[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1399 Introduced in Senate (IS)]
110th CONGRESS
1st Session
S. 1399
To amend the Internal Revenue Code of 1986 to combine the Hope
Scholarship Credit and the deduction for qualified tuition and related
expenses into a refundable college affordability and creating chances
for educational success for students (ACCESS) credit, to establish an
Early Federal Pell Grant Commitment Demonstration Program, and to
increase the maximum Federal Pell Grant Award.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 15, 2007
Mr. Biden 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 combine the Hope
Scholarship Credit and the deduction for qualified tuition and related
expenses into a refundable college affordability and creating chances
for educational success for students (ACCESS) credit, to establish an
Early Federal Pell Grant Commitment Demonstration Program, and to
increase the maximum Federal Pell Grant Award.
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 ``College Affordability and Creating
Chances for Educational Success for Students Act of 2007''.
TITLE I--COLLEGE ACCESS TAX CREDIT ACT
SEC. 101. SHORT TITLE.
This title may be cited as the ``College ACCESS Tax Credit Act''.
SEC. 102. COLLEGE AFFORDABILITY AND CREATING CHANCES FOR EDUCATIONAL
SUCCESS FOR STUDENTS (ACCESS) CREDIT.
(a) Allowance of Credit.--
(1) In general.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable credits) is amended by redesignating section 36 as
section 37 and by inserting after section 35 the following new
section:
``SEC. 36. COLLEGE AFFORDABILITY AND CREATING CHANCES FOR EDUCATIONAL
SUCCESS FOR STUDENTS (ACCESS) CREDIT.
``(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this subtitle for any taxable year an amount
equal to 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).
``(b) Limitations.--
``(1) In general.--The credit allowed under this section
shall not exceed $3,000 with respect to any student for any
taxable year.
``(2) Lifetime limitation.--The credit allowed under this
section with respect to any student shall not exceed--
``(A) the excess (if any) of --
``(i) $12,000 with respect to education
furnished prior to the date such student
receives a baccalaureate degree, over
``(ii) the aggregate credit allowed under
this section with respect to such education for
all prior taxable years, and
``(B) the excess (if any) of--
``(i) $6,000 with respect to education
furnished after to the date such student
receives a baccalaureate degree, over
``(ii) the aggregate credit allowed under
this section with respect to such education for
all prior taxable years.
``(3) Limitation based on modified adjusted gross income.--
``(A) In general.--The amount which would (but for
this subsection) be taken into account under subsection
(a) for the taxable year shall be reduced (but not
below zero) by the amount determined under subparagraph
(B).
``(B) Amount of reduction.--The amount determined
under this subparagraph is the amount which bears the
same ratio to the amount which would be so taken into
account as--
``(i) the excess of--
``(I) the taxpayer's modified
adjusted gross income for such taxable
year, over
``(II) $65,000 ($130,000 in the
case of a joint return), bears to
``(ii) $18,500 ($37,000 in the case of a
joint return).
``(C) Modified adjusted gross income.--The term
`modified adjusted gross income' 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.
``(4) Denial of credit if student convicted of a felony
drug offense.--The credit under subsection (a) shall not be
allowed for qualified tuition and related expenses for the
enrollment or attendance of a student for any academic period
if such student has been convicted of a Federal or State felony
offense consisting of the possession or distribution of a
controlled substance before the end of the taxable year with or
within which such period ends.
``(c) Election Not To Have Section Apply.--A taxpayer may elect not
to have this section apply with respect to the qualified tuition and
related expenses of an individual for any taxable year.
``(d) Definitions.--For purposes of this section, the terms
`qualified tuition and related expenses' and `eligible educational
institution' shall have the meaning give such terms under section
25A(d).
``(e) Special Rules.--For purposes of this section, rules similar
to the rules of paragraphs (1) through (7) of section 25A shall apply.
``(f) Inflation Adjustment.--
``(1) Dollar limitation on amount of credit.--
``(A) In general.--In the case of a taxable year
beginning after 2007, the $3,000 amount under
subsection (b)(1) shall be increased by an amount equal
to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2006'
for `calendar year 1992' in subparagraph (B)
thereof.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $100, such amount
shall be rounded to the next lowest multiple of $100.
``(2) Income limits.--
``(A) In general.--In the case of a taxable year
beginning after 2007, each of the dollar amounts in
subsection (b)(2)(B) shall each be increased by an
amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2006'
for `calendar year 1992' in subparagraph (B)
thereof.
``(B) Rounding.--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.
``(g) Regulations.--The Secretary may prescribe such regulations 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.''.
(2) Refundability of credit.--Paragraph (2) of section
1324(b) of title 31, United States Code, is amended by
inserting before the period ``or enacted by the College ACCESS
Tax Credit Act''.
(3) Conforming amendments.--
(A) Subparagraph (A) of section 135(d)(2) of the
Internal Revenue Code of 1986 is amended by striking
``section 25A'' and inserting ``sections 25A and 36''.
(B) Section 529 of such Code is amended by striking
``the credit allowed to the taxpayer or any other
person under section 25A'' in subclause (II) of
subsection (c)(3)(B)(v) and inserting ``any credit
allowed to the taxpayer or any other person under
sections 25A and 36''.
(C) Section 530 of such Code is amended by striking
``the credit allowed to the taxpayer or any other
person under section 25A'' in subclause (II) of
subsection (d)(2)(C)(i) and inserting ``any credit
allowed to the taxpayer or any other person under
sections 25A and 36''.
(D) Subparagraph (J) of section 6213(g)(2) of such
Code is amended by striking ``section 25A(g)(1)'' and
inserting ``section 25A(g)(1) or 36(e)(1)''.
(E) Section 6501(m) of such Code is amended by
inserting ``36(c),'' before ``, 40(f)''
(F) The table of sections for subpart C of part IV
of subchapter A of chapter 1 of such Code is amended by
striking the item relating to section 36 and inserting
the following:
``Sec. 36. College affordability and creating chances for educational
success for students (ACCESS) credit.
``Sec. 37. Overpayments of tax.''.
(b) Repeal of Hope Scholarship Credit.--
(1) In general.--Subsection (a) of section 25A of the
Internal Revenue Code of 1986 is amended to read as follows:
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year 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.''.
(2) Conforming amendments.--
(A) Section 25A of such Code is amended by striking
subsections (b) and (c) and by redesignating
subsections (d), (e), (f), (g), (h), and (i) as
subsections (b), (c), (d), (e), (f), and (g).
(B) Section 25A(e) of such Code, as redesignated by
subparagraph (A), is amended by adding at the end the
following:
``(8) Coordination with college affordability and creating
chances for educational success for students (access) credit.--
The qualified tuition and related expenses with respect to an
individual for whom a credit under section 36 is allowed for
the taxable year shall not be taken into account under this
section.
``(9) Certain expenses eligible.--For purposes of this
section, qualified tuition and related expenses shall include
expenses described in subsection (d)(1) with respect to any
course of instruction at an eligible educational institution to
acquire or improve job skills of the individual.''.
(C) Paragraph (2) of section 25A(e) of such Code,
as redesignated by subparagraph (A), is amended by
striking ``before the application of subsections (b),
(c), and (d)'' and inserting ``before the application
of subsection (b) and paragraphs (8) and (9) of this
subsection''.
(D) Section 25A(f) of such Code, as redesignated by
subparagraph (A), is amended to read as follows:
``(f) Inflation Adjustment.--
``(1) In general.--In the case of a taxable year beginning
after 2001, the $40,000 and $80,000 amounts in subsection
(b)(2) shall each be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2000' for `calendar year 1992' in
subparagraph (B) thereof.
``(2) Rounding.--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.''.
(E) The heading for section 25A of such Code is
amended--
(i) by striking ``hope and'', and
(ii) by striking ``credits'' and inserting
``credit''.
(F) The item relating to section 25A in the table
of sections for subpart A of part IV of subchapter A of
chapter 1 of such Code is amended to read as follows:
``25A. Lifetime Learning credit.''.
(G)(i) Subparagraph (B) of section 72(t)(7) of such
Code is amended by striking ``section 25A(g)(2)'' and
inserting ``section 25A(e)(2)''.
(ii) Section 221(d) of such Code is amended--
(I) by striking ``section 25A(g)(2)'' in
paragraph (2)(B) and inserting ``section
25A(e)(2)'',
(II) by striking ``section 25A(f)(2)'' in
paragraph (2)(B) and inserting ``section
25A(d)(2)'', and
(III) by striking ``section 25A(b)(3)'' in
paragraph (3) and inserting ``section
25A(b)(3)(B)''.
(iii) Section 529 of such Code is amended--
(I) by striking ``section 25A(g)(2)'' in
subclause (I) of subsection (c)(3)(B)(v) and
inserting ``section 25A(e)(2)'', and
(II) by striking ``section 25A(b)(3)'' in
clause (i) of subsection (e)(3)(B) and
inserting ``section 25A(b)(3)(A)''.
(iv) Section 530 of such Code is amended--
(I) by striking ``section 25A(g)(2)'' in
subclause (I) of subsection (d)(2)(C)(i) and
inserting ``section 25A(e)(2)'', and
(II) by striking ``section 25A(g)(2)'' in
clause (iii) of subsection (d)(4)(B) and
inserting ``section 25A(e)(2)''.
(v) Subsection (e) of section 6050S of such Code is
amended by striking ``(g)(2) thereof'' and inserting
``(e)(2) thereof''.
(vi) Subparagraph (J) of section 6213(g)(2) of such
Code, as amended by subsection 9a)(3), is amended by
striking ``section 25A(g)(1)'' and inserting ``section
25A(e)(1)''.
(c) Repeal of Deduction for Qualified Tuition and Related
Expenses.--
(1) In general.--Part VII of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 is amended by striking
section 222.
(2) Conforming amendments.--
(A) The table of sections for part VII of
subchapter B of chapter 1 of such Code is amended by
striking the item relating to section 222.
(B) The following sections of the Internal Revenue
Code of 1986 are each amended by striking ``222,'':
(i) Section 86(b)(2)(A).
(ii) Section 135(c)(4)(A).
(iii) Section 137(b)(3)(A).
(iv) Section 199(d)(2)(A).
(v) Section 219(g)(3)(A)(ii).
(vi) Section 221(b)(2)(C)(i).
(C) Section 469(i)(3)(F)(iii) of such Code is
amended by striking ``221, and 222'' and inserting
``and 221''.
(d) Effective Date.--The amendments made by this section shall
apply to expenses paid after December 31, 2006, for education furnished
in academic periods beginning after such date.
TITLE II--EARLY FEDERAL PELL GRANT COMMITMENT DEMONSTRATION PROGRAM
SEC. 201. EARLY FEDERAL PELL GRANT COMMITMENT DEMONSTRATION PROGRAM.
Subpart 1 of part A of title IV of the Higher Education Act of 1965
(20 U.S.C. 1070a et seq.) is amended by adding at the end the
following:
``SEC. 401B. EARLY FEDERAL PELL GRANT COMMITMENT DEMONSTRATION PROGRAM.
``(a) Demonstration Program Authority.--
``(1) In general.--The Secretary is authorized to carry out
an Early Federal Pell Grant Commitment Demonstration Program
under which--
``(A) the Secretary awards grants to 4 State
educational agencies, in accordance with paragraph (2),
to pay the administrative expenses incurred in
participating in the demonstration program under this
section; and
``(B) the Secretary awards Federal Pell Grants to
participating students in accordance with this section.
``(2) Grants.--
``(A) In general.--From amounts appropriated under
subsection (g) for a fiscal year, the Secretary is
authorized to award grants to 4 State educational
agencies to enable the State educational agencies to
pay the administrative expenses incurred in
participating in a demonstration program under which
students in 8th grade who are eligible for a free or
reduced price meal receive a commitment to receive a
Federal Pell Grant early in their academic careers.
``(B) Equal amounts.--The Secretary shall award
grants under this section in equal amounts to each of
the 4 participating State educational agencies.
``(b) Demonstration Project Requirements.--Each of the 4
demonstration projects assisted under this section shall meet the
following requirements:
``(1) Participants.--
``(A) In general.--The State educational agency
shall make participation in the demonstration project
available to 2 cohorts of students, which shall consist
of--
``(i) 1 cohort of 8th grade students who
begin the participation in academic year 2007-
2008; and
``(ii) 1 cohort of 8th grade students who
begin the participation in academic year 2008-
2009.
``(B) Students in each cohort.--Each cohort of
students shall consist of not more than 10,000 8th
grade students who qualify for a free or reduced price
meal under the Richard B. Russell National School Lunch
Act or the Child Nutrition Act of 1966.
``(2) Student data.--The State educational agency shall
ensure that student data from local educational agencies
serving students who participate in the demonstration project,
as well as student data from local educational agencies serving
a comparable group of students who do not participate in the
demonstration project, are available for evaluation of the
demonstration project.
``(3) Federal pell grant commitment.--Each student who
participates in the demonstration project receives a commitment
from the Secretary to receive a Federal Pell Grant during the
first academic year that student is in attendance at an
institution of higher education as an undergraduate, if the
student applies for Federal financial aid (via the FAFSA)
during the student's senior year of secondary school and during
succeeding years.
``(4) Applicability of federal pell grant requirements.--
The requirements of section 401 shall apply to Federal Pell
Grants awarded pursuant to this section, except that the amount
of each participating student's Federal Pell Grant only shall
be calculated by deeming such student to have an expected
family contribution equal to zero.
``(5) Application process.--The Secretary shall establish
an application process to select State educational agencies to
participate in the demonstration program and State educational
agencies shall establish an application process to select local
educational agencies within the State to participate in the
demonstration project.
``(6) Local educational agency participation.--Subject to
the 10,000 statewide student limitation described in paragraph
(1), a local educational agency serving students, not less than
50 percent of whom are eligible for a free or reduced price
meal under the Richard B. Russell National School Lunch Act or
the Child Nutritional Act of 1966, shall be eligible to
participate in the demonstration project.
``(c) State Educational Agency Applications.--
``(1) In general.--Each State educational agency desiring
to participate in the demonstration program under this section
shall submit an application to the Secretary at such time and
in such manner as the Secretary may require.
``(2) Contents.--Each application shall include--
``(A) a description of the proposed targeted
information campaign for the demonstration project and
a copy of the plan described in subsection (f)(2);
``(B) a description of the student population that
will receive an early commitment to receive a Federal
Pell Grant under this section;
``(C) an assurance that the State educational
agency will fully cooperate with the ongoing evaluation
of the demonstration project; and
``(D) such other information as the Secretary may
require.
``(d) Selection Considerations.--
``(1) Selection of state educational agencies.--In
selecting State educational agencies to participate in the
demonstration program, the Secretary shall consider--
``(A) the number and quality of State educational
agency applications received;
``(B) the Department's capacity to oversee and
monitor each State educational agency's participation
in the demonstration program;
``(C) a State educational agency's--
``(i) financial responsibility;
``(ii) administrative capability;
``(iii) commitment to focusing State
resources, in addition to any resources
provided under part A of title I of the
Elementary and Secondary Education Act of 1965,
on students who receive assistance under such
part A;
``(iv) the ability and plans of a State
educational agency to run an effective and
thorough targeted information campaign for
students served by local educational agencies
eligible to participate in the demonstration
project; and
``(v) ensuring the participation in the
demonstration program of a diverse group of
students with respect to ethnicity and gender.
``(2) Local educational agency.--In selecting local
educational agencies to participate in a demonstration project
under this section, the State educational agency shall
consider--
``(A) the number and quality of local educational
agency applications received;
``(B) the State educational agency's capacity to
oversee and monitor each local educational agency's
participation in the demonstration project;
``(C) a local educational agency's--
``(i) financial responsibility;
``(ii) administrative capability;
``(iii) commitment to focusing local
resources, in addition to any resources
provided under part A of title I of the
Elementary and Secondary Education Act of 1965,
on students who receive assistance under such
part A;
``(iv) the ability and plans of a local
educational agency to run an effective and
thorough targeted information campaign for
students served by the local educational
agency; and
``(v) ensuring the participation in the
demonstration project of a diverse group of
students with respect to ethnicity and gender.
``(e) Evaluation.--
``(1) In general.--From amounts appropriated under section
(g) for a fiscal year, the Secretary shall reserve not more
than $1,000,000 to award a grant or contract to an organization
outside the Department for an independent evaluation of the
impact of the demonstration program assisted under this
section.
``(2) Competitive basis.--The grant or contract shall be
awarded on a competitive basis.
``(3) Matters evaluated.--The evaluation described in this
subsection shall--
``(A) determine the number of individuals who were
encouraged by the demonstration program to pursue
higher education;
``(B) identify the barriers to the effectiveness of
the demonstration program;
``(C) assess the cost-effectiveness of the
demonstration program in improving access to higher
education;
``(D) identify the reasons why participants in the
demonstration program either received or did not
receive a Federal Pell Grant;
``(E) identify intermediate outcomes (relative to
postsecondary education attendance), such as whether
participants--
``(i) were more likely to take a college-
prep curriculum while in secondary school;
``(ii) submitted any college applications;
and
``(iii) took the PSAT, SAT, or ACT;
``(F) identify the number of individuals
participating in the demonstration program who pursued
an associate's degree or a bachelor's degree, as well
as other forms of postsecondary education;
``(G) compare the findings of the demonstration
program with respect to participants to comparison
groups (of similar size and demographics) that did not
participate in the demonstration program; and
``(H) identify the impact on the parents of
students eligible to participate in the demonstration
program.
``(4) Dissemination.--The findings of the evaluation shall
be widely disseminated to the public by the organization
conducting the evaluation as well as by the Secretary.
``(f) Targeted Information Campaign.--
``(1) In general.--Each State educational agency receiving
a grant under this section shall, in cooperation with the
participating local educational agencies within the State and
the Secretary, develop a targeted information campaign for the
demonstration program assisted under this section.
``(2) Plan.--Each State educational agency receiving a
grant under this section shall include in the application
submitted under subsection (c) a written plan for their
proposed targeted information campaign. The plan shall include
the following:
``(A) Outreach.--Outreach to students and their
families, at a minimum, at the beginning and end of
each academic year of the demonstration project.
``(B) Distribution.--How the State educational
agency plans to provide the outreach described in
subparagraph (A) and to provide the information
described in subparagraph (C).
``(C) Information.--The annual provision by the
State educational agency to all students and families
participating in the demonstration program of
information regarding--
``(i) the estimated statewide average
higher education institution cost data for each
academic year, which cost data shall be
disaggregated by--
``(I) type of institution,
including--
``(aa) 2-year public
colleges;
``(bb) 4-year public
colleges; and
``(cc) 4-year private
colleges;
``(II) by component, including--
``(aa) tuition and fees;
and
``(bb) room and board;
``(ii) Federal Pell Grants, including--
``(I) the maximum Federal Pell
Grant for each academic year;
``(II) when and how to apply for a
Federal Pell Grant; and
``(III) what the application
process for a Federal Pell Grant
requires;
``(iii) State-specific college savings
programs;
``(iv) State-based merit aid;
``(v) State-based financial aid; and
``(vi) Federal financial aid available to
students, including eligibility criteria for
the Federal financial aid and an explanation of
the Federal financial aid programs.
``(3) Cohorts.--The information described in paragraph
(2)(C) shall be provided to 2 cohorts of students annually for
the duration of the students' participation in the
demonstration program. The 2 cohorts shall consist of--
``(A) 1 cohort of 8th grade students who begin the
participation in academic year 2007-2008; and
``(B) 1 cohort of 8th grade students who begin the
participation in academic year 2008-2009.
``(4) Reservation.--Each State educational agency receiving
a grant under this section shall reserve $200,000 of the grant
funds received each fiscal year for each of the 2 cohorts of
students (for a total reservation of $400,000 each fiscal year)
served by the State to carry out their targeted information
campaign described in this subsection.
``(g) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section--
``(1) $1,300,000 for fiscal year 2008, of which--
``(A) $500,000 shall be available to carry out
subsection (e); and
``(B) $800,000 shall be available to carry out
subsection (f)(2)(C);
``(2) $1,600,000 for fiscal year 2009, of which $1,600,000
shall be available to carry out subsection (f)(2)(C);
``(3) $1,600,000 for fiscal year 2010, of which $1,600,000
shall be available to carry out subsection (f)(2)(C);
``(4) $2,100,000 for fiscal year 2011, of which--
``(A) $500,000 shall be available to carry out
subsection (e); and
``(B) $1,600,000 shall be available to carry out
subsection (f)(2)(C);
``(5) $1,600,000 for fiscal year 2012, of which $1,600,000
shall be available to carry out subsection (f)(2)(C);
``(6) $14,600,000 for fiscal year 2013, of which--
``(A) $800,000 shall be available to carry out
subsection (f)(2)(C); and
``(B) $13,800,000 shall be available for Federal
Pell Grants provided in accordance with this section;
and
``(7) $13,800,000 for fiscal year 2014, of which
$13,800,000 shall be available for Federal Pell Grants provided
in accordance with this section.''.
TITLE III--INCREASE IN FEDERAL PELL GRANT MAXIMUM AWARD
SEC. 301. INCREASE OF MAXIMUM FEDERAL PELL GRANT AMOUNT.
Section 401(b)(2)(A) of the Higher Education Act of 1965 (20 U.S.C.
1070a(b)(2)(A)) is amended by striking clauses (i) through (v) and
inserting the following:
``(i) $5,100 for academic year 2007-2008;
``(ii) $5,400 for academic year 2008-2009;
``(iii) $5,700 for academic year 2009-2010;
``(iv) $6,000 for academic year 2010-2011; and
``(v) $6,300 for academic year 2011-2012,''.
<all>