WASHINGTON — The Build America Bonds program would be extended for three years, but the direct-pay subsidy rate would shrink from the current 35% of interest costs to 33% in 2011, 31% in 2012 and 30% in 2013, under a draft of a second jobs bill unveiled yesterday by House Ways and Means Committee chairman Sander Levin, D-Mich.

The bill also would exempt private-activity bonds from the alternative minimum tax for another year, permanently exempt water and sewer exempt-facility PABs from state volume caps, and extend the recovery zone bond programs for another year while modifying the allocation formula to ensure that areas of the country that were previously overlooked can issue some of the bonds.

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