Good news - The Senate Finance Committee approved a $95 billion tax extenders package extending 52 expired tax provisions for 2 years, including the Qualified Zone Academy Bond (QZAB) program.  QZABs provide tax credits to assist the financing of school renovation, repair and modernization projects.  The approved Modified Chairman's package also includes a modification to the QZAB program reducing the required local match from 10 to 5 percent.  This change should particularly assist small and rural school districts.  The Finance Committee hopes to bring the extenders bill to the Senate Floor for approval before Congress leaves Washington for its summer recess.

 A Californians for School Facilities advocacy team, including C.A.S.H. Vice-Chair Don Ulrich, met in June with Finance Committee Republican and Democratic staff to discuss the successful use of tax credit bonds such as QZABS to finance more than $1 billion in California school renovation, repair and modernization projects.

-Bob Canavan, CSF Federal Legislative Advocate

The Senate passed H.R. 5771, the Tax Increase Prevention Act (the tax extenders bill), Tuesday December 16 without amendments. CSF Federal Legislative Advocate Bob Cananvan has provided the update below on the action.    

Senate Tax Extenders:

The Senate passed H.R. 5771, the Tax Increase Prevention Act (the House tax extender bill) without amendments by a vote of 76-16 on Tuesday, December 16.  H.R. 5771 extends 55 expired tax provisions for one year (2014).   The extenders bill includes a one-year $400 million extension of the Qualified Zone Academy Bond (QZAB) program.  The bill also included a one-year extension of the Energy Efficient Commercial Building Deduction.

House Tax Extenders Action:

On December 3, the House passed the Tax Increase Prevention Act (H.R. 5771), the tax extenders package to retroactively extend the tax provisions which expired in 2013 for one year (2014), on a 378-46 vote.  

Congressional approval of the extenders bill with the one year extension of programs such as QZABs provides temporary financial stability to the extenders programs.

The QZAB program has cost effectively  renovated and repaired schools and classrooms in California and every state since 1998. California school districts have used  more than $1.2 billion in Qualified Zone Academy Bonds in the last ten years.

Californians for School Facilities will work with the 114th Congress to advance school facility issues and with the Ways and Means and Finance Committees  to continue and improve tax extender provisions such as the Qualified Zone Academy Bond program and the energy efficient buildings deduction as comprehensive tax reform moves to the front of the agenda.  

FFC Raises Funding Cap to Finance Expansion of Schools and Libraries Wi-Fi Broadband Coverage and Capacity

 The Federal Communications Commission (FCC) met today and approved an order to raise the cap on the Universal Service Fund.  The higher funding cap for the Universal Service Fund will finance the E-Rate program giving schools and libraries discounts on internet access and helping pay for the physical connections needed to expand wireless broadband service.

The FCC Commissioners approved the Order raising the Cap on a 3-2 along party line vote.  Chairman Wheeler, with Commissioner Rosenworcel and Commissioner Clyburn, voted for the order that would raise the Universal Service Fund cap by up to $1.5 billion annually. 

The approved order also makes other changes, including:

- Allowing schools and libraries to pay large upfront construction costs over multiple years.

- Permitting program applicants to build high-speed broadband facilities themselves when doing so would be cost-effective.

-Matching state support for "last-mile" broadband with up to 10 percent of construction costs.

Retiring Sen. Jay Rockefeller, D-W.Va., the author of the E-Rate program, said that when he and others created the program, they weren't sure "where the future would take us."   "The accomplishments of the E-Rate program over the last decade and a half are something we should all be very proud of, and I am confident we have only begun to see the promise of this program. Today's action will provide generations of students the opportunity to compete in an increasingly interconnected and data-driven world, and ultimately lead them to brighter future," he said in a statement.

The FCC in July made changes to phase-out funding for outdated technology, such as pagers, to allow more funding to be invested in the connections needed to expand wireless and broadband coverage and capacity.

The Universal Service Fund E-Rate will be using $1 billion in added funding to finance school Wi-Fi broadband expansion in 2015 for school year 2015-2016.   The change in the E-Rate cap will ensure that these additional funds will be available in future years.

Californians for School Facilities and the Coalition for Adequate School Housing encourage school districts and consortia to take advantage of this newly available E-Rate funding to expand Wi-Fi coverage and capacity. 

-Bob Canavan, CSF Federal Legislative Advocate

The clock is ticking on the December 11 expiring FY 2015 Continuing Resolution.  Hopefully Congress will opt for an Omnibus Appropriations bill including the Labor, Health and Human Services, and Education bill rather than a Continuing Resolution.  

Tax Extenders:   Earlier this year the Senate Finance Committee approved the EXPIRE Act (S. 2260) to extend 55 expired tax provisions for two years.  The QZAB program with the positive modification reducing the local business contribution match from 10% to 5% is included in the EXPIRE ACT.  The Ways and Means Committee approved individual bills permanently extending a handful of the expired tax provisions led by the research and development tax credit program. Californians for School Facilities supports the EXPIRE Act provisions extending and modifying the QZAB program for inclusion in the Extenders package.

The Ways and Means and Finance Committees were negotiating their differences when Senate Majority Leader Reid and Ways and Means Committee Chair Camp reached a deal to extend the majority of expired tax provisions, including the Qualified Zone Academy Bond (QZAB) program for two years and make permanent the research and development, mass transit, deductions for state and local taxes, and the American Opportunity tax credits.  The extenders deal generated objections and a veto threat from the Administration because it did not make the earned income and dependent child tax credit permanent and its estimated $400 billion cost.

House Extenders Action: The House Ways and Means Committee is introducing The Tax Increase Prevention Act (H.R. 5771), a tax extenders package to retroactively extend the expired tax provisions which expired in 2013 for one year (2014).  The Rules Committee is scheduled to meet Tuesday.  H.R. 5771 is scheduled for House consideration Wednesday.  The Ways and Means Committee reports that the Joint Committee on Taxation estimates the one year $400 million Qualified Zone Academy Bond extension would have a total cost of $126 million over ten years (2015-2024). 

Senate Extenders:  The Senate Finance Committee and the Senate will have the options of passing the House extenders bill with the one year extension or amending it with the Senate EXPIRE Act two-year extension (2014-2015).  The EXPIRE Act two-year extension would cover last year and the current fiscal year (2015).  Californians for School Facilities continues to support the EXPIRE Act extension provisions. 

Please urge Congress to complete and pass an extenders package.  It is critical that expired tax provisions such as the Qualified Zone Academy Bond program, which has cost effectively  renovated and repaired schools and classrooms in California and every state since 1998, be extended.  Action on the tax extenders in this Congress will restore financial stability to the extenders programs and could open the door for more comprehensive tax reform when the 114th Congress begins in January. 

Thank you for your continued support for Californians for School Facilities .

-Bob Canavan, CSF Federal Legislative Advocate

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