Investing in Our Communities Act

This bill brings back “advance refunding bonds,” a tool that lets bond issuers refinance older debt early to lock in lower interest costs under federal tax law. It adds guardrails to make sure the refinancing actually saves money and isn’t used to game interest rate differences.

Key points

• What changes: Allows advance refinancing again, but with limits. Most bonds can be advance-refinanced only once (twice for some very old bonds), the old bonds must be paid off at the first allowed date, and the money from the new bonds can’t sit around or be invested to make extra profit. Deals that try to create gains beyond normal interest savings are banned .
• Who is affected: Bond issuers, including those that issue certain private activity bonds; bonds for 501(c)(3) organizations are not included in that group.
• When: These rules apply to advance refunding bonds issued after the bill becomes law.

In short, this aims to help bond issuers refinance at lower rates to reduce debt costs, while preventing abusive transactions and interest-profit schemes .