Us Congress 2023-2024 Regular Session

Us Congress Senate Bill SB56 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	II
2	2	118THCONGRESS
3	3	1
4	4	STSESSION S. 56
5	5	To amend the Internal Revenue Code of 1986 to establish tax credits to
6	6	encourage individual and corporate taxpayers to contribute to scholar-
7	7	ships for students through eligible scholarship-granting organizations and
8	8	eligible workforce training organizations, and for other purposes.
9	9	IN THE SENATE OF THE UNITED STATES
10	10	JANUARY24 (legislative day, JANUARY3), 2023
11	11	Mr. C
12	12	RUZ(for himself, Mrs. BLACKBURN, Mr. CRAMER, Mr. LANKFORD, and
13	13	Mr. S
14	14	COTTof Florida) introduced the following bill; which was read twice
15	15	and referred to the Committee on Finance
16	16	A BILL
17	17	To amend the Internal Revenue Code of 1986 to establish
18	18	tax credits to encourage individual and corporate tax-
19	19	payers to contribute to scholarships for students through
20	20	eligible scholarship-granting organizations and eligible
21	21	workforce training organizations, and for other purposes.
22	22	Be it enacted by the Senate and House of Representa-1
23	23	tives of the United States of America in Congress assembled, 2
24	24	SECTION 1. SHORT TITLE. 3
25	25	This Act may be cited as the ‘‘Education Freedom 4
26	26	Scholarships and Opportunity Act’’. 5
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30	30	SEC. 2. PURPOSE. 1
31	31	The purpose of this Act is to encourage individual 2
32	32	and corporate taxpayers to contribute to scholarships for 3
33	33	individual students through eligible scholarship-granting 4
34	34	organizations and eligible workforce training organiza-5
35	35	tions, as identified by States. 6
36	36	TITLE I—AMENDMENTS TO THE 7
37	37	INTERNAL REVENUE CODE 8
38	38	OF 1986 9
39	39	SEC. 101. REFERENCES TO THE INTERNAL REVENUE CODE 10
40	40	OF 1986. 11
41	41	Except as otherwise expressly provided, whenever in 12
42	42	this title an amendment or repeal is expressed in terms 13
43	43	of an amendment to, or repeal of, a section or other provi-14
44	44	sion, the reference shall be considered to be made to a 15
45	45	section or other provision of the Internal Revenue Code 16
46	46	of 1986. 17
47	47	SEC. 102. TAX CREDITS FOR CONTRIBUTIONS TO ELIGIBLE 18
48	48	SCHOLARSHIP-GRANTING ORGANIZATIONS 19
49	49	AND ELIGIBLE WORKFORCE TRAINING ORGA-20
50	50	NIZATIONS. 21
51	51	(a) C
52	52	REDIT FORINDIVIDUALS.— 22
53	53	(1) I
54	54	N GENERAL.—Subpart A of part IV of sub-23
55	55	chapter A of chapter 1 is amended by adding after 24
56	56	section 25E the following new section: 25
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60	60	‘‘SEC. 25F. CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP- 1
61	61	GRANTING ORGANIZATIONS AND ELIGIBLE 2
62	62	WORKFORCE TRAINING ORGANIZATIONS. 3
63	63	‘‘(a) A
64	64	LLOWANCE OFCREDIT.—In the case of an in-4
65	65	dividual, there shall be allowed as a credit against the tax 5
66	66	imposed by this chapter for the taxable year an amount 6
67	67	equal to the sum of any qualified contributions made by 7
68	68	the taxpayer during the taxable year. 8
69	69	‘‘(b) A
70	70	MOUNT OFCREDIT.—The credit allowed under 9
71	71	subsection (a) in any taxable year shall not exceed 10 per-10
72	72	cent of the taxpayer’s adjusted gross income for the tax-11
73	73	able year. 12
74	74	‘‘(c) D
75	75	EFINITIONS.—For purposes of this section— 13
76	76	‘‘(1) Q
77	77	UALIFIED CONTRIBUTION .—The term 14
78	78	‘qualified contribution’ means a contribution of cash 15
79	79	to any eligible scholarship-granting organization or 16
80	80	eligible workforce training organization. 17
81	81	‘‘(2) Q
82	82	UALIFIED EXPENSE.—The term ‘quali-18
83	83	fied expense’ means any educational expense that 19
84	84	is— 20
85	85	‘‘(A) for an individual student’s elementary 21
86	86	or secondary education, as recognized by the 22
87	87	State, 23
88	88	‘‘(B) for the secondary education compo-24
89	89	nent of an individual elementary or secondary 25
90	90	student’s career and technical education, as de-26
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94	94	fined by section 3(5) of the Carl D. Perkins Ca-1
95	95	reer and Technical Education Act of 2006 (20 2
96	96	U.S.C. 2302(5)), or 3
97	97	‘‘(C) for the purpose of providing eligible 4
98	98	individual participants with scholarships for 5
99	99	secondary or postsecondary vocational education 6
100	100	and training, workforce development, or appren-7
101	101	ticeship training, including preparation and ex-8
102	102	amination costs relating to portable certificates 9
103	103	or credentials, or industry recognized certifi-10
104	104	cation or credentialing programs. 11
105	105	‘‘(3) E
106	106	LIGIBLE SCHOLARSHIP-GRANTING ORGA-12
107	107	NIZATION.—The term ‘eligible scholarship-granting 13
108	108	organization’ means— 14
109	109	‘‘(A) an organization that— 15
110	110	‘‘(i) is described in section 501(c)(3) 16
111	111	and exempt from taxation under section 17
112	112	501(a), 18
113	113	‘‘(ii) provides qualifying scholarships 19
114	114	for qualified expenses to only individual el-20
115	115	ementary and secondary students who— 21
116	116	‘‘(I) reside in the State in which 22
117	117	the eligible scholarship-granting orga-23
118	118	nization is recognized, or 24
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122	122	‘‘(II) in the case of the Bureau of 1
123	123	Indian Education, are members of a 2
124	124	federally recognized tribe, 3
125	125	‘‘(iii) a State reports to the Secretary 4
126	126	of Education as an eligible scholarship- 5
127	127	granting organization pursuant to section 6
128	128	201(c)(5)(B) of the Education Freedom 7
129	129	Scholarships and Opportunity Act, 8
130	130	‘‘(iv) allocates at least 90 percent of 9
131	131	qualified contributions to qualifying schol-10
132	132	arships for qualified expenses, and 11
133	133	‘‘(v) provides scholarships to— 12
134	134	‘‘(I) more than 1 eligible student, 13
135	135	‘‘(II) more than 1 eligible family, 14
136	136	and 15
137	137	‘‘(III) different eligible students 16
138	138	attending more than one education 17
139	139	provider, or 18
140	140	‘‘(B) an organization that— 19
141	141	‘‘(i) is described in section 501(c)(3) 20
142	142	and exempt from taxation under section 21
143	143	501(a), and 22
144	144	‘‘(ii) pursuant to State law, was able, 23
145	145	as of the date of the enactment of the 24
146	146	Education Freedom Scholarships and Op-25
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150	150	portunity Act, to receive contributions that 1
151	151	are eligible for a State tax credit if such 2
152	152	contributions are used by the organization 3
153	153	to provide scholarships to individual ele-4
154	154	mentary and secondary students, including 5
155	155	scholarships for attending private schools. 6
156	156	‘‘(4) E
157	157	LIGIBLE WORKFORCE TRAINING ORGANI -7
158	158	ZATION.— 8
159	159	‘‘(A) I
160	160	N GENERAL.—The term ‘eligible 9
161	161	workforce training organization’ means any or-10
162	162	ganization— 11
163	163	‘‘(i) which is— 12
164	164	‘‘(I) described in section 13
165	165	501(c)(3) and exempt from taxation 14
166	166	under section 501(a), and 15
167	167	‘‘(II) not a private foundation (as 16
168	168	defined in section 509), 17
169	169	‘‘(ii) whose purpose is to provide voca-18
170	170	tional education and training, workforce 19
171	171	development, or apprenticeship training to 20
172	172	eligible potential secondary or postsec-21
173	173	ondary students, including organizations 22
174	174	whose purpose is to provide scholarships 23
175	175	for portable certificates or credentials, or 24
176	176	industry recognized certifications or 25
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180	180	credentialing programs, including prepara-1
181	181	tion and examination costs, 2
182	182	‘‘(iii) which is in compliance with ap-3
183	183	plicable State laws, 4
184	184	‘‘(iv) which a State has reported to 5
185	185	the Secretary of Education as an eligible 6
186	186	workforce training organization pursuant 7
187	187	to section 201(c)(5)(B) of the Education 8
188	188	Freedom Scholarships and Opportunity 9
189	189	Act, and 10
190	190	‘‘(v) which satisfies the requirements 11
191	191	described in clauses (iv) and (v) of para-12
192	192	graph (3)(A). 13
193	193	‘‘(B) P
194	194	OTENTIAL ELIGIBLE WORKFORCE 14
195	195	TRAINING ORGANIZATIONS .—Eligible workforce 15
196	196	training organizations may include, but are not 16
197	197	limited to, organizations such as the following 17
198	198	(provided that such organizations satisfy the re-18
199	199	quirements under subparagraph (A)): 19
200	200	‘‘(i) Community colleges. 20
201	201	‘‘(ii) Workforce training programs (as 21
202	202	defined by the applicable State workforce 22
203	203	agency). 23
204	204	‘‘(iii) Organizations which provide— 24
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208	208	‘‘(I) career and technical edu-1
209	209	cation, or 2
210	210	‘‘(II) training or apprenticeships, 3
211	211	including, but not limited to, training 4
212	212	or apprenticeships operated by a col-5
213	213	lective bargaining organization or that 6
214	214	provide industry recognized certifi-7
215	215	cations or credentials. 8
216	216	‘‘(iv) Community organizations that 9
217	217	provide training that results in a certifi-10
218	218	cation. 11
219	219	‘‘(5) Q
220	220	UALIFYING SCHOLARSHIP .—The term 12
221	221	‘qualifying scholarship’ means— 13
222	222	‘‘(A) a scholarship granted by an eligible 14
223	223	scholarship-granting organization to an indi-15
224	224	vidual elementary or secondary student, or 16
225	225	‘‘(B) a scholarship granted by an eligible 17
226	226	workforce training organization as a scholarship 18
227	227	to a secondary or postsecondary student for the 19
228	228	purpose of vocational education and training, 20
229	229	workforce development, obtaining portable cer-21
230	230	tificates or credentials, or industry recognized 22
231	231	certification or credentialing programs, includ-23
232	232	ing preparation and examination costs, 24
233	233	under this section. 25
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237	237	‘‘(6) STATE.—The term ‘State’ means each of 1
238	238	the 50 States, the District of Columbia, the Com-2
239	239	monwealth of Puerto Rico, American Samoa, Guam, 3
240	240	the Commonwealth of the Northern Mariana Is-4
241	241	lands, the United States Virgin Islands, and the De-5
242	242	partment of the Interior (acting through the Bureau 6
243	243	of Indian Education). 7
244	244	‘‘(d) R
245	245	ULES OFCONSTRUCTION.— 8
246	246	‘‘(1) I
247	247	N GENERAL.—A scholarship awarded to a 9
248	248	student from the proceeds of a qualified contribution 10
249	249	under this section or section 45AA shall not be con-11
250	250	sidered assistance to the school, eligible workforce 12
251	251	training organization, or other educational provider 13
252	252	that enrolls, or provides educational services to, the 14
253	253	student or the student’s parents. 15
254	254	‘‘(2) N
255	255	OT TREATED AS INCOME .—The amount 16
256	256	of any such scholarship shall not be treated as in-17
257	257	come of the student or their parents for purposes of 18
258	258	Federal tax laws or for determining eligibility for 19
259	259	any other Federal program. 20
260	260	‘‘(3) P
261	261	ROHIBITION OF CONTROL OVER NON -21
262	262	PUBLIC EDUCATION PROVIDERS .— 22
263	263	‘‘(A) Nothing in this Act shall be con-23
264	264	strued to permit, allow, encourage, or authorize 24
265	265	any Federal control over any aspect of any pri-25
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269	269	vate, religious, or home education provider, 1
270	270	whether or not a home education provider is 2
271	271	treated as a private school or home school 3
272	272	under State law. This Act shall not be con-4
273	273	strued to exclude private, religious, or home 5
274	274	education providers from participation in pro-6
275	275	grams or services under this Act. 7
276	276	‘‘(B) Nothing in this Act shall be con-8
277	277	strued to permit, allow, encourage, or authorize 9
278	278	an entity submitting a list of eligible scholar-10
279	279	ship-granting organizations or eligible workforce 11
280	280	training organizations on behalf of a State to 12
281	281	mandate, direct, or control any aspect of a pri-13
282	282	vate or home education provider, regardless of 14
283	283	whether or not a home education provider is 15
284	284	treated as a private school under State law. 16
285	285	‘‘(C) No participating State or entity act-17
286	286	ing on behalf of a State shall exclude, discrimi-18
287	287	nate against, or otherwise disadvantage any 19
288	288	education provider with respect to programs or 20
289	289	services under this Act based in whole or in 21
290	290	part on the provider’s religious education char-22
291	291	acter or affiliation, including religiously or mis-23
292	292	sion-based policies or practices. 24
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296	296	‘‘(4) PARENTAL RIGHTS TO USE SCHOLAR -1
297	297	SHIPS.—No participating State or entity acting on 2
298	298	behalf of a State shall disfavor or discourage the use 3
299	299	of such scholarships for the purchase of elementary 4
300	300	and secondary or workforce training education serv-5
301	301	ices, including those services provided by private or 6
302	302	nonprofit entities, such as faith-based providers. 7
303	303	‘‘(5) S
304	304	TATE AND LOCAL AUTHORITY .—Nothing 8
305	305	in this section or section 45AA shall be construed to 9
306	306	modify a State or local government’s authority and 10
307	307	responsibility to fund education. 11
308	308	‘‘(e) L
309	309	IMITATIONS.— 12
310	310	‘‘(1) T
311	311	AX LIABILITY.—No credit allowed under 13
312	312	this section or section 45AA shall exceed the tax-14
313	313	payer’s Federal income tax liability for the taxable 15
314	314	year. 16
315	315	‘‘(2) P
316	316	ROHIBITIONS.—A taxpayer is prohibited 17
317	317	from selling or transferring any portion of a tax 18
318	318	credit allowed under this section or section 45AA. 19
319	319	‘‘(3) D
320	320	ENIAL OF DOUBLE BENEFIT .—The Sec-20
321	321	retary shall prescribe such regulations or other guid-21
322	322	ance to ensure that the sum of the tax benefits pro-22
323	323	vided by Federal, State, or local law for a qualified 23
324	324	contribution receiving a Federal tax credit in any 24
325	325	taxable year shall not exceed the sum of the quali-25
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329	329	fied contributions made by the taxpayer for the tax-1
330	330	able year. 2
331	331	‘‘(f) C
332	332	ARRYOVER OFCREDIT.—If a tax credit allowed 3
333	333	under this section or section 45AA is not fully used within 4
334	334	the applicable taxable year because of insufficient tax li-5
335	335	ability on the part of the taxpayer, the unused amount 6
336	336	may be carried forward for a period not to exceed 5 years. 7
337	337	‘‘(g) E
338	338	LECTION.—This section shall apply to a tax-8
339	339	payer for a taxable year only if the taxpayer elects to have 9
340	340	this section apply for such taxable year. 10
341	341	‘‘(h) A
342	342	LTERNATIVEMINIMUMTAX.—For purposes of 11
343	343	calculating the alternative minimum tax under section 55, 12
344	344	a taxpayer may use any credit received for a qualified con-13
345	345	tribution under this section.’’. 14
346	346	(2) C
347	347	LERICAL AMENDMENT .—The table of sec-15
348	348	tions for subpart A of part IV of subchapter A of 16
349	349	chapter 1 of is amended by inserting after the item 17
350	350	relating to section 25E the following new item: 18
351	351	‘‘Sec. 25F. Contributions to eligible scholarship-granting organizations and eli-
352	352	gible workforce training organizations.’’.
353	353	(b) CREDIT FORCORPORATIONS.— 19
354	354	(1) I
355	355	N GENERAL.—Subpart D of part IV of 20
356	356	subchapter A of chapter 1 is amended by adding at 21
357	357	the end the following new section: 22
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361	361	‘‘SEC. 45AA. CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP- 1
362	362	GRANTING ORGANIZATIONS AND ELIGIBLE 2
363	363	WORKFORCE TRAINING ORGANIZATIONS. 3
364	364	‘‘(a) A
365	365	LLOWANCE OFCREDIT.—For purposes of sec-4
366	366	tion 38, in the case of a domestic corporation, there shall 5
367	367	be allowed as a credit against the tax imposed by this 6
368	368	chapter for the taxable year an amount equal to the sum 7
369	369	of any qualified contributions (as defined in section 8
370	370	25F(c)(1)) made by such corporation taxpayer during the 9
371	371	taxable year. 10
372	372	‘‘(b) A
373	373	MOUNT OFCREDIT.—The credit allowed under 11
374	374	subsection (a) for any taxable year shall not exceed 5 per-12
375	375	cent of the taxable income (as defined in section 13
376	376	170(b)(2)(D)) of the domestic corporation for such taxable 14
377	377	year. 15
378	378	‘‘(c) A
379	379	DDITIONALPROVISIONS.—For purposes of this 16
380	380	section, any qualified contributions made by a domestic 17
381	381	corporation shall be subject to the provisions of section 18
382	382	25F, to the extent applicable. 19
383	383	‘‘(d) E
384	384	LECTION.—This section shall apply to a tax-20
385	385	payer for a taxable year only if the taxpayer elects to have 21
386	386	this section apply for such taxable year.’’. 22
387	387	(2) C
388	388	REDIT PART OF GENERAL BUSINESS 23
389	389	CREDIT.—Section 38(b) is amended— 24
390	390	(A) by striking ‘‘plus’’ at the end of para-25
391	391	graph (39); 26
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395	395	(B) by striking the period at the end of 1
396	396	paragraph (40) and inserting ‘‘, plus’’; and 2
397	397	(C) by adding at the end the following new 3
398	398	paragraph: 4
399	399	‘‘(41) the credit for qualified contributions de-5
400	400	termined under section 45AA(a).’’. 6
401	401	(3) C
402	402	LERICAL AMENDMENT .—The table of sec-7
403	403	tions for subpart D of part IV of subchapter A of 8
404	404	chapter 1 is amended by adding at the end the fol-9
405	405	lowing new item: 10
406	406	‘‘Sec. 45AA. Contributions to eligible scholarship-granting organizations and el-
407	407	igible workforce training organizations.’’.
408	408	TITLE II—EDUCATION FREEDOM 11
409	409	SCHOLARSHIPS AND OPPOR-12
410	410	TUNITY ACT WEB PORTAL 13
411	411	AND ADMINISTRATION 14
412	412	SEC. 201. EDUCATION FREEDOM SCHOLARSHIPS AND OP-15
413	413	PORTUNITY ACT WEB PORTAL AND ADMINIS-16
414	414	TRATION. 17
415	415	(a) I
416	416	NGENERAL.—The Secretary of Education shall, 18
417	417	in coordination with the Secretary of the Treasury and 19
418	418	the Secretary of Labor, establish, host, and maintain a 20
419	419	Web portal that— 21
420	420	(1) lists all scholarship-granting organizations 22
421	421	and workforce training organizations that are eligi-23
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425	425	ble under section 25F or 45AA of the Internal Rev-1
426	426	enue Code of 1986; 2
427	427	(2) enables a taxpayer to make a qualifying 3
428	428	contribution to one or more eligible scholarship- 4
429	429	granting organizations and eligible workforce train-5
430	430	ing organizations and to immediately obtain both a 6
431	431	pre-approval of a tax credit for that contribution 7
432	432	and a receipt for tax filings; 8
433	433	(3) provides information about the tax benefits 9
434	434	of the provisions of the Education Freedom Scholar-10
435	435	ships and Opportunity Act under the Internal Rev-11
436	436	enue Code of 1986; and 12
437	437	(4) enables a State to submit and update infor-13
438	438	mation about its programs and its eligible scholar-14
439	439	ship-granting organizations and eligible workforce 15
440	440	training organizations for informational purposes 16
441	441	only, including information on— 17
442	442	(A) student eligibility; 18
443	443	(B) allowable educational expenses; 19
444	444	(C) the types of allowable education pro-20
445	445	viders; 21
446	446	(D) the percentage of funds an organiza-22
447	447	tion may use for program administration; and 23
448	448	(E) the percentage of total contributions 24
449	449	the organization awards in a calendar year. 25
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453	453	(b) NONPORTALCONTRIBUTIONS.—A taxpayer may 1
454	454	opt to make a contribution directly to an eligible scholar-2
455	455	ship-granting organization or an eligible workforce train-3
456	456	ing organization, instead of through the Web portal de-4
457	457	scribed in subsection (a), provided that the taxpayer, or 5
458	458	the eligible scholarship-granting organization or eligible 6
459	459	workforce training organization on behalf of the taxpayer, 7
460	460	applies for, and receives pre-approval for a tax credit from 8
461	461	the Secretary of Education in coordination with the Sec-9
462	462	retary of the Treasury. 10
463	463	(c) N
464	464	ATIONAL ANDSTATECAPS ONCREDITS.— 11
465	465	(1) N
466	466	ATIONAL CAP.—There is a cap of 12
467	467	$10,000,000,000 on the sum of the contributions 13
468	468	that qualify for a credit under section 25F and sec-14
469	469	tion 45AA of the Internal Revenue Code of 1986 for 15
470	470	each calendar year, of which— 16
471	471	(A) $5,000,000,000 shall be allotted for 17
472	472	qualified contributions to eligible scholarship- 18
473	473	granting organizations; and 19
474	474	(B) $5,000,000,000 shall be allotted for 20
475	475	qualified contributions to eligible workforce 21
476	476	training organizations. 22
477	477	(2) A
478	478	LLOCATION OF CAP.— 23
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481	481	•S 56 IS
482	482	(A) INITIAL ALLOCATIONS.—For each cal-1
483	483	endar year, the Secretary of Education, in co-2
484	484	ordination with the Secretary of Labor, shall— 3
485	485	(i) from the amount allotted under 4
486	486	paragraph (1)(A)— 5
487	487	(I) first reserve, for each State, 6
488	488	an amount equal to the sum of the 7
489	489	qualifying contributions made in the 8
490	490	State in the previous year; and 9
491	491	(II) next, allocate the remaining 10
492	492	amount among the participating 11
493	493	States by allocating to each State the 12
494	494	sum of— 13
495	495	(aa) an amount that bears 14
496	496	the same relationship to 20 per-15
497	497	cent of such remaining amount 16
498	498	as the number of individuals 17
499	499	aged 5 through 17 in the State, 18
500	500	as determined by the Secretary of 19
501	501	Education on the basis of the 20
502	502	most recent satisfactory data, 21
503	503	bears to the number of those in-22
504	504	dividuals in all such States, as so 23
505	505	determined; and 24
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507	507	kjohnson on DSK79L0C42PROD with BILLS 18
508	508	•S 56 IS
509	509	(bb) an amount that bears 1
510	510	the same relationship to 80 per-2
511	511	cent of such remaining amount 3
512	512	as the number of individuals 4
513	513	aged 5 through 17 from families 5
514	514	with incomes below the poverty 6
515	515	line in the State, as determined 7
516	516	by the Secretary of Education, on 8
517	517	the basis of the most recent sat-9
518	518	isfactory data, bears to the num-10
519	519	ber of those individuals in all 11
520	520	such States, as so determined; 12
521	521	and 13
522	522	(ii) from the amount allotted under 14
523	523	paragraph (1)(B)— 15
524	524	(I) first reserve, for each State, 16
525	525	an amount equal to the sum of the 17
526	526	qualifying contributions made in the 18
527	527	State in the previous year attributable 19
528	528	to eligible workforce training organi-20
529	529	zations; and 21
530	530	(II) next, allocate the remaining 22
531	531	amount among the participating 23
532	532	States by allocating to each State an 24
533	533	amount determined through a system, 25
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535	535	kjohnson on DSK79L0C42PROD with BILLS 19
536	536	•S 56 IS
537	537	as established and maintained by the 1
538	538	Secretary of Labor, that accurately 2
539	539	reflects demand and potential quali-3
540	540	fied participants for apprenticeships 4
541	541	and workforce training within that 5
542	542	State. 6
543	543	(B) M
544	544	INIMUM ALLOCATION .—Notwith-7
545	545	standing subparagraph (A), no State receiving 8
546	546	an allotment under this section may receive less 9
547	547	than one-half of one percent of the amount al-10
548	548	lotted for a fiscal year. 11
549	549	(C) A
550	550	LTERNATIVE ALLOCATION FOR 12
551	551	QUALIFIED CONTRIBUTIONS TO ELIGIBLE 13
552	552	SCHOLARSHIP-GRANTING ORGANIZATIONS .— 14
553	553	(i) I
554	554	N GENERAL.—Not later than the 15
555	555	end of the fifth year of the program or one 16
556	556	year after the end of the first fiscal year 17
557	557	for which the total amount of credits 18
558	558	claimed under section 25F and section 19
559	559	45AA of the Internal Revenue Code of 20
560	560	1986 for qualified contributions to eligible 21
561	561	scholarship-granting organizations is 22
562	562	$2,500,000,000 or more, whichever comes 23
563	563	first, the Secretary of Education shall, by 24
564	564	regulation, provide for an alternative allo-25
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566	566	kjohnson on DSK79L0C42PROD with BILLS 20
567	567	•S 56 IS
568	568	cation method for the amount described in 1
569	569	paragraph (1)(A) that shall take effect be-2
570	570	ginning with the first fiscal year after the 3
571	571	regulation takes effect. 4
572	572	(ii) A
573	573	LTERNATIVE ALLOCATION METH -5
574	574	OD.—The alternative allocation method de-6
575	575	scribed in clause (i) shall be expressed as 7
576	576	a formula based on a combination of the 8
577	577	following data for each State, as reported 9
578	578	by the State to the Secretary of Education: 10
579	579	(I) The relative percentage of 11
580	580	students in the State who receive an 12
581	581	elementary or secondary scholarship 13
582	582	through a State program that is fi-14
583	583	nanced through State tax-credited do-15
584	584	nations or appropriations and that 16
585	585	permits the elementary or secondary 17
586	586	scholarship to be used to attend a pri-18
587	587	vate school. 19
588	588	(II) The total amount of all ele-20
589	589	mentary and secondary scholarships 21
590	590	awarded through a State program 22
591	591	that is financed through State tax- 23
592	592	credited donations or appropriations 24
593	593	compared to the total amount of cur-25
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595	595	kjohnson on DSK79L0C42PROD with BILLS 21
596	596	•S 56 IS
597	597	rent State and local expenditures for 1
598	598	free public education in the State. 2
599	599	(iii) A
600	600	LLOCATION FORMULA .—For any 3
601	601	fiscal year to which clause (i) applies, the 4
602	602	Secretary of Education shall— 5
603	603	(I) first reserve, for each State, 6
604	604	an amount equal to the sum of the 7
605	605	qualifying contributions made in the 8
606	606	State in the previous year; 9
607	607	(II) next, allocate two-thirds of 10
608	608	the remaining amount of the national 11
609	609	cap for that year using the alternative 12
610	610	allocation method in clause (ii); and 13
611	611	(III) then, allocate one-third of 14
612	612	the remaining amount in accordance 15
613	613	with subparagraph (A)(ii). 16
614	614	(iv) I
615	615	NELIGIBILITY.—For any fiscal 17
616	616	year to which clause (i) applies, a State 18
617	617	that does not provide the Secretary of 19
618	618	Education with information described in 20
619	619	clause (ii) is not eligible to receive an allo-21
620	620	cation through the alternative allocation 22
621	621	method under clause (ii). 23
622	622	(3) A
623	623	LLOWABLE PARTNERSHIPS .—A State may 24
624	624	choose to administer the allocation it receives under 25
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627	627	•S 56 IS
628	628	paragraph (2) in partnership with one or more 1
629	629	States, provided that the eligible scholarship-grant-2
630	630	ing organizations or eligible workforce training orga-3
631	631	nizations in each partner State serve students who 4
632	632	reside in all States in the partnership. 5
633	633	(4) T
634	634	OTAL ALLOCATION.—A State’s allocation, 6
635	635	for any fiscal year, is the sum of the amount deter-7
636	636	mined for it under subparagraphs (A) and (B) of 8
637	637	paragraph (2), except as provided in paragraph 9
638	638	(2)(C). 10
639	639	(5) A
640	640	LLOCATION AND ADJUSTMENTS .— 11
641	641	(A) I
642	642	NITIAL ALLOCATION TO STATES .—No 12
643	643	later than November 1 of the year preceding a 13
644	644	year for which there is a national cap on credits 14
645	645	under paragraph (1) (hereafter in this section, 15
646	646	the ‘‘applicable year’’), or as early as prac-16
647	647	ticable with respect to the first year, the Sec-17
648	648	retary of Education shall announce the State 18
649	649	allocations under paragraph (2) for the applica-19
650	650	ble year. 20
651	651	(B) L
652	652	IST OF ELIGIBLE SCHOLARSHIP - 21
653	653	GRANTING ORGANIZATIONS AND ELIGIBLE 22
654	654	WORKFORCE TRAINING ORGANIZATIONS .—No 23
655	655	later than January 1 of each applicable year, or 24
656	656	as early as practicable with respect to the first 25
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659	659	•S 56 IS
660	660	year, each State shall provide the Secretary of 1
661	661	Education a list of eligible scholarship-granting 2
662	662	organizations and eligible workforce training or-3
663	663	ganizations described in paragraphs (3)(A) and 4
664	664	(4) of section 25F(c) of the Internal Revenue 5
665	665	Code of 1986, including a certification that the 6
666	666	entity submitting the list on behalf of the State 7
667	667	has the authority to perform this function. Nei-8
668	668	ther this Act nor any other Federal law shall be 9
669	669	construed as limiting the entities that may sub-10
670	670	mit the list on behalf of a State. 11
671	671	(C) R
672	672	EALLOCATION.— 12
673	673	(i) I
674	674	N GENERAL.—The Secretary of 13
675	675	Education shall, in accordance with para-14
676	676	graph (2), reallocate to any other States 15
677	677	the allocation of a State which, for any ap-16
678	678	plicable year— 17
679	679	(I) fails to provide the Secretary 18
680	680	of Education a list of eligible scholar-19
681	681	ship-granting organizations and eligi-20
682	682	ble workforce training organizations 21
683	683	pursuant to subparagraph (B); and 22
684	684	(II) does not have an eligible 23
685	685	scholarship-granting organization (as 24
686	686	described in section 25F(c)(3)(B) of 25
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689	689	•S 56 IS
690	690	the Internal Revenue Code of 1986) 1
691	691	located in such State. 2
692	692	(ii) U
693	693	NCLAIMED CREDITS .—On or 3
694	694	after April 1 of any applicable year, the 4
695	695	Secretary of Education may reallocate, to 5
696	696	one or more other States that have eligible 6
697	697	scholarship-granting organizations and eli-7
698	698	gible workforce training organizations in 8
699	699	the States, without regard to paragraph 9
700	700	(2), the allocation of a State for which the 10
701	701	State’s allocation has not been claimed. 11
702	702	(d) D
703	703	EFINITIONS.—The definitions of terms in sec-12
704	704	tion 25F(c) of the Internal Revenue Code of 1986 apply 13
705	705	to those terms as used in this title. 14
706	706	(e) A
707	707	UTHORIZATION OF APPROPRIATIONS.—For the 15
708	708	purpose of administering this section and sections 25F 16
709	709	and 45AA of the Internal Revenue Code of 1986, there 17
710	710	are authorized to be appropriated, and there are appro-18
711	711	priated, such sums as may be necessary for fiscal year 19
712	712	2023 and each succeeding fiscal year. 20
713	713	Æ
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715	715	kjohnson on DSK79L0C42PROD with BILLS