This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0143z.DOCX
DATE: 3/6/2024
HOUSE OF REPRESENTATIVES STAFF FINAL BILL ANALYSIS
BILL #: CS/HM 143 Tax-exempt Private Activity Bonds
SPONSOR(S): Transportation & Modals Subcommittee, Sirois and others
TIED BILLS: IDEN./SIM. BILLS: SM 370
FINAL HOUSE FLOOR ACTION: N/A Y’s
N/A N’s GOVERNOR’S ACTION: N/A
SUMMARY ANALYSIS
HM 143 passed the House on March 4, 2024, as SM 370.
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 PABs are tax-exempt under the IRC.
The memorial urges the United States Congress to add spaceports as a qualified tax-exempt category of
PABs. 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.
The memorial is not subject to the Governor’s veto powers.
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DATE: 3/6/2024
I. SUBSTANTIVE INFORMATION
A. EFFECT OF 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 PABs are tax-exempt under the IRC.
The memorial urges the United States Congress to add spaceports as a qualified tax-exempt category
of PABs. The memorial further directs the Secretary of State to dispatch copies of this memorial to the
1
MunicipalBonds.com, Understanding Private Activity Bonds, https://www.municipalbonds.com/education/understanding-private-
activity-bonds/ (last visited Mar. 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 Mar. 4, 2023).
5
MunicipalBonds.com, supra note 1.
6
26 U.S.C. §§ 141(e)(1)(a) and 142(a).
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DATE: 3/6/2024
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.
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.