To amend the Public Health Service Act and the Internal Revenue Code to help solve the worsening shortage of registered nurses in hospitals and continuing care settings, and for other purposes.

Summary: Nurse of Tomorrow Act of 2001 - Amends the Public Health Service Act to authorize the Secretary of Health and Human services to make grants for: (1) nurse recruitment and retention; (2) basic nurse education; and (3) nurse education encouragement.Amends the Internal Revenue Code to: (1) provide a refundable tax credit for certain nurses; and (2) exclude from gross income certain amounts received under the nurse loan repayment program.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Nurse of Tomorrow Act of 2001''.

SEC. 2. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

    (a) Nurse Retention and Recruitment.--
            (1) In general.--Title VIII of the Public Health Service 
        Act (42 U.S.C. 296 et seq.) is amended by inserting at the end 
        the following:

               ``PART H--NURSE RETENTION AND RECRUITMENT

``SEC. 851. NURSE RECRUITMENT AND RETENTION GRANTS.

    ``(a) In General.--The Secretary may award grants to hospitals, 
nursing facilities, home health agencies, and hospices that are 
experiencing shortages in nursing personnel to meet the costs of--3.
            ``(1) providing skills training and career development of 
        nurses to encourage them to work in clinical specialty areas 
        experiencing shortages;
            ``(2) providing grants to encourage nurses to upgrade their 
        skills to enable them to work in clinical specialty areas 
        experiencing shortages;
            ``(3) providing tuition reimbursement for nurses who pursue 
        study towards a bachelors degree, masters degree, or PHD in 
        nursing or for other health care workers who pursue associate 
        degrees in nursing;
            ``(4) providing grants to support externships and 
        internships for student nurses;
            ``(5) providing grants to train nurses who have not been 
        practicing nursing for a period of at least five years and who 
        make a commitment to work for a multiyear period; and
            ``(6) creating other nurse retention and recruitment 
        strategies the Secretary deems appropriate.
    ``(b) Preference.--In awarding grants under this section, the 
Secretary shall give preference to applicants in financial need as 
demonstrated by low or negative operating margins.''.
            (2) Authorization of appropriations.--Section 841 of the 
        Public Health Service Act (42 U.S.C. 297q) is amended by adding 
        at the end the following:
    ``(f) Part H.--For the purposes of carrying out part H, there are 
authorized to be appropriated $100,000,000 for fiscal year 2002, and 
such sums as may be necessary for each of the fiscal years 2003 through 
2006.''.
    (b) Strengthening Capacity for Basic Nurse Education and 
Practice.--
            (1) In general.--Part D of title VIII of the Public Health 
        Service Act (42 U.S.C. 296p et seq.) is amended by inserting at 
        the end the following sections:

``SEC. 832. BASIC NURSE EDUCATION EXPANSION GRANTS.

    ``(a) In General.--The Secretary may award grants to and enter into 
contracts with schools of nursing, including single-purpose degree or 
certificate granting institutions for nursing affiliated with hospitals 
for the purpose of expanding the number of students provided basic 
nurse education at such schools.
    ``(b) Preference.--In awarding grants under this section, the 
Secretary shall give preference to applicants that--
            ``(1) have demonstrated the ability to recruit and create a 
        diverse student body;
            ``(2) provide remedial education to help students with 
        diverse needs and backgrounds to master the language, reading, 
        math, and computer skills necessary to attain a license;
            ``(3) provide the Secretary with a plan to recruit nurse 
        aides, licensed practical nurses, and other health care 
        workers;
            ``(4) provide the Secretary with a plan to build 
        technologically modern classrooms and laboratories to enable 
        students to learn the latest technologies, including medical 
        error reduction technologies; and
            ``(5) provide the Secretary with a detailed plan to 
        substantially expand the number of students enrolled in the 
        school over a four-year period.

``SEC. 833. NURSE EDUCATION ENCOURAGEMENT GRANTS.

    ``The Secretary may award grants to State departments of health, 
State departments of education, collegiate schools of nursing, 
associate degree schools of nursing, diploma schools of nursing, 
hospital, home health, hospice, or nursing facility or other 
professional associations, hospitals, or nursing facilities to enable 
such entities to work with local school districts to develop programs 
to encourage secondary school students to choose nursing as a 
profession.''.
            (2) Authorization of Appropriations.--Section 841 of the 
        Public Health Service Act (42 U.S.C. 297q), as amended by 
        subsection (a)(2) of this section, is amended--
                    (A) in subsection (a), by striking ``parts B, C, 
                and D'' and inserting the following: ``parts B and C 
                and section 831 of part D''; and
                    (B) by adding at the end the following subsection:
    ``(g) Certain Programs Under Part D.--For the purpose of carrying 
out sections 832 and 833 of part D, there are authorized to be 
appropriated $100,000,000 for fiscal year 2002, and such sums as may be 
necessary for each of the fiscal years 2003 through 2006.''.
    (c) Loan Repayment Program.--Section 846(g) of the Public Health 
Service Act (42 U.S.C. 297n(g)) is amended by striking ``there are 
authorized'' and all that follows and inserting the following: ``there 
is authorized to be appropriated $5,000,000 for each of the fiscal 
years 2002 through 2006.''.

SEC. 3. AMENDMENT TO INTERNAL REVENUE CODE OF 1986.

    (a) Refundable Credit for Certain Nurses.--
            (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 35 as 
        section 36 and by inserting after section 34 the following new 
        section:

``SEC. 35. CERTAIN NURSES.

    ``(a) In General.--In the case of an individual who is an eligible 
nurse at any time during the taxable year, there shall be allowed as a 
credit against the tax imposed by this subtitle the amount determined 
under subsection (b).
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of credit determined under 
        this subsection for a taxable year is $2,000.
            ``(2) Partial years.--In the case of an individual who is 
        an eligible nurse for less than an entire taxable year, the 
        amount of credit determined under this subsection is the amount 
        which bears the same ratio to $2,000 as the number of days 
        during the taxable year that the individual is such a nurse 
        bears to 365.
    ``(c) Eligible Nurse.--For purposes of this section, the term 
`eligible nurse' means any individual who is employed as a nurse at--
            ``(1) a hospital;
            ``(2) a skilled nursing facility (as defined in section 
        1819(a) of the Social Security Act);
            ``(3) a nursing facility (as defined in section 1919(a) of 
        the Social Security Act);
            ``(4) a home health agency (as defined in section 1861 of 
        the Social Security Act); or
            ``(5) a hospice program (as defined in section 1861 of the 
        Social Security Act).''.
            (2) Conforming amendments.--
                    (A) Paragraph (2) of section 1324(b) of title 31, 
                United States Code, is amended by inserting before the 
                period ``, or from section 35 of such Code''.
                    (B) The table of sections for subpart C of part IV 
                of subchapter A of chapter 1 of such Code is amended by 
                striking the last item and inserting the following new 
                items:

                              ``Sec. 35. Certain nurses.
                              ``Sec. 36. Overpayments of tax.''.
            (3) Effective Date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 2001.
    (b) Exclusion From Gross Income of Amounts Received Under Nurse 
Loan Repayment Program.--
            (1) In general.--Section 117 of the Internal Revenue Code 
        of 1986 is amended by adding at the end the following new 
        subsection:
    ``(e) Certain nurse loan payments under public health service 
act.--Gross income shall not include any amount received under section 
846 of the Public Health Service Act.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to amounts received by an individual in taxable 
        years beginning after December 31, 2001.