I 

108TH CONGRESS 

1ST SESSION H. R. 3251

To amend the Internal Revenue Code of 1986 to increase and enhance 

the Hope Scholarship Credit and to repeal the Lifetime Learning Credit. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 7, 2003

Mr. MCDERMOTT (for himself, Mr. GEORGE MILLER of California, Mr. MATSUI, and Mr. KILDEE) introduced the following bill; which was referred 

to the Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to increase 

and enhance the Hope Scholarship Credit and to repeal 

the Lifetime Learning Credit.

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 ‘‘Personal Access to 

5 Continued Education Act of 2003’’. 

6 SEC. 2. HOPE SCHOLARSHIP CREDIT MADE REFUNDABLE; 

7 REPEAL OF LIFETIME LEARNING CREDIT. 

8 (a) HOPE CREDIT TO BE REFUNDABLE.—Section 

9 25A of the Internal Revenue Code of 1986 (relating to 
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1 Hope and Lifetime Learning credits) is hereby moved to 

2 subpart C of part IV of subchapter A of chapter 1 of such 

3 Code (relating to refundable credits) and inserted after 

4 section 35. 

5 (b) REPEAL OF LIFETIME LEARNING CREDIT.—Sub6 section (a) of section 36 of such Code (as moved by sub7 section (a) and redesignated by subsection (c)) is amended 

8 by striking ‘‘the sum of—’’ and all that follows and insert9 ing ‘‘the Hope Scholarship Credit.’’. 

10 (c) TECHNICAL AMENDMENTS.—

11 (1) Section 36 of such Code is redesignated as 

12 section 37. 

13 (2) Section 25A of such Code (as moved by 

14 subsection (a)) is redesignated as section 36. 

15 (3) Section 36 of such Code (as redesignated by 

16 paragraph (2)) is amended as follows: 

17 (A) Such section is amended by striking 

18 subsection (c) and redesignating subsections (d) 

19 through (i) as subsections (c) through (h), re20 spectively. 

21 (B) Subsection (f)(2)(A) of such section 

22 (as amended by subparagraph (A)) is amended 

23 by striking ‘‘(b), (c), and (d)’’ and inserting 

24 ‘‘(b) and (c)’’. 
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1 (C) Subsection (g)(2)(A) of such section 

2 (as amended by subparagraph (A)) is amended 

3 by striking ‘‘subsection (d)(2)’’ and inserting 

4 ‘‘subsection (c)(2)’’. 

5 (4) Paragraph (1) of section 36(a) of such Code 

6 (as redesignated by paragraph (2)) is amended by 

7 striking ‘‘this chapter’’ and inserting ‘‘this subtitle’’. 

8 (5) Subparagraph (B) of section 72(t)(7) of 

9 such Code is amended by striking ‘‘section 

10 25A(g)(2)’’ and inserting ‘‘section 36(f)(2)’’. 

11 (6) Subparagraph (A) of section 135(d)(2) of 

12 such Code is amended by striking ‘‘section 25A’’ and 

13 inserting ‘‘section 36’’. 

14 (7) Section 221(e) of such Code is amended—

15 (A) in paragraph (2)(B), by striking ‘‘sec16 tion 25A(g)(2)’’ and inserting ‘‘section 

17 36(f)(2)’’ and by striking ‘‘section 25A(f)(2)’’ 

18 and inserting ‘‘section 36(e)(2)’’, and 

19 (B) in paragraph (3), by striking ‘‘section 

20 25A(b)(3)’’ and inserting ‘‘section 36(b)(3)’’. 

21 (8) Section 222 of such Code is amended—

22 (A) in subsection (c)(2)(A) by striking 

23 ‘‘section 25A’’ and inserting ‘‘36’’, and 

24 (B) in subsection (d)(1)—
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1 (i) by striking ‘‘section 25A(f)’’ and 

2 inserting ‘‘section 36(e)’’, and 

3 (ii) by striking ‘‘section 25A(g)(2)’’ 

4 and inserting ‘‘36(f)(2)’’. 

5 (9) Section 529 of such Code is amended—

6 (A) in subsection (c)(3)(B)(v)(I) by strik7 ing ‘‘section 25A(g)(2)’’ and inserting ‘‘section 

8 36(f)(2)’’, 

9 (B) in subsection (c)(3)(B)(v)(II) by strik10 ing ‘‘section 25A’’ and inserting ‘‘section 36’’, 

11 and 

12 (C) in subsection (e)(3)(B)(i) by striking 

13 ‘‘section 25A(b)(3)’’ and inserting ‘‘section 

14 36(b)(3)’’. 

15 (10) Section 530(d) of such Code is amended—

16 (A) in paragraph (2)(C)(i)(I) by striking 

17 ‘‘section 25A(g)(2)’’ and inserting ‘‘section 

18 36(f)(2)’’, 

19 (B) in paragraph (2)(C)(i)(II) by striking 

20 ‘‘section 25A’’ and inserting ‘‘section 36’’, and 

21 (C) in paragraph (4)(B)(iii) by striking 

22 ‘‘section 25A(g)(2)’’ and inserting ‘‘section 

23 36(f)(2)’’.

24 (11) Subsection (e) of section 6050S of such 

25 Code is amended by striking ‘‘section 25A (without 
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1 regard to subsection (g)(2) thereof)’’ and inserting 

2 ‘‘section 36 (without regard to subsection (f)(2) 

3 thereof)’’. 

4 (12) Subparagraph (J) of section 6213(g)(2) of 

5 such Code is amended by striking ‘‘section 

6 25A(g)(1)’’ and inserting ‘‘section 36(f)(1)’’. 

7 (13) Paragraph (2) of section 1324(b) of title 

8 31, United States Code, is amended by inserting ‘‘or 

9 36’’ after ‘‘section 35’’. 

10 (14) The heading for section 36 of such Code 

11 is amended to read as follows: 

12 ‘‘SEC. 36. HOPE SCHOLARSHIP CREDIT.’’. 

13 (15) The table of sections for subpart C of part 

14 IV of subchapter A of chapter 1 of the Internal Rev15 enue Code of 1986 is amended by striking the item 

16 relating to section 36 and inserting the following:

‘‘Sec. 36. Hope and Lifetime Learning credits. 

‘‘Sec. 37. Overpayments of tax.’’

17 (16) The table of sections for subpart A of such 

18 part IV is amended by striking the item relating to 

19 section 25A. 

20 (d) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to taxable years beginning after 

22 December 31, 2004. 
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1 SEC. 3. EXPANSION OF HOPE SCHOLARSHIP CREDIT. 

2 (a) ELIGIBLE STUDENT.—Paragraph (3) of section 

3 36(b) of the Internal Revenue Code of 1986 (as amended 

4 by section 2) is amended to read as follows: 

5 ‘‘(3) ELIGIBLE STUDENT.—For purposes of 

6 this section— 

7 ‘‘(A) IN GENERAL.—Except as provided in 

8 subparagraph (B), the term ‘eligible student’ 

9 means, with respect to any academic period, a 

10 student who meets the requirements of section 

11 484(a)(1) of the Higher Education Act of 1965 

12 (20 U.S.C. 1091(a)(1)), as in effect on the date 

13 of the enactment of this section. 

14 ‘‘(B) SPECIAL RULE FOR JOB SKILLS

15 COURSES.—In the case of any course of instruc16 tion at an eligible educational institution to ac17 quire or improve job skills of the individual, 

18 such term means the individual.’’. 

19 (b) REPEAL OF LIMITATIONS RELATING TO CREDIT

20 ALLOWED ONLY FOR FIRST 2 YEARS OF POSTSECONDARY

21 EDUCATION AND CONVICTIONS FOR CERTAIN OF22 FENSES.—Paragraph (2) of section 36(b) of such Code 

23 (as amended by section 2) is amended by striking subpara24 graphs (C) and (D). 

25 (c) INCREASE IN CREDIT AMOUNT.—
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1 (1) IN GENERAL.—Paragraph (1) of section 

2 36(b) of such Code (as amended by section 2) is 

3 amended—

4 (A) in subparagraph (A) by striking 

5 ‘‘$1,000’’ and inserting ‘‘$1,500’’, and 

6 (B) in subparagraph (B) by striking ‘‘ap7 plicable limit’’ and inserting ‘‘$2,500’’. 

8 (2) INFLATION ADJUSTMENT.—Subparagraph 

9 (A) of section 36(h)(1) of such Code (as amended by 

10 section 2) is amended—

11 (A) by striking ‘‘2001’’ and inserting 

12 ‘‘2005’’, and 

13 (B) by striking ‘‘$1,000’’ and inserting 

14 ‘‘dollar’’. 

15 (d) HOPE SCHOLARSHIP CREDIT NOT REDUCED BY

16 FEDERAL PELL GRANTS AND SUPPLEMENTAL EDU17 CATIONAL OPPORTUNITY GRANTS.—Subsection (f) of sec18 tion 36 of such Code (as amended by section 2) is amend19 ed by adding at the end the following new paragraph: 

20 ‘‘(8) PELL AND SEOG GRANTS.—For purposes 

21 of the Hope Scholarship Credit, paragraph (2) shall 

22 not apply to amounts paid for an individual as a 

23 Federal Pell Grant or a Federal supplemental edu24 cational opportunity grant under subparts 1 and 3, 

25 respectively, of part A of title IV of the Higher Edu-
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1 cation Act of 1965 (20 U.S.C. 1070a and 1070b et 

2 seq., respectively).’’. 

3 (e) QUALIFIED TUITION AND RELATED EXPENSES

4 EXPANDED TO INCLUDE BOOKS, SUPPLIES, EQUIPMENT, 

5 AND JOB SKILL COURSES.—

6 (1) IN GENERAL.—Paragraph (1) of section 

7 36(e) of such Code (as amended by section 2)) is 

8 amended by adding at the end the following new 

9 subparagraphs: 

10 ‘‘(D) ADDITIONAL EXPENSES ALLOWED

11 FOR HOPE SCHOLARSHIP CREDIT.—For pur12 poses of the Hope Scholarship Credit, such 

13 term shall include fees, books, supplies, and 

14 equipment required for courses of instruction at 

15 the eligible educational institution. 

16 ‘‘(E) JOB SKILLS COURSES.—Such term 

17 shall include expenses described in subpara18 graph (A) (determined after the application of 

19 subparagraphs (B) and (C)) with respect to any 

20 course of instruction at an eligible educational 

21 institution to acquire or improve job skills of 

22 the individual.’’. 

23 (2) EXPANDED HOPE EXPENSES NOT SUBJECT

24 TO INFORMATION REPORTING REQUIREMENTS.—

25 Subsection (e) of section 6050S of such Code (as 
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1 amended by section 2) is amended by striking ‘‘sub2 section (f)(2)’’ and inserting ‘‘subsections (e)(1)(D) 

3 and (e)(2)’’. 

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

5 this section shall apply to taxable years beginning after 

6 December 31, 2004.

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