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Details emerge on new US levy on banks, hedge funds

* 10-year tax to raise $19 billion to fund bill

* No use in bailing out failing firms

WASHINGTON, June 25 (Reuters) - A proposed tax on banks and hedge funds to fund the landmark financial overhaul bill will last a decade and proceeds will be barred from use to bail out failing firms, according to text of the legislation obtained by Reuters.

The new assessment will cover the costs of the $19 billion legislation that slaps tougher rules for Wall Street, which passed early Friday morning.

Expenses include setting up a new consumer watchdog agency, helping the jobless with mortgages and funding community development.

Financial companies with more than $50 billion in assets and hedge funds with more than $10 billion in assets will be hit with the new levy upon enactment and lasting until 2020.

The House and Senate still need to vote on the legislation, strongly backed by President Barack Obama.

Some bank lobbyists and Republicans say the tax is a sly attempt to enact Obama’s earlier proposed $90 billion tax to recoup funds from bailouts during the financial meltdown.

“Payback is nice for the short term. The long term focus for everybody should be job creation,” Tom Quaadman, vice president with capital markets at the U.S. Chamber of Commerce.

House Financial Services Committee chairman Barney Frank disputed any link late on Thursday.

“It’s going to pay for the expenses of this bill, nothing beyond that,” Frank said.

The legislative text does not set the amount of the tax per bank, which will be determined by the Administration’s Office of Management and Budget, based on factors such as a company’s leverage, off balance sheet transactions, among other factors.

Obama has proposed a 0.15 percent tax on liabilities of big financial companies, but the idea has stalled because of some opposition among fiscally conservative Democrats. (Reporting by Kim Dixon; Editing by Kenneth Barry)