I 

116TH CONGRESS 

1ST SESSION H. R. 4038 

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 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 

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), and 

4 ‘‘(II) is either a private founda5 tion (other than a private foundation 

6 established by an organization de7 scribed in section 170(b)(1)(A)(ii) or 

8 an organization described in section 

9 170(b)(1)(A)(iii) the principal purpose 

10 or function of which is the provision 

11 of medical education) or a community 

12 trust described in section 

13 170(b)(1)(A)(vi), 

14 ‘‘(ii) which is designed to encourage 

15 individuals to serve in occupations of 

16 unmet needs or in areas of unmet needs 

17 (as such terms are used in section 

18 108(f)(2)(D)(ii)), and 

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

20 the conditions of a grant, such organiza21 tion repays any portion of an applicable 

22 education loan incurred by an individual. 

23 ‘‘(B) APPLICABLE EDUCATION LOAN.—For 

24 purposes of subparagraph (A)(iii), the term ‘ap25 plicable education loan’ means, with respect to 


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1 any individual, a qualified education loan (as 

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

3 qualified higher education expenses (as defined 

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

5 (c) AMOUNT NOT TREATED AS TAXABLE EXPENDI6 TURE BY PRIVATE FOUNDATION.—Section 4945(g) of 

7 such Code is amended by striking ‘‘or’’ at the end of para8 graph (2), by striking the period at the end of paragraph 

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

10 following new paragraph: 

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

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

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

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

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

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

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

18 POST-GRADUATION SCHOLARSHIP GRANTS.—Any in19 terest which is paid as part of a post-graduation 

20 scholarship grant and excluded from gross income 

21 under section 117 shall not be taken into account 

22 under this section.’’. 


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

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

Æ 


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