Supportive Communities Helping Offer Opportunities for Learning Act of 2005 - SCHOOL ACT of 2005 - Directs the Secretary of Education to establish the Supportive Communities Helping Offer Opportunities for Learning (SCHOOL) Program.
Allows educational scholarships under the SCHOOL Program to be grants to eligible low-income elementary or secondary school students to cover all or part of: (1) private or religious school tuition and fees; (2) the cost of transportation to a public school; or (3) any other school or educational program expenses as the Secretary may determine.
Authorizes the Secretary to certify scholarship granting organizations participating in the SCHOOL Program if they meet specified requirements.
Amends the Internal Revenue Code to allow an income tax credit for individuals and corporations for their contributions to qualified scholarship granting organizations certified as SCHOOL Program participants.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2426 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 2426
To establish the Supportive Communities Helping Offer Opportunities for
Learning Program and to allow an income tax credit for contributions to
qualified scholarship granting organizations.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 18, 2005
Mr. Green of Wisconsin (for himself, Mr. Petri, Ms. Hart, Mr. Jindal,
Mr. Miller of Florida, Mr. Hostettler, Mr. Feeney, and Mr. Souder)
introduced the following bill; which was referred to the Committee on
Ways and Means, and in addition to the Committee on Education and the
Workforce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To establish the Supportive Communities Helping Offer Opportunities for
Learning Program and to allow an income tax credit for contributions to
qualified scholarship granting organizations.
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 ``Supportive Communities Helping Offer
Opportunities for Learning Act of 2005'' or as the ``SCHOOL Act of
2005''.
SEC. 2. ESTABLISHMENT OF SUPPORTIVE COMMUNITIES HELPING OFFER
OPPORTUNITIES FOR LEARNING PROGRAM.
(a) In General.--The Secretary of Education shall establish a
program to be known as the ``Supportive Communities Helping Offer
Opportunities for Learning Program'' or as the ``SCHOOL Program''.
(b) Certification of Scholarship Granting Organizations.--
(1) In general.--The Secretary of Education may certify an
organization as a scholarship granting organization
participating in the SCHOOL Program if such organization meets
all of the following requirements:
(A) Notifies the Secretary of its intent to provide
educational scholarships for eligible students
attending qualified schools.
(B) Demonstrates to the Secretary that it is
described in section 501(c)(3) of the Internal Revenue
Code of 1986 and exempt from tax under section 501(a)
of such Code.
(C) Provides a receipt to taxpayers for
contributions made to the organization.
(D) Ensures that at least 90 percent of its annual
receipts are spent on educational scholarships, and
that all receipts from interest or investments is spent
on educational scholarships.
(E) Spends each year a portion of its expenditures
on scholarships for low-income eligible students equal
to the percentage of low-income eligible students in
the county where the organization expends the majority
of its scholarships.
(F) Ensures that at least 30 percent of first time
recipients of educational scholarships were not
continuously enrolled in a private elementary or
secondary school during the previous year.
(G) Distributes periodic scholarship payments as
checks made out to a student's parent or guardian and
mailed to the qualified school where the student is
enrolled.
(H) Cooperates with the Secretary in conducting
criminal background checks on all of its employees and
board members and excluding from employment or
governance any individual that might reasonably pose a
risk to the appropriate use of contributed funds.
(I) Ensures that scholarships are portable during
the school year and can be used at any qualified school
that accepts the student according to a parent's
wishes.
(J) Ensures that if a student moves to a new
qualified school during a school year, the scholarship
amount may be prorated.
(K) Demonstrates its financial accountability by--
(i) submitting a financial information
report for the organization that complies with
uniform financial accounting standards
established by the Secretary and that has been
conducted by a certified public accountant; and
(ii) having an auditor certify that the
report is free of material misstatements.
(L) Demonstrates its financial viability, if the
organization is to receive donations of $50,000 or more
during any school year (as determined by the
Secretary), by--
(i) filing with the Secretary prior to the
start of the school year a surety bond payable
to the Federal Government in an amount equal to
the aggregate amount of contributions expected
to be received during the school year; or
(ii) filing with the Secretary prior to the
start of the school year financial information
that demonstrates the financial viability of
the organization.
(M) Ensures that qualified schools that accept its
scholarship students will--
(i) comply with all health and safety laws
or codes that apply to the school;
(ii) hold a valid occupancy permit if
required by their municipality;
(iii) certify that they will not
discriminate in admissions on the basis of
race, color, national origin, religion or
disability; and
(iv) provide academic accountability to
parents of the students in the program by
regularly reporting to the parent on the
student's progress.
(N) Does not provide educational scholarships for
students to attend any school with paid staff or board
members, or relatives thereof, in common with the
organization.
(O) Publicly reports to the Secretary by June 1 of
each year the following information prepared by a
certified public accountant for the previous calendar
year--
(i) the name and address of the
organization;
(ii) the total number and total dollar
amount of contributions received during the
previous calendar year;
(iii) the total number and total dollar
amount of educational scholarships awarded
during the previous calendar year;
(iv) the total number and total dollar
amount of educational scholarships awarded
during the previous year to low-income eligible
students; and
(v) the percentage of first time recipients
of educational scholarships who were
continuously enrolled in a public elementary or
secondary school during the previous year.
(2) Definitions.--For purposes of this subsection--
(A) Educational scholarships.--The term
``educational scholarships'' means grants for eligible
students to cover all or part of--
(i) in the case of a private or religious
school which charges tuition or fees, the
tuition and fees of such school,
(ii) in the case of a public school, the
cost of transportation to such school, and
(iii) in the case of any other school or
program, such expenses as the Secretary of
Education may provide.
(B) Qualified school.--The term ``qualified
school'' means any public, private, religious, or other
school or program which provides elementary or
secondary education (as determined under State law).
(C) Eligible student.--The term ``eligible
student'' means any student who--
(i) has not--
(I) attained age 21, or
(II) been graduated from high
school, and
(ii) as of the time that such student first
receives assistance under the SCHOOL Program,
is a member of a household whose total annual
income during the year before receipt of such
assistance does not exceed an amount equal to
2.5 times the highest amount of income which
qualifies for a reduced price lunch under
section 9(b)(1) of the Richard B. Russell
National School Lunch Act.
(D) Low-income eligible student.--The term ``low-
income eligible student'' means a student who meets the
requirements of paragraph (3)(A) and who qualifies for
a free or reduced price lunch under section 9(b)(1) of
the Richard B. Russell National School Lunch Act.
(E) Parent.--The term ``parent'' includes a
guardian, custodian, or other person with authority to
act on behalf of the child.
(c) Duties of the Secretary of Education.--The Secretary of
Education shall--
(1) adopt such rules and procedures as are necessary or
appropriate to implement the SCHOOL Program; and
(2) provide a standardized format for certified
organizations to report the information described in subsection
(b)(1)(O).
SEC. 3. EDUCATIONAL IMPROVEMENT CONTRIBUTIONS CREDIT.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to other credits) is
amended by adding at the end the following new section:
``SEC. 30B. EDUCATIONAL IMPROVEMENT CONTRIBUTIONS CREDIT.
``(a) In General.--There shall be allowed as a credit against the
tax imposed by this chapter for the taxable year an amount equal to the
aggregate amount of the qualified contributions made by the taxpayer to
qualified scholarship granting organizations during the taxable year.
``(b) Limitation.--
``(1) Individuals.--In the case of an individual, the
amount of the credit determined under this section for any
taxable year shall not exceed $3,000 ($6,000 in the case of a
joint return).
``(2) Corporations.--In the case of a corporation, the
amount of the credit determined under this section for any
taxable year shall not exceed the lesser of--
``(A) 5 percent of the taxpayer's regular tax
liability for the taxable year, or
``(B) $20,000.
``(c) Qualified Scholarship Granting Organization.--For purposes of
this section, the term `qualified scholarship granting organization'
means any organization which--
``(1) is described in section 501(c)(3) and exempt from tax
under section 501(a), and
``(2) has in effect a certification from the Secretary of
Education that such organization is a scholarship granting
organization participating in the SCHOOL Program (within the
meaning of section 2 of the SCHOOL Act of 2005).
``(d) Qualified Contributions.--For purposes of this section, the
term `qualified contribution' means any cash contribution which the
taxpayer elects (at such time and in such form and manner as the
Secretary may prescribe) to treat as a qualified contribution.
``(e) Coordination With Other Credits; Carryover of Unused
Credit.--
``(1) In general.--If the credit allowable under subsection
(a) for a taxable year exceeds the limitation imposed by
paragraph (2) for such taxable year, such excess shall be
carried over to the succeeding taxable year and added to the
credit allowable under subsection (a) for such succeeding
taxable year. No credit may be carried forward under this
subsection to any taxable year following the third taxable year
after the taxable year in which the credit arose. For purposes
of the preceding sentence, credits shall be treated as used on
a first-in first-out basis.
``(2) Application with other credits.--The credit allowed
by subsection (a) for any taxable year shall not exceed the
excess (if any) of--
``(A) the regular tax liability for the taxable
year reduced by the sum of the credits allowed by this
part (other than this section), over
``(B) the tentative minimum tax for the taxable
year.
``(f) Special Rules.--
``(1) Substantiation.--No credit shall be allowed under
subsection (a) with respect to any contribution to a qualified
scholarship granting organization unless the taxpayer attaches
to the taxpayer's return for the taxable year a receipt from
such organization which meets such requirements as the
Secretary may establish.
``(2) Controlled groups.--Rules similar to the rules of
paragraphs (1) and (2) of section 41(f) shall apply for
purposes of this section.
``(3) Denial of double benefit.--No deduction or credit
shall be allowed under this subtitle for any contribution which
is taken into account under this section.
``(g) Regulations.--The Secretary may prescribe such regulations as
may be necessary or appropriate to carry out the purposes of this
section.''.
(b) Coordination With Limitations on Charitable Deductions.--
Subsection (c) of section 170 of such Code is amended by adding at the
end the following: ``Such term shall not include any contribution taken
into account under section 30B.''
(c) 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. Educational improvement contributions credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to contributions made during taxable years beginning after the
date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Education Reform.
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