[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1090 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                S. 1090

 To amend the Internal Revenue Code of 1986 to consolidate the current 
education tax incentives into one credit against income tax for higher 
              education expenses, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 4, 2013

   Mr. Rubio 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 consolidate the current 
education tax incentives into one credit against income tax for higher 
              education expenses, and for other purposes.

    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 ``Higher Education and Skills 
Obtainment Act''.

SEC. 2. CONSOLIDATION OF EDUCATION TAX INCENTIVES INTO HIGHER EDUCATION 
              AND SKILLS OBTAINMENT CREDIT.

    (a) In General.--Section 25A of the Internal Revenue Code of 1986 
(relating to Hope and Lifetime Learning credits) is amended to read as 
follows:

``SEC. 25A. HIGHER EDUCATION AND SKILLS OBTAINMENT CREDIT.

    ``(a) Allowance of Credit.--In the case of any eligible student for 
whom an election is in effect under this section for any taxable year, 
there shall be allowed as a credit against the tax imposed by this 
chapter for the taxable year an amount equal to the sum of--
            ``(1) 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
            ``(2) 25 percent of such expenses so paid as exceeds $2,000 
        but does not exceed $4,000.
    ``(b) Limitations.--
            ``(1) Credit allowed only for 4 taxable years.--The credit 
        under subsection (a) shall not be allowed for a taxable year 
        with respect to the qualified tuition and related expenses of 
        an eligible student if the student has completed (before the 
        beginning of such taxable year) 4 years of any combination of 
        postsecondary education at an eligible educational institution 
        and instruction described in subsection (c)(2)(B).
            ``(2) Limitation based on household income.--The amount 
        which would (but for this paragraph) be taken into account 
        under subsection (a) for the taxable year shall be reduced (but 
        not below zero) by the amount which bears the same ratio to the 
        amount which would be so taken into account as the excess (if 
        any) of--
                    ``(A) the household income of the taxpayer for such 
                taxable year over 400 percent of the poverty line, 
                bears to
                    ``(B) the amount equal to 500 percent of the 
                poverty line minus the amount equal to 400 percent of 
                the poverty line.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible student.--The term `eligible student' means, 
        with respect to any academic period, any individual who--
                    ``(A) meets the requirements of section 484(a)(1) 
                of the Higher Education Act of 1965 (20 U.S.C. 
                1091(a)(1)), as in effect on the date of the enactment 
                of the Taxpayer Relief Act of 1997, and
                    ``(B) in the case of a student enrolled in a degree 
                program, is carrying at least \1/2\ the normal full-
                time work load for the course of study the student is 
                pursuing.
            ``(2) Qualified tuition and related expenses.--The term 
        `qualified tuition and related expenses' means tuition, fees, 
        and costs of course materials--
                    ``(A) for education during the taxable year with 
                respect to the attendance at an eligible educational 
                institution during any academic period beginning in 
                such taxable year of--
                            ``(i) the taxpayer,
                            ``(ii) the taxpayer's spouse, or
                            ``(iii) any dependent of the taxpayer with 
                        respect to whom the taxpayer is allowed a 
                        deduction under section 151, and
                    ``(B) for a course of instruction from an eligible 
                provider to acquire or improve job skills of the 
                individual during the taxable year (for education 
                furnished during any academic period beginning in such 
                taxable year).
            ``(3) Eligible educational institution.--The term `eligible 
        educational institution' means an institution--
                    ``(A) which is described in section 481 of the 
                Higher Education Act of 1965, as in effect on the date 
                of the enactment of the Taxpayer Relief Act of 1997, 
                and
                    ``(B) which is eligible to participate in a program 
                under title IV of the Higher Education Act of 1965.
            ``(4) Poverty line.--
                    ``(A) In general.--The term `poverty line' has the 
                meaning given that term in section 2110(c)(5) of the 
                Social Security Act (42 U.S.C. 1397jj(c)(5)) with 
                respect to the taxpayer's family of the size involved.
                    ``(B) Poverty line used.--The poverty line used 
                shall be the most recently published poverty line as of 
                the 1st day of the regular enrollment period for 
                coverage during such calendar year.
            ``(5) Eligible provider.--The term `eligible provider' 
        means provider of training services (within the meaning of 
        section 134(d)(4)(D) of the Workforce Investment Act of 1998) 
        (29 U.S.C. 2864(d)(4)(D)) who is identified in accordance with 
        section 122(e)(3) of such Act (29 U.S.C. 2842(e)(3)).
    ``(d) Special Rules.--
            ``(1) Identification requirements.--No credit shall be 
        allowed under subsection (a) to a taxpayer with respect to an 
        eligible student unless the taxpayer includes on the return of 
        tax for the taxable year--
                    ``(A) the name and social security number of such 
                student, and
                    ``(B) the employer identification number, name, and 
                address of any institution or eligible provider to 
                which tuition, fees, and costs of course materials were 
                paid with respect to such student.
            ``(2) Adjustment for certain scholarships.--The expenses 
        otherwise taken into account under subsection (a) with respect 
        to an individual for an academic period shall be reduced 
        (before the application of subsections (a) and (b)) by the sum 
        of any amounts paid for the benefit of such individual which 
        are allocable to such period as--
                    ``(A) a qualified scholarship which is excludable 
                from gross income under section 117,
                    ``(B) an educational assistance allowance under 
                chapter 30, 31, 32, 34, or 35 of title 38, United 
                States Code, or under chapter 1606 of title 10, United 
                States Code,
                    ``(C) a Federal Pell Grant or a Federal 
                supplemental educational opportunity grant under 
                subparts 1 and 3, respectively, of part A of title IV 
                of the Higher Education Act of 1965 (20 U.S.C. 1070a 
                and 1070b et seq., respectively), and
                    ``(D) a payment (other than a gift, bequest, 
                devise, or inheritance within the meaning of section 
                102(a)) for such student'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.
            ``(3) Treatment of expenses paid by dependent.--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--
                    ``(A) no credit shall be allowed under subsection 
                (a) to such individual for such individual's taxable 
                year, and
                    ``(B) amounts paid by such individual during such 
                individual's taxable year shall be treated for purposes 
                of this section as paid by such other taxpayer.
            ``(4) Treatment of certain prepayments.--If tuition, fees, 
        or costs of course materials 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.
            ``(5) Denial of double benefit.--No credit shall be allowed 
        under this section for any expense for which deduction is 
        allowed under any other provision of this chapter.
            ``(6) No credit for married individuals filing separate 
        returns.--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.
            ``(7) Nonresident aliens.--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.
            ``(8) Supporting information.--No expense shall be taken 
        into account under this section for a taxable year unless the 
        taxpayer submits with the return of tax for the taxable year 
        information supporting such expense.
    ``(e) Election Not To Have Section Apply.--A taxpayer may elect not 
to have this section apply with respect to the expenses of an 
individual for any taxable year.
    ``(f) Verification and Confirmation of Certain Information.--In 
carrying out this section, the Secretary shall utilize information from 
the Secretary of Education to confirm and verify information relating 
to educational institutions and students, including the Integrated 
Postsecondary Education Data System and the National Student Loan Data 
System.
    ``(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 expense which was taken into account in determining the amount 
of such credit.''.
    (b) Repeal of Deduction for Qualified Tuition and Related 
Expenses.--
            (1) In general.--Part VII of subchapter B of chapter 1 of 
        such Code (relating to additional itemized deductions for 
        individuals) is amended by striking section 222.
            (2) Clerical amendment.--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.
    (c) Information Returns.--
            (1) In general.--Section 6050S(e) of such Code is amended 
        by striking ``subsection (g)(2)'' and inserting ``subsection 
        (d)(2)''.
            (2) Attendance.--Paragraph (2) of section 6050S(b) of such 
        Code is amended by redesignating subparagraph (C) as 
        subparagraph (D) and by inserting after subparagraph (B) the 
        following new subparagraph:
                    ``(C) the status of the individual for each 
                academic period of the year for which payments are 
                received as--
                            ``(i) a full-time or part-time student,
                            ``(ii) if a part-time student, whether the 
                        individual is at least half time, and
                            ``(iii) whether the student is a graduate 
                        student.''.
    (d) Omission of Identification Information and Number of Years 
Credit Is Claimed Treated as Mathematical or Clerical Error.--
Subparagraph (J) of section 6213(g)(2) of such Code is amended to read 
as follows:
                    ``(J) in the case of information required under 
                section 25A (relating to higher education obtainment 
                credit)--
                            ``(i) an omission of a correct social 
                        security number and employer identification 
                        number of any institution required to be 
                        included on a return under subsection (d)(1) of 
                        such section, and
                            ``(ii) an entry on the return claiming the 
                        credit in violation of the limitation under 
                        subsection (b)(1) of such return,''.
    (e) Conforming Amendments.--
            (1) Section 62(a) of such Code is amended by striking 
        paragraph (18).
            (2) Subparagraph (A) of section 86(b)(2) of such Code is 
        amended by striking ``222,''.
            (3) Subparagraph (B) of section 72(t)(7) of such Code is 
        amended by striking ``section 25A(g)(2)'' and inserting 
        ``section 25A(d)(2)''.
            (4) Subparagraph (A) of section 135(c)(4) of such Code is 
        amended by striking ``222,''.
            (5) Subparagraph (A) of section 137(b)(3) of such Code is 
        amended by striking ``222,''.
            (6) Subparagraph (A) of section 199(d)(2) of such Code is 
        amended by striking ``222,''.
            (7) Clause (ii) of section 219(g)(3)(A) of such Code is 
        amended by striking ``222,''.
            (8) Clause (i) of section 221(b)(2)(C) of such Code is 
        amended by striking ``222,''.
            (9) Clause (iii) of section 469(i)(3)(F) of such Code is 
        amended by striking ``221, and 222'' and inserting ``and 221''.
            (10) Subsection (d) of section 221 of such Code is 
        amended--
                    (A) by striking ``section 25A(g)(2)'' in paragraph 
                (2)(B) and inserting ``section 25A(d)(2)'', and
                    (B) by striking ``section 25A(f)(2)'' in the second 
                sentence of paragraph (2) and inserting ``section 
                25A(c)(3)''.
            (11) Section 221(d)(3) of such Code is amended by striking 
        ``section 25A(b)(3)'' and inserting ``section 25A(c)(3)''.
            (12) Subclause (I) of section 529(c)(3)(B)(v) of such Code 
        is amended by striking ``section 25A(g)(2)'' and inserting 
        ``25A(d)(2)''.
            (13) Clause (i) of section 529(e)(3)(B) of such Code is 
        amended by striking ``section 25A(b)(3)'' and inserting 
        ``section 221(c)(3)''.
            (14) Subclause (I) of section 530(d)(2)(C)(i) of such Code 
        is amended by striking ``section 25A(g)(2)'' and inserting 
        ``section 25A(d)(2)''.
            (15) Clause (iii) of section 530(d)(4)(B) of such Code is 
        amended by striking ``section 25A(g)(2)'' and inserting 
        ``25A(d)(2)''.
            (16) Section 1400O of such Code is amended by adding at the 
        end the following flush sentence:
``For purposes of this section, any reference to section 25A shall be 
treated as a reference to such section as in effect on the day before 
the date of the enactment of this sentence.''.
            (17) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 25A and inserting the following:

``Sec. 25A. Higher education and skills obtainment credit.''.
    (f) Sense of Congress.--It is the sense of Congress that any 
savings in revenues resulting from the enactment of this section shall 
be applied to the currently projected Pell Grant funding shortfall 
beginning in 2015 and to deficit reduction.
    (g) Effective Date.--The amendments made by this section shall 
apply to expenses paid after December 31, 2013, for education furnished 
in academic periods beginning after such date.
                                 <all>