SEC. 2. CREDIT FOR CONTRIBUTIONS TO A TRUST USED TO 
PROVIDE NEED-BASED COLLEGE SCHOLAR-
SHIPS. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to other credits) is amended by adding at 
the end the following new section: 
‘‘SEC. 30D. CONTRIBUTIONS TO TRUST USED TO PROVIDE 
NEED-BASED COLLEGE SCHOLARSHIPS. 
‘‘(a) ALLOWANCE OF CREDIT.—In addition to any 
deduction allowable under this title, there shall be allowed 
as a credit against the tax imposed by this chapter for 
the taxable year an amount equal to 50 percent of des-
ignated qualified college scholarship funding contributions 
made by the taxpayer during the taxable year. 
‘‘(b) DESIGNATED QUALIFIED COLLEGE SCHOLAR-
SHIP FUNDING CONTRIBUTION.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—The term ‘designated quali-
fied college scholarship funding contribution’ means 
any charitable contribution (as defined in section 
170(c))— 
‘‘(A) which is paid in cash by the taxpayer 
to a qualified scholarship funding trust, and 
‘‘(B) which is designated by the trust for 
purposes of this section. 
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‘‘(2) 
QUALIFIED
SCHOLARSHIP
FUNDING 
TRUST.—The term ‘qualified scholarship funding 
trust’ means a trust— 
‘‘(A) which is established and maintained 
in the United States by an organization— 
‘‘(i) described in section 501(c)(3) and 
exempt from tax under section 501(a), and 
‘‘(ii) organized primarily for edu-
cational purposes, 
‘‘(B) which is part of a plan of one or 
more local education agencies (as defined in 
section 9101 of the Elementary and Secondary 
Education Act of 1965) of the State in which 
such trust is established and maintained to pro-
vide scholarships to children of such agencies, 
and 
‘‘(C) the written governing instrument of 
which— 
‘‘(i) requires that the income of the 
trust be used exclusively to provide quali-
fied scholarships (as defined in section 
117(b)) to individuals who— 
‘‘(I) are candidates for a degree 
at an institution of higher education 
(within the meaning given such term 
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by section 101 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1001)), 
and 
‘‘(II) have demonstrated financial 
need in accordance with section 471 
of such Act (20 U.S.C. 1087kk), and 
‘‘(ii) requires that the assets of the 
trust not be distributed for any purpose. 
‘‘(c) LIMITATIONS.— 
‘‘(1) IN GENERAL.—There is a national quali-
fied college scholarship funding contribution limita-
tion of $1,000,000,000. 
‘‘(2) ALLOCATION OF LIMITATION.— 
‘‘(A) IN GENERAL.—Such national limita-
tion shall be allocated by the Secretary among 
the qualified scholarship funding trusts which 
have registered with the Secretary on or before 
the 180th day after the date of the enactment 
of this section. Each trust’s share of such na-
tional limitation shall be the amount which 
bears the same ratio to such limitation as the 
number of school age children of such trust’s 
sponsoring agencies bears to the aggregate 
number of school age children of the sponsoring 
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agencies of all trusts which have so registered 
with the Secretary. 
‘‘(B) SCHOOL
AGE
CHILDREN
OF
SPON-
SORING AGENCIES.—For purposes of subpara-
graph (A), the number of school age children of 
a trust’s sponsoring agencies is the number of 
children of the local education agencies referred 
to in subsection (b)(2)(B) who have attained 
age 5 but not age 18 for the most recent fiscal 
year ending before the date the allocations 
under this paragraph are made. 
‘‘(3) DESIGNATION
SUBJECT
TO
ALLOCATED 
LIMITATION AMOUNT.—The amount of contributions 
made to a qualified scholarship funding trust which 
may be designated by such trust for purposes of this 
section shall not exceed the limitation amount allo-
cated to such trust under paragraph (2). 
‘‘(4) MAXIMUM ALLOCATION PER TRUST.—The 
maximum qualified college scholarship funding con-
tribution limitation which may be allocated to each 
trust is $200,000,000. An amount which may not be 
allocated to a trust by reason of the preceding sen-
tence shall be allocated as provided in paragraph (2) 
among registered qualified scholarship funding 
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trusts whose allocated limitation (without regard to 
this sentence) does not exceed $200,000,000. 
‘‘(d) APPLICATION WITH OTHER CREDITS.—The 
credit allowed under subsection (a) for any taxable year 
shall not exceed the excess (if any) of— 
‘‘(1) the regular tax liability (as defined in sec-
tion 26(b)) reduced by the sum of the credits allow-
able under subpart A and sections 27, 30, 30B, and 
30C, over 
‘‘(2) the tentative minimum tax for the taxable 
year. 
‘‘(e) APPLICATION OF SECTION.—This section shall 
apply only to contributions made during the 3-year period 
beginning on the 180th day after the date of the enact-
ment of this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 30D. Contributions to trust used to provide need-based college scholar-
ships.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made on or after 
the 180th day after the date of the enactment of this Act 
in taxable years ending after such date. 
Æ 
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