NAICU Washington Update

Proposed House Infrastructure Bill Reinstates Bond Refinancing

February 23, 2018

Bipartisan legislation recently introduced by Reps. Randy Hultgren (R-IL) and C.A. Dutch Ruppersberger (D-MD) includes the reinstatement of bond advance refunding, which was eliminated in the recent tax bill.  The legislation, H.R. 5003, is one of several House infrastructure bills that has been introduced to address a variety of transportation and infrastructure initiatives in response to the President’s recently released infrastructure blueprint.

Bond advance refunding operates similarly to home refinancing, allowing borrowers to take advantage of lower interest rates, and ultimately lowering the costs of bond and other debt arrangements.  Although the ability for private colleges to use tax exempt bonds was retained in the recent tax bill, the refinancing option was eliminated. The loss of this option will cause significant cost increases for colleges and universities that regularly refinance campus infrastructure initiatives with bonds.

While several bills have been introduced in the House that would address differing infrastructure priorities, the likely vehicle will come from the House Transportation and Infrastructure Committee once Congress moves beyond the current immigration debate.  Although it is not clear that refinancing will be included in whatever final vehicle emerges, its inclusion in H.R. 5003 puts the issue back on the table. Senate plans for similar legislation are uncertain.

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