The US House of Representatives passed a $16.8 billion package of tax incentives for state and local governments and small businesses Wednesday, the second measure in the Democrats’ “jobs agenda” to pass the chamber this month.  The measure passed on a partisan 246-178 vote.  Key provisions include:

  • An extension of the Build America Bond Program through April of 2013.  The program provides financial support to state and local governments through federal tax exemptions for interest on municipal bonds and is being used increasingly in conjunction with the LIHTC.  The bill also includes provisions that will lower the applicable percentage for the Build America Bond program over time along the following schedule:
    • 2009 or 2010: 35 percent
    • 2011: 33 percent
    • 2012: 31 percent
    • 2013: 30 percent
  • An expansion of the 1602 LIHTC Exchange program to projects financed using tax-exempt bonds with 4 percent tax credits
  • An exemption that would allow new markets tax credits to be used to offset the alternative minimum tax

The measure now awaits consideration by the US Senate, which is expected to take action after the April Congressional Recess. Read More…