While most attention has been paid to the package's overall provisions -- extending current income-tax rates for all Americans for two years, cutting the employee share of the Social Security payroll tax by two percentage points, and continuing for another 13 months long-term unemployment benefits for Americans who are out of work -- it also would extend dozens of expired and soon-to-expire tax provisions (including a one-year extension of higher transit benefits employers may offer their employees -- see related story).

The House of Representatives voted Thursday night to pass the bill (HR 4853), sending it to the White House for President Barack Obama's signature. 

Transportation advocates were disappointed this week when the Senate modified its package to exclude the popular Build America Bond program.

A tax package considered by the Senate two weeks ago included a one-year extension of that program, which is currently scheduled to expire at the end of this month. The previous Senate proposal would have reduced federal subsidy payments to 32% from the current 35%. An effort to terminate debate on that measure failed 53-36, seven votes shy of the 60 required.

In the last two weeks, President Barack Obama negotiated a compromise tax package with Republican senators who opposed the original legislation, which would have extended current income-tax rates only to those making less than $250,000 per year. During those negotiations, the provision to extend Build America Bonds was dropped.

Rep. John Mica, R-Florida and soon-to-be chairman of the House Transportation and Infrastructure Committee, said today he will push to renew the program next year.

"I can almost guarantee a reiteration of the Build America Bonds program," Mica told Bloomberg News. "We’re working to find a reincarnation."

The bonds were created as part of last year's recovery act to spur job growth by allowing state and local governments to obtain much-needed funding at lower borrowing costs for infrastructure projects. Build America Bonds are designed to appeal to a broader set of investors than customary tax-exempt bonds, including pension funds that traditionally do not hold tax exempt bonds and foreign investors.

BABs allow a direct cash subsidy from the federal government. They are taxable bonds issued by state and local governments that give them access to the conventional markets for corporate debt. The U.S. Treasury makes a direct payment to the state or local governmental issuer in an amount equal to 35% of the interest payment on the Build America Bonds. As a result of this federal subsidy payment, state and local governments have lower net borrowing costs and are able to reach more sources of borrowing than with more traditional tax-exempt bonds.

Figures compiled by the American Association of State Highway and Transportation Officials indicate that more than $42 billion of BAB issuances (31%) have financed highway, transit, parking, airport/port/marina, and miscellaneous transportation projects. The remaining 69% has funded nontransportation public infrastructure such as water and sewer lines, schools, and other buildings.

Top states issuing Build America Bonds are California (134 bonds worth $29.7 billion), New York (51 bonds worth $17.3 billion), Texas (82 bonds worth $14.6 billion), Illinois (192 bonds worth $10 billion), Ohio (105 bonds worth $5.7 billion), Florida (64 bonds worth $5.2 billion), and Washington (71 bonds worth $5.1 billion).

A two-page primer from AASHTO about Build America Bonds is available at bit.ly/BABprimer. Governing magazine's database of all the Build America Bonds projects issued since the program's inception is available at bit.ly/BABgoverning.