[Congressional Record Volume 147, Number 28 (Tuesday, March 6, 2001)]
[Senate]
[Pages S1901-S1902]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KYL:
  S. 462. A bill to amend the Internal Revenue Code of 1986 to allow a 
credit against income tax for contributions to charitable organizations 
which provide scholarships for children to attend elementary and 
secondary schools; to the Committee on Finance.
  Mr. KYL. Mr. President, I rise today to introduce legislation that 
will provide new educational options to the students who need those 
options the most.
  While many Americans are satisfied with the public schools available 
to their children, we know that there are also many who are not, and 
with good reason.
  In large urban school districts, a majority of students drop out 
before high school graduation. Nearly 70 percent are unable to read at 
the so-called ``basic'' level. And all too frequently, violence and 
entrenched mediocrity create a climate where learning is actually 
discouraged.
  No wonder caring parents in such circumstances want alternatives.
  We have seen compelling evidence of the pent-up demand for different 
options when private organizations have invited low-income parents to 
apply for partial scholarships that could be used at a non-public 
school.
  Usually, these private scholarship programs are structured in such a 
way that, to be eligible for an award, a low-income family must agree 
to contribute a significant portion of the total tuition bill.
  The results are striking: In 1997, two distinguished business 
leaders, Ted Forstmann and John Walton invited applications for one 
thousand partial tuition scholarships from families here in the 
District of Columbia. Nearly eight thousand applications were received.
  In 1998, they formed an organization called the Children's 
Scholarship Fund to apply the idea on a national basis. They planned to 
offer 40,000 scholarships. 1.25 million applications were received.
  No less impressive than the numbers are the testimonials offered by 
parents who have been pleading for better options.
  One mother said the following about her experience: ``We would not be 
able to afford this without your help. Our daughter is really excited 
to be learning spelling and grammar, which was not being taught in 
public school. She's an aspiring writer and thinks this is great. My 
son has autism, and his new school had more services in place for him 
on the first day of school, without me even asking, than we've been 
able to pull out of the public school in six years! They both love 
their new schools and are doing well.''
  Here's another mother's testimony: I am so excited that my son has 
been chosen to receive a scholarship . . . One evening I sat on my bed 
and cried because I really wanted him to attend a private school but I 
know that I cannot afford all of the tuition. Therefore your 
scholarship fund was my only hope.''
  Yet another mother wrote, ``I cannot begin to tell you how grateful I 
am for this opportunity to send my children to a private school. As a 
low-income mother of four wonderful children with great potential, I 
would not be able to provide this chance for them without your help.
  This particular mother goes on to say, ``I have chosen,'' I cannot 
put enough stress on that word, ``chosen a school that will help 
nurture the seeds of greatness in them. I am sure that with this 
opportunity to succeed, my children will be successful and contribute 
greatly to society in the future.''
  Mr. President, in 1997, leaders in my state settled on a plan to help 
the private sector to satisfy that vast unmet demand for options. They 
instituted a state tax credit that allows Arizona residents to claim a 
dollar-for-dollar income tax credit for donations to school tuition 
organizations, like the Children's Scholarship Fund.
  Thanks to that program, 4,000 Arizona students, nearly all of them 
from disadvantaged backgrounds, have received scholarship assistance 
that has made it possible for them to enroll in a school of their 
choice. The number of school tuition organizations operating in the 
state has shot up from 2 to 33.
  The legislation I am introducing today would extend this Arizona idea 
nation-wide, and I am pleased that my Arizona colleague, Congressman 
John Shadegg, will introduce this legislation this week in the House of 
Representatives.
  By way of tribute to President Bush's more comprehensive education 
proposal, I have given this bill the title, ``The Leave No Child Behind 
Tax Credit Act of 2001.''
  The Leave No Child Behind Tax Credit Act would allow a family or 
business to claim a $250 tax credit for donations to qualified school 
tuition organizations. To qualify for that designation, an organization 
would have to devote at least 90 percent of its annual income to 
offering grants and scholarships for parents to use to send their 
children to the school of their choice.
  Scholarships awarded by such organizations could be used to offset 
tuition costs at a private school, or to pay the tuition costs families 
in most states must pay to enroll a child in a public school across 
district boundaries.
  This measure would move us toward an education policy that recognizes 
the vital importance of parental choice.
  It also recognizes and encourages the efforts that have been 
undertaken by public-spirited private citizens to find non-governmental 
solutions to the serious challenge of improving education in our 
country. These activists embody the vision set forth by President Bush 
in his inaugural address, the vision of responsible citizens building 
communities of service and a nation of character.

[[Page S1902]]

  Moreover, when parents are able to decide for themselves how to go 
about securing one of life's most vital goods, namely, education for 
their children, rather than having such decisions made for them by a 
bureaucracy, they become, in President Bush's memorable terms, 
citizens, not subjects.
  I believe that this legislation will help them to do that, and I am 
very pleased to introduce it today.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 462

       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 ``Leave No Child Behind Tax 
     Credit Act of 2001''.

     SEC. 2. CREDIT FOR CONTRIBUTIONS TO CHARITABLE ORGANIZATIONS 
                   WHICH PROVIDE SCHOLARSHIPS FOR STUDENTS 
                   ATTENDING ELEMENTARY AND SECONDARY 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 CONTRIBUTIONS TO CHARITABLE 
                   ORGANIZATIONS WHICH PROVIDE SCHOLARSHIPS FOR 
                   STUDENTS ATTENDING ELEMENTARY AND SECONDARY 
                   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 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 $250 ($500, in the case 
     of a joint return).
       ``(c) 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 (d)(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 scholarships 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.
       ``(d) 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.
       ``(e) 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 contributions to charitable organizations which 
              provide scholarships for students attending elementary 
              and secondary schools.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.
                                 ______