IV 

113TH CONGRESS 

1ST SESSION H. RES. 112 

Celebrating the history of municipal bonds, the 100-year precedent of the 

Federal tax exemption for municipal bond interest, and the important 

contribution municipal bonds have made to economic growth and 

wellbeing in each State and municipality in our great Nation. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 13, 2013 

Mr. TERRY (for himself and Mr. NEAL) submitted the following resolution; 

which was referred to the Committee on Ways and Means 

RESOLUTION 

Celebrating the history of municipal bonds, the 100-year 

precedent of the Federal tax exemption for municipal 

bond interest, and the important contribution municipal 

bonds have made to economic growth and wellbeing in 

each State and municipality in our great Nation. 

Whereas in the 200 years since the first recorded municipal 

bond was issued by the City of New York to build a 

canal, municipal bonds have helped build a strong economy and provide for the health and welfare of our citizenry; 

Whereas three-quarters of all infrastructure investments 

made in the United States are financed by municipal 

bonds; 


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Whereas municipal bonds finance infrastructure projects that 

touch the daily lives of every American citizen and business—roads we drive on, schools and education for our 

children, affordable family housing, water systems that 

supply safe drinking water, courthouses, hospitals and 

clinics to treat the sick, airports and ports that help 

move products domestically and overseas, and utility 

plants that power our homes, businesses, and factories; 

Whereas interest on municipal bonds is exempt from Federal 

taxation as part of the principle of reciprocal immunity 

under which the Federal Government is exempt from 

State and local taxation and State and local governments 

are exempt from Federal taxation; 

Whereas the Federal Revenue Act of 1913 codified this principle as part of the Federal income tax by exempting 

from income tax the interest on municipal bonds; 

Whereas exempting municipal bond interest from Federal 

taxation reduces the cost of infrastructure financing by 

State and local governments; 

Whereas reduced infrastructure costs for State and local governments allow for greater infrastructure investments 

and savings passed directly to taxpayers and ratepayers 

in the form of reduced taxes and fees; 

Whereas, because of critical infrastructure needs, it is estimated that in 2013, $300 billion of municipal bonds will 

be issued; 

Whereas keeping infrastructure costs low is critical for job 

creation and rebuilding infrastructure is crucial to our 

Nation’s State and local economies, including power generation, distribution, and transmission; 


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Whereas the ability of municipal bonds and the 100-year 

precedent of the Federal income tax exemption for municipal bonds provides State and local governments timely 

access to cost-effective capital; and 

Whereas the Federal tax exemption for municipal bond interest is a cost-effective financing vehicle available to State 

and local governments: Now, therefore, be it 

1 Resolved, That the House of Representatives— 

2 (1) celebrates the history of municipal bonds; 

3 (2) celebrates the 100-year precedent of the 

4 Federal tax exemption for municipal bond interest; 

5 and 

6 (3) celebrates the important contribution mu7 nicipal bonds have made to the economic growth and 

8 wellbeing in each State and municipality in our 

9 great Nation. 

Æ 


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