Members of the Senate Commerce, Science and Transportation Committee held a hearing on the nomination of former South Bend, Indiana Mayor Pete Buttigieg to serve as the Secretary of Transportation.
Chairman Roger Wicker (R-MS) opened the hearing by commending the former Secretary, Elaine Chao, for her work and by recognizing Buttigieg for his qualifications and local perspectives. Ranking Member Maria Cantwell (D-WA) went on to outline some of the pressing issues facing the next Transportation Secretary, including major mass transit budget shortfalls and other issues stemming from the ongoing COVID-19 pandemic.
Buttigieg’s opening statement outlined his work as the former mayor of Indiana’s fourth largest city and how he hopes to bring his local experiences to the Department of Transportation, if confirmed. The hearing went on to discuss a broad array of infrastructure issues related to rail, rural transportation, safety, broadband, the American Disability Act, regulatory burden, climate and others.
In many of his answers, Buttigieg stressed his desire to listen to state, local and tribal leaders who frequently build and maintain much of America’s infrastructure network. And, while he maintained support for protecting the underlying purposes of regulations, he committed to working with states and local governments to minimize regulatory burdens when feasible.
A particularly noteworthy moment occurred when the Chairman Wicker expressed his intent to work with Senator Debbie Stabenow (D-MI) to work on legislation to address the elimination of advance refunding bonds. He asked Buttigieg if he was familiar with the concept and if he would offer his support on their endeavor. Buttigieg stated that “as mayor few things gave me more fiscal pleasure than to find that we could save taxpayer dollars by refunding previously existing debt,” and went on to affirm his support for bringing advance refundings back.
Prior to January 1, 2018, issuers used to be able to issue a single-time tax exempt advance refunding bond to refinance an outstanding tax-advantaged bond. The Tax Cuts and Jobs Act of 2017 (P.L. 115-97) eliminated the tax exemption. Issuers may still issue tax-exempt current refundings and taxable advance refundings. The inability to issue tax-exempt advance refundings limits issuers’ ability to take advantage of favorable interest rate environments and save public taxpayer dollars. Senators Wicker and Stabenow introduced the LOCAL Infrastructure Act (S. 4129) in the 116th Congress, which would restore the tax exemption and garnered NAST support.