Jeff Bingaman United States Senator from New Mexico

WASHINGTON – U.S. Senators Jeff Bingaman (D-NM) today reaffirmed his commitment to reinstate and permanently extend a provision that helps small and rural municipal governments raise capital to finance local infrastructure projects – including school and road construction – and meet other ongoing needs.

Before 2009, banks had incentives to purchase municipal bonds only from municipalities that issue $10 million or less in debt each year – a level that was unchanged since 1986. The American Recovery and Reinvestment Act, passed in 2009, incorporated a provision pushed by Bingaman to raise that limit to $30 million, but that measure was allowed to expire at the end of last year.

Bingaman today introduced the Municipal Bond Market Support Act of 2011 – a bill that would make the $30 million level permanent, and index it for inflation. He was joined in introducing the bill by five of his colleagues on the Senate Finance Committee: Senator Mike Crapo (R-ID); Senator John Kerry (D-MA); Senator Olympia Snowe (R-ME); Senator Ben Cardin (D-MD); and Senator Charles Grassley (R-IA).

When the limit was $30 million, many municipalities across the country were able to place bonds directly at financial institutions, including community banks. When municipal governments work directly with community banks, they achieve considerable savings on interest and transaction costs.

"This proposal would help small municipalities and school districts across New Mexico and the country finance critical infrastructure needs and create jobs. The higher bank-qualified limit was a great success and deserves to be made permanent," said Bingaman. "As the strong support from five of my Finance Committee colleagues demonstrates, this is an issue that crosses party lines and affects communities across the country. We must ensure that our small municipalities can raise capital," Bingaman said.

At least 15 national organizations have endorsed Bingaman's Municipal Bond Market Support Act of 2011. They are as follows:

• American Hospital Association
• American Public Power Association
• Council of Development Finance Agencies
• Government Finance Officers Association
• International City/County Management Association
• National Association of Bond Lawyers
• National Association of Counties
• National Association of College and University Business Officers
• National Association of Health and Educational Facilities Authorities
• National Association of State Auditors, Comptrollers and Treasurers
• National Association of State Treasurers
• National League of Cities
• U.S. Conference of Mayors
• Bond Dealers of America
• Securities Industry and Financial Market Association

The bill has been sent to the Senate Finance Committee, where Bingaman is the chairman of the Subcommittee on Energy, Natural Resources & Infrastructure.