A Busy December: What We’re Tracking
This month marks the first December in quite a few years without a fiscal funding deadline. Nonetheless, Congress has piled up yet another long end of the year to-do list. More importantly, Congress will return from the holiday break in January to an election year with two looming funding deadlines.
Here’s what we’re tracking this December.
- FAA: Disputes over pilot training requirements have stalled congressional efforts to reauthorize the Federal Aviation Administration (FAA), which was technically due back in September. A continuing resolution (CR) passed on September 30 also extended FAA reauthorization through the end of this calendar year. Members of Congress now have until December 31, 2023 to either 1) pass a second extension, or 2) pass a comprehensive air travel and infrastructure bill that will likely authorize programs for several years. The FAA runs numerous airport infrastructure programs, including the Airport Improvement Program (AIP) grant and the collection of jet fuel taxes that fund the AIP.
- NDAA: Congress also must pass its annual authorization for defense and military programs by December 31, 2023. While the National Defense Authorization Act (NDAA) rarely overlaps with the work of bond lawyers, the Financial Data Transparency Act (FDTA) was enacted via last year’s NDAA, which imposes data standards to several financial regulators including the Municipal Securities Rulemaking Board (MSRB). At this point in time, we are unaware of plans to include provisions of direct impact to the municipal market in this year’s NDAA.
- Tax Extenders: Even amid the partisan gridlock, there remains a slight potential for Congress to reach an agreement on a “tax extenders” package. Congress failed to pass a year-end tax package last year. Partisan disputes on expansion of the Child Tax Credit (CTC) and corrections to the tax treatment of research and development expenses for corporations remain sticking points for action this year. Politico reported in mid-November that a number of conservative voices— including several former presidential candidates Newt Gingrich, Rick Santorum, and Mike Huckabee— sent a letter urging congressional leadership to strengthen the CTC. While none of the signatories currently serve in Congress, the list of conservative bona fides adds significant weight to finding a deal on CTC. If Congress can reach an agreement on CTC (and R&D), we may see a year-end tax package that could contain other key priorities, potentially including elements of the Affordable Housing Tax Credit Improvement Act. The broad affordable housing proposal includes several major changes to tax credits. One such change, the “LIHTC fix,” would lower the tax-exempt financing requirement for projects receiving 4 percent Low Income Housing Tax Credit (LIHTC) from 50 to 25 percent.
Next Year’s Problem
- FY2024 Approps: As mentioned, Congress passed a second CR in November and punted its funding problems to two separate deadlines early next year. By those dates, appropriators must fully appropriate parts of the government for FY2024, pass another CR, or risk partial or full government shutdowns. We will continue to track the status of federal funding via our FY2024 Appropriations Tracker into the new year.
- NFIP: The second CR included another extension to the National Flood Insurance Program (NFIP), which now expires on February 2, 2024. Congress must pass another extension by that date or risk a lapse in coverage for millions of properties in floodplains.
- Farm Bill: Congress last passed an agriculture and nutrition package in September 2018. Many of the programs, including ones for rural development, were set to expire throughout the year. Congress, acknowledging the low likelihood of passing another Farm Bill this year, passed a package that broadly extends authorizations for key programs through September 2024. The move now puts the onus on Congress to tackle a comprehensive Farm Bill just over a month before the 2024 elections.
As always, we will continue to update members on legislative developments as they become available.
Congress may have punted its funding problems into next year, but members still face a long to-do list before this holiday season.
Bond lawyer, father of two, third generation New Mexico lawyer, and loves how public finance helps local communities. Meet Daniel M. Alsup.
Bond lawyer, mom of two, avid soccer fan, and our new NABL President. Meet Carol McCoog.
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