| 1 | 1 | | II |
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| 2 | 2 | | 119THCONGRESS |
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| 3 | 3 | | 1 |
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| 4 | 4 | | STSESSION S. 370 |
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| 5 | 5 | | To amend the Internal Revenue Code of 1986 to establish tax credits to |
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| 6 | 6 | | encourage individual and corporate taxpayers to contribute to scholar- |
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| 7 | 7 | | ships for students through eligible scholarship-granting organizations and |
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| 8 | 8 | | eligible workforce training organizations, and for other purposes. |
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| 9 | 9 | | IN THE SENATE OF THE UNITED STATES |
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| 10 | 10 | | FEBRUARY3, 2025 |
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| 11 | 11 | | Mr. C |
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| 12 | 12 | | RUZ(for himself and Mr. LANKFORD) introduced the following bill; |
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| 13 | 13 | | which was read twice and referred to the Committee on Finance |
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| 14 | 14 | | A BILL |
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| 15 | 15 | | To amend the Internal Revenue Code of 1986 to establish |
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| 16 | 16 | | tax credits to encourage individual and corporate tax- |
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| 17 | 17 | | payers to contribute to scholarships for students through |
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| 18 | 18 | | eligible scholarship-granting organizations and eligible |
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| 19 | 19 | | workforce training organizations, and for other purposes. |
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| 20 | 20 | | Be it enacted by the Senate and House of Representa-1 |
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| 21 | 21 | | tives of the United States of America in Congress assembled, 2 |
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| 22 | 22 | | SECTION 1. SHORT TITLE. 3 |
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| 23 | 23 | | This Act may be cited as the ‘‘Education Freedom 4 |
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| 24 | 24 | | Scholarships and Opportunity Act’’. 5 |
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| 26 | 26 | | ssavage on LAPJG3WLY3PROD with BILLS 2 |
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| 27 | 27 | | •S 370 IS |
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| 28 | 28 | | SEC. 2. PURPOSE. 1 |
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| 29 | 29 | | The purpose of this Act is to encourage individual 2 |
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| 30 | 30 | | and corporate taxpayers to contribute to scholarships for 3 |
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| 31 | 31 | | individual students through eligible scholarship-granting 4 |
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| 32 | 32 | | organizations and eligible workforce training organiza-5 |
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| 33 | 33 | | tions, as identified by States. 6 |
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| 34 | 34 | | TITLE I—AMENDMENTS TO THE 7 |
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| 35 | 35 | | INTERNAL REVENUE CODE 8 |
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| 36 | 36 | | OF 1986 9 |
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| 37 | 37 | | SEC. 101. REFERENCES TO THE INTERNAL REVENUE CODE 10 |
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| 38 | 38 | | OF 1986. 11 |
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| 39 | 39 | | Except as otherwise expressly provided, whenever in 12 |
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| 40 | 40 | | this title an amendment or repeal is expressed in terms 13 |
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| 41 | 41 | | of an amendment to, or repeal of, a section or other provi-14 |
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| 42 | 42 | | sion, the reference shall be considered to be made to a 15 |
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| 43 | 43 | | section or other provision of the Internal Revenue Code 16 |
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| 44 | 44 | | of 1986. 17 |
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| 45 | 45 | | SEC. 102. TAX CREDITS FOR CONTRIBUTIONS TO ELIGIBLE 18 |
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| 46 | 46 | | SCHOLARSHIP-GRANTING ORGANIZATIONS 19 |
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| 47 | 47 | | AND ELIGIBLE WORKFORCE TRAINING ORGA-20 |
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| 48 | 48 | | NIZATIONS. 21 |
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| 49 | 49 | | (a) C |
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| 50 | 50 | | REDIT FORINDIVIDUALS.— 22 |
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| 51 | 51 | | (1) I |
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| 52 | 52 | | N GENERAL.—Subpart A of part IV of sub-23 |
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| 53 | 53 | | chapter A of chapter 1 is amended by adding after 24 |
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| 54 | 54 | | section 25E the following new section: 25 |
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| 56 | 56 | | ssavage on LAPJG3WLY3PROD with BILLS 3 |
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| 57 | 57 | | •S 370 IS |
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| 58 | 58 | | ‘‘SEC. 25F. CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP- 1 |
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| 59 | 59 | | GRANTING ORGANIZATIONS AND ELIGIBLE 2 |
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| 60 | 60 | | WORKFORCE TRAINING ORGANIZATIONS. 3 |
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| 61 | 61 | | ‘‘(a) A |
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| 62 | 62 | | LLOWANCE OFCREDIT.—In the case of an in-4 |
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| 63 | 63 | | dividual, there shall be allowed as a credit against the tax 5 |
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| 64 | 64 | | imposed by this chapter for the taxable year an amount 6 |
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| 65 | 65 | | equal to the sum of any qualified contributions made by 7 |
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| 66 | 66 | | the taxpayer during the taxable year. 8 |
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| 67 | 67 | | ‘‘(b) A |
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| 68 | 68 | | MOUNT OFCREDIT.—The credit allowed under 9 |
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| 69 | 69 | | subsection (a) in any taxable year shall not exceed 10 per-10 |
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| 70 | 70 | | cent of the taxpayer’s adjusted gross income for the tax-11 |
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| 71 | 71 | | able year. 12 |
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| 72 | 72 | | ‘‘(c) D |
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| 73 | 73 | | EFINITIONS.—For purposes of this section— 13 |
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| 74 | 74 | | ‘‘(1) Q |
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| 75 | 75 | | UALIFIED CONTRIBUTION .—The term 14 |
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| 76 | 76 | | ‘qualified contribution’ means a contribution of cash 15 |
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| 77 | 77 | | to any eligible scholarship-granting organization or 16 |
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| 78 | 78 | | eligible workforce training organization. 17 |
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| 79 | 79 | | ‘‘(2) Q |
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| 80 | 80 | | UALIFIED EXPENSE.—The term ‘quali-18 |
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| 81 | 81 | | fied expense’ means any educational expense that 19 |
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| 82 | 82 | | is— 20 |
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| 83 | 83 | | ‘‘(A) for an individual student’s elementary 21 |
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| 84 | 84 | | or secondary education, as recognized by the 22 |
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| 85 | 85 | | State, 23 |
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| 86 | 86 | | ‘‘(B) for the secondary education compo-24 |
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| 87 | 87 | | nent of an individual elementary or secondary 25 |
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| 88 | 88 | | student’s career and technical education, as de-26 |
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| 90 | 90 | | ssavage on LAPJG3WLY3PROD with BILLS 4 |
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| 91 | 91 | | •S 370 IS |
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| 92 | 92 | | fined by section 3(5) of the Carl D. Perkins Ca-1 |
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| 93 | 93 | | reer and Technical Education Act of 2006 (20 2 |
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| 94 | 94 | | U.S.C. 2302(5)), or 3 |
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| 95 | 95 | | ‘‘(C) for the purpose of providing eligible 4 |
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| 96 | 96 | | individual participants with scholarships for 5 |
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| 97 | 97 | | secondary or postsecondary vocational education 6 |
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| 98 | 98 | | and training, workforce development, or appren-7 |
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| 99 | 99 | | ticeship training, including preparation and ex-8 |
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| 100 | 100 | | amination costs relating to portable certificates 9 |
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| 101 | 101 | | or credentials, or industry recognized certifi-10 |
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| 102 | 102 | | cation or credentialing programs. 11 |
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| 103 | 103 | | ‘‘(3) E |
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| 104 | 104 | | LIGIBLE SCHOLARSHIP-GRANTING ORGA-12 |
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| 105 | 105 | | NIZATION.—The term ‘eligible scholarship-granting 13 |
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| 106 | 106 | | organization’ means— 14 |
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| 107 | 107 | | ‘‘(A) an organization that— 15 |
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| 108 | 108 | | ‘‘(i) is described in section 501(c)(3) 16 |
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| 109 | 109 | | and exempt from taxation under section 17 |
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| 110 | 110 | | 501(a), 18 |
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| 111 | 111 | | ‘‘(ii) provides qualifying scholarships 19 |
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| 112 | 112 | | for qualified expenses to only individual el-20 |
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| 113 | 113 | | ementary and secondary students who— 21 |
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| 114 | 114 | | ‘‘(I) reside in the State in which 22 |
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| 115 | 115 | | the eligible scholarship-granting orga-23 |
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| 116 | 116 | | nization is recognized, or 24 |
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| 118 | 118 | | ssavage on LAPJG3WLY3PROD with BILLS 5 |
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| 119 | 119 | | •S 370 IS |
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| 120 | 120 | | ‘‘(II) in the case of the Bureau of 1 |
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| 121 | 121 | | Indian Education, are members of a 2 |
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| 122 | 122 | | federally recognized tribe, 3 |
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| 123 | 123 | | ‘‘(iii) a State reports to the Secretary 4 |
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| 124 | 124 | | of Education as an eligible scholarship- 5 |
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| 125 | 125 | | granting organization pursuant to section 6 |
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| 126 | 126 | | 201(c)(5)(B) of the Education Freedom 7 |
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| 127 | 127 | | Scholarships and Opportunity Act, 8 |
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| 128 | 128 | | ‘‘(iv) allocates at least 90 percent of 9 |
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| 129 | 129 | | qualified contributions to qualifying schol-10 |
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| 130 | 130 | | arships for qualified expenses, and 11 |
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| 131 | 131 | | ‘‘(v) provides scholarships to— 12 |
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| 132 | 132 | | ‘‘(I) more than 1 eligible student, 13 |
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| 133 | 133 | | ‘‘(II) more than 1 eligible family, 14 |
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| 134 | 134 | | and 15 |
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| 135 | 135 | | ‘‘(III) different eligible students 16 |
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| 136 | 136 | | attending more than one education 17 |
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| 137 | 137 | | provider, or 18 |
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| 138 | 138 | | ‘‘(B) an organization that— 19 |
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| 139 | 139 | | ‘‘(i) is described in section 501(c)(3) 20 |
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| 140 | 140 | | and exempt from taxation under section 21 |
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| 141 | 141 | | 501(a), and 22 |
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| 142 | 142 | | ‘‘(ii) pursuant to State law, was able, 23 |
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| 143 | 143 | | as of the date of the enactment of the 24 |
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| 144 | 144 | | Education Freedom Scholarships and Op-25 |
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| 146 | 146 | | ssavage on LAPJG3WLY3PROD with BILLS 6 |
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| 147 | 147 | | •S 370 IS |
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| 148 | 148 | | portunity Act, to receive contributions that 1 |
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| 149 | 149 | | are eligible for a State tax credit if such 2 |
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| 150 | 150 | | contributions are used by the organization 3 |
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| 151 | 151 | | to provide scholarships to individual ele-4 |
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| 152 | 152 | | mentary and secondary students, including 5 |
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| 153 | 153 | | scholarships for attending private schools. 6 |
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| 154 | 154 | | ‘‘(4) E |
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| 155 | 155 | | LIGIBLE WORKFORCE TRAINING ORGANI -7 |
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| 156 | 156 | | ZATION.— 8 |
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| 157 | 157 | | ‘‘(A) I |
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| 158 | 158 | | N GENERAL.—The term ‘eligible 9 |
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| 159 | 159 | | workforce training organization’ means any or-10 |
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| 160 | 160 | | ganization— 11 |
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| 161 | 161 | | ‘‘(i) which is— 12 |
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| 162 | 162 | | ‘‘(I) described in section 13 |
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| 163 | 163 | | 501(c)(3) and exempt from taxation 14 |
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| 164 | 164 | | under section 501(a), and 15 |
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| 165 | 165 | | ‘‘(II) not a private foundation (as 16 |
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| 166 | 166 | | defined in section 509), 17 |
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| 167 | 167 | | ‘‘(ii) whose purpose is to provide voca-18 |
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| 168 | 168 | | tional education and training, workforce 19 |
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| 169 | 169 | | development, or apprenticeship training to 20 |
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| 170 | 170 | | eligible potential secondary or postsec-21 |
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| 171 | 171 | | ondary students, including organizations 22 |
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| 172 | 172 | | whose purpose is to provide scholarships 23 |
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| 173 | 173 | | for portable certificates or credentials, or 24 |
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| 174 | 174 | | industry recognized certifications or 25 |
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| 176 | 176 | | ssavage on LAPJG3WLY3PROD with BILLS 7 |
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| 177 | 177 | | •S 370 IS |
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| 178 | 178 | | credentialing programs, including prepara-1 |
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| 179 | 179 | | tion and examination costs, 2 |
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| 180 | 180 | | ‘‘(iii) which is in compliance with ap-3 |
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| 181 | 181 | | plicable State laws, 4 |
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| 182 | 182 | | ‘‘(iv) which a State has reported to 5 |
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| 183 | 183 | | the Secretary of Education as an eligible 6 |
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| 184 | 184 | | workforce training organization pursuant 7 |
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| 185 | 185 | | to section 201(c)(5)(B) of the Education 8 |
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| 186 | 186 | | Freedom Scholarships and Opportunity 9 |
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| 187 | 187 | | Act, and 10 |
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| 188 | 188 | | ‘‘(v) which satisfies the requirements 11 |
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| 189 | 189 | | described in clauses (iv) and (v) of para-12 |
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| 190 | 190 | | graph (3)(A). 13 |
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| 191 | 191 | | ‘‘(B) P |
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| 192 | 192 | | OTENTIAL ELIGIBLE WORKFORCE 14 |
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| 193 | 193 | | TRAINING ORGANIZATIONS .—Eligible workforce 15 |
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| 194 | 194 | | training organizations may include, but are not 16 |
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| 195 | 195 | | limited to, organizations such as the following 17 |
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| 196 | 196 | | (provided that such organizations satisfy the re-18 |
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| 197 | 197 | | quirements under subparagraph (A)): 19 |
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| 198 | 198 | | ‘‘(i) Community colleges. 20 |
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| 199 | 199 | | ‘‘(ii) Workforce training programs (as 21 |
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| 200 | 200 | | defined by the applicable State workforce 22 |
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| 201 | 201 | | agency). 23 |
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| 202 | 202 | | ‘‘(iii) Organizations which provide— 24 |
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| 205 | 205 | | •S 370 IS |
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| 206 | 206 | | ‘‘(I) career and technical edu-1 |
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| 207 | 207 | | cation, or 2 |
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| 208 | 208 | | ‘‘(II) training or apprenticeships, 3 |
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| 209 | 209 | | including, but not limited to, training 4 |
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| 210 | 210 | | or apprenticeships operated by a col-5 |
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| 211 | 211 | | lective bargaining organization or that 6 |
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| 212 | 212 | | provide industry recognized certifi-7 |
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| 213 | 213 | | cations or credentials. 8 |
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| 214 | 214 | | ‘‘(iv) Community organizations that 9 |
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| 215 | 215 | | provide training that results in a certifi-10 |
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| 216 | 216 | | cation. 11 |
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| 217 | 217 | | ‘‘(5) Q |
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| 218 | 218 | | UALIFYING SCHOLARSHIP .—The term 12 |
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| 219 | 219 | | ‘qualifying scholarship’ means— 13 |
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| 220 | 220 | | ‘‘(A) a scholarship granted by an eligible 14 |
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| 221 | 221 | | scholarship-granting organization to an indi-15 |
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| 222 | 222 | | vidual elementary or secondary student, or 16 |
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| 223 | 223 | | ‘‘(B) a scholarship granted by an eligible 17 |
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| 224 | 224 | | workforce training organization as a scholarship 18 |
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| 225 | 225 | | to a secondary or postsecondary student for the 19 |
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| 226 | 226 | | purpose of vocational education and training, 20 |
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| 227 | 227 | | workforce development, obtaining portable cer-21 |
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| 228 | 228 | | tificates or credentials, or industry recognized 22 |
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| 229 | 229 | | certification or credentialing programs, includ-23 |
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| 230 | 230 | | ing preparation and examination costs, 24 |
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| 231 | 231 | | under this section. 25 |
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| 234 | 234 | | •S 370 IS |
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| 235 | 235 | | ‘‘(6) STATE.—The term ‘State’ means each of 1 |
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| 236 | 236 | | the 50 States, the District of Columbia, the Com-2 |
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| 237 | 237 | | monwealth of Puerto Rico, American Samoa, Guam, 3 |
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| 238 | 238 | | the Commonwealth of the Northern Mariana Is-4 |
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| 239 | 239 | | lands, the United States Virgin Islands, and the De-5 |
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| 240 | 240 | | partment of the Interior (acting through the Bureau 6 |
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| 241 | 241 | | of Indian Education). 7 |
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| 242 | 242 | | ‘‘(d) R |
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| 243 | 243 | | ULES OFCONSTRUCTION.— 8 |
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| 244 | 244 | | ‘‘(1) I |
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| 245 | 245 | | N GENERAL.—A scholarship awarded to a 9 |
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| 246 | 246 | | student from the proceeds of a qualified contribution 10 |
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| 247 | 247 | | under this section or section 45BB shall not be con-11 |
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| 248 | 248 | | sidered assistance to the school, eligible workforce 12 |
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| 249 | 249 | | training organization, or other educational provider 13 |
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| 250 | 250 | | that enrolls, or provides educational services to, the 14 |
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| 251 | 251 | | student or the student’s parents. 15 |
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| 252 | 252 | | ‘‘(2) N |
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| 253 | 253 | | OT TREATED AS INCOME .—The amount 16 |
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| 254 | 254 | | of any such scholarship shall not be treated as in-17 |
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| 255 | 255 | | come of the student or their parents for purposes of 18 |
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| 256 | 256 | | Federal tax laws or for determining eligibility for 19 |
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| 257 | 257 | | any other Federal program. 20 |
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| 258 | 258 | | ‘‘(3) P |
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| 259 | 259 | | ROHIBITION OF CONTROL OVER NON -21 |
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| 260 | 260 | | PUBLIC EDUCATION PROVIDERS .— 22 |
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| 261 | 261 | | ‘‘(A) Nothing in this Act shall be con-23 |
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| 262 | 262 | | strued to permit, allow, encourage, or authorize 24 |
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| 263 | 263 | | any Federal control over any aspect of any pri-25 |
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| 265 | 265 | | ssavage on LAPJG3WLY3PROD with BILLS 10 |
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| 266 | 266 | | •S 370 IS |
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| 267 | 267 | | vate, religious, or home education provider, 1 |
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| 268 | 268 | | whether or not a home education provider is 2 |
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| 269 | 269 | | treated as a private school or home school 3 |
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| 270 | 270 | | under State law. This Act shall not be con-4 |
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| 271 | 271 | | strued to exclude private, religious, or home 5 |
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| 272 | 272 | | education providers from participation in pro-6 |
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| 273 | 273 | | grams or services under this Act. 7 |
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| 274 | 274 | | ‘‘(B) Nothing in this Act shall be con-8 |
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| 275 | 275 | | strued to permit, allow, encourage, or authorize 9 |
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| 276 | 276 | | an entity submitting a list of eligible scholar-10 |
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| 277 | 277 | | ship-granting organizations or eligible workforce 11 |
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| 278 | 278 | | training organizations on behalf of a State to 12 |
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| 279 | 279 | | mandate, direct, or control any aspect of a pri-13 |
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| 280 | 280 | | vate or home education provider, regardless of 14 |
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| 281 | 281 | | whether or not a home education provider is 15 |
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| 282 | 282 | | treated as a private school under State law. 16 |
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| 283 | 283 | | ‘‘(C) No participating State or entity act-17 |
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| 284 | 284 | | ing on behalf of a State shall exclude, discrimi-18 |
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| 285 | 285 | | nate against, or otherwise disadvantage any 19 |
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| 286 | 286 | | education provider with respect to programs or 20 |
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| 287 | 287 | | services under this Act based in whole or in 21 |
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| 288 | 288 | | part on the provider’s religious education char-22 |
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| 289 | 289 | | acter or affiliation, including religiously or mis-23 |
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| 290 | 290 | | sion-based policies or practices. 24 |
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| 293 | 293 | | •S 370 IS |
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| 294 | 294 | | ‘‘(4) PARENTAL RIGHTS TO USE SCHOLAR -1 |
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| 295 | 295 | | SHIPS.—No participating State or entity acting on 2 |
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| 296 | 296 | | behalf of a State shall disfavor or discourage the use 3 |
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| 297 | 297 | | of such scholarships for the purchase of elementary 4 |
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| 298 | 298 | | and secondary or workforce training education serv-5 |
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| 299 | 299 | | ices, including those services provided by private or 6 |
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| 300 | 300 | | nonprofit entities, such as faith-based providers. 7 |
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| 301 | 301 | | ‘‘(5) S |
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| 302 | 302 | | TATE AND LOCAL AUTHORITY .—Nothing 8 |
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| 303 | 303 | | in this section or section 45BB shall be construed to 9 |
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| 304 | 304 | | modify a State or local government’s authority and 10 |
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| 305 | 305 | | responsibility to fund education. 11 |
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| 306 | 306 | | ‘‘(e) L |
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| 307 | 307 | | IMITATIONS.— 12 |
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| 308 | 308 | | ‘‘(1) T |
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| 309 | 309 | | AX LIABILITY.—No credit allowed under 13 |
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| 310 | 310 | | this section or section 45BB shall exceed the tax-14 |
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| 311 | 311 | | payer’s Federal income tax liability for the taxable 15 |
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| 312 | 312 | | year. 16 |
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| 313 | 313 | | ‘‘(2) P |
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| 314 | 314 | | ROHIBITIONS.—A taxpayer is prohibited 17 |
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| 315 | 315 | | from selling or transferring any portion of a tax 18 |
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| 316 | 316 | | credit allowed under this section or section 45BB. 19 |
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| 317 | 317 | | ‘‘(3) D |
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| 318 | 318 | | ENIAL OF DOUBLE BENEFIT .—The Sec-20 |
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| 319 | 319 | | retary shall prescribe such regulations or other guid-21 |
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| 320 | 320 | | ance to ensure that the sum of the tax benefits pro-22 |
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| 321 | 321 | | vided by Federal, State, or local law for a qualified 23 |
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| 322 | 322 | | contribution receiving a Federal tax credit in any 24 |
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| 323 | 323 | | taxable year shall not exceed the sum of the quali-25 |
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| 325 | 325 | | ssavage on LAPJG3WLY3PROD with BILLS 12 |
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| 326 | 326 | | •S 370 IS |
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| 327 | 327 | | fied contributions made by the taxpayer for the tax-1 |
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| 328 | 328 | | able year. 2 |
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| 329 | 329 | | ‘‘(f) C |
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| 330 | 330 | | ARRYOVER OFCREDIT.—If a tax credit allowed 3 |
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| 331 | 331 | | under this section or section 45BB is not fully used within 4 |
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| 332 | 332 | | the applicable taxable year because of insufficient tax li-5 |
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| 333 | 333 | | ability on the part of the taxpayer, the unused amount 6 |
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| 334 | 334 | | may be carried forward for a period not to exceed 5 years. 7 |
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| 335 | 335 | | ‘‘(g) E |
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| 336 | 336 | | LECTION.—This section shall apply to a tax-8 |
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| 337 | 337 | | payer for a taxable year only if the taxpayer elects to have 9 |
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| 338 | 338 | | this section apply for such taxable year. 10 |
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| 339 | 339 | | ‘‘(h) A |
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| 340 | 340 | | LTERNATIVEMINIMUMTAX.—For purposes of 11 |
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| 341 | 341 | | calculating the alternative minimum tax under section 55, 12 |
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| 342 | 342 | | a taxpayer may use any credit received for a qualified con-13 |
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| 343 | 343 | | tribution under this section.’’. 14 |
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| 344 | 344 | | (2) C |
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| 345 | 345 | | LERICAL AMENDMENT .—The table of sec-15 |
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| 346 | 346 | | tions for subpart A of part IV of subchapter A of 16 |
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| 347 | 347 | | chapter 1 of is amended by inserting after the item 17 |
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| 348 | 348 | | relating to section 25E the following new item: 18 |
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| 349 | 349 | | ‘‘Sec. 25F. Contributions to eligible scholarship-granting organizations and eli- |
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| 350 | 350 | | gible workforce training organizations.’’. |
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| 351 | 351 | | (b) CREDIT FORCORPORATIONS.— 19 |
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| 352 | 352 | | (1) I |
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| 353 | 353 | | N GENERAL.—Subpart D of part IV of 20 |
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| 354 | 354 | | subchapter A of chapter 1 is amended by adding at 21 |
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| 355 | 355 | | the end the following new section: 22 |
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| 357 | 357 | | ssavage on LAPJG3WLY3PROD with BILLS 13 |
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| 358 | 358 | | •S 370 IS |
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| 359 | 359 | | ‘‘SEC. 45BB. CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP- 1 |
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| 360 | 360 | | GRANTING ORGANIZATIONS AND ELIGIBLE 2 |
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| 361 | 361 | | WORKFORCE TRAINING ORGANIZATIONS. 3 |
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| 362 | 362 | | ‘‘(a) A |
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| 363 | 363 | | LLOWANCE OFCREDIT.—For purposes of sec-4 |
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| 364 | 364 | | tion 38, in the case of a domestic corporation, there shall 5 |
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| 365 | 365 | | be allowed as a credit against the tax imposed by this 6 |
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| 366 | 366 | | chapter for the taxable year an amount equal to the sum 7 |
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| 367 | 367 | | of any qualified contributions (as defined in section 8 |
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| 368 | 368 | | 25F(c)(1)) made by such corporation taxpayer during the 9 |
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| 369 | 369 | | taxable year. 10 |
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| 370 | 370 | | ‘‘(b) A |
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| 371 | 371 | | MOUNT OFCREDIT.—The credit allowed under 11 |
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| 372 | 372 | | subsection (a) for any taxable year shall not exceed 5 per-12 |
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| 373 | 373 | | cent of the taxable income (as defined in section 13 |
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| 374 | 374 | | 170(b)(2)(D)) of the domestic corporation for such taxable 14 |
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| 375 | 375 | | year. 15 |
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| 376 | 376 | | ‘‘(c) A |
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| 377 | 377 | | DDITIONALPROVISIONS.—For purposes of this 16 |
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| 378 | 378 | | section, any qualified contributions made by a domestic 17 |
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| 379 | 379 | | corporation shall be subject to the provisions of section 18 |
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| 380 | 380 | | 25F, to the extent applicable. 19 |
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| 381 | 381 | | ‘‘(d) E |
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| 382 | 382 | | LECTION.—This section shall apply to a tax-20 |
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| 383 | 383 | | payer for a taxable year only if the taxpayer elects to have 21 |
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| 384 | 384 | | this section apply for such taxable year.’’. 22 |
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| 385 | 385 | | (2) C |
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| 386 | 386 | | REDIT PART OF GENERAL BUSINESS 23 |
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| 387 | 387 | | CREDIT.—Section 38(b) is amended— 24 |
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| 388 | 388 | | (A) by striking ‘‘plus’’ at the end of para-25 |
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| 389 | 389 | | graph (40); 26 |
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| 391 | 391 | | ssavage on LAPJG3WLY3PROD with BILLS 14 |
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| 392 | 392 | | •S 370 IS |
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| 393 | 393 | | (B) by striking the period at the end of 1 |
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| 394 | 394 | | paragraph (41) and inserting ‘‘, plus’’; and 2 |
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| 395 | 395 | | (C) by adding at the end the following new 3 |
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| 396 | 396 | | paragraph: 4 |
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| 397 | 397 | | ‘‘(42) the credit for qualified contributions de-5 |
|---|
| 398 | 398 | | termined under section 45BB(a).’’. 6 |
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| 399 | 399 | | (3) C |
|---|
| 400 | 400 | | LERICAL AMENDMENT .—The table of sec-7 |
|---|
| 401 | 401 | | tions for subpart D of part IV of subchapter A of 8 |
|---|
| 402 | 402 | | chapter 1 is amended by adding at the end the fol-9 |
|---|
| 403 | 403 | | lowing new item: 10 |
|---|
| 404 | 404 | | ‘‘Sec. 45BB. Contributions to eligible scholarship-granting organizations and el- |
|---|
| 405 | 405 | | igible workforce training organizations.’’. |
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| 406 | 406 | | TITLE II—EDUCATION FREEDOM 11 |
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| 407 | 407 | | SCHOLARSHIPS AND OPPOR-12 |
|---|
| 408 | 408 | | TUNITY ACT WEB PORTAL 13 |
|---|
| 409 | 409 | | AND ADMINISTRATION 14 |
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| 410 | 410 | | SEC. 201. EDUCATION FREEDOM SCHOLARSHIPS AND OP-15 |
|---|
| 411 | 411 | | PORTUNITY ACT WEB PORTAL AND ADMINIS-16 |
|---|
| 412 | 412 | | TRATION. 17 |
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| 413 | 413 | | (a) I |
|---|
| 414 | 414 | | NGENERAL.—The Secretary of Education shall, 18 |
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| 415 | 415 | | in coordination with the Secretary of the Treasury and 19 |
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| 416 | 416 | | the Secretary of Labor, establish, host, and maintain a 20 |
|---|
| 417 | 417 | | Web portal that— 21 |
|---|
| 418 | 418 | | (1) lists all scholarship-granting organizations 22 |
|---|
| 419 | 419 | | and workforce training organizations that are eligi-23 |
|---|
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| 421 | 421 | | ssavage on LAPJG3WLY3PROD with BILLS 15 |
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| 422 | 422 | | •S 370 IS |
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| 423 | 423 | | ble under section 25F or 45BB of the Internal Rev-1 |
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| 424 | 424 | | enue Code of 1986; 2 |
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| 425 | 425 | | (2) enables a taxpayer to make a qualifying 3 |
|---|
| 426 | 426 | | contribution to one or more eligible scholarship- 4 |
|---|
| 427 | 427 | | granting organizations and eligible workforce train-5 |
|---|
| 428 | 428 | | ing organizations and to immediately obtain both a 6 |
|---|
| 429 | 429 | | pre-approval of a tax credit for that contribution 7 |
|---|
| 430 | 430 | | and a receipt for tax filings; 8 |
|---|
| 431 | 431 | | (3) provides information about the tax benefits 9 |
|---|
| 432 | 432 | | of the provisions of the Education Freedom Scholar-10 |
|---|
| 433 | 433 | | ships and Opportunity Act under the Internal Rev-11 |
|---|
| 434 | 434 | | enue Code of 1986; and 12 |
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| 435 | 435 | | (4) enables a State to submit and update infor-13 |
|---|
| 436 | 436 | | mation about its programs and its eligible scholar-14 |
|---|
| 437 | 437 | | ship-granting organizations and eligible workforce 15 |
|---|
| 438 | 438 | | training organizations for informational purposes 16 |
|---|
| 439 | 439 | | only, including information on— 17 |
|---|
| 440 | 440 | | (A) student eligibility; 18 |
|---|
| 441 | 441 | | (B) allowable educational expenses; 19 |
|---|
| 442 | 442 | | (C) the types of allowable education pro-20 |
|---|
| 443 | 443 | | viders; 21 |
|---|
| 444 | 444 | | (D) the percentage of funds an organiza-22 |
|---|
| 445 | 445 | | tion may use for program administration; and 23 |
|---|
| 446 | 446 | | (E) the percentage of total contributions 24 |
|---|
| 447 | 447 | | the organization awards in a calendar year. 25 |
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| 449 | 449 | | ssavage on LAPJG3WLY3PROD with BILLS 16 |
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| 450 | 450 | | •S 370 IS |
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| 451 | 451 | | (b) NONPORTALCONTRIBUTIONS.—A taxpayer may 1 |
|---|
| 452 | 452 | | opt to make a contribution directly to an eligible scholar-2 |
|---|
| 453 | 453 | | ship-granting organization or an eligible workforce train-3 |
|---|
| 454 | 454 | | ing organization, instead of through the Web portal de-4 |
|---|
| 455 | 455 | | scribed in subsection (a), provided that the taxpayer, or 5 |
|---|
| 456 | 456 | | the eligible scholarship-granting organization or eligible 6 |
|---|
| 457 | 457 | | workforce training organization on behalf of the taxpayer, 7 |
|---|
| 458 | 458 | | applies for, and receives pre-approval for a tax credit from 8 |
|---|
| 459 | 459 | | the Secretary of Education in coordination with the Sec-9 |
|---|
| 460 | 460 | | retary of the Treasury. 10 |
|---|
| 461 | 461 | | (c) N |
|---|
| 462 | 462 | | ATIONAL ANDSTATECAPS ONCREDITS.— 11 |
|---|
| 463 | 463 | | (1) N |
|---|
| 464 | 464 | | ATIONAL CAP.—There is a cap of 12 |
|---|
| 465 | 465 | | $10,000,000,000 on the sum of the contributions 13 |
|---|
| 466 | 466 | | that qualify for a credit under section 25F and sec-14 |
|---|
| 467 | 467 | | tion 45BB of the Internal Revenue Code of 1986 for 15 |
|---|
| 468 | 468 | | each calendar year, of which— 16 |
|---|
| 469 | 469 | | (A) $5,000,000,000 shall be allotted for 17 |
|---|
| 470 | 470 | | qualified contributions to eligible scholarship- 18 |
|---|
| 471 | 471 | | granting organizations; and 19 |
|---|
| 472 | 472 | | (B) $5,000,000,000 shall be allotted for 20 |
|---|
| 473 | 473 | | qualified contributions to eligible workforce 21 |
|---|
| 474 | 474 | | training organizations. 22 |
|---|
| 475 | 475 | | (2) A |
|---|
| 476 | 476 | | LLOCATION OF CAP.— 23 |
|---|
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| 478 | 478 | | ssavage on LAPJG3WLY3PROD with BILLS 17 |
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| 479 | 479 | | •S 370 IS |
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| 480 | 480 | | (A) INITIAL ALLOCATIONS.—For each cal-1 |
|---|
| 481 | 481 | | endar year, the Secretary of Education, in co-2 |
|---|
| 482 | 482 | | ordination with the Secretary of Labor, shall— 3 |
|---|
| 483 | 483 | | (i) from the amount allotted under 4 |
|---|
| 484 | 484 | | paragraph (1)(A)— 5 |
|---|
| 485 | 485 | | (I) first reserve, for each State, 6 |
|---|
| 486 | 486 | | an amount equal to the sum of the 7 |
|---|
| 487 | 487 | | qualifying contributions made in the 8 |
|---|
| 488 | 488 | | State in the previous year; and 9 |
|---|
| 489 | 489 | | (II) next, allocate the remaining 10 |
|---|
| 490 | 490 | | amount among the participating 11 |
|---|
| 491 | 491 | | States by allocating to each State the 12 |
|---|
| 492 | 492 | | sum of— 13 |
|---|
| 493 | 493 | | (aa) an amount that bears 14 |
|---|
| 494 | 494 | | the same relationship to 20 per-15 |
|---|
| 495 | 495 | | cent of such remaining amount 16 |
|---|
| 496 | 496 | | as the number of individuals 17 |
|---|
| 497 | 497 | | aged 5 through 17 in the State, 18 |
|---|
| 498 | 498 | | as determined by the Secretary of 19 |
|---|
| 499 | 499 | | Education on the basis of the 20 |
|---|
| 500 | 500 | | most recent satisfactory data, 21 |
|---|
| 501 | 501 | | bears to the number of those in-22 |
|---|
| 502 | 502 | | dividuals in all such States, as so 23 |
|---|
| 503 | 503 | | determined; and 24 |
|---|
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| 505 | 505 | | ssavage on LAPJG3WLY3PROD with BILLS 18 |
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| 506 | 506 | | •S 370 IS |
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| 507 | 507 | | (bb) an amount that bears 1 |
|---|
| 508 | 508 | | the same relationship to 80 per-2 |
|---|
| 509 | 509 | | cent of such remaining amount 3 |
|---|
| 510 | 510 | | as the number of individuals 4 |
|---|
| 511 | 511 | | aged 5 through 17 from families 5 |
|---|
| 512 | 512 | | with incomes below the poverty 6 |
|---|
| 513 | 513 | | line in the State, as determined 7 |
|---|
| 514 | 514 | | by the Secretary of Education, on 8 |
|---|
| 515 | 515 | | the basis of the most recent sat-9 |
|---|
| 516 | 516 | | isfactory data, bears to the num-10 |
|---|
| 517 | 517 | | ber of those individuals in all 11 |
|---|
| 518 | 518 | | such States, as so determined; 12 |
|---|
| 519 | 519 | | and 13 |
|---|
| 520 | 520 | | (ii) from the amount allotted under 14 |
|---|
| 521 | 521 | | paragraph (1)(B)— 15 |
|---|
| 522 | 522 | | (I) first reserve, for each State, 16 |
|---|
| 523 | 523 | | an amount equal to the sum of the 17 |
|---|
| 524 | 524 | | qualifying contributions made in the 18 |
|---|
| 525 | 525 | | State in the previous year attributable 19 |
|---|
| 526 | 526 | | to eligible workforce training organi-20 |
|---|
| 527 | 527 | | zations; and 21 |
|---|
| 528 | 528 | | (II) next, allocate the remaining 22 |
|---|
| 529 | 529 | | amount among the participating 23 |
|---|
| 530 | 530 | | States by allocating to each State an 24 |
|---|
| 531 | 531 | | amount determined through a system, 25 |
|---|
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| 533 | 533 | | ssavage on LAPJG3WLY3PROD with BILLS 19 |
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| 534 | 534 | | •S 370 IS |
|---|
| 535 | 535 | | as established and maintained by the 1 |
|---|
| 536 | 536 | | Secretary of Labor, that accurately 2 |
|---|
| 537 | 537 | | reflects demand and potential quali-3 |
|---|
| 538 | 538 | | fied participants for apprenticeships 4 |
|---|
| 539 | 539 | | and workforce training within that 5 |
|---|
| 540 | 540 | | State. 6 |
|---|
| 541 | 541 | | (B) M |
|---|
| 542 | 542 | | INIMUM ALLOCATION .—Notwith-7 |
|---|
| 543 | 543 | | standing subparagraph (A), no State receiving 8 |
|---|
| 544 | 544 | | an allotment under this section may receive less 9 |
|---|
| 545 | 545 | | than one-half of one percent of the amount al-10 |
|---|
| 546 | 546 | | lotted for a fiscal year. 11 |
|---|
| 547 | 547 | | (C) A |
|---|
| 548 | 548 | | LTERNATIVE ALLOCATION FOR 12 |
|---|
| 549 | 549 | | QUALIFIED CONTRIBUTIONS TO ELIGIBLE 13 |
|---|
| 550 | 550 | | SCHOLARSHIP-GRANTING ORGANIZATIONS .— 14 |
|---|
| 551 | 551 | | (i) I |
|---|
| 552 | 552 | | N GENERAL.—Not later than the 15 |
|---|
| 553 | 553 | | end of the fifth year of the program or one 16 |
|---|
| 554 | 554 | | year after the end of the first fiscal year 17 |
|---|
| 555 | 555 | | for which the total amount of credits 18 |
|---|
| 556 | 556 | | claimed under section 25F and section 19 |
|---|
| 557 | 557 | | 45BB of the Internal Revenue Code of 20 |
|---|
| 558 | 558 | | 1986 for qualified contributions to eligible 21 |
|---|
| 559 | 559 | | scholarship-granting organizations is 22 |
|---|
| 560 | 560 | | $2,500,000,000 or more, whichever comes 23 |
|---|
| 561 | 561 | | first, the Secretary of Education shall, by 24 |
|---|
| 562 | 562 | | regulation, provide for an alternative allo-25 |
|---|
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| 564 | 564 | | ssavage on LAPJG3WLY3PROD with BILLS 20 |
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| 565 | 565 | | •S 370 IS |
|---|
| 566 | 566 | | cation method for the amount described in 1 |
|---|
| 567 | 567 | | paragraph (1)(A) that shall take effect be-2 |
|---|
| 568 | 568 | | ginning with the first fiscal year after the 3 |
|---|
| 569 | 569 | | regulation takes effect. 4 |
|---|
| 570 | 570 | | (ii) A |
|---|
| 571 | 571 | | LTERNATIVE ALLOCATION METH -5 |
|---|
| 572 | 572 | | OD.—The alternative allocation method de-6 |
|---|
| 573 | 573 | | scribed in clause (i) shall be expressed as 7 |
|---|
| 574 | 574 | | a formula based on a combination of the 8 |
|---|
| 575 | 575 | | following data for each State, as reported 9 |
|---|
| 576 | 576 | | by the State to the Secretary of Education: 10 |
|---|
| 577 | 577 | | (I) The relative percentage of 11 |
|---|
| 578 | 578 | | students in the State who receive an 12 |
|---|
| 579 | 579 | | elementary or secondary scholarship 13 |
|---|
| 580 | 580 | | through a State program that is fi-14 |
|---|
| 581 | 581 | | nanced through State tax-credited do-15 |
|---|
| 582 | 582 | | nations or appropriations and that 16 |
|---|
| 583 | 583 | | permits the elementary or secondary 17 |
|---|
| 584 | 584 | | scholarship to be used to attend a pri-18 |
|---|
| 585 | 585 | | vate school. 19 |
|---|
| 586 | 586 | | (II) The total amount of all ele-20 |
|---|
| 587 | 587 | | mentary and secondary scholarships 21 |
|---|
| 588 | 588 | | awarded through a State program 22 |
|---|
| 589 | 589 | | that is financed through State tax- 23 |
|---|
| 590 | 590 | | credited donations or appropriations 24 |
|---|
| 591 | 591 | | compared to the total amount of cur-25 |
|---|
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| 593 | 593 | | ssavage on LAPJG3WLY3PROD with BILLS 21 |
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| 594 | 594 | | •S 370 IS |
|---|
| 595 | 595 | | rent State and local expenditures for 1 |
|---|
| 596 | 596 | | free public education in the State. 2 |
|---|
| 597 | 597 | | (iii) A |
|---|
| 598 | 598 | | LLOCATION FORMULA .—For any 3 |
|---|
| 599 | 599 | | fiscal year to which clause (i) applies, the 4 |
|---|
| 600 | 600 | | Secretary of Education shall— 5 |
|---|
| 601 | 601 | | (I) first reserve, for each State, 6 |
|---|
| 602 | 602 | | an amount equal to the sum of the 7 |
|---|
| 603 | 603 | | qualifying contributions made in the 8 |
|---|
| 604 | 604 | | State in the previous year; 9 |
|---|
| 605 | 605 | | (II) next, allocate two-thirds of 10 |
|---|
| 606 | 606 | | the remaining amount of the national 11 |
|---|
| 607 | 607 | | cap for that year using the alternative 12 |
|---|
| 608 | 608 | | allocation method in clause (ii); and 13 |
|---|
| 609 | 609 | | (III) then, allocate one-third of 14 |
|---|
| 610 | 610 | | the remaining amount in accordance 15 |
|---|
| 611 | 611 | | with subparagraph (A)(ii). 16 |
|---|
| 612 | 612 | | (iv) I |
|---|
| 613 | 613 | | NELIGIBILITY.—For any fiscal 17 |
|---|
| 614 | 614 | | year to which clause (i) applies, a State 18 |
|---|
| 615 | 615 | | that does not provide the Secretary of 19 |
|---|
| 616 | 616 | | Education with information described in 20 |
|---|
| 617 | 617 | | clause (ii) is not eligible to receive an allo-21 |
|---|
| 618 | 618 | | cation through the alternative allocation 22 |
|---|
| 619 | 619 | | method under clause (ii). 23 |
|---|
| 620 | 620 | | (3) A |
|---|
| 621 | 621 | | LLOWABLE PARTNERSHIPS .—A State may 24 |
|---|
| 622 | 622 | | choose to administer the allocation it receives under 25 |
|---|
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| 624 | 624 | | ssavage on LAPJG3WLY3PROD with BILLS 22 |
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| 625 | 625 | | •S 370 IS |
|---|
| 626 | 626 | | paragraph (2) in partnership with one or more 1 |
|---|
| 627 | 627 | | States, provided that the eligible scholarship-grant-2 |
|---|
| 628 | 628 | | ing organizations or eligible workforce training orga-3 |
|---|
| 629 | 629 | | nizations in each partner State serve students who 4 |
|---|
| 630 | 630 | | reside in all States in the partnership. 5 |
|---|
| 631 | 631 | | (4) T |
|---|
| 632 | 632 | | OTAL ALLOCATION.—A State’s allocation, 6 |
|---|
| 633 | 633 | | for any fiscal year, is the sum of the amount deter-7 |
|---|
| 634 | 634 | | mined for it under subparagraphs (A) and (B) of 8 |
|---|
| 635 | 635 | | paragraph (2), except as provided in paragraph 9 |
|---|
| 636 | 636 | | (2)(C). 10 |
|---|
| 637 | 637 | | (5) A |
|---|
| 638 | 638 | | LLOCATION AND ADJUSTMENTS .— 11 |
|---|
| 639 | 639 | | (A) I |
|---|
| 640 | 640 | | NITIAL ALLOCATION TO STATES .—No 12 |
|---|
| 641 | 641 | | later than November 1 of the year preceding a 13 |
|---|
| 642 | 642 | | year for which there is a national cap on credits 14 |
|---|
| 643 | 643 | | under paragraph (1) (hereafter in this section, 15 |
|---|
| 644 | 644 | | the ‘‘applicable year’’), or as early as prac-16 |
|---|
| 645 | 645 | | ticable with respect to the first year, the Sec-17 |
|---|
| 646 | 646 | | retary of Education shall announce the State 18 |
|---|
| 647 | 647 | | allocations under paragraph (2) for the applica-19 |
|---|
| 648 | 648 | | ble year. 20 |
|---|
| 649 | 649 | | (B) L |
|---|
| 650 | 650 | | IST OF ELIGIBLE SCHOLARSHIP - 21 |
|---|
| 651 | 651 | | GRANTING ORGANIZATIONS AND ELIGIBLE 22 |
|---|
| 652 | 652 | | WORKFORCE TRAINING ORGANIZATIONS .—No 23 |
|---|
| 653 | 653 | | later than January 1 of each applicable year, or 24 |
|---|
| 654 | 654 | | as early as practicable with respect to the first 25 |
|---|
| 655 | 655 | | VerDate Sep 11 2014 21:05 Feb 28, 2025 Jkt 059200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S370.IS S370 |
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| 656 | 656 | | ssavage on LAPJG3WLY3PROD with BILLS 23 |
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| 657 | 657 | | •S 370 IS |
|---|
| 658 | 658 | | year, each State shall provide the Secretary of 1 |
|---|
| 659 | 659 | | Education a list of eligible scholarship-granting 2 |
|---|
| 660 | 660 | | organizations and eligible workforce training or-3 |
|---|
| 661 | 661 | | ganizations described in paragraphs (3)(A) and 4 |
|---|
| 662 | 662 | | (4) of section 25F(c) of the Internal Revenue 5 |
|---|
| 663 | 663 | | Code of 1986, including a certification that the 6 |
|---|
| 664 | 664 | | entity submitting the list on behalf of the State 7 |
|---|
| 665 | 665 | | has the authority to perform this function. Nei-8 |
|---|
| 666 | 666 | | ther this Act nor any other Federal law shall be 9 |
|---|
| 667 | 667 | | construed as limiting the entities that may sub-10 |
|---|
| 668 | 668 | | mit the list on behalf of a State. 11 |
|---|
| 669 | 669 | | (C) R |
|---|
| 670 | 670 | | EALLOCATION.— 12 |
|---|
| 671 | 671 | | (i) I |
|---|
| 672 | 672 | | N GENERAL.—The Secretary of 13 |
|---|
| 673 | 673 | | Education shall, in accordance with para-14 |
|---|
| 674 | 674 | | graph (2), reallocate to any other States 15 |
|---|
| 675 | 675 | | the allocation of a State which, for any ap-16 |
|---|
| 676 | 676 | | plicable year— 17 |
|---|
| 677 | 677 | | (I) fails to provide the Secretary 18 |
|---|
| 678 | 678 | | of Education a list of eligible scholar-19 |
|---|
| 679 | 679 | | ship-granting organizations and eligi-20 |
|---|
| 680 | 680 | | ble workforce training organizations 21 |
|---|
| 681 | 681 | | pursuant to subparagraph (B); and 22 |
|---|
| 682 | 682 | | (II) does not have an eligible 23 |
|---|
| 683 | 683 | | scholarship-granting organization (as 24 |
|---|
| 684 | 684 | | described in section 25F(c)(3)(B) of 25 |
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| 686 | 686 | | ssavage on LAPJG3WLY3PROD with BILLS 24 |
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| 687 | 687 | | •S 370 IS |
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| 688 | 688 | | the Internal Revenue Code of 1986) 1 |
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| 689 | 689 | | located in such State. 2 |
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| 690 | 690 | | (ii) U |
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| 691 | 691 | | NCLAIMED CREDITS .—On or 3 |
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| 692 | 692 | | after April 1 of any applicable year, the 4 |
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| 693 | 693 | | Secretary of Education may reallocate, to 5 |
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| 694 | 694 | | one or more other States that have eligible 6 |
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| 695 | 695 | | scholarship-granting organizations and eli-7 |
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| 696 | 696 | | gible workforce training organizations in 8 |
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| 697 | 697 | | the States, without regard to paragraph 9 |
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| 698 | 698 | | (2), the allocation of a State for which the 10 |
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| 699 | 699 | | State’s allocation has not been claimed. 11 |
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| 700 | 700 | | (d) D |
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| 701 | 701 | | EFINITIONS.—The definitions of terms in sec-12 |
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| 702 | 702 | | tion 25F(c) of the Internal Revenue Code of 1986 apply 13 |
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| 703 | 703 | | to those terms as used in this title. 14 |
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| 704 | 704 | | (e) A |
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| 705 | 705 | | UTHORIZATION OF APPROPRIATIONS.—For the 15 |
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| 706 | 706 | | purpose of administering this section and sections 25F 16 |
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| 707 | 707 | | and 45BB of the Internal Revenue Code of 1986, there 17 |
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| 708 | 708 | | are authorized to be appropriated, and there are appro-18 |
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| 709 | 709 | | priated, such sums as may be necessary for fiscal year 19 |
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| 710 | 710 | | 2025 and each succeeding fiscal year. 20 |
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| 711 | 711 | | Æ |
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| 713 | 713 | | ssavage on LAPJG3WLY3PROD with BILLS |
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