Local Education Authority Returns Now Act - Requires the Secretary of the Treasury to make an annual determination of states that have chosen to opt-out of K-12 education grant programs.
Requires the Secretary of Education to determine credits due to states as opt-out state education amounts.
Amends the Internal Revenue Code to allow individual taxpayers in states that opt-out a refundable tax credit for a share of the opt-out amount creditable to such states.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3176 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 3176
To allow a State to opt out of K-12 education grant programs and the
requirements of those programs, to amend the Internal Revenue Code of
1986 to provide a credit to taxpayers in such a State, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 13, 2011
Mr. Garrett (for himself, Mr. Paul, Mr. Lamborn, Mr. Jones, Mr.
Westmoreland, Mrs. Myrick, Mr. Walsh of Illinois, Mr. Flores, Mr.
Pitts, Mr. Huelskamp, Mr. Ribble, Mr. Southerland, Mr. Franks of
Arizona, Mrs. Blackburn, Mrs. Lummis, Mr. Pearce, Mr. Kingston, and Mr.
Ross of Florida) 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 allow a State to opt out of K-12 education grant programs and the
requirements of those programs, to amend the Internal Revenue Code of
1986 to provide a credit to taxpayers in such a State, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Local Education
Authority Returns Now Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--ABILITY OF STATES TO OPT OUT OF K-12 EDUCATION GRANT PROGRAMS
Sec. 101. Determinations by Secretary of Treasury as to which States
are opt-out States.
Sec. 102. Amounts creditable to States.
Sec. 103. Opt-out States not eligible to receive grants under K-12
education grant programs.
Sec. 104. Requirements of K-12 education grant programs do not apply to
opt-out States.
Sec. 105. Definitions.
TITLE II--CREDIT TO TAXPAYERS IN OPT-OUT STATE
Sec. 201. Refundable opt-out State education credit.
TITLE I--ABILITY OF STATES TO OPT OUT OF K-12 EDUCATION GRANT PROGRAMS
SEC. 101. DETERMINATIONS BY SECRETARY OF TREASURY AS TO WHICH STATES
ARE OPT-OUT STATES.
(a) Deadline.--Not later than February 1 of each calendar year
(hereinafter in this title referred to as the ``determination year''),
the Secretary of the Treasury shall determine which States, if any, are
opt-out States for the calendar year (hereinafter in this title
referred to as the ``opt-out year'') that follows the determination
year.
(b) Determination.--The Secretary of the Treasury shall determine
that a State is an opt-out State for an opt-out year under subsection
(a) if, and only if, there is transmitted to the Secretary a copy of a
law, in effect as of January 1 of the determination year, that can
fairly be read to mean that the policy of the State is to not accept
grant funds under the K-12 education grant programs, and thereby to not
be bound by the requirements of those programs, for that opt-out year.
(c) Notification.--Upon making a determination under subsection
(a), the Secretary of the Treasury shall transmit that determination to
the Secretary of Education and to Congress.
SEC. 102. AMOUNTS CREDITABLE TO STATES.
(a) In General.--For purposes of determinations relating to the
refundable opt-out State education credit under section 36D of the
Internal Revenue Code of 1986, as early as practicable for a calendar
year, the Secretary of Education shall, for each State, determine the
amount creditable to that State for that calendar year and make
available that determination.
(b) Amount Creditable.--The Secretary shall determine the amount
creditable to a State for a calendar year as follows:
(1) If the State was not an opt-out State for the preceding
calendar year, the amount creditable for the calendar year
shall be equal to the aggregate K-12 funding (as determined
under subsection (d)) for that State for that preceding
calendar year.
(2) If the State was an opt-out State for the preceding
calendar year, the amount creditable for the calendar year
shall be equal to--
(A) the extrapolated amount (as determined under
subsection (c)) for that preceding calendar year, plus
(B) the amount that results when the amount
creditable for that preceding calendar year is
subtracted from the extrapolated amount (as determined
under subsection (c)) for that preceding calendar year.
(c) Extrapolated Amount.--
(1) In general.--The Secretary of Education shall determine
the extrapolated amount for a State for a calendar year. The
determination shall be based on--
(A) the amount of grant funds that would have been
received other than on a competitive basis, as direct
grants, subgrants, or otherwise, under the K-12
education grant programs, by the State or any public
educational entity in the State for that calendar year,
had it elected not to be an opt-out State for that
calendar year; plus
(B) the average annual amount of all grant funds
that would have been received on a competitive basis,
as direct grants, subgrants, or otherwise, under the K-
12 education grant programs, by the State or any public
educational entity in the State for that calendar year
and the four preceding calendar years, had it elected
not to be an opt-out State for those calendar years.
(2) Regulations.--The Secretary shall prescribe regulations
for making determinations required by this subsection. The
initial regulations shall be prescribed not later than 6 months
after the date of the enactment of this Act.
(d) Aggregate K-12 Funding.--The aggregate K-12 funding for a State
for a calendar year shall be equal to--
(1) the amount of all grant funds received other than on a
competitive basis, as direct grants, subgrants, or otherwise,
under the K-12 education grant programs, by the State or any
public educational entity in the State for that calendar year;
plus
(2) the average annual amount of all grant funds received
on a competitive basis, as direct grants, subgrants, or
otherwise, under the K-12 education grant programs, by the
State or any public educational entity in the State for that
calendar year and the four preceding calendar years.
SEC. 103. OPT-OUT STATES NOT ELIGIBLE TO RECEIVE GRANTS UNDER K-12
EDUCATION GRANT PROGRAMS.
(a) In General.--When a State is an opt-out State for a calendar
year, neither the State nor any public educational entity in the State
is eligible to receive, as direct grants, subgrants, or otherwise, any
funds under any of the K-12 education grant programs for that calendar
year.
(b) Reallocation.--Any funds under a K-12 education grant program
that are not allocated to a State or public educational entity in the
State by reason of subsection (a) shall be returned to the Treasury.
SEC. 104. REQUIREMENTS OF K-12 EDUCATION GRANT PROGRAMS DO NOT APPLY TO
OPT-OUT STATES.
When a State is an opt-out State for a calendar year, neither the
State nor any public educational entity in the State is subject to any
statutory or regulatory requirement of a K-12 education grant program
for that calendar year.
SEC. 105. DEFINITIONS.
In this title:
(1) The term ``K-12 education grant program'' means any
grant program carried out under any title of the Elementary and
Secondary Education Act of 1965, except for the following:
(A) Indian, native hawaiian, and alaska native
education.--Title VII (20 U.S.C. 7401 et seq.).
(B) Impact aid.--Title VIII (20 U.S.C. 7701 et
seq.).
(2) The term ``public educational entity'' means, with
respect to a State, the State educational agency, any local
educational agency in the State, or any public elementary or
secondary school in the State.
TITLE II--CREDIT TO TAXPAYERS IN OPT-OUT STATE
SEC. 201. REFUNDABLE OPT-OUT STATE EDUCATION CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to refundable credits)
is amended by inserting after section 36C the following new section:
``SEC. 36D. OPT-OUT STATE EDUCATION CREDIT.
``(a) General Rule.--In the case of an eligible individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year the opt-out State education amount.
``(b) Opt-Out State Education Amount.--For purposes of this
section--
``(1) In general.--The term `opt-out State education
amount' means, with respect to a taxpayer for a taxable year
beginning in an opt-out year, the amount equal to--
``(A) the amount creditable under section 102 of
the Local Education Authority Returns Now Act to an
opt-out State (determined under section 101 of such
Act), multiplied by--
``(B) a fraction--
``(i) the numerator of which is the
taxpayer's household tax burden from such State
for the opt-out year, and
``(ii) the denominator of which is the
total tax revenue of such State for the opt-out
year.
``(2) Household tax burden.--The household tax burden from
a State for an opt-out year is the sum of--
``(A) the State real property taxes,
``(B) the State personal property taxes,
``(C) the State income, war profits, and excess
profits taxes, plus
``(D) the State general sales taxes,
for the calendar year in which the second preceding taxable
year ends and within which paid or accrued by the taxpayer. For
purposes of this section, terms used in the preceding sentence
which are also used in section 164 shall have the respective
meanings given such terms by section 164.
``(3) Total tax revenue.--The total tax revenue of a State
for an opt-out year is the amount determined by the Secretary
to be the aggregate tax revenue of such State for the calendar
year in which the second preceding taxable year ends.
``(c) Eligible Individual.--For purposes of this section--
``(1) In general.--The term `eligible individual' means an
individual whose principal place of abode (within the meaning
of section 121) was in the opt-out State for the entire taxable
year.
``(2) Dependents.--The term `eligible individual' does not
include any individual if a deduction under section 151 with
respect to such individual is allowed to another taxpayer for a
taxable year beginning in the calendar year in which such
individual's taxable year begins.
``(d) Opt-Out Year.--The term `opt-out year' means a calendar year
for which the Secretary determines a State to be an opt-out State under
section 101 of the Local Education Authority Returns Now Act.
``(e) Amount of Credit Shall Be Determined Under Tables.--
``(1) In general.--The credit under subsection (a) shall be
determined under tables prescribed by the Secretary.
``(2) Requirements for tables.--The tables prescribed under
paragraph (1) shall--
``(A) reflect the provisions of this section, and
``(B) take into account filing status, State of
residence, and adjusted gross income.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``36D,'' after ``36C,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by inserting after the item relating to section 36C
the following new item:
``Sec. 36D. Opt-out State education credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to 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.
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