expected to take office as president of the treasurer's group this December, said the association "wanted to be very visible on the issues affecting tax-exempt bonds."

Treasures at this year's national conference also are expected to voice concerns about the credit rating agencies and keeping down issuance costs. In July, for example, 13 treasurers from the Northeast met with rating agency officials in a session aimed to ensure that the agencies considered states individually, rather than on a regional basis.

"We're going to try to make sure that we're all judged individually, that we're not penalized for what's going on beyond our state lines," said Maine's Mr. Shapiro last month.

Mr. Shapiro also plans to discuss another concern with the other treasurers. "Bond counsel fees," he said recently, adding, "They're exorbitant. But it's been sacrosanct until now to talk about them. But I think it's time people really looked at them.

"We're setting fees ahead of time: $25,000 on our $150 million note issue," he said of a recent issue. "I know an issuer, who will go unnamed, who paid $200,000 for a $15 million issue, on stuff the lawyers did hundreds of times. That's not right. Underwriter fees have come down; bond counsel fees should too."

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