II 

116TH CONGRESS 

1ST SESSION S. 676 

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 

MARCH 6, 2019 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Workforce Develop5 ment Through Post-Graduation Scholarships Act of 

6 2019’’. 


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1 SEC. 2. POST-GRADUATION SCHOLARSHIP GRANTS EX2 CLUDED FROM GROSS INCOME IN SAME MAN3 NER AS QUALIFIED SCHOLARSHIPS. 

4 (a) IN GENERAL.—Section 117(a) of the Internal 

5 Revenue Code of 1986 is amended— 

6 (1) by striking the period at the end and insert7 ing ‘‘, or’’, 

8 (2) by striking ‘‘any amount received’’ and in9 serting the following: ‘‘any amount which— 

10 ‘‘(1) is received’’, and 

11 (3) by adding at the end the following new 

12 paragraph: 

13 ‘‘(2) is a post-graduation scholarship grant re14 ceived by or paid on behalf of an individual.’’. 

15 (b) POST-GRADUATION SCHOLARSHIP GRANT.—Sec16 tion 117(b) of such Code is amended by redesignating 

17 paragraph (2) as paragraph (3) and by inserting after 

18 paragraph (1) the following new paragraph: 

19 ‘‘(2) POST-GRADUATION SCHOLARSHIP

20 GRANT.— 

21 ‘‘(A) IN GENERAL.—The term ‘post-grad22 uation scholarship grant’ means any grant pro23 gram— 

24 ‘‘(i) which is established by an organi25 zation which— 


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1 ‘‘(I) is described in section 

2 501(c)(3) and exempt from tax under 

3 section 501(a) (other than an organi4 zation established by an organization 

5 described in section 170(b)(1)(A)(ii) 

6 or an organization described in section 

7 170(b)(1)(A)(iii) the principal purpose 

8 or function of which is the provision 

9 of medical education), and 

10 ‘‘(II) is either a private founda11 tion or a community trust described 

12 in section 170(b)(1)(A)(vi), 

13 ‘‘(ii) which requires a grantee to live 

14 and work in an applicable community, and 

15 ‘‘(iii) under which, in accordance with 

16 the conditions of a grant, such organiza17 tion repays any portion of an applicable 

18 education loan incurred by an individual. 

19 ‘‘(B) APPLICABLE COMMUNITY.—For pur20 poses of subparagraph (A)(ii), the term ‘appli21 cable community’ means any area that— 

22 ‘‘(i) is— 

23 ‘‘(I) a low-income community (as 

24 determined under section 45D(e)), or 


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1 ‘‘(II) a county that has, during 

2 the 10-year period ending with the 

3 year in which the most recent census 

4 was conducted, a net out-migration of 

5 inhabitants from the county of the 

6 population of the county at the begin7 ning of such period, and 

8 ‘‘(ii) has a bachelor’s degree attain9 ment rate for the population of 25–34 

10 year-olds that is below the national average 

11 for such population (as determined based 

12 on data collected by the Census Bureau). 

13 ‘‘(C) APPLICABLE EDUCATION LOAN.—For 

14 purposes of subparagraph (A)(iii), the term ‘ap15 plicable education loan’ means, with respect to 

16 any individual, a qualified education loan (as 

17 defined in section 221(d)(1)) incurred to pay 

18 qualified higher education expenses (as defined 

19 in section 221(d)(2)) of such individual.’’. 

20 (c) AMOUNT NOT TREATED AS TAXABLE EXPENDI21 TURE BY PRIVATE FOUNDATION.—Section 4945(g) of 

22 such Code is amended by striking ‘‘or’’ at the end of para23 graph (2), by striking the period at the end of paragraph 

24 (3) and inserting ‘‘, or’’, and by adding at the end the 

25 following new paragraph: 


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1 ‘‘(4) the grant is a post-graduation scholarship 

2 grant (as defined in section 117(b)(2)).’’. 

3 (d) DENIAL OF DOUBLE BENEFIT.—Section 221(e) 

4 of such Code is amended by redesignating paragraphs (2) 

5 and (3) as paragraphs (3) and (4), respectively, and by 

6 inserting after paragraph (1) the following new paragraph: 

7 ‘‘(2) DENIAL OF DOUBLE BENEFIT IN CASE OF

8 POST-GRADUATION SCHOLARSHIP GRANTS.—Any in9 terest which is paid as part of a post-graduation 

10 scholarship grant and excluded from gross income 

11 under section 117 shall not be taken into account 

12 under this section.’’. 

13 (e) REGULATORY AUTHORITY.—Section 117 of such 

14 Code is amended by adding at the end the following new 

15 subsection: 

16 ‘‘(e) REGULATIONS.—The Secretary shall prescribe 

17 such reporting requirements and regulations as may be 

18 necessary or appropriate to carry out subsection (a)(2), 

19 including— 

20 ‘‘(1) regulations defining under what conditions 

21 an individual is considered to live and work in a 

22 community for purposes of subsection (b)(2)(A)(ii), 

23 and 

24 ‘‘(2) regulations to ensure the implementation 

25 and effectiveness of such subsection.’’. 


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1 (f) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply with respect to taxable years begin3 ning after the date of enactment of this Act. 

4 (g) REPORTS.— 

5 (1) SECRETARY OF TREASURY.—Not later than 

6 3 years after the date of the enactment of this Act, 

7 and periodically thereafter, the Secretary of the 

8 Treasury, or the Secretary’s delegate, shall submit 

9 to Congress a report on the implementation and ef10 fectiveness of the amendments made by this section. 

11 (2) COMPTROLLER GENERAL.— 

12 (A) IN GENERAL.—Not later than 5 years 

13 after the date of enactment of this Act, the 

14 Comptroller General of the United States shall 

15 publish the result of a study on post-graduation 

16 scholarship grants to which section 117 of the 

17 Internal Revenue Code of 1986 (as amended by 

18 this section) applies. 

19 (B) CONTENTS.—The information pub20 lished under subparagraph (A) shall include the 

21 following: 

22 (i) A description of the characteristics 

23 of individuals who receive post-graduation 

24 scholarship grants. 


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1 (ii) The length of time involved in 

2 such grants. 

3 (iii) The amount paid out under such 

4 grants. 

5 (iv) The disposition of any funds paid 

6 under such grants, including the identity 

7 of any loan holders who benefit from such 

8 funds. 

Æ 


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