New Legislation Aims to Make It Easier for HBCUs to Raise Money Through Bonds
Filed in HBCUs on September 23, 2016
Last week, JBHE published a post about legislation that would provide $70 million for the restoration of historic buildings on HBCU campuses. In another legislative effort to support historically Black colleges and university, U.S. Representative Keith Ellison of Minnesota has introduced the HBCU Investment Expansion Act.
The legislation would make bonds issued by historically Black colleges and universities exempt from federal, state, and local taxes. Earlier this year JBHE published a post on a study by scholars at Drexel University in Philadelphia, the University of Notre Dame in Indiana, Duke University in North Carolina, and the University of California, San Diego. The study found that historically Black colleges and universities pay a higher underwriting fee for debt issues than predominantly White institutions even when credit reporting agencies rate the debt issues as having similar risk.
The Ellison legislation would serve to make HBCU bonds more attractive to investors. Congressman Ellison stated that “this legislation will level the playing field and help HBCus get the funds they need to build new dorms, labs, or classrooms without additional costs or fees.”
Representative Ellison is a native of Detroit. He is a graduate of Wayne State University in Detroit and earned his law degree at the University of Minnesota. He was elected to Congress in 2006.