JCT Provides Revenue Estimates for S. 1134, the 'Affordable Education Act of 2000'
JCX-28-00
- Institutional AuthorsJoint Committee on TaxationSenateHouse of Representatives
- Cross-Reference
- Code Sections
- Subject Area/Tax Topics
- Index Termsbudget, federallegislation, taxeducation, IRAseducational assistance programs
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2000-7695 (2 original pages)
- Tax Analysts Electronic Citation2000 TNT 51-4
=============== 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 , or H&D, Mar. 6, 2000, p. 3203; also see Doc 2000-6508 (4 original pages), 2000 TNT 43-1 , 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
- Institutional AuthorsJoint Committee on TaxationSenateHouse of Representatives
- Cross-Reference
- Code Sections
- Subject Area/Tax Topics
- Index Termsbudget, federallegislation, taxeducation, IRAseducational assistance programs
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2000-7695 (2 original pages)
- Tax Analysts Electronic Citation2000 TNT 51-4