Telephonic TEFRA hearings are now available through March 31, 2022

On November 4, 2020, we all thought that the COVID-19 pandemic was going to be long over by now. We certainly did not think we were going to get so far down the Greek alphabet of variants of this virus. And, this author certainly did not think that she was going to have to keep looking up what the next letter of the Greek alphabet is.  Now we are at mu, and there does not seem to be an end in sight.

It seems like when the IRS issued Revenue Procedure 2020-49, it thought that the COVID-19 pandemic was going to be over by now too.  As a reminder, on November 4, 2020, the IRS issued Revenue Procedure 2020-49, which allowed telephonic TEFRA hearings to continue through September 30, 2021.  Specifically, during this period, a governmental unit can meet the TEFRA requirement that the public hearing be held in a convenient location for affected residents by affording the general public access to the hearing by toll-free telephone call.[1]

With September 30th right around the corner, public finance tax attorneys were starting to get nervous[2] about whether these hearings were going to have to be in-person as cases are back on the rise.  We can all breathe a sigh of relief because yesterday the IRS has further extended the period during which telephonic TEFRA hearings can be held in lieu of in-person TEFRA hearings until March 31, 2022 through issued Revenue Procedure 2021-39.

Hopefully this will be the last extension that we need, and we won’t have variants that start sounding like sororities.

[1] The authors of this blog are still explaining to people what constitutes a toll-free number.

[2] More nervous than we usually are.

A “Good” Tax-Advantaged Bond Bill Tells Issuers Whether They Can Refund – A Case Study

This is the second in a series of posts about neutral principles that make for “good” tax-advantaged bond legislation.

We pick up our series as the Senate prepares for a final vote on a bipartisan infrastructure bill in the coming days. In the last post, we stated the general rule that a good piece of tax-advantaged bond legislation tells issuers how and when they can refund bonds issued under any new bond program. Here’s an example in current law to illustrate the point.

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A “Good” Tax-Advantaged Bond Bill Tells Issuers Whether They Can Refund

This is the first in a series of posts about neutral principles that make for “good” tax-advantaged bond legislation. 

A good muni bond tax bill deals with refundings. For new programs, it provides the terms and conditions under which the new bonds may be refunded. 

Over the long life of a project and the bonds that finance it, prevailing market interest rates are almost certain to be more favorable at some point than they were when the bonds were issued.[1] Refinancing transactions thus have always been a part of life in our corner of the world. And so the clock will begin to tick as soon as the bonds under a new bond program are issued, and once the issuer can call the bonds, our phones will begin to ring with the question: Can we refund?

A good tax-advantaged bond program will tell issuers in clear language whether and how they can refund bonds under the program.

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What makes a “good” muni bond tax bill?

Do you feel it? Good vibes for tax-advantaged bond legislation permeate the air around us. White smoke emerged from the White House on June 24, signifying that the President and key Senate leaders had reached a deal on an infrastructure bill. The deal includes “public private partnerships, private activity bonds, direct pay bonds and asset recycling for infrastructure investment.” Hey, that’s us![1]

It feels downright 2009ish. The prospect of new bond legislation has us thinking: Is there a right or wrong way to write a tax-advantaged bond bill?

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RECORDING NOW AVAILABLE: “Biden Unveils Script for The American Jobs Plan and a Leading Role Goes to Infrastructure – What Does It Mean to the Transportation Industry?”

Was your schedule incredibly busy on April 8th?  Was your schedule so busy that you missed the Squire Patton Boggs webinar on what President Biden’s American Jobs Plan and what it means for the transportation industry? If it was, and you’re disappointed that you missed former Secretary of Transportation Rodney E. Slater, former Republican Congressman and former Chairman of the House Transportation and Infrastructure Committee Bill Shuster, the former Chairman of the House Democratic Caucus Joe Crowley, and former Vice-Chairman of the House Republic Conference Jack Kingston discuss their insights and perspectives on President Biden’s American Jobs Plan and how it could affect the transportation industry with Jane Garvey, North America Chairman of Meridiam Infrastructure, Robert (Bob) Poole, Director of Transportation Policy, Reason Foundation, and Robert (Rob) Puentes, President and CEO of the Eno Center for Transportation we have some good news!  You can watch the recording of the webinar here!

During the webinar a Wall Street Journal article regarding how the private section is helping fund infrastructure developments through Public-Private Partnerships (P3) financing is discussed.  We are including the article here for your reference as you watch!

Moving on from LIBOR (Update)

Amid the world’s turmoil, we can take comfort in the persistent march of long-foretold events. Keeping to their pre-pandemic promises (at least partially), the Federal Reserve and U.K. regulators[1] of LIBOR have reaffirmed their plans to cease publication of the one-week and two-month LIBORs by the end of 2021. Issuers, holders, and counterparties are slowly and grudgingly waking up to this reality. How are they responding? Continue Reading

Biden’s Script for the American Jobs Plan and a Leading Role Goes to Infrastructure – What Does that Mean For Transportation? Squire Patton Boggs (and Friends) Will Tell You

On the 396th day of March, 2020 (or March 31, 2021 for those who have returned to some semblance of normalcy), President Joe Biden outlined his vision for a new economy.  Specifically, President Biden focused on the American Jobs Plan as a $2.25 trillion investment in the United States that “will create millions of good  jobs, rebuilding our country’s infrastructure, and position the US to out-compete China.”

Ambitious climate policies are a major focus of the President’s vision for this massive infrastructure bill, which aims at rebuilding and developing both the US physical and technological infrastructure, creating jobs, and bolstering resilience.  The impact on the transportation sector will undoubtedly be substantial.

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Rodney Slater on the The American Jobs Plan

Rodney Slater

On March 31, 2021, President Biden officially unveiled the planned $2.25 trillion infrastructure bill, marking the beginning of what promises to be a lengthy debate over the appropriate size and scope of infrastructure investment and economic recovery in the country. Who better to guide you through it than our partner, Rodney Slater, former Secretary of Transportation in the Clinton Administration. Rodney appeared on Bloomberg TV and on Bloomberg’s SoundOn podcast to offer his insights.

Come Hear Rep. Bill Shuster and Secretary Rodney Slater Discuss Infrastructure on March 15th

Bill Shuster, Rodney Slater

We invite you to listen to our colleagues, Rep. Bill Shuster, former Chairman of the House Transportation and Infrastructure Committee, and Secretary Rodney Slater, former U.S. Secretary of Transportation, in conversation with Paul Burton of The Bond Buyer about the prospects for federal infrastructure legislation.

The conversation will happen next Monday, March 15, at 12:30 pm eastern. You can register for free (even if you are not a subscriber to The Bond Buyer, although you should probably fix that) by clicking the link here.

As the likelihood that Congress will pass infrastructure legislation with tax-advantaged bond provisions appears greater than it has in many years, this conversation is one you won’t want to miss.

We’ll have much more to say about that topic as the legislative text crystallizes over the coming months.

(And, as always, we exhort you to Live Every Week Like It’s Infrastructure Week.)

In Support of the Fiscal Pleasure Restoration Act of 2021

Our own Mike Cullers was quoted in Law360 on Wednesday in an article about renewed hope for a full restoration of tax-exempt advance refundings of tax-advantaged bonds after their repeal by the TCJA. The article describes the renewed optimism in the muni bond community that tax-exempt advance refundings can be restored, precipitated by the confirmation of Mayor Pete as Transportation Secretary.

As you have probably seen by now, Mr. Buttigieg made clear in his Senate confirmation hearing that he, like Brother Cullers, is a man of refined taste who appreciates the great pleasures of life (fine scotch, advance refundings for debt service savings, etc.). (Other similarities: neither man is a cat.)

At the tail-end of the hearing, in a delightfully deliberate gesture, which you can watch here, Senator Roger Wicker (R-MS), outgoing chair of the Senate Transportation Committee and co-sponsor of a bill in the last Congress that would have brought back tax-exempt advance refundings, asked Mayor Pete if he would support doing so. The new Secretary said he would, and noted that few things gave him more “fiscal pleasure” as Mayor of South Bend, Indiana than tax-exempt advance refundings and the savings that come with them.

The Law360 article is worth a read. It does a good job of surveying the chief players involved in the efforts to fully restore tax-exempt advance refundings. As Mike and the other public servants and lawyers (but I repeat myself!) quoted in the article observe, tax-exempt advance refundings save money in the long run for taxpayers at the federal, state, and local levels, even though there will be a brief period where both the advance refunding bonds and the advance refunded bonds are bearing tax-exempt interest. Although there are ways to address this overlap period without eliminating tax-exempt advance refundings, such as those ably described in recent years by Charlie Almond (R.I.P.) and Steven Gortler in The Bond Buyer, we could all use a bit of pleasure these days. Just bring them back already. We’ll give you the name in the headline, free of charge.