Bonds and Financing

Senate clears bill that prohibits issuance of advance refunding bonds

The U.S. Senate on Dec. 2 approved its version of the Tax Cuts and Jobs Act (H.R. 1), which includes a prohibition on the issuance of tax-exempt advance refunding bonds after Dec. 31, 2017.

The bill cleared with a nearly party-line, 51-to-49 vote. Citing budget concerns, Sen. Bob Corker, R-Tenn., was the only Republican to vote against the measure.

The House has scheduled a vote for the evening of Dec. 4 to vote to proceed to a House-Senate conference to formally resolve differences between the Senate-passed bill and the bill passed by the House in November.

President Trump and congressional Republican leaders have said they want a final agreement reached, passed by Congress, and signed into law by President Trump before Christmas.

During the Senate’s four days of debate of H.R. 1, close to 300 amendments were filed for consideration, but just 18 came to a vote and, of those 18, just two were adopted.

Three advance refunding bonds amendments that had been filed were never formally offered and never came to a vote. As a result, as passed, the Senate bill includes a prohibition on the issuance of tax-exempt advance refunding bonds after December 31, 2017. This makes the bill identical in this respect to the House-passed version of the bill.

The House and Senate have rules in place for “conference agreements” that prohibit changes to provisions on which the two chambers already agree.

The House version of H.R. 1 passed 227-205 on Nov. 16 and included a repeal of advance refunding bonds and a repeal of private activity bonds.