Bills
| 3.23.22

Prohibiting Federal Tax-Exempt Bonds From Being Used to Build Abortion Clinics (H.R. 219)

Do you support or oppose this bill?

What is H.R. 219?

(Updated July 1, 2020)

This bill — known as the No Abortion Bonds Act — would impose taxes on state, local, and tax credit bonds that are used to build a facility owned or used by an abortion provider for more than 30 days during a year in which interest is paid on the bond. An entity wouldn’t be considered an “abortion provider” if the abortions it performs are only in the cases of rape or incest, or when the life of the mother is in danger.

The Department of the Treasury could exempt certain hospitals from being considered abortion providers by making the hospital’s name available on Treasury’s public website.

Argument in favor

Since the Hyde Amendment already bans the use of federal funds for abortion services, and construction bonds are essentially a federal subsidy, it follows that federal tax-exempt bonds shouldn’t be used to support abortion clinics in any way — including by funding their construction.

Argument opposed

In general, the abortion clinics in question aren’t abortion-only providers — they’re women’s health clinics that provide important services such as STI/STD testing, contraceptive prescriptions, and more. Cutting off their access to tax-exempt bonds would hurt women’s healthcare.

Impact

Hospitals; abortion providers; state, local, and tax credit bonds; Internal Revenue Code; and the Department of the Treasury.

Cost of H.R. 219

A CBO cost estimate for this bill is unavailable.

Additional Info

In-Depth: Rep. Jason Smith (R-MO) reintroduced this bill from the 115th Congress to prohibit federal tax-exempt bonds' use to finance the construction of abortion clinics:

“For 42 years it has been law in this country that no federal funds can be used for abortion services. Yet a loophole in the tax code remains, allowing abortion clinics to be built using federally subsidized tax-free bonds. The would remedy this and take another step in the right direction to defend innocent life and protect vulnerable unborn children.”

In the previous Congress, Rep. Robert Pittenger (R-NC) introduced this bill to prohibit the use of federal tax-exempt bonds to finance the construction of abortion clinics:

“Under a loophole in the current law, cities, counties, and states can issue federally tax-free bonds to finance construction of abortion clinics. These tax-free bonds are intended to finance schools, hospitals, and infrastructure, not abortion clinics.  This legislation applies the spirit of the Hyde Amendment to the tax code, by preventing tax-free bonds from going to abortion providers.”

Given that Planned Parenthood — which provides abortion services in some of its clinics — has historically been a major recipient of these bonds, Pittenger argues that tax-exempt bonds convey a direct benefit to Planned Parenthood, since it acts as a less expensive loan for the group to pay back. He said these bonds therefore act as a federal subsidy to Planned Parenthood that is inconsistent with current federal law, which prohibits the use of taxpayer funds for abortion or abortion services.

Although Planned Parenthood has not made public statements on this bill, it has commented on similar attempts to revoke or otherwise reduce its funding, especially around abortion care. Dara Singiser, Vice President of Public Policy and Government Relations for the organization, said the following about H.R. 4712, a bill criminalizing abortion providers:

“Planned Parenthood physicians provide high-quality medical care and adhere to the most rigorous professional standards, including providing emergency care. The political agenda here is clear: to take away access to safe, legal abortion. Time and time again, the American people have rejected these blatantly political attacks on women’s health care. Instead of attacking women’s health, Congress needs to listen to the American people and invest in women and families.”

Missouri Right to Life supports this bill in the current Congress. Its executive director, Susan Klein, says:

“Missouri Right to Life supports the as it will deny ‘tax credit bond status’ to any bonds used to provide a facility owned by an abortion provider. Our federal tax dollars should not be used to support the killing of unborn children. This bill is another attempt by our pro-life legislators to reduce and eventually eliminate the hundreds of millions of dollars in government funds making its way into the pockets of abortion providers each year. Missouri Right to Life applauds Congressman Jason Smith and all of the Members of Congress who support this bill.”

Americans United for Life, the U.S. Conference of Catholic Bishops, Susan B. Anthony List, National Right to Life, the Eagle Forum, March for Life, and Family Policy Alliance, are among the organizations that supported this bill in the 115th Congress. In its letter of support, Family Policy Alliance wrote of this bill:

“[This] legislation applies the principle of the Hyde Amendment consistently to government spending, including through the tax code, ensuring that families are not forced to subsidize abortion facilities. Additionally, we appreciate that [this] legislation demonstrates a dedication to good stewardship of American families’ money. Many of the facilities that have benefited from millions of dollars worth of federal tax-exempt bonds include Planned Parenthood and its affiliates, which together generate over one billion in revenue according to Planned Parenthood’s latest annual report. With our nation’s current debt level and many existing infrastructure responsibilities, providing tax-free, subsidized, low-interest loans for abortion facilities—particularly for an abortion giant like Planned Parenthood— is clearly not a priority.”

There are 42 cosponsors of this bill in the current Congress, all of whom are Republicans. In the previous Congress, there were 104 cosponsors of this bill, including 103 Republicans and one Democrat.


Of Note: State and local governments are allowed to finance the construction of schools, roads, and hospitals with special bonds exempt from federal taxes. These tax breaks for the investors in such projects, which cost the federal government billions in revenue and lead to lower costs for the borrowers, are a federal taxpayer subsidy of these projects.

While the 1976 Hyde Amendment prohibits the use of taxpayer funding for abortion or abortion-related services, the use of tax-exempt federal bonds to build abortion clinics represents a loophole that allows state and local governments to effectively use federal subsidies for abortion clinics.

Lawmakers in various states have issued millions of dollars' worth of tax-exempt bonds to finance the construction of Planned Parenthood clinics in a range of states::

  • In 2012, New York City issued a tax-free, $15 million bond for renovation of Planned Parenthood’s national headquarters

  • In 2007, the Illinois Finance Authority approved an $8.05 million tax-free bond to pay for a Planned Parenthood abortion clinic in Aurora

  • In 2006, the Massachusetts Development Finance Agency granted a $5 million tax-exempt bond for a Planned Parenthood clinic in Worcester


Media:

Summary by Lorelei Yang

(Photo Credit: iStock.com / jetcityimages)