Ruppersberger, Hultgren Introduce Bipartisan Infrastructure Legislation

(Washington, DC) — U.S. Representatives Congressman C.A. Dutch Ruppersberger and Randy Hultgren introduced legislation to help state and local governments take advantage of low interest rates to build essential infrastructure projects. The bill restores the tax exemption for advance refunding bonds that was repealed by the Tax Cuts and Jobs Act passed by Congress in December.
 
“I’m proud to lead this bipartisan effort on behalf of local governments in Maryland who rely on this tool to finance projects that benefit everyone,” Congressman Ruppersberger said. “We need to do what we can to help local governments create jobs while building roads, schools, hospitals, fire and police stations. When counties can issue an advance refunding bond, it saves taxpayers billions nationwide – and an average of nearly $37 million annually here in Maryland. This can translate into lower property taxes.”
 
“States and local governments need flexibility for managing their finances so they can invest in infrastructure like roads, bridges, hospital, libraries and schools to support our communities,” said Rep. Hultgren, a Republican from Illinois. “In recent years, tax-exempt advance refunding bonds have saved Illinois taxpayers $80 million per year on average. Given that interest rates are expected to increase, this tool is especially important to states and local governments responsibly planning for the future.”
 
While the Tax Cuts and Jobs Act protected the vast majority of municipal bonds—a key tool to finance infrastructure projects—the law repealed the exclusion of interest income earned on advance refunding bonds from federal income taxation. This change to the tax code makes it more expensive for states and local governments to take advantage of a favorable interest rate environment. 
 
Congressmen Ruppersberger and Hultgren fought to preserve tax-exempt private activity bonds and advance refunding bonds during consideration of the Tax Cuts and Jobs Act. While the law preserved tax-exempt private activity bonds, the tax-exemption for advance refunding bonds expired on December 31, 2017. 
 
Other original co-sponsors include Reps. Luke Messer (R-IN-06), Ed Royce (R-CA-39), Dan Kildee (D-MI-06) and Michael Capuano (D-MA-07).