In December 2017, Congress passed the Tax Cuts and Jobs Act (TCJA)—a sweeping reform of the U.S. tax code that included a number of permanent changes as well as other provisions set to expire at the end of Calendar Year 2025. The process leading up to the passage of TCJA included various threats to the tax-exempt municipal market. A version of the bill that passed the House of Representatives even included a widespread repeal of the tax exemption for qualified private activity bonds (PABs). The final enacted bill repealed the tax exemption for advanced refunding bonds. 

Regardless of the outcome of the 2024 elections, municipal market participants have recognized the high potential for legislative action on tax reform in 2025 and—more specifically—the potential for threats to the tax exemption on municipal bonds to reemerge. NABL and other municipal market groups have launched an array of advocacy resources to enable and encourage market participants to advocate early and often for tax-exempt municipal bonds.

As the process to address looming TCJA expirations unfolds this year, developments will likely come piecemeal and through both formal and informal channels. In order to help NABL members stay on top of these developments we have created and will maintain this tracker to organize important updates chronologically. NABL members will receive urgent updates via “NABL Alert” emails.

Timeline of Updates

January | February | March | April | May

[New Updates]

May

• [5/28/2025] JCT Updates Score of House Bill: The Joint Committee on Taxation (JCT) released a revised score on the already House-passed version of the OBBB to account for various last minute changes, including the increase on the state and local tax (SALT) deduction cap to $40k. The new estimate places the cost of the bill at just over $3.9 trillion.
• [5/22/2025] House Passes OBBB: Early in the morning of Thursday, May 22, the U.S. House of Representatives passed its version of the OBBB (H.R 1) in an extremely narrow 215-214 vote. Two members of the Republican caucus joined all Democrats in voting against the measure, and one Republican member voted “present.” The package now heads to the Senate where it will almost certainly undergo substantial changes and possibly require a conference process prior to final passage. While the bill does focus on municipal bonds, it does include a number of provisions that will likely directly and indirectly impact the municipal market, including:
  • [LIHTC and Housing Bonds] Sec. 111109. Modifications to low-income housing credit (LIHTC): Among various other changes, this section would alter the requirement for 4% LIHTC that at least 50 percent of the aggregate basis of the building and land be financed with tax-exempt bonds subject to a state’s private activity bond (PAB) volume cap. The new requirement would drop from 50 to 25 percent of the aggregate basis. Several past Congresses have floated this proposal, dubbed the “LIHTC Fix,” as a means to alleviate state volume cap pressures and expand LIHTC availability.
  • [Qualified Small Issue Bonds] Sec. 111002. Deduction of domestic research and experimental expenditures: This section would create a new section of the code, Section 174A, that would allow taxpayers for a period of time to immediately deduct domestic research or experimental expenditures. Along with other coordinating changes, this provision would also harmonize these changes with the consideration of capital expenditures not taken into account when determining the aggregate authorized face amount for qualified small issue bonds under Section 144(a)(4)(C).
• [5/21/2025] OBBB Manager’s Amendment: The House Committee on Rules adjourned in the evening of May 21, 2025 without a vote on the package. Shortly thereafter, the Budget Committee reconvened and Republican leadership released text of a manager’s amendment that offers strategic changes to various portions of the OBBB in an effort to win over hardliners. Analysis on the changes is ongoing.
• [5/21/2025] Rules Committee Meeting: The House Rules Committee convened at 1:00am on Wednesday, May 21, to discuss and set the terms for a forthcoming floor vote on the One, Big, Beautiful Bill (OBBB) Act. House leadership is expected to introduce a manager’s amendment that would address outstanding policy disputes within the Republican caucus, including how to address the SALT cap. As of 11:00am, the Rules Committee hearing was ongoing and no manager’s amendment has been released. Speaker Mike Johnson (R-LA) is reportedly working with the SALT caucus on a deal to raise the SALT cap to $40k along with other promises and restrictions.
• [5/18/2025] Budget Committee Advances Tax Bill: The House Budget Committee voted to advance the tax bill out of committee during a hearing held late in the evening of Sunday, May 18. House leadership reportedly offered to accelerate the implementation date for new proposed work requirements on Medicaid from 2029 to December 31, 2026 in order to coax several fiscal conservatives who had threatened to reject the bill. The four hardline conservatives, who tanked the Friday committee vote, cast their Sunday vote as “present” in order to allow the bill to proceed out of committee. Fiscal conservatives continue to push for deeper cuts to Medicaid and select clean energy tax credits, while the “SALT caucus” continues to reject the proposed increase to $30k for the state and local tax (SALT) deduction.
• [5/16/2025] Budget Committee Rejects Tax Bill: The House Budget Committee voted 16-21 against advancing the One, Big, Beautiful Bill (OBBB) Act. Several conservative Republican members defected from the rest of the party citing concerns pertaining to outstanding JCT scores on certain aspects of the bill and a desire to see deeper cuts to energy tax credits and Medicaid.
  • Text of House Budget Committee Print >

• [5/15/2025] House Budget Schedules Markup: The House Committee on Budget noticed a markup hearing for the One, Big, Beautiful Bill Act scheduled for the morning of Friday, May 16. The Budget Committee’s role is to assemble the various contributions passed by each committee into a comprehensive bill. As of the afternoon of Thursday, May 15, it remains unclear if the Budget Committee has the votes to advance the package.
• [5/14/2025] W&M Advances Package in Markup: The Ways and Means Committee held a markup into the night on May 13. The Committee advanced the bill along party lines, clearing a major obstacle and placing the package on a clearer path to a full floor vote before Memorial Day. NEXT STEPS: After all the House Committees clear their portions of the package, the House Budget Committee will stitch the various sections together into one comprehensive package. The House Rules Committee will then schedule a hearing to finalize the procedures for a floor vote. Amendments may be offered at the Rules Committee to address last minute items, including potential changes to the proposed $30k cap to individual state and local tax (SALT) deductions. Municipal market participants should pay close attention to the procedural steps over the next several weeks. The Senate will also likely make changes to whatever package passes the House.
• [5/12/2025] W&M AINS Text Released: The Chairman of the Ways and Means Committee, Rep. Jason Smith (R-MO), released an Amendment in the Nature of a Substitute (AINS) to the text released on May 9. As expected, the updated text puts forth a host of revenue raising proposals that were absent from the first iteration of text released by the Committee. It also proposes elevating the cap on state and local tax (SALT) deductions from $10k to $30k, although the SALT caucus has already rejected this offer. Notably, the AINS does not include any immediately apparent proposal to broadly curtail the tax-exempt bond market. Instead, it proposes reducing the volume cap subjected tax-exempt bond financing requirement for 4 percent Low Income Housing Tax Credit (LIHTC) from 50 to 25 percent—a proposal colloquially known as the “LIHTC Fix.” It also proposes slight modifications for qualified small issue bonds. These observations result from an initial analysis conducted by NABL and may evolve as the market fully digests and analyzes the AINS. While the omission of provisions harmful to the tax-exempt bond at this juncture is highly welcomed news, the situation remains fluid and subject to rapid changes. Municipal market participants should continue to conduct outreach to the members of Congress to emphasize the importance of tax-exempt bonds to American communities.
  • Section by Section Summaries >
  • Updated Revenue Estimates (“Score”) from the Joint Committee on Taxation (JCT) >

• [5/10/2025] JCT Scores “Skinny” Bill: The Joint Committee on Taxation (JCT) released estimates for the House Ways and Means starting text, described immediately below, and scored the preliminary portions of the package to cost just under $5 trillion over the next 10 years. Read JCT Report >
• [5/9/2025] W&M Releases Tax Starting Text: The Ways and Means Committee released 28 pages of legislative text outlining a starting point for an upcoming House reconciliation bill. The bill notably does not include a number of outstanding policy items, including how the $10k cap on state and local tax deductions will be addressed. With the exception of a few small provisions, the text also does not include many revenue raising provisions (“pay fors”). While the legislative text does not include any provisions directly related to tax-exempt municipal bonds, it is critical to note that additional legislative text is likely between now and the scheduled Committee markup on Tuesday, May 13. Read W&M Starting Text >
• [5/9/2025] Bessent Estimates “X-Date” in August: Treasury Secretary Scott Bessent indicated in a letter to Speaker Johnson that the federal government would likely reach its “x-date,” the date on which the federal government will exhaust its cash and extraordinary measures, sometime in August. He urged Congress to address the federal government’s debt ceiling by mid-July to avoid disruptions. Congressional Republicans aim to address the federal government’s self-imposed borrowing limit via an upcoming budget reconciliation package. Read Letter >

April

• [4/30/2025] Transportation and Infrastructure Markup: The House Committee on Transportation and Infrastructure (T&I) held markup on and advanced its contributions to the House’s reconciliation package. As proposed, the legislation would reduce the federal deficit by $10 billion over the next 10 years, make a series of increased investments to the Coast Guard and air traffic controllers network, rescind a host of funding streams authorized under IRA, and impose an annual car registration fee of $250 for electric and $100 for hybrid vehicles. The markup notably scrapped a plan to impose a $20 annual vehicle registration fee that had initially been proposed by the committee. Committee Information >
• [4/30/2025] Financial Services Markup: The House Committee on Financial Services held markup on and advanced its contributions to the House’s reconciliation package. As proposed, the legislation would reduce the federal deficit by $1 billion over the next 10 years, fold the Public Company Accounting Oversight Board (PCAOB) under the SEC, substantially cut funding to the Consumer Financial Protection Bureau (CFPB), rescinds certain funding for the Department of Housing and Urban Development (HUD) authorized under the Inflation Reduction Act (IRA), and a host of other changes in the financial services and consumer protection space. Committee Information >
• [4/29/2025] Johnson Signals W&M Markup Next Week: Speaker Mike Johnson (R-LA) told reporters that he expects the House Ways and Means Committee, which has jurisdiction over the tax code, to markup and vote on its portion of the reconciliation package next week. Various other committees began work on their aspects of the large forthcoming package, but the Ways and Means Committee has reportedly been waiting to conduct its process until it knows the outcome of work conducted by other committees. To date, no legislative text proposals have been made public from the Ways and Means Committee.
• [4/28/2025] Markup Begins: Various House Committees begin markup on their contributions to a larger package. Notably, the House Ways and Means Committee is not expected to begin public markup work on their portion of the bill until the following week.

• [4/14/2025] HFSC Letter in Support of Munis: Republican leaders on the House Financial Services Committee send a letter (dated April 10, 2025) in support of preserving tax-exempt municipal bonds to the leadership of the Ways and Means Committee.

• [4/10/2025] House Passes Revised Senate Budget Resolution: Two House Republicans joined all the Democrats in voting against the measure, which ultimately prevailed with the support of the remainder of House Republicans in a 216 to 214 vote.
• [4/5/2025] Senate Passes Budget Resolution: Early on Saturday morning, the Senate voted along party lines (51 to 48) to adopt the budget resolution outlined immediately below.
• [4/4/2025] House Dear Colleague Letter: A bipartisan group of 25 members of the House led by Rep. Don Bacon (R-NE) sent a Dear Colleague letter in support of tax-exempt municipal bonds to Ways and Means leadership. Read Letter >
• [4/2/2025] Senate Unveils New Budget Blueprint: The Senate Committee on Budget unveiled a new budget resolution that moves the Senate’s starting reconciliation salvo closer in line to the House but demonstrates continued differences between the two chambers. View Second Proposed Senate Budget Resolution >
  • What’s In the Resolution: The resolution brings the Senate’s proposed plan closer inline to those in the House, but it continues to deviate from the House version in some potentially significant ways. It provides for a $5 trillion increase to the federal debt; instructs Committees to aim for $1.5 trillion in cuts to federal expenditures; but notably sets a deficit reduction floor for Committees of a few billion dollars.
  • “Current Policy” vs. “Current Law”: The Senate’s second resolution relies on a method of accounting for the cost of TCJA extensions known as “current policy” baseline, which allows the cost estimation of any forthcoming reconciliation package to assume expiring TCJA provisions exist in perpetuity when considering the baseline. The move essentially allows the Senate to project that the cost of further TCJA extensions will not materially increase the federal government’s tax expenditures and would greatly reduce pressure to find revenue offsets to pay for such extensions. It remains a significant difference from the House budget resolution, which relies on “current law” baseline and assumes extending expiring TCJA provisions, which expire on December 31, 2025 absent legislation, will increase federal expenditures for the purpose of accounting the cost of a forthcoming reconciliation package.
  • Next Steps: The Senate could begin the process on voting on the package as soon as Thursday, April 3. A Senate vote on the package by week’s end would possibly allow the House to clear it before Congress adjourns for a two week Easter recess. Speaker Johnson has reiterated his desire to deliver a final package to the President for signature by Memorial Day, but many uncertainties remain that could drag the reconciliation debate through the summer and into fall.

March

• [3/26/2025] CBO: X-Date Likely in August/September: The Congressional Budget Office (CBO) released its estimate that “if the debt limit remains unchanged, the government’s ability to borrow using established ‘extraordinary measures’ will probably be exhausted in August or September 2025.” Read CBO Report >

February

• [2/25/2025] House Passes Budget Resolution: Late in the evening on Tuesday, February 25, the House of Representatives passed its version of a budget resolution. This version of the budget resolution differs from a resolution that passed the Senate last week.
  • What is in the Resolution: The House resolution establishes a federal budget for FY2025, sets budgetary levels for the federal government for FY2026-2034, and provides instructions to specific Committees to begin working on a forthcoming budget reconciliation package that would reconcile federal revenues and expenditures to reach these budgetary levels. Those instructions direct the Ways and Means Committee to increase the federal expenditures over such time by no more than $4.5 trillion. This deficit threshold is to be reduced proportionally in the event that Committees, including the Committee on Ways and Means, fail to enact offsets that reduce that deficit by at least $2 trillion.
  • What It Means in General: House Republicans plan to use this budget resolution to begin a budget reconciliation process that seeks to increase federal expenditures, which would include outlays and tax expenditures, by $4.5 trillion and reduce federal spending or increase revenues by $2 trillion. This subsequent reconciliation bill would aim to address the majority of the Republican party’s economic agenda—including extension and modification of select expiring provisions of the TCJA, other tax priorities, increased spending on national and border security, and addressing the pending U.S. federal government debt ceiling.
  • Next Steps: Both the House and Senate must pass identical budget resolutions for both chambers to commence work on a reconciliation package. It seems likely that the Senate will now shift toward the House’s strategy to advance their economic agenda via one large bill instead of two separate ones. Members of Congress, however, will likely need to iron out remaining substantive differences across the chambers via either a formal conference committee or an informal pre-conference process. Once both chambers agree to a budget resolution, we will likely see the House take a lead start in suggesting and vetting specific policy proposals consistent with and seeking to accomplish the goals set forth in the budget resolution. The process of reconciliation is rather rigid and involves a number of steps.
  • What It Means for the Municipal Market: At this time, Republicans are still aiming to use this budget reconciliation process to address the debt ceiling. In theory, the process would need to conclude before the approach of the debt ceiling x-date, which is likely some time in or around May. This week’s vote represents a significant advance in the Republican effort to address the expirations of the TCJA in the first half of this year. While this plan is ambitious, municipal market participants should prepare for developments to occur along this timeline. Despite inclusion on the House Budget Committee’s “Menu of Options,” the tax exemption continues to enjoy broad bipartisan support, and we have heard minimal threats to the tax-exempt status of municipal bonds from congressional offices. It is worth noting, however, that details surrounding offsets and revenue raisers will likely only manifest after both chambers pass identical budget resolutions and the elimination or reduction of the tax exemption for municipal bonds remains a potential option for negotiators. Municipal market participants should continue to advocate on behalf of the tax exemption.

• [2/20/2025] Senate Advances Budget Resolution: The full Senate voted 52 to 48 to advance the chamber’s version of a budget resolution.
• [2/19/2025] Trump Backs House Approach: After previously maintaining no affirmative preference on whether his economic agenda was advanced via one or two reconciliation packages, President Trump threw his support behind the House budget resolution in a Truth Social post. The move surprised Senate leadership who spent the week working to advance their own budget resolution that would lay the groundwork for a two bill approach. Vice President JD Vance later told negotiators that while the President preferred a single bill approach, the White House understood the need for a backup approach to advance as well.

• [2/13/2025] House Advances Budget Resolution: The House Budget Committee voted to advance its version of a budget resolution along party lines. Leaders of the House Freedom Caucus endorsed the package after striking an agreement that would effective limit the amount of tax cuts allowed in a forthcoming package if negotiators are unable to reach $2 trillion in spending cuts.
• [2/12/2025] House Unveils Competing Budget Resolution: In response to the Senate’s shift toward working on its own budget resolution, House leadership released their own version that seeks to tee up one forthcoming large reconciliation package. Unlike the proposal in the Senate, the House package would seek to tackle most of President Trump’s economic agenda, including expirations of the TCJA, in one singular reconciliation package. It would:
  • Raise the debt ceiling by $4 trillion, which would effectively punt the next debt ceiling by an estimated two years
  • Provide for $4.5 trillion worth of tax cuts and additional spending;
  • Provide for $300 billion of new defense and border security spending;
  • And, instruct negotiators to cut at least $1.5 trillion in other expenses.
• [2/12/2025] Senate Budget Committee Advances Resolution: After holding a markup of the budget blueprint released the week prior, the Senate Committee on Budget voted along party lines to advance the measure on to a floor vote.
• [2/7/2025] Senate Releases Budget Resolution: Coming out of a convening in Mar A Lago, the Senate Budget Committee Chairman, Lindsey Graham (R-SC), released his chamber’s budget resolution framework. Graham announced that the Senate Budget Committee would debate the blueprint next Wednesday and Thursday with a possible vote on the measure in the second half of next week. The Senate’s move comes as the House continues to work toward finding consensus on their chamber’s blueprint. The Senate’s blueprint is more limited in scope than what the House is expected to produce. It would authorize $85.5 billion in new annual spending to support investments in border security, national security, and domestic energy production.
• [2/6/2025] Trump Outlines Tax Reform Priorities: During a meeting with Senators at Mar A Lago, President Trump outlined his priorities for a forthcoming tax package. Information provided to the media about the meeting specifically referenced the President’s desire to “eliminate all the special tax breaks for billionaire sports teams owners.” Read More from Politico >
• [2/6/2025] Key Senators Want to Advance Their Own Budget Resolution: Senate Budget Committee Chairman Lindsey Graham (R-SC) announced this week that his chamber will attempt to advance its own version of a budget resolution, teeing up a process for the Senate to move before the House on a budget reconciliation package. Unlike the House, the Senate has favored advancing their priorities via two bills: a preliminary package to address immigration and energy, and a second one to address expirations of the TCJA later in the year.
• [2/4/2025] Higher Ed “Menu” Options: A new document was released, entitled “Possible Reconciliation Revenue Options Affecting Higher Education.” The document appears to be a reiteration of the earlier “Menu” of options with only specific line items related to higher education in America. It lists “Eliminate Exclusion of Interest on State and Local Bonds,” but does not include the bullet discussing the tax exemption on all other bonds, which would presumably include qualified 501(c)(3) bonds.

January

• [1/31/2025] PFN Letter to Congress: The Public Finance Network (PFN), including NABL, submits a letter to members of the 119th Congress in support of the tax exemption on municipal bonds. Read Letter >
• [1/17/2025] House “Menu” of Options: POLITICO published a document released from the House Budget Committee that appears to list 50 pages of potential revenue raisers that could pay for at least part of a large reconciliation bill later this year. The list appears to be a basis for discussion rather than concrete proposals that have achieved broad consensus from committee members. It is a large list of potential revenue raising options, extending far beyond the realm of tax. Although many of the options are likely unviable and specifics remain ambiguous, the document does represent the first written document from this Congress suggesting to alter the tax-exempt status of interest on municipal bonds. It also further validates the early advocacy work by municipal market groups such as NABL and illuminates the need for market participants to advocate early and often for tax-exempt municipal bonds. Some of the listed options include changing existing law to:
  • Eliminate exclusion of interest on state and local bonds;
  • End tax preferences for “other bonds” (with a note indicating that this means “private activity bonds and Build America Bonds”);
  • Eliminate “nonprofit status” for hospitals;
  • Expand taxes on large college endowments;
  • Advance other proposals relating to entitlement reforms, the state and local tax (SALT) deduction, and other development tax incentives.