WASHINGTON -- The tax exemptions for mortgage revenue bonds and small-issue industrial development bonds are virtually certain to lapse tomorrow and will probably stay in limbo for several weeks after that, congressional aides and municipal lobbyists said Friday.
"It will be almost impossible to finish [legislation] before the Independence Day recess, and thus before expiration," said a congressional tax aide. This source and others predicted the exemptions would expire on schedule tomorrow and not be renewed at least until late July or August.
"I think it will all come together in late July," a Senate aide said.
Mortgage bond and IDB proponents had been hoping that Congress would be able to pass an extension bill before lawmakers adjourn for the Independence Day recess that begins July 3. A completed bill by that date is crucial because the Senate will remain out of session until after the Democratic National Convention ends on July 17.
But there are at least two roadblocks to completing action this week.
One is that legislation passed by the Senate Finance Committee to continue the expiring provisions for 18 months, through Dec. 31, 1993, has not reached the Senate floor because it is backed up behind other bills waiting for floor action, lobbyists said.
Even if the Senate were able to rush its extension bill through, there is also the problem of the way the House framed its version of the bill, according to tax aides and lobbyists.
The House Ways and Means Committee virtually ensured that the extensions would be delayed by approving legislation last week that coupled the extensions with many other tax items, including a proposal for urban enterprise zones, those sources said.
Reconciling the Senate's narrow bill with the House's bigger package would be difficult because finance panel Chairman Lloyd Bentsen, D-Tex., has said he wants to wait until late July to draft an enterprise zone bill, the tax aides and lobbyists said.
The House is expected to take up the Ways and Means panel's tax package on Wednesday or Thursaday, committee aides said.
Later in July, there will be a small window of opportunity to complete the bill. Once the Senate returns from its two-week recess, lawmakers will have about four weeks before leaving town again on Aug. 13 for the Republican National Convention and their traditional August recess.
That should give the House and Senate enough time to finish their packages, reconcile their differences, and produce a completed bill for the President to sign, some lobbyists and tax aides said.
"I look for it to get done between the conventions," said John T. McEvoy, the executive director of the National Council of State Housing Agencies.
But one tax aide suggested that it may be too optimistic to plan for the extensions to be renewed by Aug. 13. "It may be September before we finish conferencing" the House and Senate bills, the aide said.
In addition to the extension bills, comprehensive energy legislation that contains two bond provisions is also on hold, Senate aides said. The Senate Finance Committee passed the energy measure earlier this month, but the full Senate is unlikely to vote on the bill before adjournment because of the backlog of bills.
The finance panel's bill contains a provision that would remove investment restrictions on nuclear trust funds, a move that municipal market participants have warned would curtail demand for municipal bonds.
The House version contains that provision as well as one that would raise the limit for bank-qualified bonds to $20 million from $10 million, but House and Senate negotiators will not be able to make a decision on including that measure in the final bill until the Senate acts on its measure.