Powering Strong Communities

Senate Commerce Committee Chairman, Buttigieg support advance refunding bonds

U.S. Senate Commerce Committee Chairman Roger Wicker, R-Miss., and Peter Buttigieg, who is President Joe Biden’s nominee to serve as Secretary of Transportation, praised tax-exempt advance refunding bonds during Buttigieg’s nomination hearing on Jan. 21.

Speaking to Buttigieg at the hearing, Wicker noted that tax-exempt advance refunding bonds have historically been used to help state and local governments refinance debt at lower interest rates and asked the nominee “do you agree that they provide one more additional financing tool for state and local governments?”

“As mayor few things gave me more fiscal pleasure than to find that we could save taxpayer dollars by refunding previously existing debt,” said Buttigieg, adding that he thinks tax-exempt advance refunding bonds “hold a lot of promise for providing relief to state and local governments.”

Buttigieg is the former Mayor of South Bend, Ind.

Wicker noted that he and Senate Finance Committee member Debbie Stabenow, D-Mich., intended to reintroduce S. 4129 from the 116th Congress that would reinstate the ability to issue tax-exempt advance refunding bonds with the hope of seeing it enacted. He also asked the nominee for his support.

The Tax Cuts and Jobs Act of 2017 eliminated the ability to issue advance refunding bonds.

The American Public Power Association strongly supports enactment of legislation to reinstate advance refunding bonds.