Frannie Reilly

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In December 2017, former President Donald Trump signed into law the Tax Cuts and Jobs Act. Among the many provisions of the Act was a provision that eliminated the tax exemption for municipal bonds that advance refunded another series of bonds. Prior to its passage, issuers had the ability to issue such bonds on a tax-exempt basis, and did so for a variety of reasons, including to achieve debt service savings. With the loss of tax-exempt status for advance refunding bonds issued after the passage of the Act, issuers and their advisors have searched for alternatives to the traditional tax-exempt advance refunding model.

In this article, we explore some of the alternatives that issuers have applied to achieve the same or similar benefits that would be achieved with a traditional tax-exempt advance refunding. First, we discuss the use of “forward delivery” bonds, where the bonds are sold, but not delivered to investors until a much later date in the future; second, we consider so-called “Cinderella” bonds, which are issued taxable but later convert to tax-exempt; and finally, “tenders and exchanges,” where issuers, often in conjunction with a current issuance, make an offer to investors to acquire their outstanding bonds, either for purchase or exchange.
Continue Reading Four Years On, Alternatives to Tax-Exempt Advance Refundings Continue to Proliferate in Municipal Bond Market

As colleges and universities develop and implement sustainability plans to reduce their carbon footprint, there remains the question as to how to fund these sustainability plans.  Some colleges and universities look to federal and state grants for a portion of this funding and some look to donors.  In addition to these options,  there is a new development in the debt market which could also lead to lower interest rates for issuers as a result of increased demand:  ESG bonds and Green bonds.
Continue Reading Why ESG Bonds and Green Bonds May Help Colleges and Universities with Their Sustainability Plans

Recognizing the importance of The American Rescue Plan Act of 2021 (ARPA), our  colleague, Attorney Tim Horstmann, wrote the first article in this series titled “The American Rescue Plan Act of 2021. Here’s What to Expect” in April 2021 and in July 2021 Tim penned an article titled “ARPA Windfall: What May Pa. and Its Municipalities Do With This Money?” Adding to this series, we will now discuss what to expect in an ARPA audit.  This article will focus on Pennsylvania’s $13,450,275,500.40 portion of the $350B Coronavirus State and Local Fiscal Recovery Funds Program (CSLFRF), which is the specific program under ARPA that provides new funding to tribal governments, states, territories, and local governments across the United States to aid in their recovery from the COVID-19 pandemic.
Continue Reading ARPA Audits– What to Expect and What You Can Advise Your Clients to Do Now

On Friday, September 10, 2021, the House Ways and Means Committee released the text of a bill – known as the “Build Back Better Act” – that would restore the ability of state and local governments to issue tax-exempt “advance refunding” bonds, i.e., bonds issued more than 90 days before the redemption date of the bonds to be refunded.
Continue Reading Tax-Exempt Advance Refundings Included in Proposed Build Back Better Act

With the effective date of recent amendments to Pennsylvania’s open meetings law, commonly known as the Sunshine Act, rapidly approaching on August 29, 2021, Pennsylvania public agencies, including but not limited to School Boards, Counties, Townships, Boroughs, Cities, and the Governing Bodies of community colleges, must be prepared to ensure they are in compliance with Act 65’s changes.

As background, on June 30, 2021, Governor Wolf signed into law as Act 65 of 2021 Senate Bill 554, which amends the Sunshine Act to mandate that a public agency’s agenda include all issues where a deliberation is expected, even if there is no anticipated vote on the issue. Furthermore, Act 65 requires that this agenda must be available to the public at least 24 hours prior to the public meeting, with few exceptions.
Continue Reading Compliance with the Sunshine Act Amendments: What Pennsylvania Public Agencies Need to Know