President Obama’s 2009 “stimulus” bill, otherwise known as the American Recovery and Reinvestment Act, contained a provision for the creation of a new type of municipal bond called the “Build America Bond”. These BAB’s were specifically designed to help cities and municipalities raise money for infrastructure projects (re: union jobs). One aspect to these bonds, however, was the income from these bonds would be subject to Federal income tax. Congress and the President though, through their all knowing omnipotence and infinite investment wisdom provided a taxpayer-funded subsidy to the municipal issuer (re: city) OR a 35{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} tax credit to the holder of the bond. The program also stipulated NO LIMITATION on the total amount of Build America Bonds that state and/or local governments could issue.
The legislation did specify the BAB program would be in existence for two years, expiring January 1, 2011.
Where does Houston’s own State Senator Rodney Ellis fit in?
Rodney “Elections Have Consequences” Ellis is a partner at Rice Financial Products Company. According to their website, Rice Financial Products Taxable Fixed Income group “grew its taxable bond underwriting business substantially in 2009…Eleven of the 39 taxable transactions the firm completed in 2009 ($3.5 billion) involved Build
When the Bush tax cuts extension passed last week, a provision to extend the Build America Bonds program was not in the bill.
Since the Chronicle piece was written two days after the BusinessWeek story no wonder Rodney wasn’t very happy at the time he was interviewed; his firm will recognize the “consequences” as a result of the end of the Build America Bond program.
In fact, by looking at some of the bills Rodney has filed in advance of the 82nd Regular Session in Austin, I’d say a consequence of elections he’s focused on relates to registering voters…hey wait a minute; isn’t this just recycled from 2009?
