WASHINGTON--The urban aid tax package narrowly won final approval in the House early yesterday, but immediately ran aground in the Senate along with other bills amid last-minute delaying tactics by several senators.
The House, on a 208-to-202 vote, acted hours after tax lawmakers put the finishing touches on a tentative conference agreement they had reached Saturday night. (See page 31 for tax bill box score.)
The final bill is largely unchanged from the tentative accord, though three bond provisions that had been up in the air were agreed to by the conferees.
One of those provisions would increase the capital expenditure limit for projects financed with small-issue industrial development bonds to $20 million from $10 million. Another would make pooled bond issues bank-eligible under certain circumstances.
The third provision would permit proceeds of mortgage revenue bond issues to be used for home-improvement loans in Florida, Louisiana, and Hawaii, the states recently hit by hurricanes.
Capitol Hill observers had expected the Senate yesterday to rush the urban aid bill and other last-minute measures to approval before adjourning for the year. But late Monday night, work in the Senate ground to a halt as Sen. Alfonse D'Amato, R-N.Y., began what turned out to be a 15-hour filibuster.
D'Amato was objecting to a conference decision to drop from the final tax bill agreement a trade amendment he had sponsored in the Senate's version of the bill.
As soon as D'Amato ended his speech Tuesday afternoon, Sen. John Seymour, R-Calif., began several hours of delaying tactics designed to stall another pending bill, one involving water reclamation rights in western states.
By the end of the day, congressional aides and lobbyist were predicting that the Senate, after taking off today to observe Yom Kippur, would be in session the rest of the week and into the weekend to try to finish up the urban aid and water bills, as well as the energy bill and housing reauthorization legislation.
But even with the additional time, they said it was unclear whether the Senate would be able to act on the tax bill before adjourning. The aides and lobbyists said it was possible D'Amato could again filibuster the bill. In addition, Sen. Bob Dole, R-Kan., was said to be prepared to stage a filibuster to keep the bill from reaching President Bush.
Bush may not want to bill to reach his desk because it would put him in a difficult position, congressional aides and lobbyists said. He probably could not sign the bill since he said in August he would "never, ever" accept another tax increase, but if he vetoes it he could be accused of failing to help depressed urban areas, they said.
Senate Finance Committee Chairman Lloyd Bentsen, D-Tex., said in a statement late Monday that Bush "has painted himself into a corner with the intemperate things he's saying on the campaign trail," and has given the tax conferees no guidance as to what size urban aid bill or what types of revenue raisers he would accept.
"President Bush doesn't even try," Bentsen said. "No one in the administration would talk to Republicans or Democrats in Congress about this bill. They wouldn't say a word about what they wanted in it or taken out of it."
For the municipal market, the final bill would make permanent the low-income housing tax credit and the tax exemption for mortgage revenue bonds. It would also extend the exemption for small-issue IDBs through Sept. 30, 1993. All three tax breaks expired June 30.
The package would also create 50 enterprise zones, economically depressed areas in which tax incentives would be offered to encourage the creation of companies or lure existing firms from other areas. As part of the proposal, tax law curbs on qualified redevelopment bonds would be eased so the bonds could be issued in the zones.
Another major bond provision would eliminate the $150 million cap on the amount of tax-exempt bonds that private, nonprofit organizations other than hospitals may have outstanding at any one time The provision would also reclassify 501(c)(3) bonds as governmental debt.
The bill also includes a proposal to increase the supply of bank-qualified bonds. Under current law banks are allowed to deduct 80% of the cost of carrying tax-exempt bonds if they are purchased from issuers who expect to sell no more than $10 million annually. The measure would raise that limit to $20 million.
In addition, the package includes a number of bond simplification items. For example, it would increase the $5 million small-issuer exemption from the arbitrage rebate requirement to $10 million.