Established. Informed. Engaged. Private Activity Bonds: The Road Ahead Matthew Hoekstra, Principal Williams & Jensen February 7, 2018 Established. Informed. Engaged.

PABs and Tax Reform Original House Tax Proposal: “Interest on newly issued PABs would be included in income and thus subject to tax. The provisions would be effective for bonds issued after 2017. “ Raises $38.9B over 10 years Senate proposal was silent on PABs, and this provision was left out of the final bill Bill terminated tax-exempt advanced refunding bonds and tax credit bonds issued after December 31, 2017 Impact

Opportunities - Infrastructure Trump Transportation Funding Principles: Amends 26 U.S.C. 142 to allow broader categories of public purpose infrastructure, including reconstruction projects, to take advantage of PABs and would encourage more private investment in projects to benefit the public. Elimination of the AMT provision and the Advance Refunding prohibition on PABs Elimination of the transportation volume caps on PABs and expend eligibility to ports and airports Removal of state volume cap on PABs Provide change-of-use provisions to preserve the tax exempt status of governmental Require public attributes for core public infrastructure projects Provide change-of-use cures for private leasing of projects to ensure preservation of tax exemption for core infrastructure bonds Advanced Refunding Legislation Other PABs Enhancements, i.e. the Student Loan Opportunity Act (H.R. 480)

Threats Nearly $40 billion pay-for that House Ways & Means Committee (and full House) is on the record supporting As proposals like increasing the gas tax inevitably fall out of favor, Congressional leaders will look to other ways to finance infrastructure bill There is a strong sentiment among some on Ways & Means and others in the House that there are abuses with PABs – the passage of tax reform did nothing to address their concerns Variety of proposals to repeal or “reform” New types of bonds