19 Dec The Future of Tax Reform and Its Connection to Infrastructure
Article courtesy of: Annick Miller Rivera, Senior Policy Advisor, Water Strategies
November marked the beginning of the first meaningful attempt to overhaul the federal tax code since 1986. Both the House and Senate have passed separate versions of tax reform bills; the House tax bill, H.R.1, passed mid-November, and the Senate version passed in the early morning hours on December 2. The chambers are headed to conference committee to iron out a compromise and create a single piece of legislation that can gain support in both the House and Senate before it is put on the President’s desk. Both Washington State Senators Maria Cantwell and Patty Murray have been appointed to the tax bill conference committee, ensuring that Washington State’s voice will be represented.
As of this writing, both the House and Senate versions maintain the tax-exempt status of municipal bonds and eliminate advance refunding bonds. However, the House bill additionally eliminates private activity bonds. Water Strategies and CBDL staff are closely monitoring the tax reform bill movement to ensure that the final version of the tax reform bill doesn’t negatively impact financing tools for water infrastructure.
Any potential funding component to infrastructure will especially rely on the success of the tax bill to ensure economic development and new revenues (such as repatriating taxes on overseas corporate earnings). In addition to the funding component, both chambers have been moving forward several regulatory reform bills. One of these bills includes Bureau of Reclamation Project Streamlining Act, which applies the water project development process used by the U.S. Army Corps of Engineers under the Water Resources Reform Development Act of 2014 to the U.S. Bureau of Reclamation.
Overall, lawmakers are slowly laying the groundwork to move an infrastructure package next year and the CBDL continues to work with its delegation to ensure that when an infrastructure package is ready to move the priorities of the Columbia Basin priorities are represented.