[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2077 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2077

To amend the Public Health Service Act and the Internal Revenue Code of 
  1986 to establish an entitlement of certain individuals to receive 
     payments for attendance at certain health professions schools.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 11, 1993

Mr. Stark introduced the following bill; which was referred jointly to 
        the Committees on Energy and Commerce and Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Public Health Service Act and the Internal Revenue Code of 
  1986 to establish an entitlement of certain individuals to receive 
     payments for attendance at certain health professions schools.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Education Lending Program 
Act''.

SEC. 2. ESTABLISHMENT OF ENTITLEMENT PROGRAM REGARDING ATTENDANCE AT 
              CERTAIN HEALTH PROFESSIONS SCHOOLS.

    Title VII of the Public Health Service Act (42 U.S.C. 292 et seq.), 
as amended by section 102 of Public Law 102-408, is amended by adding 
at the end of part A the following subpart:

                   ``Subpart III--Entitlement Program

``SEC. 735A. PAYMENTS FOR ATTENDANCE AT CERTAIN HEALTH PROFESSIONS 
              SCHOOLS.

    ``(a) In General.--
            ``(1) Provision of assistance.--Subject to the provisions 
        of this section, in the case of an individual described in 
        subsection (c) who submits to the Secretary an application in 
        accordance with subsection (i), the Secretary shall make 
        payments on behalf of the individual for the costs related to 
        the attendance of the individual at any school of medicine, 
        osteopathic medicine, dentistry, podiatry, or optometry.
            ``(2) Recapture tax.--The Secretary may not approve an 
        application for payments under paragraph (1) unless the 
        individual involved acknowledges in writing that the individual 
        understands that receiving such payments may subject the 
        individual to taxation under section 59B of the Internal 
        Revenue Code of 1986.
    ``(b) Entitlement Status of Payments.--
            ``(1) In general.--Subject to paragraph (3), each eligible 
        individual is entitled to payments under subsection (a) on 
        behalf of the individual in an amount determined under 
        subsection (e) and for the purposes specified in such 
        subsection. The preceding sentence constitutes budget authority 
        in advance of appropriations Acts, and represents the 
        obligation of the Federal Government to make the payments.
            ``(2) Trust fund.--Payments under subsection (a) shall be 
        made from amounts in the Health Professions Education Trust 
        Fund established in section 9511 of the Internal Revenue Code 
        of 1986.
            ``(3) Limitation.--The obligation of the Federal Government 
        to make payments under subsection (a) is effective only to the 
        extent of amounts in the Fund.
    ``(c) Enrollment Status; Immigration Status.--For purposes of 
subsection (a), an individual described in this subsection is any 
individual--
            ``(1) who is enrolled or accepted for enrollment as a full-
        time student at a designated health professions school in any 
        of the States; and
            ``(2) for whom being in any of the States, or attending an 
        educational institution in any of the States, does not 
        constitute a violation of the Immigration and Nationality Act.
    ``(d) Requirement Regarding Completion of Educational Program.--
With respect to the program of education in which an individual is 
enrolled or accepted for enrollment at the designated health 
professions school involved, an application agreement for payments 
under subsection (a) for the individual is that the individual will--
            ``(1) maintain an acceptable level of academic standing in 
        the program (as determined by the school in accordance with 
        standards issued by the Secretary); and
            ``(2) complete the program of education.
    ``(e) Amount of Payments; Authorized Expenditures.--
            ``(1) Amount.--
                    ``(A) For purposes of subsection (b)(1), the amount 
                of payments determined under this subsection is, 
                subject to subparagraph (B), the total of payments 
                described in paragraph (2) that the Secretary 
                determines is necessary for the individual to complete 
                the program of education in which the individual is 
                enrolled or accepted for enrollment at the designated 
                health professions school involved.
                    ``(B) The total of payments made under subsection 
                (a) during the life of the individual involved may not 
                exceed $120,000, as adjusted for each academic year 
                beginning after July 1994 to offset the effects of 
                inflation occurring after October 1, 1993, as indicated 
                by changes in the consumer price index for all urban 
                consumers (U.S. city average), published by the Bureau 
                of Labor Statistics.
            ``(2) Authorized expenditures.--For purposes of paragraph 
        (1)(A), the payments described in this paragraph are payments 
        for the purposes of--
                    ``(A) tuition and all other reasonable educational 
                expenses of the program of education involved, 
                including fees, books, and laboratory expenses; and
                    ``(B) a stipend.
            ``(3) Certain considerations regarding stipends.--In 
        determining the amount of a stipend that an individual is to 
        receive under paragraph (1), the Secretary shall consider the 
        costs of living in the locality involved, the costs of child 
        care for the children of the individual (if any), the costs 
        involved in taking examinations required by the States involved 
        as a condition of practicing the health profession with respect 
        to which payments under subsection (a) are provided, and such 
        other costs as the Secretary determines to be appropriate with 
        respect to attendance at a designated health professions 
        school.
            ``(4) Transfer of loan balances to secretary.--In the case 
        of an eligible individual to whom a financial institution has 
        made a loan for any of the purposes specified in paragraph (2), 
        the Secretary may, upon the request of the individual, pay the 
        balance of the loan (except to the extent that the loan was 
        provided for other purposes). Payments made under the preceding 
        sentence on behalf of an eligible individual shall be included 
        in determining the total of payments made for the individual 
        for purposes of paragraph (1)(B).
            ``(5) Agreement.--An application agreement for payments 
        under subsection (a) for an individual is that the individual 
        will expend the payments in accordance with such restrictions 
        on amount as the Secretary may, under paragraph (1), establish 
        for the various categories of expenditures authorized in 
        paragraph (2).
    ``(f) Authority for Direct Payments to Schools.--The Secretary may 
enter into an agreement with a designated health professions school 
under which the payments made under subsection (a) on behalf of an 
individual for the purposes specified in subsection (e)(2)(A) are made 
directly to the school. Payments under the preceding sentence are not 
subject to section 3324 of title 31, United States Code (relating to 
advance payments).
    ``(g) Failure Regarding Satisfactory Completion of Educational 
Program.--
            ``(1) In general.--An application agreement for payments 
        under subsection (a) for an individual is that, if the 
        individual fails to comply with subsection (d), the individual 
        is liable to the Federal Government in an amount equal to the 
        sum of--
                    ``(A) the amount of the payments that have been 
                made; and
                    ``(B) an amount representing interest on such 
                payments, accruing during the period in which the 
                payments were made and determined by the Secretary of 
                the Treasury on the basis of the average of the bond 
                equivalent of the weekly 90-day auction rate of 
                Treasury bills.
            ``(2) Waiver.--The Secretary may waive the right of the 
        Federal Government to recover amounts pursuant to paragraph (1) 
        if compliance by the individual with the agreement made under 
        subsection (d) is impossible or would involve extreme hardship 
        and if enforcement of the agreement with respect to any 
        individual would be unconscionable.
            ``(3) Bankruptcy.--The liability of an individual pursuant 
        to paragraph (1) may be released by a discharge in bankruptcy 
        under title 11, United States Code, only if such discharge is 
        granted after the expiration of the 7-year period beginning on 
        the first date that payments pursuant to such liability are 
        required, and only if the bankruptcy court finds that 
        nondischarge of the obligation would be unconscionable.
    ``(h) Choice of School.--The entitlement established pursuant to 
subsection (a) regarding an individual applies to any designated health 
professions school with respect to which the requirements of this 
section are met. Application agreements made under this section may not 
be construed as prohibiting an individual from transferring between 
schools.
    ``(i) Application for Payments.--For purposes of subsection (a), an 
application for payments under such subsection is in accordance with 
this subsection if--
            ``(1) the application is submitted to the Secretary by the 
        date established by the Secretary regarding payments for the 
        academic year involved;
            ``(2) the application contains the acknowledg- ment 
        required in subsection (a)(2);
            ``(3) the application contains assurances satisfactory to 
        the Secretary that the individual involved is an individual 
        described in subsection (c);
            ``(4) the application contains each application agreement 
        described in this section; and
            ``(5) the application is in writing, is signed by such 
        individual, and otherwise is in such form as the Secretary may 
        require.
    ``(j) Dental residencies.--The entitlement established pursuant to 
subsection (b) applies to the costs related to participation in a 
residency training program in dentistry to the same extent and in the 
same manner as the entitlement applies to the costs related to 
attendance at a designated health professions school. For purposes of 
subsection (e)(1)(B), the preceding sentence does not affect the 
limitation on the total of payments under subsection (a) that may be 
made to an individual during the life of the individual.
    ``(k) Definitions.--For purposes of this section:
            ``(1) The term `application agreement', with respect to 
        payments under subsection (a) for an individual, means that the 
        Secretary may not make the payments unless the individual makes 
        the agreement involved.
            ``(2) The term `costs', in the case of the costs related to 
        the attendance of an individual at a designated health 
        professions school, means the costs for which payments may be 
        made for purposes of subsection (e)(2).
            ``(3) The term `designated health professions school' means 
        a school specified in subsection (a)(1).
            ``(4) The term `eligible individual' means an individual 
        described in subsection (c) who submits to the Secretary an 
        application in accordance with subsection (i).
            ``(5) The term `Fund' means the Health Professions 
        Education Trust Fund established in section 9511 of the 
        Internal Revenue Code of 1986.''.

SEC. 3. FINANCING OF ENTITLEMENT PROGRAM.

    (a) Health Professions Assistance Recapture Tax.--
            (1) In general.--Subchapter A of chapter 1 of the Internal 
        Revenue Code of 1986 (relating to determination of tax 
        liability) is amended by adding at the end thereof the 
        following new part:

        ``PART III--HEALTH PROFESSIONS ASSISTANCE RECAPTURE TAX

                              ``Sec. 59B. Imposition of additional tax.

``SEC. 59B. IMPOSITION OF ADDITIONAL TAX.

    ``(a) General Rule.--In the case of any individual to whom this 
section applies, there is hereby imposed (in addition to any other tax 
imposed by this subtitle) a tax equal to 1 percent of the recapture 
income of such individual for the taxable year.
    ``(b) Higher Tax Rate Where Assistance Exceeds Certain Amount.--If 
the aggregate amount of payments made to the taxpayer (or spouse of the 
taxpayer) under section 735A of the Public Health Service Act exceeds 
an amount equal to 50 percent of the amount in effect for purposes of 
subsection (e)(1)(B) of such section (as of the time the taxpayer 
completes the program of education with respect to which such payments 
were provided), subsection (a) shall be applied by substituting `2 
percent' for `1 percent'.
    ``(c) Individuals to Whom Section Applies.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, this section shall apply to an individual who--
                    ``(A) received payments under section 735A of the 
                Public Health Service Act, and
                    ``(B) before the close of the taxable year, 
                successfully completed the program of education with 
                respect to which such payments were provided.
            ``(2) Three-year residency forbearance.--If an individual 
        is enrolled in a residency training program in medicine, 
        dentistry, or podiatry, this section shall not apply to the 
        individual for a taxable year--
                    ``(A) which includes any portion of the period 
                beginning on the date on which the individual begins 
                participation in the program and ending on the earlier 
                of the date on which the individual completes the 
                program or the date that is 3 years after the 
                individual begins such participation; and
                    ``(B) for which the individual participates in the 
                program in accordance with the terms of the program.
            ``(3) Services in health professional shortage areas.--With 
        respect to an individual who completes a residency training 
        program in medicine, dentistry, or podiatry and who continues 
        or begins practice as a provider of primary health services (as 
        defined in section 331(a)(3)(D) of the Public Health Service 
        Act), this section shall not apply to the individual for a 
        taxable year during which, for not less than 6 months, the 
        individual provides such services in a health professional 
        shortage area (as designated under section 332 of such Act).
            ``(4) Taxpayers not required to file return.--This section 
        shall not apply to any individual for any taxable year if such 
        individual is not required to file a return of the tax imposed 
        by this chapter for such taxable year.
            ``(5) Individuals who have attained age 67.--This section 
        shall not apply to any individual for any taxable year if such 
        individual has attained age 67 before the close of such taxable 
        year.
    ``(d) Recapture Income.--For purposes of this section--
            ``(1) In general.--Except as provided in paragraph (2), the 
        term `recapture income' means modified adjusted gross income 
        (as defined in section 86(b)(2)).
            ``(2) Treatment of married individuals.--
                    ``(A) Joint returns.--In the case of a joint return 
                where only 1 spouse is an individual to whom this 
                section applies, the term `recapture income' means the 
                sum of--
                            ``(i) the portion of the modified adjusted 
                        gross income of the individuals filing such 
                        return which is attributable to earned income 
                        (as defined in section 911(d)(2)) of the 
                        individual to whom this section applies, plus
                            ``(ii) 50 percent of the portion of such 
                        modified adjusted gross income which is not 
                        described in clause (i) and is not attributable 
                        to the earned income (as so defined) of the 
                        other spouse.
                    ``(B) Separate returns.--In the case of a married 
                couple where only 1 of the spouses is an individual to 
                whom this section applies (determined without regard to 
                this subparagraph) and where the spouses file separate 
                returns for the taxable year--
                            ``(i) both spouses shall be treated as 
                        individuals to whom this section applies, and
                            ``(ii) the recapture income of each of such 
                        spouses shall be determined under the rules of 
                        subparagraph (A); except that clause (i) of 
                        this subparagraph shall not apply for purposes 
                        of subparagraph (A)(i).
    ``(e) Credits Not Allowable; Etc.--The tax imposed by this section 
shall not be treated as a tax imposed by this chapter for purposes of 
determining--
            ``(1) the amount of any credit allowable under this 
        chapter, or
            ``(2) the amount of the minimum tax imposed by section 55.
    ``(f) Marital Status.--For purposes of this section, marital status 
shall be determined under section 7703.''
            (2) Clerical amendment.--The table of parts for subchapter 
        A of chapter 1 of such Code is amended by adding at the end 
        thereof the following new item:

                              ``Part VIII. Health professions 
                                        assistance recapture tax.''
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years ending after the date of the 
        enactment of this Act.
    (b) Health Professions Education Trust Fund.--
            (1) In general.--Subchapter A of chapter 98 of such Code 
        (relating to Trust Fund Code) is amended by adding at the end 
        thereof the following new section:

``SEC. 9511. HEALTH PROFESSIONS EDUCATION TRUST FUND.

    ``(a) Creation of Trust Fund.--There is hereby established in the 
Treasury of the United States a trust fund to be known as the `Health 
Professions Education Trust Fund', consisting of such amounts as may be 
appropriated to credited to such Trust Fund as provided in this section 
or section 9602(b).
    ``(b) Transfer To Trust Fund of Amounts Equivalent to Certain 
Taxes.--There are hereby appropriated to the Health Professions 
Education Trust Fund amounts equivalent to the taxes received in the 
Treasury under section 59B.
    ``(c) Expenditures From Trust Fund.--Amounts in the Health 
Professions Education Trust Fund shall be available, as provided by 
appropriation Acts, for making payments under section 735A of the 
Public Health Service Act.
    ``(d) Authority To Borrow.--
            ``(1) In general.--There are authorized to be appropriated 
        to the Health Professions Education Trust Fund, as repayable 
        advances, such sums as may be necessary to make payments under 
        section 735A of the Public Health Service Act.
            ``(2) Repayment of advances.--Advances made to the Health 
        Professions Education Trust Fund shall be repaid, and interest 
        on such advances shall be paid, to the general fund of the 
        Treasury when the Secretary determines that moneys are 
        available for such purposes in such Trust Fund.
            ``(3) Interest.--Interest on advances made under this 
        subsection shall be at a rate determined by the Secretary of 
        the Treasury (as of the close of the calendar month preceding 
        the calendar month in which the advance is made) to equal to 
        the current average market yield on outstanding marketable 
        obligations of the United States with remaining periods to 
        maturity comparable to the anticipated period during which the 
        advance will be outstanding. Such interest shall be compounded 
        annually.''
            (2) Clerical amendment.--The table of sections for 
        subchapter A of chapter 98 of such Code is amended by adding at 
        the end thereof the following new item:

                              ``Sec. 9511. Health Professions Education 
                                        Trust Fund.''

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HR 2077 IH----2