Inhofe Cosponsors LOCAL Infrastructure Act to Support State and Local Government

Press Release

U.S. Sen. Jim Inhofe (R-Okla.) joined Sens. Roger Wicker (R-Miss.) and Debbie Stabenow (D-Mich.) to introduce S.479, the Lifting Our Communities through Advance Liquidity for Infrastructure (LOCAL Infrastructure) Act of 2021. The legislation would amend the federal tax code to restore state and local governments' ability to use advance refunding to manage bond debt and reduce borrowing costs for public projects. This initiative could provide a boost to local communities across the nation as the U.S. deals with the economic effects of the COVID-19 outbreak.

"Oklahomans are working hard to rebuild and recover as we continue to fight this coronavirus pandemic," Inhofe said. "The pandemic has brought unexpected costs for our communities, so I want to lessen their burden with the introduction of the LOCAL Infrastructure Act. With this legislation, we have the opportunity to amend the federal tax code and restore advance refunding. This would help state and local governments manage their existing debts and bring local Oklahoma communities a much needed boost."

"Senator Inhofe continues to work to help our state and local governments both get dollars that we need for infrastructure as well as the tools so we can do creative funding to allow us to do even more projects," said Karen Keith, Tulsa County Board of County Commissioners Chair. "Being able to refinance our existing bonds would give Tulsa County greater flexibility, especially during the coronavirus pandemic, and will allow us to prioritize important local projects, like Arkansas River levee improvements and other river development projects."

"Senator James Inhofe was an original sponsor of the LOCAL Infrastructure Act that returns advance funding to the communities across the state," said Homer Nicholson, Ponca City Mayor. "This act provides a value to local communities by providing lower interest rates by refinancing municipal bonds. The resulting savings can be used to fund infrastructure and other capital improvements projects. In many cases the financial difference between a large successful municipal capital project and not doing the project can be the amount of barriers to the project. Barriers include licensing process and permitting process. Ponca City, Oklahoma provides electrical power to our citizens through Ponca City Energy and we constantly have the need to build new sub-stations, upgrade distribution lines and replace worn out equipment and systems which require capital investments."

"I am very appreciative of Senator Inhofe's continued focus on local control and state support," said Matt Dukes, Midwest City Mayor. "As a defense community of Tinker Air Force Base, Midwest City exists in a challenging financial intersection of federal, state, county, and local jurisdictions. Lessening the burden of federal regulation goes a long way in our city's ability to provide necessary public services and infrastructure to our community and nation."

The senators' legislation comes in response to calls from state and local leaders for the federal government to provide additional support to communities as they assess the impact of the coronavirus outbreak on their budgets and begin planning for the future.

Advance refunding would allow state and local governments to refinance outstanding municipal bonds to more favorable borrowing rates or conditions before the end of the initial bond term on a tax-exempt basis. This process is very similar to how a homeowner may refinance the mortgage on their property to lock in a lower interest rate.

The federal tax-exempt debt could be refinanced only once, but local communities would be able to take advantage of the lower interest rates to generate additional savings on existing bonds. Local governments could reinvest these savings to fund infrastructure, education, health care, or other capital improvement projects.

Advance refunding has saved state and local governments billions of dollars over decades, but has been unavailable to state and local governments since 2017.

Other original cosponsors of the legislation include: John Barrasso (R-Wyo.), Michael Bennet (D-Colo.), Tammy Baldwin (D-Wisc.), Shelley Moore Capito (R-W.Va.), Bob Menendez (D-N.J.), Jerry Moran (R-Kan.), Jeanne Shaheen (D-N.H.), Lisa Murkowski (R-Alaska), Chris Van Hollen (D-Md.), Deb Fischer (R-Neb.), John Boozman (R-Ark.) and Jacky Rosen (D-Nev.).

Among other organizations, the senators' legislation is supported by: The National League of Cities, United States Conference of Mayors, National Association of Counties, National Conference of State Legislatures, American Hospital Association, American Public Power Association, American Society of Civil Engineers, American Public Works Association, National School Boards Association, Government Finance Officers Association, and National Association of Bond Lawyers.

Click here to read a one-page outline of the legislation.

Click here to view the full text of the legislation.

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