1. Short title This Act may be cited as the 21st Century American Service Act . 2. Findings Section 2(a) of the National and Community Service Act of 1990 ( 42 U.S.C. 12501(a) ) is amended by adding at the end the following: (7) The number of Americans applying to participate in national service programs each year significantly exceeds the number of available positions, depriving hundreds of thousands of Americans from participating in national and community service. (8) By dramatically lowering the barriers to participating in national service and expanding the network of quality volunteer opportunities, the United States can address important national priorities and promote a sense of shared purpose among the citizenry, at a time when less than one percent of Americans are serving as members of the Armed Forces. . 3. Exclusion from gross income of AmeriCorps educational awards (a) In general Section 117 of the Internal Revenue Code of 1986 (relating to qualified scholarships) is amended by adding at the end the following new subsection: (e) AmeriCorps Educational Awards Gross income shall not include any national service educational award described in subtitle D of title I of the National and Community Service Act of 1990 ( 42 U.S.C. 12601 et seq.). . (b) Effective Date The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act. 4. Income tax exclusion for living allowance (a) In general Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139G the following new section: 139H. Living allowance for national service participants Gross income does not include the amount of any living allowance provided under section 140 of the National and Community Service Act of 1990. . (b) Clerical amendment The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 139G the following new item: Sec. 139H. Living