[Congressional Record Volume 147, Number 167 (Wednesday, December 5, 2001)]
[Extensions of Remarks]
[Page E2211]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       INTRODUCTION OF H.R. 3381

                                 ______
                                 

                          HON. SANDER M. LEVIN

                              of michigan

                    in the house of representatives

                      Wednesday, December 5, 2001

  Mr. LEVIN. Mr. Speaker, last week, I introduced a bill, H.R. 3381, 
for Mr. Camp, other members of the Michigan delegation, and myself, 
that would clarify that certain bonds issued by local governments 
should be treated as tax-exempt. This issue has particular importance 
to local governments in Michigan.
  In Michigan, counties collect real property taxes to fund their 
school systems. To facilitate the collection of delinquent real 
property taxes levied for local school districts, the counties issue 
bonds (General Obligation Limited Tax Notes). The counties have been 
doing this since 1973. Until 1987, interest on the bonds was treated as 
tax exempt.
  In 1987, a cloud was cast upon the tax exempt status of these bonds 
due to issues unrelated to the bonds. Michigan counties have continued 
to issue bonds under the delinquent property tax program, but since 
1987 the bonds have effectively not been treated as tax-exempt, costing 
the counties millions of dollars per year.
  This bill would restore the valuable General Obligation Limited Tax 
Notes program to a tax-exempt status, reducing borrowing costs, and 
providing badly needed support for education in the State of Michigan. 
While it would be highly beneficial to local schools, the Federal 
revenue cost of this bill would be negligible.
  I urge all of my colleagues to join me in co-sponsoring this 
bipartisan bill.

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