This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0143b.WMC
DATE: 1/5/2024
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HM 143 Tax-exempt Private Activity Bonds
SPONSOR(S): Transportation & Modals Subcommittee, Sirois
TIED BILLS: IDEN./SIM. BILLS: SM 370
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Transportation & Modals Subcommittee 16 Y, 0 N, As CS Hinshelwood Hinshelwood
2) Ways & Means Committee Rexford Aldridge
3) Infrastructure Strategies Committee
SUMMARY ANALYSIS
Private activity bonds (PABs) are issued by state and local governments for the purpose of financing projects
for a private, non-government user where the projects have a public or common utility. A PAB that is
considered a qualified PAB is tax-exempt under the Internal Revenue Code (IRC), meaning that the interest
earned on the qualified PAB is excluded from a person’s calculation of gross income for federal income tax
purposes. Because interest paid to bondholders on these obligations is not includable in their gross income for
federal income tax purposes, bondholders are willing to accept a lower interest rate than they would accept if
the interest was taxable. Qualified PABs not only benefit private entities but the public as well, due to increased
infrastructure spending.
Included on the list of qualified PABs are “exempt facility bonds,” which are bonds issued for facilities such as
airports, docks and wharves, facilities for the furnishing of water, sewage facilities, solid waste disposal
facilities, and qualified highway or surface freight transfer facilities. In other words, these facilities qualify for
tax-exempt financing under the IRC. Spaceports are not currently a type of facility for which a qualified (i.e.,
tax-exempt) PAB may be issued.
The memorial provides historical information on the state’s support for space transportation and related
transportation facilities, such as spaceports. The memorial explains the importance of adding spaceports as a
type of facility for which associated private activity bonds are tax-exempt under the IRC.
The memorial urges the United States Congress to add spaceports as a qualified tax-exempt category of
private activity bonds. The memorial further directs the Secretary of State to dispatch copies of this memorial to
the President of the United States, the President of the United States Senate, the Speaker of the United States
House of Representatives, and each member of the Florida delegation to the United States Congress.
Legislative memorials are not subject to the Governor’s veto powers and are not presented to the Governor for
review. Memorials have no force of law, as they are mechanisms for formally petitioning the federal
government to act on a particular subject.
This memorial has no fiscal impact on the state, local governments, or the private sector. STORAGE NAME: h0143b.WMC PAGE: 2
DATE: 1/5/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Private activity bonds (PABs) are issued by state and local governments for the purpose of financing
projects for a private, non-government user where the projects have a public or common utility.
1
A PAB
that is considered a qualified PAB is tax-exempt under the Internal Revenue Code (IRC),
2
meaning that
the interest earned on the qualified PAB is excluded from a person’s calculation of gross income for
federal income tax purposes.
3
Because interest paid to bondholders on these obligations is not
includable in their gross income for federal income tax purposes, bondholders are willing to accept a
lower interest rate than they would accept if the interest was taxable.
4
Qualified PABs not only benefit
private entities but the public as well, due to increased infrastructure spending.
5
Included on the list of qualified PABs are “exempt facility bonds”, which are bonds issued for the
following types of facilities:
6
Airports,
Docks and wharves,
Mass commuting facilities,
Facilities for the furnishing of water,
Sewage facilities,
Solid waste disposal facilities,
Qualified residential rental projects,
Facilities for the local furnishing of electric energy or gas,
Local district heating or cooling facilities,
Qualified hazardous waste facilities,
High-speed intercity rail facilities,
Environmental enhancements of hydroelectric generating facilities,
Qualified public educational facilities,
Qualified green building and sustainable design projects,
Qualified highway or surface freight transfer facilities,
Qualified broadband projects, or
Qualified carbon dioxide capture facilities.
In other words, the facilities listed above qualify for tax-exempt financing under the IRC. Spaceports are
not currently a type of facility for which a qualified (i.e., tax-exempt) PAB may be issued.
Effect of the Memorial
The memorial provides historical information on the state’s support for space transportation and related
transportation facilities, such as spaceports. The memorial explains the importance of adding
spaceports as a type of facility for which associated private activity bonds are tax-exempt under the
IRC.
The memorial urges the United States Congress to add spaceports as a qualified tax-exempt category
of private activity bonds. The memorial further directs the Secretary of State to dispatch copies of this
memorial to the President of the United States, the President of the United States Senate, the Speaker
1
MunicipalBonds.com, Understanding Private Activity Bonds, https://www.municipalbonds.com/education/understanding-private-
activity-bonds/ (last visited Dec. 4, 2023).
2
Title 26 of the United States Code.
3
26 U.S.C. § 103(a)&(b)(1).
4
Internal Revenue Service, Publication 4078 (Rev. 9-2019): Tax-Exempt Private Activity Bonds, p. 1, https://www.irs.gov/pub/irs-
pdf/p4078.pdf (last visited Dec. 4, 2023).
5
MunicipalBonds.com, supra note 1.
6
26 U.S.C. §§ 141(e)(1)(a) and 142(a). STORAGE NAME: h0143b.WMC PAGE: 3
DATE: 1/5/2024
of the United States House of Representatives, and each member of the Florida delegation to the
United States Congress.
Legislative memorials are not subject to the Governor’s veto powers and are not presented to the
Governor for review. Memorials have no force of law, as they are mechanisms for formally petitioning
the federal government to act on a particular subject.
B. SECTION DIRECTORY:
Not applicable.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The memorial neither authorizes nor requires executive branch rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
STORAGE NAME: h0143b.WMC PAGE: 4
DATE: 1/5/2024
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On December 7, 2023, the Transportation & Modals Subcommittee considered one amendment, which
was adopted, and reported the bill favorably as a committee substitute. The amendment clarifies the
memorial’s message that spaceports should qualify as a type of facility for which associated private activity
bonds are tax-exempt under the Internal Revenue Code.
This analysis is drafted to the committee substitute as approved by the Transportation & Modals
Subcommittee.