09 Nov Tax Reform’s Impact on Infrastructure in Tax
Below is a letter from the Coalition to Modernize American Infrastructure to members of the Senate Finance Committee supporting maintaining the tax-exempt status for Private Activity Bonds.
Dear Chairman Hatch and Ranking Member Wyden:
Today we write in strong support of maintaining the tax-exempt status for Private Activity Bonds (PABs). As you are aware, Section 3601 of the House bill, the Tax Cuts and Jobs Act (H.R. 1), calls for the termination of tax-exempt private activity bonds. This provision severely conflicts with the need to deploy all types of funding sources for infrastructure improvements, including private capital. Ultimately, it would raise costs for most such projects, regardless of how they are financed.
In a time when all levels of government are struggling to meet their infrastructure needs, PABs are a crucial financing tool. PABs are traditionally the means of tax exempt financing for surface transportation projects, airports, port facilities, water and wastewater facilities, multi-family housing projects and certain other exempt facility bond projects. PABs also include bonds for schools, universities, and hospitals. In total states can issue PABs to a subset of 22 activities. Removing this tool will have a far reaching impact across all classes of infrastructure.