[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 138 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 138

 To amend the Internal Revenue Code of 1986 to allow a credit against 
 income tax for expenses of attending elementary and secondary schools 
    and for contributions to charitable organizations which provide 
           scholarships for children to attend such schools.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 19, 1999

    Mr. Kyl introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow a credit against 
 income tax for expenses of attending elementary and secondary schools 
    and for contributions to charitable organizations which provide 
           scholarships for children to attend such schools.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``K-12 Community Participation Act of 
1999''.

SEC. 2. CREDIT FOR ELEMENTARY AND SECONDARY SCHOOL EXPENSES AND FOR 
              CONTRIBUTIONS TO CHARITABLE ORGANIZATIONS WHICH PROVIDE 
              SCHOLARSHIPS FOR STUDENTS ATTENDING SUCH SCHOOLS.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 30B. CREDIT FOR ELEMENTARY AND SECONDARY SCHOOL EXPENSES AND FOR 
              CONTRIBUTIONS TO CHARITABLE ORGANIZATIONS WHICH PROVIDE 
              SCHOLARSHIPS FOR STUDENTS ATTENDING SUCH SCHOOLS.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of--
            ``(1) the qualified elementary and secondary education 
        expenses which are paid or incurred by the taxpayer during such 
        taxable year, and
            ``(2) the qualified charitable contributions of the 
        taxpayer for the taxable year.
    ``(b) Maximum Credit.--The credit allowed by subsection (a) for any 
taxable year shall not exceed--
            ``(1) $100 in the case of taxable years beginning in 
        calendar year 1999,
            ``(2) $150 in the case of taxable years beginning in 
        calendar year 2000,
            ``(3) $200 in the case of taxable years beginning in 
        calendar year 2001, and
            ``(4) $250 in the case of taxable years beginning after 
        calendar year 2001.
In the case of a joint return, the limitation under this subsection 
shall be twice the dollar amount otherwise applicable under the 
preceding sentence.
    ``(c) Qualified Elementary and Secondary Education Expenses.--For 
purposes of this section--
            ``(1) In general.--The term `qualified elementary and 
        secondary education expenses' means tuition, fees, tutoring, 
        special needs services, books, supplies, computer equipment 
        (including related software and services) and other equipment, 
        transportation, and supplementary expenses required for the 
        enrollment or attendance of any individual at a public, 
        private, or religious school.
            ``(2) Special rule for home-schooling.--Such term shall 
        include expenses described in paragraph (1) required for 
        education provided for homeschooling if the requirements of any 
        applicable State or local law are met with respect to such 
        education.
            ``(3) School.--The term `school' means any school which 
        provides elementary education or secondary education (through 
        grade 12), as determined under State law.
    ``(d) Qualified Charitable Contribution.--For purposes of this 
section--
            ``(1) In general.--The term `qualified charitable 
        contribution' means, with respect to any taxable year, the 
        amount allowable as a deduction under section 170 (determined 
        without regard to subsection (e)(1)) for cash contributions to 
        a school tuition organization.
            ``(2) School tuition organization.--
                    ``(A) In general.--The term `school tuition 
                organization' means any organization described in 
                section 170(c)(2) if the annual disbursements of the 
                organization for elementary and secondary school 
                scholarship are normally not less than 90 percent of 
                the sum of such organization's annual gross income and 
                contributions and gifts.
                    ``(B) Elementary and secondary school 
                scholarship.--The term `elementary and secondary school 
                scholarship' means any scholarship excludable from 
                gross income under section 117 for expenses related to 
                education at or below the 12th grade.
    ``(e) Special Rules.--
            ``(1) Denial of double benefit.--No deduction shall be 
        allowed under this chapter for any contribution for which 
        credit is allowed under this section.
            ``(2) Application with other credits.--The credit allowable 
        under subsection (a) for any taxable year shall not exceed the 
        excess (if any) of--
                    ``(A) the regular tax for the taxable year, reduced 
                by the sum of the credits allowable under subpart A and 
                the preceding sections of this subpart, over
                    ``(B) the tentative minimum tax for the taxable 
                year.
            ``(3) Controlled groups.--All persons who are treated as 
        one employer under subsection (a) or (b) of section 52 shall be 
        treated as 1 taxpayer for purposes of this section.
    ``(f) Election To Have Credit Not Apply.--A taxpayer may elect to 
have this section not apply for any taxable year.''
    (b) Clerical Amendment.--The table of sections for subpart B of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

                              ``Sec. 30B. Credit for elementary and 
                                        secondary school expenses and 
                                        for contributions to charitable 
                                        organizations which provide 
                                        scholarships for students 
                                        attending such schools.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.
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