<enum>I</enum><header>Amendments to the Internal Revenue Code of 1986</header><section id="idA4E82E4BD8BC4571952193FB587912EB"><enum>101.</enum><header>References to the Internal Revenue Code of 1986</header><text display-inline="no-display-inline">Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.</text></section><section id="id2053BCC6FA9D40DF905EF15B6A4A429A"><enum>102.</enum><header>Tax credits for contributions to eligible scholarship-granting organizations and eligible workforce training organizations</header><subsection id="id5FC424078E684D0AABAD57A1F481D633"><enum>(a)</enum><header>Credit for individuals</header><paragraph id="id414710206FF94504B3DB8EE80E3C8143"><enum>(1)</enum><header>In general</header><text>Subpart A of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by adding after section 25D the following new section:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id327589479F4944A988D7574AE2220D4D"><section id="idFE8CFEE7F5FF46C782B87AA0CF688DFB"><enum>25E.</enum><header>Contributions to eligible scholarship-granting organizations and eligible workforce training organizations</header><subsection id="id4254A53219B94502BE5D3D2D7E0E0973"><enum>(a)</enum><header>Allowance of credit</header><text display-inline="yes-display-inline">In the case of an individual, 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 any qualified contributions made by the taxpayer during the taxable year.</text></subsection><subsection id="id069995db97584b9bbd0dc869620ae9c8"><enum>(b)</enum><header>Amount of credit</header><text>The credit allowed under subsection (a) in any taxable year shall not exceed 10 percent of the taxpayer's adjusted gross income for the taxable year.</text></subsection><subsection id="idcf810ed6c8f5458a95c665072a41dfdc"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section—</text><paragraph id="id70495c5b00f54ddca4775710a84e93f5"><enum>(1)</enum><header>Qualified contribution</header><text>The term <term>qualified contribution</term> means a contribution of cash to any eligible scholarship-granting organization or eligible workforce training organization.</text></paragraph><paragraph id="id7c54246e4066424c8482c5cbf99324d2"><enum>(2)</enum><header>Qualified expense</header><text>The term <term>qualified expense</term> means any educational expense that is—</text><subparagraph id="idc716d10155934a1ca045d95766757fe5"><enum>(A)</enum><text>for an individual student’s elementary or secondary education, as recognized by the State,</text></subparagraph><subparagraph id="ida09ae00eaf5147ef93a8278a6605db9d"><enum>(B)</enum><text>for the secondary education component of an individual elementary or secondary student’s career and technical education, as defined by section 3(5) of the Carl D. Perkins Career and Technical Education Act of 2006 (<external-xref legal-doc="usc" parsable-cite="usc/20/2302">20 U.S.C. 2302(5)</external-xref>), or</text></subparagraph><subparagraph id="idF772B21FA6204BE787BCFDEDD0DF89AB"><enum>(C)</enum><text>for the purpose of providing eligible individual participants with scholarships for secondary or postsecondary vocational education and training, workforce development, or apprenticeship training, including preparation and examination costs relating to portable certificates or credentials, or industry recognized certification or credentialing programs.</text></subparagraph></paragraph><paragraph id="id13ad428e95f441238f2fbcfa52ae922d"><enum>(3)</enum><header>Eligible scholarship-granting organization</header><text>The term <term>eligible scholarship-granting organization</term> means—</text><subparagraph id="id108FC5331AF54365885AF46CDA262E01"><enum>(A)</enum><text>an organization that—</text><clause id="id9c0c69664b9241d5bd34427ef110c975"><enum>(i)</enum><text>is described in section 501(c)(3) and exempt from taxation under section 501(a),</text></clause><clause id="idc491a2c3836243b7a2382459d84cf854"><enum>(ii)</enum><text>provides qualifying scholarships for qualified expenses to only individual elementary and secondary students who—</text><subclause id="id8f4d267175af45ad8b55161166a568ac"><enum>(I)</enum><text>reside in the State in which the eligible scholarship-granting organization is recognized, or</text></subclause><subclause id="idc388aa241dd64d6690b2052489a5e3c7"><enum>(II)</enum><text>in the case of the Bureau of Indian Education, are members of a federally recognized tribe,</text></subclause></clause><clause id="id00531fa3434a43d29403534e93e14f25"><enum>(iii)</enum><text>a State reports to the Secretary of Education as an eligible scholarship-granting organization pursuant to section 201(c)(5)(B) of the <short-title>Education Freedom Scholarships and Opportunity Act</short-title>,</text></clause><clause id="id3ff50d20a7e54bcf971ebf80c00541c0"><enum>(iv)</enum><text>allocates at least 90 percent of qualified contributions to qualifying scholarships for qualified expenses, and</text></clause><clause id="id22ca2024ecc54c3585724a4d638eba49"><enum>(v)</enum><text>provides scholarships to—</text><subclause id="id9edf0ffced414210be4178cf4c6cebba"><enum>(I)</enum><text>more than 1 eligible student,</text></subclause><subclause id="id8893F909FBAB42A09A57A09E7B9BF77A"><enum>(II)</enum><text>more than 1 eligible family, and</text></subclause><subclause id="id2cb32d1f5bfa4f00aaa79a51d146d375"><enum>(III)</enum><text>different eligible students attending more than one education provider, or</text></subclause></clause></subparagraph><subparagraph id="idD29940C51A094F339E3F2E8ACD5A5E9C"><enum>(B)</enum><text>an organization that—</text><clause id="idAD71E408DEBF4518B55C2A3C362482BF"><enum>(i)</enum><text>is described in section 501(c)(3) and exempt from taxation under section 501(a), and</text></clause><clause id="idD525DC5A298B483A9AECF8DBF02F1911"><enum>(ii)</enum><text>pursuant to State law, was able, as of the date of the enactment of the <short-title>Education Freedom Scholarships and Opportunity Act</short-title>, to receive contributions that are eligible for a State tax credit if such contributions are used by the organization to provide scholarships to individual elementary and secondary students, including scholarships for attending private schools.</text></clause></subparagraph></paragraph><paragraph id="id62017b32fa9a4acd83500749e86eb146"><enum>(4)</enum><header>Eligible workforce training organization</header><subparagraph id="idD38D675BD6694241B712B1F564C61A9A"><enum>(A)</enum><header>In general</header><text>The term <term>eligible workforce training organization</term> means any organization—</text><clause id="id8BE7103E9091450AB32F5BBE0F35F76A"><enum>(i)</enum><text>which is—</text><subclause id="id1FF6D1EDA16145EDB631D1458BC2202F"><enum>(I)</enum><text>described in section 501(c)(3) and exempt from taxation under section 501(a), and</text></subclause><subclause id="id837E881400964FB8838ED3C9976F8645"><enum>(II)</enum><text>not a private foundation (as defined in section 509),</text></subclause></clause><clause id="id9B24DEEC3EA84721B1C9BDC838881F16"><enum>(ii)</enum><text>whose purpose is to provide vocational education and training, workforce development, or apprenticeship training to eligible potential secondary or postsecondary students, including organizations whose purpose is to provide scholarships for portable certificates or credentials, or industry recognized certifications or credentialing programs, including preparation and examination costs,</text></clause><clause id="id0655EE11FE9C4285A72FACD28DEBD992"><enum>(iii)</enum><text>which is in compliance with applicable State laws,</text></clause><clause id="idC1D4C78E6CBD40219C38D2607A68F5A9"><enum>(iv)</enum><text>which a State has reported to the Secretary of Education as an eligible workforce training organization pursuant to section 201(c)(5)(B) of the <short-title>Education Freedom Scholarships and Opportunity Act</short-title>,</text></clause><clause id="id1ABA158E06AE4E3795D3AF84442FEA0B"><enum>(v)</enum><text>which satisfies the requirements described in clauses (iv) and (v) of paragraph (3)(A).</text></clause></subparagraph><subparagraph id="id9141AF33E7114EDDA6890627AA8CA801"><enum>(B)</enum><header>Potential eligible workforce training organizations</header><text>Eligible workforce training organizations may include, but are not limited to, organizations such as the following (provided that such organizations satisfy the requirements under subparagraph (A)):</text><clause id="id8A46607E1B994953A83D9B9A35450ABD"><enum>(i)</enum><text>Community colleges.</text></clause><clause id="id2760DFF9510A493FB14208A9F207B4F6"><enum>(ii)</enum><text>Workforce training programs (as defined by the applicable State workforce agency).</text></clause><clause id="idCD16D0D19FFB4C279AF759AA5D31BE4B"><enum>(iii)</enum><text>Organizations which provide—</text><subclause id="idDD1A3645AA7D4BA5A8C0203549A31BD5"><enum>(I)</enum><text>career and technical education, or</text></subclause><subclause id="id59843C3510B14996988CBE5537335860"><enum>(II)</enum><text>training or apprenticeships, including, but not limited to, training or apprenticeships operated by a collective bargaining organization or that provide industry recognized certifications or credentials.</text></subclause></clause><clause id="id80ED9ADC9CDD499587D05445883776EC"><enum>(iv)</enum><text>Community organizations that provide training that results in a certification.</text></clause></subparagraph></paragraph><paragraph id="id0C5C203ED2ED40A68177D7CF3D6E7048"><enum>(5)</enum><header>Qualifying scholarship</header><text>The term <term>qualifying scholarship</term> means—</text><subparagraph id="id625B37B331E040DAA01B91419661CE52"><enum>(A)</enum><text>a scholarship granted by an eligible scholarship-granting organization to an individual elementary or secondary student, or</text></subparagraph><subparagraph id="idFC12DF16755A4D3B82C6AD49A67A5A8F"><enum>(B)</enum><text>a scholarship granted by an eligible workforce training organization as a scholarship to a secondary or postsecondary student for the purpose of vocational education and training, workforce development, obtaining portable certificates or credentials, or industry recognized certification or credentialing programs, including preparation and examination costs,</text></subparagraph><continuation-text continuation-text-level="paragraph">under this section.</continuation-text></paragraph><paragraph id="id00a33321b13746279e2fb7bb972b10e7"><enum>(6)</enum><header>State</header><text>The term <term>State</term> means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the United States Virgin Islands, and the Department of the Interior (acting through the Bureau of Indian Education).</text></paragraph></subsection><subsection id="ida9b165d0a1be43298ceaec2475283ffe"><enum>(d)</enum><header>Rules of construction</header><paragraph id="id6E117F2F171842ACA4D1FEFF0AA40F6A"><enum>(1)</enum><header>In general</header><text>A scholarship awarded to a student from the proceeds of a qualified contribution under this section or section 45U shall not be considered assistance to the school, eligible workforce training organization, or other educational provider that enrolls, or provides educational services to, the student or the student's parents.</text></paragraph><paragraph id="idAF15A581A88C49C5A305BA8CBF36DBCB"><enum>(2)</enum><header>Not treated as income</header><text>The amount of any such scholarship shall not be treated as income of the student or their parents for purposes of Federal tax laws or for determining eligibility for any other Federal program.</text></paragraph><paragraph id="id42f4a7b2860e4443b31f4639e418bf74"><enum>(3)</enum><header>Prohibition of control over nonpublic education providers</header><subparagraph id="iddae7ed384a844709a6f25b8287b55ea5"><enum>(A)</enum><text>Nothing in this Act shall be construed to permit, allow, encourage, or authorize any Federal control over any aspect of any private, religious, or home education provider, whether or not a home education provider is treated as a private school or home school under State law. This Act shall not be construed to exclude private, religious, or home education providers from participation in programs or services under this Act.</text></subparagraph><subparagraph id="idad8032e710714570a009739390ec2418"><enum>(B)</enum><text>Nothing in this Act shall be construed to permit, allow, encourage, or authorize an entity submitting a list of eligible scholarship-granting organizations or eligible workforce training organizations on behalf of a State to mandate, direct, or control any aspect of a private or home education provider, regardless of whether or not a home education provider is treated as a private school under state law.</text></subparagraph><subparagraph id="id07769C1A936D47A996C0B4359C66ED44"><enum>(C)</enum><text>No participating State or entity acting on behalf of a State shall exclude, discriminate against, or otherwise disadvantage any education provider with respect to programs or services under this Act based in whole or in part on the provider’s religious education character or affiliation, including religiously or mission-based policies or practices.</text></subparagraph></paragraph><paragraph id="id8588f29569a04d13beafab4b46ca25c8"><enum>(4)</enum><header>Parental rights to use scholarships</header><text>No participating State or entity acting on behalf of a State shall disfavor or discourage the use of such scholarships for the purchase of elementary and secondary or workforce training education services, including those services provided by private or nonprofit entities, such as faith-based providers.</text></paragraph><paragraph id="idDF91E250618F425D84974B907FCF068D"><enum>(5)</enum><header>State and local authority</header><text>Nothing in this section or section 45U shall be construed to modify a State or local government’s authority and responsibility to fund education.</text></paragraph></subsection><subsection id="ide734a26536784425a950b88eeff3ae52"><enum>(e)</enum><header>Limitations</header><paragraph id="id47A529626CA242BDB96DE69B3B34F885"><enum>(1)</enum><header>Tax liability</header><text>No credit allowed under this section or section 45U shall exceed the taxpayer’s Federal income tax liability for the taxable year.</text></paragraph><paragraph id="ida7329b51b0b24643a6fba43e57d85f79"><enum>(2)</enum><header>Prohibitions</header><text>A taxpayer is prohibited from selling or transferring any portion of a tax credit allowed under this section or section 45U.</text></paragraph><paragraph id="id14036ddd0b9948fd83796d867ca2f2be"><enum>(3)</enum><header>Denial of double benefit</header><text>The Secretary shall prescribe such regulations or other guidance to ensure that the sum of the tax benefits provided by Federal, State, or local law for a qualified contribution receiving a Federal tax credit in any taxable year shall not exceed the sum of the qualified contributions made by the taxpayer for the taxable year.</text></paragraph></subsection><subsection id="id3857b0a3e67549759775cf4a4eab09a7"><enum>(f)</enum><header>Carryover of credit</header><text>If a tax credit allowed under this section or section 45U is not fully used within the applicable taxable year because of insufficient tax liability on the part of the taxpayer, the unused amount may be carried forward for a period not to exceed 5 years.</text></subsection><subsection id="id53e90c6d33ad4b01bada37f4f615ae76"><enum>(g)</enum><header>Election</header><text>This section shall apply to a taxpayer for a taxable year only if the taxpayer elects to have this section apply for such taxable year.</text></subsection><subsection id="idc149f9e39e344d6299fede95996cfc41"><enum>(h)</enum><header>Alternative minimum tax</header><text>For purposes of calculating the alternative minimum tax under section 55, a taxpayer may use any credit received for a qualified contribution under this section.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="id1cc47e5842a64a7d84194c392bd12853"><enum>(2)</enum><header>Clerical amendment</header><text>The table of sections for subpart A of part IV of subchapter A of chapter 1 of is amended by inserting after the item relating to section 25D the following new item:</text><quoted-block style="OLC" id="id2e4fa32a-54f9-4445-a54f-78e9fd521845"><toc><toc-entry idref="idFE8CFEE7F5FF46C782B87AA0CF688DFB" level="section">Sec. 25E. Contributions to eligible scholarship-granting organizations and eligible workforce training organizations.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id50DEDD64A7FA42919FBA88E8F2C6FFA2"><enum>(b)</enum><header>Credit for corporations</header><paragraph id="idDC21D927DC6C44E78F68BBA880A2CDEB"><enum>(1)</enum><header>In general</header><text>Subpart D of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by adding at the end the following new section:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id89F1802895D145F88B24613315923D93"><section id="idB567D529E7CC44FBAEDEF1A042872744"><enum>45U.</enum><header>Contributions to eligible scholarship-granting organizations and eligible workforce training organizations</header><subsection id="id88B2132A45734597826E21777C30DCF1"><enum>(a)</enum><header>Allowance of credit</header><text>For purposes of section 38, in the case of a domestic corporation, 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 any qualified contributions (as defined in section 25E(c)(1)) made by such corporation taxpayer during the taxable year.</text></subsection><subsection id="idb4e58fbc52e44f59947da30341b58fc6"><enum>(b)</enum><header>Amount of credit</header><text>The credit allowed under subsection (a) for any taxable year shall not exceed 5 percent of the taxable income (as defined in section 170(b)(2)(D)) of the domestic corporation for such taxable year.</text></subsection><subsection id="ida11fee93ae3c45fd902c431e2ad3711e"><enum>(c)</enum><header>Additional provisions</header><text>For purposes of this section, any qualified contributions made by a domestic corporation shall be subject to the provisions of section 25E, to the extent applicable.</text></subsection><subsection id="idA85AC0B3875B4F5F9253F3313ADC4C26"><enum>(d)</enum><header>Election</header><text>This section shall apply to a taxpayer for a taxable year only if the taxpayer elects to have this section apply for such taxable year.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="idAD838516A2D94DA099E178F32300C421"><enum>(2)</enum><header>Credit part of general business credit</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/38">Section 38(b)</external-xref> is amended—</text><subparagraph id="id6D28D1CFA15442A080FE9CDF2ABA7EC3"><enum>(A)</enum><text>by striking <quote>plus</quote> at the end of paragraph (32);</text></subparagraph><subparagraph id="id10213922C4DB4031B2CDFBABB7895FCD"><enum>(B)</enum><text>by striking the period at the end of paragraph (33) and inserting <quote>, plus</quote>; and</text></subparagraph><subparagraph id="id6A1CA8DF6B9F4066B4726631CAF6333F"><enum>(C)</enum><text>by adding at the end the following new paragraph:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idE8177DA12EEF428A95287C2372FE894F"><paragraph id="id9286257AD0B54407AD1D26C7A07F7EF0"><enum>(34)</enum><text>the credit for qualified contributions determined under section 45U(a).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="idE69C3F66DBDE4D83935B62FF99D2C844"><enum>(3)</enum><header>Clerical amendment</header><text>The table of sections for subpart D of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by adding at the end the following new item:</text><quoted-block style="OLC" id="idc699936c-fde9-43d4-95c2-cf0e1e92abc8"><toc><toc-entry idref="idB567D529E7CC44FBAEDEF1A042872744" level="section">Sec. 45U. Contributions to eligible scholarship-granting organizations and eligible workforce training organizations.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section>

117 S43 IS: Education Freedom Scholarships and Opportunity Act U.S. Senate 2021-01-26 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

Short title

This Act may be cited as the

Education Freedom Scholarships and Opportunity Act

Purpose

The purpose of this Act is to encourage individual and corporate taxpayers to contribute to scholarships for individual students through eligible scholarship-granting organizations and eligible workforce training organizations, as identified by States.

<enum>I</enum><header>Amendments to the Internal Revenue Code of 1986</header><section id="idA4E82E4BD8BC4571952193FB587912EB"><enum>101.</enum><header>References to the Internal Revenue Code of 1986</header><text display-inline="no-display-inline">Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.</text></section><section id="id2053BCC6FA9D40DF905EF15B6A4A429A"><enum>102.</enum><header>Tax credits for contributions to eligible scholarship-granting organizations and eligible workforce training organizations</header><subsection id="id5FC424078E684D0AABAD57A1F481D633"><enum>(a)</enum><header>Credit for individuals</header><paragraph id="id414710206FF94504B3DB8EE80E3C8143"><enum>(1)</enum><header>In general</header><text>Subpart A of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by adding after section 25D the following new section:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id327589479F4944A988D7574AE2220D4D"><section id="idFE8CFEE7F5FF46C782B87AA0CF688DFB"><enum>25E.</enum><header>Contributions to eligible scholarship-granting organizations and eligible workforce training organizations</header><subsection id="id4254A53219B94502BE5D3D2D7E0E0973"><enum>(a)</enum><header>Allowance of credit</header><text display-inline="yes-display-inline">In the case of an individual, 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 any qualified contributions made by the taxpayer during the taxable year.</text></subsection><subsection id="id069995db97584b9bbd0dc869620ae9c8"><enum>(b)</enum><header>Amount of credit</header><text>The credit allowed under subsection (a) in any taxable year shall not exceed 10 percent of the taxpayer's adjusted gross income for the taxable year.</text></subsection><subsection id="idcf810ed6c8f5458a95c665072a41dfdc"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section—</text><paragraph id="id70495c5b00f54ddca4775710a84e93f5"><enum>(1)</enum><header>Qualified contribution</header><text>The term <term>qualified contribution</term> means a contribution of cash to any eligible scholarship-granting organization or eligible workforce training organization.</text></paragraph><paragraph id="id7c54246e4066424c8482c5cbf99324d2"><enum>(2)</enum><header>Qualified expense</header><text>The term <term>qualified expense</term> means any educational expense that is—</text><subparagraph id="idc716d10155934a1ca045d95766757fe5"><enum>(A)</enum><text>for an individual student’s elementary or secondary education, as recognized by the State,</text></subparagraph><subparagraph id="ida09ae00eaf5147ef93a8278a6605db9d"><enum>(B)</enum><text>for the secondary education component of an individual elementary or secondary student’s career and technical education, as defined by section 3(5) of the Carl D. Perkins Career and Technical Education Act of 2006 (<external-xref legal-doc="usc" parsable-cite="usc/20/2302">20 U.S.C. 2302(5)</external-xref>), or</text></subparagraph><subparagraph id="idF772B21FA6204BE787BCFDEDD0DF89AB"><enum>(C)</enum><text>for the purpose of providing eligible individual participants with scholarships for secondary or postsecondary vocational education and training, workforce development, or apprenticeship training, including preparation and examination costs relating to portable certificates or credentials, or industry recognized certification or credentialing programs.</text></subparagraph></paragraph><paragraph id="id13ad428e95f441238f2fbcfa52ae922d"><enum>(3)</enum><header>Eligible scholarship-granting organization</header><text>The term <term>eligible scholarship-granting organization</term> means—</text><subparagraph id="id108FC5331AF54365885AF46CDA262E01"><enum>(A)</enum><text>an organization that—</text><clause id="id9c0c69664b9241d5bd34427ef110c975"><enum>(i)</enum><text>is described in section 501(c)(3) and exempt from taxation under section 501(a),</text></clause><clause id="idc491a2c3836243b7a2382459d84cf854"><enum>(ii)</enum><text>provides qualifying scholarships for qualified expenses to only individual elementary and secondary students who—</text><subclause id="id8f4d267175af45ad8b55161166a568ac"><enum>(I)</enum><text>reside in the State in which the eligible scholarship-granting organization is recognized, or</text></subclause><subclause id="idc388aa241dd64d6690b2052489a5e3c7"><enum>(II)</enum><text>in the case of the Bureau of Indian Education, are members of a federally recognized tribe,</text></subclause></clause><clause id="id00531fa3434a43d29403534e93e14f25"><enum>(iii)</enum><text>a State reports to the Secretary of Education as an eligible scholarship-granting organization pursuant to section 201(c)(5)(B) of the <short-title>Education Freedom Scholarships and Opportunity Act</short-title>,</text></clause><clause id="id3ff50d20a7e54bcf971ebf80c00541c0"><enum>(iv)</enum><text>allocates at least 90 percent of qualified contributions to qualifying scholarships for qualified expenses, and</text></clause><clause id="id22ca2024ecc54c3585724a4d638eba49"><enum>(v)</enum><text>provides scholarships to—</text><subclause id="id9edf0ffced414210be4178cf4c6cebba"><enum>(I)</enum><text>more than 1 eligible student,</text></subclause><subclause id="id8893F909FBAB42A09A57A09E7B9BF77A"><enum>(II)</enum><text>more than 1 eligible family, and</text></subclause><subclause id="id2cb32d1f5bfa4f00aaa79a51d146d375"><enum>(III)</enum><text>different eligible students attending more than one education provider, or</text></subclause></clause></subparagraph><subparagraph id="idD29940C51A094F339E3F2E8ACD5A5E9C"><enum>(B)</enum><text>an organization that—</text><clause id="idAD71E408DEBF4518B55C2A3C362482BF"><enum>(i)</enum><text>is described in section 501(c)(3) and exempt from taxation under section 501(a), and</text></clause><clause id="idD525DC5A298B483A9AECF8DBF02F1911"><enum>(ii)</enum><text>pursuant to State law, was able, as of the date of the enactment of the <short-title>Education Freedom Scholarships and Opportunity Act</short-title>, to receive contributions that are eligible for a State tax credit if such contributions are used by the organization to provide scholarships to individual elementary and secondary students, including scholarships for attending private schools.</text></clause></subparagraph></paragraph><paragraph id="id62017b32fa9a4acd83500749e86eb146"><enum>(4)</enum><header>Eligible workforce training organization</header><subparagraph id="idD38D675BD6694241B712B1F564C61A9A"><enum>(A)</enum><header>In general</header><text>The term <term>eligible workforce training organization</term> means any organization—</text><clause id="id8BE7103E9091450AB32F5BBE0F35F76A"><enum>(i)</enum><text>which is—</text><subclause id="id1FF6D1EDA16145EDB631D1458BC2202F"><enum>(I)</enum><text>described in section 501(c)(3) and exempt from taxation under section 501(a), and</text></subclause><subclause id="id837E881400964FB8838ED3C9976F8645"><enum>(II)</enum><text>not a private foundation (as defined in section 509),</text></subclause></clause><clause id="id9B24DEEC3EA84721B1C9BDC838881F16"><enum>(ii)</enum><text>whose purpose is to provide vocational education and training, workforce development, or apprenticeship training to eligible potential secondary or postsecondary students, including organizations whose purpose is to provide scholarships for portable certificates or credentials, or industry recognized certifications or credentialing programs, including preparation and examination costs,</text></clause><clause id="id0655EE11FE9C4285A72FACD28DEBD992"><enum>(iii)</enum><text>which is in compliance with applicable State laws,</text></clause><clause id="idC1D4C78E6CBD40219C38D2607A68F5A9"><enum>(iv)</enum><text>which a State has reported to the Secretary of Education as an eligible workforce training organization pursuant to section 201(c)(5)(B) of the <short-title>Education Freedom Scholarships and Opportunity Act</short-title>,</text></clause><clause id="id1ABA158E06AE4E3795D3AF84442FEA0B"><enum>(v)</enum><text>which satisfies the requirements described in clauses (iv) and (v) of paragraph (3)(A).</text></clause></subparagraph><subparagraph id="id9141AF33E7114EDDA6890627AA8CA801"><enum>(B)</enum><header>Potential eligible workforce training organizations</header><text>Eligible workforce training organizations may include, but are not limited to, organizations such as the following (provided that such organizations satisfy the requirements under subparagraph (A)):</text><clause id="id8A46607E1B994953A83D9B9A35450ABD"><enum>(i)</enum><text>Community colleges.</text></clause><clause id="id2760DFF9510A493FB14208A9F207B4F6"><enum>(ii)</enum><text>Workforce training programs (as defined by the applicable State workforce agency).</text></clause><clause id="idCD16D0D19FFB4C279AF759AA5D31BE4B"><enum>(iii)</enum><text>Organizations which provide—</text><subclause id="idDD1A3645AA7D4BA5A8C0203549A31BD5"><enum>(I)</enum><text>career and technical education, or</text></subclause><subclause id="id59843C3510B14996988CBE5537335860"><enum>(II)</enum><text>training or apprenticeships, including, but not limited to, training or apprenticeships operated by a collective bargaining organization or that provide industry recognized certifications or credentials.</text></subclause></clause><clause id="id80ED9ADC9CDD499587D05445883776EC"><enum>(iv)</enum><text>Community organizations that provide training that results in a certification.</text></clause></subparagraph></paragraph><paragraph id="id0C5C203ED2ED40A68177D7CF3D6E7048"><enum>(5)</enum><header>Qualifying scholarship</header><text>The term <term>qualifying scholarship</term> means—</text><subparagraph id="id625B37B331E040DAA01B91419661CE52"><enum>(A)</enum><text>a scholarship granted by an eligible scholarship-granting organization to an individual elementary or secondary student, or</text></subparagraph><subparagraph id="idFC12DF16755A4D3B82C6AD49A67A5A8F"><enum>(B)</enum><text>a scholarship granted by an eligible workforce training organization as a scholarship to a secondary or postsecondary student for the purpose of vocational education and training, workforce development, obtaining portable certificates or credentials, or industry recognized certification or credentialing programs, including preparation and examination costs,</text></subparagraph><continuation-text continuation-text-level="paragraph">under this section.</continuation-text></paragraph><paragraph id="id00a33321b13746279e2fb7bb972b10e7"><enum>(6)</enum><header>State</header><text>The term <term>State</term> means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the United States Virgin Islands, and the Department of the Interior (acting through the Bureau of Indian Education).</text></paragraph></subsection><subsection id="ida9b165d0a1be43298ceaec2475283ffe"><enum>(d)</enum><header>Rules of construction</header><paragraph id="id6E117F2F171842ACA4D1FEFF0AA40F6A"><enum>(1)</enum><header>In general</header><text>A scholarship awarded to a student from the proceeds of a qualified contribution under this section or section 45U shall not be considered assistance to the school, eligible workforce training organization, or other educational provider that enrolls, or provides educational services to, the student or the student's parents.</text></paragraph><paragraph id="idAF15A581A88C49C5A305BA8CBF36DBCB"><enum>(2)</enum><header>Not treated as income</header><text>The amount of any such scholarship shall not be treated as income of the student or their parents for purposes of Federal tax laws or for determining eligibility for any other Federal program.</text></paragraph><paragraph id="id42f4a7b2860e4443b31f4639e418bf74"><enum>(3)</enum><header>Prohibition of control over nonpublic education providers</header><subparagraph id="iddae7ed384a844709a6f25b8287b55ea5"><enum>(A)</enum><text>Nothing in this Act shall be construed to permit, allow, encourage, or authorize any Federal control over any aspect of any private, religious, or home education provider, whether or not a home education provider is treated as a private school or home school under State law. This Act shall not be construed to exclude private, religious, or home education providers from participation in programs or services under this Act.</text></subparagraph><subparagraph id="idad8032e710714570a009739390ec2418"><enum>(B)</enum><text>Nothing in this Act shall be construed to permit, allow, encourage, or authorize an entity submitting a list of eligible scholarship-granting organizations or eligible workforce training organizations on behalf of a State to mandate, direct, or control any aspect of a private or home education provider, regardless of whether or not a home education provider is treated as a private school under state law.</text></subparagraph><subparagraph id="id07769C1A936D47A996C0B4359C66ED44"><enum>(C)</enum><text>No participating State or entity acting on behalf of a State shall exclude, discriminate against, or otherwise disadvantage any education provider with respect to programs or services under this Act based in whole or in part on the provider’s religious education character or affiliation, including religiously or mission-based policies or practices.</text></subparagraph></paragraph><paragraph id="id8588f29569a04d13beafab4b46ca25c8"><enum>(4)</enum><header>Parental rights to use scholarships</header><text>No participating State or entity acting on behalf of a State shall disfavor or discourage the use of such scholarships for the purchase of elementary and secondary or workforce training education services, including those services provided by private or nonprofit entities, such as faith-based providers.</text></paragraph><paragraph id="idDF91E250618F425D84974B907FCF068D"><enum>(5)</enum><header>State and local authority</header><text>Nothing in this section or section 45U shall be construed to modify a State or local government’s authority and responsibility to fund education.</text></paragraph></subsection><subsection id="ide734a26536784425a950b88eeff3ae52"><enum>(e)</enum><header>Limitations</header><paragraph id="id47A529626CA242BDB96DE69B3B34F885"><enum>(1)</enum><header>Tax liability</header><text>No credit allowed under this section or section 45U shall exceed the taxpayer’s Federal income tax liability for the taxable year.</text></paragraph><paragraph id="ida7329b51b0b24643a6fba43e57d85f79"><enum>(2)</enum><header>Prohibitions</header><text>A taxpayer is prohibited from selling or transferring any portion of a tax credit allowed under this section or section 45U.</text></paragraph><paragraph id="id14036ddd0b9948fd83796d867ca2f2be"><enum>(3)</enum><header>Denial of double benefit</header><text>The Secretary shall prescribe such regulations or other guidance to ensure that the sum of the tax benefits provided by Federal, State, or local law for a qualified contribution receiving a Federal tax credit in any taxable year shall not exceed the sum of the qualified contributions made by the taxpayer for the taxable year.</text></paragraph></subsection><subsection id="id3857b0a3e67549759775cf4a4eab09a7"><enum>(f)</enum><header>Carryover of credit</header><text>If a tax credit allowed under this section or section 45U is not fully used within the applicable taxable year because of insufficient tax liability on the part of the taxpayer, the unused amount may be carried forward for a period not to exceed 5 years.</text></subsection><subsection id="id53e90c6d33ad4b01bada37f4f615ae76"><enum>(g)</enum><header>Election</header><text>This section shall apply to a taxpayer for a taxable year only if the taxpayer elects to have this section apply for such taxable year.</text></subsection><subsection id="idc149f9e39e344d6299fede95996cfc41"><enum>(h)</enum><header>Alternative minimum tax</header><text>For purposes of calculating the alternative minimum tax under section 55, a taxpayer may use any credit received for a qualified contribution under this section.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="id1cc47e5842a64a7d84194c392bd12853"><enum>(2)</enum><header>Clerical amendment</header><text>The table of sections for subpart A of part IV of subchapter A of chapter 1 of is amended by inserting after the item relating to section 25D the following new item:</text><quoted-block style="OLC" id="id2e4fa32a-54f9-4445-a54f-78e9fd521845"><toc><toc-entry idref="idFE8CFEE7F5FF46C782B87AA0CF688DFB" level="section">Sec. 25E. Contributions to eligible scholarship-granting organizations and eligible workforce training organizations.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id50DEDD64A7FA42919FBA88E8F2C6FFA2"><enum>(b)</enum><header>Credit for corporations</header><paragraph id="idDC21D927DC6C44E78F68BBA880A2CDEB"><enum>(1)</enum><header>In general</header><text>Subpart D of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by adding at the end the following new section:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id89F1802895D145F88B24613315923D93"><section id="idB567D529E7CC44FBAEDEF1A042872744"><enum>45U.</enum><header>Contributions to eligible scholarship-granting organizations and eligible workforce training organizations</header><subsection id="id88B2132A45734597826E21777C30DCF1"><enum>(a)</enum><header>Allowance of credit</header><text>For purposes of section 38, in the case of a domestic corporation, 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 any qualified contributions (as defined in section 25E(c)(1)) made by such corporation taxpayer during the taxable year.</text></subsection><subsection id="idb4e58fbc52e44f59947da30341b58fc6"><enum>(b)</enum><header>Amount of credit</header><text>The credit allowed under subsection (a) for any taxable year shall not exceed 5 percent of the taxable income (as defined in section 170(b)(2)(D)) of the domestic corporation for such taxable year.</text></subsection><subsection id="ida11fee93ae3c45fd902c431e2ad3711e"><enum>(c)</enum><header>Additional provisions</header><text>For purposes of this section, any qualified contributions made by a domestic corporation shall be subject to the provisions of section 25E, to the extent applicable.</text></subsection><subsection id="idA85AC0B3875B4F5F9253F3313ADC4C26"><enum>(d)</enum><header>Election</header><text>This section shall apply to a taxpayer for a taxable year only if the taxpayer elects to have this section apply for such taxable year.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="idAD838516A2D94DA099E178F32300C421"><enum>(2)</enum><header>Credit part of general business credit</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/38">Section 38(b)</external-xref> is amended—</text><subparagraph id="id6D28D1CFA15442A080FE9CDF2ABA7EC3"><enum>(A)</enum><text>by striking <quote>plus</quote> at the end of paragraph (32);</text></subparagraph><subparagraph id="id10213922C4DB4031B2CDFBABB7895FCD"><enum>(B)</enum><text>by striking the period at the end of paragraph (33) and inserting <quote>, plus</quote>; and</text></subparagraph><subparagraph id="id6A1CA8DF6B9F4066B4726631CAF6333F"><enum>(C)</enum><text>by adding at the end the following new paragraph:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idE8177DA12EEF428A95287C2372FE894F"><paragraph id="id9286257AD0B54407AD1D26C7A07F7EF0"><enum>(34)</enum><text>the credit for qualified contributions determined under section 45U(a).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="idE69C3F66DBDE4D83935B62FF99D2C844"><enum>(3)</enum><header>Clerical amendment</header><text>The table of sections for subpart D of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by adding at the end the following new item:</text><quoted-block style="OLC" id="idc699936c-fde9-43d4-95c2-cf0e1e92abc8"><toc><toc-entry idref="idB567D529E7CC44FBAEDEF1A042872744" level="section">Sec. 45U. Contributions to eligible scholarship-granting organizations and eligible workforce training organizations.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><enum>II</enum><header>Education Freedom Scholarships and Opportunity Act web portal and administration</header><section id="id8D4ABADB56104134A4F81D81B483EAC1"><enum>201.</enum><header>Education Freedom Scholarships and Opportunity Act web portal and administration</header><subsection id="id79A9D11DD01C4DD68D24B0CF8C037C1D"><enum>(a)</enum><header>In general</header><text>The Secretary of Education shall, in coordination with the Secretary of the Treasury and the Secretary of Labor, establish, host, and maintain a Web portal that—</text><paragraph id="idac7158d9ebea4195b3c8487b4904487c"><enum>(1)</enum><text>lists all scholarship-granting organizations and workforce training organizations that are eligible under section 25E or 45U of the Internal Revenue Code of 1986;</text></paragraph><paragraph id="id7fa4e97ffba64043a89c6a27d9d802cb"><enum>(2)</enum><text>enables a taxpayer to make a qualifying contribution to one or more eligible scholarship-granting organizations and eligible workforce training organizations and to immediately obtain both a pre-approval of a tax credit for that contribution and a receipt for tax filings;</text></paragraph><paragraph id="id37fb936204ea4701bdc685b3a56f3541"><enum>(3)</enum><text>provides information about the tax benefits of the provisions of the <short-title>Education Freedom Scholarships and Opportunity Act</short-title> under the Internal Revenue Code of 1986; and</text></paragraph><paragraph id="id30c55daeb9a140d0877d228cc9f93cc8"><enum>(4)</enum><text>enables a State to submit and update information about its programs and its eligible scholarship-granting organizations and eligible workforce training organizations for informational purposes only, including information on—</text><subparagraph id="idec57811b04dc4ba9bd457f2eb899e5af"><enum>(A)</enum><text>student eligibility;</text></subparagraph><subparagraph id="id6bebf11c5c7e41d79e982424f878e3dd"><enum>(B)</enum><text>allowable educational expenses;</text></subparagraph><subparagraph id="idcfd27131022947b0aeb5a14c21282764"><enum>(C)</enum><text>the types of allowable education providers;</text></subparagraph><subparagraph id="idf5d36d800ea745948d4028455d3759a8"><enum>(D)</enum><text>the percentage of funds an organization may use for program administration; and</text></subparagraph><subparagraph id="id6d559ec911784c1d9bddbba7dc161f16"><enum>(E)</enum><text>the percentage of total contributions the organization awards in a calendar year.</text></subparagraph></paragraph></subsection><subsection id="idb0d78c369c5c48ab9f5a2a65be88307f"><enum>(b)</enum><header>Nonportal contributions</header><text>A taxpayer may opt to make a contribution directly to an eligible scholarship-granting organization or an eligible workforce training organization, instead of through the Web portal described in subsection (a), provided that the taxpayer, or the eligible scholarship-granting organization or eligible workforce training organization on behalf of the taxpayer, applies for, and receives pre-approval for a tax credit from the Secretary of Education in coordination with the Secretary of the Treasury.</text></subsection><subsection id="id53bc1ccb7c8a4e14a61ec67b51bee2fa"><enum>(c)</enum><header>National and State caps on credits</header><paragraph id="id982A0D6BE2B74B50B6FA7AFEFCB2D690"><enum>(1)</enum><header>National cap</header><text>There is a cap of $10,000,000,000 on the sum of the contributions that qualify for a credit under section 25E and <external-xref legal-doc="usc" parsable-cite="usc/26/45U">section 45U</external-xref> of the Internal Revenue Code of 1986 for each calendar year, of which—</text><subparagraph id="idB3F22EF4389F4CACAA25F0FD0CFB9334"><enum>(A)</enum><text>$5,000,000,000 shall be allotted for qualified contributions to eligible scholarship-granting organizations; and</text></subparagraph><subparagraph id="idE9710768525A450095788DAEA72DD091"><enum>(B)</enum><text>$5,000,000,000 shall be allotted for qualified contributions to eligible workforce training organizations.</text></subparagraph></paragraph><paragraph id="idebd2298a467c417bbb459aa6a7c05862"><enum>(2)</enum><header>Allocation of cap</header><subparagraph id="id54D3FFDC936541CFB00ED795F9049DC9"><enum>(A)</enum><header>Initial allocations</header><text>For each calendar year, the Secretary of Education, in coordination with the Secretary of Labor, shall—</text><clause id="idE918C54D26364522921409D746580FB5"><enum>(i)</enum><text>from the amount allotted under paragraph (1)(A)—</text><subclause id="id40d536d6f65741c5bc8d0e731b51f54e"><enum>(I)</enum><text>first reserve, for each State, an amount equal to the sum of the qualifying contributions made in the State in the previous year; and</text></subclause><subclause id="id1c7ef8457bbb4121b6d112e0c223f27d"><enum>(II)</enum><text>next, allocate the remaining amount among the participating States by allocating to each State the sum of—</text><item id="id4ea7afc005a04dcd8cc37d20bafb2e67"><enum>(aa)</enum><text>an amount that bears the same relationship to 20 percent of such remaining amount as the number of individuals aged 5 through 17 in the State, as determined by the Secretary of Education on the basis of the most recent satisfactory data, bears to the number of those individuals in all such States, as so determined; and</text></item><item id="idbfebc1b66348470eb9b6e135725a9fe8"><enum>(bb)</enum><text>an amount that bears the same relationship to 80 percent of such remaining amount as the number of individuals aged 5 through 17 from families with incomes below the poverty line in the State, as determined by the Secretary of Education, on the basis of the most recent satisfactory data, bears to the number of those individuals in all such States, as so determined; and</text></item></subclause></clause><clause id="idD74200BE92C147EE90968DF413BBA802"><enum>(ii)</enum><text>from the amount allotted under paragraph (1)(B)—</text><subclause id="id58C21954038E4101834F810D53A11B5D"><enum>(I)</enum><text>first reserve, for each State, an amount equal to the sum of the qualifying contributions made in the State in the previous year attributable to eligible workforce training organizations; and</text></subclause><subclause id="idA684D82F14F4469DABCDCC41D11AE560"><enum>(II)</enum><text>next, allocate the remaining amount among the participating States by allocating to each State an amount determined through a system, as established and maintained by the Secretary of Labor, that accurately reflects demand and potential qualified participants for apprenticeships and workforce training within that State.</text></subclause></clause></subparagraph><subparagraph id="id2d062edac52146a2ab366aca18d317c8"><enum>(B)</enum><header>Minimum allocation</header><text>Notwithstanding subparagraph (A), no State receiving an allotment under this section may receive less than one-half of one percent of the amount allotted for a fiscal year.</text></subparagraph><subparagraph id="ide128bbe9a03a4b30b391873361039d0b"><enum>(C)</enum><header>Alternative allocation for qualified contributions to eligible scholarship-granting organizations</header><clause id="id1ACB4120E1FF4F1BAE5E366617484CE3"><enum>(i)</enum><header>In general</header><text>Not later than the end of the fifth year of the program or one year after the end of the first fiscal year for which the total amount of credits claimed under section 25E and <external-xref legal-doc="usc" parsable-cite="usc/26/45U">section 45U</external-xref> of the Internal Revenue Code of 1986 for qualified contributions to eligible scholarship-granting organizations is $2,500,000,000 or more, whichever comes first, the Secretary of Education shall, by regulation, provide for an alternative allocation method for the amount described in paragraph (1)(A) that shall take effect beginning with the first fiscal year after the regulation takes effect.</text></clause><clause id="id0736f993976742e1a6db89e581e7d7d9"><enum>(ii)</enum><header>Alternative allocation method</header><text>The alternative allocation method described in clause (i) shall be expressed as a formula based on a combination of the following data for each State, as reported by the State to the Secretary of Education:</text><subclause id="id5964086cc5e94fe7a7eafb7a56334fc6"><enum>(I)</enum><text>The relative percentage of students in the State who receive a elementary or secondary scholarship through a State program that is financed through State tax-credited donations or appropriations and that permits the elementary or secondary scholarship to be used to attend a private school.</text></subclause><subclause id="id8c521b05f021443ca2bf7dd85572a76d"><enum>(II)</enum><text>The total amount of all elementary and secondary scholarships awarded through a State program that is financed through State tax-credited donations or appropriations compared to the total amount of current State and local expenditures for free public education in the State.</text></subclause></clause><clause id="idd4839d8df55442a3b1e1f41d47b912a4"><enum>(iii)</enum><header>Allocation formula</header><text>For any fiscal year to which clause (i) applies, the Secretary of Education shall—</text><subclause id="id94480b2d4f054d0880bc19298f000351"><enum>(I)</enum><text>first reserve, for each State, an amount equal to the sum of the qualifying contributions made in the State in the previous year;</text></subclause><subclause id="id1a73fc693979481d802af18116525cee"><enum>(II)</enum><text>next, allocate two-thirds of the remaining amount of the national cap for that year using the alternative allocation method in clause (ii); and</text></subclause><subclause id="id49535935451a431ca31a8ca2c1201a35"><enum>(III)</enum><text>then, allocate one-third of the remaining amount in accordance with subparagraph (A)(ii).</text></subclause></clause><clause id="idaa5c56ff8ce3477191e190e3d9540009"><enum>(iv)</enum><header>Ineligibility</header><text>For any fiscal year to which clause (i) applies, a State that does not provide the Secretary of Education with information described in clause (ii) is not eligible to receive an allocation through the alternative allocation method under clause (ii).</text></clause></subparagraph></paragraph><paragraph id="idce3d96548341486eba28c913b7058440"><enum>(3)</enum><header>Allowable partnerships</header><text>A State may choose to administer the allocation it receives under paragraph (2) in partnership with one or more States, provided that the eligible scholarship-granting organizations or eligible workforce training organizations in each partner State serve students who reside in all States in the partnership.</text></paragraph><paragraph id="id2eb38920993b4975a9f4dd54e7a59f35"><enum>(4)</enum><header>Total allocation</header><text>A State’s allocation, for any fiscal year, is the sum of the amount determined for it under subparagraphs (A) and (B) of paragraph (2), except as provided in paragraph (2)(C).</text></paragraph><paragraph id="id61f57f3a31fc429483c1f3f6b2b7b71d"><enum>(5)</enum><header>Allocation and adjustments</header><subparagraph id="id65D34EC812DE4A138623FA00B7C1A864"><enum>(A)</enum><header>Initial allocation to States</header><text>No later than November 1 of the year preceding a year for which there is a national cap on credits under paragraph (1) (hereafter in this section, the <quote>applicable year</quote>), or as early as practicable with respect to the first year, the Secretary of Education shall announce the State allocations under paragraph (2) for the applicable year.</text></subparagraph><subparagraph id="id93161b32b28c47b4a9bb392cf3e5f522"><enum>(B)</enum><header>List of eligible scholarship-granting organizations and eligible workforce training organizations</header><text>No later than January 1 of each applicable year, or as early as practicable with respect to the first year, each State shall provide the Secretary of Education a list of eligible scholarship-granting organizations and eligible workforce training organizations described in paragraphs (3)(A) and (4) of <external-xref legal-doc="usc" parsable-cite="usc/26/25E">section 25E(c)</external-xref> of the Internal Revenue Code of 1986, including a certification that the entity submitting the list on behalf of the State has the authority to perform this function. Neither this Act nor any other Federal law shall be construed as limiting the entities that may submit the list on behalf of a state.</text></subparagraph><subparagraph id="id0d99e5e1d6104b6abac50b97a7e55386"><enum>(C)</enum><header>Reallocation</header><clause id="id18534D9DBBC74D2E8027BC3FFD25AA30"><enum>(i)</enum><header>In general</header><text>The Secretary of Education shall, in accordance with paragraph (2), reallocate to any other States the allocation of a State which, for any applicable year—</text><subclause id="id6FE77B5781BB4405B6F69C4A8EA8B6DE"><enum>(I)</enum><text>fails to provide the Secretary of Education a list of eligible scholarship-granting organizations and eligible workforce training organizations pursuant to subparagraph (B); and</text></subclause><subclause commented="no" id="idC9A3CCBB66A440A7A7411792F397E3E9"><enum>(II)</enum><text>does not have an eligible scholarship-granting organization (as described in <external-xref legal-doc="usc" parsable-cite="usc/26/25E">section 25E(c)(3)(B)</external-xref> of the Internal Revenue Code of 1986) located in such State.</text></subclause></clause><clause id="idADFF74BD3F6D48B1B5CC422C06A67EBB"><enum>(ii)</enum><header>Unclaimed credits</header><text>On or after April 1 of any applicable year, the Secretary of Education may reallocate, to one or more other States that have eligible scholarship-granting organizations and eligible workforce training organizations in the States, without regard to paragraph (2), the allocation of a State for which the State's allocation has not been claimed.</text></clause></subparagraph></paragraph></subsection><subsection id="id8381c018f41044ae8a1f3641efe53830"><enum>(d)</enum><header>Definitions</header><text>The definitions of terms in <external-xref legal-doc="usc" parsable-cite="usc/26/25E">section 25E(c)</external-xref> of the Internal Revenue Code of 1986 apply to those terms as used in this title.</text></subsection><subsection id="id518001b7a1da488ab4cac9297b336dfc"><enum>(e)</enum><header>Authorization of appropriations</header><text>For the purpose of administering this section and sections 25E and 45U of the Internal Revenue Code of 1986, there are authorized to be appropriated, and there are appropriated, such sums as may be necessary for fiscal year 2021 and each succeeding fiscal year.</text></subsection></section>