WASHINGTON -- Almost every year in Congress there is one last train out of the station.

The "train" is the last major tax measure approved for the year, and every interest group wants to jump aboard.

Unfortunately, for the last five years the municipal bond market has been relegated to riding the rails of a freight car on each departing tax train. It has had to settle for temporary extensions of mortgage bonds and small-issue industrial development bonds, coupled with some slight easing and selected tightening of the laws governing tax-exempt bonds.

This year, though, the municipal market has a realistic chance of at least riding coach: It could find a seat on the urban aid tax bill that many hope will be drafted by the Senate Finance Committee starting next week and given final approval by Congress before both houses leave town for the Republican National Convention in mid-August.

The House has already given a major boost to the odds of the market traveling in some style this year. Its version of the urban aid bill, passed 10 days ago, contains two firsts for bonds.

The measure would grant permanent extensions for both mortgage bonds and IDBs, which for the first time were supported by the White House, and it would also allow expanded use of redevelopment bonds in enterprise zones.

That second provision represents a major admission on the part of the House and the Bush administration that bonds are not inefficient federal subsidies, but can be used to help solve economic problems and attract capital.

If adopted by the Senate, the two items certainly would constitute a significant turnabout in the treatment of bonds.

And the market also may have a shot at riding first class.

Several lobbyists believe there is a good chance of convincing the Senate Finance Committee to add a provision to its version of the urban aid bill that would increase the supply of bank-qualified bonds.

That provision, which is now contained in the House version of the stalled energy bill, would raise the limit on bank-eligible bonds to $20 million from the current $10 million.

The expanded use of redevelopment bonds would certainly help spur investment in enterprise zones, but that alone is not enough.

Enterprise zones will be a sham unless more credit is made available within them. One way to do so would be to expand the use of bank-eligible bonds.

But that expansion should not be limited to just the 50 enterprise zones that are to be set up. It should include all so-called small issues so that all blighted areas can get the credit they need.

Market participants must get that message across before the tax train pulls out of the station.

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