Tax Reform One Step Closer to the Finish Line
Congress is one step closer to finally passing H.R. 1, The Tax Cuts and Jobs Act, as the bill now goes to a conference committee to work out the differences between the House and Senate. House Conferees have been named and include two members from Texas. Representative Kevin Brady (R-The Woodlands), who is the House author of the bill, and Congressman Lloyd Doggett (D- Austin) will be responsible for negotiating on behalf of the House. The Senate named its conferees on Wednesday night which include Senator John Cornyn (R- Texas).
Both versions of the bill preserve the tax exemption for municipal bonds. However, the House eliminated the authority of cities to issue Private Activity Bonds (PABs) while the Senate preserves current authority to issue PABs. PABs are a critical funding tool used to fund upgrades to airports, water treatment facilities, transportation systems, and other critical components of city infrastructure. Both versions also eliminate advance refunding bonds which allow cities to do a one-time refinance on bonds to achieve lower rates and cost savings for taxpayers.
City officials across Texas should contact Congressman Brady and Doggett, as well as Senator Cornyn, urging them to (1) support the preservation of the tax exemption on municipal bonds; (2) concur with the Senate version on PABs; and, (3) reinstate the ability of cities to use advance refunding bonds.