[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 477 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 477

To amend the Internal Revenue Code of 1986 to exclude national service 
         educational awards from the recipient's gross income.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 7, 2001

   Mr. Kerry introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to exclude national service 
         educational awards from the recipient's gross income.

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

SECTION 1. EXCLUSION OF NATIONAL SERVICE EDUCATIONAL AWARDS.

    (a) In General.--Section 117 of the Internal Revenue Code of 1986 
(relating to qualified scholarships) is amended by adding at the end 
the following:
    ``(e) Qualified National Service Educational Awards.--
            ``(1) In general.--Gross income for any taxable year shall 
        not include any qualified national service educational award.
            ``(2) Qualified national service educational award.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `qualified national 
                service educational award' means any amount received by 
                an individual in a taxable year as a national service 
                educational award under section 148 of the National and 
                Community Service Act of 1990 (42 U.S.C. 12604) to the 
                extent (except as provided in subparagraph (C)) such 
                amount does not exceed the qualified tuition and 
                related expenses (as defined in subsection (b)(2)) of 
                the individual for such taxable year.
                    ``(B) Determination of expenses.--The total amount 
                of the qualified tuition and related expenses (as so 
                defined) which may be taken into account under 
                subparagraph (A) with respect to an individual for the 
                taxable year shall be reduced (after the application of 
                the reduction provided in section 25A(g)(2)) by the 
                amount of such expenses which were taken into account 
                in determining the credit allowed to the taxpayer or 
                any other person under section 25A with respect to such 
                expenses.
                    ``(C) Exception to limitation.--The limitation 
                under subparagraph (A) shall not apply to any portion 
                of a national service educational award used by such 
                individual to repay any student loan described in 
                section 148(a)(1) of such Act or to pay any interest 
                expense described in section 148(a)(4) of such Act.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts received in taxable years beginning after December 31, 2001.
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