[Congressional Record Volume 141, Number 2 (Thursday, January 5, 1995)]
[Extensions of Remarks]
[Page E55]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                  SCHOLARSHIPS NEED TAX EXEMPT STATUS

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                           HON. BILL EMERSON

                              of missouri

                    in the house of representatives
                       Thursday, January 5, 1995
  Mr. EMERSON. Mr. Speaker, teachers in every State compete annually 
for the prized Christa McAuliffe Fellowship. This prize, named after 
the teacher who gave her life in the explosion of the space shuttle 
Challenger, was created by Congress in 1986. The fellowship is given to 
outstanding teachers across the country to improve their knowledge and 
teaching skills and to use innovative methods in their classrooms to 
teach their children.
  When the Congress created the Christa McAuliffe Fellowship, it had 
the good sense to exempt these moneys from taxation: The fellowship is 
not truly personal income and it should not be treated as such. 
Moreover, if the fellowship is treated as personal income, it could 
well push the recipient into a higher tax bracket than he or she would 
normally fall.
  For some reason, we allowed the tax exclusion of the Christa 
McAuliffe Fellowship to expire in 1990. Thus, if a teacher receives a 
fellowship and devotes those funds to school projects, he or she must 
pay the taxes out-of-pocket. One recipient told me she did not know of 
the tax implications at the time she applied for the fellowship. Had 
she been aware of the personal costs she would incur, she would have 
seriously reconsidered applying for the fellowship in the first place.
  Today, I am introducing legislation to restore prior law and once 
again exclude the Christa McAuliffe Fellowship from the recipient's 
income. Taxing these fellowships doesn't help teachers, it doesn't help 
students, and it doesn't help education as a whole.


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