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[DOCID: f:h436ih.txt]






107th CONGRESS
  1st Session
                                H. R. 436

    To amend the Internal Revenue Code of 1986 to repeal the dollar 
    limitation on the deduction for interest on education loans, to 
increase the income threshold for the phase out of such deduction, and 
 to repeal the 60-month limitation on the amount of such interest that 
                      is allowable as a deduction.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 6, 2001

  Mr. English (for himself and Mr. Hulshof) 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 repeal the dollar 
    limitation on the deduction for interest on education loans, to 
increase the income threshold for the phase out of such deduction, and 
 to repeal the 60-month limitation on the amount of such interest that 
                      is allowable as a deduction.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. EXPANSION OF DEDUCTION FOR INTEREST ON EDUCATION LOANS.

    (a) Repeal of Dollar Limitation on, and Increase in Income 
Threshold for Phase Out of, Deduction for Interest on Education 
Loans.--
            (1) In general.--Subsection (b) of section 221 of the 
        Internal Revenue Code of 1986 (relating to maximum deduction) 
        is amended to read as follows:
    ``(b) Limitation Based on Adjusted Gross Income.--
            ``(1) In general.--The amount which would (but for this 
        subsection) be allowable as a deduction under this section 
        shall be reduced (but not below zero) by the amount determined 
        under paragraph (2).
            ``(2) 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--
                    ``(A) the excess of--
                            ``(i) the taxpayer's modified adjusted 
                        gross income for such taxable year, over
                            ``(ii) $100,000 ($150,000 in the case of a 
                        joint return), bears to
                    ``(B) $15,000.
            ``(3) Modified adjusted gross income.--The term `modified 
        adjusted gross income' means adjusted gross income determined--
                    ``(A) without regard to this section and sections 
                911, 931, and 933, and
                    ``(B) after application of sections 86, 135, 137, 
                219, and 469.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to taxable years beginning after December 31, 2001.
    (b) Repeal of 60-Month Limitation on Deduction for Interest on 
Education Loans.--
            (1) In general.--Section 221 of the Internal Revenue Code 
        of 1986 (relating to interest on education loans) is amended by 
        striking subsection (d) and by redesignating subsections (e), 
        (f), and (g) as subsections (d), (e), and (f), respectively.
            (2) Conforming amendment.--Subsection (e) of section 6050S 
        of such Code is amended by striking ``section 221(e)(1)'' and 
        inserting ``section 221(d)(1)''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to loan interest payments due and paid after 
        December 31, 2001, in taxable years ending after such date.
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