By Ralph Tabor
associate legislative director
Senator Daniel P. Moynihan (D-N.Y.) agreed late last month to delay the controversial effective date in his legislation to ban the use of tax-exempt bonds for professional sports stadiums until the Senate Finance Committee acts on the measure next year.
Moynihan made the move just before Congress adjourned for the year, after he acknowledged that "it is now certain" that his stadium bill will not become law this year.
Moynihan's bill had cast a cloud over the stadium finance market since he introduced it last June 14 and included language that would make any bonds issued for professional sports facilities after that date taxable.
Although he later agreed to add transition language that would exempt issuers who had entered into "binding contracts" for stadium financing before June 14, he simultaneously pledged to reintroduce the bill during the next session of Congress, and did not say whether he would amend the effective date at that time.
In a statement on the floor of the Senate, however, Moynihan said he would now propose that the ban apply to bonds issued after the committee acts on the bill, while also retaining the previous transition rule.
Moynihan said he made the move "in order to provide needed certainty to those remaining localities that have expended significant time and funds in planning and financing professional sports stadiums."
Municipal and county market participants said Moynihan's statement on the bill's effective date represented a victory for them and for several counties and cities whose projects were well advanced but did not fall under the binding contract exemption.
Moving quickly last month, some potential stadium bond issuers whose projects were left in limbo after they failed to qualify for Moynihan's original transition rule said they will try to pick up the pace of their financing, in order to keep any bonds they issue tax-exempt.
"We can and will get this deal done during this calendar year, if that's what it takes to make sure that we will fall out of the reach of Moynihan's bill," said Ed Marquez, finance director for Dade County, Fla., where voters will decide in November whether to authorize approximately $130 million in bonds for a new basketball arena for the Miami Heat.
"After the referendum, we could have a deal ready in a month,"
he said.