The ARRA provision increased the bank qualified debt limit to $30 million from $10 million until the end of 2010. This type of debt allows small governments and authorities to directly place their debt with community banks that are then able to deduct a percentage of the carrying costs for purchasing the bonds, according to the letter from the groups to Senate Finance Committee Chairman Max Baucus, D-Mont., and the committee’s ranking Republican, Sen. Charles Grassley, R-Iowa.
Without permanent extension of this provision, many small 501(c)(3) borrowers will soon have a more difficult time accessing capital, the AHA and other groups say. The stimulus measure had helped ease the credit crunch for many hospitals, according to the report.
Read the AHA News Now report on bank-qualified bonds.
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