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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3766 Introduced in Senate (IS)]

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.

    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 ``America's Communities Leveraging 
Assets for Students and Schools (America's CLASS) Act of 2006''.

SEC. 2. EDUCATION IMPROVEMENT TAX CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45N. EDUCATION IMPROVEMENT CREDIT.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible taxpayer, the education improvement credit determined under 
this section for any taxable year is an amount equal to 50 percent of 
qualified contributions made by the eligible taxpayer during the 
taxable year.
    ``(b) Limitation.--The amount of the credit allowed under 
subsection (a) with respect to any taxpayer for any taxable year shall 
not exceed $75,000.
    ``(c) Eligible Taxpayer.--For purposes of this section, the term 
`eligible taxpayer' means a taxpayer which is a corporation (other than 
an S corporation).
    ``(d) Qualified Contribution.--For purposes of this section--
            ``(1) In general.--The term `qualified contribution' means 
        any contribution which is--
                    ``(A) in cash,
                    ``(B) not less than $5,000, and
                    ``(C) made to--
                            ``(i) a non-profit scholarship 
                        organization, or
                            ``(ii) an educational improvement 
                        organization.
            ``(2) Non-profit scholarship organization.--The term `non-
        profit scholarship organization' means an organization--
                    ``(A) which is described in section 501(c)(3) and 
                exempt from tax under section 501(a), and
                    ``(B) not less than 80 percent of the annual gross 
                receipts of which are used to provide scholarships to 
                individuals to attend the school of the individual's 
                choice.
            ``(3) Education improvement organization.--The term 
        `education improvement organization' means an organization--
                    ``(A) which is described in section 501(c)(3) and 
                exempt from tax under section 501(a), and
                    ``(B) not less than 80 percent of the annual gross 
                receipts of which are used to provide funds for 
                innovative programs in public schools.
    ``(e) Special Rules.--
            ``(1) Denial of double benefit.--Any contribution which is 
        taken into account under subsection (a) shall not be taken into 
        account under section 170, and no deduction shall be allowed 
        under such section for such contribution.
            ``(2) Aggregation rules.--For purposes of this section, all 
        persons treated as a single employer under subsection (a) of 
        section 52 shall be treated as 1 person.''.
    (b) Credit Treated as Part of General Business Credit.--Section 
38(b) of the Internal Revenue Code of 1986 is amended by striking 
``and'' at the end of paragraph (29), by striking the period at the end 
of paragraph (30) and inserting ``, plus'', and by adding at the end 
the following new paragraph:
            ``(31) the education improvement credit determined under 
        section 45N.''.
    (c) Clerical Amendment.--The table of section for subpart D of part 
IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new item:

``Sec. 45N. Education improvement credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to contributions made in taxable years beginning after the date 
of the enactment of this Act.
                                 <all>
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