WASHINGTON -- Two tax-exempt bond provisions in the pending energy bill no longer appear to be in danger of removal from the legislation, congressional aides said yesterday.

House Energy and Commerce Committee Chairman John Dingell, D-Mich., appears to have agreed to let the two provisions remain in the bill, the aides said. One provision would encourage an increase in bank purchases of tax-exempt bonds, while another could cause nuclear decommissioning trust funds to stop buying municipals.

The full House is scheduled to beging debating the energy bill today and take a final vote on it later this week. The House Rules of Committee, which clears bills for floor action, met for several hours yesterday on the energy bill, and was expected to wrap up work by last night.

The two provisions were part of a controversial tax section added to the bill by the House Ways and Means Committee earlier this month. Rep. Dingell had objected to some of the tax provisions -- though not the two bond items -- and had been expected to ask the Rules Committee to let him offer an amendment on the House floor that would strip out the entire tax section.

But during yesterday's Rules Committee meeting, Rep. Dingell said he had smoothed out most of the problems that had cropped up when Ways and Means and eight other committees added controversial amendments to the bill. He did not elaborate on how the dispute over the tax section was resolved.

Congressional aides, however, said Rep. Dingell and House Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., had reached a last-minute agreement on the tax section that preserved the noncontroversial tax amendments, including the bond provisions.

According to the aides, the two agreed the more contentious amendments would be removed from the bill, and Rep. Rostenkowski would offer those items as amendments on the House floor.

But the aides cautioned that agreement would not be considered final until ratified by the Rules Committee, which has the final say on what amendments may be offered on the House floor.

One of the bond amendments would increase the supply of bank-qualified bonds. Under current law, banks may deduct 80% of the cost of carrying tax exempt bonds only if they are purchased from issuers who expect to sell less than $10 million annually. The amendment, offered by Rep. Beryl Anthony, D-Ark., would raise that limit to $20 million.

The other bond amendment, sponsored by Rep. Richard Schulze, R-Pa., would remove restrictions on investments made by nuclear decommissioning trust funds. Current law limits fund investments to U.S. Treasury securities or tax-exempt municipal bonds. Rep. Schulze's amendment also would lower the funds' 34% tax rate to 20%.

Municipal market participants have warned that Rep. Schulze's amendment, if enacted, would cause the funds to stop buying municipal bonds and sell the ones they now hold. Rep. Anthony said he offered his amendment on bank-qualified bonds to offset the effect of Rep. Schulze's measure.

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