WASHINGTON - The pending energy bill could become the vehicle for renewing and extending two popular bond programs and other expired tax breaks if the urban aid tax bill becomes hopelessly stalled in the Senate, Capitol Hill observers said yesterday.

The expired provisions, which include tax exemptions for mortgage revenue bonds and small-issue industrial development bonds, are among a small group of items that form the core of HR 11, the huge urban aid measure.

If congressional leaders find it impossible to pass that bill, they will need another vehicle for the core tax items, and lobbyists say the comprehensive energy authorization bill is a leading candidate.

"The Senate is still working on HR 11. but if it fails they can consolidate it into the energy bill," said a securities industry lobbyist.

"Clearly the thinking is that the two [bills] are woven together, so that if one begins to collapse, the other is an option," said a municipal lobbyist.

Although the urban aid bill and the energy measure are moving separately through Congress, they are linked in the minds of top lawmakers because they contain several identical energy tax provisions.

The energy bill is farther along in the legislative process since the Senate and House both have passed their respective versions of the measure. Conferees have begun trying to reconcile the two versions, but are at least a week away from finishing their work, congressional aides said.

Several lobbyists predicted that a final version of the energy bill will not come to a vote in Congress until legislators determine the fate of the urban aid bill.

"I'm still hearing that the tax bill comes first," said a lobbyist for localities. Tax legislators "would prefer not to put tax bill provisions on the energy bill, but it's still a backup."

A Senate aide said the tax section of the energy bill will need to go into conference at about the same time as the tax bill because they share so many items. But he said that so far no decision has been made to use the energy bill as a vehicle for the expired provisions, which at present are not in the energy bill.

"There being tax items in each, I think the conferences may dove-tail," the aide said. But Senate Finance Committee Chairman Lloyd Bentsen, D-Tex., "is still committed to moving the tax bill" as a separate measure, he added.

The aide said the Senate is expected to try to take up the bill next Wednesday.

The mortgage bond and IDB exemptions and other tax breaks have been in limbo since they expired nearly three months ago on June 30. The House's urban aid bill, approved in July, would make the two bond breaks permanent, while the measure pending in the Senate would extend them through Dec. 31, 1993.

Both versions of the urban aid bill also propose creating enterprise zones, economically depressed areas in which tax incentives would be offered to start new businesses or encourage existing firms to move into the areas. Both versions propose expanding the use of tax-exempt bonds in the zones.

Senate leaders have been unable to bring the urban aid bill to a vote in that chamber because senators have indicated they want to offer more than 100 amendments to the measure. With less than three weeks left before Congress' scheduled Oct. 3 adjournment, there is scant time to get the urban aid bill through the Senate and reconcile it with the House version, congressional aides and lobbyists have said.

The House and Senate energy measures also contain a number of bond-related provisions.

The House's energy bill would end the requirement that nuclear decommissioning trust funds invest only in Treasury securities and tax-exempt municipal bonds. The bill would also lower the funds' 34% tax rate to 20%. Municipal market participants have warned that the provision could decrease demand for tax-exempts.

The bill also contains a provision designed to increase the supply of bank-eligible bonds. Under current law, banks may deduct carrying charges for bonds purchased from issuers who expect to sell no more than $10 million of governmental bonds annually. The bill would increase that amount to $20 million.

The Senate's energy bill does not contain a provision on bank-qualified bonds, but the tax bill pending in the Senate would increase the $10 million limit to $25 million.

The Senate version of the energy bill would also ease investment restrictions on nuclear decommissioning funds, but does not propose to lower their tax rate.

That bill would also expand a law passed in 1988 that permits tax-exempt financing for high-speed rail projects. The 1988 law requires issuers to obtain an allocation under the private-activity bond volume cap for 25% of each high-speed rail issue. The pending energy bill provision would eliminate that requirement.

Some lobbyists also pointed out that there has been enough controversy over many of the energy bill's non-tax items that it also could run aground before coming to a final vote.

The idea of using the energy bill as a vehicle for tax items "assumes agreement on the other non-tax parts of the energy bill, which has not been achieved," said the municipal lobbyist.

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