A bipartisan bill cosponsored on Feb. 26 by U.S. Sen. Todd Young (R-IN) would level the development playing field by giving local lenders the necessary tools to help their communities invest in infrastructure, health care, and economic development without putting taxpayers on the hook for higher interest rates.
“Our bill will restore a proven financing tool to help lower costs for community development projects in towns across America,” Sen. Young said. “Bureaucratic red tape should not stand in the way of local communities accessing affordable financing.”
The Municipal Investment and Neighborhood Transformation (MINT) Act, S. 3941, which is sponsored by U.S. Sen. Catherine Cortez Masto (D-NV), would allow Federal Home Loan Bank (FHLBank) member institutions to support local development authorities by credit enhancing tax-exempt bonds for non-housing related community development projects.
“For too long, communities across the country have had a hard time raising the funds they need to make improvements to sewer and water systems, hospitals, schools, and more,” said Sen. Cortez Masto. “Our legislation unlocks more options for these communities that were previously unavailable to them and empowers the Federal Home Loan Bank system to better fulfill its mission to support community development.”
Currently, FHLBank member institutions are allowed to support municipalities when they’re setting up housing related tax-exempt bonds, but not for a variety of other community development projects, such as infrastructure improvements, water and sewage treatment facilities, transportation centers, industrial development, health care facilities, or schools.
If enacted, S. 3941 would include these non-housing community development projects as eligible for Letters of Credit from FHLBank member institutions, making it easier for municipalities and their development authorities to secure a tax-exempt bond to fund these projects, according to a bill summary provided by the lawmakers.
The legislation was also introduced by U.S. Reps. Lisa McClain (R-MI) and Sam Liccardo (D-CA) in the U.S. House.