Student Loan Bond Expansion Act of 2026

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3761 Introduced in Senate (IS)]

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119th CONGRESS
  2d Session
                                S. 3761

To amend the Internal Revenue Code of 1986 to exempt qualified student 
    loan bonds from the volume cap and the alternative minimum tax.


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                   IN THE SENATE OF THE UNITED STATES

                            February 3, 2026

 Mr. Grassley (for himself, Mr. Welch, and Mr. Cassidy) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

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                                 A BILL


 
To amend the Internal Revenue Code of 1986 to exempt qualified student 
    loan bonds from the volume cap and the alternative minimum tax.

    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 ``Student Loan Bond Expansion Act of 
2026''.

SEC. 2. QUALIFIED STUDENT LOAN BONDS EXEMPT FROM VOLUME CAP AND 
              ALTERNATIVE MINIMUM TAX.

    (a) Exemption From Volume Cap.--
            (1) In general.--Section 146(g) of the Internal Revenue 
        Code of 1986 is amended by redesignating paragraphs (2) through 
        (6) as paragraphs (3) through (7), respectively, and by 
        inserting after paragraph (1) the following new paragraph:
            ``(2) any qualified student loan bond,''.
            (2) Special rule for application of pooled financing bond 
        rules.--Section 149(f)(6) of such Code is amended by adding at 
        the end the following new subparagraph:
                    ``(C) Special rule for qualified student loan 
                bonds.--For purposes of subparagraph (A), in the case 
                of any qualified student loan bond, the term `ultimate 
                borrower' shall not include any student borrower.''.
            (3) Conforming amendment.--Section 146(g) of such Code is 
        amended by striking ``Paragraphs (4) and (5)'' in the last 
        sentence and inserting ``Paragraphs (5) and (6)''.
    (b) Exemption From Alternative Minimum Tax.--Section 57(a)(5)(C) of 
the Internal Revenue Code of 1986 is amended by redesignating clauses 
(iv), (v), and (vi) as clauses (v), (vi), and (vii), respectively, and 
by inserting after clause (iii) the following new clause:
                            ``(iv) Exception for qualified student loan 
                        bonds.--For purposes of clause (i), the term 
                        `private activity bond' shall not include any 
                        bond issued after the date of the enactment of 
                        this clause if such bond is a qualified student 
                        loan bond (as defined in section 144(b)). The 
                        preceding sentence shall not apply to any 
                        refunding bond unless such preceding sentence 
                        applied to the refunded bond (or in the case of 
                        a series of refundings, the original bond).''.
    (c) Effective Dates.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.
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