Private activity bonds

A new law allows state agency Space Florida to sell revenue bonds for private aerospace firms without requiring approvals from the state governor or cabinet.

Citing market turmoil from the pandemic, a California conduit issuer gave the Virgin Trains USA project a five-month extension to sell $3.25 billion of debt.

Highlights of a House Democrat legislative package include a new series of taxable direct-pay bonds that would start with a federal 42% subsidy for interest expenses.

The Move America Forward Act would permanently reinstate Build America Bonds, advance refundings and expand the issuance of private activity bonds.

PABs represented 25.4% of all tax-exempt bonds issued in 2017, up from 21.5% in 2016.

Indian River County petitioned the court to overturn its unsuccessful appeal against the U.S. Department of Transportation and the passenger train operator.

IRS General Counsel Michael Desmond said Wednesday his office has received “a number of requests” for extending deadlines.

The IRS also announced temporary guidance providing relief for the calendar year 2020 regarding the reacquisition of qualified tender bonds and commercial paper.

Virgin Trains USA hopes to sell tax-exempt bonds from its $600 million California allocation this summer.

"Like all businesses, we are operating in a period of uncertainty which may last several months," Virgin Trains/Brightline President Patrick Goddard said.

The IRS has informally responded to a letter from NABL asking for a reduction in the high fee it charged for private letter rulings.

More private money would be invested in infrastructure if Congress expands the use of PABs and P3s.

Some muni market members don’t see hope for an infrastructure bill passing in 2020, even though Trump called for it in his address.

The $760 billion, 5-year plan also calls for expanding qualified private activity bonds, reinstating tax credit bonds, and more bond-friendly provisions.

The California Debt Limit Allocation Committee wants more information on the request for $600 million of private activity bond allocation.

Indian River County won’t pursue the federal litigation further, but it will proceed with a lawsuit in state court over the use of its railroad crossings.

The challenge this year will be biggest in the three states that were found by the Council of Development Finance Agencies to be closest to using their 2018 limits — California, New York and Massachusetts.

The U.S. Department of Transportation reasonably determined the Florida’s passenger train owners were qualified to receive private activity bond financing.

Another round of tax legislation is not expected to emerge until the very end of the year after the presidential election or in 2021 after a new Congress is sworn in.

The issuance limit on tax-exempt private activity bonds for Industrial Development Bonds would be raised to $30 million from the current $10 million while the limitation for first-time farmers using so-called Aggie Bonds would be raised to $552,500 from $450,000.