In 2016, many GFOA member organizations responded to proposed regulation that would redefine political subdivisions according to the Internal Revenue Service. These proposed regulations would make it difficult for authorities to issue tax-exempt bonds. GFOA’s response to and testimony concerning the proposed regulations in 2016 explained why the proposed amendments would add complexities and burdens to political subdivisions (i.e., public authorities) that provide essential public services.
In early July 2017, the administration released a request for comments regarding the results of Executive Order 13789, which asks agencies to identify regulations that are burdensome and too complex in our current environment for potential elimination or withdrawal. GFOA’s comments, filed August 7, articulate the same key points: the far-reaching scope and potential negative impact to political subdivisions across the United States; the disruption to states’ rights to create these entities; and the creation of roadblocks that would hinder the ability of the political subdivisions to effectively, efficiently, and economically serve communities.
The proposed regulations would have an overreaching effect on all political subdivisions that are well established, formed under state law, and provide significant public benefit. Therefore, GFOA has respectfully requested that the proposed regulation be withdrawn. Municipal bonds build infrastructure, and there should be no outstanding proposed regulation that would make it more difficult for issuers to access the public markets.