[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 319 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 319

  To amend the Internal Revenue Code of 1986 to restore the prior law 
exclusion for scholarships and fellowships and to restore the deduction 
                   for interest on educational loans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 7, 1997

 Mr. Solomon introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to restore the prior law 
exclusion for scholarships and fellowships and to restore the deduction 
                   for interest on educational loans.

    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 ``Student Tax Equity Act of 1997''.

SEC. 2. RESTORATION OF PRIOR LAW EXCLUSION FOR SCHOLARSHIPS AND 
              FELLOWSHIPS.

    (a) In General.--Each provision of law amended by section 123 of 
the Tax Reform Act of 1986 is amended to read as if the amendments made 
by such section had not been enacted.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 3. RESTORATION OF DEDUCTION FOR INTEREST ON EDUCATIONAL LOANS.

    (a) In General.--Paragraph (2) of section 163(h) of the Internal 
Revenue Code of 1986 (defining personal interest) is amended by 
striking ``and'' at the end of subparagraph (D), by redesignating 
subparagraph (E) as subparagraph (F), and by inserting after 
subparagraph (D) the following new subparagraph:
                    ``(E) any interest on a qualified educational loan, 
                and''.
    (b) Qualified Educational Loan Defined.--Subsection (h) of section 
163 of such Code is amended by adding at the end the following new 
paragraph:
            ``(6) Qualified educational loan.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `qualified educational loan' means any 
                indebtedness incurred to pay qualified educational 
                expenses which are paid or incurred within a reasonable 
                period of time before or after the indebtedness is 
                incurred.
                    ``(B) Qualified educational expenses.--For purposes 
                of this paragraph--
                            ``(i) In general.--The term `qualified 
                        educational expenses' means qualified tuition 
                        and related expenses of the taxpayer, his 
                        spouse, or a dependent for attendance at an 
                        educational institution described in section 
                        170(b)(1)(A)(ii).
                            ``(ii) Qualified tuition and related 
                        expenses.--The term `qualified tuition and 
                        related expenses' means--
                                    ``(I) tuition and fees required for 
                                enrollment or attendance at an 
                                educational institution described in 
                                section 170(b)(1)(A)(ii),
                                    ``(II) fees, books, supplies, and 
                                equipment required for courses of 
                                instruction at such an institution, and
                                    ``(III) reasonable living expenses 
                                while away from home.
                    ``(C) Dependent.--For purposes of this paragraph, 
                the term `dependent' has the meaning given such term by 
                section 152.
                    ``(D) Coordination with paragraph (3)(C)(ii).--Any 
                qualified educational loan shall not be taken into 
                account for purposes of applying the limitation of 
                paragraph (3)(C)(ii).''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.
                                 <all>