WASHINGTON -- The House Rules Committee approved the tax section of the energy bill late Wednesday, retaining two provisions affecting the tax-exempt bond market, a committee aide said.
The full House was scheduled to take a final vote on the bill yesterday, but became bogged down by disputes not related to the bond provisions. The final vote now is not expected until next week, congressional aides said.
One of the bond provisions would encourage an increase in bank purchases of tax-exempt bonds. The other could cause nuclear decommissioning trust funds to stop buying municipals.
The provisions were part of a tax section added to the energy bill by the House Ways and Means Committee earlier this month. The House Energy and Commerce Committee, which originated the bill, had objected to other parts of the tax section, and wanted it stripped entirely out of the bill.
Eventually, Energy Committee Chairman John Dingell, D-Mich., and Ways and Means Chairman Dan Rostenkowski, D-III., reached an agreement that would keep the noncontroversial tax provisions in the bill, including the bond provisions. Under that agreement, the controversial items would be removed and Rep. Rostenkowski would offer them on the House floor as an amendment.
The House Rules Committee, which must clear bills for floor consideration, then had to approve the change. It ratified the agreement late Wednesday night, the rules committee aide said.
Under current law, banks may deduct 80% of the cost of carrying tax-exempt bonds only if they are purchased from issuers who expect to sell less than $10 million annually. The provision increasing the supply of bank-qualified bonds would raise that limit to $20 million.
The other bond provision would remove restrictions on investments made by nuclear decommissioning trust funds and would lower the funds 34% tax rate to 20%.