Multiple committee markup hearings were held for portions of the Build Back Better Act in Congress throughout the past week. On September 15, late in the afternoon, the House Ways & Means Committee approved the tax provisions underpinning the Build Better Act, bringing the possibly $3.5 trillion budget reconciliation bill one step closer to becoming law.
“Mark up” hearings precede a general vote by the entire House of Representatives, giving committee members the opportunity to debate, offer amendments, and make general revisions to legislation under consideration. Hearings have taken place over the past several days amidst a barrage of looming deadlines, all of which impact the “money matters” of the federal government.
On September 14, on the third day of debate over the Build Back Better Act, the US House Committee on Ways & Means discussed “subtitle F” of the budget reconciliation bill, which covers infrastructure financing & community development. This section of the budget bill contains multiple GFOA priorities as part of the Build Back Better Act, including:
Advance Refunding Bonds
- Allows eligible entities to save in financing costs through issuance of tax-exempt advance refunding bonds.
Expansion of Bank Qualified Debt
- Allows relatively “smaller” issuers to directly access tax-exempt financing through community banks
Qualified Infrastructure Bonds (QIBs)
- Similar to “Build America Bonds”, state and local government issuers of qualified infrastructure bonds can receive a federal subsidy as support for investing into their communities
The provisions come directly from the previously introduced Local Infrastructure Financing Tools (LIFT) Act, sponsored by public finance advocate Rep. Terri Sewell (D-AL). By including text from the LIFT Act, the Congresswoman remarked that “common sense bond financing opportunities” would be expanded for both local governments and non-profits. The Congresswoman specifically singled out tax-exempt advance refunding bonds as an excellent tool for managing tax-exempt debt and spurring infrastructure development.
For more information on GFOA legislative priorities and the legislation currently under debate, please see the links below:
- Build Back Better Act Text: Subtitle F-J
- Local Infrastructure Financing Tools Act (LIFT) Resources
- Tax-exempt Advance Refunding
- Bank Qualified Debt
- House Ways & Means Subtitle F Section-by-Section
GFOA’s Federal Liaison Center will continue to monitor this legislation as it moves through Congress.