Committee on Governmental Debt Management.

• Author: Brock, Emily Swenson
• Position: COMMITTEE UPDATE

Over the past 12 months, the Committee on Governmental Debt Management created five new best practice documents:

* A series focusing on the E,S, and G in ESG [environmental, social, and governance] investing, detailing risk factors for issuers of municipal debt.

* Considerations on the issuance of labeled, or designated bonds, for potential issuers of green or social bonds.

* Information on the voluntary disclosures that issuers make when entering ESG risk disclosures or issuing labeled bonds.

These best practices have been highlighted in national press outlets and have been central to industry discussions among issuers, bond counsel, municipal advisors, underwriters, and regulators. They're available on GFOA's ESG website at gfoa.org/ESG.

The last few years have shifted municipal issuance practices in significant ways. As a result, in early 2022, the Debt Committee started reviewing best practices and advisories through the lens of GFOA's strategic framework, incorporating diversity, equity, and inclusion principles. They then identified new advances in reference rate reform and new and revised products and processes available to issuers of public debt. The revised best practices will head to the Executive Board at the September 2022 meeting for approval.

Legislative and regulatory initiatives

The committee has assisted GFO A's Federal Liaison Center with legislative and regulatory matters over the year, including legislative efforts to curtail or repeal the federal exemption of municipal bond interest, increase the bank qualified debt limit, and reinstate tax-exempt advance refunding.

A common theme for the committee over the last year has been educating issuers and the municipal market overall about ESG risk factors and designating green or social bonds, an area that has fallen under intense regulatory interest. GFOA's Committee on Governmental Debt Management continues to advocate for state and local governments with the federal government. Recent activities have included providing resources to regulatory agencies around ESG and how ESG factors relate to the SEC's Public Finance Abuse Unit and labeled or alternatively marketed bonds.

Beyond ESG, committee members also met with members of Congress and committee staff to discuss federal infrastructure funding frameworks. The debt disclosure conversation has shifted slightly toward identifying the disclosure objectives of the...