[Congressional Record Volume 141, Number 86 (Tuesday, May 23, 1995)]
[Extensions of Remarks]
[Page E1098]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 AN AMENDMENT TO TREAT ACADEMIC HEALTH CENTERS LIKE OTHER EDUCATIONAL 
   INSTITUTIONS FOR PURPOSES OF THE EXCLUSION FOR EMPLOYER-PROVIDED 
                                HOUSING

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                           HON. AMO HOUGHTON

                              of new york

                    in the house of representatives

                         Tuesday, May 23, 1995
  Mr. HOUGHTON. Mr. Speaker, I am joined today by Mr. Rangel, and Mrs. 
Maloney, in introducing legislation to provide an exclusion for 
employer-provided housing for academic health centers the same as 
provided to other educational institutions. In the 1986 Tax Reform Act, 
Congress enacted a safe harbor provision for college and university-
owned housing provided to certain faculty and staff. Under the safe 
harbor provision, the difference between the fair market value and the 
actual rent for campus housing provided to employees of an educational 
institution is excluded from gross income to the employees. In the 1986 
Act, academic health centers were not included in the safe harbor 
provision.
  The legislation that is being introduced today would afford the same 
safe harbor provision to academic health centers, and place them on 
equal footing with colleges and universities. I believe that academic 
health centers are important national resources that provide 
significant contributions to the Nation's understanding and treatment 
of diseases afflicting our citizens.
  The arguments that applied to the safe harbor provision for colleges 
and universities in the 1986 tax law are the same arguments that apply 
to an academic health center.
  The benefits of providing faculty and staff housing enables the 
center to attract and retain a full-time faculty and staff to fulfill 
the mission of the institution. For institutions located in high rent 
areas such as New York City, this provision is essential for the 
institution to carry out its missions of patient care, education, and 
research.
  Second, many of the tenants of academic center-owned housing are 
pursuing advanced degrees and training at the center and usually at 
substantial financial hardship. In addition, the faculty and staff of 
an academic health center are often living in the same building as 
faculty and staff of a neighboring university.
  Our bill would amend the definition of ``educational institution'' 
under section 119(d) of the Internal Revenue Code. The amendment would 
ensure that academic health centers, which are not part of a college or 
university, but nevertheless are teaching institutions, would qualify 
for the section 119(d) special valuation rule. This change would 
correct the anomalous situation under current law where a qualified 
educational institution can use the rule and an academic health center 
cannot, even though the two institutions must hire and compete for the 
same highly qualified employees.
  The proposed amendment narrowly defines ``academic health center'' to 
focus only on rectifying the competitive problem that I've described. 
Under the proposed amendment, the academic health center must: First, 
qualify as a tax exempt hospital or medical research organization 
eligible to receive charitable contributions, second, receive graduate 
medical education Federal funding, and third, engage in and teach basic 
and clinical medical science and research with the organization's own 
standing faculty.
  We believe that the legislation will allow for a fair and equitable 
competitive market for these skilled and qualified employees.


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