Amends the Internal Revenue Code to exempt a private foundation making an employer-related grant from the excise tax on taxable expenditures when an individual scholarship or fellowship grant made by such a foundation is made on an objective and nondiscriminatory basis and is made pursuant to a qualified employer-related grant program.
[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3737 Introduced in House (IH)]
104th CONGRESS
2d Session
H. R. 3737
To amend the Internal Revenue Code of 1986 to clarify the treatment of
educational grants by private foundations, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 27, 1996
Mr. Bryant of Tennessee (for himself and Mr. Clement) 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 clarify the treatment of
educational grants by private foundations, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. TAXABLE EXPENDITURES OF PRIVATE FOUNDATIONS NOT TO INCLUDE
CERTAIN EDUCATION GRANTS AND LOANS.
(a) In General.--Section 4945 of the Internal Revenue Code of 1986
is amended by redesignating subsection (i) as subsection (j) and by
adding after subsection (h) the following new subsection:
``(i) Qualified Employer-Related Grant Programs.--
``(1) In general.--An individual grant shall be treated as
made on an objective and nondiscriminatory basis for purposes
of subsection (g) if it is demonstrated to the satisfaction of
the Secretary that it was made pursuant to a qualified
employer-related grant program.
``(2) Qualified employer-related grant program.--For
purposes of this subsection, the term `qualified employer-
related grant program' means any employer-related grant program
which--
``(A) is not used to recruit employees of the
employer, or to induce employees to continue their
employment with the employer or otherwise follow a
course of action sought by the employer,
``(B) selects grantees by a committee consisting
entirely of individuals who are not--
``(i) in a position to directly or
indirectly derive a private benefit if certain
applicants are selected, or
``(ii) current or former directors,
officers, or employees of the employer or
disqualified persons with respect to the
private foundation,
``(C) limits potential grantees to those who meet
the minimum standards for admission to an educational
institution (within the meaning of section
170(b)(1)(A)(ii)),
``(D) selects grantees based upon objective
criteria which are--
``(i) related to enabling grantees to
obtain an education solely for their personal
benefit, and
``(ii) not related (aside from the initial
qualification of the group of potential
grantees) to the employment of the grantees or
employees whose spouses or children are
grantees or to the employer's line of business,
``(E) does not fail to make grants, or does not
terminate or decline to renew grants previously made,
solely because of the failure of--
``(i) employees who are grantees, or
employees whose spouses or children are
grantees, to remain employed by the employer
for any length of time, or
``(ii) grantees to agree to become employed
by the employer at any time,
``(F) does not limit the courses of study for which
the grants are available,
``(G) is not established pursuant to an agreement
which the Secretary of Labor finds to be a collective
bargaining agreement between employee representatives
and the employer, if there is evidence that the program
was the subject of good faith bargaining between such
employee representatives and such employer, and
``(H) excludes from among the potential grantees--
``(i) disqualified persons with respect to
the private foundation, and
``(ii) highly compensated employees or
spouses or children of highly compensated
employees.
``(3) Definitions.--For purposes of this subsection--
``(A) Employer-related grant program.--The term
`employer-related grant program' means any program of
making grants conducted by a private foundation that--
``(i) treats employees (or spouses or
children of employees) of an employer as a
group from which grantees of all or a portion
of the grants will be selected,
``(ii) limits the potential grantees of all
or a portion of the grants to employees (or
spouses or children of employees) of an
employer, or
``(iii) otherwise gives employees (or
spouses or children of employees) of an
employer a preference or priority over other
individuals in being selected as grantees of
such grants.
``(B) Highly compensated employee.--The term
`highly compensated employee' means a highly
compensated employee under subparagraph (A) or (B) of
section 414(q)(1), except that the $75,000 amount under
subparagraph (B) shall be adjusted at the same time and
in the same manner as under section 415(d).''
(b) Effective Date.--The amendments made by this section shall
apply to grants or loans made after the date of enactment of this Act.
<all>
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR E1189-1190)
Referred to the House Committee on Ways and Means.
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