H.R. 6206: Build America Bonds Act of 2012

H.R. 6206: Build America Bonds Act of 2012

The Build America Bonds (BABs) program was created in 2009 by the American Recovery and Reinvestment Act and expired at the end of 2010.  This bill restores BABs and makes them permanent.  For 2012, the subsidy rate for the bonds is set at 32 percent.  The subsidy rate is reduced by one percentage point each year until it reaches a permanent rate of 28 percent in 2016.  BABs spur job creation and unleash private-sector investments by helping state and local governments finance infrastructure projects – building schools, hospitals, transit systems, and water systems.

This bill is offset by repealing the Section 199 manufacturing deduction for major integrated oil producers. The Section 199 manufacturing deduction was designed to replace the old FSC/ETI regime, which oil and gas companies did not use.  Yet in 2004, under the previous Republican majority, oil and gas companies were included in the replacement benefit. The Build America Bonds Act of 2012 would repeal the subsidy for major integrated oil companies, which continue to earn record profits quarter after quarter.