GFOA and SIFMA lay out federal legislation goals

SIFMA

Top advocates for the Government Finance Officers Association and Securities Industry and Financial Markets Association said transportation and water issues are among several topics on which they are pursuing federal legislation, though the near future outlook for Congress is fairly quiet.

The leaders set out their federal legislative goals at The Bond Buyer's Southeast Conference Wednesday.

GFOA Senior Policy Advisor Paige Mellerio said the GFOA was hoping three pieces of legislation would be passed by Sept. 30 deadlines. The federal government is trying to pass a budget by this deadline. The last time the federal government passed a budget on time was 1997. 

Surface transportation authorization and water investments authorized in the Infrastructure Investment and Jobs Act are also currently set to expire Sept. 30. The GFOA is pressuring congress to address the expirations, Mellerio said. 

Lobbyists are trying to get Congress to advance a housing bill stalled between the U.S. House and U.S. Senate, she said. 

Since the municipal bond tax exemption is one of the top 10-sized tax expenditures in the federal budget, members of Congress naturally might consider eliminating it to gain revenue, Mellerio said.

SIFMA Managing Director Leslie Norwood said she thought there wasn't a "big fear" about losing the tax exemption right now. 

SIFMA is trying to get Congress to pass the Local Infrastructure Financing Tools (LIFT) Act. This would reintroduce advance refunding of municipal bonds on a taxable basis. It would change the small issuance exemption, raising the cap from $10 million to $30 million and index the latter figure to inflation and change the designation from the issuer to the obligor. Doing this would make it more appealing for small community banks to purchase local and tax-exempt debt. 

The LIFT act would also introduce a tax credit bond program. An earlier one, the Build America Bonds program brought taxable investors into the municipal bond space, Norwood said. 

The biggest play regarding municipal bonds in Congress, besides the recently introduced transportation bill, is legislation on private activity bonds, Norwood said. 

People are also talking about creating a National Infrastructure Bank, Norwood said.

There are discussions of possibly changing the Transportation Infrastructure Finance and Innovation Act, she said.

Mellerio said the GFOA generally supported the things Norwood mentioned but had concerns about the proposed tax credit in the LIFT act, stemming from localities' and states' negative experience with Build America Bonds in sequestration.  

The GFOA is very interested in continuing the clean water/drinking water state revolving funds, which currently expire Sept. 30, Mellerio said. 

Norwood said on the state front, SIFMA is very concerned that some states are considering eliminating property taxes, mentioning Kansas and Ohio as examples.