By Robert Eidnier ( March 5, 2018, 6:18 PM EST) -- Public finance tax lawyers have been acutely aware of the direct effects of the Tax Cuts and Jobs Act, P.L. 115-97, especially the elimination of tax-exempt advance refundings, but some of the indirect effects have begun to appear only recently. One of those is the triggering of automatic bank rate adjustments resulting from the drop in the corporate tax rate. This article addresses primarily automatic bank rate adjustments, i.e., those that occur without action by the issuer or bank holder as a result of a reduction in the corporate tax rate. Interest rate adjustments that are optional on the part of the bank are addressed briefly below. As frequently touted by the president, the legislation reduced the maximum corporate tax rate from 35 percent to 21 percent. The effect of this rate reduction on bond interest rates is more pronounced because of the popularity of bank placements of tax-exempt bonds in recent years. For a number of reasons, including to remain competitive, many banks have been willing to forgo or reduce the interest rate increase that would otherwise occur automatically under the bank loan documents. This is obviously good news for bond obligors but the tax consequences — namely, a potential reissuance for federal tax purposes of those bonds — must be kept in mind....