The House of Representatives took off for summer break after clearing a short term transportation funding bill, while the Senate passed the same bill, as well as a longer-term transportation bill last week. It is anticipated to be an action packed fall with Congress attempting to address many politically tricky issues on tight deadlines, including:
- a resolution of disapproval for the Iran nuclear deal
- a federal government funding bill
- legislation reauthorizing the Federal Aviation Administration
- legislation renewing the charter of the Export-Import Bank
- a federal transportation funding bill
- legislation addressing the federal debt limit
- tax extender legislation
Congress does not return until mid-September and they will just have 12 legislative workdays to pass a resolution of disapproval for the Iran nuclear deal (and then override an expected presidential veto), and pass a government funding bill before the federal government shuts down on October 1, 2015. (Authorization for the Federal Aviation Administration also expires at the end of September 2015.) Legislation to fund the federal government might get caught up in abortion politics, increasing the likelihood of at least a temporary government shutdown.
But the fun does not end there. The charter of the Export-Import Bank expired at the end of June 2015 and efforts to combine that issue with a longer-term transportation funding package failed to get traction in the House of Representatives this month (although it passed the Senate). Expect to see a renewal of that effort in October 2015. Also, last week Treasury Secretary Lew sent a letter to Congress estimating that action to increase the statutory federal debt limit is needed by October 30, 2015.
Retirement Provisions in Short Term Transportation Bill
The short term transportation bill Congress opted to pass extends funding through October 29, 2015. The legislation includes a provision that extends the maximum extension for the Form 5500 employee benefit plan information return from 2 ½ months to 3 ½ months for returns in years beginning after December 31, 2015. So for 2016 calendar year plans, for example, the due date for filing the Form 5500 may be extended to November 15, 2017.
The bill also extends a provision, originally included the MAP-21 transportation bill that became law in 2012, that allows employers to transfer excess pension assets in a defined benefit plan to a health benefits account or an applicable life insurance account for four more years (from December 31, 2021 to December 31, 2025). This extension raised $172 million.
On July 21, 2015, the Senate Finance Committee voted 23 to 3 to advance legislation that extends a variety of tax provisions in the Internal Revenue Code for the next two years, the so-called tax extenders bill. The bill includes an extension of a provision that allows individuals to take tax-free distributions from IRAs for charitable purposes, the so-called IRA charitable rollover provision. Earlier this year, the House Ways & Means Committee passed legislation extending this provision permanently.
The House of Representatives has shown a preference to address individual or small groups of extenders on a permanent basis, while the Senate is more interested in a shorter term extension of essentially all non-permanent current tax law to preserve a default status-quo in the Internal Revenue Code. The two chambers will have to reconcile their philosophical differences in how to address these provisions before the start of the 2015 tax filing season in early 2016.