I
106TH CONGRESS
1ST SESSION
H. R. 3119
To amend the Internal Revenue Code of 1986 to exclude from gross income
certain stipends paid as part of a State program under which individuals
who have attained age 60 perform essentially volunteer services specified
by the program.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 20, 1999
Mr. NEAL of Massachusetts 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
from gross income certain stipends paid as part of a
State program under which individuals who have attained
age 60 perform essentially volunteer services specified
by the program.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. EXCLUSION FROM GROSS INCOME FOR STI-
PENDS RECEIVED FOR ESSENTIALLY VOLUN-
TEER 
SERVICES 
PERFORMED 
UNDER 
A
STATE PROGRAM.
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
items specifically excluded from gross income) is amended
by inserting after section 138 the following new section:
‘‘SEC. 138A. CERTAIN STIPENDS RECEIVED UNDER STATE
PROGRAMS BY INDIVIDUALS WHO HAVE AT-
TAINED AGE 60.
‘‘(a) IN GENERAL.—Gross income shall not include
amounts received by an individual who has attained age
60 from a qualified State program for services performed
under such program.
‘‘(b) QUALIFIED STATE PROGRAM.—For purposes of
this section, the term ‘qualified State program’ means any
program established by State law if—
‘‘(1) the program consists of assigning individ-
uals who have attained age 60 to perform volunteer
services for nonprofit and nonsectarian entities,
‘‘(2) the individuals participating in the pro-
gram must commit to performing volunteer services
under the program for at least 48 hours a month,
‘‘(3) the individuals receive no compensation
other than from such program for such services,
‘‘(4) State law limits the maximum compensa-
tion that an individual may receive under the pro-
gram to the earnings limitation under section 203 of
the Social Security Act, and
‘‘(5) substantially all of the funds for such pro-
gram are provided by the State.
‘‘(c) DENIAL OF CERTAIN DEDUCTIONS.—Unless the
taxpayer elects not to have this section apply for any tax-
able year, no deduction shall be allowed under this chapter
for any amount which is otherwise allowable as a deduc-
tion by reason of performing services under a qualified
State program.’’
(b) EXCLUSION FROM EMPLOYMENT TAXES.—
(1)(A) Paragraph (18) of section 3121(a) of
such Code is amended by striking ‘‘or 129’’ and in-
serting ‘‘, 129, or 138A’’.
(B) Paragraph (15) of section 209(a) of the So-
cial Security Act is amended by striking ‘‘or 129’’
and inserting ‘‘, 129, or 138A’’.
(2) Paragraph (13) of section 3306(b) of such
Code is amended by striking ‘‘or 129’’ and inserting
‘‘, 129, or 138A’’.
(3) Paragraph (18) of section 3401(a) of such
Code is amended by striking ‘‘or 129’’ and inserting
‘‘, 129, or 138A’’.
(c) CLERICAL AMENDMENT.—The table of sections
for part III of subchapter B of chapter 1 of such Code
is amended by inserting after the item relating to section
138 the following new item:
‘‘Sec. 138A. Certain stipends received under State programs by
individuals who have attained age 60.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
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