Legislation restoring state and local government’s ability to refinance bond debt will help them save money on infrastructure projects, officials said.
U.S. Sens. Roger Wicker (R-MS) and Michael Bennet (D-CO) said the Lifting Our Communities Through Advance Liquidity for Infrastructure (LOCAL Infrastructure) Act of 2025 would amend the federal tax code to help state and local governments use advance refunding to restructure their bond debt and reduce borrowing costs for public infrastructure projects.
“As state and local governments work to improve their communities and plan for the future, our bipartisan bill will support their efforts to revitalize infrastructure, create jobs, and improve quality of life for all Coloradans,” Bennet said. “From improving our roads and bridges to modernizing our hospitals and schools, this legislation will help create stronger and more resilient communities.”
Similar to homeowner refinancing their mortgage, advance refunding lets state and local governments refinance outstanding municipal bonds to more favorable borrowing conditions. The process has been unavailable to local governments since 2017 but had previously saved those entities billions, officials said.
“Advance refunding is an important tool which permits state and local governments to save billions of dollars in interest costs by refinancing their outstanding debt to a lower interest rate,” Kenneth Bentsen, Jr., president of Securities Industry and Financial Markets Association (SIFMA), said. “Our nation benefits by allowing for a robust capital market to flourish, which in turn helps local communities build affordable infrastructure specifically related to their needs. Reinstating the prior tax-exemption for advance refunding bonds is essential to making that happen and the LOCAL Infrastructure Act does just that.”