```

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1697 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                S. 1697

     To amend the Internal Revenue Code of 1986 to allow the Hope 
Scholarship Credit to cover fees, books, supplies, and equipment and to 
    exempt Federal Pell Grants and Federal supplemental educational 
 opportunity grants from reducing expenses taken into account for the 
                        Hope Scholarship Credit.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 14, 2005

Mr. Smith (for himself and Mr. Bingaman) 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 allow the Hope 
Scholarship Credit to cover fees, books, supplies, and equipment and to 
    exempt Federal Pell Grants and Federal supplemental educational 
 opportunity grants from reducing expenses taken into account for the 
                        Hope Scholarship Credit.

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

SECTION 1. EXPANSION OF EDUCATIONAL EXPENSES ALLOWED AS PART OF HOPE 
              SCHOLARSHIP CREDIT.

    (a) Qualified Tuition and Related Expenses Expanded to Include 
Books, Supplies, and Equipment.--Paragraph (1) of section 25A(f) of the 
Internal Revenue Code of 1986 (defining qualified tuition and related 
expenses) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Additional expenses allowed for hope 
                scholarship credit.--For purposes of the Hope 
                Scholarship Credit, such term shall include fees, 
                books, supplies, and equipment required for courses of 
                instruction at the eligible educational institution.''.
    (b) Hope Scholarship Credit Not Reduced by Federal Pell Grants and 
Supplemental Educational Opportunity Grants.--Subsection (g) of section 
25A of such Code (relating to special rules) is amended by adding at 
the end the following new paragraph:
            ``(8) Pell and seog grants.--For purposes of the Hope 
        Scholarship Credit, paragraph (2) shall not apply to amounts 
        paid for an individual as a Federal Pell Grant or a Federal 
        supplemental educational opportunity grant under subparts 1 and 
        3, respectively, of part A of title IV of the Higher Education 
        Act of 1965 (20 U.S.C. 1070a and 1070b et seq., 
        respectively).''.
    (c) Expanded Hope Expenses Not Subject to Information Reporting 
Requirements.--Subsection (e) of section 6050S of such Code (relating 
to definitions) is amended by striking ``subsection (g)(2)'' and 
inserting ``subsections (f)(1)(D) and (g)(2)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses paid after December 31, 2004 (in tax years ending 
after such date), for education furnished in academic periods beginning 
after such date.
                                 <all>
```