DC Update: Sweeping Muni Legislation Introduced in House
Last night, Rep. Terri Sewell (D-AL) introduced the “Local Infrastructure Financing Tools (LIFT) Act“ with support of the BDA, MBFA and the Public Finance Network.The legislation is a sweeping muni focused package that would restore tax-exempt advance refundings, raise the bank qualified limit, and create a new taxable direct pay infrastructure bond.
- The press release featuring a BDA quote of support can be viewed here
- The bill text can be viewed here
- The BondBuyer article can be found here
**The MBFA, as part of a quarterly fly-in series leading up to the 2025 Tax Cuts and Jobs Act debates, is hosting a fly-in on June 21st to discuss this bill, as well promote and advance municipal bonds on Capitol Hill. if you are interested in participating, please email Brett Bolton at bbolton@bdamerica.org.
The Sewell bill includes several BDA and MBFA priorities, including:
- Reinstate advance refundings as they were in pre-2018 tax law: This provision would take effect 30 days after the date of enactment. (It should be noted this is the same provision introduced by Rep. Kustoff (R-TN) earlier this congress.)
- Expand bank-qualified bonds: The bill would raise the annual issuance limit for bank-qualified bonds from $10 to $30 million, an index that limits annually for inflation, and apply the issuance test at the level of the borrower, not the issuer, so that it will apply to small conduit borrowers. This would take effect upon enactment;
- The bill would establish a new category of tax-preferred financing for state and local governments to be known as American Infrastructure Bonds (AIBs): Similar Issuers would sell taxable bonds and receive a cash reimbursement from the federal government at a varied rate starting at 42% and ending at 30%. Reimbursement payments to issuers would be subject to sequestration.
