To amend the Internal Revenue Code of 1986 to increase and enhance the Hope Scholarship Credit and to repeal the Lifetime Learning Credit.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Personal Access to Continued 
Education Act of 2003''.

SEC. 2. HOPE SCHOLARSHIP CREDIT MADE REFUNDABLE; REPEAL OF LIFETIME 
              LEARNING CREDIT.

    (a) Hope Credit To Be Refundable.--Section 25A of the Internal 
Revenue Code of 1986 (relating to Hope and Lifetime Learning credits) 
is hereby moved to subpart C of part IV of subchapter A of chapter 1 of 
such Code (relating to refundable credits) and inserted after section 
35.
    (b) Repeal of Lifetime Learning Credit.--Subsection (a) of section 
36 of such Code (as moved by subsection (a) and redesignated by 
subsection (c)) is amended by striking ``the sum of--'' and all that 
follows and inserting `` the Hope Scholarship Credit.''.
    (c) Technical Amendments.--
            (1) Section 36 of such Code is redesignated as section 37.
            (2) Section 25A of such Code (as moved by subsection (a)) 
        is redesignated as section 36.
            (3) Section 36 of such Code (as redesignated by paragraph 
        (2)) is amended as follows:
                    (A) Such section is amended by striking subsection 
                (c) and redesignating subsections (d) through (i) as 
                subsections (c) through (h), respectively.
                    (B) Subsection (f)(2)(A) of such section (as 
                amended by subparagraph (A)) is amended by striking 
                ``(b), (c), and (d)'' and inserting ``(b) and (c)''.
                    (C) Subsection (g)(2)(A) of such section (as 
                amended by subparagraph (A)) is amended by striking 
                ``subsection (d)(2)'' and inserting ``subsection 
                (c)(2)''.
            (4) Paragraph (1) of section 36(a) of such Code (as 
        redesignated by paragraph (2)) is amended by striking ``this 
        chapter'' and inserting ``this subtitle''.
            (5) Subparagraph (B) of section 72(t)(7) of such Code is 
        amended by striking ``section 25A(g)(2)'' and inserting 
        ``section 36(f)(2)''.
            (6) Subparagraph (A) of section 135(d)(2) of such Code is 
        amended by striking ``section 25A'' and inserting ``section 
        36''.
            (7) Section 221(e) of such Code is amended--
                    (A) in paragraph (2)(B), by striking ``section 
                25A(g)(2)'' and inserting ``section 36(f)(2)'' and by 
                striking ``section 25A(f)(2)'' and inserting ``section 
                36(e)(2)'', and
                    (B) in paragraph (3), by striking ``section 
                25A(b)(3)'' and inserting ``section 36(b)(3)''.
            (8) Section 222 of such Code is amended--
                    (A) in subsection (c)(2)(A) by striking ``section 
                25A'' and inserting ``36'', and
                    (B) in subsection (d)(1)--
                            (i) by striking ``section 25A(f)'' and 
                        inserting ``section 36(e)'', and
                            (ii) by striking ``section 25A(g)(2)'' and 
                        inserting ``36(f)(2)''.
            (9) Section 529 of such Code is amended--
                    (A) in subsection (c)(3)(B)(v)(I) by striking 
                ``section 25A(g)(2)'' and inserting ``section 
                36(f)(2)'',
                    (B) in subsection (c)(3)(B)(v)(II) by striking 
                ``section 25A'' and inserting ``section 36'', and
                    (C) in subsection (e)(3)(B)(i) by striking 
                ``section 25A(b)(3)'' and inserting ``section 
                36(b)(3)''.
            (10) Section 530(d) of such Code is amended--
                    (A) in paragraph (2)(C)(i)(I) by striking ``section 
                25A(g)(2)'' and inserting ``section 36(f)(2)'',
                    (B) in paragraph (2)(C)(i)(II) by striking 
                ``section 25A'' and inserting ``section 36'', and
                    (C) in paragraph (4)(B)(iii) by striking ``section 
                25A(g)(2)'' and inserting ``section 36(f)(2)''.
            (11) Subsection (e) of section 6050S of such Code is 
        amended by striking ``section 25A (without regard to subsection 
        (g)(2) thereof)'' and inserting ``section 36 (without regard to 
        subsection (f)(2) thereof)''.
            (12) Subparagraph (J) of section 6213(g)(2) of such Code is 
        amended by striking ``section 25A(g)(1)'' and inserting 
        ``section 36(f)(1)''.
            (13) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``or 36'' after ``section 
        35''.
            (14) The heading for section 36 of such Code is amended to 
        read as follows:

``SEC. 36. HOPE SCHOLARSHIP CREDIT.''.

            (15) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the item relating to section 36 and 
        inserting the following:

                              ``Sec. 36. Hope and Lifetime Learning 
                                        credits.
                              ``Sec. 37. Overpayments of tax.''
            (16) The table of sections for subpart A of such part IV is 
        amended by striking the item relating to section 25A.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004.

SEC. 3. EXPANSION OF HOPE SCHOLARSHIP CREDIT.

    (a) Eligible Student.--Paragraph (3) of section 36(b) of the 
Internal Revenue Code of 1986 (as amended by section 2) is amended to 
read as follows:
            ``(3) Eligible student.--For purposes of this section--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `eligible student' means, 
                with respect to any academic period, a student who 
                meets the requirements of section 484(a)(1) of the 
                Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as 
                in effect on the date of the enactment of this section.
                    ``(B) Special rule for job skills courses.--In the 
                case of any course of instruction at an eligible 
                educational institution to acquire or improve job 
                skills of the individual, such term means the 
                individual.''.
    (b) Repeal of Limitations Relating to Credit Allowed Only for First 
2 Years of Postsecondary Education and Convictions for Certain 
Offenses.--Paragraph (2) of section 36(b) of such Code (as amended by 
section 2) is amended by striking subparagraphs (C) and (D).
    (c) Increase in Credit Amount.--
            (1) In general.--Paragraph (1) of section 36(b) of such 
        Code (as amended by section 2) is amended--
                    (A) in subparagraph (A) by striking ``$1,000'' and 
                inserting ``$1,500'', and
                    (B) in subparagraph (B) by striking ``applicable 
                limit'' and inserting ``$2,500''.
            (2) Inflation adjustment.--Subparagraph (A) of section 
        36(h)(1) of such Code (as amended by section 2) is amended--
                    (A) by striking ``2001'' and inserting ``2005'', 
                and
                    (B) by striking ``$1,000'' and inserting 
                ``dollar''.
    (d) Hope Scholarship Credit Not Reduced by Federal Pell Grants and 
Supplemental Educational Opportunity Grants.--Subsection (f) of section 
36 of such Code (as amended by section 2) 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).''.
    (e) Qualified Tuition and Related Expenses Expanded to Include 
Books, Supplies, Equipment, and Job Skill Courses.--
            (1) In general.--Paragraph (1) of section 36(e) of such 
        Code (as amended by section 2)) is amended by adding at the end 
        the following new subparagraphs:
                    ``(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.
                    ``(E) Job skills courses.--Such term shall include 
                expenses described in subparagraph (A) (determined 
                after the application of subparagraphs (B) and (C)) 
                with respect to any course of instruction at an 
                eligible educational institution to acquire or improve 
                job skills of the individual.''.
            (2) Expanded hope expenses not subject to information 
        reporting requirements.--Subsection (e) of section 6050S of 
        such Code (as amended by section 2) is amended by striking 
        ``subsection (f)(2)'' and inserting ``subsections (e)(1)(D) and 
        (e)(2)''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004.

Summary: Personal Access to Continued Education Act of 2003 - Amends the Internal Revenue Code to: (1) repeal the Lifetime Learning Credit; (2) make the Hope Credit refundable; (3) increase the Hope Credit; (4) specify that such credit shall not be reduced by either Pell grants or supplemental educational opportunity grants; and (5) allow additional qualifying expenses for such credit, including job skills courses.