[Congressional Record Volume 167, Number 88 (Thursday, May 20, 2021)]
[Senate]
[Pages S3284-S3286]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 1863. Mr. CRUZ submitted an amendment intended to be proposed to
amendment SA 1502 proposed by Mr. Schumer to the bill S. 1260, to
establish a new Directorate for Technology and Innovation in the
National Science Foundation, to establish a regional technology hub
program, to require a strategy and report on economic security,
science, research, innovation, manufacturing, and job creation, to
establish a critical supply chain resiliency program, and for other
purposes; which was ordered to lie on the table; as follows:
At the end of division F, insert the following:
TITLE IV--EDUCATION FREEDOM SCHOLARSHIPS AND OPPORTUNITY ACT
SEC. 6401. SHORT TITLE.
This title may be cited as the ``Education Freedom
Scholarships and Opportunity Act''.
SEC. 6402. PURPOSE.
The purpose of this title 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.
Subtitle A--Amendments to the Internal Revenue Code of 1986
SEC. 6411. REFERENCES TO THE INTERNAL REVENUE CODE OF 1986.
Except as otherwise expressly provided, whenever in this
subtitle 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.
SEC. 6412. TAX CREDITS FOR CONTRIBUTIONS TO ELIGIBLE
SCHOLARSHIP-GRANTING ORGANIZATIONS AND ELIGIBLE
WORKFORCE TRAINING ORGANIZATIONS.
(a) Credit for Individuals.--
(1) In general.--Subpart A of part IV of subchapter A of
chapter 1 is amended by adding after section 25D the
following new section:
``SEC. 25E. CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP-GRANTING
ORGANIZATIONS AND ELIGIBLE WORKFORCE TRAINING
ORGANIZATIONS.
``(a) Allowance of Credit.--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.
``(b) Amount of Credit.--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.
``(c) Definitions.--For purposes of this section--
``(1) Qualified contribution.--The term `qualified
contribution' means a contribution of cash to any eligible
scholarship-granting organization or eligible workforce
training organization.
``(2) Qualified expense.--The term `qualified expense'
means any educational expense that is--
``(A) for an individual student's elementary or secondary
education, as recognized by the State,
``(B) 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 (20
U.S.C. 2302(5)), or
``(C) 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.
``(3) Eligible scholarship-granting organization.--The term
`eligible scholarship-granting organization' means--
``(A) an organization that--
``(i) is described in section 501(c)(3) and exempt from
taxation under section 501(a),
``(ii) provides qualifying scholarships for qualified
expenses to only individual elementary and secondary students
who--
``(I) reside in the State in which the eligible
scholarship-granting organization is recognized, or
``(II) in the case of the Bureau of Indian Education, are
members of a federally recognized tribe,
``(iii) a State reports to the Secretary of Education as an
eligible scholarship-granting organization pursuant to
section 6421(c)(5)(B) of the Education Freedom Scholarships
and Opportunity Act,
``(iv) allocates at least 90 percent of qualified
contributions to qualifying scholarships for qualified
expenses, and
``(v) provides scholarships to--
``(I) more than 1 eligible student,
``(II) more than 1 eligible family, and
``(III) different eligible students attending more than one
education provider, or
``(B) an organization that--
``(i) is described in section 501(c)(3) and exempt from
taxation under section 501(a), and
``(ii) pursuant to State law, was able, as of the date of
the enactment of the Education Freedom Scholarships and
Opportunity Act, 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.
``(4) Eligible workforce training organization.--
``(A) In general.--The term `eligible workforce training
organization' means any organization--
``(i) which is--
``(I) described in section 501(c)(3) and exempt from
taxation under section 501(a), and
``(II) not a private foundation (as defined in section
509),
``(ii) 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,
``(iii) which is in compliance with applicable State laws,
``(iv) which a State has reported to the Secretary of
Education as an eligible workforce training organization
pursuant to section 6421(c)(5)(B) of the Education Freedom
Scholarships and Opportunity Act,
``(v) which satisfies the requirements described in clauses
(iv) and (v) of paragraph (3)(A).
``(B) Potential eligible workforce training
organizations.--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)):
``(i) Community colleges.
``(ii) Workforce training programs (as defined by the
applicable State workforce agency).
``(iii) Organizations which provide--
``(I) career and technical education, or
``(II) 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.
``(iv) Community organizations that provide training that
results in a certification.
``(5) Qualifying scholarship.--The term `qualifying
scholarship' means--
``(A) a scholarship granted by an eligible scholarship-
granting organization to an individual elementary or
secondary student, or
``(B) 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
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portable certificates or credentials, or industry recognized
certification or credentialing programs, including
preparation and examination costs,
under this section.
``(6) State.--The term `State' 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).
``(d) Rules of Construction.--
``(1) In general.--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.
``(2) Not treated as income.--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.
``(3) Prohibition of control over nonpublic education
providers.--
``(A) 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.
``(B) 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.
``(C) 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.
``(4) Parental rights to use scholarships.--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.
``(5) State and local authority.--Nothing in this section
or section 45U shall be construed to modify a State or local
government's authority and responsibility to fund education.
``(e) Limitations.--
``(1) Tax liability.--No credit allowed under this section
or section 45U shall exceed the taxpayer's Federal income tax
liability for the taxable year.
``(2) Prohibitions.--A taxpayer is prohibited from selling
or transferring any portion of a tax credit allowed under
this section or section 45U.
``(3) Denial of double benefit.--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.
``(f) Carryover of Credit.--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.
``(g) Election.--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.
``(h) Alternative Minimum Tax.--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.''.
(2) Clerical amendment.--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:
``Sec. 25E. Contributions to eligible scholarship-granting
organizations and eligible workforce training
organizations.''.
(b) Credit for Corporations.--
(1) In general.--Subpart D of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:
``SEC. 45U. CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP-GRANTING
ORGANIZATIONS AND ELIGIBLE WORKFORCE TRAINING
ORGANIZATIONS.
``(a) Allowance of Credit.--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.
``(b) Amount of Credit.--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.
``(c) Additional Provisions.--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.
``(d) Election.--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.''.
(2) Credit part of general business credit.--Section 38(b)
is amended--
(A) by striking ``plus'' at the end of paragraph (32);
(B) by striking the period at the end of paragraph (33) and
inserting ``, plus''; and
(C) by adding at the end the following new paragraph:
``(34) the credit for qualified contributions determined
under section 45U(a).''.
(3) Clerical amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 is amended by
adding at the end the following new item:
``Sec. 45U. Contributions to eligible scholarship-granting
organizations and eligible workforce training
organizations.''.
Subtitle B--Education Freedom Scholarships and Opportunity Act Web
Portal and Administration
SEC. 6421. EDUCATION FREEDOM SCHOLARSHIPS AND OPPORTUNITY ACT
WEB PORTAL AND ADMINISTRATION.
(a) In General.--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--
(1) lists all scholarship-granting organizations and
workforce training organizations that are eligible under
section 25E or 45U of the Internal Revenue Code of 1986;
(2) 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;
(3) provides information about the tax benefits of the
provisions of the Education Freedom Scholarships and
Opportunity Act under the Internal Revenue Code of 1986; and
(4) 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--
(A) student eligibility;
(B) allowable educational expenses;
(C) the types of allowable education providers;
(D) the percentage of funds an organization may use for
program administration; and
(E) the percentage of total contributions the organization
awards in a calendar year.
(b) Nonportal Contributions.--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.
(c) National and State Caps on Credits.--
(1) National cap.--There is a cap of $10,000,000,000 on the
sum of the contributions that qualify for a credit under
section 25E and section 45U of the Internal Revenue Code of
1986 for each calendar year, of which--
(A) $5,000,000,000 shall be allotted for qualified
contributions to eligible scholarship-granting organizations;
and
(B) $5,000,000,000 shall be allotted for qualified
contributions to eligible workforce training organizations.
(2) Allocation of cap.--
(A) Initial allocations.--For each calendar year, the
Secretary of Education, in coordination with the Secretary of
Labor, shall--
(i) from the amount allotted under paragraph (1)(A)--
(I) first reserve, for each State, an amount equal to the
sum of the qualifying contributions made in the State in the
previous year; and
(II) next, allocate the remaining amount among the
participating States by allocating to each State the sum of--
(aa) 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
(bb) 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
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the number of those individuals in all such States, as so
determined; and
(ii) from the amount allotted under paragraph (1)(B)--
(I) 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
(II) 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.
(B) Minimum allocation.--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.
(C) Alternative allocation for qualified contributions to
eligible scholarship-granting organizations.--
(i) In general.--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 section 45U 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.
(ii) Alternative allocation method.--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:
(I) 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.
(II) 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.
(iii) Allocation formula.--For any fiscal year to which
clause (i) applies, the Secretary of Education shall--
(I) first reserve, for each State, an amount equal to the
sum of the qualifying contributions made in the State in the
previous year;
(II) next, allocate two-thirds of the remaining amount of
the national cap for that year using the alternative
allocation method in clause (ii); and
(III) then, allocate one-third of the remaining amount in
accordance with subparagraph (A)(ii).
(iv) Ineligibility.--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).
(3) Allowable partnerships.--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.
(4) Total allocation.--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).
(5) Allocation and adjustments.--
(A) Initial allocation to states.--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 ``applicable year''), 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.
(B) List of eligible scholarship-granting organizations and
eligible workforce training organizations.--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
section 25E(c) 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 title nor any other Federal law shall
be construed as limiting the entities that may submit the
list on behalf of a state.
(C) Reallocation.--
(i) In general.--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--
(I) fails to provide the Secretary of Education a list of
eligible scholarship-granting organizations and eligible
workforce training organizations pursuant to subparagraph
(B); and
(II) does not have an eligible scholarship-granting
organization (as described in section 25E(c)(3)(B) of the
Internal Revenue Code of 1986) located in such State.
(ii) Unclaimed credits.--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.
(d) Definitions.--The definitions of terms in section
25E(c) of the Internal Revenue Code of 1986 apply to those
terms as used in this title.
(e) Authorization of Appropriations.--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.
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