II 

109TH CONGRESS 

2D SESSION S. 3766 

To amend the Internal Revenue Code of 1986 to provide a tax credit for 

donations to non-profit scholarship organizations and educational improvement organizations. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 1, 2006 

Mr. SANTORUM (for himself and Mr. MARTINEZ) 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 provide 

a tax credit for donations to non-profit scholarship organizations and educational improvement organizations. 

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 ‘‘America’s Commu5 nities Leveraging Assets for Students and Schools (Amer6 ica’s CLASS) Act of 2006’’. 

7 SEC. 2. EDUCATION IMPROVEMENT TAX CREDIT. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by adding at the end the following new 

2 section: 

3 ‘‘SEC. 45N. EDUCATION IMPROVEMENT CREDIT. 

4 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

5 the case of an eligible taxpayer, the education improve6 ment credit determined under this section for any taxable 

7 year is an amount equal to 50 percent of qualified con8 tributions made by the eligible taxpayer during the taxable 

9 year. 

10 ‘‘(b) LIMITATION.—The amount of the credit allowed 

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

12 taxable year shall not exceed $75,000. 

13 ‘‘(c) ELIGIBLE TAXPAYER.—For purposes of this sec14 tion, the term ‘eligible taxpayer’ means a taxpayer which 

15 is a corporation (other than an S corporation). 

16 ‘‘(d) QUALIFIED CONTRIBUTION.—For purposes of 

17 this section— 

18 ‘‘(1) IN GENERAL.—The term ‘qualified con19 tribution’ means any contribution which is— 

20 ‘‘(A) in cash, 

21 ‘‘(B) not less than $5,000, and 

22 ‘‘(C) made to— 

23 ‘‘(i) a non-profit scholarship organiza24 tion, or 


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1 ‘‘(ii) an educational improvement or2 ganization. 

3 ‘‘(2) NON-PROFIT SCHOLARSHIP ORGANIZA4 TION.—The term ‘non-profit scholarship organiza5 tion’ means an organization— 

6 ‘‘(A) which is described in section 

7 501(c)(3) and exempt from tax under section 

8 501(a), and 

9 ‘‘(B) not less than 80 percent of the an10 nual gross receipts of which are used to provide 

11 scholarships to individuals to attend the school 

12 of the individual’s choice. 

13 ‘‘(3) EDUCATION IMPROVEMENT ORGANIZA14 TION.—The term ‘education improvement organiza15 tion’ means an organization— 

16 ‘‘(A) which is described in section 

17 501(c)(3) and exempt from tax under section 

18 501(a), and 

19 ‘‘(B) not less than 80 percent of the an20 nual gross receipts of which are used to provide 

21 funds for innovative programs in public schools. 

22 ‘‘(e) SPECIAL RULES.— 

23 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—Any con24 tribution which is taken into account under sub25 section (a) shall not be taken into account under 


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1 section 170, and no deduction shall be allowed under 

2 such section for such contribution. 

3 ‘‘(2) AGGREGATION RULES.—For purposes of 

4 this section, all persons treated as a single employer 

5 under subsection (a) of section 52 shall be treated 

6 as 1 person.’’. 

7 (b) CREDIT TREATED AS PART OF GENERAL BUSI8 NESS CREDIT.—Section 38(b) of the Internal Revenue 

9 Code of 1986 is amended by striking ‘‘and’’ at the end 

10 of paragraph (29), by striking the period at the end of 

11 paragraph (30) and inserting ‘‘, plus’’, and by adding at 

12 the end the following new paragraph: 

13 ‘‘(31) the education improvement credit deter14 mined under section 45N.’’. 

15 (c) CLERICAL AMENDMENT.—The table of section for 

16 subpart D of part IV of subchapter A of chapter 1 of the 

17 Internal Revenue Code of 1986 is amended by adding at 

18 the end the following new item: 

‘‘Sec. 45N. Education improvement credit.’’. 

19 (d) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to contributions made in taxable 

21 years beginning after the date of the enactment of this 

22 Act. 

Æ 


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