II 

108TH CONGRESS 

2D SESSION S. 2087

To amend the Internal Revenue Code of 1986 to expand the Hope Scholarship 

and Lifetime Learning Credits. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 12, 2004

Mr. GRAHAM of Florida 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 expand 

the Hope Scholarship and Lifetime Learning Credits.

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

3 SECTION 1. HOPE SCHOLARSHIP CREDIT. 

4 (a) EXPANSION OF CREDIT.—

5 (1) IN GENERAL.—Section 25A(b) of the Inter6 nal Revenue Code of 1986 (relating to Hope Schol7 arship Credit) is amended—

8 (A) in paragraph (1), by striking ‘‘the sum 

9 of’’ and all that follows and inserting ‘‘100 per10 cent of so much of the qualified tuition and re-
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1 lated expenses paid by the taxpayer during the 

2 taxable year (for education furnished to the eli3 gible student during any academic period begin4 ning in such taxable year) as does not exceed 

5 $2,500.’’, 

6 (B) in paragraph (2)(A), by striking ‘‘2’’ 

7 in the text and in the heading and inserting 

8 ‘‘4’’, 

9 (C) in paragraph (2)(C), by striking ‘‘2’’ 

10 in the text and in the heading and inserting 

11 ‘‘4’’, and 

12 (D) by striking paragraph (4). 

13 (2) CONFORMING AMENDMENTS.—Section 

14 25A(h)(1)(A) of such Code (relating to inflation ad15 justments) is amended—

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

17 ‘‘2004’’, 

18 (B) by striking ‘‘each of the $1,000 

19 amounts’’ and inserting ‘‘the $2,500 amount’’, 

20 and 

21 (C) by striking ‘‘2000’’ and inserting 

22 ‘‘2003’’. 

23 (b) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to taxable years beginning after 

25 December 31, 2003. 
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1 SEC. 2. REFUNDABILITY OF HOPE AND LIFETIME LEARN2 ING CREDIT. 

3 (a) REFUNDABLE CREDIT.—

4 (1) IN GENERAL.—Section 25A of the Internal 

5 Revenue Code of 1986 is hereby moved to subpart 

6 C of part IV of subchapter A of chapter 1 of such 

7 Code (relating to refundable credits) and inserted 

8 after section 35. 

9 (2) TECHNICAL AMENDMENTS.—

10 (A) Section 36 of such Code is redesig11 nated as section 37. 

12 (B) Section 25A of such Code (as moved 

13 by subsection (a)) is redesignated as section 36. 

14 (C) Paragraph (1) of section 36(a) of such 

15 Code (as redesignated by paragraph (2)) is 

16 amended by striking ‘‘this chapter’’ and insert17 ing ‘‘this subtitle’’. 

18 (D) Section 36 of such Code (as so redes19 ignated) is amended by redesignating sub20 section (i) as subsection (j) and by inserting 

21 after subsection (h) the following new sub22 section: 

23 ‘‘(i) COORDINATION WITH ADVANCE PAYMENT.—

24 With respect to any taxable year, the amount which would 

25 (but for this subsection) be allowed as a credit to the tax26 payer under subsection (a) shall be reduced (but not below 
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1 zero) by the aggregate amount paid on behalf of such tax2 payer under section 7528 for such taxable year.’’. 

3 (E) Subparagraph (B) of section 72(t)(7) 

4 of such Code is amended by striking ‘‘section 

5 25A(g)(2)’’ and inserting ‘‘section 36(g)(2)’’. 

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

7 of such Code is amended by striking ‘‘section 

8 25A’’ and inserting ‘‘section 36’’. 

9 (G) Section 221(d) of such Code is 

10 amended—

11 (i) by striking ‘‘section 25A(g)(2)’’ in 

12 paragraph (2)(B) and inserting ‘‘section 

13 36(g)(2)’’, 

14 (ii) by striking ‘‘section 25A(f)(2)’’ in 

15 paragraph (2)(B) and inserting ‘‘section 

16 36(f)(2)’’, and 

17 (iii) by striking ‘‘section 25A(b)(3)’’ 

18 in paragraph (3) and inserting ‘‘section 

19 36(b)(3)’’. 

20 (H) Section 222 of such Code is 

21 amended—

22 (i) by striking ‘‘section 25A’’ in sub23 paragraph (A) of subsection (c)(2) and in24 serting ‘‘section 36’’, 
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1 (ii) by striking ‘‘section 25A(f)’’ in 

2 subsection (d)(1) and inserting ‘‘section 

3 36(f)’’, and 

4 (iii) by striking ‘‘section 25A(g)(2)’’ 

5 in subsection (d)(1) and inserting ‘‘section 

6 36(g)(2)’’. 

7 (I) Section 529 of such Code is amended—

8 (i) by striking ‘‘section 25A(g)(2)’’ in 

9 subclause (I) of subsection (c)(3)(B)(v) 

10 and inserting ‘‘section 36(g)(2)’’, 

11 (ii) by striking ‘‘section 25A’’ in sub12 clause (II) of subsection (c)(3)(B)(v) and 

13 inserting ‘‘section 36’’, and 

14 (iii) by striking ‘‘section 25A(b)(3)’’ 

15 in clause (i) of subsection (e)(3)(B) and in16 serting ‘‘section 36(b)(3)’’. 

17 (J) Section 530 of such Code is 

18 amended—

19 (i) by striking ‘‘section 25A(g)(2)’’ in 

20 subclause (I) of subsection (d)(2)(C)(i) and 

21 inserting ‘‘section 36(g)(2)’’, 

22 (ii) by striking ‘‘section 25A’’ in sub23 clause (II) of subsection (d)(2)(C)(i) and 

24 inserting ‘‘section 36’’, and 
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•S 2087 IS 

1 (iii) by striking ‘‘section 25A(g)(2)’’ 

2 in clause (iii) of subsection (d)(4)(B) and 

3 inserting ‘‘section 36(g)(2)’’. 

4 (K) Subsection (e) of section 6050S of 

5 such Code is amended by striking ‘‘section 

6 25A’’ and inserting ‘‘section 36’’. 

7 (L) Subparagraph (J) of section 

8 6213(g)(2) of such Code is amended by striking 

9 ‘‘section 25A(g)(1)’’ and inserting ‘‘section 

10 36(g)(1)’’. 

11 (M) Paragraph (2) of section 1324(b) of 

12 title 31, United States Code, is amended by in13 serting before the period ‘‘or from section 36 of 

14 such Code’’. 

15 (N) The table of sections for subpart C of 

16 part IV of subchapter A of chapter 1 of such 

17 Code is amended by striking the item relating 

18 to section 36 and inserting the following:

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

‘‘Sec. 37. Overpayments of tax.’’.

19 (O) The table of sections for subpart A of 

20 part IV of such Code is amended by striking 

21 the item relating to section 25A. 

22 (b) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to taxable years beginning after 

24 December 31, 2003.
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1 SEC. 3. ADVANCE PAYMENT OF CREDIT FOR HOPE SCHOL2 ARSHIP AND LIFETIME LEARNING. 

3 (a) IN GENERAL.—Chapter 77 of the Internal Rev4 enue Code of 1986 (relating to miscellaneous provisions) 

5 is amended by redesignating section 7528 as section 7529 

6 and inserting after section 7527 the following new section: 

7 ‘‘SEC. 7528. ADVANCE PAYMENT OF CREDIT FOR HOPE 

8 SCHOLARSHIP AND LIFETIME LEARNING. 

9 ‘‘(a) GENERAL RULE.—Not later than August 1, 

10 2004, the Secretary shall establish a program for making 

11 payments on behalf of certified individuals to eligible edu12 cational institutions (as defined in section 36(f)(2)) for 

13 such individuals. 

14 ‘‘(b) LIMITATION ON ADVANCE PAYMENTS DURING

15 ANY TAXABLE YEAR.—The Secretary may make pay16 ments under subsection (a) only to the extent that the 

17 total amount of such payments made on behalf of any indi18 vidual during the taxable year does not exceed the quali19 fied tuition and related expenses (within the meaning of 

20 section 36(f)(1)) incurred by such individual at such eligi21 ble educational institution during the taxable year. 

22 ‘‘(c) CERTIFIED INDIVIDUAL.—For purposes of this 

23 section, the term ‘certified individual’ means any indi24 vidual for whom a qualified education costs credit eligi25 bility certificate is in effect. 
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1 ‘‘(d) QUALIFIED EDUCATION COSTS CREDIT ELIGI2 BILITY CERTIFICATE.—For purposes of this section, the 

3 term ‘qualified education costs credit eligibility certificate’ 

4 means any written statement that an individual has in5 curred costs which are qualified tuition and related ex6 penses (within the meaning of section 36(f)(1)) if such 

7 statement provides such information as the Secretary may 

8 require for purposes of this section.’’. 

9 (b) DISCLOSURE OF RETURN INFORMATION FOR

10 PURPOSES OF CARRYING OUT A PROGRAM FOR ADVANCE

11 PAYMENT OF CREDIT FOR HOPE SCHOLARSHIP AND

12 LIFETIME LEARNING.—

13 (1) IN GENERAL.—Subsection (l) of section 

14 6103 of such Code (relating to disclosure of returns 

15 and return information for purposes other than tax 

16 administration) is amended by adding at the end the 

17 following new paragraph: 

18 ‘‘(21) DISCLOSURE OF RETURN INFORMATION

19 FOR PURPOSES OF CARRYING OUT A PROGRAM FOR

20 ADVANCE PAYMENT OF CREDIT FOR HOPE SCHOLAR21 SHIP AND LIFETIME LEARNING.—The Secretary may 

22 disclose to educational institutions for any certified 

23 individual (as defined in section 7528(c)) return in24 formation with respect to such certified individual 

25 only to the extent necessary to carry out the pro-
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1 gram established by section 7528 (relating to ad2 vance payment of credit for hope scholarship and 

3 lifetime learning).’’. 

4 (2) PROCEDURES AND RECORDKEEPING RE5 LATED TO DISCLOSURES.—Subsection (p) of such 

6 section is amended—

7 (A) in paragraph (3)(A) by striking ‘‘or 

8 (18)’’ and inserting ‘‘(18), or (21)’’, and 

9 (B) in paragraph (4) by striking ‘‘or (20)’’ 

10 and inserting ‘‘(20), or (21)’’ each place it ap11 pears. 

12 (3) UNAUTHORIZED INSPECTION OF RETURNS

13 OR RETURN INFORMATION.—Section 

14 7213A(a)(1)(B) of such Code is amended by striking 

15 ‘‘(l)(18) or (n)’’ and inserting ‘‘(l)(18), (l)(19), or 

16 (n)’’. 

17 (c) INFORMATION REPORTING.—

18 (1) IN GENERAL.—Subpart B of part III of 

19 subchapter A of chapter 61 of the Internal Revenue 

20 Code of 1986 (relating to information concerning 

21 transactions with other persons) is amended by in22 serting after section 6050S the following new sec23 tion: 
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1 ‘‘SEC. 6050U. RETURNS RELATING TO CREDIT FOR HOPE 

2 SCHOLARSHIP AND LIFETIME LEARNING. 

3 ‘‘(a) REQUIREMENT OF REPORTING.—Every person 

4 who is entitled to receive payments for any month of any 

5 calendar year under section 7528 (relating to advance pay6 ment of credit for hope scholarship and lifetime learning) 

7 with respect to any certified individual (as defined in sec8 tion 7528(c)) shall, at such time as the Secretary may pre9 scribe, make the return described in subsection (b) with 

10 respect to each such individual. 

11 ‘‘(b) FORM AND MANNER OF RETURNS.—A return 

12 is described in this subsection if such return—

13 ‘‘(1) is in such form as the Secretary may pre14 scribe, and 

15 ‘‘(2) contains—

16 ‘‘(A) the name, address, and TIN of each 

17 individual referred to in subsection (a), 

18 ‘‘(B) the number of months for which 

19 amounts were entitled to be received with re20 spect to such individual under section 7528 (re21 lating to advance payment of credit for hope 

22 scholarship and lifetime learning), 

23 ‘‘(C) the amount entitled to be received for 

24 each such year, and 

25 ‘‘(D) such other information as the Sec26 retary may prescribe. 
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1 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID2 UALS WITH RESPECT TO WHOM INFORMATION IS RE3 QUIRED.—Every person required to make a return under 

4 subsection (a) shall furnish to each individual whose name 

5 is required to be set forth in such return a written state6 ment showing—

7 ‘‘(1) the name and address of the person re8 quired to make such return and the phone number 

9 of the information contact for such person, and 

10 ‘‘(2) the information required to be shown on 

11 the return with respect to such individual. 

12 The written statement required under the preceding sen13 tence shall be furnished on or before January 31 of the 

14 year following the calendar year for which the return 

15 under subsection (a) is required to be made.’’. 

16 (2) ASSESSABLE PENALTIES.—

17 (A) Subparagraph (B) of section 

18 6724(d)(1) of such Code (relating to defini19 tions) is amended by redesignating clauses (xii) 

20 through (xviii) as clauses (xiii) through (xiv), 

21 respectively, and by inserting after clause (xi) 

22 the following new clause: 

23 ‘‘(xii) section 6050U (relating to re24 turns relating to credit for hope scholar25 ship and lifetime learning),’’. 
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1 (B) Paragraph (2) of section 6724(d) of 

2 such Code is amended by striking ‘‘or’’ at the 

3 end of subparagraph (AA), by striking the pe4 riod at the end of subparagraph (BB) and in5 serting ‘‘, or’’, and by adding after subpara6 graph (BB) the following new subparagraph: 

7 ‘‘(CC) section 6050U (relating to returns 

8 relating to credit for hope scholarship and life9 time learning).’’. 

10 (d) CLERICAL AMENDMENTS.—

11 (1) ADVANCE PAYMENT.—The table of sections 

12 for chapter 77 of the Internal Revenue Code of 1986 

13 is amended by adding at the end the following new 

14 item:

‘‘Sec. 7528. Advance payment of credit for hope scholarship and 

lifetime learning.’’.

15 (2) INFORMATION REPORTING.—The table of 

16 sections for subpart B of part III of subchapter A 

17 of chapter 61 of such Code is amended by inserting 

18 after the item relating to section 6050S the fol19 lowing new item:

‘‘Sec. 6050U. Returns relating to credit for hope scholarship and 

lifetime learning.’’.

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

21 this section shall take effect on the date of the enactment 

22 of this Act.

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