House Municipal Finance Caucus Chairmen Dutch Ruppersberger, D-Md., and Steve Stivers, R-Ohio, on May 15 introduced legislation to reinstate the ability to issue tax-exempt advance refunding bonds.
Tax-exempt advance refunding has historically been an important tool in reducing financing costs. In the five years prior to their repeal by the Tax Cuts and Jobs Act of 2017, tax-exempt advance refunding bonds provided net present value savings of at least $600 million to public power utilities.
Nationwide, advance refundings saved all levels of state and local government at least $14.3 billion during the same time period.
The bill, H.R. 2772, has eight additional co-sponsors: Rep. Terri Sewell, D-Ala., Rep. Lee Zeldin, R-N.Y., Del. Eleanor Holmes Norton, D-District of Columbia, Rep. Raja Krishnamoorthi D-Ill., Rep. John Garamendi, D-Calif., Rep. Derek Kilmer, D-Wash., Rep. Henry Cuellar, D-Texas, and Rep. Andy Barr, R-Ky.
The American Public Power Association said it strongly supports the legislation.
The Association’s members in February approved several new policy resolutions including one in which the Association urges Congress to improve tax-exempt municipal bonds.
At a briefing with reporters held at the rally, Sue Kelly, President and CEO of the Association, said that the Association would like to see certain improvements to tax exempt financing. “One would be to return our ability to do what’s known as advance refundings,” she said.
And Desmarie Waterhouse, Vice President, Government Relations and Counsel at the Association, noted at the press briefing that the Association has identified six national priorities for 2019 including modernizing municipal bonds.
Reinstating tax-exempt advance refunding bonds is a top priority of the Municipal Bonds for America Coalition and the Public Finance Network.
Municipal Bonds for America is a non-partisan coalition of municipal bond issuers and state and local government officials along with other municipal market professionals working together to explain the benefits of the tax-exempt municipal bond market. Kelly is a participating member of the coalition’s executive committee.