[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3697 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3697

  To amend the Internal Revenue Code of 1986 to exclude certain post 
 graduation scholarship grants from gross income in the same manner as 
           qualified scholarships to promote economic growth.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 29, 2018

Mr. Peters (for himself and Mrs. Capito) 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 certain post 
 graduation scholarship grants from gross income in the same manner as 
           qualified scholarships to promote economic growth.

    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 ``Workforce Development Through Post-
Graduation Scholarships Act of 2018''.

SEC. 2. POST-GRADUATION SCHOLARSHIP GRANTS EXCLUDED FROM GROSS INCOME 
              IN SAME MANNER AS QUALIFIED SCHOLARSHIPS.

    (a) In General.--Section 117(a) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking the period at the end and inserting ``, 
        or'';
            (2) by striking ``any amount received'' and inserting the 
        following: ``any amount which--
            ``(1) is received''; and
            (3) by adding at the end the following new paragraph:
            ``(2) is a post-graduation scholarship grant received by or 
        paid on behalf of an individual.''.
    (b) Post-Graduation Scholarship Grant.--Section 117(b) of such Code 
is amended by redesignating paragraph (2) as paragraph (3) and by 
inserting after paragraph (1) the following new paragraph:
            ``(2) Post-graduation scholarship grant.--
                    ``(A) In general.--The term `post-graduation 
                scholarship grant' means any grant program--
                            ``(i) which is established by an 
                        organization which--
                                    ``(I) is described in section 
                                501(c)(3) and exempt from tax under 
                                section 501(a), and
                                    ``(II) is either a private 
                                foundation (other than a private 
                                foundation established by an 
                                organization described in section 
                                170(b)(1)(A)(ii) or an organization 
                                described in section 170(b)(1)(A)(iii) 
                                the principal purpose or function of 
                                which is the provision of medical 
                                education) or a community trust 
                                described in section 170(b)(1)(A)(vi),
                            ``(ii) which requires a grantee to live and 
                        work in an applicable community, and
                            ``(iii) under which, in accordance with the 
                        conditions of a grant, such organization repays 
                        any portion of an applicable education loan 
                        incurred by an individual.
                    ``(B) Applicable community.--For purposes of 
                subparagraph (A)(ii), the term `applicable community' 
                means any area that--
                            ``(i) is--
                                    ``(I) a low-income community (as 
                                determined under section 45D(e)), or
                                    ``(II) a county that has, during 
                                the 10-year period ending with the year 
                                in which the most recent census was 
                                conducted, a net out-migration of 
                                inhabitants from the county of the 
                                population of the county at the 
                                beginning of such period, and
                            ``(ii) has a bachelor's degree attainment 
                        rate for the population of 25-34 year-olds that 
                        is below the national average for such 
                        population (as determined based on data 
                        collected by the Census Bureau).
                    ``(C) Applicable education loan.--For purposes of 
                subparagraph (A)(iii), the term `applicable education 
                loan' means, with respect to any individual, a 
                qualified education loan (as defined in section 
                221(d)(1)) incurred to pay qualified higher education 
                expenses (as defined in section 221(d)(2)) of such 
                individual.''.
    (c) Amount Not Treated as Taxable Expenditure by Private 
Foundation.--Section 4945(g) of such Code is amended by striking ``or'' 
at the end of paragraph (2), by striking the period at the end of 
paragraph (3) and inserting ``, or'', and by adding at the end the 
following new paragraph:
            ``(4) the grant is a post-graduation scholarship grant (as 
        defined in section 117(b)(2)).''.
    (d) Denial of Double Benefit.--Section 221(e) of such Code is 
amended by redesignating paragraphs (2) and (3) as paragraphs (3) and 
(4), respectively, and by inserting after paragraph (1) the following 
new paragraph:
            ``(2) Denial of double benefit in case of post-graduation 
        scholarship grants.--Any interest which is paid as part of a 
        post-graduation scholarship grant and excluded from gross 
        income under section 117 shall not be taken into account under 
        this section.''.
    (e) Regulatory Authority.--Section 117 of such Code is amended by 
adding at the end the following new subsection:
    ``(e) Regulations.--The Secretary shall prescribe such reporting 
requirements and regulations as may be necessary or appropriate to 
carry out subsection (a)(2), including--
            ``(1) regulations defining under what conditions an 
        individual is considered to live and work in a community for 
        purposes of subsection (b)(2)(A)(2), and
            ``(2) regulations to ensure the implementation and 
        effectiveness of such subsection.''.
    (f) Effective Date.--The amendments made by this section shall 
apply with respect to taxable years beginning after the date of 
enactment of this Act.
    (g) Reports.--
            (1) Secretary of treasury.--Not later than 3 years after 
        the date of the enactment of this Act, and periodically 
        thereafter, the Secretary of the Treasury, or the Secretary's 
        delegate, shall submit to Congress a report on the 
        implementation and effectiveness of the amendments made by this 
        section.
            (2) Comptroller general.--
                    (A) In general.--Not later than 5 years after the 
                date of enactment of this Act, the Comptroller General 
                of the United States shall publish the result of a 
                study on post-graduation scholarship grants to which 
                section 117 of the Internal Revenue Code of 1986 (as 
                amended by this section) applies.
                    (B) Contents.--The information published under 
                subparagraph (A) shall include the following:
                            (i) A description of the characteristics of 
                        individuals who receive post-graduation 
                        scholarship grants.
                            (ii) The length of time involved in such 
                        grants.
                            (iii) The amount paid out under such 
                        grants.
                            (iv) The disposition of any funds paid 
                        under such grants, including the identity of 
                        any loan holders who benefit from such funds.
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