H. R. 4038
IN THE HOUSE OF REPRESENTATIVES
July 25, 2019
Mr. LaHood (for himself and Ms. Sewell of Alabama) introduced the following bill; which was referred to the Committee on Ways and Means
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.
This Act may be cited as the
Workforce Development Through Post-Graduation Scholarships Act of 2019.
Post-graduation scholarship grants excluded from gross income in same manner as qualified scholarships
Section 117(a) of the Internal Revenue Code of 1986 is amended—
by striking the period at the end and inserting
any amount received and inserting the following:
any amount which—
by adding at the end the following new paragraph:
is a post-graduation scholarship grant received by or paid on behalf of an individual.
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:
Post-graduation scholarship grant
The term post-graduation scholarship grant means any grant program—
which is established by an organization which—
is described in section 501(c)(3) and exempt from tax under section 501(a), and
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),
which is designed to encourage individuals to serve in occupations of unmet needs or in areas of unmet needs (as such terms are used in section 108(f)(2)(D)(ii)), and
under which, in accordance with the conditions of a grant, such organization repays any portion of an applicable education loan incurred by an individual.
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.
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:
the grant is a post-graduation scholarship grant (as defined in section 117(b)(2)).
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:
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.
The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.