WASHINGTON - The Anthony Public Finance Commission will remain in existence after its founder, Rep. Beryl Anthony, leaves Congress at the end of the year, one of his aides said yesterday.
"There's no question the Anthony Commission is going to continue," said J. W. Rayder, tax counsel to the Arkansas Democrat. "I think you can affirmatively say that is going to happen."
Rep. Anthony, a member of the House Ways and Means Committee, has been the municipal bond community's chief advocate in Congress for several years. He formed the commission in 1988 to study how the Tax Reform Act of 1986 impeded the ability of state and local governments to use tax-exempt financing.
In June, Rep. Anthony failed to win re-election to Arkansas' Fourth Congressional District seat when he narrowly lost a Democratic primary runoff to Arkansas Secretary of State Bill McCuen.
Mr. Rayder, the Anthony Commission's chief of staff, did not say what he or Rep. Anthony plan to do after leaving Capitol Hill. But he said they will continue to be involved with the commission.
The 21-member group is composed of governors, mayors, bond lawyers, and others involved in public finance, including Gov. Bill Clinton of Arkansas, the Democratic presidential candidate. The commission published a report in October 1989 outlining how the 1986 tax act harmed the municipal bond market and suggesting solutions.
One of the commission's key recommendations was for Congress to allow issuers of governmental and 501 (c)(3) bonds to opt out of the arbitrage rebate requirement by spending their proceeds according to a predetermined schedule. That recommendation, which found its way into law in 1989, is commonly referred to as the, two-year spend-down rule.
The group's other proposals include: exempting interest on municipal bonds from the alternative minimum tax, re-examining and possibly raising the 10% private use test, and increasing the supply of bank-eligible bonds.
In 1990 and again in 1991, Rep. Anthony introduced legislation that would ease a number of tax law bond curbs, particularly the arbitrage rebate requirement. Several of his proposals have found their way into pending urban aid legislation.
For example, the House's urban aid bill, HR 11, proposes to increase the small-issuer exemption from the arbitrage rebate requirement to $10 million from $5 million.
The Senate Finance Committee's version of HR 11, meanwhile, proposes a tax law change designed to increase the supply of bank-qualified bonds. Under current law, banks are allowed to deduct 80% of the cost of carrying tax-exempt debt if it is purchased from issuers who sell no more than $10 million annually. The panel's bill would raise that level to $25 million.
Mr. Anthony believes the commission, "needs to sit down and update and revise and revitalize" its report, particularly given what is going on in Congress now. "A lot of the emphasis of that report will pass if HR 11 passes," he noted.
The group will probably also want to redefine its role in the public finance community now that its top member will no longer be on the Ways and Means panel, Mr. Rayder said.
He expects Rep. Anthony to offer more details on the commission's future plans in an Oct. 19 speech to the Public Securities Association in New York City.
