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NASAO Signs Letter Urging Congress to Maintain Tax-Exempt Status for PABs

On Tuesday, NASAO joined with other associations in strong support of maintaining the tax-exempt status for Private Activity Bonds (PABs) in the Tax Cuts and Jobs Act (H.R.1) Conference Report.

Section 3601 of the House bill calls for the termination of tax-exempt private activity bonds. The Senate bill contains no such provision. Section 3601 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.

“We were pleased to join this broad and important coalition in urging Conferees to protect the tax-exempt status of Private Activity Bonds (PABs),” said NASAO President Mark Kimberling. “PAB’s are an essential infrastructure financing tool for airports across the country.”

In addition to airports, the bonds are issued for private projects and have been used to finance a wide range of infrastructure projects around the country, including roads, highways, housing and hospitals.

With the tax bill having passed in both chambers, the bill will now go to Conference and differences between the two versions will be resolved.

Ending the preferential tax treatment of PABs has the potential to seriously undermine President Trump’s infrastructure bill, which is supposed to rely on public-private partnerships.

U.S. airports are facing nearly $100 billion in infrastructure needs over the next five years, according to a recent report.

Read More: PABs Conference Letter

 

Categories: News
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