WASHINGTON -- The Senate is scheduled to vote today on urban aid legislation that picked up a number of bond amendments over the weekend, including one to ease curbs on small-issue industrial development bonds and another to expand slightly the use of mortgage bonds in disaster areas.

But the Senate failed to consider proposals that would have substantially increased bond authority under the private-activity volume cap for Florida, Louisiana, and Hawaii, three states recently hit by hurricanes.

Although the Senate completed debate over the weekend, a final vote on the bill was postponed until today because more than 30 senators had left Capitol Hill by late Saturday. In scheduling the vote, Senate leaders decreed that no further debate or amendments would be allowed.

Municipal lobbyists said they expect a conference committee to begin Thursday to reconcile differences between the Senate measure and the urban aid bill passed by the House in July.

The core of each bill is a proposal to create enterprise zones, economically depressed areas in which tax incentives would be offered to lure new businesses or retain existing ones. The Senate bill would also extend the tax exemptions for mortgage revenue bonds and small-issue IDBs through Sept. 30, 1993, while the House bill would make them permanent. Authority to issue the bonds expired June 30.

The amendment on IDBs, offered by Sen. John Glenn, D-Ohio, would allow more outside funds to be spent for projects financed with the bonds. Under current law, individual IDB issues are capped at $10 million, and there is an overall $10 million limit on the amount of money that may be spent on a project financed with IDBs. Sen. Glenn's amendment would not change the per issue limit, but would raise the capital expenditure limit to $20 million.

Small manufacturers have been chafing under the expenditure limit because they are often in situations where they may want to issue only $8 million for a project, for example, but need to spend a total of $12 million to make it work. In other cases, issuers may have already completed a $10 million project and want to spend additional money to expand, but are blocked from doing so by the expenditure limit.

"Raising the capital expenditure limit will allow plans to expand and modernize, enabling them to take advantage of market growth or increase their productivity to remain competitive," Guy Land, a lobbyist for the Council of Development Finance Agencies, said in a letter to Sen. Glenn.

"At the same time, the new $20 million limit continues to ensure that this program is targeted to smaller companies," added Mr. Land, whose organization was known as the Council of Industrial Development Bond Issuers until earlier this month.

Mr. Land noted the proposed change could potentially be used by a large number of existing firms because it is retroactive. The amendment would apply to any outstanding bond issues as long as the expenditures above the $10 million limit were made after the bill's date of enactment.

Nathan Brostrom, executive secretary for the California Industrial Development Financing Advisory Commission, said the amendment would "help a tremendous number of companies in California." High costs for land and construction in the state make the $10 million limit an unrealistic cap, he noted.

Mr. Brostrom estimated that if the change is enacted, up to half a dozen additional IDB issues would come to market each year in California for deals with total capital expenditures of between $14 million and $16 million.

Another amendment approved by the Senate, one offered by the senators from Florida, Hawaii, and Louisiana, would ease curbs on the use of mortgage revenue bond proceeds in regions declared disaster areas by the President. For those areas, the amendment would allow mortgage bond proceeds to be used for home improvement loans through Dec. 31, 1993.

The amendment is retroactive to June 30, which would allow $300 million of mortgage bonds issued on that date by the Florida Housing Finance Agency to be used for rebuilding in the wake of Hurricane Andrew. Lobbyist said they were unsure whether the amendment was broad enough to allow for rebuilding a residence that had been completely destroyed.

But the Senate took no other action relating to bonds and disaster relief. Officials in Florida, Louisiana, and Hawaii unsuccessfully urged their congressional delegations to offer amendments that would substantially increase the private-activity volume cap in those states next year so that additional mortgage bonds and multi-family housing bonds could be issued for disaster relief. Florida officials, for example, had been talking about an extra $750 million in bond authority.

The Senate also approved an amendment offered by Sen. James Sasser, D-Tenn., that would require the Congressional Budget Office to study how state and local governments have used bond banks and pool bonds since passage of the Tax Reform Act of 1986. The study would give lawmakers guidance in determining whether Congress needs to lift some of the 1986 act's restrictions to make it easier to use bond banks and pools.

"State bond banks do face some limitation on their activities due to the arbitrage and private-activity limitations imposed on state-local bonds under the 1986 tax act," Sen. Sasser said in a statement included in the Sept. 26 edition of the Congressional Record. "Removal or modification of these limitations might spur more of this low-cost borrowing, creating more infrastructure and jobs in small communities."

In other action, the Senate defeated an amendment offered by Sen. Pete Domenici, R-N.M., to ease curbs on environmental infrastructure bonds.

Sen. Domenici's proposal would classify bonds for a variety of environmental uses -- including hazardous and solid waste removal, and sewage treatment -- as governmental bonds, even if the projects could not meet the 10% private-use test. At least 95% of the proceeds would have to be dedicated to the project and the facilities would have to serve the general public. The bonds would be exempt from the private-activity volume cap.

Sen. Domenici said the change in the tax law was needed because the federal government is saddling state and local governments with large numbers of environmental rules and regulations, but providing no funding to help meet those mandates.

But Sen. Howard Metzenbaum, D-Ohio, said he objected to the amendment because it appeared to go too far in rolling back 1986 tax act curbs.

"Once you open the door with respect to industrial revenue bonds for infrastructure, then it is, ~Watch out, Charlie,'" said Sen. Metzenbaum. "We just cannot afford it. This country cannot afford it. You cannot afford to do all the things you want to do."

Senate Finance Committee Chairman Lloyd Bentsen, D-Tex., said he objected to the last-minute nature of the environmental amendment. "The bottom line is this is a very expensive proposal that is coming quite late in the session," he said.

But Sen. Domenici noted that he introduced the bill last year and had testified on it before the Senate Finance Committee several months ago.

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