Personal Access to Continued Education Act of 2003

108th CONGRESS
1st Session

H. R. 3251

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

IN THE HOUSE OF REPRESENTATIVES

October 7, 2003

Mr. MCDERMOTT (for himself, Mr. GEORGE MILLER of California, Mr. MATSUI, and Mr. KILDEE) 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 increase and enhance the Hope Scholarship Credit and to repeal the Lifetime Learning Credit.

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 `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.'.

(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

(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

(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).

(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.

END