Market participants will be closely watching lawmakers this week as they move forward with tax measures that would impact municipal bonds.

The Senate Finance Committee on Monday will take up its tax proposal, which would benefit private activity bonds by eliminating the alternative minimum tax, but put an end to advance refundings after this year.

Later in the week, the full House will begin consideration of the Republican tax bill passed along party lines by the House Ways and Means Committee on Thursday.

The bill in the House is harsher than the one in the Senate in that it would terminate PABs and advance refundings after the end of the year.

Both measures would reduce the corporate tax rate to 20%, which would also hurt munis, but the Senate proposal would delay the rate reduction until 2019.

In addition, the Senate proposal would eliminate the federal deduction for state and local taxes altogether, while the bill pending in the House would allow the continued deduction of state and local property taxes up to $10,000 annually and end the deduction for income and sales taxes.