Tax Extenders Bill Introduced; Contains Changes to Community College Grant Program

House and Senate leaders have introduced an extenders bill that contains a number of tax-specific and other provisions, including the extension of unemployment benefits that have expired or are expected to expire. The House is expected to consider the bill tomorrow, while the Senate will take action sometime next week. The Senate will need to finish the financial services bill prior to moving to consider the extenders bill.

For community colleges, the extenders bill introduces important changes to the Community College and Career Training Grant (CCCTG) program funded by the reconciliation bill. The CCCTG program is funded at $500 million for fiscal years 2011, 2012, 2013, and 2014. According to the summary, the provisions included in the bill would expand the program by authorizing the grants to benefit individuals who are eligible for unemployment insurance, who are likely to be eligible for unemployment insurance (according to specific criteria), or who have exhausted their unemployment insurance. Additionally, the provisions would: (1) clarify that only public and non-profit educational institutions are eligible for grants; (2) authorize the Department of Labor to spend up to five percent of program funds to administer, evaluate, and establish reporting systems for the program; and (3) give the Department of Labor more flexibility by allowing it to obligate grant funds in the year that they are appropriated as well as the subsequent fiscal year.

The bill would also extend the deduction for qualified tuition and related expenses until the end of 2010 and extend the Build America Bonds program through 2012. The summary of the bill can viewed at: http://waysandmeans.house.gov/media/pdf/111/America_Jobs_Summary.pdf

Congress continues to work on passing a Supplemental Appropriations bill within the next couple of weeks. Senate Health, Education, Labor, and Pensions Chairman Tom Harkin (D-IA) is working to get support for his bill, S. 3206 (the Keep Our Educators Working Act of 2010), which will be offered on the floor as an amendment to the bill. The amendment will likely need 60 votes to pass. Meanwhile, House Appropriations Chairman David Obey (D-WI) stated that the committee would consider its version of the bill sometime next week. At present, it is unclear whether the base funding included in the bill will contain the $23 billion for the education jobs bill. It is very important for the education jobs bill to be included in either bill before heading to the conference committee. Read more!

Senate Invokes Cloture on Jobs Legislation

On Monday, the Senate invoked cloture (end debate or limit time for bill consideration) by a 62-30 vote on the Senate Jobs legislation introduced by Senate Majority Leader Harry Reid (D-NV). The Senate Jobs legislation would provide $15 billion in tax cuts, with the bulk of the funding intended to help employers hire new employees. The Senate is now expected to consider and pass its bill sometime this week. The legislation includes:

1. Payroll Tax Exemption: offers an exemption from social security payroll taxes for every worker hired in 2010 who has been unemployed for at least 60 days. There would also be an additional $1,000 income tax credit for every new employee retained for 52 weeks to be taken on the employer’s 2011 income tax return. ($13 billion)
2. Section 179 Expensing: helps small businesses grow by allowing them to write off more of their expenditures.
3. Highway Trust Fund Extension: extends existing highway programs, which provides states and localities with the certainty they need to make decisions on projects.
4. Expansion of Build America Bonds: allows state and local governments to borrow at lower costs to finance more infrastructure projects and put people to work. ($2 billion)
   

The Senate bill differs greatly from the House Jobs bill (see below) and it is unclear how they will proceed to conference a final bill. Majority Leader Reid did announce that he would introduce bills to cover a wide range of provisions that were included in the House bill.

Last year, the House of Representatives passed the “Jobs for Main Street Act of 2010” by a 217-212 vote. The act provides $154 billion for a number of programs. Most importantly, $23 billion will be available to states as part of an “Education Jobs Fund” over the next two years. 95% of the funds will be allocated by states to school districts and public institutions of higher education to retain or create jobs that provide educational services and to modernize, renovate, and repair public education facilities.

The bill provides $750 million in competitive grants to train workers for jobs in high-growth fields. The bill also provides $300 million for the Federal Work Study Program.

The summary of the bill can be found here: http://appropriations.house.gov/pdf/Jobs_for_Main_Street_Act_of_2010_Summary.pdf.

The bill can be found here: http://appropriations.house.gov/pdf/2010_Jobs_For_Main_Street_Bill_Text.pdf. Read more!