LOCAL Infrastructure Act

The LOCAL Infrastructure Act is a narrowly focused bill that would reinstate a financing mechanism known as advance refunding bonds for state and local governments. Specifically, it repeals the repeal in Public Law 115-97 that had ended the use of advance refunding bonds and restores the law to what it was before that repeal, as if the repeal never occurred. The effect is to immediately reauthorize municipalities to issue advance refunding bonds (subject to existing law and market practices) to refinance existing debt, typically in order to reduce debt service costs when interest rates are favorable. The act is short and does not add spending or create new programs; it simply restores a prior debt-management tool for infrastructure financing. The short title given is the “Lifting Our Communities through Advance Liquidity for Infrastructure Act” or “LOCAL Infrastructure Act.” What this means in practical terms: local governments could once again use advance refunding as a financing option to manage debt on infrastructure projects, potentially lowering the cost of debt and improving liquidity for large-scale local projects once the bill is enacted.