A nonbinding resolution in support of preserving tax-exempt municipal bonds attracted four new supporters in the House of Representatives over the past month, as lawmakers expect the first draft of a comprehensive tax reform bill to emerge sometime this fall.
With the four new cosponsors added in September, H.Res. 112 now enjoys the support of 92 House members. The resolution, introduced in March, marks the 100-year anniversary of tax-exempt municipal bonds and recognizes their importance in rebuilding critical infrastructure. H.Res. 112 is largely a symbolic measure that allows lawmakers to publicly demonstrate opposition to weakening municipal bond tax benefits during the tax reform debate.
The issue is timely because House Ways and Means Committee Chairman Dave Camp (R-Mich.) is expected to release his proposal to overhaul and streamline the tax code as early as October. While few leaks have emerged from his office, the plan is widely expected to do away with a number of popular tax breaks. The Camp proposal will likely serve as the basis of tax reform discussions that could dominate Capitol Hill going into next year.
In July, AMWA and the National Association of Clean Water Agencies sent a white paper to members of Congress explaining the importance of tax-exempt municipal bonds to the nation’s water and wastewater utilities. According to the paper, if municipal bonds issued to finance water and wastewater infrastructure in 2012 were fully taxed, communities across the country would have paid an additional $9 billion in debt service costs.