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APGA is a member of the Public Finance Network (PFN), a coalition of associations and other organizations interested in municipal finance issues. This week, APGA joined other PFN members to send a letter to Congressional leadership urging them to reinstate the tax exemption for advance refunding bonds, expand the use of direct-pay bonds for infrastructure, and protect interest on tax-exempt bonds from being included in a proposed new federal corporate alternative minimum tax.

Direct-pay infrastructure bonds and advance refunding were both included in the initial House draft of the reconciliation package. However, the House recently released revised text for the Build Back Better Act (the bill that will move through the reconciliation process) that reflects negotiations with the Senate over the course of the last month. APGA was disappointed to see that Congress has removed both of those provisions from the current version.

The new version of the legislation also proposes a new corporate alternative minimum tax that would include interest on tax-exempt bonds. This will raise borrowing costs for communities who rely on bond issuances to finance vital infrastructure projects. The letter urges the House to create an exemption for this important municipal finance tool.

A copy of the letter is available here.

For questions about this article, please contact Emily Wong of APGA staff by phone at 202-470-4262 or by email at ewong@apga.org.