Applicability. 26 USC 221. Applicability. Applicability. 26 USC 117 note. (3) EFFECTIVE DATE.-The amendments made by this subsection shall apply with respect to any loan interest paid after December 31, 2001, in taxable years ending after such date. (b) INCREASE IN INCOME LIMITATION.— (1) IN GENERAL.-Section 221(b)(2)(B) (relating to amount of reduction) is amended by striking clauses (i) and (ii) and inserting the following: "(i) the excess of "(I) the taxpayer's modified adjusted gross income for such taxable year, over "(II) $50,000 ($100,000 in the case of a joint return), bears to "(ii) $15,000 ($30,000 in the case of a joint return).". (2) CONFORMING AMENDMENT.-Section 221(g)(1) is amended by striking "$40,000 and $60,000 amounts" and inserting "$50,000 and $100,000 amounts". (3) EFFECTIVE DATE.-The amendments made by this subsection shall apply to taxable years ending after December 31, 2001. SEC. 413. EXCLUSION OF CERTAIN AMOUNTS RECEIVED UNDER THE NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PRO- (a) IN GENERAL.-Section 117(c) (relating to the exclusion from gross income amounts received as a qualified scholarship) is amended (1) by striking "Subsections (a)" and inserting the following: "(1) IN GENERAL.-Except as provided in paragraph (2), subsections (a)”, and (2) by adding at the end the following new paragraph: "(2) EXCEPTIONS.-Paragraph (1) shall not apply to any amount received by an individual under "(A) the National Health Service Corps Scholarship Program under section 338A(g)(1)(A) of the Public Health Service Act, or "(B) the Armed Forces Health Professions Scholarship and Financial Assistance program under subchapter I of chapter 105 of title 10, United States Code.". (b) EFFECTIVE DATE.-The amendments made by subsection (a) shall apply to amounts received in taxable years beginning after December 31, 2001. Subtitle C-Liberalization of Tax-Exempt Financing Rules for Public School Construction SEC. 421. ADDITIONAL INCREASE IN ARBITRAGE REBATE EXCEPTION (a) IN GENERAL.-Section 148(f)(4)(D)(vii) (relating to increase in exception for bonds financing public school capital expenditures) is amended by striking "$5,000,000" the second place it appears and inserting "$10,000,000". (b) EFFECTIVE DATE.-The amendment made by subsection (a) shall apply to obligations issued in calendar years beginning after December 31, 2001. SEC. 422. TREATMENT OF QUALIFIED PUBLIC EDUCATIONAL FACILITY (a) TREATMENT AS EXEMPT FACILITY BOND.-Subsection (a) of Applicability. section 142 (relating to exempt facility bond) is amended by striking 26 USC 142. "or" at the end of paragraph (11), by striking the period at the end of paragraph (12) and inserting ", or", and by adding at the end the following new paragraph: "(13) qualified public educational facilities.". (b) QUALIFIED PUBLIC EDUCATIONAL FACILITIES.-Section 142 (relating to exempt facility bond) is amended by adding at the end the following new subsection: “(k) QUALIFIED PUBLIC EDUCATIONAL FACILITIES.— "(1) IN GENERAL.-For purposes of subsection (a)(13), the term 'qualified public educational facility' means any school facility which is "(A) part of a public elementary school or a public secondary school, and PARTNERSHIP AGREEMENT "(B) owned by a private, for-profit corporation pursuant to a public-private partnership agreement with a State or local educational agency described in paragraph (2). "(2) PUBLIC-PRIVATE DESCRIBED.—A public-private partnership agreement is described in this paragraph if it is an agreement"(A) under which the corporation agrees "(i) to do 1 or more of the following: construct, to transfer the school facility to such agency for no "(B) the term of which does not exceed the term of "(3) SCHOOL FACILITY.-For purposes of this subsection, the term 'school facility' means "(A) any school building, "(B) any functionally related and subordinate facility and land with respect to such building, including any stadium or other facility primarily used for school events, and "(C) any property, to which section 168 applies (or would apply but for section 179), for use in a facility described in subparagraph (A) or (B). "(4) PUBLIC SCHOOLS.-For purposes of this subsection, the terms ‘elementary school' and 'secondary school' have the meanings given such terms by section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801), as in effect on the date of the enactment of this subsection. "(5) ANNUAL AGGREGATE FACE AMOUNT OF TAX-EXEMPT FINANCING. "(A) IN GENERAL.-An issue shall not be treated as an issue described in subsection (a)(13) if the aggregate face amount of bonds issued by the State pursuant thereto 26 USC 146. Applicability. (when added to the aggregate face amount of bonds pre- "(i) $10 multiplied by the State population, or "(B) ALLOCATION RULES. "(i) IN GENERAL.-Except as otherwise provided in this subparagraph, the State may allocate the amount described in subparagraph (A) for any calendar year in such manner as the State determines appropriate. “(ii) RULES FOR CARRYFORWARD OF UNUSED LIMITATION. A State may elect to carry forward an unused limitation for any calendar year for 3 calendar years following the calendar year in which the unused limitation arose under rules similar to the rules of section 146(f), except that the only purpose for which the carryforward may be elected is the issuance of exempt facility bonds described in subsection (a)(13).". (c) EXEMPTION FROM GENERAL STATE VOLUME CAPS.-Paragraph (3) of section 146(g) (relating to exception for certain bonds) is amended (1) by striking “"or (12)" and inserting “(12), or (13)", and (2) by striking "and environmental enhancements of hydroelectric generating facilities" and inserting "environmental enhancements of hydroelectric generating facilities, and qualified public educational facilities". (d) EXEMPTION FROM LIMITATION ON USE FOR LAND ACQUISITION.-Section 147(h) (relating to certain rules not to apply to mortgage revenue bonds, qualified student loan bonds, and qualified 501(c)(3) bonds) is amended by adding at the end the following new paragraph: "(3) EXEMPT FACILITY BONDS FOR QUALIFIED PUBLIC-PRIVATE SCHOOLS. Subsection (c) shall not apply to any exempt facility bond issued as part of an issue described in section 142(a)(13) (relating to qualified public educational facilities).". (e) CONFORMING AMENDMENT.-The heading for section 147(h) is amended by striking "MORTGAGE REVENUE BONDS, QUALIFIED STUDENT LOAN BONDS, AND QUALIFIED 501(c)(3) BONDS" and inserting "CERTAIN BONDS". (f) EFFECTIVE DATE.-The amendments made by this section shall apply to bonds issued after December 31, 2001. Subtitle D-Other Provisions SEC. 431. DEDUCTION FOR HIGHER EDUCATION EXPENSES. (a) DEDUCTION ALLOWED.-Part VII of subchapter B of chapter 1 (relating to additional itemized deductions for individuals) is amended by redesignating section 222 as section 223 and by inserting after section 221 the following: “SEC. 222. QUALIFIED TUITION AND RELATED EXPENSES. "(a) ALLOWANCE OF DEDUCTION.-In the case of an individual, there shall be allowed as a deduction an amount equal to the qualified tuition and related expenses paid by the taxpayer during the taxable year. "(b) DOLLAR LIMITATIONS. "(1) IN GENERAL.-The amount allowed as a deduction under subsection (a) with respect to the taxpayer for any taxable year shall not exceed the applicable dollar limit. "(2) APPLICABLE DOLLAR LIMIT. "(A) 2002 AND 2003.-In the case of a taxable year beginning in 2002 or 2003, the applicable dollar limit shall be equal to "(i) in the case of a taxpayer whose adjusted gross income for the taxable year does not exceed $65,000 ($130,000 in the case of a joint return), $3,000, and"(ii) in the case of any other taxpayer, zero. "(B) 2004 AND 2005.-In the case of a taxable year beginning in 2004 or 2005, the applicable dollar amount shall be equal to "(i) in the case of a taxpayer whose adjusted gross income for the taxable year does not exceed $65,000 ($130,000 in the case of a joint return), $4,000, "(ii) in the case of a taxpayer not described in clause (i) whose adjusted gross income for the taxable year does not exceed $80,000 ($160,000 in the case of a joint return), $2,000, and "(iii) in the case of any other taxpayer, zero. "(C) ADJUSTED GROSS INCOME.-For purposes of this paragraph, adjusted gross income shall be determined"(i) without regard to this section and sections 911, 931, and 933, and "(ii) after application of sections 86, 135, 137, 219, 221, and 469. "(c) NO DOUBLE BENEFIT.— "(1) IN GENERAL.-No deduction shall be allowed under subsection (a) for any expense for which a deduction is allowed to the taxpayer under any other provision of this chapter. "(2) COORDINATION WITH OTHER EDUCATION INCENTIVES.— “(A) DENIAL OF DEDUCTION IF CREDIT ELECTED.-No deduction shall be allowed under subsection (a) for a taxable year with respect to the qualified tuition and related expenses with respect to an individual if the taxpayer or any other person elects to have section 25A apply with respect to such individual for such year. "(B) COORDINATION WITH EXCLUSIONS.-The total amount of qualified tuition and related expenses shall be reduced by the amount of such expenses taken into account in determining any amount excluded under section 135, 529(c)(1), or 530(d)(2). For purposes of the preceding sentence, the amount taken into account in determining the amount excluded under section 529(c)(1) shall not include that portion of the distribution which represents a return of any contributions to the plan. “(3) DEPENDENTS.-No deduction shall be allowed under subsection (a) to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins. "(d) DEFINITIONS AND SPECIAL RULES.-For purposes of this section Applicability. 26 USC 62. “(1) QUALIFIED TUITION AND RELATED EXPENSES.-The term 'qualified tuition and related expenses' has the meaning given such term by section 25A(f). Such expenses shall be reduced in the same manner as under section 25A(g)(2). “(2) IDENTIFICATION REQUIREMENT.-No deduction shall be allowed under subsection (a) 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 the individual on the return of tax for the taxable year. "(3) LIMITATION ON TAXABLE YEAR OF DEDUCTION.— "(A) IN GENERAL.-A deduction shall be allowed under subsection (a) for qualified tuition and related expenses for any taxable year only to the extent such expenses are in connection with enrollment at an institution of higher education during the taxable year. "(B) CERTAIN PREPAYMENTS ALLOWED.-Subparagraph (A) shall not apply to qualified tuition and related expenses paid during a taxable year if such expenses are in connection with an academic term beginning during such taxable year or during the first 3 months of the next taxable year. "(4) NO DEDUCTION FOR MARRIED INDIVIDUALS FILING SEPARATE RETURNS.-If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. “(5) NONRESIDENT ALIENS.-If the taxpayer is a nonresident alien individual for any portion of the taxable year, 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 (g) or (h) of section 6013. "(6) REGULATIONS.-The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations requiring recordkeeping and information reporting. "(e) TERMINATION.-This section shall not apply to taxable years beginning after December 31, 2005.". (b) DEDUCTION ALLOWED IN COMPUTING ADJUSTED GROSS INCOME.-Section 62(a) is amended by inserting after paragraph (17) the following: "(18) HIGHER EDUCATION EXPENSES.-The deduction allowed by section 222.". (c) CONFORMING AMENDMENTS.— (1) Sections 86(b)(2), 135(c)(4), 137(b)(3), and 219(g)(3) are each amended by inserting "222," after "221,". (2) Section 221(b)(2)(C) is amended by inserting "222," before "911". (3) Section 469(i)(3)(F) is amended by striking "and 221" and inserting “, 221, and 222”. (4) The table of sections for part VII of subchapter B of chapter 1 is amended by striking the item relating to section 222 and inserting the following: "Sec. 222. Qualified tuition and related expenses. "Sec. 223. Cross reference.". |