II 

118TH CONGRESS 

1ST SESSION S. 301 

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

tax for qualified elementary and secondary education tuition. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 7, 2023 

Mr. RUBIO 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 tax for qualified elementary and secondary 

education tuition. 

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 ‘‘Educational Opportu5 nities Act of 2023’’. 

6 SEC. 2. TAX CREDIT FOR CONTRIBUTIONS TO SCHOLAR7 SHIP GRANTING ORGANIZATIONS. 

8 (a) CREDIT FOR INDIVIDUALS.— 

9 (1) IN GENERAL.—Subpart A of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code 


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1 of 1986 is amended by inserting after section 25E 

2 the following new section: 

3 ‘‘SEC. 25F. CONTRIBUTIONS FOR QUALIFIED ELEMENTARY 

4 AND SECONDARY EDUCATION TUITION. 

5 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in6 dividual, there shall be allowed as a credit against the tax 

7 imposed by this chapter for the taxable year an amount 

8 equal to the amount of qualified contributions made by 

9 the taxpayer during the taxable year. 

10 ‘‘(b) DOLLAR LIMITATION.—The amount allowed as 

11 a credit under subsection (a) with respect to any taxpayer 

12 shall not exceed— 

13 ‘‘(1) $2,250, in the case of a married individual 

14 filing a separate return, and 

15 ‘‘(2) $4,500, in any other case. 

16 ‘‘(c) QUALIFIED CONTRIBUTIONS; OTHER DEFINI17 TIONS.—For purposes of this section— 

18 ‘‘(1) QUALIFIED CONTRIBUTION.—The term 

19 ‘qualified contribution’ means a charitable contribu20 tion (as defined by section 170(c)) to a scholarship 

21 granting organization. 

22 ‘‘(2) SCHOLARSHIP GRANTING ORGANIZA23 TION.—The term ‘scholarship granting organization’ 

24 means any organization— 


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1 ‘‘(A) which is described in section 

2 501(c)(3) and exempt from tax under section 

3 501(a), 

4 ‘‘(B) whose exclusive purpose is to provide 

5 scholarships for the qualified elementary and 

6 secondary education expenses of eligible stu7 dents, and 

8 ‘‘(C) which meets the requirements of sub9 section (d). 

10 ‘‘(3) ELIGIBLE STUDENT.—The term ‘eligible 

11 student’ means an individual— 

12 ‘‘(A) who is enrolled in a school (within the 

13 meaning of section 530(b)(3)(B), after the ap14 plication of paragraph (4)(B)), and 

15 ‘‘(B) who is a member of a household with 

16 a total annual household income which does not 

17 exceed 250 percent of the Federal poverty 

18 guidelines (as determined by the Secretary of 

19 Health and Human Services). 

20 ‘‘(4) QUALIFIED ELEMENTARY AND SECONDARY

21 EDUCATION EXPENSES.—The term ‘qualified ele22 mentary and secondary education expenses’ has the 

23 meaning given such term by section 530(b)(3), ex24 cept that— 


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1 ‘‘(A) ‘child’ shall be substituted for ‘bene2 ficiary’ and ‘a child’ shall be substituted for 

3 ‘the designated beneficiary of the trust’ in 

4 clauses (i) and (iii) of subparagraph (A) there5 of, and 

6 ‘‘(B) in applying such paragraph, the term 

7 ‘school’ shall only include schools which— 

8 ‘‘(i) charge tuition for attendance, 

9 ‘‘(ii) comply with all applicable State 

10 laws, including laws relating to unlawful 

11 discrimination, health and safety require12 ments, and criminal background checks of 

13 employees, and 

14 ‘‘(iii) agree to provide annual reports 

15 as described in subsection (e) to the schol16 arship granting organization and to the 

17 parents or guardians of eligible students 

18 receiving a scholarship from the scholar19 ship granting organization. 

20 ‘‘(5) SCHOLARSHIP.—The term ‘scholarship’ 

21 does not include any payment to fulfill or fund any 

22 obligation or project of any school or school system 

23 to provide a free, appropriate public education. 


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1 ‘‘(d) REQUIREMENTS FOR SCHOLARSHIP GRANTING

2 ORGANIZATIONS.—An organization meets the require3 ments of this section if— 

4 ‘‘(1) such organization does not provide grants 

5 to eligible students for any expenses other than 

6 qualified elementary and secondary education ex7 penses, 

8 ‘‘(2) such organization provides grants to— 

9 ‘‘(A) more than 1 student, and 

10 ‘‘(B) students attending more than 1 

11 school, 

12 ‘‘(3) such organization does not earmark or set 

13 aside contributions for scholarships on behalf of any 

14 particular student or to any specific school or group 

15 of schools, 

16 ‘‘(4) such organization takes appropriate steps 

17 to verify the annual household income and family 

18 size of eligible students to which it provides grants, 

19 ‘‘(5) such organization obtains annual audits 

20 from an independent certified public accountant and 

21 submits such audits to the Secretary, 

22 ‘‘(6) no employee of such organization has vio23 lated any law relating to the audit described in para24 graph (4), and 

25 ‘‘(7) such organization— 


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1 ‘‘(A) requires any eligible student who re2 ceives a scholarship— 

3 ‘‘(i) to participate in the evaluation 

4 conducted by the Institute of Education 

5 Science under section 2(d) of the Edu6 cational Opportunities Act of 2023, and 

7 ‘‘(ii) to permit such organization to 

8 share assessment information and other 

9 data regarding the student with the Insti10 tute in accordance with subparagraph (B), 

11 and 

12 ‘‘(B) provides the reports described in sub13 section (e)(1)(C) and such other information as 

14 necessary to the Director of the Institute of 

15 Education Science for the purposes of identi16 fying eligible students receiving a scholarship 

17 from such organization and conducting the eval18 uations and reports required under section 2(d) 

19 of the Educational Opportunities Act of 2023. 

20 For purposes of paragraph (5), the term ‘inde21 pendent certified public accountant’ means, with re22 spect to an organization, a certified public account23 ant which is not a related person (within the mean24 ing of section 465(b)(3)(C)) with respect to such or25 ganization or any employee of such organization. 


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1 ‘‘(e) ELIGIBLE SCHOOL REPORTING REQUIRE2 MENT.— 

3 ‘‘(1) IN GENERAL.—The reports described in 

4 this subsection include— 

5 ‘‘(A) a report to the parents on the stu6 dent’s academic achievement, including a com7 parison with the aggregate academic achieve8 ment of other students in the same grade or 

9 level at the school who receive a scholarship 

10 from a scholarship granting organization, if 

11 available, and 

12 ‘‘(B) a report to each scholarship granting 

13 organization that provides scholarships to stu14 dents at the school, including— 

15 ‘‘(i) the test results, in the aggregate 

16 and disaggregated by race or ethnicity and 

17 grade level, of the students receiving such 

18 scholarships who are in grades 3 through 

19 12 on a grade-appropriate nationally norm20 referenced standardized test, or a grade21 appropriate State-recognized assessment, 

22 and 

23 ‘‘(ii) any additional data requested by 

24 the Director of the Institute of Education 

25 Sciences in accordance with section 


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1 2(d)(B) of the Educational Opportunities 

2 Act of 2023. 

3 ‘‘(2) NO PERSONALLY IDENTIFIABLE INFORMA4 TION.—In preparing and submitting the report de5 scribed in paragraph (1)(B), a school shall not in6 clude any personally identifiable information regard7 ing a student. 

8 ‘‘(f) DENIAL OF DOUBLE BENEFIT.—No deduction 

9 shall be allowed under any provision of this chapter for 

10 any expense for which a credit is allowed under this sec11 tion. 

12 ‘‘(g) ELECTION.—This section shall apply to a tax13 payer for a taxable year only if such taxpayer elects to 

14 have this section apply for such taxable year.’’. 

15 (2) CLERICAL AMENDMENT.—The table of sec16 tions for subpart A of part IV of subchapter A of 

17 chapter 1 of such Code is amended by inserting 

18 after the item relating to section 25E the following 

19 new item: 

‘‘Sec. 25F. Contributions for qualified elementary and secondary education tuition.’’. 

20 (b) CREDIT FOR CORPORATIONS.— 

21 (1) IN GENERAL.—Subpart D of part IV of 

22 subchapter A of chapter 1 of the Internal Revenue 

23 Code of 1986 is amended by adding at the end the 

24 following new section: 


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1 ‘‘SEC. 45AA. CONTRIBUTIONS TO SCHOLARSHIP GRANTING 

2 ORGANIZATIONS. 

3 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

4 in the case of a corporation, the education scholarship 

5 credit determined under this section for the taxable year 

6 is the aggregate amount of qualified contributions for the 

7 taxable year. 

8 ‘‘(b) LIMITATION.—The amount of the credit deter9 mined under this section for any taxable year shall not 

10 exceed $100,000. 

11 ‘‘(c) QUALIFIED CONTRIBUTIONS.—For purposes of 

12 this section, the term ‘qualified contribution’ has the 

13 meaning given such term under section 25F. 

14 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 

15 shall be allowed under any provision of this chapter for 

16 any expense for which a credit is allowed under this sec17 tion. 

18 ‘‘(e) ELECTION.—This section shall apply to a tax19 payer for a taxable year only if such taxpayer elects to 

20 have this section apply for such taxable year.’’. 

21 (2) CONFORMING AMENDMENTS.— 

22 (A) Section 38(b) of such Code is amended 

23 by striking ‘‘plus’’ at the end of paragraph 

24 (39), by striking the period at the end of para25 graph (40) and inserting ‘‘, plus’’, and by add26 ing at the end the following new paragraph: 


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1 ‘‘(41) the education scholarship credit deter2 mined under section 45AA(a).’’. 

3 (B) The table of sections for subpart D of 

4 part IV of subchapter A of chapter 1 of such 

5 Code is amended by adding at the end the fol6 lowing new item: 

‘‘Sec. 45AA. Contributions to scholarship granting organizations.’’. 

7 (c) EXCISE TAX ON FAILURE OF SCHOLARSHIP

8 GRANTING ORGANIZATIONS TO MAKE DISTRIBUTIONS.— 

9 (1) IN GENERAL.—Chapter 42 of the Internal 

10 Revenue Code of 1986 is amended by adding at the 

11 end the following new subchapter: 

12 ‘‘Subchapter I—Scholarship Granting 

13 Organizations 

‘‘Sec. 4969. Tax on failure to distribute receipts. 

14 ‘‘SEC. 4969. TAX ON FAILURE TO DISTRIBUTE RECEIPTS. 

15 ‘‘(a) TAX IMPOSED.—There is hereby imposed a tax 

16 on the failure of an scholarship granting organization (as 

17 defined in section 25F(c)(2)) to make distributions in any 

18 taxable year in an amount equal to or in excess of the 

19 required distribution amount before the distribution dead20 line. 

21 ‘‘(b) AMOUNT OF TAX.—The tax imposed by sub22 section (a) shall be equal to 15 percent of the excess (if 

23 any) of— 


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1 ‘‘(1) the required distribution amount with re2 spect to the taxable year, over 

3 ‘‘(2) the amount of receipts of the scholarship 

4 granting organization for such taxable year which 

5 are distributed before the distribution deadline with 

6 respect to such receipts. 

7 ‘‘(c) DEFINITIONS.—For purposes of this section— 

8 ‘‘(1) REQUIRED DISTRIBUTION AMOUNT.—The 

9 required distribution amount with respect to a tax10 able year is an amount equal to 90 percent of the 

11 total receipts of the scholarship granting organiza12 tion for such taxable year. 

13 ‘‘(2) DISTRIBUTIONS.—The term ‘distribution’ 

14 includes amounts which are formally committed but 

15 not distributed. 

16 ‘‘(3) DISTRIBUTION DEADLINE.—The distribu17 tion deadline with respect to receipts for a taxable 

18 year is the first day of the second taxable year fol19 lowing the taxable year in which such receipts are 

20 received by the scholarship granting organization. 

21 ‘‘(d) REASONABLE CAUSE EXCEPTION.—The tax im22 posed by subsection (a) shall not apply with respect to any 

23 failure to make required distributions before the distribu24 tion deadline which is not willful and is due to reasonable 

25 cause.’’. 


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1 (2) ABATEMENT OF TAX.— 

2 (A) GENERAL RULE.—Subsection (b) of 

3 section 4962 of such Code is amended by strik4 ing ‘‘or G’’ and inserting ‘‘G, or I’’. 

5 (B) FIRST TIER TAX.—Subsection (a) of 

6 section 4963 of such Code is amended by in7 serting ‘‘4969,’’ after ‘‘4967,’’. 

8 (C) TAXABLE EVENT.—Subsection (c) of 

9 section 4963 of such Code is amended by in10 serting ‘‘4969,’’ after ‘‘4967,’’. 

11 (3) CORRECTION PERIOD.—Subparagraph (A) 

12 of section 4963(e)(2) of such Code is amended by in13 serting ‘‘or 4969’’ after ‘‘4942’’. 

14 (4) CONFORMING AMENDMENT.—The table of 

15 subchapters for chapter 42 of such Code is amended 

16 by adding at the end the following new item: 

‘‘SUBCHAPTER I—SCHOLARSHIP GRANTING ORGANIZATIONS’’. 

17 (d) EVALUATIONS.— 

18 (1) DEFINITIONS.—In this section— 

19 (A) the terms ‘‘eligible student’’, ‘‘qualified 

20 elementary and secondary education expenses’’, 

21 and ‘‘scholarship granting organization’’ have 

22 the meanings given such terms in section 

23 25F(c) of the Internal Revenue Code of 1986, 

24 as added by this Act; 


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1 (B) the term ‘‘Director’’ means the Direc2 tor of the Institute of Education Sciences; and 

3 (C) the term ‘‘participating student’’ 

4 means an eligible student who receives a schol5 arship for qualified elementary and secondary 

6 education expenses from a scholarship granting 

7 organization. 

8 (2) EVALUATIONS.— 

9 (A) IN GENERAL.—By not later than April 

10 1 of the year following the year of the date of 

11 enactment of this Act, and by April 1 of each 

12 subsequent year, the Director shall conduct an 

13 annual evaluation to determine the effectiveness 

14 of scholarships provided by scholarship granting 

15 organizations to eligible students in improving 

16 the academic achievement and success of the el17 igible students. 

18 (B) CONTENTS OF THE EVALUATION.—In 

19 conducting the evaluation required under this 

20 subsection, the Director shall— 

21 (i) request, from each scholarship 

22 granting organization, the reports provided 

23 to the scholarship granting organization by 

24 the schools accepting participating stuVerDate Sep 11 2014 03:30 Feb 17, 2023 Jkt 047007 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S301.IS S301

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1 dents, in accordance with section 

2 25F(e)(1)(B); 

3 (ii) using the reports described in 

4 clause (i), assess the academic achievement 

5 of all participating students in grades 3 

6 through 12, based on the nationally norm7 referenced standardized test or State-rec8 ognized assessment used by each school; 

9 (iii) evaluate the school retention 

10 rates, secondary school graduation rates, 

11 and institution of higher education admis12 sion rates of participating students; 

13 (iv) evaluate the success of the tax 

14 credits allowed under section 25F and 

15 45AA of the Internal Revenue Code of 

16 1986, as added by this Act, in expanding 

17 school choice options for parents of partici18 pating students, increasing the satisfaction 

19 of such parents and students, and increas20 ing parental involvement of such parents in 

21 the education of their students; and 

22 (v) evaluate such other issues with re23 spect to the education of participating stu24 dents as the Director considers appropriate 

25 for inclusion in the evaluation. 


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1 (3) REPORTS.—By not later than April 1 of the 

2 year after the year of the first evaluation under 

3 paragraph (2), and by April 1 of each subsequent 

4 year, the Director shall submit to the Committee on 

5 Finance and the Committee on Health, Education, 

6 Labor, and Pensions of the Senate, and the Com7 mittee on Ways and Means and the Committee on 

8 Education and the Workforce of the House of Rep9 resentatives, an annual report on scholarships pro10 vided by scholarship granting organizations that in11 corporates the results of the most recent evaluation 

12 described in paragraph (2). 

13 (4) PROHIBITION.—No personally identifiable 

14 information shall be disclosed in the data, evalua15 tions, and reports required under this subsection. 

16 (5) PUBLIC AVAILABILITY.—The Director shall 

17 make all evaluations, reports, and underlying data 

18 gathered pursuant to this subsection available to the 

19 public, upon request and in a timely manner fol20 lowing submission of the applicable report or evalua21 tion under this subsection, subject to paragraph (4). 

22 (e) EFFECTIVE DATE.—The amendments made by 

23 subsections (a), (b), and (c) shall apply to taxable years 

24 beginning after December 31, 2022. 

Æ 


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