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Federal File

Coverage of legislation and regulatory activity that affects higher education

By Liz Clark

More Questions Than Answers

In 2016, the House of Representatives is sched-uled to be in session only 111 days. Typical of an election year, Congress is usually out of session in August and October to meet with constituents and to campaign.

Given the limited number of work days in Washington, and the waning days of the Obama administration, it is unclear what legislative priorities will make it to the finish line this year.

Election year politics will also have lawmakers muscling to prevent opposing parties from claiming any legislative or policy wins in the weeks leading up to Nov. 8, Election Day.

Following are some areas of unfinished business relating to higher education.

Higher Education Act Reauthorization

The Higher Education Act, which technically expired last fall, is due for renewal. With significant public attention on student loan debt and broad concerns about the cost of college, there is keen interest on the part of both Republicans and Democrats to tackle higher education issues. Despite successful bipartisan efforts in 2015 to reauthorize K–12 legislation, as Election Day approaches, similar compromise on a higher education bill appears less and less likely. 

Despite successful bipartisan efforts in 2015 to reauthorize K–12 legislation, as Election Day approaches, similar compromise on a higher education bill appears less and less likely.

Washington insiders expected Sen. Lamar Alexander (R-TN) and Sen. Patty Murray (D-WA), who together led the way on the elementary and secondary education package, to come together to address a number of postsecondary education concerns. There had been some speculation that they might be able to pass individual bills, providing for year-round Pell Grants and regulatory relief, as well as a bill addressing concerns related to campus sexual assault policies.

However, a number of factors are limiting the ability to find bipartisan compromise, even with this piecemeal approach. Some Senate Democrats are reluctant to negotiate and are hoping to have the upper hand next year, with the belief that Democrats may return to the majority after Election Day in November. Further limiting compromise are budgetary constraints; this is always difficult when there is no new money to spend.

IRS Form 1098-T

NACUBO is continuing to press the Internal Revenue Service to delay the implementation of mandatory reporting in Box 1 on IRS Form 1098-T, allowing filing institutions the time to feasibly implement and test systems to accommodate the change enacted into law last year. At press time, NACUBO had not yet received a response to its letters. We have also requested that IRS develop guidance for filing institutions that acknowledges and accommodates the realities of tax year reporting of information that is tied to academic periods and publish easy-to-understand, Web-based resources to help taxpayers with the transition. 

Overtime Rules

As of press time, the White House Office of Management and Budget is in the process of reviewing new overtime rules. The Department of Labor (DOL) has proposed changes to the overtime provisions of the Fair Labor Standards Act (FLSA), and last year suggested regulations that would (1) raise the threshold at which an individual qualifies as a salaried worker exempt from overtime pay requirements, and (2) set an automatic annual increase of the minimum salary amount.

NACUBO is continuing to press the Internal Revenue Service to delay the implementation of mandatory reporting in Box 1 on IRS Form 1098-T.

The Senate and the House of Representatives recently introduced legislation that would prevent DOL from finalizing the proposed rule. Further, because President Obama's second term is coming to an end, the administration faces a possible hurdle in a Congressional Resolution of Disapproval of the final overtime rule. This is a complex legislative procedure that could nullify the new regulation.

NACUBO is continuing to work closely with CUPA-HR and others to respond appropriately and follow developments related to the proposal.

Fisher v. University of Texas at Austin

Perhaps one of the biggest questions facing colleges and universities is what the eight-member Supreme Court will decide as it revisits Fisher v. University of Texas at Austin. Justices heard oral arguments in December in this case that focuses on UT's limited use of race in its admissions process. A decision is expected before the end of June, and the outcome will have widespread implications on the role that race can have in college admissions.

Tax Reform

House Ways and Means Committee Chairman Kevin Brady (R-TX) and Sen. Ron Wyden (D-OR), the ranking Democrat on the Senate Finance Committee, both continue to make the case for comprehensive tax reform, with an eye on passage of major legislation next year. While NACUBO does not expect any substantial legislative changes this year, an overarching tax reform effort could have significant implications for colleges and universities. Tax writers this year are continuing to gather information and ideas to inform future legislative proposals.

Budget Outlook

Republican lawmakers in the House have been unable to agree on a budget framework, making it difficult for the House Appropriations Committee to begin its work on the 12 annual appropriations bills needed to fund the government for FY17. The conservative House Freedom Caucus is pushing to cut spending by $30 billion, but House Speaker Paul Ryan (R-WI) has been eager to stick with a spending limit agreed upon and passed in a bipartisan budget deal last year.

As a result, little progress has been made in determin-ing program-by-programspending lines. While some progress will be made on each of these fronts in the coming months, it is possible that a lame-duck Congress, and lame-duck president, willsee a hefty workload in the weeks following the November elections. Some unresolvedissues will ultimately be left to a new administration and new Congress to deal with in 2017.   

NACUBO CONTACT Liz Clark, director of federal affairs, 202.861.2553, @lizclarknacubo


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