With the recent introduction of HR 2229, U.S. Rep. Tom Reed (R-N.Y.) hopes to implement legislation that will save homeowners money by assisting local government to obtain more efficient financing options for construction projects.
The bill would achieve this objective by increasing the amount of money municipalities are allowed to borrow on a yearly basis via bonds qualified and facilitated by local banks. The bill is currently awaiting further consideration by the House Ways and Means Committee.
“I care about saving taxpayers money,” Reed said. “Simply, bank-qualified bonds save tax dollars and keep property taxes in check. I also believe in the fairness of keeping local tax dollars in local communities. Using these bonds keeps the control, financing and benefits of capital improvements right in the local economy.”
Currently at $10 million, the limit for municipal bank bonds would be increased to $30 million under the new legislation. The increase matches the index amount for inflation since the program was originally set up in 1986.
The legislation will also save taxpayers, indirectly allowing more local bank-qualified bonds for capital projects. The lower interest rate for this type of financing results in savings of hundreds of thousands of dollars on each bond.
“The Bond Dealers of America organization supports this legislation and we hope to see it move forward this year,” Mike Nicholas, CEO of Bond Dealers of America, said. “Bank-qualified bonds are a cost-effective method of financing for local governments and financing authorities, incentivizing community banks to invest in tax-exempt bonds to finance important local projects.”