[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

[[Page S3285]]

     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

[[Page S3286]]

     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.
                                 ______