II

106TH CONGRESS

1ST SESSION S. 138

To amend the Internal Revenue Code of 1986 to allow a credit against

income tax for expenses of attending elementary and secondary schools

and for contributions to charitable organizations which provide scholarships for children to attend such schools.

IN THE SENATE OF THE UNITED STATES

JANUARY 19, 1999

Mr. KYL introduced the following bill; which was read twice and referred to

the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to allow a

credit against income tax for expenses of attending elementary and secondary schools and for contributions to

charitable organizations which provide scholarships for

children to attend such schools.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘K-12 Community Par5 ticipation Act of 1999’’.
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1 SEC. 2. CREDIT FOR ELEMENTARY AND SECONDARY

2 SCHOOL EXPENSES AND FOR CONTRIBU3 TIONS TO CHARITABLE ORGANIZATIONS

4 WHICH PROVIDE SCHOLARSHIPS FOR STU5 DENTS ATTENDING SUCH SCHOOLS.

6 (a) IN GENERAL.—Subpart B of part IV of sub7 chapter A of chapter 1 of the Internal Revenue Code of

8 1986 is amended by adding at the end the following new

9 section:

10 ‘‘SEC. 30B. CREDIT FOR ELEMENTARY AND SECONDARY

11 SCHOOL EXPENSES AND FOR CONTRIBU12 TIONS TO CHARITABLE ORGANIZATIONS

13 WHICH PROVIDE SCHOLARSHIPS FOR STU14 DENTS ATTENDING SUCH SCHOOLS.

15 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al16 lowed as a credit against the tax imposed by this chapter

17 for the taxable year an amount equal to the sum of—

18 ‘‘(1) the qualified elementary and secondary

19 education expenses which are paid or incurred by

20 the taxpayer during such taxable year, and

21 ‘‘(2) the qualified charitable contributions of

22 the taxpayer for the taxable year.

23 ‘‘(b) MAXIMUM CREDIT.—The credit allowed by sub24 section (a) for any taxable year shall not exceed—

25 ‘‘(1) $100 in the case of taxable years begin26 ning in calendar year 1999,
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1 ‘‘(2) $150 in the case of taxable years begin2 ning in calendar year 2000,

3 ‘‘(3) $200 in the case of taxable years begin4 ning in calendar year 2001, and

5 ‘‘(4) $250 in the case of taxable years begin6 ning after calendar year 2001.

7 In the case of a joint return, the limitation under this sub8 section shall be twice the dollar amount otherwise applica9 ble under the preceding sentence.

10 ‘‘(c) QUALIFIED ELEMENTARY AND SECONDARY

11 EDUCATION EXPENSES.—For purposes of this section—

12 ‘‘(1) IN GENERAL.—The term ‘qualified elemen13 tary and secondary education expenses’ means tui14 tion, fees, tutoring, special needs services, books,

15 supplies, computer equipment (including related

16 software and services) and other equipment, trans17 portation, and supplementary expenses required for

18 the enrollment or attendance of any individual at a

19 public, private, or religious school.

20 ‘‘(2) SPECIAL RULE FOR HOME-SCHOOLING.—

21 Such term shall include expenses described in para22 graph (1) required for education provided for

23 homeschooling if the requirements of any applicable

24 State or local law are met with respect to such edu25 cation.
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1 ‘‘(3) SCHOOL.—The term ‘school’ means any

2 school which provides elementary education or sec3 ondary education (through grade 12), as determined

4 under State law.

5 ‘‘(d) QUALIFIED CHARITABLE CONTRIBUTION.—For

6 purposes of this section—

7 ‘‘(1) IN GENERAL.—The term ‘qualified chari8 table contribution’ means, with respect to any tax9 able year, the amount allowable as a deduction

10 under section 170 (determined without regard to

11 subsection (e)(1)) for cash contributions to a school

12 tuition organization.

13 ‘‘(2) SCHOOL TUITION ORGANIZATION.—

14 ‘‘(A) IN GENERAL.—The term ‘school tui15 tion organization’ means any organization de16 scribed in section 170(c)(2) if the annual dis17 bursements of the organization for elementary

18 and secondary school scholarship are normally

19 not less than 90 percent of the sum of such or20 ganization’s annual gross income and contribu21 tions and gifts.

22 ‘‘(B) ELEMENTARY AND SECONDARY

23 SCHOOL SCHOLARSHIP.—The term ‘elementary

24 and secondary school scholarship’ means any

25 scholarship excludable from gross income under
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1 section 117 for expenses related to education at

2 or below the 12th grade.

3 ‘‘(e) SPECIAL RULES.—

4 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc5 tion shall be allowed under this chapter for any con6 tribution for which credit is allowed under this sec7 tion.

8 ‘‘(2) APPLICATION WITH OTHER CREDITS.—

9 The credit allowable under subsection (a) for any

10 taxable year shall not exceed the excess (if any) of—

11 ‘‘(A) the regular tax for the taxable year,

12 reduced by the sum of the credits allowable

13 under subpart A and the preceding sections of

14 this subpart, over

15 ‘‘(B) the tentative minimum tax for the

16 taxable year.

17 ‘‘(3) CONTROLLED GROUPS.—All persons who

18 are treated as one employer under subsection (a) or

19 (b) of section 52 shall be treated as 1 taxpayer for

20 purposes of this section.

21 ‘‘(f) ELECTION TO HAVE CREDIT NOT APPLY.—A

22 taxpayer may elect to have this section not apply for any

23 taxable year.’’

24 (b) CLERICAL AMENDMENT.—The table of sections

25 for subpart B of part IV of subchapter A of chapter 1
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1 of such Code is amended by adding at the end the follow2 ing new item:

‘‘Sec. 30B. Credit for elementary and secondary school expenses

and for contributions to charitable organizations

which provide scholarships for students attending

such schools.’’

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to taxable years beginning after

5 December 31, 1998.

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