• Member Spotlight

Carol L. Lew, Stradling Yocca Carlson & Rauth, Newport Beach, CA

Over many years, I have witnessed how NABL efforts have helped facilitate advancements in the law applicable to public finance.

Carol L. Lew, Stradling Yocca Carlson & Rauth, Newport Beach, CA

Tell us something about you outside of your NABL activities…..

I have two boys, both of whom have attended many NABL events over the years!

How has being an active NABL member impacted your career, including the relationships you have developed and your approach to practicing law? 

I have always viewed NABL as an engaging part of my practice, regardless of whether I was serving on a comment project as a junior lawyer or serving as NABL’s President. Over many years, I have witnessed how NABL efforts have helped facilitate advancements in the law applicable to public finance. Sometimes we have to be patient, but NABL efforts can make positive impacts over time. NABL has also had benefits for my career because it has allowed me to meet and work with many great lawyers over the years, including making some great friends.

What are some recent industry trends NABL members should be aware of that could impact the public finance industry?

The Tax Cuts and Jobs Act of 2017 eliminated the ability to issue tax-exempt refunding bonds. This legislation, together with historically low interest rates, has led to increased usage of taxable debt by state and local governmental issuers to advance refund debt obligations. 

Another recent trend, driven by consequences of the COVID-19 pandemic, has been the increased need for working capital due to cash flow shortfalls and uncertainty, resulting in larger and more frequent deficit financings. Certain areas have been particularly impacted, such as financings for facilities closed by shut-downs. Additionally, schools and hospitals have had to grapple with shifting budgets to address dramatic operational changes. 

Some issuers have also been confronted with the need to restructure debt to address cash flow concerns, resulting in the need to analyze reissuance issues. 

Flight from inner cities to the suburbs due to the pandemic has bolstered some demand for new housing, which may involve land secured financings to provide essential infrastructure. 

Bond financed facilities are also being repurposed because of the pandemic to address changing needs, such as additional facilities to isolate those testing positive.

You were the chair of the working group that wrote two letters to Congress and the Treasury during the early months of the pandemic. The March 22 letter was sent in record time because Congress was moving swiftly on passing coronavirus relief legislation and the April 9 letter expanded upon and built out that original letter and was much more robust. What was that experience like, and do you think NABL’s letters had the impact we wanted? 

NABL had a great group that worked on both letters; it was truly a collaborative effort of many people to identify the most pressing issues and suggest solutions. While it was challenging to produce the letters due to shut-downs and time pressure, it was gratifying to see how open and responsive Congress and the IRS were to hearing about issues and working to address them. Provisions permitting advance refundings were introduced on both the Senate and House side. The HEROES Act also included direct pay bonds, expanded private activity bonds, and bank qualified provisions, all suggestions referenced in NABL letters. Additionally, the IRS was quick to release guidance extending filing deadlines for the Form 8038 series, permitting issuers to buy their own bonds, allowing virtual TEFRA hearings, and providing guidance to address certain issues impacting multifamily housing bonds. While not everything mentioned in the NABL letters has yet been addressed, I am pleased that NABL’s voice has been heard, including with respect to proposed legislation that is currently being negotiated in Congress. I have witnessed over many years of volunteering that while we might not get an immediate response to some suggestions, over time NABL’s well thought out solutions to issues may very well be adopted. I am proud of NABL’s service over the years in that regard.

NABL launched NABL Issue Briefings and NABL Podcasts to provide additional ways to educate Hill staff and our members on issues we see affecting the municipal bond market as a result of the COVID-19 pandemic. How will listening to these recordings benefit our advocacy efforts on the Hill and our members practices? 

I have appreciated over the years NABL’s connections in Washington and our ability to communicate issues and possible solutions to address needs of state and local government issuers. While NABL cannot meet in person with staff on the Hill nor regulators due to the pandemic, NABL Issue Briefings and Podcasts are important ways for NABL’s message to come alive, educating others about important matters and potential solutions. It has been helpful that these resources are available on the NABL website for easy accessibility. Members can download the resources and share them with government connections, potentially assisting in addressing crucial issues, especially as new legislation is considered in Washington.