85R12726 BPG-D     By: Turner H.C.R. No. 82       CONCURRENT RESOLUTION          WHEREAS, Interest on municipal bonds has been excluded from   taxation since the enactment of the federal income tax in 1913; and          WHEREAS, Municipal bond tax exemptions provide state and   local governments with a subsidy to finance crucial infrastructure   projects; because municipal bonds are tax-exempt, investors are   willing to accept lower interest payments, thus reducing borrowing   costs for governments; and          WHEREAS, Approximately 6 percent of all bonds issued each   year in the United States are municipal bonds, and in 2016, state   and local governments issued nearly $424 billion in tax-exempt   bonds, representing a six-year high and a 12 percent increase over   2015; governmental bonds typically fund schools, transportation   infrastructure, utilities, and other improvements, creating jobs   while improving the quality of life for area residents; and          WHEREAS, State and local governments make approximately 75   percent, the overwhelming majority, of our nation's infrastructure   investments, and many of those investments are financed with   municipal bonds; and          WHEREAS, The tax exemption for municipal bonds allows the   federal government to support infrastructure investment in a manner   that minimizes federal bureaucracy and maximizes community   decision making; and          WHEREAS, Over the years, the municipal bond market has   offered greater predictability than most, and it holds tremendous   appeal for individual investors, especially those of retirement   age; municipal bonds are owned disproportionately by households,   rather than by banks and other financial institutions, and a   Brookings Institution study found that the average age of municipal   bondholders was 62; and          WHEREAS, If the tax exemption for municipal bonds were to be   repealed, state and local governments would have to offer higher   returns to continue to attract investors, and taxpayers would pay   more for important infrastructure projects; increased debt service   costs would result in fewer such projects in an era in which the   safety and competitiveness of the nation's infrastructure gives   cause for tremendous concern; and          WHEREAS, For more than a century, the highly efficient   municipal bond market has helped to spur vital infrastructure   investment and associated job creation, and eliminating the federal   tax exemption would jeopardize these low-risk investment   opportunities; now, therefore, be it          RESOLVED, That the 85th Legislature of the State of Texas   hereby respectfully urge the United States Congress to retain the   tax exemption for municipal bonds; and, be it further          RESOLVED, That the Texas secretary of state forward official   copies of this resolution to the president of the United States, to   the president of the Senate and the speaker of the House of   Representatives of the United States Congress, and to all the   members of the Texas delegation to Congress with the request that   this resolution be entered in the Congressional Record as a   memorial to the Congress of the United States of America.