WASHINGTON -- President Bush's proposal for tax-exempt bonds in enterprise zones could be a significant help to cities rebuilding after recent riots, but the plan has some serious flaws that may keep it from being widely used, municipal lobbyists said yesterday.

Those sources said the limit on loans made from bond proceeds -- $250,000 per business -- needs to be increased, and the bonds should not be subject to the private-activity bond volume cap limit, as the President has proposed.

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