114 S2191 IS: PARTNERSHIPS Act
U.S. Senate
2015-10-21
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.
This Act may be cited as the Promoting Access and Retention Through New Efforts to Require Shared Higher Investments in Postsecondary Success Act
or the PARTNERSHIPS Act
.
<enum>I</enum><header>State-Federal college affordability and completion partnerships</header>
<section id="id0004E40C52074D5DABDF597ACD06D4D0"><enum>101.</enum><header>State-Federal college affordability and completion partnerships</header><text display-inline="no-display-inline">Title IV of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1070">20 U.S.C. 1070 et seq.</external-xref>) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="id9C756BEE6F5C4ADB97B05D74A8AC6617" style="OLC">
<part id="idC44905A757AE446CA59FA65DDD5C49CB" style="OLC"><enum>J<?LEXA-Enum J?></enum><header>State-Federal college affordability and completion partnerships</header>
<section id="id52f65049ea9d4658aa461e99ad26caf7"><enum>499–1.</enum><header>Purpose</header><text display-inline="no-display-inline">The purpose of this part is to establish a State-Federal partnership that incentivizes State investment in public higher education.</text>
</section><section id="idfd176edba2f34e6592c835a8baf01a8b"><enum>499–2.</enum><header>Definitions</header><text display-inline="no-display-inline">In this part:</text> <paragraph id="ida803303641c94189b5ff50f75ec9de1e"><enum>(1)</enum><header>Eligible State</header><text>The term <term>eligible State</term> means a State that provides, to public institutions of higher education, net State operating support per FTE student in an amount equal to not less than 50 percent of the amount that reflects the maximum Federal Pell Grant award amount for the most recent academic year.</text>
</paragraph><paragraph id="idadb08b826cec4380845e7973b947b13c"><enum>(2)</enum><header>Full-time equivalent student number</header><text>The term <term>full-time equivalent student number</term> means a number reflecting the number of students enrolled full-time at a public institution of higher education in the State, and shall be defined and calculated in the manner determined most appropriate by the Secretary.</text>
</paragraph><paragraph id="idE1988BD33F2640D08FB6058492C58B43"><enum>(3)</enum><header>Low-income student</header><text>The term <term>low-income student</term> means a student who is eligible for a Federal Pell Grant under section 401.</text> </paragraph><paragraph id="id5f75a2bc6841490b8994d5017d1c5340"><enum>(4)</enum><header>Net State operating support</header><text>The term <term>net State operating support</term> means an amount that is equal to the amount of State funds and local government appropriations used to support public higher education annual operating expenses in the State, calculated in accordance with subparagraphs (A) and (B).</text>
<subparagraph id="id669aff81f94647538a142fe683bbfea8"><enum>(A)</enum><header>Calculation</header><text>A State's net State operating support shall, for a fiscal year, be an amount that is equal to the difference resulting from the gross amount of State funds appropriated and disbursed by the State and expended by the recipient institutions in the fiscal year for public higher education operating expenses in the State, minus—</text>
<clause id="id1d5c37431cd84e3d8c8ed2eba0db6d99"><enum>(i)</enum><text>such appropriations that are returned to the State;</text> </clause><clause id="id7e1b3c33e48b4a10a5aa830dc97209f8"><enum>(ii)</enum><text>State-appropriated funds derived from Federal sources, including funds provided under this part;</text>
</clause><clause id="idad8b1492b81e4c2b9015d17140381cf3"><enum>(iii)</enum><text>local government funds not appropriated for operating support for public higher education;</text> </clause><clause id="ideca595a728d842a88737d2aab3342403"><enum>(iv)</enum><text>amounts that are portions of multi-year appropriations to be distributed over multiple years that are not to be spent for the year for which the calculation is being made;</text>
</clause><clause id="id8fefecf0012b4167a71dbacba613250b"><enum>(v)</enum><text>tuition charges remitted to the State to offset State appropriations;</text> </clause><clause id="id5e7a88991ffa4b119255b2b351a9e093"><enum>(vi)</enum><text>State funding for students in non-credit continuing or adult education courses and non-credit extension courses;</text>
</clause><clause id="idca42efb85dbc41e58f7b2490266ab1c6"><enum>(vii)</enum><text>sums appropriated to private nonprofit institutions of higher education, or to proprietary institutions of higher education, for capital outlay or operating expenses; and</text>
</clause><clause id="id8b30e8d4f8fa4aa981481170d1210d17"><enum>(viii)</enum><text>any other funds excluded under subparagraph (B).</text> </clause></subparagraph><subparagraph id="ida966eb59fda74262a5490e781d02e01e"><enum>(B)</enum><header>Exclusions</header><text>Net State operating support does not include—</text>
<clause id="idf2714d04649b4a809660f8c580e7f994"><enum>(i)</enum><text>funds for—</text> <subclause id="id45183D5EB6C0406FBE758D112ACF069F"><enum>(I)</enum><text>student aid programs that provide grants to students attending in-State private nonprofit institutions of higher education, in-State proprietary institutions of higher education, independent institutions, in-State public institutions, and out-of-State institutions;</text>
</subclause><subclause id="id1ea837a9b674432ab1a20fc3aa207a36"><enum>(II)</enum><text>capital outlay;</text> </subclause><subclause id="id5d09673916bd4ab18e8bfc67d93a9832"><enum>(III)</enum><text>deferred maintenance; or</text>
</subclause><subclause id="id2c082159629c4f2f8abfdd4f67fa13cb"><enum>(IV)</enum><text>research and development; or</text> </subclause></clause><clause id="ida517cb4063384f8aa745da4779348a90"><enum>(ii)</enum><text>any other funds that the Secretary may exclude.</text>
</clause></subparagraph></paragraph><paragraph id="id6da2a7bf720b48c5a99eeb561fd51a93"><enum>(5)</enum><header>Net State operating support per FTE student</header><text>The term <term>net State operating support per FTE student</term> means, for a fiscal year—</text> <subparagraph id="ida26af49311c2481c8c6c89a36959b855"><enum>(A)</enum><text>the net State operating support for the previous fiscal year; divided by</text>
</subparagraph><subparagraph id="idf2ab169860c54710ba64c27d821df7f1"><enum>(B)</enum><text>the full-time equivalent student number for the previous fiscal year.</text> </subparagraph></paragraph><paragraph id="idd57dbce8e3f24bc5942146b2d453c842"><enum>(6)</enum><header>Public institution</header><text>The term <term>public institution</term> means an institution of higher education (as defined in section 101) whose liabilities are backed by the full faith and credit of the State or its equivalent, as determined in accordance with section 668.15 of title 34, Code of Federal Regulations, or any successor regulation.</text>
</paragraph><paragraph id="ide05d8d939f84484a8882c5686a9ab184"><enum>(7)</enum><header>Private nonprofit institution of higher education</header><text>The term <term>private nonprofit institution of higher education</term> means an institution of higher education, as defined in section 102, that is a private nonprofit institution.</text>
</paragraph><paragraph id="idd0b693d2397c4e3083b2be5bb8d0ede7"><enum>(8)</enum><header>Proprietary institution of higher education</header><text>The term <term>proprietary institution of higher education</term> has the meaning given the term in section 102(b).</text> </paragraph></section><section id="id48f20d2e0ba9479eac3e1d88f3a07613"><enum>499–3.</enum><header>Authorization; use of funds</header> <subsection id="id155b43313ada4c309197c628f779498f"><enum>(a)</enum><header>Authorization</header><text>The Secretary shall award annual block grants to eligible States to encourage States to provide additional funding for public higher education.</text>
</subsection><subsection id="idafae890f5dae4c87919d67db8aca258e"><enum>(b)</enum><header>Use of funds by States</header><text>An eligible State receiving a block grant under this part shall allocate 100 percent of block grant funding to public institutions for public higher education expenditures in accordance with subsection (c).</text>
</subsection><subsection id="ide4724ac077334f86acef6a62b250300f"><enum>(c)</enum><header>Use of funds by public institutions</header><text>A public institution that receives funds under this part shall—</text> <paragraph id="idacaff7fbd0ea424e810b0b4150287871"><enum>(1)</enum><text>use a portion of such funds to directly reduce tuition costs or mitigate the need to raise tuition and fees for students residing in the State;</text>
</paragraph><paragraph id="idbd23090018ea474a8fc9208d678b4a00"><enum>(2)</enum><text>use a portion of such funds to support the enrollment of low-income students in the institution;</text> </paragraph><paragraph id="id4D3B103A8ECA4F00B5F0779FEC939C89"><enum>(3)</enum><text>use a portion of such funds to support retention and degree completion of low-income students; and</text>
</paragraph><paragraph id="idd0b65f48fbb44703b5f11cb749655290"><enum>(4)</enum><text>create a publicly available report that documents the institution's efforts to satisfy the requirements described in paragraphs (1) through (3).</text>
</paragraph></subsection><subsection id="id002d7fa4e87b46169e8d4199572cfd70"><enum>(d)</enum><header>Prohibitions</header>
<paragraph id="id3eb5e95a5c524368bbaa4305c5fa36c5"><enum>(1)</enum><header>No use for endowments</header><text>A public institution may not use funds received under this part to increase the endowment of the public institution.</text>
</paragraph><paragraph id="id3a63d2b1578b437a9691996fc43d1edc"><enum>(2)</enum><header>No use for athletic or commercial venues</header><text>No funds awarded under this part may be used for the modernization, renovation, or repair of stadiums or other facilities of a public institution primarily used for athletic contests or events for which admission is charged to the general public.</text>
</paragraph></subsection><subsection id="id64b7381187a341448734427d43183706"><enum>(e)</enum><header>State limitations on institutions</header><text>Nothing in this section shall be construed to prohibit a State from establishing additional requirements for public institutions in the State for the purpose of increasing the affordability of higher education.</text>
</subsection></section><section id="idB3D39F8A17334742B6636B1178BA6553"><enum>499–4.</enum><header>Grant formula</header>
<subsection id="id429B54B0CFB74ECABDBF9EECB806D870"><enum>(a)</enum><header>Grant Formula</header><text>The Secretary shall award a block grant to an eligible State for a fiscal year in an amount equal to the product of—</text>
<paragraph id="idEAA45F6BA0B442EC8468B3DDB5433EE7"><enum>(1)</enum><text>the marginal Federal match amount for the fiscal year, as determined under subsection (b); multiplied by</text>
</paragraph><paragraph id="id1105718ED82648D4BA170DAC6B803941"><enum>(2)</enum><text>the full-time equivalent student number for the previous fiscal year.</text> </paragraph></subsection><subsection id="id78B2BBE4576241C5A1A4D41BDF6BAB75"><enum>(b)</enum><header>Federal Match Amount for eligible States</header><text>The marginal Federal match amount shall be the following:</text>
<paragraph id="idcafbb5d740724a27a319662de93000f0"><enum>(1)</enum><header>Eligible States with net State operating support per FTE student between 50 percent and 130 percent
of the maximum Federal Pell Grant</header><text>The marginal Federal match amount for an eligible State with a net State operating support per FTE student for the fiscal year that is equal to or more than 50 percent of the amount of the maximum Federal Pell Grant under section 401 for the most recent fiscal year but is less than 130 percent of such amount, shall be equal to the product of—</text>
<subparagraph id="id01F90DE2A1B943049400DFDC906911F8"><enum>(A)</enum><text>the amount of the maximum Federal Pell Grant for the most recent fiscal year; multiplied by</text> </subparagraph><subparagraph id="id151D62C183B5439590568C59B85BCAF2"><enum>(B)</enum><text>the result of the mathematical expression 0.26<italic>x</italic><superscript>2</superscript> − 0.14<italic>x</italic> + 0.005, where <italic>x</italic> represents the ratio obtained by dividing the eligible State's net State operating support per FTE student by the amount of the maximum Federal Pell Grant for the most recent fiscal year.</text>
</subparagraph></paragraph><paragraph id="id64BBF381E6F94BFEA8B7B320375DEFDD"><enum>(2)</enum><header>Eligible States with net State operating support equal to or greater than 130 percent of the
maximum Federal Pell Grant</header><text>The marginal Federal match amount for an eligible State with a net State operating support per FTE student for the fiscal year equal to or greater than 130 percent of the amount of the maximum Federal Pell Grant for the most recent fiscal year, shall be equal to the sum of—</text>
<subparagraph id="id2356D865890F4280A26C44D140349430"><enum>(A)</enum><text>the amount calculated under paragraph (1) for a State with a net State operating support per FTE student equal to 130 percent of the amount of the maximum Federal Pell Grant for the most recent fiscal year; and</text>
</subparagraph><subparagraph id="id712FB1C2666F42B3A9AB6A435AD74900"><enum>(B)</enum><text>10 percent of the amount by which the eligible State's net State operating support per FTE student exceeds 130 percent of such maximum Federal Pell Grant,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">except that in no case shall the marginal Federal match under this paragraph exceed an amount equal
to 30 percent of the amount of the maximum Federal Pell Grant for the most
recent fiscal year.</continuation-text></paragraph></subsection><subsection commented="no" id="id12D4F44476F1400A95888527F0954A52"><enum>(c)</enum><header>Ratable Reduction</header><text>If the sums made available under this part for any fiscal year are insufficient to pay the full amounts that all States are eligible to receive in accordance with this section for such year, the Secretary shall establish procedures for ratably reducing each State's award amount.</text>
</subsection></section><section id="id09a2ec2610f641178e3a600d624b8403"><enum>499–5.</enum><header>Accountability and enforcement</header>
<subsection id="id47b8892c4c4d4005af5eafc489b66f8c"><enum>(a)</enum><header>Annual Report</header>
<paragraph id="id1c58e2bcc47349aea8ae44feb7065f79"><enum>(1)</enum><header>In general</header><text>Beginning for the first fiscal year after a State receives a block grant under this part, the State shall prepare and submit an annual report to the Secretary, which shall include detailed information about the State's use of the grant funds to increase the affordability of public higher education and increase the enrollment and completion rates of low-income students (as measured by eligibility for a Federal Pell Grant).</text>
</paragraph><paragraph id="id7a545a2b4a9541c89acbcf8c522acd23"><enum>(2)</enum><header>Contents</header><text>A report described in paragraph (1) shall—</text> <subparagraph id="id642E49755431448BBEBB9BEDB6C9A3BE"><enum>(A)</enum><text>describe the cause of any increases in public higher education costs and the sources of new funding to address such increases;</text>
</subparagraph><subparagraph id="iddf6f127cbeab49d9a16f153110036d44"><enum>(B)</enum><text>describe all actions taken to incentivize public institutions to reduce tuition costs, or mitigate the need to raise tuition and fees for in-State students;</text>
</subparagraph><subparagraph id="idb57a7011068c483cbfd20278fd91b9b7"><enum>(C)</enum><text>explain the extent to which public institutions supported the enrollment of low-income students who are eligible for Federal Pell Grants or other need-based financial assistance;</text>
</subparagraph><subparagraph id="id63199c96c4304b58a2de1ac466fa7e96"><enum>(D)</enum><text>disclose how the State distributed the allotment provided under this part to all public institutions, and the rationale for such distribution;</text>
</subparagraph><subparagraph id="id2961312b94f6430598cfe28469a17cbf"><enum>(E)</enum><text>include the aggregated graduation rates for low-income students (based on eligibility for Federal Pell Grants), part-time students, and transfer students, disaggregated by type of degree or credential;</text>
</subparagraph><subparagraph id="id38948c54572b47bbac0aa2da2cc5045c"><enum>(F)</enum><text>detail State efforts to improve the retention and graduation rates of low-income students at both 2-year and 4-year institutions of higher education; and</text>
</subparagraph><subparagraph id="id5ddf83a5fdd142e59a8f03d0d6ff682a"><enum>(G)</enum><text>be publicly available in a manner that is easily accessible to parents, students, and consumer advocates.</text>
</subparagraph></paragraph></subsection><subsection id="id584d14d0923f467d924056c8d073bbf7"><enum>(b)</enum><header>Maintaining Net State Operating Support Per FTE Student</header>
<paragraph id="id813e101d7517407b960b1f54411ad23d"><enum>(1)</enum><header>In general</header><text>Each State receiving an allotment under this part for a fiscal year shall—</text> <subparagraph id="idceb87a17557646f2902ef210298c7a66"><enum>(A)</enum><text>ensure that the amount expended by the State, from funds derived from non-Federal sources, for net State operating support per FTE student for the preceding fiscal year was not less than the amount expended by the State for net State operating support per FTE student for the second preceding fiscal year; and</text>
</subparagraph><subparagraph id="id923b607a1ce74f36b5a3be460b6212ea"><enum>(B)</enum><text>demonstrate the State's compliance with subparagraph (A) by providing the Secretary with a written assurance and detailed documentation.</text>
</subparagraph></paragraph><paragraph id="id86358bc986084e60a79169bfe5933790"><enum>(2)</enum><header>Penalty</header><text>If a State does not comply with paragraph (1), the State's grant award under this part shall be reduced by an amount equal to the product of—</text>
<subparagraph id="id30dd8b8618dd4af59fc94162070416ec"><enum>(A)</enum><text>the difference between—</text> <clause id="id6427722c97fe4113aebcc84ab7cd593c"><enum>(i)</enum><text>the net State operating support per FTE student for the second preceding fiscal year; minus</text>
</clause><clause id="id6752fc38389c47f9a8c19f07fb0b71ea"><enum>(ii)</enum><text>the net State operating support per FTE student for the preceding fiscal year; multiplied by</text> </clause></subparagraph><subparagraph id="id0d5e83914de3464fa6ac8a7e0f46372d"><enum>(B)</enum><text>the full-time equivalent student number for the previous fiscal year.</text>
</subparagraph></paragraph></subsection><subsection id="idaf8fbfbed4bf407ca944e13e9f2f86a9"><enum>(c)</enum><header>Maintenance of effort for State-Based financial aid and avoidance of tuition inflation</header><text>Each State receiving an allotment under this part for a fiscal year shall, as a condition of receiving the allotment—</text>
<paragraph id="id9C4C3B4DCFA24362AD193E409CBC2CD4"><enum>(1)</enum><text>maintain the level of State student need-based financial aid support provided for costs associated with postsecondary education at not less than the average annual level of such support provided for the 3 academic years immediately preceding the year for which the State is receiving the allotment; and</text>
</paragraph><paragraph id="idbc6e62f2a4274d1eb94e149c4e7537f2"><enum>(2)</enum><text>ensure that for the academic year immediately following the academic year for which the State is receiving the allotment, all public institutions of higher education in the State will not increase tuition for in-State students by a percentage greater than the estimated percentage increase in the Consumer Price Index (as determined by the Secretary, using the definition in section 478(f)) for the calendar year for which the State is receiving the allotment.</text>
</paragraph></subsection><subsection id="idca3139555e18402b829b3bb1ff471ebf"><enum>(d)</enum><header>Authority to compromise</header><text>Notwithstanding subsections (b) and (c), the Secretary may waive any maintenance of support and effort requirement described in such subsections for a State if there is a clear case of a significant economic downturn in the State as evidenced by a reduction in State domestic product, real per capita income, and employment. Such determination shall only be made by the Secretary following a written appeal by the State that documents recent and significant decreases in economic activity in the State.</text>
</subsection></section><section id="idbc8fa94b4f1a42ef9c2a080fcf955ebc"><enum>499–6.</enum><header>Authorization of appropriations</header>
<subsection id="id5ec0e806fa754373b9204173e84ae009"><enum></enum><text>There are authorized to be appropriated to carry out this part such sums as may be necessary for fiscal year 2016 and each of the five succeeding fiscal years.</text></subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>II</enum><header>Tax provisions</header>
<section id="id56632816C2504B0BB62F1A1843AA09FB"><enum>201.</enum><header>Permanent extension and modification of American Opportunity and Lifetime Learning credits</header>
<subsection id="idA44F3C56BBCF4412967FF708AC05478D"><enum>(a)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/25A">Section 25A</external-xref> of the Internal Revenue Code of 1986 is amended to read as follows:</text> <quoted-block act-name="" id="idDD94C3D5378E4D478E35251C622FF761" style="OLC"> <section id="idACF90C2460374EB7886E364DC0F1310A"><enum>25A.</enum><header>American Opportunity Tax Credit</header> <subsection id="id685660BBB8184E718E4E599148EB86F9"><enum>(a)</enum><header>In general</header><text>In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year, with respect to each eligible student, an amount equal to the sum of—</text>
<paragraph id="HB7A503FD2654456DA0AB25230E30E14E"><enum>(1)</enum><text display-inline="yes-display-inline">100 percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished to the eligible student during any academic period beginning in such taxable year) as does not exceed $2,000, plus</text>
</paragraph><paragraph id="H8AA66507A7834188B8CE5755ADD1549A"><enum>(2)</enum><text>25 percent of so much of such expenses so paid as exceeds the dollar amount in effect under paragraph (1) but does not exceed twice such dollar amount.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H4568106BD35643D9A7699199667DF479"><enum>(b)</enum><header display-inline="yes-display-inline">Portion of credit refundable</header><text display-inline="yes-display-inline">60 percent of the credit allowable under subsection (a) with respect to each eligible student (determined without regard to this subsection and section 26(a) and after application of all other provisions of this section) shall be treated as a credit allowable under subpart C (and not under this part). The preceding sentence shall not apply to any taxpayer for any taxable year if such taxpayer is a child to whom section 1(g) applies for such taxable year.</text>
</subsection><subsection id="H4F606F3883AE4D5293757F6B8F893B6B"><enum>(c)</enum><header>5-Year limitation</header><text display-inline="yes-display-inline">No credit shall be allowed under subsection (a) with respect to any eligible student for any taxable year if such student was taken into account in determining the credit allowed under such subsection (by the taxpayer or any other individual) for any 5 prior taxable years.</text>
</subsection><subsection id="idAF584D3F0D5148D1A90CD83707A81513"><enum>(d)</enum><header>Lifetime Learning credit</header>
<paragraph id="id792E87ABDE244F1384A32D9F2BB85C28"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter an amount equal to 20 percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished during any academic period beginning in such taxable year) as does not exceed $10,000.</text>
</paragraph><paragraph id="id3E22D1D4EC6A4A9A91F882352F88F414"><enum>(2)</enum><header>Special rules for determining expenses</header>
<subparagraph id="idF3D22CF6B50649B88610FD729F09BD01"><enum>(A)</enum><header>Coordination with American Opportunity Tax Credit</header><text display-inline="yes-display-inline">The qualified tuition and related expenses with respect to an individual who is an eligible student for whom a credit under subsection (a) is allowed for the taxable year shall not be taken into account under this subsection.</text>
</subparagraph><subparagraph id="idD5AEA73D882C4E3EA79B75BDE1625F88"><enum>(B)</enum><header>Expenses eligible for Lifetime Learning credit</header><text display-inline="yes-display-inline">For purposes of paragraph (1), qualified tuition and related expenses shall include expenses described in subsection (f)(2) with respect to any course of instruction at an eligible educational institution to acquire or improve job skills of the individual.</text>
</subparagraph></paragraph></subsection><subsection id="HC48B636F19884666AFAEB2425179F7A7"><enum>(e)</enum><header>Limitation based on modified adjusted gross income</header>
<paragraph id="HB73E868067F44A928F3228C09C1ED024"><enum>(1)</enum><header>In general</header><text>The amount allowable as a credit under subsection (a) or (d) for any taxable year shall be reduced (but not below zero) by an amount which bears the same ratio to the amount so allowable (determined without regard to this subsection and subsection (b) but after application of all other provisions of this section) as—</text>
<subparagraph id="HF3E6B8197CA04F1188076673EECCA73D"><enum>(A)</enum><text>the excess of—</text> <clause id="H7797607C408C41789314CF8A1EC1AB08"><enum>(i)</enum><text>the taxpayer’s modified adjusted gross income for such taxable year, over</text>
</clause><clause id="H49097096FD9E4B0BA22674CFF0920B4F"><enum>(ii)</enum><text>$80,000 in the case of the credit under subsection (a), or $40,000 in the case of the credit under subsection (d), bears to</text>
</clause></subparagraph><subparagraph id="H6868CE12177E4B9EA7E3CB6EED1A7ADC"><enum>(B)</enum><text>$10,000.</text> </subparagraph></paragraph><paragraph id="id59C43697886C4955AC613061B29B8766"><enum>(2)</enum><header>Joint returns</header><text>In the case of a joint return, each of the dollar amounts in effect under paragraph (1) shall be increased to twice such amount.</text>
</paragraph><paragraph id="H034E21A8D2904AC1A1428396E7802B95"><enum>(3)</enum><header>Modified adjusted gross income</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>modified adjusted gross income</term> means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.</text>
</paragraph><paragraph id="H8E2C277EA9D3415BBDC83794B7F975C5"><enum>(4)</enum><header>Inflation adjustment for Lifetime Learning credit phaseout</header>
<subparagraph id="H4C4678228A5447A4934F09428962BB54"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of a taxable year beginning after 2001, the $40,000 amount in paragraph (1)(A)(ii) shall be increased by an amount equal to—</text>
<clause id="H3CE98021C42940C188F47BD8325B5490"><enum>(i)</enum><text>such dollar amount, multiplied by</text> </clause><clause id="HC90E2F6F71B543E7A3D956FBF4DE9457"><enum>(ii)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting <quote>calendar year 2000</quote> for <quote>calendar year 1992</quote> in subparagraph (B) thereof.</text>
</clause></subparagraph><subparagraph id="HDA494C9D52074D9EB2CBA51AB52802D8"><enum>(B)</enum><header>Rounding</header><text>If any amount as adjusted under subparagraph (A) is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000.</text>
</subparagraph></paragraph></subsection><subsection id="HFBFEC8D789E748649EB110080C2B2778"><enum>(f)</enum><header>Definitions</header><text>For purposes of this section—</text> <paragraph id="HE7042A452DF444CC827DFEA5633F0FC6"><enum>(1)</enum><header>Eligible student</header><text display-inline="yes-display-inline">The term <term>eligible student</term> means, with respect to any academic period, a student who—</text>
<subparagraph id="H8967FC4401CE45F8A3F26873D6ABD874"><enum>(A)</enum><text>meets the requirements of section 484(a)(1) of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1091">20 U.S.C. 1091(a)(1)</external-xref>), as in effect on August 5, 1997, and</text> </subparagraph><subparagraph id="H5CA40C3D3AD04F0EAC50C11F15632961"><enum>(B)</enum><text>is carrying at least <fraction>1/2</fraction> the normal full-time work load for the course of study the student is pursuing.</text>
</subparagraph></paragraph><paragraph id="H5707A43105EF429C937E9F4CD3D85ACE"><enum>(2)</enum><header>Qualified tuition and related expenses</header>
<subparagraph id="H7F45B571EE5E4BCC83E122CD5DA47E67"><enum>(A)</enum><header>In general</header><text>The term <term>qualified tuition and related expenses</term> means tuition, fees, and course materials, required for enrollment or attendance of—</text> <clause id="H03B5B497419D4F738EBF953C083DB3AB"><enum>(i)</enum><text>the taxpayer,</text>
</clause><clause id="HE599EC20D004455BA722EE8C65EFFD7C"><enum>(ii)</enum><text>the taxpayer’s spouse, or</text> </clause><clause id="H51FC24C164454469820364D81032DA0A"><enum>(iii)</enum><text display-inline="yes-display-inline">any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151,</text>
</clause><continuation-text continuation-text-level="subparagraph">at an eligible educational institution for courses of instruction of such individual at such
institution.</continuation-text></subparagraph><subparagraph id="idFAB71121B69F40D7B95DAE3A228EB738"><enum>(B)</enum><header>Computer-related expenses included</header><text>Except as provided in subsection (g)(9), such term includes expenses for the purchase of computer or peripheral equipment (as defined in section 168(i)(2)(B)), computer software (as defined in section 197(e)(3)(B)), or Internet access and related services, if such equipment, software, or services are to be used primarily by the eligible student during any of the years the student is enrolled at an eligible educational institution.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idBC2006BB7D9046F4BB7A1E0890C379BF"><enum>(C)</enum><header display-inline="yes-display-inline">Special needs services included</header><text display-inline="yes-display-inline">Such term includes expenses for special needs services in the case of a special needs beneficiary (within the meaning of section 529(e)(3)(A)(ii) as in effect on the day before the date of the enactment of the <short-title>Promoting Access and Retention Through New Efforts to Require Shared Higher Investments in Postsecondary Success Act</short-title>) which are incurred in connection with the enrollment or attendance of the student at an eligible educational institution.</text>
</subparagraph><subparagraph id="H7B35D02C958C40B38094E8AE8D4906F2"><enum>(D)</enum><header>Exception for education involving sports, etc</header><text display-inline="yes-display-inline">Such term does not include expenses with respect to any course or other education involving sports, games, or hobbies, unless such course or other education is part of the individual’s degree program.</text>
</subparagraph><subparagraph id="HB22E067030E94CB5B696AA658DD133F8"><enum>(E)</enum><header>Exception for nonacademic fees</header><text display-inline="yes-display-inline">Such term does not include student activity fees, athletic fees, insurance expenses, or other expenses unrelated to an individual's academic course of instruction.</text>
</subparagraph></paragraph><paragraph id="H5FD812048C0945C7B1CA7EF8DAC39831"><enum>(3)</enum><header>Eligible educational institution</header><text>The term <term>eligible educational institution</term> means an institution—</text> <subparagraph id="HBDB4C25A488349BA937EE562BE2CF891"><enum>(A)</enum><text display-inline="yes-display-inline">which is described in section 481 of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1088">20 U.S.C. 1088</external-xref>), as in effect on August 5, 1997, and</text>
</subparagraph><subparagraph id="HF574141106344A17873198B672690B73"><enum>(B)</enum><text>which is eligible to participate in a program under title IV of such Act.</text> </subparagraph></paragraph></subsection><subsection id="HC10F4214195E48FB988225CA66ADEFBC"><enum>(g)</enum><header>Special rules</header> <paragraph id="H7580CCF7735F4A8DB501B18D0824EFE6"><enum>(1)</enum><header>Identification requirement</header><text display-inline="yes-display-inline">No credit shall be allowed under this section to a taxpayer with respect to the qualified tuition and related expenses of an individual unless the taxpayer includes the name and taxpayer identification number of such individual, and the employer identification number of any institution to which such expenses were paid, on the return of tax for the taxable year.</text>
</paragraph><paragraph id="H21B7824DD6474E26BF69064338C9ADD6"><enum>(2)</enum><header>Adjustment for certain scholarships, etc</header>
<subparagraph id="HD77CBC35B5794AC6AC7525F251CEE37F"><enum>(A)</enum><header>In general</header><text>The amount of qualified tuition and related expenses otherwise taken into account under subsection (a) or (d) with respect to an individual for an academic period shall be reduced (before the application of subsection (e)) by the sum of any amounts paid for the benefit of such individual which are allocable to such period as—</text>
<clause id="HDD33C51BCCAA46029FE31E7F2EF52393"><enum>(i)</enum><text display-inline="yes-display-inline">a qualified scholarship which is excludable from gross income under section 117,</text> </clause><clause id="HED71F9CE4BB14C5D87F48B290903454A"><enum>(ii)</enum><text>an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or under <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/10/1606">chapter 1606</external-xref> of title 10, United States Code, and</text>
</clause><clause id="H69D47077FB034072A33385BDB30FC5AB"><enum>(iii)</enum><text>a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for such individual's educational expenses, or attributable to such individual's enrollment at an eligible educational institution, which is excludable from gross income under any law of the United States.</text>
</clause></subparagraph><subparagraph id="H8D687017497F420AAEE22719033A57E0"><enum>(B)</enum><header>Coordination with Pell Grants not used for qualified tuition and related expenses</header><text display-inline="yes-display-inline">For purposes of subparagraph (A), the amount of any Federal Pell Grant under section 401 of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1070a">20 U.S.C. 1070a</external-xref>) shall be reduced (but not below zero) by the amount of expenses (other than qualified tuition and related expenses) which are taken into account in determining the cost of attendance (as defined in section 472 of the Higher Education Act of 1965, as in effect on the date of the enactment of the <short-title>Promoting Access and Retention Through New Efforts to Require Shared Higher Investments in Postsecondary Success Act</short-title>) of such individual at an eligible educational institution for the academic period for which the credit under subsection (a) or (d) (whichever is applicable) is being determined.</text>
</subparagraph></paragraph><paragraph id="H49D5D07ACEC64CD8A11F441F51ADCCA0"><enum>(3)</enum><header>Treatment of expenses paid by dependent</header><text display-inline="yes-display-inline">If a deduction under section 151 with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins—</text>
<subparagraph id="HA01B16FC875A4B2B9F366A013896E561"><enum>(A)</enum><text>no credit shall be allowed under this section to such individual for such individual’s taxable year,</text>
</subparagraph><subparagraph id="H264BA22DCC9C4FFBB8A79511DBD86C20"><enum>(B)</enum><text>qualified tuition and related expenses paid by such individual during such individual’s taxable year shall be treated for purposes of this section as paid by such other taxpayer, and</text>
</subparagraph><subparagraph id="id1A2CFE346AD94E8ABF3D55DCDE4E73ED"><enum>(C)</enum><text>a statement described in paragraph (8) and received by such individual shall be treated as received by the taxpayer.</text>
</subparagraph></paragraph><paragraph id="H3699E177C9FC46CA86992A739FFF07DD"><enum>(4)</enum><header>Treatment of certain prepayments</header><text>If qualified tuition and related expenses are paid by the taxpayer during a taxable year for an academic period which begins during the first 3 months following such taxable year, such academic period shall be treated for purposes of this section as beginning during such taxable year.</text>
</paragraph><paragraph id="HA076A7AAE9A947FAB0CF60EF1178D6EE"><enum>(5)</enum><header>Denial of double benefit</header><text>No credit shall be allowed under this section for any amount for which a deduction is allowed under any other provision of this chapter.</text>
</paragraph><paragraph id="H6041F80B88964AC8B01211E4D5D8E075"><enum>(6)</enum><header>No credit for married individuals filing separate returns</header><text>If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year.</text>
</paragraph><paragraph id="H3EAB3D5757DA4877A4149329152E739C"><enum>(7)</enum><header>Nonresident aliens</header><text>If the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013.</text>
</paragraph><paragraph id="id78518C62D7764C7E8E7A413F19CE4798"><enum>(8)</enum><header>Payee statement requirement</header><text>Except as otherwise provided by the Secretary, no credit shall be allowed under this section unless the taxpayer receives a statement furnished under section 6050S(d) which contains all of the information required by paragraph (2) thereof.</text>
</paragraph><paragraph id="idCD783D105C214621B6FB280BD2CDCD03"><enum>(9)</enum><header>Reduced credit in case of certain students</header><text>In the case of a student who is not an eligible student for the taxable year solely by reason of subparagraph (B) of subsection (f)(1), the student shall be treated as an eligible student for purposes of this section (other than subsection (f)(2)(B)) for such taxable year except that the dollar amount in effect under subsection (a)(1) shall be <fraction>1/2</fraction> of the amount otherwise in effect for such taxable year.</text>
</paragraph></subsection><subsection id="H3EFD7FC9C6804020B8065B2CE7151E03"><enum>(h)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Secretary may prescribe such regulations or other guidance as may be necessary or appropriate to carry out this section, including regulations providing for a recapture of the credit allowed under this section in cases where there is a refund in a subsequent taxable year of any amount which was taken into account in determining the amount of such credit.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H6C0164EA669541EC915F855395EBE6AC"><enum>(b)</enum><header>Requirement To report tuition paid rather than tuition billed</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/6050S">Section 6050S(b)(2)(B)(i)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>or the aggregate amount billed</quote>.</text> </subsection><subsection id="id002E6A8E85EF47EE942AE488EFC290F5"><enum>(c)</enum><header>Repeal of education savings bonds</header> <paragraph id="id71F3ECD198B14B5E9A7DE7970D1B77AB"><enum>(1)</enum><header>In general</header><text>Part III of subchapter B of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 is amended by striking section 135.</text>
</paragraph><paragraph id="idA73D87DA05E546ACB68259635D4E5326"><enum>(2)</enum><header>Table of contents</header><text>The table of sections for part III of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 135.</text>
</paragraph></subsection><subsection id="id616E1BFB325F4D348A59D828952A2909"><enum>(d)</enum><header>Termination of Coverdell education savings accounts</header>
<paragraph id="idDBE9F28D366E4BFFB7756665BF0511D7"><enum>(1)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/530">Section 530</external-xref> of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="" id="id9AEC9374C7CB4003814EF2549D81613D" style="OLC">
<subsection id="idE2AE90874B7C42B5872BC3024D9EF0C1"><enum>(i)</enum><header>Termination</header>
<text>Subsection (a) shall not apply to the portion of any Coverdell education savings account that is attributable to a contribution made after the later of—</text>
<paragraph id="id9A02DBCF53C34018A9DB4814DC40D00F"><enum>(1)</enum><text>December 31, 2015, or</text> </paragraph><paragraph id="id36314BB429274AB294C9AC83CA42C3FA"><enum>(2)</enum><text>the date of the enactment of this subsection.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id1BC7A174C8064655B2DF134F0CF1F618"><enum>(2)</enum><header>Rollovers to qualified tuition programs</header><text>Subsection (b) of section 529 of such Code is amended by adding at the end the following new paragraph:</text>
<quoted-block act-name="" id="id5FB52A9824A74DCBA859C2C56A2DAA82" style="OLC">
<paragraph id="idD2D9B5533C9F4F53B0D3B9DA0664F808"><enum>(7)</enum><header>Rollovers from Coverdell education savings accounts</header><text>A program shall not be treated as a qualified tuition program for any taxable year beginning after December 31, 2015, and before January 1, 2017, unless it accepts (without regard to any contribution limitations otherwise applicable under the program) contributions made during such taxable year which are paid or distributed from a Coverdell education savings account for the benefit of the same designated beneficiary as such program or a member of the family of such beneficiary.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HB770DB9767864BBE85FB5AAF7969062D"><enum>(e)</enum><header>Conforming amendments</header>
<paragraph id="id966B9ADE4BD34B5EBCDB74AF19D908FB"><enum>(1)</enum><text>Section 62(d)(2) of such Code is amended by striking <quote>135,</quote>.</text> </paragraph><paragraph id="idD591B4D3C8294964B7F5B9116A530FCB"><enum>(2)</enum><text>Sections 86(b)(2)(A), 137(b)(3)(B), 199(d)(2)(A), 219(g)(3)(A)(ii), and 221(b)(2)(C)(ii) of such Code are each amended by striking <quote>135,</quote>.</text>
</paragraph><paragraph id="id11566F0603C7437CAFE351335CD99DA5"><enum>(3)</enum><text>Section 221(d) of such Code is amended—</text> <subparagraph id="id90612A418C6045A2BE334616BF238FFE"><enum>(A)</enum><text>by striking <quote>25A(f)(2)</quote> in paragraph (2) and inserting <quote>25A(f)(3)</quote>, and</text>
</subparagraph><subparagraph id="idB8821EDD0A084CF0B8A7E9F0633540D9"><enum>(B)</enum><text>by striking <quote>25A(b)(3)</quote> in paragraph (3) and inserting <quote>25A(f)(1)</quote>.</text> </subparagraph></paragraph><paragraph id="id3AF78B4ADE5B4B498CA5E6255422AD6D"><enum>(4)</enum><text>Section 222 of such Code is amended—</text>
<subparagraph id="id464D7A7E58E2496B80C33BDAC14D55C7"><enum>(A)</enum><text>by striking <quote>elects to have section 25A apply</quote> in subsection (c)(2)(A) and inserting <quote>claims the credit under section 25A</quote>,</text> </subparagraph><subparagraph id="id399382A91C7340838FB661744A0F0B56"><enum>(B)</enum><text>by striking <quote><header-in-text level="subparagraph" style="OLC">if credit elected</header-in-text></quote> in the heading of subparagraph (A) of subsection (c)(2) and inserting <quote><header-in-text level="subparagraph" style="OLC">for 25A expenses</header-in-text></quote>,</text>
</subparagraph><subparagraph id="idD01B66D010F9490D9A06662042DF5E5E"><enum>(C)</enum><text>by striking <quote>135,</quote> in subsection (c)(2)(B), and</text> </subparagraph><subparagraph id="id028016C1E5EC4ED79F0354A9B6DC0531"><enum>(D)</enum><text>by striking <quote>25A(f)</quote> in subsection (d)(1) and inserting <quote>25A(f)(2)</quote>.</text>
</subparagraph></paragraph><paragraph id="idEE3015451B104CBE9854D3C7AFE6DBC8"><enum>(5)</enum><text>Section 469(i)(3)(F)(ii) of such Code is amended by striking <quote>sections 135 and 137</quote> and inserting <quote>section 137</quote>.</text> </paragraph><paragraph id="H8429DDA6BA3F4386BD7A058EDDDD718D"><enum>(6)</enum><text display-inline="yes-display-inline">Section 530(d)(2)(C) of such Code is amended by striking <quote><header-in-text level="subparagraph" style="OLC">Hope and Lifetime Learning credits</header-in-text></quote> in the heading and inserting <quote><header-in-text level="subparagraph" style="OLC">American opportunity tax credit</header-in-text></quote>.</text>
</paragraph><paragraph id="idCC45E4F618C943D497D79147CF49FA45"><enum>(7)</enum><text>Section 6103(l)(20)(A)(iv) is amended by striking <quote>sections 135 and 911</quote> and inserting <quote>section 911</quote>.</text> </paragraph><paragraph id="H72A33726C8D64622893D7EF36BBF64E8"><enum>(8)</enum><text display-inline="yes-display-inline">Section 6211(b)(4)(A) of such Code is amended by striking <quote>subsection (i)(6)</quote> and inserting <quote>subsection (b)</quote>.</text>
</paragraph><paragraph id="H526F8C431D09449E973CF6C5441EC23D"><enum>(9)</enum><text display-inline="yes-display-inline">Section 6213(g)(2)(J) of such Code is amended by striking <quote>TIN required under section 25A(g)(1)</quote> and inserting <quote>TIN or employer identification number required under section 25A(g)(1)</quote>.</text> </paragraph><paragraph id="H936C724E87E64B80BE21928B45116FC1"><enum>(10)</enum><text>Section 1004(c) of division B of the American Recovery and Reinvestment Tax Act of 2009 is amended—</text>
<subparagraph id="HCF45F75DD2D3499D8B1584B9A9B361AC"><enum>(A)</enum><text>in paragraph (1)—</text> <clause id="HD0FD274B7A90415B8D6DCBD915DFE496"><enum>(i)</enum><text>by striking <quote>section 25A(i)(6)</quote> each place it appears and inserting <quote>section 25A(b)</quote>,</text>
</clause><clause id="HFE7225A835C941198C859080C4696E4B"><enum>(ii)</enum><text>by striking “with respect to taxable years beginning after 2008 and before 2018” in subparagraph (A) and inserting “with respect to each taxable year”, and</text>
</clause><clause id="HDBF9029C9CD4484BAB1B6FD390174B11"><enum>(iii)</enum><text display-inline="yes-display-inline">by striking “for taxable years beginning after 2008 and before 2018” in subparagraph (B) and inserting “for each taxable year”,</text>
</clause></subparagraph><subparagraph id="HB023398ED9164842836EE4DF9DF60E42"><enum>(B)</enum><text>in paragraph (2), by striking <quote>Section 25A(i)(6)</quote> and inserting <quote>Section 25A(b)</quote>, and</text> </subparagraph><subparagraph id="HD0ED17CD58BE4E12BCF0629C56C5B4B7"><enum>(C)</enum><text>in paragraph (3)(C), by striking <quote>subsection (i)(6)</quote> and inserting <quote>subsection (b)</quote>.</text>
</subparagraph></paragraph><paragraph id="H09D3645753D14C7D8AAC79F3B1ECDF76"><enum>(11)</enum><text>The table of sections for subpart A of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 is amended by striking the item relating to <external-xref legal-doc="usc" parsable-cite="usc/26/25">section 25</external-xref>A and inserting the following new item:</text>
<quoted-block display-inline="no-display-inline" id="H2FD04FA9BB514823885F4DF2271E4B8A" style="OLC">
<toc container-level="quoted-block-container" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry level="section">Sec. 25A. American opportunity tax credit.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H2B3CFFCF50244CEBA74B9BFB027A827C"><enum>(f)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to taxable years beginning after December 31, 2017.</text> </subsection></section><section commented="no" display-inline="no-display-inline" id="id11E62EA77CD5409D9325784C5209E818"><enum>202.</enum><header>Expansion of exclusion for educational assistance programs</header> <subsection commented="no" display-inline="no-display-inline" id="idF19DFDA6B487475792D5FFCD6B975963"><enum>(a)</enum><header>In general</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/127">section 127(a)</external-xref> of the Internal Revenue Code of 1986 is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="idF06F40929AB644EF96FE6FF73D779621"><enum>(1)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">$5,250</header-in-text></quote> in the heading and inserting <quote><header-in-text level="paragraph" style="OLC">$10,500</header-in-text></quote>, and</text> </paragraph><paragraph commented="no" display-inline="no-display-inline" id="idBC26EDBB2E92478B8A0751C575CFA57A"><enum>(2)</enum><text>by striking <quote>$5,250</quote> both places it appears and inserting <quote>$10,500</quote>.</text>
</paragraph></subsection><subsection id="id8F2C5A1C15E945439190C7B904A572A6"><enum>(b)</enum><header>Expenses of employee's spouse and dependents</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/127">section 127(c)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>includes</quote> and all that follows and inserting “includes, for any year—</text> <quoted-block display-inline="no-display-inline" id="id7A28D429F086487095BF7BF512C90F86" style="OLC"> <subparagraph id="id7E5ABC03A89B4E258000CAAEE0DB94ED"><enum>(A)</enum><text>an individual who is an employee within the meaning of section 401(c)(1) (relating to self-employed individuals), and</text>
</subparagraph><subparagraph id="id70DC86481434437099C6687B39241C4F"><enum>(B)</enum><text>any spouse or dependent of an employee.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="id2EE586C7D6AE466BA9FA078C0A4ACA8E"><enum>(c)</enum><header>Employer-Provided educational loan repayment assistance</header> <paragraph id="idBC40DD8BA4504EF5828C1231D94E7E3F"><enum>(1)</enum><header>In general</header><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/127">section 127(c)</external-xref> of the Internal Revenue Code of 1986 is amended—</text>
<subparagraph id="id22768EBD5589490AB5B5C14A60CE3071"><enum>(A)</enum><text>by striking <quote>and</quote> at the end of subparagraph (A),</text> </subparagraph><subparagraph id="id7F8A71E1EB7243439340178340B29E95"><enum>(B)</enum><text>by striking the comma at the end of subparagraph (B) and inserting <quote>, and</quote>, and</text>
</subparagraph><subparagraph id="id3218FB5CC789433883A51CDF673A9D70"><enum>(C)</enum><text>by inserting after subparagraph (B) the following new subparagraph:</text> <quoted-block act-name="" id="id9EC0E2EF046E4EC0AA1F7B797992CF34" style="OLC"> <subparagraph id="idB4D063E9B22B45F89CBBC8004B969E28"><enum>(C)</enum><text>the payment by an employer of any portion of the indebtedness of an employee pursuant to a student loan of the employee,</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id7F794AB6A45C4095A6BF673754E7AAF0"><enum>(2)</enum><header>Student loan</header><text>Section 127(c) of such Code is amended—</text> <subparagraph id="id3BAA24CA269A4F2AB50160B8EF7B11DD"><enum>(A)</enum><text>by redesignating paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), (7), and (8), respectively, and</text>
</subparagraph><subparagraph id="id3C85CAA7C7E44E348833F647CBCAF1E9"><enum>(B)</enum><text>by inserting after paragraph (3) the following new paragraph:</text> <quoted-block act-name="" id="id620DBD3644884B6B93E520B6533FB706" style="OLC"> <paragraph id="idD93B05F68DEC47E2B1480CC01E406E65"><enum>(4)</enum><header>Student loan</header><text>The term <term>student loan</term> means any loan to an individual to assist the individual in attending an educational organization described in section 170(b)(1)(A)(ii).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id19e058290bfe49008e76e936f4e2565d"><enum>(3)</enum><header>Conforming amendment; denial of double benefit</header><text>Paragraph (1) of section 221(e) of such Code is amended by inserting before the period the following: <quote>, or for which an exclusion is allowable under section 127 to the taxpayer's employer by reason of the payment by such employer of any indebtedness on a student loan of the taxpayer</quote>.</text>
</paragraph></subsection><subsection id="id1C30155CA2484475B0AA91BD36D622B5"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to expenses paid or incurred and loan payments made in taxable years beginning after December 31, 2015.</text>
</subsection></section><section id="idFD9B0972E58646F0AAAC4CF3FBD60BE3"><enum>203.</enum><header>Exclusion of certain student loan repayments and loan forgiveness</header>
<subsection id="id399294841DB046788889670A3A08A56B"><enum>(a)</enum><header>In general</header><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/108">section 108(f)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>(in whole or in part)</quote> and all that follows and inserting <quote>(in whole or in part) or, in the case of paragraph (3), the repayment of any student loan if such discharge or repayment meets the requirements of paragraph (2), (3), or (4).</quote>.</text>
</subsection><subsection id="id360F84F2CB6D4EBD940449B698A21914"><enum>(b)</enum><header>Public interest student loans</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/108">section 108(f)</external-xref> of the Internal Revenue Code of 1986 is amended to read as follows:</text> <quoted-block act-name="" id="id1E6CE125D4254CCC97D1EA497775235C" style="OLC"> <paragraph id="idDA732F0CF8F646768CC6539F1C0251C9"><enum>(2)</enum><header>Certain public interest student loans</header> <subparagraph id="id972EB269551F4DF9AB8C8ADC439C264E"><enum>(A)</enum><header>In general</header><text>A discharge meets the requirements of this paragraph if it is made pursuant to a provision of a student loan described in subparagraph (B) under which all or part of the indebtedness of an individual would be discharged if the individual worked for a certain period of time in certain professions for any of a broad class of employers.</text>
</subparagraph><subparagraph id="id4DA0553946944F338E60AD0B4738A767"><enum>(B)</enum><header>Limitation</header><text>A student loan is described in this subparagraph if such loan is made—</text> <clause id="iddf7080fa4b7646bdbef01efc78a98a67"><enum>(i)</enum><text>by the United States, or an instrumentality or agency thereof,</text>
</clause><clause id="id0967a552eac74cb499f9573079262628"><enum>(ii)</enum><text>by a State, territory, or possession of the United States, or the District of Columbia, or any political subdivision thereof,</text>
</clause><clause id="id42f655d2cfe0472a92e1574a96306309"><enum>(iii)</enum><text>by a public benefit corporation—</text> <subclause id="id72f0a35b7bcb44b58d8328fdbd4ec279"><enum>(I)</enum><text>which is exempt from taxation under section 501(c)(3),</text>
</subclause><subclause id="idb50e5d902deb4c02bca2a43de857bb06"><enum>(II)</enum><text>which has assumed control over a State, county, or municipal hospital, and</text> </subclause><subclause id="id800e3149a89d49fa92553010800374d8"><enum>(III)</enum><text>whose employees have been deemed to be public employees under State law,</text>
</subclause></clause><clause id="id7f1fecd44fbb4bb78e91c7303b285577"><enum>(iv)</enum><text>by any educational organization described in section 170(b)(1)(A)(ii)—</text> <subclause id="id2c88723878bc458b942bf3a3743a9f3e"><enum>(I)</enum><text>pursuant to an agreement with any entity described in clause (i), (ii), or (iii) under which the funds from which the loan was made were provided to such educational organization, or</text>
</subclause><subclause id="id581efad9832f43a1a382cbfe7fb4da8e"><enum>(II)</enum><text>pursuant to a program of such educational organization which is designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs and under which the services provided by the students (or former students) are for or under the direction of a governmental unit or an organization described in section 501(c)(3) and exempt from tax under section 501(a), or</text>
</subclause></clause><clause id="id1A9DC4F807684BE59F488C9B972A8DD6"><enum>(v)</enum><text>by an educational organization described in section 170(b)(1)(A)(ii) or an organization exempt from tax under section 501(a)—</text>
<subclause id="id1FD290D808314BEC8136923FECA3495B"><enum>(I)</enum><text>to refinance a loan that meets the requirements of clause (i), (ii), (iii), or (iv), or</text> </subclause><subclause id="id42E737CAA34E49058D298CD8CDB75AE2"><enum>(II)</enum><text>to refinance a loan to an individual to assist the individual in attending any such educational organization, but only if the refinancing loan is pursuant to a program of the refinancing organization which is designed as described in clause (iv)(II).</text>
</subclause></clause></subparagraph><subparagraph id="id1325f1be6f014017954b0b98a965b51b"><enum>(C)</enum><header>Exception for discharges on account of services performed for certain lenders</header><text>A discharge of a loan made by an organization described in subparagraph (B)(iv) does not meet the requirements of this paragraph if the discharge is on account of services performed for either such organization.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id52EC0B4B7DFE4941B5B987CF560581F4"><enum>(c)</enum><header>Institution-Provided loan repayments</header><text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/108">section 108(f)</external-xref> of the Internal Revenue Code of 1986 is amended to read as follows:</text> <quoted-block act-name="" id="idFEF79226B32B40F6A7F61F24DA68F15A" style="OLC"> <paragraph id="id5B95DC5DEAC34A90B40F95BFC93136DF"><enum>(3)</enum><header>Institution-provided loan repayments</header> <text>A repayment meets the requirements of this paragraph if—</text>
<subparagraph id="idA9D10D392E20450DA053296DDC69E5AE"><enum>(A)</enum><text>it is made by an organization described in section 501(c)(3) that is exempt from tax under section 501(a),</text>
</subparagraph><subparagraph id="idD8023F1849AC41FD9B12E74F9BD2FE2F"><enum>(B)</enum><text>it is made pursuant to a program that repays all or a portion of the student loans of individuals on the condition that at the time of the repayment the individuals are working for or under the direction of a governmental unit or an organization described in section 501(c)(3) and exempt from tax under section 501(a), and</text>
</subparagraph><subparagraph id="idA4C05F2C2079432FB7C40ADE5025DB8F"><enum>(C)</enum><text>it is not made on account of services performed for the organization described in subparagraph (A).</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="idF3A47E80C8444631B23255B6726B77EC"><enum>(d)</enum><header>Certain other student loan forgiveness</header><text>Subsection (f) of <external-xref legal-doc="usc" parsable-cite="usc/26/108">section 108</external-xref> of the Internal Revenue Code of 1986 is amended—</text>
<paragraph id="id6F6A913AEC2F494DAC5AECEB0F5C12CA"><enum>(1)</enum><text>by redesignating paragraph (4) as paragraph (5), and</text> </paragraph><paragraph id="id98A072E79B1C4AD88216A21A11B7C54F"><enum>(2)</enum><text>by inserting after paragraph (3) the following new paragraph:</text>
<quoted-block act-name="" id="idA52CAF83C7454963AD8AAD45AC1CDDA5" style="OLC">
<paragraph id="idC896BF1BAEF54CA7BA000381304DD2E9"><enum>(4)</enum><header>Certain other student loan forgiveness</header><text>A discharge meets the requirements of this paragraph if it is made—</text> <subparagraph id="id3912863DC48444029EF0440C8A76901B"><enum>(A)</enum><text>in the case of a loan made by the United States or an instrumentality or agency thereof, pursuant to—</text>
<clause id="idB8E736AF19354A80A721E6777833E284"><enum>(i)</enum><text>an income-based repayment plan under section 493C of the Higher Education Act of 1965, or</text> </clause><clause id="id703E29DB7D104FE8AC275F429B1D922D"><enum>(ii)</enum><text>an income contingent repayment plan in accordance with section 455 of such Act, or</text>
</clause></subparagraph><subparagraph id="idBDEA79E950F14E4BAAA59E85FA767AB5"><enum>(B)</enum><text>because of the death or disability of the student.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="id63AD4F79B216459BA049081C7D6A01A6"><enum>(e)</enum><header>Student loan</header><text>Subsection (f) of <external-xref legal-doc="usc" parsable-cite="usc/26/108">section 108</external-xref> of the Internal Revenue Code of 1986, as amended by subsection (d), is amended—</text>
<paragraph id="id692ADFBC58E9439C82016D06099F4F8A"><enum>(1)</enum><text>by redesignating paragraph (5) as paragraph (6), and</text> </paragraph><paragraph id="id5B99A267C5FA4F479D9E0088BF219AA7"><enum>(2)</enum><text>by inserting after paragraph (4) the following new paragraph:</text>
<quoted-block act-name="" id="id4F51F8D61DC4420480DE45A35437EB75" style="OLC">
<paragraph id="id957DEA66A4164CB69D796E19F254BCA4"><enum>(5)</enum><header>Student loan</header><text>For purposes of this subsection, the term <term>student loan</term> means any loan to an individual to assist the individual in attending an educational organization described in section 170(b)(1)(A)(ii).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="idC852F0F94CBD4CC9A11E044EC58BFFE8"><enum>(f)</enum><header>Conforming amendments</header>
<paragraph id="idC9016BB4CF3B43B9AC290065331782D0"><enum>(1)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/127">Section 127(c)(4)</external-xref> of the Internal Revenue Code of 1986, as added by this Act, is amended by striking <quote>means any loan</quote> and all that follows and inserting <quote>has the meaning given such term by section 108(f)(5).</quote>.</text>
</paragraph><paragraph id="idF8E1882791F04668A1B6F1F85738B827"><enum>(2)</enum><text>Sections 3121(a)(20), 3231(e)(5), 3306(b)(16), and 3401(a)(19) of such Code are each amended by striking <quote>108(f)(4)</quote> and inserting <quote>108(f)(6)</quote>.</text>
</paragraph></subsection><subsection id="idE36A0A3B528F49518D4A9BDCB736220E"><enum>(g)</enum><header>Effective date</header><text>The amendments made by this section shall apply to discharges of indebtedness after December 31, 2015.</text>
</subsection></section><section id="id0C228994457A41D4BF78E4BE6482ED93"><enum>204.</enum><header>Uniform definition of qualifying education expenses</header>
<subsection id="idD7E91156AABF4FAC9ED046EBEC26B1CF"><enum>(a)</enum><header>Educational assistance programs</header><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/127">section 127(c)</external-xref> of the Internal Revenue Code of 1986 is amended—</text> <paragraph id="id4A99B75E0DD94704B944ED15D929D857"><enum>(1)</enum><text>by striking <quote>(including, but not limited to, tuition, fees, and similar payments, books, supplies, and equipment)</quote> in subparagraph (A) and inserting <quote>(including qualified tuition and related expenses, as defined in section 25A(f)(2))</quote>, and</text>
</paragraph><paragraph commented="no" id="id8489641BECAF4343902A95F32BF17974"><enum>(2)</enum><text>by striking the second sentence.</text> </paragraph></subsection><subsection id="id0020305A672E4820B61D87E15D328971"><enum>(b)</enum><header>Qualified scholarships</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/117">section 117(b)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>means—</quote> and all that follows and inserting <quote>has the meaning given such term by section 25A(f)(2).</quote>.</text>
</subsection><subsection id="id8FA580F95538431687E26E9AB1555F93"><enum>(c)</enum><header>Qualified tuition programs</header>
<paragraph id="idE1A60071BE674B7DB230623CF972482E"><enum>(1)</enum><header>Computer technology and equipment allowed as a qualified higher education expense for years before
2018</header>
<subparagraph id="idF6315BC5454C4B7282A7A4CEB035D6C9"><enum>(A)</enum><header>In general</header><text>Clause (iii) of <external-xref legal-doc="usc" parsable-cite="usc/26/529">section 529(e)(3)(A)</external-xref> of the Internal Revenue Code of 1986 is amended to read as follows:</text>
<quoted-block act-name="" id="id920BDD538EA14D4BBAB48BA40B51B974" style="OLC">
<clause id="id2D32CED7AB3847E5B215673552CB7220"><enum>(iii)</enum><text>expenses for the purchase of computer or peripheral equipment (as defined in section 168(i)(2)(B)), computer software (as defined in section 197(e)(3)(B)), or Internet access and related services, if such equipment, software, or services are to be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id5577983792744479B5B7E4D4BED46FC9"><enum>(B)</enum><header>Effective date</header><text>The amendment made by this paragraph shall apply to taxable years beginning after December 31, 2015.</text>
</subparagraph></paragraph><paragraph id="id08CA4794CA5345A6B4CCF70E43987FF9"><enum>(2)</enum><header>Permanent definition</header><text>Paragraph (3) of section 529(e) of such Code, as amended by paragraph (1), is amended—</text>
<subparagraph id="idC270F97D207C47BD91CC8D7408AC0F19"><enum>(A)</enum><text>by striking subparagraph (A) and inserting the following new subparagraph:</text>
<quoted-block act-name="" id="id223B0C78DAAF4D189708C988C8BA94BC" style="OLC">
<subparagraph id="idD2B2B93BA3F14822AC267EC2CB7F8952"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the term <term>qualified higher education expenses</term> has the same meaning as the term <term>qualified tuition and related expenses</term> as defined in section 25A(f)(2).</text> </subparagraph><after-quoted-block>,</after-quoted-block></quoted-block> </subparagraph><subparagraph id="id879ADEA8856B49A6883D8C80C549E968"><enum>(B)</enum><text>by striking <quote>section 25A(b)(3)</quote> in clause (i) of subparagraph (B) and inserting <quote>section 25A(f)(1) (not including any individual treated as an eligible student solely by reason of section 25A(g)(9))</quote>, and</text>
</subparagraph><subparagraph id="idC9D03CACB63A4EDC9A29C033357CDE49"><enum>(C)</enum><text>by striking <quote>such institution</quote> in clause (i) of subparagraph (B) and inserting <quote>an eligible educational institution</quote>.</text> </subparagraph></paragraph></subsection><subsection id="id41131C1B4FA5431092A88F272A6279F5"><enum>(d)</enum><header>Technical amendment</header><text>Clause (iii) of <external-xref legal-doc="usc" parsable-cite="usc/26/530">section 530(b)(3)(A)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>(as defined in section 170(e)(6)(F)(i)) or</quote> and inserting <quote>described in section 25A(f)(2)(B) or any</quote>.</text>
</subsection><subsection id="id04391543B5864A428F331AD75C1210F5"><enum>(e)</enum><header>Repeal of deadwood</header>
<paragraph id="id2C9A62AF95D8479D8935DBAB8D38A813"><enum>(1)</enum><header>In general</header><text>Part II of subchapter Y of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 is amended by striking section 1400O.</text>
</paragraph><paragraph id="idACD415D4CB10434F84D8863D074AAFC4"><enum>(2)</enum><header>Clerical amendment</header><text>The table of sections for part II of subchapter Y of chapter 1 of such Code is amended by striking the item relating to section 1400O.</text>
</paragraph></subsection><subsection id="id43F0D08F22D5417FA76EA4385D940B0E"><enum>(f)</enum><header>Effective date</header><text>Except as provided in subsection (d)(1)(B), the amendments made by this section shall apply to taxable years beginning after December 31, 2017.</text>
</subsection></section><section id="idB9A51D254CB14534976A9C88FC9BE94F"><enum>205.</enum><header>Expansion of
Pell Grant exclusion from gross income; treatment under Hope Scholarship
and Lifetime Learning credits</header>
<subsection id="idA9BC851183674E3182C89A27C667BE41"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/117">section 117(b)</external-xref> of the Internal Revenue Code of 1986 is amended by striking <quote>received by an individual</quote> and all that follows and inserting “received by an individual—</text>
<quoted-block display-inline="no-display-inline" id="id48CD79AEE63A4EFC8935A94C3BB95476" style="OLC">
<subparagraph id="id10DD4FE2D7814EB58B0844FEDAC380A3"><enum>(A)</enum><text>as a scholarship or fellowship grant to the extent the individual establishes that, in accordance with the conditions of the grant, such amount was used for qualified tuition and related expenses, or</text>
</subparagraph><subparagraph id="id720CC41AA830478E9EE30B248A47B0B8"><enum>(B)</enum><text>as a Federal Pell Grant under section 401 of the Higher Education Act of 1965 (as in effect on the date of the enactment of this subparagraph).</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id66BE4D628E614C25A6DC4456071AD85D"><enum>(b)</enum><header>Coordination with Hope Scholarship and Lifetime Learning credits</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/25A">section 25A(g)</external-xref> of the Internal Revenue Code of 1986 is amended—</text> <paragraph id="id3C1B6ED5CCBE47AB985CD3EC000B9244"><enum>(1)</enum><text>by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii), and (iii), respectively, and by moving such clauses 2 ems to the right,</text>
</paragraph><paragraph id="id952A9DD48C164B7BACBC813E9BC0CDAB"><enum>(2)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">etc</header-in-text>.—The amount</quote> and inserting “<header-in-text level="paragraph" style="OLC">etc</header-in-text>.—</text> <quoted-block display-inline="no-display-inline" id="id8FD371CF1CD7496BA9F0513EBC5FD318" style="OLC"> <subparagraph id="id60A4A4CCA4F9429FBDB72EFC721E2CE4"><enum>(A)</enum><header>In general</header><text>The amount</text></subparagraph><after-quoted-block>, and</after-quoted-block></quoted-block>
</paragraph><paragraph id="id4AF292B365FB40299DC1F06C9A2F9B91"><enum>(3)</enum><text>by adding at the end the following new subparagraph:</text> <quoted-block display-inline="no-display-inline" id="id0D097EB6F52E4E558E65C6ECD4B5F587" style="OLC"> <subparagraph id="idA98A29C2D82F4183AA249FFE2469EF13"><enum>(B)</enum><header>Coordination with Pell Grants not used for qualified tuition and related expenses</header><text display-inline="yes-display-inline">For purposes of subparagraph (A), the amount of any Federal Pell Grant under section 401 of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1070a">20 U.S.C. 1070a</external-xref>) shall be reduced (but not below zero) by the amount of expenses (other than qualified tuition and related expenses) which are taken into account in determining the cost of attendance (as defined in section 472 of the Higher Education Act of 1965, as in effect on the date of the enactment of the <short-title>Promoting Access and Retention Through New Efforts to Require Shared Higher Investments in Postsecondary Success Act</short-title>) of such individual at an eligible educational institution for the academic period for which the credit under subsection (a) is being determined.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id7EEEAEDD7F4A4F1988FDEA762576E633"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2015.</text>
</subsection></section><section id="HA4E82011BBBA49BF9F6046A56AB19125"><enum>206.</enum><header>Modifications to qualified tuition programs</header>
<subsection id="id85F45DF845E14B7788ABCAEA395EAC42"><enum>(a)</enum><header>Elimination of distribution aggregation requirements</header>
<paragraph id="HD1A0EE33C5A14A948A1645CE7662376C"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/529">Section 529(c)(3)</external-xref> of the Internal Revenue Code of 1986 is amended by striking subparagraph (D).</text> </paragraph><paragraph id="H33885021996646638922DC8EA3EFBB62"><enum>(2)</enum><header>Effective date</header><text>The amendment made by this subsection shall apply to distributions after December 31, 2015.</text>
</paragraph></subsection><subsection id="H014F1E3730E4481E9A25F6DF14FDF215"><enum>(b)</enum><header>Recontribution of refunded amounts</header>
<paragraph id="H4323BF6FF74A452BB8FB660F4417CAB0"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/529">Section 529(c)(3)</external-xref> of the Internal Revenue Code of 1986, as amended by subsection (a), is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HA22D794B2DF94CE6B272A3BC5ABCBA6E" style="OLC">
<subparagraph display-inline="no-display-inline" id="H1ABCBCD8F9074E5098AC9315B28B5C99"><enum>(D)</enum><header>Special rule for contributions of refunded amounts</header><text display-inline="yes-display-inline">In the case of a beneficiary who receives a refund of any qualified higher education expenses from an eligible educational institution, subparagraph (A) shall not apply to that portion of any distribution for the taxable year which is recontributed to a qualified tuition program of which such individual is a beneficiary, but only to the extent such recontribution is made not later than 60 days after the date of such refund and does not exceed the refunded amount.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H374DACC159DE484FB759BE34AD17995B"><enum>(2)</enum><header>Effective date</header>
<subparagraph id="HA13C1D124E8046D1B1E8799B3E8F6805"><enum>(A)</enum><header>In general</header><text>The amendment made by this subsection shall apply with respect to refunds of qualified higher education expenses after December 31, 2015.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H48253CD145DA431B88993B956F18CA16"><enum>(B)</enum><header>Transition rule</header><text>In the case of a refund of qualified higher education expenses received after December 31, 2015, and before the date of the enactment of this Act (if later), <external-xref legal-doc="usc" parsable-cite="usc/26/529">section 529(c)(3)(D)</external-xref> of the Internal Revenue Code of 1986 (as added by this section) shall be applied by substituting <quote>not later than 60 days after the date of the enactment of this subparagraph</quote> for <quote>not later than 60 days after the date of such refund</quote>.</text>
</subparagraph></paragraph></subsection></section>