Grassley's measures were included in a package of education savings incentives and othereducation-related tax proposals adopted today by the Senate Finance Committee. Grassley is asenior member of the tax-writing committee. "My goal is to prompt assistance to schools who needmoney for repairs and construction. My proposals give expanded flexibility and incentives forinvestment that could help school districts in Iowa and across the country," he said.
Nationwide, tax-exempt bonds finance about 90 percent of investment in public schools. In Iowa,over $625 million in tax-exempt bonds were issued to school districts last year alone.
The first Grassley item passed today would permit school districts to employ public-privatepartnerships for school construction and rehabilitation projects financed by tax-exempt bonds. Theproposal could mean close to $30 million more for Iowa in new school construction or rehabilitation. Under current law, public school construction is one of the only types of infrastructure investmentwhere tax-exempt bonds cannot be used in conjunction with public-private partnerships. Grassleyintroduced this measure in March with Sen. Bob Graham of Florida. Grassley said the change would"help school districts leverage private investment to improve their local schools."
The Finance Committee also endorsed the Grassley/Graham proposal to raise from $10 million to$25 million the volume of school construction bonds that a small school district could issue eachyear and still qualify for the small-issuer arbitrage rebate exemption. This provision would expandthe benefits of the small-issuer rebate exemption to a broader universe of small school bond issuers. Grassley said it could "make a big difference for districts who are trying to come up with thenecessary capital for additional construction or rehabilitation."
Finally, Grassley won committee support today for his legislation to give expanded tax relief to thoserepaying student loans for college. His measure would eliminate the current restriction which allowsa tax deduction for student loan interest for just 60 months, or five years. Grassley wants to lettaxpayers take the deduction for the life of the loan.