A group of elected officials in the Pennsylvania House of Representatives and Senate have reintroduced a series of bills making significant changes to the process by which municipalities in Pennsylvania incur debt. The introduction of these bills has become a biennial occurrence; since the 2013-2014 legislative session, similar bills have been introduced, calling for such changes. None of the prior proposals have been enacted into law.

The bills that have been introduced in the 2019-2020 legislative session primarily consist of two packages – one in the House and one in the Senate. The package of reform proposals in the House can be found at House Bills 882-884. The package of reform proposals in the Senate can be found at Senate Bills 204-210. One proposal was introduced as House Bill 320, and is a standalone measure addressing interest rate swaps. We’ve included in this post links to each bill, so that you can monitor the status of the bills.
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The MSRB is finalizing some user-friendly enhancements to the Electronic Municipal Market Access (EMMA) website, the website designated by the US Securities and Exchange Commission as the official source for municipal securities data and disclosure documents. The enhancements follow new continuing disclosure rules that will increase the volume of information required to be disclosed on EMMA. The MSRB expects that the enhancements will make it easier for issuers and obligated persons to submit information, and for the public to access it. The enhancements should roll out for public use this summer.
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Last week amendments to the SEC continuing disclosure rules for municipal bonds went into effect. Under the new rules, municipalities that are planning a public offering of municipal bonds must update their continuing disclosure agreements to include covenants to disclose each of the following:

  • Incurrence of a financial obligation of the obligated person, if material,

Republican Representative Garth Everett, in a cosponsorship memorandum posted on February 1st, announced plans to reintroduce a package of bills that would expand the ability of municipalities throughout Pennsylvania to assess stormwater management fees. These proposals, contained in former House Bills 913 through 916 (2017-2018 session), died in the Senate last term after being passed with bipartisan support by the House.
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The Internal Revenue Service celebrated New Year’s Eve this year by issuing two rule-making notices of interest to the tax-exempt bond community, on the topics of public approval of private activity bonds and reissuance.

The first notice contains final regulations on the public approval requirement of section 147(f) of the Internal Revenue Code, 26 U.S.C.

After months of deliberation, on August 20, 2018, the U.S. Securities and Exchange Commission (the “SEC”) announced its final approval of new amendments (the “2018 Amendments”) to Rule 15c2-12, 17 C.F.R. §240.15c2-12 (herein, “Rule 15c2-12” or the “Rule”). Rule 15c2-12 requires dealers, when underwriting certain types of municipal securities, to ensure that “obligated persons” enter into a written commitment (called a continuing disclosure agreement, or “CDA”) to make periodic disclosure filings to the Municipal Securities Rulemaking Board (the “MSRB”). An “obligated person” means any person, including the issuer, that supports the payment of all or part of the obligations on municipal securities to be publicly offered for sale.
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On October 26, 2018, the IRS released a memorandum from its Office of Chief Counsel, confirming that issuers may issue tax-exempt bonds to advance refund taxable bonds without running afoul of the prohibition on tax-exempt advance refundings contained in the Tax Cuts and Jobs Act. The release of the memorandum follows the request in March by the National Association of Bond Lawyers for guidance on this issue, following public statements earlier in the year by IRS and Treasury officials in favor of the approach.
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The Internal Revenue Service, Tax Exempt & Government Entities Division, has released its Fiscal Year 2019 Program Letter, a copy of which is available here. Among other things, the Program Letter identifies the compliance areas for the tax-exempt bond community that will be a priority for the IRS in the new fiscal year which began on October 1.
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