Build America Bonds
The American Recovery and Reinvestment Act of 2009 created the Build America Bond program, which authorized state and local governments to issue Build America Bonds as taxable bonds in 2009 and 2010 to finance any capital expenditures for which they otherwise could issue tax-exempt governmental bonds. State and local governments receive a direct federal subsidy payment for a portion of their borrowing costs on Build America Bonds equal to 35 percent of the total coupon interest paid to investors.
In March of 2010, the Senate voted 68 to 29 to pass a $17.6 billion jobs bill requiring the Treasury Department to provide Build America Bond-style direct payments to municipal issuers of four types of tax-credit bonds, if they want them, instead of offering tax credits to investors.
- IRS Issues Guidance on New Build America Bonds. IRS.gov.
- Senate Clears Bill With BAB Payments. Bond Buyer.
- [http:http://www.businessweek.com/news/2010-03-18/florida-suspends-build-america-bond-sales-state-official-says.html Florida Suspends Build America Sales, Official Says]. BusinessWeek.