WASHINGTON -- The chairman of the Senate Finance Committee will propose extending authority to issue mortgage revenue bonds and small-issue industrial development bonds through Dec. 31, 1993, committee aides said yesterday.
But the aides said the chairman, Sen. Lloyd Bentsen, D-Tex., may have to scale back the length of the proposed extensions, depending on what revenue-raising items he decides to propose to offset their cost. The committee is scheduled to vote on his proposal later today.
Sen. Bentsen also expects to propose an 18-month extension for the low-income housing tax credit, the committee aides said. All three tax breaks are set to expire June 30.
The timing of the committee's drafting session is unusual. Tax-related bills normally originate in the House, which has not yet taken any action on the extensions. The House Ways and Means Committee has not said when it plans to vote on the expiring provisions, but lobbyists said the panel may act next week.
Capitol Hill watchers have also been puzzled because the Senate panel appears to be trying to move the extensions forward in a stand-alone bill. When extending the provisions several times over the past few years, Congress has usually attached them to a bigger bill. By itself, the extender legislation has tended to become a magnet for members' favorite tax-related amendments.
Last year, lawmakers who fought for the extensions successfully pushed a stand-alone bill through Congress by extracting pledges not to attach amendments from a vast majority of senators and congressmen.
Lobbyists said those lawmakers, led by Sen. John Danforth, R-Mo., appear to have adopted the same strategy this year. Nine members of the Finance Committee have already pledged to avoid offering amendments to the bill when it is voted on today, according to a June 11 letter the group sent to Sen. Bentsen.
The Senate panel is also scheduled to vote today on an energy bill passed by the House last month. That bill contains two provisions that have been closely watched by the municipal market.
One is designed to increase bank purchases of municipals by easing a provision of the Tax Reform Act of 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%.
The committee aides said they expect the Senate panel to delete part of the provision on nuclear trust funds that would lower the tax rate, and to omit the provision on bank deductibility.