May 6, 2016
BUDGET, APPROPRIATIONS & TAX ISSUES
House Appropriators Can Ready Their Bills for the Floor
Senate Appropriations Process Remains Unclear
IRS Announces Delay in Change to Institutions’ Tuition Reporting
FAA Clarifies that Students May Fly Small Unmanned Aircraft Systems Under Certain Conditions
BUDGET, APPROPRIATIONS & TAX ISSUES
HOUSE APPROPRIATORS CAN READY THEIR BILLS FOR THE FLOOR
House Republican leaders remain unable to work out a deal with their most conservative colleagues on an FY17 budget resolution, so the measure is likely dead, reports Politico. Under the budget rules, appropriators can begin taking FY17 appropriations bills to the floor beginning May 15. They are using the topline discretionary spending number agreed to in last year’s two-year budget agreement. House conservatives, who opposed the agreement, are pressing their leadership to reduce discretionary spending from the agreed-upon level.
So far, the House Appropriations Committee has approved four of its 12 FY17 spending bills: Agriculture, Energy and Water, Legislative Branch, and Military Construction-Veterans Affairs. The FY17 Defense appropriations bill is scheduled for subcommittee markup on Wednesday, May 11.
SENATE APPROPRIATIONS PROCESS REMAINS UNCLEAR
The Senate will return from recess next week, but there is no word from Senate leaders on how they plan to proceed on their FY17 appropriations bills. Before leaving for this week’s recess, the Senate was close to approving the FY17 Energy and Water bill, its first of the year. But the process was stalled when Democrats objected to a last-minute amendment affecting the U.S. nuclear deal with Iran.
FAA CLARIFIES THAT STUDENTS MAY FLY SMALL UNMANNED AIRCRAFT SYSTEMS UNDER CERTAIN CONDITIONS
The Federal Aviation Administration (FAA) on May 4 issued an interpretation of existing law and regulations that will make it easier for students to use small unmanned aircraft systems (sUAS) in their studies. Recognizing that sUAS are increasingly used for educational purposes, the interpretation clarifies that students at educational institutions no longer require a Section 333 exemption or other authorization to fly sUAS under certain conditions, as long as they follow model aircraft safety guidelines.
This is positive news and might signal some relief for colleges and universities in the FAA’s final rule on the Operation and Certification of Small Unmanned Aircraft Systems. However, the May 4 interpretation is limited and does not permit all types of sUAS flights on campuses. For example, flights conducted for a student’s coursework may not be associated with research projects or university business, and a faculty member’s operation of an sUAS may only be “incidental” to the student’s use.
Consequently, the higher education community will continue to work with the FAA, Congress, and the White House to provide a workable mechanism for institutions of higher education to safely conduct a full range of research and instructional activities using sUAS.
IRS ANNOUNCES DELAY IN CHANGE TO INSTITUTIONS’ TUITION REPORTING
The Internal Revenue Service (IRS) has announced that it will not impose penalties on eligible higher education institutions that file 2016 Form 1098-T tuition statements that report the aggregate amount the institution billed for qualified tuition and related expenses instead of the aggregate amount of payments the institution received.
This announcement effectively grants a delay in the reporting change enacted by section 212 of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which requires institutions to use Box 1 in reporting on Form 1098-T for 2016 tax year.
Most colleges and universities currently report amounts billed (Box 2) and thus will need to put in place new software solutions to implement Box 1 reporting. The IRS is expected to issue guidance governing institutional reporting requirements to address some of the transitional concerns raised by the higher education associations in their March 10 letter to the IRS.
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