WASHINGTON -- The House energy bill's pace through Congress slowed this week as a spokesman for the Senate Finance Committee announced the panel would meet soon to consider adding amendments to the measure.
The House bill has been closely watched by the municipal market because its tax section contains a provision that would increase the supply of bank-qualified bonds, and another that could cause nuclear decommissioning trust funds to stop buying tax-exempts.
After the House passed the measure May 27, Capitol Hill watchers were not certain what the next step in the legislative process might be. Because the Senate had passed its own version of energy legislation earlier in the year, the most likely step would have been for a House-Senate conference to work out differences between the two measures. But in this situation there was a catch: The Senate version had not contained a tax section, and had
thus bypassed the Senate Finance Committee. So after the House passed its measure, lobbyists speculated that the Senate leadership might decide to refer the House bill to the finance panel, to give tax lawmakers there a chance to add tax amendments. The leadership sent the bill to the committee late last week.
The committee spokesman said the panel's session to consider the bill could come later this week.
In referring the bill to the finance panel, the senate leadership has not only slowed down its progress but may also have put the legislation in some danger, lobbyists said.
Once the panel completes its work, the measure will have to be voted on by the full Senate, which would open up the bill to further debate and amendments. Aready, Nevada's two senators have said they may filibuster the bill because it contains a nuclear power provision they oppose, lobbyists said.
But the move also means the finance panel could use the energy bill to extend a group of tax provisions scheduled to expire June 30. Those provisions include the tax exemptions for mortgage revenue bonds and small-issue industrial development bonds.
At this point, "I don't think anybody seriously thinks" the extensions would be added, said John T. McEvoy, executive director of the National Council of State Housing Agencies. But, he added, "I woud be making a mistake if I said that wasn't possible," because "the situation is so fluid."
The energy bill's provision on bank-qualified bonds is designed to increase bank purchases of municipals by easing rules enacted in 1986. Under that law, banks may deduct 80% of the cost of carrying tax-exempt bonds only if they are purchased from issuers who expect to sell no more than $10 million annually. The provision would raise that amount to $20 million.
The other bond provision would end the requirement that nuclear decommissioning trust funds invest only in Treasury securities or tax-exempt municipal bonds. The provision would also lower the funds 34% tax rate to 20%.