[Congressional Record (Bound Edition), Volume 147 (2001), Part 18]
[Extensions of Remarks]
[Page 25923]
[From the U.S. Government Publishing Office, www.gpo.gov]



          AMENDING INTERNAL REVENUE CODE TO SIMPLIFY REPORTING

                                 ______
                                 

                               speech of

                        HON. DONALD A. MANZULLO

                              of illinois

                    in the house of representatives

                       Tuesday, December 4, 2001

  Mr. MANZULLO. Mr. Speaker, of the many Federal regulations with which 
colleges and universities are required to comply, one of the most 
onerous is that associated with the HOPE scholarship and lifetime 
learning tax credit. Originally enacted as part of the Taxpayer Relief 
Act of 1997, the tax credits were intended to give parents back more of 
their hard-earned money, up to $1,500 for the first 2 years of college, 
so that they could better afford to send their children to school.
  While we were successful in providing, this tax relief for students 
and families, we discovered an unintended consequence: an unfunded 
mandate burdening, colleges, trade schools, community colleges, and 
universities in the form of a reporting requirement administered by the 
IRS.
  I became aware of this regulatory issue during the fall of 1997. I 
was discussing several concerns with Dr. La Tourette, president of 
Northern Illinois University. While talking about the merits of the 
HOPE scholarship, he dropped the bombshell on me and informed us of the 
new Federal requirements forcing all 6,000 institutions of higher 
education in this country to collect unprecedented information on their 
students and disseminate that information to the IRS.
  I knew compliance with the reporting requirement would be expansive 
and expensive and would ultimately be borne by the very families that 
they were trying to help with the HOPE scholarship program. Both large 
and small institutions have been hit hard by the reporting requirement. 
The cost to schools to implement and abide by these regulations will 
soar into the hundreds of millions of dollars. And, of course, they 
will be passed on to the consumers of education, which are the parents 
and the students.
  Since my conversation with Dr. La Tourette, I have worked with 
members of the higher education community and with Commissioner Charles 
Rossotti of the IRS to simplify the reporting requirements and ease the 
burden of the regulations on the colleges and universities of this 
country. Today, I am proud to say that H.R. 3346 is the product of a 
partnership that evolved between the IRS, the Treasury Department, the 
higher education community, and myself, and this can serve as a model 
for how we can positively impact higher education in the future by 
working together.
  Specifically, while H.R. 3346 maintains the reporting requirement, 
the bill eliminates certain elements of the law such as reporting a 
third party's Social Security number, and changes others, such as 
allowing schools to report the amount students are billed or the amount 
they are paid. It is my hope that the simplifications instituted as 
part of H.R. 3346 will make the reporting significantly easier on 
colleges and universities.
  Early estimates from Northern Illinois University predict that as a 
result of the passage of this bill, this school could avoid a one-time 
cost of approximately $90,000. This includes the costs of program 
computer systems to accommodate requirements included in the original 
legislation that are not included in the pending legislation, as well 
as what it would cost initially to implement Social Security number 
reporting of the taxpayer claiming the student as a dependent.
  Additionally, the university would have incurred ongoing costs on an 
annual basis for solicitation and data entry of the student-reported 
information, and those costs are estimated at $30,000 a year. The 
University of California's system expects to save $1 million in the 
first year alone as a result of H.R. 3346. Overall, the savings the 
schools will attain as a result of this legislation are very 
significant. When we consider that most institutions of higher 
education would incur costs of similar proportion, the impact is 
particularly traumatic.
  I would be remiss if I did not take a moment to heartily thank 
Commissioner Rossotti with whom we met on no less than three different 
occasions in order to fashion this legislation. I also want to thank 
Judy Dunn, Curt Wilson and Beverly Babers of the staff. I would like to 
thank Northern Illinois University, both former president Dr. La 
Tourette and current president Dr. John Peters and Kathe Shinham from 
the school for their insights and efforts as we have worked to craft 
this legislation. This bill is a memorial to Dr. Ruth Mercedes-Smith, 
former president of Highland Community College, who was killed in a car 
accident several months ago. Her support for our work was invaluable. 
Also, Dr. Chapdelaine of Rock Valley Community College, Dr. LaVista of 
McHenry Community College, Jacquelyn Ito-Woo of the University of 
California, and Mary Bachinger and Anne Gross of the National 
Association of Colleges and University Business Officers. All of these 
groups worked tirelessly together in order to craft the legislation. It 
took us 4 years to do it. During that period of time, the IRS worked 
with us, they withheld the implementation of these regulations because 
they knew that the goal was worthy. Lastly, I want to thank Sarah 
Giddens of our staff who, for 4 years, tirelessly worked on this 
legislation, dogging it dot by dot, i by i, in the hundreds of 
meetings, literally, that she had and the hours that she poured into 
this piece of legislation.
  Mr. Speaker, it is a great piece of legislation. Instead of spending 
money on regulatory compliance, the schools can spend that money doing 
what they do best, and that is educating the kids.

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