Title: Workforce Development Through Post-Graduation Scholarships Act of 2019
Policy area: Taxation

Summary:
Workforce Development Through Post-Graduation Scholarships Act of 2019
This bill modifies the requirements for calculating taxable income to exclude post-graduation scholarship grants from gross income in the same manner as scholarships are currently excluded. A "post-graduation scholarship grant" is a grant provided by a program that is established by certain tax-exempt organizations, is designed to encourage individuals to serve in occupations of unmet needs or in areas of unmet need, and that repays any portion of an education loan incurred by an individual.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4038 Introduced in House (IH)]

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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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Workforce Development Through Post-
Graduation Scholarships Act of 2019''.

SEC. 2. POST-GRADUATION SCHOLARSHIP GRANTS EXCLUDED FROM GROSS INCOME 
              IN SAME MANNER AS QUALIFIED SCHOLARSHIPS.

    (a) In General.--Section 117(a) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking the period at the end and inserting ``, 
        or'';
            (2) by striking ``any amount received'' and inserting the 
        following: ``any amount which--
            ``(1) is received''; and
            (3) by adding at the end the following new paragraph:
            ``(2) is a post-graduation scholarship grant received by or 
        paid on behalf of an individual.''.
    (b) Post-Graduation Scholarship Grant.--Section 117(b) of such Code 
is amended by redesignating paragraph (2) as paragraph (3) and by 
inserting after paragraph (1) the following new paragraph:
            ``(2) Post-graduation scholarship grant.--
                    ``(A) In general.--The term `post-graduation 
                scholarship grant' means any grant program--
                            ``(i) which is established by an 
                        organization which--
                                    ``(I) is described in section 
                                501(c)(3) and exempt from tax under 
                                section 501(a), and
                                    ``(II) is either a private 
                                foundation (other than a private 
                                foundation established by an 
                                organization described in section 
                                170(b)(1)(A)(ii) or an organization 
                                described in section 170(b)(1)(A)(iii) 
                                the principal purpose or function of 
                                which is the provision of medical 
                                education) or a community trust 
                                described in section 170(b)(1)(A)(vi),
                            ``(ii) which is designed to encourage 
                        individuals to serve in occupations of unmet 
                        needs or in areas of unmet needs (as such terms 
                        are used in section 108(f)(2)(D)(ii)), and
                            ``(iii) under which, in accordance with the 
                        conditions of a grant, such organization repays 
                        any portion of an applicable education loan 
                        incurred by an individual.
                    ``(B) Applicable education loan.--For purposes of 
                subparagraph (A)(iii), the term `applicable education 
                loan' means, with respect to any individual, a 
                qualified education loan (as defined in section 
                221(d)(1)) incurred to pay qualified higher education 
                expenses (as defined in section 221(d)(2)) of such 
                individual.''.
    (c) Amount Not Treated as Taxable Expenditure by Private 
Foundation.--Section 4945(g) of such Code is amended by striking ``or'' 
at the end of paragraph (2), by striking the period at the end of 
paragraph (3) and inserting ``, or'', and by adding at the end the 
following new paragraph:
            ``(4) the grant is a post-graduation scholarship grant (as 
        defined in section 117(b)(2)).''.
    (d) Denial of Double Benefit.--Section 221(e) of such Code is 
amended by redesignating paragraphs (2) and (3) as paragraphs (3) and 
(4), respectively, and by inserting after paragraph (1) the following 
new paragraph:
            ``(2) Denial of double benefit in case of post-graduation 
        scholarship grants.--Any interest which is paid as part of a 
        post-graduation scholarship grant and excluded from gross 
        income under section 117 shall not be taken into account under 
        this section.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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