SECTION 127 LEGISLATIVE ACTION UPDATE

THE LATEST FROM APA - August 9, 1999
The House and Senate have finished the world's fastest conference on tax reform. We don't know what's in the final package yet. Provisions that were in both bills were kept. But we don't yet know about Sec. 127.  To the many of you who faxed letters and made phone calls, thanks. It's great that you sprung into action.

Keep in mind, that whatever is in this final bill, has been doomed to veto, but that hasn't happened yet. The final legislation will most likely take on the bill number H.R. 2488 (final tax bills always take on a House number).  The details of this final bill are not yet available, but they probably will be soon. Those of you who want to see full details can download it from Thomas: http://thomas.loc.gov/ but there are many different versions right now. We will let you know when we get the official version.

FOR IMMEDIATE RELEASE - August 3, 1999
Contact: Lorenzo Nastasi  202-682-4785

APA Applauds Senate Action on Education Benefits
The American Payroll Association strongly supports action taken by the Senate to include provisions extending tax benefits for educational assistance under Sec. 127 of the Internal Revenue Code in the recently passed Taxpayer Refund Act of 1999.  "While we are always looking towards a permanent extension of Sec. 127, we urge the inclusion of the Senate language extending section 127 until December 31, 2003 in any tax reform package finalized during the House-Senate conference," said Rita Zeidner, Manager of Government Relations for the American Payroll Association.  Zeidner said she was particularly pleased that the Senate provision extended Sec. 127 benefits to graduate level classes. She said she was disappointed that the House bill did not mention Sec. 127 at all.

Section 127 was last extended temporarily in 1996 and is slated to expire on May 31, 2000. The current authorization only covers undergraduate courses.  Sec. 127 has not covered graduate level courses since July 1996.  During recent weeks, many APA members have contacted their lawmakers urging them to support Sec. 127 benefits. Some of the members are actually students who are working on their undergraduate degrees.   "The on-again, off-again status of Sec. 127 has been particularly disruptive to the payroll process," according to Zeidner. "Problems and confusion have been compounded by the fact that the benefits currently extend only to undergraduate courses. We welcome the Senate's support of this important benefit and hope that conferees will incorporate it into any final bill."