ANNUAL CONFERENCE

NEWSLETTER

F A L L 2 0 1 3

President’s Message

Since our last conference in our nation’s Capital, there have been several new develop- ments in the Municipal world. We have witnessed the declaration of bankruptcy by one of the largest cities in our nation, efforts to eliminate or limit the tax-exempt status of municipal bonds, and possibility the end to record low interest rates. On September 20, the SEC released the long awaited Municipal Advisor definition. Most of our members have been working diligently with clients on refunding bond issues, in addition to answering questions about what lead to Detroit’s bankruptcy declaration and how our clients can avoid such a situation. In addition, many members have been contacting their representatives to stress the importance of maintaining the tax- exemption of municipal bonds. Despite your busy schedules, many of you have worked tirelessly with NAIPFA to pro- mote the interest of our members, but most importantly to represent municipal issuers and taxpay- ers’ across the Country. For that, I offer my sincere thanks for your participation and contributions to NAIPFA. I believe that it has made and will continue to make a significant difference. Terri Heaton and the Conference Planning Committee have been busy planning for our upcoming conference in Nashville, Foundations for the Future. We are excited for a wonderful com- plement of speakers from the MSRB, SEC, the rating agencies, attorneys and others who will be providing us with the latest information regarding important municipal advisory topics. Learning from these experts is very important for us to plan for how the regulatory arena will impact our firms and the future of public finance. NAIPFA continued to be extremely active this year. We are excited to announce that our new website will be going live September 30, 2013! Our Public Affairs Committee has been very busy this year and now with the release of the MA definition by the SEC and the expectation of nu- merous MSRB releases, we expect to continue to be very busy. Larry Kidwell is the Committee Chair and does an excellent job updating the membership with his newsletter articles. NAIPFA has prepared numerous comment letters to the MSRB and SEC regarding specific rule releases and other matters. Steve Apfel- bacher has also worked tirelessly in seeing that NAIPFA’s voice was heard on numerous issues regarding municipal advisory regulation. Na- than Howard has assisted us so capably in preparing our comments and offering his perspective from a public finance legal standpoint. Jeanine Rodgers-Caruso, CIPFA 2013 NAIPFA President ...CONTINUED ON PAGE 3

In This Issue: President’s Message 1,3 Board Member Spotlight: Larry Kidwell 9

Thank You to Corporate Sponsors 2 Nashville, Tennessee, Q & A Fun Facts 10

Who is NAIPFA 3 Something For Everyone In Nashville, TN 11

Message From the Executive Director 5,7 NAIPFA Public Affairs Report 13-23 National Association of Independent public finance advisors NAIPFA Board of Directors 5 Current NAIPFA Members & Associates 23 naipfa NOTABLE news

Annual Conference Schedule 6-7 Next Year’s Conference Dates 25 1 N

2 Who is naipfa?

The National Association of Independent Public Finance Advisors (NAIPFA) is a professional organization limited to firms that specialize in providing financial advice on bond sales and fi- nancial planning on public projects of public agencies. NAIPFA member firms must be com- pletely independent of the underwriting of municipal securities by banks and securities dealers. Member firms must also be structured such that financial advice is not Incidental to any other service.

The purpose of the Association is to promote the common interests of independent advisory firm members. Initially, efforts will build credibility and recognition by implementing a public relations and marketing plan to champion the professional, independent image of the member firms.

The Association will speak to those issues of common interest to its membership which can best be addressed by a third party, and will seek to improve our effectiveness in influencing leg- islative matters of interest to our industry and clients.

The Association will seek to unify the member firms to develop and promote rigid ethical and professional standards for firms and their employees, to review compliance with those stand- ards, to provide educational materials describing the role of the independent advisor and to respond to legislative needs on behalf of the member firms and the public agencies they serve.

President’s message continued….

NAIPFA continues to serve as the “voice” for independent financial advisors. We have attended MSRB round table meetings in both January and June of this year. We have also had several meetings in Washington D.C. as we met with SEC Commissioners and staff, MSRB staff, and GFOA representatives to discuss municipal advisory regulation and its im- plications. NAIPFA members are also actively participating in meetings with the MSRB in developing the framework for the test that will be required for municipal advisors. The Communications Committee under the leadership of Maggie Burger continues to do an excellent job with the monthly newsletter and has worked tirelessly to develop the new web site. Lori Raineri, as Chair of the Membership Committee, continues to pursue new members for NAIPFA, and we believe the benefits of being a member of NAIPFA continue to be recognized. We would like to welcome the new members of NAIPFA! The Standards, Ethics and Certifica- tion Committee will be administering the CIPFA exam during the Conference and we wish you all luck! The Organiza- tional Structure Committee has been eagerly awaiting the release of the Municipal Advisor definition so that they can de- termine their final recommendations to the membership. The Committee has developed proposed By-law changes that would support their recommendations. There are many exciting topics to discover at the upcoming conference! A big thank you goes to the Conference Planning Committee and Roseanne Hoban. The Welcome Reception this year will take place in the Tennessee Capitol Legislative Chambers. The Annual Dinner will be held at the Country Music Hall of Fame! We are hopeful that you will join us in Nashville for our 24th NAIPFA Conference “Foundations for the Future.” I look forward to seeing you all!

3 4

A Message from the executive director….

Roseanne Hoban Welcome to Music City! Before anything more is said, a NAIPFA Executive tremendous thank you must be extended to the 2013 Conference Director Committee comprised of Shelley Aronson, Steven Bittel, Jean Buckley, Larry Burger, Pam Clary, Colette Irwin-Knott, Larry Be sure to mark your calendar for the 2014 NAIPFA Kidwell, Bruce Kimmel, Jim Mann, Jonathan Millard, Lori Rain- Annual Conference, October 8-10, 2014 in Portland, Oregon. eri, Jeanine Rodgers Caruso, Mike Sudsina, and chaired by Terri I will be visiting the city shortly to finalize all of the conference Heaton. With all of the rapid changes in the industry, it has been details and am so excited for the event to be there! Portland is a challenge to keep the program topics timely and many altera- beautifully lush boasting numerous waterfalls but doesn’t fall tions were made along the way. The conference committee is short on culture or cuisine. If you are interested in helping mold confident that the final product will keep you captivated. We the conference programming consider becoming a conference have some historical and interesting locations for our social committee member. Please contact me or any of the committee events; the Welcome Reception will be at the Tennessee Capitol members and we will be happy to discuss the details with you. and the Annual Dinner is taking place at The Country Music Hall This year there has been quite a bit of committee activ- of Fame. The dinner includes a tour of the museum. And, back ity. The Conference Committee, as mentioned above, creates by popular demand is the Friday Night “Dine in Nashville”. The the schedule of events for the conference and solicits sponsors. success of Dine in Denver and Dine in Alexandria continues to The Public Affairs Committee has not rested, and with the new grow! The mix of great conversation, amazing food and restau- definition revealed the committee will continue at full speed. rants only found here remains the same and closes the conference The Organizational Restructuring Committee has been in style. waiting in the wings but again, now that a definition has been We are constantly trying to raise the bar and make the made public, the committee will soon be very active. The Com- conference more beneficial to all; with the ultimate goal of mak- munications Committee is quite engaged continuing to produce ing the NAIPFA Annual Conference the one event you MUST a monthly newsletter and is very excited for the reveal of the attend year after year. Be sure to participate in the Annual new NAIPFA website. These are just a few ways to become Meeting of the membership on Thursday when important issues more involved in NAIPFA. Remember many hands make light including the vote on the new Board members will take place. work! ...CONTINUED ON PAGE 7

naipfa board of Directors 2012-2013

President Vice President Secretary Treasurer Jeanine Rodgers Caruso, CIPFA, Terri Heaton, CIPFA Bruce Kimmel, CIPFA Michael Sudsina, CIPFA Fiscal Advisors & Marketing, Inc. Springsted Incorporated Ehlers Sudsina & Associates

Western Zone Director Midwestern Zone Director Eastern Zone Director Jean Buckley, CIPFA Larry Kidwell, CIPFA Jeff Smith, CIPFA Tamalpais Advisors, Inc. Kidwell & Company Municipal Solutions, Inc.

Director At Large Director At Large Shelley Aronson, CIPFA Robert J. Bendzinski, CIPFA First River Advisory Bendzinski & Co.M.F.A.

Immediate Past President Executive Director Colette Irwin-Knott, CIPFA Roseanne M. Hoban Umbaugh NAIPFA 5 Annual conference schedule

6 Annual conference schedule

Executive Director Message Continued...

Our membership and CIPFA designees continue to in- crease at a notable pace. NAIPFA currently boasts 129 active Cer- Roseanne M. Hoban, Executive Director tified Independent Public Finance Advisors; as that number grows National Association of Independent Public Finance so does the professionalism in our industry. We currently stand at Advisors 33 member firms and 15 associate members. P.O. Box 304 Lastly, I want to thank the membership for their support Montgomery, IL 60538-0304 and interest in the organization. NAIPFA is only as strong as its (630) 896-1292 members. My telephone, email, and fax lines always sit ready to (209) 633-6265 fax address any concerns or comments you may have. Thank you and [email protected] enjoy the conference!

7 8 Board member spotlight

Any details about your family you would like to share? Larry Kidwell, CIPFA I married way, way, way, above my station in life and

any who know my wife Karen would agree. We have three won- NAIPFA Public Affairs derful children including son Grey and daughters Morgan and Committee Chairman Reagan. Grey was born in 2001: exactly 100 years after the birth of Clarke Gable; on the anniversary date President Lincoln signed the 13th Amendment abolishing slavery in the United States; and on the anniversary date Thomas Edison finished con- Where are you from or where did you grow up? struction of the first motion picture studio. Morgan was born in 2003: 74 years following the birth of Dr. Martin Luther King Although a proud 7th generation Tennessean, it would Jr.; on the anniversary date that Christopher Columbus set sail be fair to say I am a product of the South. My parents were na- for Spain; and the anniversary date of the crowning of Elizabeth tives of Kentucky and Tennessee, I was born in Horry County, 1, Queen of England. Reagan was born in 2004: named in honor South Carolina; attended kindergarten, first, and second grade of President Ronald Reagan; shares the birthday of Howard H. in Clayton County Georgia; third, fourth, and fifth grade in Baker, Jr., former Tennessee U.S. Representative and Senator, Spartanburg, South Carolina; and sixth through twelfth in Cross- U.S. Senate Majority Leader, and Chief of Staff to President ville, Tennessee. Ronald Reagan; and on the anniversary date that the Continental Congress adopted the Articles of Confederation. Where did you go to college at, grad school and were you a member of any groups, sports teams, etc. that When you were in school did you ever dream of one might interest people? day having the job you have now?

I graduated from Tennessee Technological University I was an engineering student when I met a mortgage with a BSBA in Business Administration with a major in Finance. investment banker that explained the job. The next quarter I During college I was elected to the Senate of the Associated changed my major to finance with the express intention of one Student Body. I was honored to pledge and be initiated into the day being a public finance investment banker. I interviewed with Kappa Sigma Fraternity where I participated in intramural foot- ball, basketball, and softball. I was elected to the Tennessee every Republican elected representative to ask that they write a Tech Interfraternity Council and served as Vice-Chairman until recommendation to the Dunn for Governor Campaign that I be elected as Vice-President of the Southeastern Interfraternity hired by the finance division of the Campaign -all did- and I land- Conference. I was a member of the Tennessee Tech Rugby Club ed the job of deputy director of finance and chief of staff of field and played several positions. operations. Governor Dunn was not elected to a second term, however a member of the campaign finance leadership team was Do you have any hobbies or activities you enjoy that managing partner of J.C. Bradford & Company, then one of the you would like to share? leading public finance investment banking firms in the South- east, and he hired me as a public finance associate in the fiscal Running, Stopping, Sipping, Knotting, Guitar Playing, advisory department of the Company and began my career in Singing, Golf, and Tennis. public finance over 26 years ago.

A special thank you to larry kidwell as

“host” naipfa member in

Nashville, Tennessee

Larry Kidwell is the President and Founder of Kidwell & Company which was established in 2001.

9 Nashville, Tennessee, Q & A fun facts

Q. What is the shape of the driveway at President Andrew Q. What singer used to wash dishes at the Nashville Palace Jackson's home Hermitage? and is now credited as beginning the movement of New Tra- A. The drive is in the shape of a guitar. ditionalists? A. Randy Travis. Q. Which Nashville captain gave the American flag its most famous nickname? Q. According to the Lovin' Spoonful, how many guitar pick- ers are there in Nashville? A. Retired Captain William Driver brought his trusty flag "Old Glo- A. 1352 ry" home to Nashville in 1837. Q. Who is the only country recording artist to be elected Q.What was the original name of the Grand Ole Opry? twice to the Country Music Hall of Fame? A.The WSM Barn Dance. A. Roy Rogers. Q. What Nashville musician had a guitar-shaped swimming pool? Q. After drinking a cup of locally produced coffee in Nash- A. Webb Pierce. ville, which U.S. president coined the phrase "good to the last drop!"? Q. What popular female singer started out as a tour guide at A. Theodore Roosevelt. the Country Music Hall of Fame? A. Kathy Mattea. Q. What famous Nashville candy is made of chocolate, caramel, Q. On what Eve was Nashville founded? marshmallows and peanuts? A. Nashville was founded on Christmas Eve 1779. A. Goo Goo Clusters.

10 Nashville, Tennessee, has something for everyone….

Historic South Country Music Mecca  Belle Mead Plantation highlights include the  The Grand Ole Opry is the world's longest-running 1853 Mansion (restored to the sumptuous ele- radio show and showcases the best in country music, gance of the ), the 1890 Carriage bluegrass and more. House and Stable, and the 1790 Log Cabin, one  The Country Music Hall of Fame and Museum has of the oldest housed in Tennessee. been the home of Country Music since 1967.  Ryman Auditorium: one of the South's premier per- formance halls launched a tradition of showcasing a wide variety of entertainment genres.

“Athens of the South”  The Parthenon: Athens, Greece isn't the only city with a classical stone temple dedicated to the arts. Home of Andrew Jackson

 The Hermitage: Despite Andrew Jackson’s ordi- nary heritage, he built The Hermitage in Nashville, a stunning Ante-bellum plantation now restored as a museum dedicated to Old Hickory.  General Jackson Showboat: Styled in the grand tradition of the paddlewheel riverboats that cruised Distilleries the great Southern waterways in the 1800s.  Jack Daniels Visitor’s Center and Distillery: Now, it's the oldest registered distillery in the United States and the Visitor Center is where the story of Jack’s life is told with rare mementos.  Prichard’s Distillery: Prichard’s Distillery hand crafts their American distilled spirits in small batches.  Dickel Distillery: George A. Dickel discovered that Football whisky made during the winter was smoother than whisky  LP Field: The Tennessee Titans play in one of the made in the summer. NFL's most beautiful stadiums

Tootsies: Live Pucketts Gro.: Miss Daisy King’s Prince’s Hot Chicken: Café Loveless Motel: Hot The Bluebird Café: Country Music Groceries, eatery, and Kitchen: Call-in/pick-up southern Biscuits, Country Ham one of the world’s live music. Famous Tea Punch fried chicken Specialty preeminent listening rooms Southern Cooking 11 12 NAIPFA PUBLIC AFFAIRS COMMITTEE REPORT

The NAIPFA Public Affairs Committee The NAIPFA Public Affairs Committee brings you the wisdom of Will Rogers who once said “If ‘pro’ is the opposite of ‘con’; what is the opposite of progress?” He also stated “I don’t make jokes, I just watch the government and report the facts.” On a different note, Mick Jagger once stated “anything worth doing is worth overdoing,” followed by “I can’t get no satisfaction,” which might actually be a mission statement for business as usual in Washington DC. President Ronald Reagan was quoted as saying “Government always finds a need for whatever money it gets,” which takes us back to the wisdom of Will Rogers, who said “it’s a good thing we don’t get all of the government we pay for.” The NAIPFA Public Affairs Committee Members include: Jeanine Rodgers Caruso, NAIPFA President; Steve Apfel- bacher, President, Ehlers Inc.; Tom Johnsen, Partner, Fieldman Rolapp & Associates; John Haas, President of Ranson Financial; Shelley Aronson; President of First River Advisory; Nate Howard, NAIPFA Legal Counsel; and Chairman Larry Kidwell.

NAIPFA has issued testimony, commentary, official let- NAIPFA Statements and Comments Published in The Bond ters, responses, position statements and editorials, and has collab- Buyer and Other Publications orated with other municipal securities industry organizations to co-author other public policy position releases. Responding to  MSRB Refines Bondholder Consent Proposal – November NAIPFA Member requests, the Public Affairs Committee has 21, 2012 undertaken to provide notice and content of publicly released  DTCC Delays Action on Fee Hike, Pending Talks – Janu- information to the NAIPFA Membership utilizing ListServ prior ary 10, 2013 to the release of such information to the public. All NAIPFA  NAIPFA: Bond Ballot Restrictions Wouldn’t Violate 1st information released to the public is available for view and down- Amendment – March 14, 2013 load at www.naipfa.com. The following provides a listing of the commentary, responses, opinion editorials, and press commen-  Dealers: Lack of Clarity Driving Complexity of G-17 Dis- tary issued by NAIPFA since the last annual conference in Alexan- closures – March 26, 2013 dria, Virginia.  Lockyer Wants Legal Opinion on FAs, Lawyers, and Bond Elections – March 26, 2013 NAIPFA Comments to Proposed SEC Regulations and MSRB Rules  NAIPFA Commentary on Stivers Amendment – April 9, 2013  Joint Comment Letter with GFOA and SIFMA regarding Proposed DTCC Fee Increases – October 16, 2012.  NAIPFA Commentary - MSRB Needs to Clarify Munici-  Comments to MSRB regarding Exemption Provisions of pal Advisor Rules – May 10, 2013 Draft Rule Amendment to Limit Dealer Consents to Changes  Reps. Stivers, Moore, Lobby SEC Chair White on MA in Authorizing Documents for Municipal Securities – De- Definition – May 13, 2013 cember 21, 2012.  Dealers Like MSRB Retail Order Proposals; MAs Warn  Comments to MSRB regarding Concept Proposal to Require Issuers Can Be Exploited – June 18, 2013 Underwriters to Submit Preliminary Official Statements to the MSRB’s EMMA System – February 8, 2013.  MSRB to Ease Standard of Independence for Board Mem- bers – July 8, 2013  Comments to SEC regarding SR-MSRB-2013-01 – Pay-to- Play & Bond Ballot Contribution Disclosures – March 12, Upcoming Comments to Proposed SEC Regulations and 2013. MSRB Rules  Comments to SEC regarding SR-MSRB-2013-05 – Retail  Consolidation of Fair Pricing Rules Order Period – July 19, 2013.  Consolidation of Registration Rules  Comments to SEC regarding SR-MSRB-2013-06 – Composi-  Best Execution Rule tion of the Board – August 14, 2013.  Concept Release on Pre and Post Trade Pricing

13 ...CONTINUED ON PAGE 15 14 NAIPFA PUBLIC AFFAIRS COMMITTEE REPORT continued….

NAIPFA Strongly Supports Preservation of the Tax- NABL Comments Regarding Tax-Exemption Exemption of Municipal Bonds The National Association of Bond Lawyers (“NABL”) has There exists a clear and present threat stated “The tax-exemption of the interest on State and local bonds that the U.S. Congress could act to elim- is a proven, effective way to provide needed funding for public inate the tax-exempt status of municipal infrastructure and the related benefits to the economy from job securities. NAIPFA is working with issu- creation and business development.” NABL highlights the follow- er and industry groups across the Coun- ing points in a publication entitled Tax Exempt Bonds: Their Im- try to support efforts to maintain the uncapped tax-exempt portance to the National Economy and to State and Local Government. status of municipal securities. It is expected that the issue of The following summary points are enumerated therein: tax-exemption, as a part of comprehensive tax reform, will be  Exemption of state and local government bond interest helps considered concurrently with efforts to increase the U.S. debt lower the cost of capital funding for state and local govern- ceiling. Many organizations have published white papers which ments. Any change will increase borrowing costs and the clearly state the any benefit the U.S. government would re- burden of such changes will fall primarily on state and local ceive through the elimination of tax-exemption of municipal governments and through them on their tax and rate payers securities would pale in comparison to the increased costs and not on high-income taxpayers. which would be experienced by state and local issuers of tax- exempt debt. The American Society of Civil Engineers pro-  State and local government bonds provide funding for critical jects that approximately $3.7 trillion in new debt financing will infrastructure. Municipal bonds are utilized to fund capital be needed to construct new and rehabilitate existing infrastruc- projects with very few exceptions. Unlike Treasury Bonds, ture by 2020, and that approximately 90 percent of the cost state and local government bonds are not generally used to will be borne by state and local government. NAIPFA strongly fund deficits. supports the efforts of all issuer organizations to preserve the  Changes to the tax-exemption of municipal bonds will in- tax-exemption of municipal securities. crease borrowing costs. Since the facilities benefitted by state Municipal Bonds Historical Overview and local government bonds are limited to specified public purposes by the Internal Revenue Code, the burden of these The first municipal bond was issued in 1812. Since increases will be borne regressively by lower and middle in- that time, state and local governments have utilized municipal come individuals. bonds to finance capital investment for needs which were de- termined, and the financing approved by, officials of state and  Principles of federalism support maintaining the current ex- local government. During the first 100 years, the doctrine of clusion of state and local government bond interest. reciprocal immunity effectively meant the federal government  State and local government bonds encourage local control did not tax state and local debt obligations, and state and local over the development of infrastructure. If the current tax- governments did not tax federal debt obligations. The Federal exempt municipal bond funding system is replaced with one Income Tax Code was enacted in 1913, and since then the tax- in which the federal government provides grants or loans in- exempt status of state and local municipal bonds has been pro- stead of assistance now provided by the exclusion of interest tected by law. on state and local debt, the federal government would inevi- So, for the first 200 years during which the tax- tably appropriate control over infrastructure and economic exempt status of municipal bonds has survived there has been: development decisions that are now made, effectively, at the the War of 1812; The ; The ; The state and local level. Bank War of 1833; The ; The Mexican-American  Infrastructure is important to our economy and development War; The ; The U.S. Civil War; The Panic of of public infrastructure provides jobs with multiplier effects 1873; The ; The Spanish American War; The to local government. Public infrastructure is vital to the eco- Boxer Rebellion; The Panic of 1901; The ; The nomic development of our States and Nation. Panic of 1910-1911; World War 1; The ; World War II; The Cold War; Gulf War; War on Terror; and  Limiting or eliminating municipal tax-exemption will mean instances of national disaster, invention, plague, famine, dis- less infrastructure development and investment. Unless sub- covery, and injustice which co-existed these referenced histori- stantial amounts of other federal funds are made available, cal points. All of America’s leaders throughout history have state and local governments will be discouraged from infra- not seriously considered balancing the federal budget by shift- structure expenditures. A lack of infrastructure investment ing the burden to state and local governments. will hurt long-term economic growth, and in the short-term, result in loss of construction-related jobs.

15 ...CONTINUED ON PAGE 17

16 NAIPFA PUBLIC AFFAIRS COMMITTEE REPORT Continued….

A Resource Providing Municipal Securities Industry The Securities and Exchange Commission Update Leadership The Securities and Exchange Commission has five NAIPFA has become the recognized leader in repre- Commissioners who are appointed by the President of the senting the positions and views of independent municipal advi- United States with the advice and consent of the Senate. Their sors. NAIPFA is an active participant in the MSRB Municipal terms last five years and are staggered so that one Commis- Securities Industry Roundtable which brings together represent- sioner's term ends on June 5 of each year. To ensure that the atives from the American Bankers Association, Bond Dealers of Commission remains non-partisan, no more than three Com- America, Government Finance Officers Association, Investment missioners may belong to the same political party. The Presi- Company Institute, National Association of Bond Lawyers, Na- dent also designates one of the Commissioners as Chairman, tional Association of State Auditors, Comptrollers and Treasur- the SEC's top executive. ers, Securities Industry & Financial Markets Association, and Mary Jo White was sworn in as the 31st Chair of the National Federation of Municipal Analysts and others to discuss SEC on April 10, 2013. The remaining members of the Com- issues of concern to issuers, investors, and the public trust in the mission include Luis Aguilar, Daniel Gallagher, Kara Stein, and municipal securities industry, the most recent of which took Michael Piwowar, the latter two confirmed to office just re- place on June 7, 2013. NAIPFA members serve on the MSRB cently. NAIPFA wishes former Commissioner Elise Walter Professional Qualifications Advisory Committee (“PQAC”) and the best following her retirement from the Commission, and have been intimately involved in the process of developing an extends great appreciation for her personal willingness, and outline for municipal advisor examination and as members of that of her staff, to be accessible and interested in the views the committee which is developing questions which will com- and opinions of NAIPFA. prise the MA Examination. The SEC has implemented the process of on-site ex- MSRB Roundtable Discussions amination of independent MA firms and several firms have NAIPFA President Jeanine Rodgers Caruso, former been examined to date. NAIPFA reminds all MA firms that President Steve Apfelbacher and Public Affairs Committee SEC examinations are underway and that your firm should Chairman Larry Kidwell attended the MSRB Municipal Securi- now be prepared for the examination process. Additionally, ties Roundtable on June 7, 2013. Representatives of each or- NAIPFA has made an offer to the SEC to assist with the devel- ganization stated priority industry concerns for their respective opment of Best Practices for independent MA SEC on-site organizations. NAIPFA President Jeanine Rodgers Caruso artic- examination. ulated NAIPFA’s priorities: NAIPFA Meets with Director of SEC Municipal Secu-  Preservation of tax-exemption of interest on municipal se- rities Office curities; NAIPFA President Jeanine Rodgers Caruso, Steve  Release of the MA Definition by the SEC (adding that Apfelbacher and Larry Kidwell met with John Cross and mem- NAIPFA member firms have been instituting regulatory bers of the SEC staff in June. This marks the third meeting practices and processes in advance of the definition and between NAIPFA representatives and Director John Cross and forthcoming rules); his staff. The group answered questions and communicated the positions of NAIPFA with respect to several issues, includ-  Continued adherence by NAIPFA member firms to the ing those relating to the finalization of the MA definition. highest standards of ethical and fair dealing standards; The Final MA Definition  Improvement of continuing education curriculum for NAIPFA member firms and issuers; Some individuals are optimistic that the release of the Final MA Definition is imminent and the SEC will meet the  Development of best practices for the MA industry; and September 30, 2013 deadline. Others believe the release  Implementation of programs designed to assist employees could come sooner, possibly several days prior to the NABL of NAIPFA member firms to prepare for the testing and Workshop in Chicago September 25-27. If certification process. this “soft” deadline is not met and September 30 passes without the release of the Final MA All Roundtable participants cited as the #1 Definition, it is expected the SEC will set a industry concern preservation of tax-exemption for new deadline, which can be accomplished municipal securities. without Congressional action. ...CONTINUED ON PAGE 19

17 18 NAIPFA PUBLIC AFFAIRS COMMITTEE REPORT continued….

MSRB Rulemaking Update The Future of NAIPFA, Tax-Exemption, Regulation, and Governmental Relations The MSRB has stated that once the Final MA Definition has been released, it expects to resubmit to the SEC certain rules The future of the municipal securities industry is which had previously been submitted and subsequently withdrawn, being actively debated in Washington D.C. today. All munic- and submit a number of new rules. ipal industry participants are confronting public policy chang- es which are either historical or generational in nature. We NAIPFA member firms should be aware that once the urge all NAIPFA members to become involved and make Final MA Definition is released, the MSRB will become very active contact with their U.S. Representatives and Senators, or staff in fulfilling its mandate to complete the regulatory structure for the members dedicated to the House Ways and Means Commit- MA Industry. NAIPFA member firms should be ready to imple- tee and Senate Finance Committee to discuss the importance ment changes to existing business practices necessary to comply of maintaining tax-exemption for municipal securities. fully with these new regulations. Additionally, once the Final MA Definition has been released, NAIPFA expects for the process of We recall the words of Will Rodgers “the worst testing to move forward and recommends for its members to pre- thing that happens to you may be the best thing for you if you don’t pare for the testing and certification process. A general recommen- let it get the best of you.” Tax-exemption has come to the at- dation is to begin by referencing the materials and sources NAIPFA tention of those in authority, and the government is aware of recommends to prepare for the CIPFA Exam. Additionally, it is a potential revenue source which may exist through the elimi- anticipated that the MSRB will circulate materials prior to testing nation of the tax exemption. Sadly, those in favor of the which will provide additional information regarding test prepara- elimination of tax-exemption for municipal securities are tion. looking only to the revenue side of the federal balance sheet. We acknowledge that numerous studies have been published The MSRB has proposed a change to Rule A-3 which de- which indicate that the elimination of tax-exemption could fines who is a public member that is able to serve on the MSRB increase federal tax revenues. However, the same studies Board. The MSRB proposal submitted to the SEC would allow for also suggest that the relative gain to the federal government a public member to be a person who works for a bank or broker from tax revenues pale in comparison to the cost which dealer but not within the municipal securities department. NAIPFA would be incurred by state and local governments if tax- has been active in opposing this proposed change and submitted a exemption of municipal securities were to be eliminated. comment letter to the SEC expressing that opposition. Unless all municipal securities issuers and industry NAIPFA Expresses Gratitude to the GFOA participants are willing to actively engage the legislative pro- As previously reported, the GFOA has hired Dustin T. cess we may witness the elimination, or limitation, of tax- McDonald, former senior public affairs advisor at the law firm of exemption of interest on municipal securities to the great Holland & Knight LLP, to succeed Susan Gaffney as Director of its detriment of state and local governmental entities across the Federal Liaison Center. Dustin is based in Washington DC, and nation. In discussions with legislative staffers, it is apparent has years of experience working with cities and counties, particu- they understand the numbers. However, they are not receiv- larly those in the Western United States, and with GFOA. The ing constituent calls in support of maintaining tax-exemption NAIPFA Public Affairs Committee is excited to be working with of municipal securities which is an imperative part of the leg- Dustin with respect to a range of issues and topics concerning the islative process and especially in an environment where the municipal securities marketplace, with specific emphasis directed federal government is looking to extract revenue from as toward the impact of SEC and MSRB rules and actions affecting many sources as possible. The U.S House of Representatives municipal issuers. NAIPFA was honored to have the benefit of Ways and Means Committee will author attempts to reform Dustin’s insights as guest contributor to the August Newsletter, the U.S. Internal Revenue Code. The U.S. Senate Finance and we once again express thanks and gratitude for his insightful Committee will author contribution. attempts to reform the NAIPFA will continue to align debt issuance and manage- U.S. Internal Revenue ment policy interests with those of the GFOA to bolster support Code. Contact your for legislative initiatives which expand issuer protections and en- Congressmen to ex- hance efficient access to the municipal marketplace. NAIPFA ex- press your views. tended an invitation to Dustin, and the GFOA staff, to participate Even better, impress in our upcoming Annual Conference. We look forward to contin- on your clients that uing to work with Dustin and GFOA to create a more competitive now is the time for and efficient marketplace for municipal issuers. action. ...CONTINUED ON PAGE 21 19 20 NAIPFA PUBLIC AFFAIRS COMMITTEE REPORT continued….

Members of the U.S. House Ways and Means Committee and Senate Finance Committee

U.S. House Ways and Means Committee

Republican Democrats Dave Camp, MI, Chairman Sander Levin, MI, Ranking Member Sam Johnson, TX Charles B. Rangel, NY Kevin Brady, TX Jim McDermott, WA Paul Ryan, WI John Lewis, GA Devin Nunes, CA Richard E. Neal, MA Pat Tiberi, OH Xavier Becerra, CA Dave G. Reichert, WA Lloyd Doggett, TX Charles W. Boustany Jr., LA Mike Thompson, CA Peter J. Roskam, IL John B. Larson, CT Jim Gerlach, PA Earl Blumenauer, OR Tom Price, GA Ron Kind, WI Vern Buchanan, FL Bill Pascrell Jr., NJ Adrian Smith, NE Joseph Crowley, NY Aaron Schock, IL Allyson Schwartz, PA Lynn Jenkins, KS Danny Davis, IL Erik Paulsen, MN Linda Sánchez, CA Kenny Marchant, TX Diane Black, TN Tom Reed, NY Todd Young, IN Mike Kelly, PA Tim Griffin, AR Jim Renacci, OH

U.S. Senate Finance Committee

Republican Democrats Orrin Hatch, UT, Ranking Member Max Baucus, MT, Chairman Chuck Grassley, IA John D. Rockefeller IV, WVA Mike Crapo, ID Ron Wyden, OR Pat Roberts, KS Charles Schumer, NY Michael B Enzi, WY Debbie Stabenow, MI John Cornyn, TX Maria Cantwell, WA John Thune, SD Bill Nelson, FL Richard Burr, NC Robert Menendez, NJ Johnny Isakson, GA Thomas R. Cooper, DE Rob Portman, OH Benjamin L. Cardin, MD Patrick J.Toomey, PA Sherrod Brown, OH Michael F. Bennet, CO Robert P. Casey, Jr., PA

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21 22 NAIPFA PUBLIC AFFAIRS COMMITTEE REPORT Continued….

Working together we can make an important difference in shaping the future of the municipal securities industry. Please contact these House and Senate Members and ask for them to vote against legislation that would in any way eliminate or limit tax-exemption for municipal securities. NAIPFA will continue to be proactive in guiding public policy which relates to the interests of issuers and the public trust. NAIPFA must continue to strive to build its membership base and actively encourage our member firms to engage the political pro- cess through outreach efforts and dialogue with their Members of the U.S. House of Representatives and Senate in their States and Districts. All NAIPFA members can help by contacting the Members of the U.S. House of Representatives and Senate from your State to discuss the positions of NAIPFA in support of the interests of issuers and the public trust, or arranging for members of the NAIPFA Public Affairs Committee to convey our message to the Members or representatives of their staff.

Current member firms & associates

Firms Associates:

-Bartle Wells Associates -Kane, McKenna Capital, Inc. -AKM Consulting Engineers

-Bendzinski & Co. Municipal Finance Advi- -Kidwell & Company -Bank of America Merrill Lynch sors -Kings Financial Consulting Inc. -BOSC, Inc. a subsidiary of BOK Financial -Bittle Financial Advisors, LLC -Longhouse Capital Advisors, LLC -Build America Mutual Assurance Co. -Columbia Capital Management, LLC -Magis Advisors, Inc. -Capital One Bank -ComCap Advisors, a division of Com- -Municipal Solutions, Inc. -D.A. Davidson & Co. munity Capital -Munistat Services, Inc. -Grant Street Group -Community Development Associates, LLC -PRISM Municipal Advisors, LLC -ImageMasters -DIXWORKS LLC -Public Financial Management -Ipreo -Ehlers and Associates, Inc. -Ranson Financial Consultants, LLC -Kensington Capital Advisors, LLC -Fieldman, Rolapp & Associates -Speer Financial, Inc. -Moody’s Investors Service -Financial S&Lutions LLC -Springsted Incorporated -National Public Finance Guarantee -First River Advisory LLC -Sudsina & Associates, LLC -Nixon Peabody LLP -Fiscal Advisors & Marketing, Inc. -Sycamore Advisors, LLC -Standard & Poor’s -Government Financial Strategies, Inc. -Tamalpais Advisors, Inc. -Stanley P. Stone & Associates, Inc. -Harrell & Company Advisors, LLC -Umbaugh -Independent Bond and Investment Consult- ants, LLC -Western Financial Group

-Independent Public Advisors, LLC -WM Financial Strategies

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See you next year in…

Portland, Oregon October 8-10, 2014

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