NACo endorsed advanced refunding bill introduced in the U.S. House
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Paige Mellerio
Emma Conover
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Key Takeaways
On February 13, Reps. David Kustoff (R-Tenn.), Rudy Yakym (R-Ind.), Gwen Moore (D-Wisc.) and Jimmy Panetta (D-Calif.) introduced the Investing in Our Communities Act (H.R. 1255). This bipartisan legislation would restore tax-exempt status of advance refunding bonds, allowing counties to refinance their bonds at lower interest rates. NACo endorsed this bill and supports counties’ ability to issue tax-exempt advance refunding bonds, which can save taxpayers millions of dollars.
About the Investing in Our Communities Act
NACo endorses the Investing in Our Communities Act, which would restore the tax-exempt status of advance refunding bonds. Before the 2017 Tax Cuts and Jobs Act, the interest on bonds issued to advance refund were tax-exempt, allowing counties to respond to market conditions and refinance municipal bonds once during the bond's lifespan. When tax-exempt, advance refunding bonds help state and local governments reduce borrowing costs and benefit from better interest rates, freeing up resources for other capital projects and minimizing costs on taxpayers.
Impact on counties
Counties would benefit from the ability to refinance bonds at lower interest rates made possible through this legislation. NACo has endorsed the Invest in our Communities Act and will continue to work to advocate for passage of this legislation. View NACo’s tax priorities for the 119th Congress here.
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