PAR Act Lets Tax-Exempt Bonds Fund Private Golf Courses, Starting Now

The "Parity for Athletic Recreation Act," or PAR Act, makes a significant change to how private golf courses and country clubs can be financed. The bill removes a restriction in Section 144 of the Internal Revenue Code that prevented the use of tax-exempt bonds for these types of facilities. Essentially, this means that private golf courses and country clubs can now access a form of cheaper financing, backed by the government, that was previously unavailable.

Teeing Off with Taxpayer Dollars?

The core change here is all about access to capital. Tax-exempt bonds are attractive to investors because the interest they earn isn't subject to federal taxes (and sometimes state taxes, too). This usually means lower interest rates for the borrower – in this case, the golf course or country club. The PAR Act applies this change broadly: to bonds issued after the law is enacted, to how empowerment zone employment credits are handled (for people starting work after enactment), and to how empowerment zone businesses and opportunity zones operate (for taxable years starting after enactment).

Real-World Fairway Impact

Let’s say a developer wants to build a new luxury golf course and country club. Before the PAR Act, they couldn't use tax-exempt bonds to finance the project. Now, they can. This could mean lower borrowing costs, making the project more financially viable. Or, imagine an existing, struggling country club needing renovations. They might now be able to refinance their debt with tax-exempt bonds, freeing up cash flow. For a construction worker, this might mean more jobs building or renovating these facilities. For a small business owner near one of these clubs, it could mean more customers – but that's not guaranteed.

The Rough Spots

While the bill's proponents might argue this stimulates local economies, there are some potential downsides. One of the biggest is the potential for abuse. Because these bonds are tax-exempt, there’s an implicit public subsidy involved. Critics might question whether that subsidy should go towards facilities that primarily benefit wealthier individuals who can afford club memberships. There’s also the question of fairness. Other types of private businesses don't get this same financing advantage. The bill doesn't spell out strict oversight for how these bonds will be used, raising concerns about transparency. It's also worth noting that this change could shift investment away from other projects that might have broader public benefits, like affordable housing or infrastructure improvements.

The Big Picture

The PAR Act essentially expands the definition of what kinds of projects can be financed with a specific type of government-backed, tax-advantaged funding. While it might spur some economic activity around golf courses and country clubs, it also raises questions about how public resources are being used and who ultimately benefits. It's a targeted change to the tax code that could have a ripple effect, particularly in communities where these types of facilities are prevalent.