Dec. 1, 2017 — As of midday Friday, the Senate GOP leadership indicated a full Senate vote on Senate tax reform legislation was likely.
Although a few members have not committed their support for the Senate version of the bill, other holdouts now have, and Republicans are likely to have the 50 votes necessary to pass the bill. Senate Majority Leader Mitch McConnell stated, "We have the votes," and let others note that votes would begin later on in the day. (New York Times, 12/1/17)
On November 16, the House passed its version of tax reform legislation, HR 1, by a vote of 227-205. Attention now turns to a revised Senate bill, which has key differences from HR 1.
On November 8th, WEF and other water sector organizations sent a letter to House Ways and Means Committee Chair Kevin Brady expressing a strong opposition to a provision in HR 1 that would repeal the ability to advance refund municipal bonds (Section 3602).
Municipal bonds are a fundamental financing tool for water and wastewater – critical public services with significant investment needs that are projected to grow over the coming decade. While WEF and the other organizations are relieved that the House bill maintains the tax-exempt status for municipal-issued bonds for water and infrastructure projects, Section 3602 - repealing the ability to advance refund municipal bonds - is concerning.
In 2016 alone, nearly $38 billion in tax-exempt municipal bonds were issued for water and wastewater projects, helping local communities meet critical infrastructure needs. Through advance refunding, the municipal water and wastewater sector has a long history of being able to respond to interest rate fluctuation. Advance refunding leads to additional funds being available for utility investment and/or significant savings of water ratepayer and taxpayer dollars.
The Senate bill does not include a provision to remove advance refund bonds. It also does not include a provision to repeal Private Activity Bonds (PAB), although the House-passed bill still includes the repeal of PABs despite a push to remove that provision.
Following passage of the Senate bill, Representatives and Senators are expected to vote to go to Conference next week to iron out the differences in the two versions before sending a final bill to the President to be signed into law.
Make your voice heard
Help ensure tax-exempt status is maintained for municipal issued bonds.
