WASHINGTON – U.S. Senators Roger Wicker, R-Miss., and Michael Bennet, D-Colo., introduced the Lifting Our Communities through Advance Liquidity for Infrastructure (LOCAL Infrastructure) Act of 2025. 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 infrastructure projects.

“The LOCAL Infrastructure Act would amend the federal tax code to give more financial flexibility to state and local governments. Restoring advance refunding would help community leaders manage their existing debts and allow for more investment to improve their existing infrastructure. Local leaders know what their states need best, and it’s important to give them the resources to ensure their community’s success,” said Senator Wicker.

“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,” said Senator Bennet. “From improving our roads and bridges to modernizing our hospitals and schools, this legislation will help create stronger and more resilient communities.”

“SIFMA would like to thank Senator Roger Wicker (R-MS) and Senator Michael Bennet (D-CO) for their continued leadership on municipal bonds. 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. 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,” said SIFMA President Kenneth E. Bentsen, Jr.

"Tax-exempt municipal bonds are a critical tool enabling counties to finance infrastructure projects for our communities” said National Association of Counties Executive Director Matthew Chase. “The LOCAL Infrastructure Act would restore the tax-exemption of advance refunding bonds and give counties the flexibility to respond to market conditions and lower borrowing costs for residents. Counties applaud Senators Wicker and Bennet for their bipartisan leadership and urge swift passage of this legislation." 

Advance refunding allows 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.

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

Click here to view the full text of the legislation.