Search

The National Association of Bond Lawyers this week gained an influential supporter in its effort to persuade the Internal Revenue its fee for Service private letter to roll rulings. If an IRS user fee discourages people from using these services, it could be very costly - reducing voluntary tax compliance or increasing tax enforcement costs." "The IRS's previous PLR fee increases prompted taxpayers to stop submitting easy PLR requests, and the cost of processing the fewer complicated ones that remained has driven up the average cost of each PLR", Collins wrote. [Extracted from the article]

The article reports on the market performance of private activity bond (PAB) in the U.S. in 2016. According to an annual survey by the Council of Development Finance Agencies, PAB issuance subject to state volume caps increased for the third consecutive year in 2016. This indicates a huge jump by about 55%, beating the previous peak in 2010.

The Center on Budget and Policy Priorities said bankruptcy "could significantly raise states' cost of issuing bonds to pay for major transportation projects and other investments that boost the economy." [ABSTRACT FROM AUTHOR]

State and local government groups want the focus on reinstating tax-exempt advance refunding bonds and expanding the current financing tools. [ABSTRACT FROM AUTHOR]

The group is also urging Congress to enact enhancements for aggie bonds and industrial development bonds. [ABSTRACT FROM AUTHOR]

States overall are expecting Medicaid enrollment to continue growing in fiscal 2022 while the public health emergency also will end at some point in the coming fiscal year, forcing them to increase their state share of the cost. State budgets have largely recovered from the revenue losses caused by the COVID-19 pandemic, according to a new survey released by the National Association of State Budget Officers. The impact of that enrollment increase on state budgets has been minimized by an enhanced Federal Medical Assistance Percentage, or FMAP. [Extracted from the article]

The DOJ recommended that H.R. 1522 be renamed the Puerto Rico Statehood Act, "so as not [to] imply that admission of Puerto Rico as a state is a fait accompli." A new opinion issued by the Justice Department says Puerto Rico's admission as a state could legally include a transition period to temporarily continue the special bankruptcy provisions under PROMESA. But the uniformity clause of the Constitution would not be violated if the Oversight Board continued, the Justice Department said in its critique of a congressional bill giving Puerto Rico a path to statehood. [Extracted from the article]

Senate Majority Leader Chuck Schumer, D-N.Y., said Thursday that he is encouraging the bipartisan negotiations to continue while Democrats separately work on a Democrats-only package that could supplement the other. A broad expansion of the use of tax-exempt municipal bonds is a key financing tool that a bipartisan group of 21 senators has included in the newest infrastructure proposal circulating in Washington. [Extracted from the article]

CDFA also wants Congress to enact enhancements for aggie bonds and industrial development bonds as well as reinstate the tax exemption for advance refundings. The Council of Development Finance Agencies is including the enactment of tax-exempt private activity bonds for electric car charging stations among its top lobbying priorities for inclusion in federal infrastructure legislation. [Extracted from the article]

Massachusetts told the Supreme Court Tuesday that New Hampshire's lawsuit contesting its temporary income tax on remote workers is no longer relevant because the pandemic emergency is over in the Bay State. New Hampshire last year asked the Supreme Court to take the case because 103,000 of its residents, about 15% of its workforce, worked for Massachusetts-based companies in 2017. Calls N.H. Remote Worker Suit Irrelevant. [Extracted from the article]

The Biden administration last month asked the justices to not take this case involving temporary taxation of remote workers who live in New Hampshire and formerly worked in Massachusetts. The nine justices of the Supreme Court are scheduled to huddle June 24 to decide whether a potentially landmark case involving the taxation of telework will be placed on their docket for the fall term. New Hampshire, which has no state income tax, filed the lawsuit after Massachusetts enacted a temporary rule continuing to impose Massachusetts income taxes on out-of-state commuters who began working from home because of the pandemic. [Extracted from the article]

Two bipartisan Senate infrastructure proposals have raised hope that the Biden administration will avert a Democrats-only approach. Maria Cantwell, D-Wash. and Roger Wicker, R-Miss., are backing one of the bipartisan infrastructure proposals. [Extracted from the article]

The House version of the water bill is for $50 billion and passed the House Transportation and Infrastructure Committee in the early part of the 19-hour markup. Transportation and Infrastructure Committee Chairman Peter DeFazio, D-Ore., is lobbying the House Democratic leadership to bring a floor vote under regular order and not under the reconciliation process. The House Transportation and Infrastructure Committee approved 38-26 a $547 billion surface transportation bill early Thursday with the support of only two Republicans. [Extracted from the article]

"Jackie has worked to promote fiscal responsibility and job creation throughout her time in office, recently introducing legislation that would maximize private bond financing for multifamily housing, for example", Ruppersberger said. Tax-exempt bond advocate Rep. Jackie Walorski of Indiana is the new Republican co-chair of the congressional Public Finance Caucus. Walorski comes to the position as a key Republican on the tax-policy writing House Ways and Means Committee with a strong record of supporting tax-exempt bond financing for state and local governments. [Extracted from the article]

The Treasury is generously allowing all state and local jurisdictions to use an assumed 4.1% rate of growth in calculating their revenue shortfalls to qualify for federal aid under the American Rescue Plan. That's how long Congress has given state and local governments to spend the $350 billion in State and Local Fiscal Recovery Funds. Some local governments have dedicated lodging and convention taxes that were hard-hit by the pandemic and needed to float short-term debt to make up the shortfall. [Extracted from the article]

The bipartisan hug that ended Wednesday's Senate Environment and Public Works Committee's unanimous approval of a five-year highway bill might best summarize how progress on infrastructure is being made. Chairman Tom Carper, D-Del., and ranking Republican Sen. Shelly Moore Capito abandoned what recently had been COVID-19 social distancing protocols to embrace to celebrate the 20-0 vote immediately after the meeting ended. [Extracted from the article]

"Despite modest increases in recent years, the overall IRS budget is still 19% below its 2010 level, after adjusting for inflation", the liberal-leaning Center on Budget and Policy Priorities reported last month. Municipal bond issuers would be drawn into a widely-cast net of beefed-up tax enforcement by the Internal Revenue Service under legislation proposed Monday by Sen. Elizabeth Warren, D-Mass. The Biden administration has set a goal of continuing to significantly increase the IRS budget in the coming years to ramp up enforcement and close the so-called tax gap between taxes owed and taxes paid. [Extracted from the article]

Members of the House Ways and Means Committee on Wednesday highlighted a number of bipartisan bills they are sponsoring that would increase the number of municipal financing tools available for financing infrastructure. Rep. Richard Neal, D-Mass., the committee chairman, called for reviving direct-pay Build America Bonds GRAPH: Ideas Aired For Tools Of Finance PHOTO (BLACK & WHITE) When Rep. Terri Sewell, D-Ala., asked Eubanks for the No. 1 thing Congress could do to make her job easier, Eubanks said it would be restoration of the tax exemption for advance refundings. [Extracted from the article]

A revival of direct-pay Build America Bonds received bipartisan support Tuesday from the Democratic chairman and ranking Republican of the Senate Finance Committee. Wyden said he intends to work with Cra- po, Bennet and Wicker to ensure direct-pay bonds become part of whatever infrastructure legislation passes the Senate. [Extracted from the article]

Among hybrids, NASRA recognizes either cash balance plans or combination plans that are part defined benefit and part defined contribution. A new study of public employee pension plans finds that many state and local governments are converting to hybrid pension plans despite the limited short-term savings. Other systems make the hybrid plan entirely optional while still others split their retirement contributions into both a traditional plan and a defined contribution plan. [Extracted from the article]

After the meeting, the White House issued a statement saying Biden spent "nearly two hours working with them to identify areas where they could collaborate, especially with regard to infrastructure, on which the leaders agreed there was a need for investment." The White House meeting -which was the first for congressional leaders since 2019 - came during another week of Washington events held under the rubric of "infrastructure week" by the nonpartisan group United for Infrastructure. "There are bipartisan conversations in Washington that are happening and continuing", said Irma Esparza Diggs, of the National League of Cities. [Extracted from the article]

Thirty states will have half of their share of $350 billion in coronavirus relief aid withheld until February 2022 under guidelines announced Monday by the Treasury. Adam Levine, who researches state fiscal policy for The Pew Charitable Trusts, said that even though some states will receive this money in two payments, "the important thing is that lawmakers keep in mind this is one-time money and should not be used for recurring expenses.". [Extracted from the article]

The Billings, Montana school district reported Monday that the Montana Legislature's action will end the deduction from state income taxes for seven series of bonds. Bond issuers in Montana and Texas have separately reported an adverse impact on the tax-exempt status of their bonds in new public disclosures with the Municipal Securities Rulemaking Board. [Extracted from the article]

SLGS are typically used by state and local governments and other entities that issue tax-exempt municipal bonds because of yield restrictions and arbitrage rebate requirements under the Internal Revenue Code. The Treasury is expected to suspend the sale of State and Local Government Series securities at the beginning of August if there is no congressional deal to raise the debt limit. [Extracted from the article]

Rep. Josh Gottheimer, D-N.J., wants to use revenue from increased IRS enforcement to pay for a repeal of the cap on SALT deductions. Pressure is growing to use a proposed increase in federal tax enforcement as a way to offset a repeal of the $10,000 cap on the deduction for state and local taxes. [Extracted from the article]

Bipartisan Senate legislation would set a 30-day in-state threshold before states could levy income taxes on nonresident workers. Growing battles among the states over how they levy income taxes on nonresident remote workers could be resolved under legislation that's languishing in Congress. This year the Senate bill added a two-year pandemic-related waiver to the proposal in order to not penalize workers who temporarily have relocated to another state. [Extracted from the article]

Public finance groups said Thursday that Biden's speech to a joint session of Congress served as a reaffirmation that the new administration wants lawmakers to pass his infrastructure-oriented American Jobs Plan this year. Brett Bolton, speaking for both the Bond Dealers of America and Municipal Bonds for America, said the two groups "remain optimistic about municipal bonds provisions being included as part of the Biden administration's Build Back Better initiative." President Biden is giving infrastructure legislation a top priority and a sense of urgency that his predecessors have not. [Extracted from the article]

DC's Interim Chief Financial Officer Fitzroy Lee testified at a House hearing in March that the District in many respects already functions as a state. Rep. Robert Gibbs, R-Ohio, speculated during the same hearing that DC's good bond rating might be good because its finances are backed by the full force of the federal government. The DC statehood admission legislation cleared the House Thursday on a strictly partisan vote with no Republican support. [Extracted from the article]

Many congressional Republicans opposed direct aid to state and local governments as part of the emergency relief even though it was sought after by Republicans elected officials at other levels of government. Connolly said he hope to increase "local government literacy" among his colleagues in Congress. State and local government finance issues are getting an additional voice in Congress through the formation of a new caucus of former state and local officials. [Extracted from the article]

If the proposal becomes law, 99.9% of issuers are likely to opt for direct-pay bonds rather than tax credit bonds which are "a clunky product", according to Ed Oswald, an attorney with Orrick Herrington & Sutcliffe in Washington. Senate Finance Committee Chairman Ron Wyden, D-Ore., has reintroduced legislation that would restore direct-pay or tax credit bonds in the form of Clean Energy Bonds. [Extracted from the article]

The legislation would maximize PAB financing for multifamily housing, according to Emily Cadik, executive director of the Affordable Housing Tax Credit Coalition. Two bills expanding the use of tax-exempt bond financing have been reintroduced in Congress with a good chance of being incorporated into infrastructure legislation. Bank-qualified debt, also known as BQ debt and bank eligible, allows the bank to deduct the carrying cost of that debt as a business cost. [Extracted from the article]