I 
119TH CONGRESS 
1ST SESSION H. R. 3519 
To amend the Internal Revenue Code of 1986 to allow a credit against 
tax for charitable donations to nonprofit organizations providing edu-
cation scholarships to qualified elementary and secondary students. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 20, 2025 
Mr. OWENS (for himself and Mr. DONALDS) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Education and 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 con-
cerned 
A BILL 
To amend the Internal Revenue Code of 1986 to allow a 
credit against tax for charitable donations to nonprofit 
organizations providing education scholarships to quali-
fied elementary and secondary students. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Universal School 
Choice Act’’. 
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SEC. 2. TAX CREDIT FOR CONTRIBUTIONS TO SCHOLAR-
SHIP GRANTING ORGANIZATIONS. 
(a) CREDIT FOR INDIVIDUALS.— 
(1) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code 
of 1986 is amended by inserting after section 25E 
the following new section: 
‘‘SEC. 25F. QUALIFIED ELEMENTARY AND SECONDARY EDU-
CATION SCHOLARSHIPS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual who is a citizen or resident of the United States 
(as defined in section 7701(a)(9)), there shall be allowed 
as a credit against the tax imposed by this chapter for 
the taxable year an amount equal to the aggregate amount 
of qualified contributions made by the taxpayer during the 
taxable year. 
‘‘(b) LIMITATIONS.— 
‘‘(1) IN GENERAL.—The credit allowed under 
subsection (a) to any taxpayer for any taxable year 
shall not exceed an amount equal to the greater of— 
‘‘(A) 10 percent of the adjusted gross in-
come of the taxpayer for the taxable year, or 
‘‘(B) $5,000. 
‘‘(2) APPLICATION OF VOLUME CAP.—No credit 
shall be allowed under subsection (a) to the taxpayer 
with respect to the amount of any qualified contribu-
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tion made during a taxable year which would result 
in the aggregate amount of credits claimed under 
this section for such taxable year exceeding— 
‘‘(A) with respect to qualified contributions 
for which the taxpayer is required to designate 
a distribution State pursuant to paragraph (4) 
of section 3(a) of the Universal School Choice 
Act, the volume cap allocated to such State pur-
suant to paragraph (2) of such section, or 
‘‘(B) with respect to qualified contributions 
which are not described in subparagraph (A), 
the volume cap made available to taxpayers 
pursuant to paragraph (3)(B) of such section. 
‘‘(3) REDUCTION BASED ON STATE CREDIT.— 
The amount allowed as a credit under subsection (a) 
for a taxable year shall be reduced by the amount 
allowed as a credit on any State tax return of the 
taxpayer for qualified contributions made by the tax-
payer during the taxable year. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) ELIGIBLE STUDENT.—The term ‘eligible 
student’ means an individual who is eligible to enroll 
in a public elementary or secondary school. 
‘‘(2) QUALIFIED
CONTRIBUTION.—The term 
‘qualified contribution’ means a charitable contribu-
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tion (as defined by section 170(c)) to a scholarship 
granting organization in the form of cash or market-
able securities. 
‘‘(3) QUALIFIED ELEMENTARY OR SECONDARY 
EDUCATION EXPENSE.— 
‘‘(A) IN GENERAL.—The term ‘qualified el-
ementary or secondary education expense’ 
means the following expenses in connection with 
enrollment or attendance at, or for students en-
rolled at or attending, a public or private ele-
mentary or secondary school (including a reli-
gious elementary or secondary school): 
‘‘(i) Tuition and required fees. 
‘‘(ii) Curricula and curricular mate-
rials. 
‘‘(iii) Books or other instructional ma-
terials. 
‘‘(iv) Online educational materials, as 
well as software, courses, and computer 
hardware or other technological devices re-
quired to access such materials and which 
is primarily used for educational purposes. 
‘‘(v) Tuition for tutoring or edu-
cational classes outside of the home or on-
line, including at a tutoring facility, but 
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only if the tutor or instructor is not related 
to the student and— 
‘‘(I) is licensed as a teacher in 
any State, 
‘‘(II) has taught at— 
‘‘(aa) a public or private ele-
mentary or secondary school, or 
‘‘(bb) an institution of high-
er education (as defined in sec-
tion 101(a) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 
1001(a))), or 
‘‘(III) is a subject matter expert 
in the relevant subject. 
‘‘(vi) Fees for a nationally standard-
ized norm-referenced achievement test, an 
advanced placement examination, or any 
examinations related to admission to an in-
stitution of higher education. 
‘‘(vii) Fees for dual enrollment in an 
institution of higher education. 
‘‘(viii) Educational therapies for stu-
dents with disabilities provided by a li-
censed or accredited practitioner or pro-
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vider, including occupational, behavioral, 
physical, and speech-language therapies. 
‘‘(ix) Transportation costs incurred 
for students to participate in any activity 
for which expenses are authorized under 
this paragraph. 
‘‘(B) HOME SCHOOLING.—The term ‘quali-
fied elementary or secondary education expense’ 
shall include expenses for the purposes de-
scribed in clauses (i) through (ix) of subpara-
graph (A) in connection with a home school 
(whether treated as a home school or a private 
school for purposes of applicable State law). 
‘‘(C) PROHIBITION ON PAYMENTS TO FAM-
ILY MEMBERS.—The term ‘qualified elementary 
or secondary education expense’ shall not in-
clude any expenses related to services provided 
to the student which are provided by an indi-
vidual who bears a relationship to the student 
described in section 152(d)(2). 
‘‘(4) 
SCHOLARSHIP
GRANTING
ORGANIZA-
TION.— 
‘‘(A) IN GENERAL.—The term ‘scholarship 
granting organization’ means any organiza-
tion— 
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‘‘(i) which— 
‘‘(I) 
is 
described 
in 
section 
501(c)(3) and exempt from tax under 
section 501(a), and 
‘‘(II) is not a private foundation, 
‘‘(ii) substantially all of the activities 
of which are providing scholarships for 
qualified elementary or secondary edu-
cation expenses of eligible students, 
‘‘(iii) which prevents the co-mingling 
of 
qualified 
contributions 
with 
other 
amounts by maintaining 1 or more sepa-
rate accounts exclusively for qualified con-
tributions, and 
‘‘(iv) which meets the requirements of 
subsection (d). 
‘‘(B) SCHOLARSHIPS
FOR
NON-ELIGIBLE 
STUDENTS.—For 
purposes 
of 
determining 
whether an organization satisfies the require-
ment described in subparagraph (A)(ii), such 
organization may include activities of which are 
providing scholarships for education expenses of 
children who are not described in paragraph 
(1). 
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‘‘(5) STATE.—The term ‘State’ means each of 
the 50 States, the District of Columbia, the Com-
monwealth of Puerto Rico, American Samoa, Guam, 
the Commonwealth of the Northern Mariana Is-
lands, the United States Virgin Islands, and the De-
partment of the Interior (acting through the Bureau 
of Indian Education). 
‘‘(d) REQUIREMENTS FOR SCHOLARSHIP GRANTING 
ORGANIZATIONS.— 
‘‘(1) IN GENERAL.—An organization meets the 
requirements of this subsection if— 
‘‘(A) such organization provides scholar-
ships to 2 or more students, provided that not 
all such students attend the same school, 
‘‘(B) with respect to any amount contrib-
uted to such organization for which a credit is 
allowed under this section, such organization 
does not provide scholarships for any expenses 
other than qualified elementary or secondary 
education expenses, 
‘‘(C) with respect to any amount contrib-
uted to such organization for which a credit is 
allowed under this section, such organization 
provides a scholarship to eligible students with 
a priority for— 
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‘‘(i) students awarded a scholarship 
the previous school year, 
‘‘(ii) after application of clause (i), 
any such students who have a sibling who 
was awarded a scholarship from such orga-
nization, and 
‘‘(iii) after application of clauses (i) 
and (ii), any such students from house-
holds with annual incomes below 500 per-
cent of the poverty line in the State, 
‘‘(D) such organization does not earmark 
or set aside contributions for scholarships on 
behalf of any particular student at the direction 
of any individual or corporation that has made 
a qualified contribution to such organization, 
‘‘(E) such organization— 
‘‘(i) obtains from an independent cer-
tified public accountant annual financial 
and compliance audits, and 
‘‘(ii) certifies to the Secretary (at such 
time, and in such form and manner, as the 
Secretary may prescribe) that the audit de-
scribed in clause (i) has been completed, 
and 
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‘‘(F) no officer or board member of such 
organization has been convicted of a felony. 
‘‘(2) INCOME VERIFICATION.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1)(C)(iii), in the case where providing 
such priority may be applicable with respect to 
a student, the organization shall take appro-
priate steps to verify the annual household in-
come to the student. 
‘‘(B) SAFE
HARBOR.—For purposes of 
subparagraph (A), review of all of the following 
(as applicable) shall be treated as satisfying the 
requirement to take appropriate steps to verify 
annual household income: 
‘‘(i) Federal and State income tax re-
turns or tax return transcripts with appli-
cable schedules for the taxable year prior 
to application. 
‘‘(ii) Income reporting statements for 
tax purposes or wage and income tran-
scripts from the Internal Revenue Service. 
‘‘(iii) Notarized income verification 
letter from employers. 
‘‘(iv) Unemployment or workers com-
pensation statements. 
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‘‘(v) Budget letters regarding public 
assistance payments and Supplemental 
Nutrition Assistance Program (SNAP) 
payments including a list of household 
members. 
‘‘(3) INDEPENDENT
CERTIFIED
PUBLIC
AC-
COUNTANT.—For purposes of paragraph (1)(E), the 
term 
‘independent 
certified 
public 
accountant’ 
means, with respect to an organization, a certified 
public accountant who is not a person described in 
section 465(b)(3)(A) with respect to such organiza-
tion or any employee of such organization. 
‘‘(4) PROHIBITION ON SELF-DEALING.— 
‘‘(A) IN GENERAL.—A scholarship grant-
ing organization may not award a scholarship 
to any disqualified person. 
‘‘(B) DISQUALIFIED
PERSON.—For pur-
poses of this paragraph, a disqualified person 
shall be determined pursuant to rules similar to 
the rules of section 4946. 
‘‘(e) DENIAL OF DOUBLE BENEFIT.—Any qualified 
contribution for which a credit is allowed under this sec-
tion shall not be taken into account as a charitable con-
tribution for purposes of section 170. 
‘‘(f) CARRYFORWARD OF UNUSED CREDIT.— 
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‘‘(1) IN
GENERAL.—If the credit allowable 
under subsection (a) for any taxable year exceeds 
the limitation imposed by section 26(a) for such tax-
able year reduced by the sum of the credits allowable 
under this subpart (other than this section, section 
23, and section 25D), such excess shall be carried to 
the succeeding taxable year and added to the credit 
allowable under subsection (a) for such taxable year. 
‘‘(2) LIMITATION.—No credit may be carried 
forward under this subsection to any taxable year 
following the fifth taxable year after the taxable year 
in which the credit arose. For purposes of the pre-
ceding sentence, credits shall be treated as used on 
a first-in first-out basis. 
‘‘(g) ALTERNATIVE MINIMUM TAX.—For purposes of 
calculating the alternative minimum tax under section 55, 
a taxpayer may use any credit received for a qualified con-
tribution under this section.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 25(e)(1)(C) of such Code is 
amended by striking ‘‘and 25D’’ and inserting 
‘‘25D, and 25F’’. 
(B) The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of such 
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Code is amended by inserting after the item re-
lating to section 25E the following new item: 
‘‘Sec. 25F. Qualified elementary and secondary education scholarships.’’. 
(b) CREDIT FOR CORPORATIONS.— 
(1) IN GENERAL.—Subpart D of part IV of 
subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding after section 
45AA the following: 
‘‘SEC. 45BB. CONTRIBUTIONS TO SCHOLARSHIP GRANTING 
ORGANIZATIONS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of a corporation, the education scholarship 
credit determined under this section for the taxable year 
is the aggregate amount of qualified contributions for the 
taxable year. 
‘‘(b) AMOUNT OF CREDIT.—The credit allowed under 
subsection (a) for any taxable year shall not exceed 5 per-
cent of the taxable income (as defined in section 
170(b)(2)(D)) of the corporation for such taxable year. 
‘‘(c) QUALIFIED CONTRIBUTIONS.—For purposes of 
this section, the term ‘qualified contribution’ has the 
meaning given such term under section 25F. 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 
shall be allowed under any provision of this chapter for 
any expense for which a credit is allowed under this sec-
tion. 
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‘‘(e) APPLICATION OF VOLUME CAP.—A qualified 
contribution shall be taken into account under this section 
only if such contribution is not in excess of the volume 
cap established under section 3 of the Universal School 
Choice Act.’’. 
(2) 
CONFORMING
AMENDMENTS.—Section 
38(b) of such Code is amended by striking ‘‘plus’’ at 
the end of paragraph (40), by striking the period 
and inserting ‘‘, plus’’ at the end of paragraph (41), 
and by adding at the end the following new para-
graph: 
‘‘(42) the education scholarship credit deter-
mined under section 45BB(a).’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of 
chapter 1 of such Code is amended by adding at the 
end the following new item: 
‘‘Sec. 45BB. Contributions to scholarship granting organizations.’’. 
(c) FAILURE OF SCHOLARSHIP GRANTING ORGANI-
ZATIONS TO MAKE DISTRIBUTIONS.— 
(1) IN GENERAL.—Chapter 42 of such Code is 
amended by adding at the end the following new 
subchapter: 
‘‘Subchapter I—Scholarship Granting 
Organizations 
‘‘Sec. 4969. Failure to distribute receipts. 
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‘‘SEC. 4969. FAILURE TO DISTRIBUTE RECEIPTS. 
‘‘(a) IN GENERAL.—In the case of any scholarship 
granting organization (as defined in section 25F) which 
has been determined by the Secretary to have failed to 
satisfy the requirement under subsection (b) for any tax-
able year, any contribution made to such organization dur-
ing the first taxable year beginning after the date of such 
determination shall not be treated as a qualified contribu-
tion (as defined in section 25F(c)(2)) for purposes of sec-
tions 25F and 45BB. 
‘‘(b) REQUIREMENT.— 
‘‘(1) IN GENERAL.—The requirement described 
in this subsection is that the amount of receipts of 
the scholarship granting organization for the taxable 
year which are distributed before the distribution 
deadline with respect to such receipts shall not be 
less than the required distribution amount with re-
spect to such taxable year. 
‘‘(2) DISTRIBUTION DEADLINE.—The distribu-
tion deadline with respect to receipts for a taxable 
year is the first day of the third taxable year fol-
lowing the taxable year in which such receipts are 
received by the scholarship granting organization. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) REQUIRED DISTRIBUTION AMOUNT.— 
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‘‘(A) IN GENERAL.—The required distribu-
tion amount with respect to a taxable year is 
the amount equal to 100 percent of the total re-
ceipts of the scholarship granting organization 
for such taxable year, as reduced by the sum of 
such receipts that are retained for reasonable 
administrative expenses for the taxable year. 
‘‘(B) SAFE HARBOR FOR REASONABLE AD-
MINISTRATIVE
EXPENSES.—For purposes of 
subparagraph (A), if the percentage of total re-
ceipts of a scholarship granting organization for 
a taxable year which are used for administrative 
purposes is equal to or less than 10 percent, 
such expenses shall be deemed to be reasonable 
for purposes of such subparagraph. 
‘‘(2) DISTRIBUTIONS.—The term ‘distribution’ 
includes amounts which are formally committed but 
not distributed. A formal commitment described in 
the preceding sentence may include contributions set 
aside for eligible students for more than 1 year.’’. 
(2) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 42 of such Code is amended by 
adding at the end the following new item: 
‘‘SUBCHAPTER I. SCHOLARSHIP GRANTING ORGANIZATIONS’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2025. 
SEC. 3. VOLUME CAP. 
(a) IN GENERAL.— 
(1) NATIONAL CAP.—For purposes of sections 
25F(b)(2) and 45BB(e) of the Internal Revenue 
Code of 1986 (as added by this Act), the volume cap 
applicable 
under 
this 
section 
shall 
be 
$10,000,000,000 for calendar year 2026 and each 
subsequent year thereafter. 
(2) ALLOCATION OF CAP.— 
(A) IN GENERAL.—For each calendar year, 
the Secretary shall, from the amount allotted 
under paragraph (1)— 
(i) subject to subparagraph (C), first 
reserve, for each State, an amount equal to 
the sum of the qualifying contributions 
designated under paragraph (4) with re-
spect to such State in the preceding year; 
and 
(ii) 
next, 
allocate 
the 
remaining 
amount among the States by allocating to 
each State the sum of— 
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(I) an amount that bears the 
same relationship to 20 percent of 
such remaining amount as the num-
ber of individuals aged 5 through 17 
in the State, as determined by the 
Secretary (in coordination with the 
Secretary of Education) on the basis 
of the most recent satisfactory data, 
bears to the number of those individ-
uals in all such States, as so deter-
mined; and 
(II) an amount that bears the 
same relationship to 80 percent of 
such remaining amount as the num-
ber of individuals aged 5 through 17 
from families with incomes below the 
poverty line in the State, as deter-
mined by the Secretary (in coordina-
tion with the Secretary of Education), 
on the basis of the most recent satis-
factory data, bears to the number of 
those individuals in all such States, as 
so determined. 
(B) 
MINIMUM
ALLOCATION.—Notwith-
standing subparagraph (A), no State receiving 
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an allotment under this section may receive less 
than one-half of one percent of the amount al-
lotted for a calendar year. 
(C) INITIAL YEAR.—For purposes of the 
first calendar year with respect to which this 
section applies, the amount allocated to each 
State under this paragraph shall be determined 
without respect to subparagraph (A)(i). 
(3) ALLOCATION AND ADJUSTMENTS.— 
(A) INITIAL ALLOCATION TO STATES.—No 
later than November 1 of the year preceding a 
year for which there is a volume cap on credits 
under paragraph (1) (hereafter in this section, 
the ‘‘applicable year’’), or as early as prac-
ticable with respect to the first year, the Sec-
retary shall announce the State allocations 
under paragraph (2) for the applicable year. 
(B) REALLOCATION OF UNCLAIMED CRED-
ITS.—On or after July 31 of any applicable 
year, the Secretary shall— 
(i) make available any amounts of the 
volume cap which were allocated to States 
under paragraph (2) and which have not 
been claimed; and 
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(ii) allocate such amounts on a first- 
come, first-serve basis, as determined 
based on the time (during such calendar 
year) at which the taxpayer made the 
qualified contribution with respect to which 
the allocation is made. 
(4) DESIGNATION BY TAXPAYER.— 
(A) IN GENERAL.—For purposes of deter-
mining the amount of the volume cap allocated 
to a State under paragraph (2) for any cal-
endar year which has been claimed by tax-
payers, the Secretary shall— 
(i) as part of the system described in 
subsection (c), require each taxpayer mak-
ing a qualified contribution to designate 
the distribution State with respect to such 
contribution; and 
(ii) for each State which an allocation 
has been made under paragraph (2), en-
sure that the total amount of qualified con-
tributions designated with respect to such 
State pursuant to clause (i) during such 
calendar year does not exceed the amount 
of the volume cap allocated to a State for 
such calendar year. 
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(B) BINDING ON SCHOLARSHIP GRANTING 
ORGANIZATION.—The designation by the tax-
payer of the distribution State pursuant to sub-
paragraph (A)(i) shall be binding on the schol-
arship granting organization for purposes of 
any distribution of the qualified contribution 
made by such taxpayer. 
(C) DISTRIBUTION STATE.—For purposes 
of this section, the term ‘‘distribution State’’ 
means the State for which the scholarship 
granting organization shall, pursuant to the re-
quirements under section 4969 of the Internal 
Revenue Code of 1986, be required to make dis-
tributions with respect to eligible students re-
siding in such State. 
(D) EXCEPTION FOR ADMINISTRATIVE EX-
PENSES.—The requirements applicable to a 
scholarship granting organization under sub-
paragraphs (B) and (C) shall not apply to such 
portion of the qualified contributions received 
by such organization that are used for adminis-
trative purposes (as described in section 
4969(c)(1)(B) of the Internal Revenue Code of 
1986). 
(b) ANNUAL INCREASES.— 
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(1) IN GENERAL.—In the case of the calendar 
year after a high use calendar year, the dollar 
amount otherwise in effect under subsection (a) for 
such calendar year shall be equal to 105 percent of 
the dollar amount in effect for such high use cal-
endar year. 
(2) HIGH USE CALENDAR YEAR.—For purposes 
of this subsection, the term ‘‘high use calendar 
year’’ means any calendar year for which 90 percent 
or more of the volume cap in effect for such cal-
endar year under subsection (a) is allocated to tax-
payers. 
(3) PREVENTION
OF
DECREASES
IN
ANNUAL 
VOLUME CAP.—The volume cap in effect under sub-
section (a) for any calendar year shall not be less 
than the volume cap in effect under such subsection 
for the preceding calendar year. 
(4) PUBLICATION OF ANNUAL VOLUME CAP.— 
The Secretary shall make publicly available the dol-
lar amount of the volume cap in effect under sub-
section (a) for each calendar year. 
(c) REAL-TIME INFORMATION.—For purposes of this 
section, the Secretary shall develop a system to track the 
amount of qualified contributions made during the cal-
endar year for which a credit may be claimed under sec-
VerDate Sep 11 2014 
02:55 Jun 28, 2025
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kjohnson on DSK7ZCZBW3PROD with $$_JOB