[Congressional Record Volume 145, Number 30 (Thursday, February 25, 1999)]
[Extensions of Remarks]
[Page E291]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    PRIVATE ACTIVITY BOND EXPANSION

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                          HON. RICHARD E. NEAL

                            of massachusetts

                    in the house of representatives

                      Thursday, February 25, 1999

  Mr. NEAL of Masschusetts. Mr. Speaker, today Representative Houghton 
and I are introducing the State and Local Investment Opportunity Act of 
1999. This legislation would raise the annual limit on states' 
authority to issue their own tax-exempt private activity bonds to the 
greater of $75 times population or $225 million, and index the limit to 
inflation.
  Tax-exempt private activity bonds finance affordable single and 
multifamily housing, manufacturing facilities, environmental, energy 
and utility projects, redevelopment of blighted areas, and student 
loans, in every state. The bond volume cap was set in 1986, and is 
adjusted only by growth in state population. Since 1986, inflation has 
cut the purchasing power of these bonds by almost 50 percent. In 1997 
the demand for this bond authority exceeded supply by almost 50 
percent, according to the National Council of State Housing Agencies.
  In my own state, the Massachusetts Housing Finance Agency has 
financed first-time homes for more than 37,000 working families with 
mortgage revenue bonds, as well as financing more than 55,000 
affordable apartments with multifamily housing bonds, both subject to 
the cap.
  Since 1979, 5,241 loans resulting from the sale of mortgage revenue 
bonds have been made to my constituents, representing $313 million of 
mortgage financing. And multifamily housing bonds account for 40 
developments in my district, making 5,399 apartments available for low 
and moderate income workers.
  Nationwide, mortgage revenue bonds have helped more than two million 
working families achieve the American Dream of home ownership. Many 
more families still need this help to achieve this Dream--help we can 
provide through this program.
  Last year the Chairman of the Ways and Means Committee, Bill Archer, 
recognized the importance of this program and included an increase in 
the bond volume cap as part of the tax section of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act. This was an 
important step forward. However, the current bond volume cap remains in 
place until 2003 at which time the increase begins to phase in, 
becoming fully effective in 2007. The phase-in provision makes clear 
the importance of making this adjustment to the bond volume cap, and 
reduces the revenue costs. Now I hope we can complete the job in this 
session of Congress by making the expansion of the bond volume cap 
effective this year, and by indexing the cap for inflation.
  Mr. Speaker, I urge my colleagues to cosponsor the State and Local 
Investment Opportunity Act of 1999, so their states can continue making 
vital investments in their citizens and communities.

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