I
107TH CONGRESS
1ST SESSION
H. R. 370
To amend the Internal Revenue Code of 1986 to allow a credit against
income tax for amounts contributed to charitable organizations which
provide elementary or secondary school scholarships and for contributions
of, and for, instructional materials and materials for extracurricular
activities.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 31, 2001
Mr. PAUL (for himself, Mr. BARTLETT of Maryland, and Mr. NORWOOD) in-
troduced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow a
credit against income tax for amounts contributed to
charitable organizations which provide elementary or sec-
ondary school scholarships and for contributions of, and
for, instructional materials and materials for extra-
curricular activities.
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 ‘‘Education Improve-
ment Tax Cut Act’’.
SEC. 2. CREDIT FOR CONTRIBUTIONS TO CHARITABLE OR-
GANIZATIONS WHICH PROVIDE ELEMENTARY
OR SECONDARY SCHOOL SCHOLARSHIPS.
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits) is
amended by inserting after section 25A the following new
section:
‘‘SEC. 25B. CONTRIBUTIONS TO ORGANIZATIONS PRO-
VIDING 
ELEMENTARY 
OR 
SECONDARY
SCHOOL SCHOLARSHIPS.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount
equal to the qualified scholarship contributions of the tax-
payer for the taxable year.
‘‘(b) MAXIMUM CREDIT.—The credit allowed by sub-
section (a) for any taxable year shall not exceed $3,000
($1,500 in the case of a married individual (as determined
under section 7703) filing a separate return).
‘‘(c) QUALIFIED SCHOLARSHIP CONTRIBUTION.—
For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified schol-
arship contribution’ means, with respect to any tax-
able year, the amount which would (but for sub-
section (e)) be allowable as a deduction under sec-
tion 170 for cash contributions to a school tuition
organization.
‘‘(2) SCHOOL TUITION ORGANIZATION.—
‘‘(A) IN GENERAL.—The term ‘school tui-
tion organization’ means any organization de-
scribed in section 170(c)(2) if the annual dis-
bursements of the organization for elementary
and secondary school scholarships are normally
not less than 90 percent of the sum of such or-
ganization’s annual gross income and contribu-
tions and gifts.
‘‘(B) 
ELEMENTARY
AND
SECONDARY
SCHOOL SCHOLARSHIP.—The term ‘elementary
and secondary school scholarship’ means any
scholarship excludable from gross income under
section 117 for expenses related to education at
or below the 12th grade.
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction
shall be allowed under this chapter for any contribution
for which a credit is allowed under this section.
‘‘(e) ELECTION TO HAVE CREDIT NOT APPLY.—
‘‘(1) IN GENERAL.—A taxpayer may elect to
have this section not apply for any taxable year.
‘‘(2) TIME FOR MAKING ELECTION.—An elec-
tion under paragraph (1) for any taxable year may
‘‘(e) ELECTION TO HAVE CREDIT NOT APPLY.—
‘‘(1) IN GENERAL.—A taxpayer may elect to
have this section not apply for any taxable year.
‘‘(2) TIME FOR MAKING ELECTION.—An elec-
tion under paragraph (1) for any taxable year may
be made (or revoked) at any time before the expira-
tion of the 3-year period beginning on the last date
prescribed by law for filing the return for such tax-
able year (determined without regard to extensions).
‘‘(f) COST-OF-LIVING ADJUSTMENT.—In the case of
any taxable year beginning in a calendar year after 2002,
each dollar amount contained in subsection (b) shall be
increased by an amount equal to—
‘‘(1) such dollar amount, multiplied by
‘‘(2) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, by substituting ‘calendar
year 2001’ for ‘calendar year 1992’ in subparagraph
(B) thereof.
If any increase determined under the preceding sentence
is not a multiple of $10, such increase shall be increased
to the next highest multiple of $10. In the case of a mar-
ried individual (as determined under section 7703) filing
a separate return, the preceding sentence shall be applied
by substituting ‘$5’ for ‘$10’ each place it appears.
‘‘(g) REGULATIONS.—The Secretary shall prescribe
regulations to carry out this section, including regulations
providing for claiming the credit under this section on
Form 1040EZ.’’
(b) CLERICAL AMENDMENT.—The table of sections
for subpart A of part IV of subchapter A of chapter 1
of such Code is amended by inserting after the item relat-
ing to section 25B the following new item:
‘‘Sec. 25C. Contributions of and for instructional materials and
materials for extracurricular activities.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
Æ