John Kerry: “today Senator Snowe and I are introduce legislation to exempt private activity bond interest from the alternative…”

“today Senator Snowe and I are introduce legislation to exempt private activity bond interest from the alternative minimum tax, AMT. My colleague from Massachusetts, Representative Richard Neal has introduced similar legislation. Under current law, interest paid on private activity bonds is subject to the alternative minimum tax. This results in the bonds not being very marketable in these difficult economic times. Making private activity bonds no longer subject to the AMT would help with the issuance of bonds. This legislation would assist in needed relief to State and local governments across the Nation. It would provide more buyers to the market, resulting in interest savings for issuers, and ultimately taxpayers. Subjecting private activity bond interest to the AMT could cost an issuer 25 to 30 more basis points when issuing an AMT bond compared to a non-AMT bond. However, the recent freezing of the municipal credit market has led the difference to rise as much as 100 basis points. This results in increased costs for various infrastructure projects including airports, docks and other transportation-related facilities; water, sewer and other utility facilities; and solid and hazardous waste disposal facilities. Last Congress, I worked on a provision to exempt the interest from private activity housing bonds from the AMT and this provision was included in the Housing and Economic Recovery Act of 2008.…”