Airports have sold nearly $10B in bonds since Congress waived the alternative minimum tax for two years as part of a federal stimulus package last year. The U.S. House of Representatives passed a bill last week that would extend that waiver for another year.
The Small Business and Infrastructure Jobs Tax Act of 2010 would also extend a refinancing provision found in the stimulus bill for private activity bonds issued between 2004 and 2008 through 2011.
“Airports serve as a true testimony to how this provision has made a significant difference in the bond market,” says Greg Principato, president of Airports Council International-North America. “This has had a phenomenal impact on airports, benefiting passengers and the economy as airports are now equipped to fund important safety and security projects and in doing so have created thousands of jobs.”
ACI-NA officials say the one-year extension is a step in the right direction but add that they would like to see the waiver made permanent.
“It’s made such a difference for airports across the country,” says Jane Calderwood, vice president for government and political affairs.
She cites several airports as examples for what the AMT waiver has meant for airports. A $550M bond sale at McCarran International (LAS) saved 1,600 jobs and kept the airport’s $2.5B Terminal 3 project alive.
Sacramento International (SMF) sold nearly $500M in bonds to keep its improvements on track, as have airports in Denver, Houston, Miami and others.
“All across the country, it’s made a real difference,” Calderwood says. “It’s allowed us to continue with major projects that were under way and to start ones that were on the drawing board.”
She notes that airports get more than half the capital necessary for infrastructure additions or improvements through bonds and that the AMT waiver awoke what had been a nearly dry market.
“When we couldn’t sell them, it was a big issue,” she says.
The next step is in the hands of the Senate, which is expected to consider its version of the bill in April. If the Senate passes a different version than the House, it would have to be reconciled in a conference committee before going to President Barack Obama for his signature.