Amendments to Tax-Credit Bill Clear the Way to Senate Floor

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Washington--After two months of heated debate over the anti-discrimination provisions of the Reagan Administration's tuition tax-credit bill, the Senate Finance Committee last week finally cleared the way for the measure to be brought to the Senate floor.

Following the committee's 12-to-6 vote last Thursday in favor of the bill, the committee's Republican chairman, Senator Robert Dole of Kansas, said he expected to bring the bill to the floor before the Congress recesses for the November elections.

The bill's approval had been held up by disagreements between several Senators and the Administration over provisions that would prohibit awarding the tax credits to parents who send their children to schools that discriminate on the basis of race.

A majority of committee members had on Wednesday voted in favor of a provision sponsored by Senator Bill Bradley, Democrat of New Jersey, that would permit the Internal Revenue Service (irs), in addition to the Justice Department, to investigate complaints brought against schools suspected of practicing racial discrimination.

Because that provision was said by Sena-tor Dole to be unacceptable to the private-school community, the Senator on the following day introduced an amendment that would tie the tuition tax-credit bill to the disposition of a private-school lawsuit that is currently before the U.S. Supreme Court.

The case involves Bob Jones University in Greenville, S.C., and the Goldsboro

Christian Schools in North Carolina--two institutions that are contesting an irs move to deny them tax exemptions because of policies that are alleged to be racially discriminatory.

The Administration says it supports the schools' positions that the irs was overstepping its statutory authority by promulgating regulations that tie schools' admissions and disciplinary policies to their eligibility for tax exemptions. But the Administration has also promoted a bill introduced in the Congress earlier this year that would specifically grant the irs that authority.

Conditional on I.R.S. Powers

The compromise, which the committee passed unanimously, says that tuition tax credits will not be available to parents until the Supreme Court decides the issue. If the Court rules that the irs now lacks the authority to regulate private schools seeking tax exemptions, the compromise provision says, tuition tax credits will not be available until the Congress passes the bill giving the irs the authority to investigate private schools' admissions policies prior to granting tax exemptions.

Other anti-discrimination measures approved by the committee would: require private schools seeking tax exemptions to publish for the public and to file with the irs an annual statement that they do not discriminate on the basis of race; permit any individual, not just students or parents, to file a complaint with the Justice Department against a school suspected of discrimination; and require schools that have been denied tax exemptions to prove in court that they no longer discriminate.

"We're very pleased that the committee has voted convincingly for this bill," said Gary L. Jones, the undersecretary of education, after the vote.

Robert L. Smith, executive director of the Council for American Private Education, a coalition that represents several private-school organizations, said he was "delighted that this chapter has now ended."

The committee members also approved several other amendments to the Administration's version of the bill. Those amendments would:

Permit tax credits for one-half of tuition, beginning with a $100 credit in the fiscal year 1984 and rising to $200 in 1985, and $300 thereafter. The Administration had recommended that those amounts be $100, $300, and $500, respectively.

Provide "refundable" tax credits to parents whose income is so low that they have no federal tax liability. The Administration did not support this provision.

Limit full credits to parents with incomes up to $40,000 and permit partial credits to parents with incomes between $40,000 and $50,000. The Administration proposed income ceilings of $50,000 and $75,000, respectively.

Delay the effective date of tuition tax credits, depending on the disposition of the Bob Jones University case, until July 1, 1983, at the earliest. This provision will mean that the expected revenue loss to the treasury of $229 million will not affect the fiscal 1983 budget.

Require private schools to comply with states' compulsory-attendance laws. Schools would not be required to seek accreditation by state agencies, however.

Deny tax credits to schools that discriminate in their admissions policies against handicapped students. No finding of discrimination would be brought against schools that do not maintain special facilities for handicapped students who require them, however.

Vol. 02, Issue 03

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