The Washington Weekly: A Turn to Munis and Infrastructure

While the Senate is on track to pass an additional $1.9 trillion dollar stimulus package by the end of the week that includes $350 in unencumbered funding to state and local governments, the Biden Administration and some in House Leadership appear to be turning attention to infrastructure.

Yesterday, the President, Vice-President and DOT Secretary Buttigieg met with the bipartisan leadership of the House Transportation and Infrastructure Committee to discuss the next steps including the size and scope of the package. The Administration seems set on taking a bipartisan approach which would result in a more narrow package, however, it is yet to be seen if the final product will follow that model. The House is on track to introduce legislation in late spring, and advance it to the senate by the end of summer.

The BDA continues to discuss the package with senior agency staff and our partners on Capitol Hill, and at this time it seems the talks are still in their infancy, and a turn to the tax title/financing has yet to be discussed in full. However, the Administration continues to state that bonds will play an important role in the package.

Muni Watch:

Bipartisan Senate Duo Introduce AR Legislation

Last week, Senators Roger Wicker (R-MS) and Debbie Stabenow (D-MI) reintroduced legislation that would fully reinstate tax-exempt advance refundings.  The legislation, which was originally introduced in 2020, has already gained to support of 13 Senators showing bipartisan strength of the muni issue.

The BDA expects the House to follow suit in the coming weeks and introduce companion legislation, as well as introduce several other BDA muni priorities.

These include:

  • Creation of a new BAB like product untethered to sequestration;
  • Raising the BQ debt limit and tying to inflation; and
  • Expansion of the use of PABs including GSE use.

The BDA continues to work with our partners on Capitol Hill and in the Public Finance Network (PFN) to ensure that municipal bond provisions are well placed and considered as Congress works on additional 2021 measures including infrastructure.

BDA Comments on Electronic Trading

This week, the BDA submitted comments to the SEC on the FIMSAC recommendation on the electronic trading of both muni and corporate bonds. The release is the first step in a long-term project to revise Rule ATS’s treatment of corporate and municipal trading.

The BDA letter addresses issues such as investor protection in electronic trades, treatment of individual firms’ customer trading systems, and how electronic trading volume is reported to regulators.

The BDA stated,

“We agree with the FIMSAC’s suggestion that electronic platforms dedicated to bringing together buyers and sellers of debt securities for the purpose of effecting transactions should generally be regulated the same regardless of how they are structured internally. Regulation should be based on the functions and services trading platforms provide in the market.”

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