Update:  The President signed the Tax Cuts and Jobs Act into law on December 22, 2017.  On that same date, he also executed the Continuing Resolution passed by Congress that permits the federal government to make expenditures through January 19, 2018.  This Continuing Resolution also suspends the application of the PAYGO law in respect of the annual deficits that will accrue as a result of the enactment of the Tax Cuts and Jobs Act.  Thus, the full sequestration that otherwise could have applied to the subsidies on direct payment tax credit bonds (such as Build America Bonds, Recovery Zone Economic Development Bonds, Qualified School Construction Bonds, Qualified Zone Academy Bonds, and Qualified Energy Conservation Bonds), as discussed below, will not take effect.  Direct payment tax credit bonds do, however, remain subject to sequestration under the Budget Control Act of 2011.  Subsidies on direct payment tax credit bonds are reduced pursuant to that sequestration by 6.6% for the fiscal year ending September 30, 2018.


If action-adventure films with titles such as The Librarian, The Accountant, and The Mechanic can be greenlit, then surely there is a place for The Parliamentarian.[1]  Skeptical?  Read this plotline before dismissing the idea.

On December 15, the House-Senate Conference Committee approved its version of the Tax Cuts and Jobs Act.  Yesterday afternoon, the House passed the version of the Act as approved by the Conference Committee.  Later that afternoon, our mild-mannered hero, The (Senate) Parliamentarian, agreed with points of order raised by Senators Bernie Sanders and Ron Wyden that three minor provisions of the Act that have nothing to do with tax-advantaged bonds violate the Byrd rule.  The offending provisions were stripped from the version of the Act approved by the Conference Committee before the Senate voted on it.  The Senate passed this modified version of the Act on a party-line vote shortly before 1:00 a.m. EST this morning.[2]  Because the version of the Act that was passed by the Senate differed slightly from the one passed by the House, the House had to pass the Senate-approved version of the Act for the Act to be sent to President Trump for execution and enactment.  The House today passed the version of the Act that had passed the Senate, and President Trump will now sign the Act into law.

Perhaps not the most compelling plot, but it could be worthy of a January or February release.  Our summary and analysis of the provisions of Act, as approved by the Conference Committee, that relate to tax-advantaged bonds applies with equal force to the Act as passed by Congress (and which will be signed into law).  The only unsettled point regarding the effect that the Act has on the law that applies to tax-advantaged bonds is whether the PAYGO law (and resulting sequestration), which will be triggered by the Act, will operate to eliminate the subsidies for outstanding direct payment tax-credit bonds, or whether Congress will prevent the application of the PAYGO law.  Click here for more discussion of this point.

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Absent any breaking news (and the execution of the Act does not count), this is our last post of 2017.  We hope you’ve enjoyed reading our coverage of the Act and other posts as much as we’ve enjoyed writing them, and we wish you all the best for a happy, healthy, and prosperous (even without tax-exempt advance refundings) 2018.

[1] To be clear, we’re not dealing with Citizen Kane here, but even Orson Welles, who wrote, produced, directed, and starred in what is generally regarded as the greatest film ever made, had some awkward moments toward the end of his career.  Although much less awkward when set to music.        

[2] An hour at which people other than alcoholics, the unemployable, angry loners, and Johnny Hutchinson might still be awake.