Workforce Development Through Post-Graduation Scholarships Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4038 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 HOUSE OF REPRESENTATIVES JULY 25, 2019 Mr. LAHOOD (for himself and Ms. SEWELL of Alabama) introduced the following bill; which was referred to the Committee on Ways and Means 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 19:27 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4038.IH H4038 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 4038 IH 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 19:27 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4038.IH H4038 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 4038 IH ‘‘(I) is described in section 1 501(c)(3) and exempt from tax under 2 section 501(a), and 3 ‘‘(II) is either a private founda- 4 tion (other than a private foundation 5 established by an organization de- 6 scribed in section 170(b)(1)(A)(ii) or 7 an organization described in section 8 170(b)(1)(A)(iii) the principal purpose 9 or function of which is the provision 10 of medical education) or a community 11 trust described in section 12 170(b)(1)(A)(vi), 13 ‘‘(ii) which is designed to encourage 14 individuals to serve in occupations of 15 unmet needs or in areas of unmet needs 16 (as such terms are used in section 17 108(f)(2)(D)(ii)), and 18 ‘‘(iii) under which, in accordance with 19 the conditions of a grant, such organiza- 20 tion repays any portion of an applicable 21 education loan incurred by an individual. 22 ‘‘(B) APPLICABLE EDUCATION LOAN.—For 23 purposes of subparagraph (A)(iii), the term ‘ap- 24 plicable education loan’ means, with respect to 25 VerDate Sep 11 2014 19:27 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4038.IH H4038 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 4038 IH any individual, a qualified education loan (as 1 defined in section 221(d)(1)) incurred to pay 2 qualified higher education expenses (as defined 3 in section 221(d)(2)) of such individual.’’. 4 (c) AMOUNT NOT TREATED AS TAXABLE EXPENDI- 5 TURE BY PRIVATE FOUNDATION.—Section 4945(g) of 6 such Code is amended by striking ‘‘or’’ at the end of para- 7 graph (2), by striking the period at the end of paragraph 8 (3) and inserting ‘‘, or’’, and by adding at the end the 9 following new paragraph: 10 ‘‘(4) the grant is a post-graduation scholarship 11 grant (as defined in section 117(b)(2)).’’. 12 (d) DENIAL OF DOUBLE BENEFIT.—Section 221(e) 13 of such Code is amended by redesignating paragraphs (2) 14 and (3) as paragraphs (3) and (4), respectively, and by 15 inserting after paragraph (1) the following new paragraph: 16 ‘‘(2) DENIAL OF DOUBLE BENEFIT IN CASE OF 17 POST-GRADUATION SCHOLARSHIP GRANTS.—Any in- 18 terest which is paid as part of a post-graduation 19 scholarship grant and excluded from gross income 20 under section 117 shall not be taken into account 21 under this section.’’. 22 VerDate Sep 11 2014 19:27 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4038.IH H4038 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 4038 IH (e) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years beginning after 2 the date of the enactment of this Act. 3 Æ VerDate Sep 11 2014 19:27 Aug 16, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H4038.IH H4038 pamtmann on DSKBFK8HB2PROD with BILLS