Airport Alert: House Ways and Means Committee Releases Reconciliation Proposal

May 12, 2025

The House Ways and Means Committee today released the tax portion of the reconciliation bill, and the measure appears to retain tax exemptions for private activity bonds (PABs) and municipal bonds. AAAE and other stakeholders have been urging lawmakers to preserve the tax-exempt status to help airports finance infrastructure projects and avoid paying higher borrowing costs.
 
Earlier this year, GOP lawmakers identified a long list of potential revenue raising proposals to help offset the cost of extending the 2017 tax cuts and implementing other tax cuts, costing approximately $5 trillion. Doing away with tax exemptions for PABs and municipal bonds could save the federal government an estimated $365 billion over 10 years, making them potential targets.
 
Lawmakers on both sides of the aisle also weighed in on the bond proposals. On April 4, 25 House Republicans and Democrats sent a letter to Way and Means Committee urging it to preserve tax-exempt municipal bonds. The group pointed out that municipal bonds help drive the local economy, spur job growth, and fund critical infrastructure projects.
 
On April 11, House Financial Services Committee French Hill (R-AR) also sent a letter the House Way and Means Committee Chairman urging him to preserve tax-exempt municipal bonds. The letter was signed by the full committee vice chair and five other Republican subcommittee chairs.
 
The reconciliation process is far from over. But the fact that the Ways and Means Committee draft keeps the tax exemptions in place is good news for airports that rely on bonds to help finance their infrastructure projects.
 
In 2017 AAAE and ACI-NA helped to defeat a proposal that would have eliminated PABs. But the reconciliation package that Congress passed that year repealed the tax-exempt status for advance refunding bonds, which airports had used to refinance debt and take advantage of lower interest rates.
 
The House Ways and Means Committee is scheduled to mark up its tax portion of the reconciliation bill tomorrow. House Speaker Mike Johnson (R-LA) has said that he wants the House to finish its part of the reconciliation exercise by Memorial Day.