,i #aacth ,,congress #ast ,session ,h4 ,r4 #cdcg ,,in ,,the ,,house ,,of ,,representatives ,october #cj1 #bjac,ms4 ,schwartz introduced the following bill2 which was referred to the ,committee on ,ways and ,means1 and in addition to the ,committee on ,education and the ,workforce1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to consolidate1 with modifications1 the ,hope ,scholarship ,credit1 the ,lifetime ,learning ,credit1 and the ,american ,opportunity ,tax ,credit1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,college ,affordability ,act of #bjac4 #b4 ,consolidation of education credits with modifications 7a7 ,in general ,section #be;,a of the ,internal ,revenue ,code of #aihf is amended to read as follows3 #be;,a4 ,american opportunity tax credit 7a7 ,allowance of credit ,in the case of an individual1 there shall be allowed as a credit against the tax imposed by this chapter for the taxable year the amount equal to #ajj percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year 7for education furnished to the eligible student during any academic period beginning in such taxable year7 as does not exceed #b1ejj4 7b7 ,lifetime limitation on aggregate credit ,in the case of qualified tuition and related expenses with respect to any individual1 the aggregate amount of the credits claimed under this section for all taxable years shall not exceed #aj1jjj1 determined without regard to whether-- 7#a7 such credits are claimed on the return of tax filed by the individual or by another taxpayer1 or 7#b7 such expenses are treated as paid by the individual or by another taxpayer4 7c7 ,limitation based on modified adjusted gross income 7#a7 ,in general ,the amount which would 7but for this subsection7 be taken into account under this section for the taxable year shall be reduced 7but not below zero7 by the amount determined under paragraph 7#b74 7#b7 ,amount of reduction ,the amount determined under this paragraph is the amount which bears the same ratio to the amount which would be so taken into account as-- 7,a7 the excess of-- 7i7 the taxpayer's modified adjusted gross income for such taxable year1 over 7ii7 #hj1jjj 7twice such amount in the case of a joint return71 bears to 7,b7 #aj1jjj 7#bj1jjj in the case of a joint return74 7#c7 ,modified adjusted gross income ,for purposes of this subsection1 the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section #iaa1 #ica1 or #icc4 7d7 ,other limitations 7#a7 ,credit allowed for year only if individual is at least time student for portion of year ,the credit under this section shall not be allowed for a taxable year with respect to the qualified tuition and related expenses of an individual unless such individual is an eligible student for at least one academic period which begins during such year4 7#b7 ,denial of credit if student convicted of a felony drug offense ,the credit under subsection 7a7 shall not be allowed for qualified tuition and related expenses for the enrollment or attendance of a student for any academic period if such student has been convicted of a ,federal or ,state felony offense consisting of the possession or distribution of a controlled substance before the end of the taxable year with or within which such period ends4 7e7 ,definitions ,for purposes of this section3 7#a7 ,eligible student ,the term eligible student means1 with respect to any academic period1 a student who-- 7,a7 meets the requirements of section #dhd7;a77#a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajia7;a77#a771 as in effect on ,august #e1 #aiig1 and 7,b7 is carrying at least the normal full-time work load for the course of study the student is pursuing4 7#b7 ,qualified tuition and related expenses 7,a7 ,in general ,the term qualified tuition and related expenses means tuition1 fees1 and course materials required for the enrollment or attendance of-- 7i7 the taxpayer1 7ii7 the taxpayer's spouse1 or 7iii7 any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section #aea1 at an eligible educational institution for courses of instruction of such individual at such institution4 7,b7 ,exception for education involving sports1 etc ,such term does not include expenses with respect to any course or other education involving sports1 games1 or hobbies1 unless such course or other education is part of the individual's degree program4 7,c7 ,exception for nonacademic fees ,such term does not include student activity fees1 athletic fees1 insurance expenses1 or other expenses unrelated to an individual's academic course of instruction4 7#c7 ,eligible educational institution ,the term eligible educational institution means an institution-- 7,a7 which is described in section #dha of the ,higher ,education ,act of #aife1 as in effect on ,august #e1 #aiig1 and 7,b7 which is eligible to participate in a program under title ,,iv of such ,act4 7f7 ,other limitations and special rules ,for purposes of this section3 7#a7 ,identification requirement ,no credit shall be allowed under this section to a taxpayer with respect to the qualified tuition and related expenses of an individual unless the taxpayer includes the name and taxpayer identification number of such individual on the return of tax for the taxable year4 7#b7 ,adjustment for certain scholarships1 etc 7,a7 ,in general ,the amount of qualified tuition and related expenses otherwise taken into account under this section with respect to an individual for an academic period shall be reduced 7before the application of subsections 7a7 and 7c77 by the sum of any amounts paid for the benefit of such individual which are allocable to such period as-- 7i7 a qualified scholarship which is excludable from gross income under section #aag1 7ii7 an educational assistance allowance under chapter #cj1 #ca1 #cb1 #cd1 or #ce of title #ch1 ,united ,states ,code1 or under chapter #afjf of title #aj1 ,united ,states ,code1 and 7iii7 a payment 7other than a gift1 bequest1 devise1 or inheritance within the meaning of section #ajb7;a77 for such individual's educational expenses1 or attributable to such individual's enrollment at an eligible educational institution1 which is excludable from gross income under any law of the ,united ,states4 7,b7 ,coordination with pell grants not used for qualified tuition and related expenses ,any amount determined with respect to an individual under subparagraph 7,a7 which is attributable to a ,federal ,pell ,grant under section #dja of the ,higher ,education ,act of #aife shall be reduced 7but not below zero7 by the amount of the expenses 7other than qualified tuition and related expenses7 which are taken into account in determining the cost of attendance 7as defined in section #dgb of the ,higher ,education ,act of #aife1 as in effect on the date of the enactment of this subparagraph7 of such individual at an eligible educational institution for the academic period for which the credit under this section is being determined4 7#c7 ,treatment of expenses paid by dependent ,if a deduction under section #aea with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins-- 7,a7 no credit shall be allowed under this section to such individual for such individual's taxable year1 and 7,b7 qualified tuition and related expenses paid by such individual during such individual's taxable year shall be treated for purposes of this section as paid by such other taxpayer4 7#d7 ,treatment of certain prepayments ,if qualified tuition and related expenses are paid by the taxpayer during a taxable year for an academic period which begins during the first #c months following such taxable year1 such academic period shall be treated for purposes of this section as beginning during such taxable year4 7#e7 ,denial of double benefit ,no credit shall be allowed under this section for any expense for which a deduction is allowed under any other provision of this chapter4 7#f7 ,no credit for married individuals filing separate returns ,if the taxpayer is a married individual 7within the meaning of section #ggjc71 this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year4 7#g7 ,nonresident aliens ,if the taxpayer is a nonresident alien individual for any portion of the taxable year1 this section shall apply only if such individual is treated as a resident alien of the ,united ,states for purposes of this chapter by reason of an election under subsection 7g7 or 7h7 of section #fjac4 7g7 ,portion of credit refundable 7#a7 ,in general #hj percent of the amount which would 7but for this subsection and section #bf7 be allowed as a credit allowed under this section for the taxable year shall be treated as a credit allowable under subpart ,c 7and not allowed under this section74 ,the preceding sentence shall not apply to any taxpayer for any taxable year if such taxpayer is a child to whom subsection 7g7 of section #a applies for such taxable year4 7#b7 ,maximum amount refundable ,the amount treated by paragraph 7#a7 as a credit allowable under subpart ,c for any taxable year shall not exceed #a1ejj4 7h7 ,inflation adjustments 7#a7 ,in general ,in the case of taxable years beginning after #bjad1 the #b1ejj and #c1jjj amounts in subsection 7a71 the #aj1jjj amount in subsection 7b71 the #hj1jjj amount in subsection 7c77#b77;,a77ii71 and the #a1ejj in subsection 7g77#b7 shall each be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjac for calendar year #aiib in subparagraph 7,b7 thereof4 7#b7 ,rounding 7,a7 ,in general ,if the #a1ejj1 #b1ejj1 #c1jjj1 or #aj1jjj amount as adjusted under paragraph 7#a7 is not a multiple of #ajj1 such amount shall be rounded to the next lowest multiple of #ajj4 7,b7 #hj1jjj amount ,if the #hj1jjj amount as adjusted under paragraph 7#a7 is not a multiple of #a1jjj1 such amount shall be rounded to the next lowest multiple of #a1jjj4 7i7 ,election not ,to have section apply ,a taxpayer may elect not to have this section apply with respect to the qualified tuition and related expenses of an individual for any taxable year4 7j7 ,regulations ,the ,secretary may prescribe such regulations as may be necessary or appropriate to carry out this section1 including regulations providing for a recapture of the credit allowed under this section in cases where there is a refund in a subsequent taxable year of any amount which was taken into account in determining the amount of such credit4 7k7 ,pilot program ,to make periodic payments as college expenses incurred 7#a7 ,in general ,the ,secretary of the ,treasury and the ,secretary of ,education shall jointly establish a program designed to make payments periodically to or on behalf of an eligible student as the student incurs qualified expenses during the taxable year4 ,the total amount that may be so paid to or on behalf of an eligible student through this program shall not exceed the credit which would 7but for paragraph 7#b77 be allowable under this section if subsection 7c7 were applied by using the taxpayer's modified adjusted gross income for the preceding taxable year4 7#b7 ,credit reduced by pilot program payments ,the credit allowable under this section 7without regard to this paragraph7 for any taxable year shall be reduced 7but not below zero7 by the payments made with respect to a student under paragraph 7#a7 for expenses which would otherwise be taken into account in determining the credit under this section for such year4 7#c7 ,program participation ,participation in the program established under this subsection shall be voluntary with respect to both students and educational institutions2 except that1 institutions which are taxable under this chapter 7other than by reason of section #eaa7 may not participate in such program4 7#d7 ,program period ,the program established under this subsection shall apply to expenses for academic periods beginning during the #e-year period which begins on the date which is #a year after the date of the enactment of this subsection4 7#e7 ,payments not treated as resources for financial aid ,payments made under this subsection shall not be treated as resources for purposes of determining the amount of any financial aid which is funded in whole or part with ,federal funds4 ,payments under the program shall not be made in a manner that would reduce the ,state1 private1 or institutional aid available to an eligible student4 7#f7 ,notice of program ,educational institutions participating in the program established under this subsection shall provide appropriate notices to parents and students of the option of payments under such program4 ,such notices shall not be considered tax advice for purposes of any ,federal law or regulation4 7#g7 ,reporting ,the ,secretary of the ,treasury and the ,secretary of ,education shall jointly submit annual reports to ,congress on the program established under this subsection1 together with any recommendations with respect to such program4 4 7b7 ,clerical amendment ,the item relating to section #be;,a in the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of such ,code is amended to read as follows3 ,sec4 #be;,a4 ,american ,opportunity ,tax ,credit4 4 7c7 ,conforming amendments 7#a7 ,subparagraph 7,b7 of section #gb7t77#g7 of such ,code is amended by striking #be;,a7g77#b7 and inserting #be;,a7f77#b74 7#b7 ,paragraph 7#b7 of section #bba7;d7 of such ,code is amended-- 7,a7 by striking #be;,a7g77#b7 in subparagraph 7,b7 and inserting #be;,a7f77#b71 and 7,b7 by striking #be;,a7f77#b7 and inserting #be;,a7e77#c74 7#c7 ,paragraph 7#c7 of section #bba7;d7 of such ,code is amended by striking #be;,a7b77#c7 and inserting #be;,a7e77#a74 7#d7 ,paragraph 7#a7 of section #bbb7;d7 of such ,code is amended-- 7,a7 by striking #be;,a7f7 and inserting #be;,a7e77#b71 and 7,b7 by striking #be;,a7g77#b7 and inserting #be;,a7f77#b74 7#e7 ,clause 7v7 of section #ebi7;c77#c77;,b7 of such ,code is amended-- 7,a7 by striking #be;,a7g77#b7 in subclause 7,i7 and inserting #be;,a7f77#b71 and 7,b7 by striking ,hope and ,lifetime ,learning credits in the heading and inserting ,american ,opportunity ,tax ,credit4 7#f7 ,clause 7i7 of section #ebi7;e77#c77;,b7 of such ,code is amended by striking #be;,a7b77#c7 and inserting #be;,a7e77#a74 7#g7 ,subparagraph 7,c7 of section #ecj7;d77#b7 of such ,code is amended-- 7,a7 by striking #be;,a7g77#b7 in clause 7i77,i7 and inserting #be;,a7f77#b71 and 7,b7 by striking ,hope and ,lifetime ,learning credits in the heading and inserting ,american ,opportunity ,tax ,credit4 7#h7 ,clause 7iii7 of section #ecj7;d77#d77;,b7 of such ,code is amended by striking #be;,a7g77#b7 and inserting #be;,a7f77#b74 7#i7 ,section #adjj,o of such ,code is amended-- 7,a7 by striking #be;,a7f77#b7 and inserting #be;,a7e77#c71 7,b7 by inserting 7as in effect on the date of the enactment of this section7 after #be;,a7b77#a7 in paragraph 7#b71 and 7,c7 by inserting 7as in effect on the date of the enactment of this section7 after #be;,a7c77#a7 in paragraph 7#c74 7#aj7 ,subsection 7e7 of section #fjej,s of such ,code is amended by striking subsection 7g77#b7 and inserting subsection 7f77#b74 7#aa7 ,subparagraph 7,a7 of section #fbaa7;b77#d7 of such ,code is amended by striking subsection 7i77#f7 and inserting subsection 7g74 7#ab7 ,subparagraph 7,j7 of section #fbac7;g77#b7 of such ,code is amended by striking #be;,a7g77#a7 and inserting #be;,a7f77#a74 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjac4 #c4 ,expansion of pell grant exclusion from gross income 7a7 ,in general ,paragraph 7#a7 of section #aag7;b7 of the ,internal ,revenue ,code of #aihf is amended by striking received by an individual and all that follows and inserting received by an individual-- 7,a7 as a scholarship or fellowship grant to the extent the individual establishes that1 in accordance with the conditions of the grant1 such amount was used for qualified tuition and related expenses1 or 7,b7 as a ,federal ,pell ,grant under section #dja of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgj;a7 7as in effect on the date of the enactment of this subparagraph74 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjac4 #d4 ,increased public awareness of american opportunity tax credit ,the ,secretary of the ,treasury1 or the ,secretary's delegate1 in consultation with the ,secretary of ,education1 shall establish a taxpayer awareness program to inform the taxpaying public of the availability of the ,american ,opportunity ,tax ,credit allowed under section #be;,a of the ,internal ,revenue ,code of #aihf4 ,such public awareness program shall be designed to assure that individuals who may be eligible are informed of the availability of such credit and filing procedures4 ,the ,secretary shall use appropriate means of communication to carry out the provisions of this section4 ,the taxpayer awareness program shall include1 but not be limited to1 prominent display of information about the availability of the ,american ,opportunity ,tax ,credit on information return forms specified by such ,secretary for use by educational institutions to report qualified tuition and related expenses incurred4