Are you interested in public policy? Do you want to help NABL staff educate federal policy makers and their staff on the importance of tax-advantaged bonds? Join NABL's Governmental Affairs Committee!
The NABL Office of Governmental Affairs represents NABL before the federal government, tracks federal legislative and regulatory developments, works with other professional associations, and informs members through NABLNET Alerts and the Weekly Wrap.
The Office of Governmental Affairs works with NABL leadership and committees to submit comment letters to federal agencies and to prepare position statements. Visit the RESEARCH section of the website to search for a particular comment letter or position statement.
If you have any questions or comments or need assistance finding a document, email or call Jessica Giroux, Director of Governmental Affairs.
Restoration of Tax-Exempt Advance Refunding Bonds
House:
The Investing in our Communities Act
The Investing in Our Communities Act, introduced March 29, 2021 by Reps. Dutch Ruppersberger (D-MD), and Steve Stivers (R-OH) would restore advance refunding bonds.
The “Investing in Our Communities Act” enables governments to refinance outstanding bonds for projects such as new roads, schools, hospitals and fire stations, reducing their borrowing costs and freeing up resources for other community improvements.
The legislation reverses changes made under the tax reform law of 2017, restoring the tax-exemption for advance refunding bonds, which are often used by municipalities to pay off another, outstanding bond. The change enables governments to take advantage of lower interest rates, similar to homeowners refinancing their mortgages. The use of tax-exempt advance refunding bonds saves taxpayers an estimated $2.35 billion a year.
Find a press release here.
Find an advocacy template here.
Senate:
LOCAL Infrastructure Act
Senators Roger Wicker (R-MS) and Debbie Stabenow (D-MI) introduced the Lifting Our Communities through Advance Liquidity for Infrastructure (LOCAL Infrastructure) Act of 2021 on February 25, 2021.
The legislation would amend the federal tax code to restore state and local governments’ ability to use advance refunding to manage bond debt and reduce borrowing costs for public projects. This initiative could provide a boost to local communities across the nation as the U.S. deals with the economic effects of the COVID-19 outbreak.
Among other organizations, the senators’ legislation is supported by several municipal industry leaders, including the National Association of Bond Lawyers.
Find a one-pager of the legislation here.
Find the legislative text here.
Find an advocacy template here.
Direct-Pay Bonds
Senate
Senators Roger Wicker (R-MS) and Michael Bennet (D-CO) have introduced the American Infrastructure Bonds Act, legislation that would create a new class of "direct-pay" taxable municipal bonds.
The use of this tool will help to expand the investor base to include entities that are not traditionally interested in tax-exempt bonds because they are not subject to federal income tax, such as pension funds and foreign investors. The competition among these additional investors lowers the costs of infrastructure financed with the bonds – both to the issuers of the bonds and to the federal government. This results in more investment in public infrastructure and a big achievement in our current pandemic environment.
This is an important legislative step and NABL members can further support this effort.
Find legislative text here.
Find a one-pager here.
Find an advocacy template here.
Municipal Bond Package: Restoration of Tax-Exempt Advance Refunding Bonds, Introduction of a Direct-Pay Bond Model, and Expansion of Bank Qualified Bonds
House
The Local Infrastructure Financing Tools (LIFT) Act was introduced April 16, 2021 by House Ways and Means Committee member Terri A. Sewell (D-AL). This legislation would provide a number of flexible financing tools that meet the unique needs of communities across the country, including transportation, public health facilities, schools, and other infrastructure and economic development projects.
The bill would:
- Restore the ability of states and localities to refinance existing debt through advance refunding bonds;
- Authorize American infrastructure bonds, which are taxable direct-pay bonds;
- Raise the annual issuance limit for bank-qualified bonds from $10 million to $30 million and apply the limit at the borrower level instead of aggregating the bonds of specific conduit issuers.
Find a press release here.
Find the legislative text here.
Find an advocacy template here.