I 
108TH CONGRESS 
1ST SESSION 
H. R. 282
To amend the Internal Revenue Code of 1986 to allow a credit for 
contributions for the benefit of elementary and secondary schools. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 8, 2003
Mr. HOEKSTRA (for himself, Mr. TANCREDO, and Mr. SOUDER) introduced 
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 for contributions for the benefit of elementary 
and secondary schools.
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 Freedom 
Act’’. 
SEC. 2. CREDIT FOR CONTRIBUTIONS FOR THE BENEFIT OF 
ELEMENTARY AND SECONDARY SCHOOLS. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 30B. CREDIT FOR CONTRIBUTIONS FOR THE BENEFIT 
OF ELEMENTARY AND SECONDARY SCHOOLS. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 50 percent of the 
qualified charitable contributions of the taxpayer for the 
taxable year. 
‘‘(b) LIMITATIONS.—
‘‘(1) INDIVIDUALS, ETC.—In the case of a tax-
payer other than a corporation, the credit allowed by 
subsection (a) for any taxable year shall not exceed 
$250 ($500 in the case of a joint return). 
‘‘(2) CORPORATIONS.—In the case of a corpora-
tion, the credit allowed by subsection (a) shall not 
exceed $50,000. 
‘‘(3) LIMITATION IN CASE OF STATE CREDIT.—
Subject to subsection (d)(2), in the case of a tax-
payer which claims a credit on a State income tax 
return for any qualified charitable contribution, the 
amount of credit under this section shall be the less-
er of—
‘‘(A) the amount which, when added to the 
amount of the State income tax credit, equals
the total amount of the taxpayer’s qualified 
charitable contributions, or 
‘‘(B) the limitation amount that applies 
under paragraph (1) or (2). 
‘‘(c) QUALIFIED CHARITABLE CONTRIBUTION.—For 
purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified chari-
table contribution’ means, with respect to any tax-
able year, the aggregate amount allowable as a de-
duction under section 170 (determined without re-
gard to subsection (d)(1)) for cash contributions—
‘‘(A) to an education investment organiza-
tion, or 
‘‘(B) to a public, private, or religious 
school providing education at the elementary or 
secondary level. 
‘‘(2) 
EDUCATION
INVESTMENT
ORGANIZA-
TION.—For purposes of this section—
‘‘(A) IN GENERAL.—The term ‘education 
investment organization’ means any organiza-
tion described in section 170(c)(2) if the annual 
disbursements of the organization in the form 
of grants for qualified elementary and sec-
ondary education expenses are normally not less 
than 90 percent of the sum of such organiza-
tion’s annual gross income and contributions 
and gifts. 
‘‘(B) QUALIFIED ELEMENTARY AND SEC-
ONDARY
EDUCATION
EXPENSES.—The term 
‘qualified elementary and secondary education 
expenses’ has the meaning given such term by 
section 530(b)(4), except that ‘child’ shall be 
substituted for ‘beneficiary’ and ‘a child’ shall 
be substituted for ‘the designated beneficiary of 
the trust’ in clauses (i) and (iii) of subpara-
graph (A). 
‘‘(d) SPECIAL RULES.—
‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion shall be allowed under this chapter for any con-
tribution for which credit is allowed under this sec-
tion. 
‘‘(2) APPLICATION
WITH
OTHER
CREDITS.—
The credit allowed by subsection (a) for any taxable 
year shall not exceed the excess of—
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under this part (other than sections 21, 22, 24,
25A, 25B, subpart C, and this section) and 
under section 1397E. 
‘‘(3) CONTROLLED GROUPS.—All persons who 
are treated as one employer under subsection (a) or 
(b) of section 52 shall be treated as 1 taxpayer for 
purposes of this section. 
‘‘(e) ELECTION TO HAVE CREDIT NOT APPLY.—A 
taxpayer may elect to have this section not apply for any 
taxable year.’’. 
(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. 30B. Credit for contributions for the benefit of elementary 
and secondary schools.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 3. EXCLUSION FROM GROSS INCOME OF GRANTS 
FROM EDUCATION INVESTMENT ORGANIZA-
TIONS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
items specifically excluded from gross income) is amended 
by inserting after section 117 the following new section:
‘‘SEC. 117A. GRANTS FROM EDUCATION INVESTMENT ORGA-
NIZATIONS. 
‘‘(a) GENERAL RULE.—Gross income does not in-
clude any amount received as a grant for qualified elemen-
tary and secondary education expenses from an education 
investment organization. 
‘‘(b) DEFINITIONS.—For purposes of this section, the 
terms ‘qualified elementary and secondary education ex-
penses’ and ‘education investment organization’ have the 
meanings provided by section 30B.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter B of chapter 1 of such Code 
is amended by inserting after the item relating to section 
117 the following:
‘‘Sec. 117A. Grants from education investment organizations.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts received in taxable 
years beginning after December 31, 2003. 
SEC. 4. REVISION OF DEFINITION OF SCHOOL FOR PUR-
POSES OF QUALIFIED ELEMENTARY AND 
SECONDARY EDUCATION EXPENSES. 
(a) IN GENERAL.—Paragraph (4) of section 530(b) 
of the Internal Revenue Code of 1986 (defining qualified 
elementary and secondary education expenses) is amend-
ed—
(1) in clauses (i) and (ii) of subparagraph (A), 
by striking ‘‘public, private, or religious’’, and 
(2) in subparagraph (B), by inserting after 
‘‘any school’’ the following: ‘‘, including a public, 
private, religious, or home school,’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003.
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