BDA infrastructure priorities on Capitol Hill remain: The reinstatement of advance refundings, raising the limit of bank qualified debt, and expand the usage of PABs.
*While discussions surrounding a new Build America Bonds program untethered from sequestration continue, there is yet to be legislation drafted*  

Below are bills that are currently being considered in the 116th Congress:  
  • Increase in the private activity bond annual state volume caps;

The House Majority recently introduced and passed a robust infrastructure bill in the form of the Surface Transportation Reauthorization.  The package includes many BDA provisions such as:
  • Reinstatement of advance refundings;
  • Enhancements to small issue industrial development bonds for small manufacturing companies and first time farmers;
  • Private activity bond financing for electric vehicle charging stations; 
  • Exempt private activity water and sewer bonds from requiring volume cap allocation; and
  • Expansion of bank qualified bonds;
  • Reinstatement of direct pay bonds with reimbursement rates starting at 42% in 2020-2024 and declining to 30% in 2027 and thereafter
  • Raise the national volume cap for private activity highway bonds.
  • The bill would amend Section 149(d) of the Tax Code to reinstate advance refunding to free up much needed capital for state and local governments and assist in the long-term economic recovery following the COVID-19 crisis 

  • Bipartisan legislation that would fully reinstate advance refundings
  • Standalone bill that follows language provided in the House Moving America Forward Act

  • Sponsored by House Municipal Finance Caucus Co-Chairs;
  • Would fully reinstate the ability for issuers to refinance their debt via tax-exempt advance refundings;
  • The bill currently has 28 co-sponsors.

  • Introduced by Rep. Terri Sewell (D-AL) who sits on the powerful tax writing Committee on Ways and Means;
  • The bill would raise to $30 million from $10 million the deductibility of bank qualified debt; and
  • Set the $30 million limit on a borrower-by-borrower basis, rather than aggregating all bank-qualified bonds issued by a conduit issue.
  • The bill currently has 5 co-sponsors.

  • Bi-cameral and bi-partisan legislation would expand the use of tax-exempt PABs;
  • Projects covered under the legislation include: airports; ports; transit; freight and passenger rail; roads; bridges; flood projects; inland and costal waterway improvements; wastewater and sewage facilities; and broadband infrastructure;
  • Creates new infrastructure tax credit to help fund infrastructure projects through P3's
  • The bill has 4 co-sponsors in House, 1 in the Senate.
  • Repeal the separate dollar limitation on the use of small issue bond proceeds for depreciable property

H.R 5422 - The MAMBA Act

  • Expand the definition of “manufacturing facility” Eliminate restrictions on “directly related and ancillary facilities”
  • Increase the maximum IDB size limitation from $10 million to $30 million Increase the limitation on small issue bond proceeds for first-time farmers

  • American Infrastructure Bonds (AIBs) would allow state and local governments to issue taxable bonds for any public purpose expenditure that is eligible to be financed with tax- exempt bonds. 
  • IBs would be available to all state and local governments to use as they determine what is best for them. 
  • AIBs would be modeled as a “direct-pay” taxable bond. 
  • The Treasury Department would make direct payments to the issuer of the bonds at 35% after the date of enactment and down to an estimated revenue neutral rate of 28% starting in 2026. 
  • AIBs would improve upon BABs because the Treasury payments are exempt from sequestration
  • AIBs could be used for any expenditure that is eligible to be financed with tax-exempt bonds  including roads, bridges, tunnels, canals, ports, water systems, sewage treatment facilities, storm water management systems, pipelines, utility system expansions and environmental and safety upgrades, long-term natural gas supplies for municipal utility gas distribution systems and electric generation facilities, long-term supplies of electricity for municipal electric utility systems including renewable energy projects, broadband and other telecommunications systems, rail facilities, subways, and other purposes.
In recent years, there have been no shortage of infrastructure proposals on Capitol Hill and from the Administration.  One common theme is the recognition of the important role that municipal financing will play in any long-term infrastructure recovery.  This recognition is in no small part due to long standing municipal market advocacy from the BDA, as well other muni participants involved with the Public Finance Network, and previously with the Municipal Bonds for America Coalition.  
BDA Infrastructure Priorities
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