Leslie Powell, a partner in Kutak Rock’s public finance practice and the leader of the firm's Tax Reform Advocacy Group, was recently quoted in an article published by The Bond Buyer.

The article examines the potential impact of the Byrd Rule on tax exemption for municipal bonds, including qualified private activity bonds, in the proposed "One Big Beautiful Bill." The Byrd Rule is a process employed by the Senate to review the inclusion of proposed provisions included in budget reconciliation bills based on their impact on the budget deficit. The Senate Parliamentarian is charged with enforcing the Byrd Rule and has spent this week reviewing the entirety of the legislation to ensure compliance. Those provisions she deems noncompliant will be struck unless conforming revisions are agreed to or she is overruled by the President of the Senate.

On the Byrd Rule's potential impact Leslie said: "Some of the provisions that she is striking can impact the total amount of pay-fors in the legislation. You have a Congress that has slim majorities, and you have a portion that is hyper focused on reducing the deficit. Because the tax code is so sweeping, the reconciliation process and what could happen next means that everything is still on the table."

The article went on to cite Kutak Rock's Tax Reform Advocacy Group's June 24 client alert, as well as other industry experts in warning that while there is reason to cautiously optimistic, market participants should remain engaged and vigilant because restricting the tax exemption on municipal bonds is still a possible option for the Senate to consider when looking for alternate methods of paying for tax cuts.

Read the full Bond Buyer article here. (Subscription may be required)

Kutak Rock remains focused on this evolving issue. Recognizing the importance of tax-exempt and municipal bonds to our clients, the firm has engaged a Washington, D.C.-based lobbying firm to support advocacy and education around the value of these financing tools. The team is closely monitoring congressional activity and working to ensure decision-makers understand how proposed tax changes could affect the tax-exempt bond market and its participants.

Kutak Rock’s Capitol Connection newsletter provides timely updates as the Senate finalizes its version of the tax legislation. For more information, or to receive the newsletter, please reach out to your Kutak Rock attorney or a member of Kutak Rock’s Tax Reform Advocacy Group at taxreform@kutakrock.com. 

Leslie routinely serves as bond counsel and underwriter’s counsel in single and multifamily housing financings. Additionally, she has represented financial institutions in a wide range of lending transactions with a focus on public financings, including direct bond purchases and draw down bond financings. Leslie also has experience representing banks in a variety of structured investment transactions involving financial products such as forward delivery agreements, repurchase agreements and investment agreements. Leslie is a member of the firm’s Executive Committee.