Workforce Development Through Post-Graduation Scholarships Act of 2019

II 116TH CONGRESS 1ST SESSION S. 676 To amend the Internal Revenue Code of 1986 to exclude certain post-gradua- tion scholarship grants from gross income in the same manner as quali- fied scholarships to promote economic growth. IN THE SENATE OF THE UNITED STATES MARCH 6, 2019 Mr. PETERS (for himself and Mrs. CAPITO) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to exclude certain post-graduation scholarship grants from gross in- come in the same manner as qualified scholarships to promote economic growth. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Workforce Develop- 4 ment Through Post-Graduation Scholarships Act of 5 2019’’. 6 VerDate Sep 11 2014 22:22 Mar 18, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S676.IS S676 tkelley on DSKBCP9HB2PROD with BILLS 2 •S 676 IS SEC. 2. POST-GRADUATION SCHOLARSHIP GRANTS EX- 1 CLUDED FROM GROSS INCOME IN SAME MAN- 2 NER AS QUALIFIED SCHOLARSHIPS. 3 (a) IN GENERAL.—Section 117(a) of the Internal 4 Revenue Code of 1986 is amended— 5 (1) by striking the period at the end and insert- 6 ing ‘‘, or’’, 7 (2) by striking ‘‘any amount received’’ and in- 8 serting the following: ‘‘any amount which— 9 ‘‘(1) is received’’, and 10 (3) by adding at the end the following new 11 paragraph: 12 ‘‘(2) is a post-graduation scholarship grant re- 13 ceived by or paid on behalf of an individual.’’. 14 (b) POST-GRADUATION SCHOLARSHIP GRANT.—Sec- 15 tion 117(b) of such Code is amended by redesignating 16 paragraph (2) as paragraph (3) and by inserting after 17 paragraph (1) the following new paragraph: 18 ‘‘(2) POST-GRADUATION SCHOLARSHIP 19 GRANT.— 20 ‘‘(A) IN GENERAL.—The term ‘post-grad- 21 uation scholarship grant’ means any grant pro- 22 gram— 23 ‘‘(i) which is established by an organi- 24 zation which— 25 VerDate Sep 11 2014 21:25 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S676.IS S676 tkelley on DSKBCP9HB2PROD with BILLS 3 •S 676 IS ‘‘(I) is described in section 1 501(c)(3) and exempt from tax under 2 section 501(a) (other than an organi- 3 zation established by an organization 4 described in section 170(b)(1)(A)(ii) 5 or an organization described in section 6 170(b)(1)(A)(iii) the principal purpose 7 or function of which is the provision 8 of medical education), and 9 ‘‘(II) is either a private founda- 10 tion or a community trust described 11 in section 170(b)(1)(A)(vi), 12 ‘‘(ii) which requires a grantee to live 13 and work in an applicable community, and 14 ‘‘(iii) under which, in accordance with 15 the conditions of a grant, such organiza- 16 tion repays any portion of an applicable 17 education loan incurred by an individual. 18 ‘‘(B) APPLICABLE COMMUNITY.—For pur- 19 poses of subparagraph (A)(ii), the term ‘appli- 20 cable community’ means any area that— 21 ‘‘(i) is— 22 ‘‘(I) a low-income community (as 23 determined under section 45D(e)), or 24 VerDate Sep 11 2014 21:25 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S676.IS S676 tkelley on DSKBCP9HB2PROD with BILLS 4 •S 676 IS ‘‘(II) a county that has, during 1 the 10-year period ending with the 2 year in which the most recent census 3 was conducted, a net out-migration of 4 inhabitants from the county of the 5 population of the county at the begin- 6 ning of such period, and 7 ‘‘(ii) has a bachelor’s degree attain- 8 ment rate for the population of 25–34 9 year-olds that is below the national average 10 for such population (as determined based 11 on data collected by the Census Bureau). 12 ‘‘(C) APPLICABLE EDUCATION LOAN.—For 13 purposes of subparagraph (A)(iii), the term ‘ap- 14 plicable education loan’ means, with respect to 15 any individual, a qualified education loan (as 16 defined in section 221(d)(1)) incurred to pay 17 qualified higher education expenses (as defined 18 in section 221(d)(2)) of such individual.’’. 19 (c) AMOUNT NOT TREATED AS TAXABLE EXPENDI- 20 TURE BY PRIVATE FOUNDATION.—Section 4945(g) of 21 such Code is amended by striking ‘‘or’’ at the end of para- 22 graph (2), by striking the period at the end of paragraph 23 (3) and inserting ‘‘, or’’, and by adding at the end the 24 following new paragraph: 25 VerDate Sep 11 2014 21:25 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S676.IS S676 tkelley on DSKBCP9HB2PROD with BILLS 5 •S 676 IS ‘‘(4) the grant is a post-graduation scholarship 1 grant (as defined in section 117(b)(2)).’’. 2 (d) DENIAL OF DOUBLE BENEFIT.—Section 221(e) 3 of such Code is amended by redesignating paragraphs (2) 4 and (3) as paragraphs (3) and (4), respectively, and by 5 inserting after paragraph (1) the following new paragraph: 6 ‘‘(2) DENIAL OF DOUBLE BENEFIT IN CASE OF 7 POST-GRADUATION SCHOLARSHIP GRANTS.—Any in- 8 terest which is paid as part of a post-graduation 9 scholarship grant and excluded from gross income 10 under section 117 shall not be taken into account 11 under this section.’’. 12 (e) REGULATORY AUTHORITY.—Section 117 of such 13 Code is amended by adding at the end the following new 14 subsection: 15 ‘‘(e) REGULATIONS.—The Secretary shall prescribe 16 such reporting requirements and regulations as may be 17 necessary or appropriate to carry out subsection (a)(2), 18 including— 19 ‘‘(1) regulations defining under what conditions 20 an individual is considered to live and work in a 21 community for purposes of subsection (b)(2)(A)(ii), 22 and 23 ‘‘(2) regulations to ensure the implementation 24 and effectiveness of such subsection.’’. 25 VerDate Sep 11 2014 21:25 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S676.IS S676 tkelley on DSKBCP9HB2PROD with BILLS 6 •S 676 IS (f) EFFECTIVE DATE.—The amendments made by 1 this section shall apply with respect to taxable years begin- 2 ning after the date of enactment of this Act. 3 (g) REPORTS.— 4 (1) SECRETARY OF TREASURY.—Not later than 5 3 years after the date of the enactment of this Act, 6 and periodically thereafter, the Secretary of the 7 Treasury, or the Secretary’s delegate, shall submit 8 to Congress a report on the implementation and ef- 9 fectiveness of the amendments made by this section. 10 (2) COMPTROLLER GENERAL.— 11 (A) IN GENERAL.—Not later than 5 years 12 after the date of enactment of this Act, the 13 Comptroller General of the United States shall 14 publish the result of a study on post-graduation 15 scholarship grants to which section 117 of the 16 Internal Revenue Code of 1986 (as amended by 17 this section) applies. 18 (B) CONTENTS.—The information pub- 19 lished under subparagraph (A) shall include the 20 following: 21 (i) A description of the characteristics 22 of individuals who receive post-graduation 23 scholarship grants. 24 VerDate Sep 11 2014 21:25 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S676.IS S676 tkelley on DSKBCP9HB2PROD with BILLS 7 •S 676 IS (ii) The length of time involved in 1 such grants. 2 (iii) The amount paid out under such 3 grants. 4 (iv) The disposition of any funds paid 5 under such grants, including the identity 6 of any loan holders who benefit from such 7 funds. 8 Æ VerDate Sep 11 2014 21:25 Mar 15, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S676.IS S676 tkelley on DSKBCP9HB2PROD with BILLS