Reps. Sewell, Reed Introduce Legislation to Help Finance Local Infrastructure Projects
July 24, 2019
Washington, D.C. – Today, U.S. Reps. Terri Sewell (AL-07), a former bond lawyer, and Tom Reed (NY-23), both members of the House Committee on Ways and Means, introduced the Municipal Bond Market Support Act of 2019, bipartisan legislation to help local governments, non-profits, schools, hospitals, universities and other entities reduce costs associated with infrastructure and development projects.
“When it comes to infrastructure and community revitalization projects in Alabama and across the country, the need is constant, but too often local governments and non-profit entities struggle to obtain the financing necessary to move forward with these endeavors,” Rep. Sewell said. “Expanding the availability of bank-qualified bonds will help local governments and nonprofits afford critical construction projects and stimulate their economies, all while providing significant savings for Alabama taxpayers.”
“Bank qualified bonds save tax dollars,” said Rep. Reed. “Using local bonds keeps the control, financing and benefits of capital improvements at home to boost jobs and facilities all across Western New York.”
The Municipal Bond Market Support Act of 2019 will expand access to low-cost capital for municipalities and non-profits.
The legislation will increase the annual limit for municipal bank qualified bond borrowing from $10 million to $30 million for each and indexes this level to inflation going forward. The $10 million limit was set in 1986 and in today’s dollars is not sufficient to fund most community projects, making many local projects more expensive than if they were financed under bank-qualified tax-exempt loans.
The legislation also applies the bank qualified debt limit on a borrower-by-borrower basis, rather than aggregating all bank qualified bonds issued by a conduit issuer, so that schools, hospitals and other community organizations can more easily access capital.
More information about Alabama projects that have been funded by tax-exempt municipal bonds is available here.