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JCT Provides Revenue Estimates for S. 1134, the 'Affordable Education Act of 2000'

MAR. 14, 2000

JCX-28-00

DATED MAR. 14, 2000
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Joint Committee on Taxation
    Senate
    House of Representatives
  • Cross-Reference
    For prior coverage, see Doc 2000-6581 (5 original pages), 2000 TNT

    44- 1 Database 'Tax Notes Today 2000', View '(Number', or H&D, Mar. 6, 2000, p. 3203; also see Doc 2000-6508 (4

    original pages), 2000 TNT 43-1 Database 'Tax Notes Today 2000', View '(Number', or H&D, Mar. 3, 2000, p. 3143.
  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    budget, federal
    legislation, tax
    education, IRAs
    educational assistance programs
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2000-7695 (2 original pages)
  • Tax Analysts Electronic Citation
    2000 TNT 51-4
Citations: JCX-28-00

 

=============== SUMMARY ===============

 

The Joint Committee on Taxation has released revenue estimates (JCX-28-00) for S. 1134, the "Affordable Education Act of 2000," a bill benefiting educational assistance programs and educational savings incentives projected to cost $21.3 billion through 2010.

The employer provided assistance provision allows for the permanent exclusion for undergraduate and graduate level courses, and is the most expensive issue covered by the bill, costing an estimated $7 billion over the next ten years.

Modifications to educational IRAs, including increasing the annual contribution to $2000 and expanding the definition of "qualified education expenses" to include qualified elementary and secondary education expenses, are expected to cost approximately $5 billion through 2010.

The bill has already been passed by the Senate. (For prior coverage, see Doc 2000-6581 (5 original pages), 2000 TNT 44-1 Database 'Tax Notes Today 2000', View '(Number', or H&D, Mar. 6, 2000, p. 3203; also see Doc 2000-6508 (4 original pages), 2000 TNT 43-1 Database 'Tax Notes Today 2000', View '(Number', or H&D, Mar. 3, 2000, p. 3143.)

 

=============== FULL TEXT ===============

 

                     JOINT COMMITTEE ON TAXATION

 

                           March 14, 2000

 

                              JCX-28-00

 

 

                ESTIMATED REVENUE EFFECTS OF S. 1134,

 

               THE "AFFORDABLE EDUCATION ACT OF 2000,"

 

                       AS PASSED BY THE SENATE

 

 

                      Fiscal Years 2000 - 2010

 

 

                        [Millions of Dollars]

 

_____________________________________________________________________

 

Provision

 

[Effective]                    2000       2001       2002       2003

 

_____________________________________________________________________

 

 

EDUCATION SAVINGS

 

INCENTIVE PROVISIONS

 

 

1. Education IRAs --

 

increase the annual

 

contribution limit to

 

$2,000; expand the

 

definition of qualified

 

education expenses

 

to include qualified

 

elementary and secondary

 

education expenses; allow

 

education IRA contributions

 

for special needs

 

beneficiaries above the

 

age of 18; allow corporations

 

and other entities to

 

contribute to education IRAs;

 

allow contributions until

 

April 15 of the following

 

year; and allow a taxpayer

 

to exclude ED IRA distributions

 

from gross income and claim

 

the HOPE or Lifetime

 

Learning credits as

 

long as they are not

 

used for the same expenses

 

[tyba 12/31/00]                  --        -53       -175       -267

 

 

2. Qualified Tuition Plans

 

-- tax-free distributions

 

from State plans; and allow

 

private institutions to offer

 

prepaid tuition plans,

 

tax-deferred in 2001, with

 

tax-free distributions

 

beginning in 2004; allow a

 

taxpayer to exclude State

 

plan distributions from gross

 

income and claim the HOPE

 

or Lifetime Learning credits

 

as long as they are not

 

used for the same expenses

 

[tyba 12/31/00]                  --        -11        -34        -51

 

 

Total of Education Savings

 

Incentive Provisions             --        -64       -209       -318

 

 

EDUCATIONAL ASSISTANCE PROVISIONS

 

 

1. Employer Provided

 

Assistance - permanent

 

exclusion for undergraduate

 

courses and graduate

 

level courses

 

[1/1/02 & 1/1/01]                --       -178       -530       -685

 

 

2. Student Loan Interest --

 

eliminate the 60 month rule

 

[ipa 12/31/00]                   --        -19        -78        -83

 

 

3. Eliminate the tax on

 

awards under the National

 

Health Corps Scholarship

 

program and F. Edward Hebert

 

Armed Forces Health

 

Professions Scholarship program

 

[tyba 12/31/93]                  -1         -2         -1         -1

 

 

4. 2% floor on miscellaneous

 

itemized deductions not

 

to apply to qualified

 

professional development

 

expenses of elementary and

 

secondary school teachers

 

[tyba 12/31/00]                  --        -12        -26        -30

 

 

5. Credit to elementary

 

and secondary school

 

teachers who provide

 

classroom materials

 

[tyba 12/31/00]                  --       -101       -403       -405

 

 

6. Exclusion of

 

national service

 

educational awards

 

[ari tyba 12/31/99]              -1         -4         -3         -3

 

 

7. Elimination of

 

the marriage penalty

 

in phaseout of education

 

loan interest deduction

 

[tyba 12/31/00]                  --        -21        -85        -92

 

 

Total of education

 

Assistance Provisions            -2       -337     -1,126     -1,299

 

 

LIBERALIZATION OF

 

TAX-EXEMPT FINANCING

 

RULES FOR PUBLIC SCHOOL

 

CONSTRUCTION PROVISIONS

 

 

1. Increase arbitrage

 

rebate exception for

 

governmental bonds

 

used to finance qualified

 

school construction

 

from $10 million

 

to $15 million

 

[bia 12/31/00]                   --        1         -3         -5

 

 

2. Issuance of

 

tax-exempt private

 

activity bonds for

 

qualified education

 

facilities with annual

 

volume cap the greater

 

of $10 per resident

 

or $5 million

 

[bia 12/31/00]                   --         -6        -19        -37

 

 

3. Allow Federal Home

 

Loan Bank to guarantee

 

school construction bonds,

 

capped at $500 million

 

annually [/2/]                               No Revenue Effect

 

 

4. Disclosure of fire

 

safety standards and

 

measures with respect

 

to campus buildings

 

[DOE]                                        No Revenue Effect

 

 

Total of Liberalization of

 

Tax-Exempt Financing Rules

 

for Public School Construction

 

Provisions                       --         -6        -22        -42

 

 

MISCELLANEOUS PROVISIONS --

 

EXPANSION OF SECTION 170(e)(6)

 

CORPORATE CONTRIBUTIONS OF

 

COMPUTER TECHNOLOGY AND

 

EQUIPMENT; CREDIT FOR

 

COMPUTER DONATIONS TO

 

SCHOOLS AND SENIOR

 

CENTERS [/3/]                    --        -69       -129       -137

 

_____________________________________________________________________

 

NET TOTAL                        -2       -476     -1,486     -1,796

 

_____________________________________________________________________

 

 

                          [table continued]

 

_____________________________________________________________________

 

 

Provision

 

[Effective]                    2004       2005       2006       2007

 

_____________________________________________________________________

 

 

EDUCATION SAVINGS

 

INCENTIVE PROVISIONS

 

 

1. Education IRAs --

 

increase the annual

 

contribution limit to

 

$2,000; expand the

 

definition of qualified

 

education expenses

 

to include qualified

 

elementary and secondary

 

education expenses; allow

 

education IRA contributions

 

for special needs

 

beneficiaries above the

 

age of 18; allow corporations

 

and other entities to

 

contribute to education IRAs;

 

allow contributions until

 

April 15 of the following

 

year; and allow a taxpayer

 

to exclude ED IRA distributions

 

from gross income and claim

 

the HOPE or Lifetime

 

Learning credits as

 

long as they are not

 

used for the same expenses

 

[tyba 12/31/00]                -356       -447       -543       -645

 

 

2. Qualified Tuition Plans

 

-- tax-free distributions

 

from State plans; and allow

 

private institutions to offer

 

prepaid tuition plans,

 

tax-deferred in 2001, with

 

tax-free distributions

 

beginning in 2004; allow a

 

taxpayer to exclude State

 

plan distributions from gross

 

income and claim the HOPE

 

or Lifetime Learning credits

 

as long as they are not

 

used for the same expenses

 

[tyba 12/31/00]                 -73       -100       -129       -158

 

 

Total of Education Savings

 

Incentive Provisions           -429       -547       -672       -803

 

 

EDUCATIONAL ASSISTANCE PROVISIONS

 

 

1. Employer Provided

 

Assistance - permanent

 

exclusion for undergraduate

 

courses and graduate

 

level courses

 

[1/1/02 & 1/1/01]              -720       -759       -805       -854

 

 

2. Student Loan Interest --

 

eliminate the 60 month rule

 

[ipa 12/31/00]                  -91        -98       -100       -105

 

 

3. Eliminate the tax on

 

awards under the National

 

Health Corps Scholarship

 

program and F. Edward Hebert

 

Armed Forces Health

 

Professions Scholarship program

 

[tyba 12/31/93]                  1        1        -1         -1

 

 

4. 2% floor on miscellaneous

 

itemized deductions not

 

to apply to qualified

 

professional development

 

expenses of elementary and

 

secondary school teachers

 

[tyba 12/31/00]                 -33        -37        -41        -45

 

 

5. Credit to elementary

 

and secondary school

 

teachers who provide

 

classroom materials

 

[tyba 12/31/00]                -406       -407       -408       -408

 

 

6. Exclusion of

 

national service

 

educational awards

 

[ari tyba 12/31/99]              -3         -3         -3         -3

 

 

7. Elimination of

 

the marriage penalty

 

in phaseout of education

 

loan interest deduction

 

[tyba 12/31/00]                 -96       -101       -105       -110

 

 

Total of Education

 

Assistance Provisions        -1,349     -1,406     -1,463     -1,526

 

 

LIBERALIZATION OF

 

TAX-EXEMPT FINANCING

 

RULES FOR PUBLIC SCHOOL

 

CONSTRUCTION PROVISIONS

 

 

1. Increase arbitrage

 

rebate exception for

 

governmental bonds

 

used to finance qualified

 

school construction

 

from $10 million to

 

$15 million

 

[bia 12/31/00]                   -6        -11        -14        -15

 

 

2. Issuance of

 

tax-exempt private

 

activity bonds for

 

qualified education

 

facilities with annual

 

volume cap the greater

 

of $10 per resident

 

or $5 million

 

[bia 12/31/00]                  -57        -83       -113       -146

 

 

3. Allow Federal Home

 

Loan Bank to guarantee

 

school construction bonds,

 

capped at $500 million

 

annually [/2/]                               No Revenue Effect

 

 

4. Disclosure of fire

 

safety standards and

 

measures with respect

 

to campus buildings

 

[DOE]                                        No Revenue Effect

 

 

Total of Liberalization of

 

Tax-Exempt Financing Rules

 

for Public School Construction

 

Provisions                      -63        -94       -127       -161

 

 

MISCELLANEOUS PROVISIONS --

 

EXPANSION OF SECTION 170(e)(6)

 

CORPORATE CONTRIBUTIONS OF

 

COMPUTER TECHNOLOGY AND

 

EQUIPMENT; CREDIT FOR

 

COMPUTER DONATIONS TO

 

SCHOOLS AND SENIOR

 

CENTERS [/3/]                   -67         -3        --         --

 

____________________________________________________________________

 

NET TOTAL                    -1,908     -2,050     -2,262     -2,490

 

_____________________________________________________________________

 

 

                          [table continued]

 

_____________________________________________________________________

 

 

Provision

 

[Effective]                    2008       2009       2010

 

_____________________________________________________________________

 

 

EDUCATION SAVINGS

 

INCENTIVE PROVISIONS

 

 

1. Education IRAs --

 

increase the annual

 

contribution limit to

 

$2,000; expand the

 

definition of qualified

 

education expenses

 

to include qualified

 

elementary and secondary

 

education expenses; allow

 

education IRA contributions

 

for special needs

 

beneficiaries above the

 

age of 18; allow corporations

 

and other entities to

 

contribute to education IRAs;

 

allow contributions until

 

April 15 of the following

 

year; and allow a taxpayer

 

to exclude ED IRA distributions

 

from gross income and claim

 

the HOPE or Lifetime

 

Learning credits as

 

long as they are not

 

used for the same expenses

 

[tyba 12/31/00]                -749       -856       -965

 

 

2. Qualified Tuition Plans

 

-- tax-free distributions

 

from State plans; and allow

 

private institutions to offer

 

prepaid tuition plans,

 

tax-deferred in 2001, with

 

tax-free distributions

 

beginning in 2004; allow a

 

taxpayer to exclude State

 

plan distributions from gross

 

income and claim the HOPE

 

or Lifetime Learning credits

 

as long as they are not

 

used for the same expenses

 

[tyba 12/31/00]                -185       -213       -236

 

 

Total of Education Savings

 

Incentive Provisions           -934     -1,069     -1,201

 

 

EDUCATIONAL ASSISTANCE PROVISIONS

 

 

1. Employer Provided

 

Assistance - permanent

 

exclusion for undergraduate

 

courses and graduate

 

level courses

 

[1/1/02 & 1/1/01]              -906       -962     -1,024

 

 

2. Student Loan Interest --

 

eliminate the 60 month rule

 

[ipa 12/31/00]                 -109       -112       -115

 

 

3. Eliminate the tax on

 

awards under the National

 

Health Corps Scholarship

 

program and F. Edward Hebert

 

Armed Forces Health

 

Professions Scholarship program

 

[tyba 12/31/93]                  -1         -1         -1

 

 

4. 2% floor on miscellaneous

 

itemized deductions not

 

to apply to qualified

 

professional development

 

expenses of elementary and

 

secondary school teachers

 

[tyba 12/31/00]                 -50        -55        -60

 

 

5. Credit to elementary

 

and secondary school

 

teachers who provide

 

classroom materials

 

[tyba 12/31/00]                -408       -407       -404

 

 

6. Exclusion of

 

national service

 

educational awards

 

[ari tyba 12/31/99]              -3         -3         -3

 

 

7. Elimination of

 

the marriage penalty

 

in phaseout of education

 

loan interest deduction

 

[tyba 12/31/00]                -114       -119       -124

 

 

Total of Education

 

Assistance Provisions        -1,591     -1,659     -1,731

 

 

LIBERALIZATION OF

 

TAX-EXEMPT FINANCING

 

RULES FOR PUBLIC SCHOOL

 

Construction Provisions

 

 

1. Increase arbitrage

 

rebate exception for

 

governmental bonds

 

used to finance qualified

 

school construction

 

from $10 million

 

to $15 million

 

[bia 12/31/00]                  -16        -17        -18

 

 

2. Issuance of

 

tax-exempt private

 

activity bonds for

 

qualified education

 

facilities with annual

 

volume cap the greater

 

of $10 per resident

 

or $5 million

 

[bia 12/31/00]                 -178       -210       -241

 

 

3. Allow Federal Home

 

Loan Bank to guarantee

 

school construction bonds,

 

capped at $500 million

 

annually [/2/]                       No Revenue Effect

 

 

4. Disclosure of fire

 

safety standards and

 

measures with respect

 

to campus buildings

 

[DOE]                                No Revenue Effect

 

 

Total of Liberalization of

 

Tax-Exempt Financing Rules

 

for Public School Construction

 

Provisions                     -194       -227       -259

 

 

MISCELLANEOUS PROVISIONS --

 

EXPANSION OF SECTION 170(e)(6)

 

CORPORATE CONTRIBUTIONS OF

 

COMPUTER TECHNOLOGY AND

 

EQUIPMENT; CREDIT FOR

 

COMPUTER DONATIONS TO

 

SCHOOLS AND SENIOR

 

CENTERS [/3/]                    --         --         --

 

_____________________________________________________________________

 

NET TOTAL                    -2,719     -2,955      -3,191

 

_____________________________________________________________________

 

 

                          [table continued]

 

_____________________________________________________________________

 

 

Provision

 

[Effective]                        2000-05             2000-10

 

_____________________________________________________________________

 

 

EDUCATION SAVINGS

 

INCENTIVE PROVISIONS

 

 

1. Education IRAs --

 

increase the annual

 

contribution limit to

 

$2,000; expand the

 

definition of qualified

 

education expenses

 

to include qualified

 

elementary and secondary

 

education expenses; allow

 

education IRA contributions

 

for special needs

 

beneficiaries above the

 

age of 18; allow corporations

 

and other entities to

 

contribute to education IRAs;

 

allow contributions until

 

April 15 of the following

 

year; and allow a taxpayer

 

to exclude ED IRA distributions

 

from gross income and claim

 

the HOPE or Lifetime

 

Learning credits as

 

long as they are not

 

used for the same expenses

 

[tyba 12/31/00]                     -1,298              -5,057

 

 

2. Qualified Tuition Plans

 

-- tax-free distributions

 

from State plans; and allow

 

private institutions to offer

 

prepaid tuition plans,

 

tax-deferred in 2001, with

 

tax-free distributions

 

beginning in 2004; allow a

 

taxpayer to exclude State

 

plan distributions from gross

 

income and claim the HOPE

 

or Lifetime Learning credits

 

as long as they are not

 

used for the same expenses

 

[tyba 12/31/00]                       -269              -1,191

 

 

Total of Education Savings

 

Incentive Provisions                -1,567              -6,248

 

 

EDUCATIONAL ASSISTANCE PROVISIONS

 

 

1. Employer Provided

 

Assistance - permanent

 

exclusion for undergraduate

 

courses and graduate

 

level courses

 

[1/1/02 & 1/1/01]                   -2,873              -7,424

 

 

2. Student Loan Interest --

 

eliminate the 60 month rule

 

[ipa 12/31/00]                        -369                -911

 

 

3. Eliminate the tax on

 

awards under the National

 

Health Corps Scholarship

 

program and F. Edward Hebert

 

Armed Forces Health

 

Professions Scholarship program

 

[tyba 12/31/93]                         -6                 -11

 

 

4. 2% floor on miscellaneous

 

itemized deductions not

 

to apply to qualified

 

professional development

 

expenses of elementary and

 

secondary school teachers

 

[tyba 12/31/00]                       -138                -391

 

 

5. Credit to elementary

 

and secondary school

 

teachers who provide

 

classroom materials

 

[tyba 12/31/00]                     -1,721              -3,756

 

 

6. Exclusion of

 

national service

 

educational awards

 

[ari tyba 12/31/99]                    -19                 -36

 

 

7. Elimination of

 

the marriage penalty

 

in phaseout of education

 

loan interest deduction

 

[tyba 12/31/00]                       -394                -966

 

 

Total of Education

 

Assistance Provisions               -5,520             -13,495

 

 

LIBERALIZATION OF

 

TAX-EXEMPT FINANCING

 

RULES FOR PUBLIC SCHOOL

 

CONSTRUCTION PROVISIONS

 

 

1. Increase arbitrage

 

rebate exception for

 

governmental bonds

 

used to finance qualified

 

school construction

 

from $10 million

 

to $15 million

 

[bia 12/31/00]                         -24                -104

 

 

2. Issuance of

 

tax-exempt private

 

activity bonds for

 

qualified education

 

facilities with annual

 

volume cap the greater

 

of $10 per resident

 

or $5 million

 

[bia 12/31/00]                        -202              -1,090

 

 

3. Allow Federal Home

 

Loan Bank to guarantee

 

school construction bonds,

 

capped at $500 million

 

annually [/2/]                           No Revenue Effect

 

 

4. Disclosure of fire

 

safety standards and

 

measures with respect

 

to campus buildings

 

[DOE]                                    No Revenue Effect

 

 

Total of Liberalization of

 

Tax-Exempt Financing Rules

 

for Public School Construction

 

Provisions                            -226              -1,194

 

 

MISCELLANEOUS PROVISIONS --

 

EXPANSION OF SECTION 170(e)(6)

 

CORPORATE CONTRIBUTIONS OF

 

COMPUTER TECHNOLOGY AND

 

EQUIPMENT; CREDIT FOR

 

COMPUTER DONATIONS TO

 

SCHOOLS AND SENIOR

 

CENTERS [/3/]                         -405                -405

 

_____________________________________________________________________

 

NET TOTAL                           -7,718             -21,342

 

_____________________________________________________________________

 

 

Joint Committee on Taxation

 

 

NOTE: Details may not add to totals due to rounding.

 

 

Legend for "Effective" column:

 

 

     ari = amounts received in

 

     bia = bonds issued after

 

     DOE = date of enactment

 

     ipa = interest paid after

 

     tyba = taxable years beginning after

 

 

                         FOOTNOTES TO TABLE

 

 

     1 Loss of less than $500,000.

 

 

     2 The provision will take effect upon the enactment (after the

 

enactment of this bill) of legislation expressly authorizing the

 

Federal Housing Finance Board to allocate authority to Federal Home

 

Loan Banks to guarantee any bond described in the provision, but only

 

if such legislation makes specific reference to the provision.

 

 

     3 Expansion effective for contributions made in taxable years

 

ending after the date of enactment; credit effective before taxable

 

years beginning on or after the date which is 3 years after the date

 

of enactment.

 

 

                      END OF FOOTNOTES TO TABLE
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Joint Committee on Taxation
    Senate
    House of Representatives
  • Cross-Reference
    For prior coverage, see Doc 2000-6581 (5 original pages), 2000 TNT

    44- 1 Database 'Tax Notes Today 2000', View '(Number', or H&D, Mar. 6, 2000, p. 3203; also see Doc 2000-6508 (4

    original pages), 2000 TNT 43-1 Database 'Tax Notes Today 2000', View '(Number', or H&D, Mar. 3, 2000, p. 3143.
  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    budget, federal
    legislation, tax
    education, IRAs
    educational assistance programs
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2000-7695 (2 original pages)
  • Tax Analysts Electronic Citation
    2000 TNT 51-4
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