I
106TH CONGRESS
1ST SESSION
H. R. 936
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
MARCH 2, 1999
Mr. PAUL 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 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’’.
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 2000,
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 1999’ 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.’’.
(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 25A the following new item:
‘‘Sec. 25B. Contributions to organizations providing elementary or
secondary school scholarships.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 3. CREDIT FOR CONTRIBUTIONS OF AND FOR IN-
STRUCTIONAL MATERIALS AND MATERIALS
FOR EXTRACURRICULAR ACTIVITIES.
(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 25B the following new
section:
‘‘SEC. 25C. CONTRIBUTIONS OF AND FOR INSTRUCTIONAL
MATERIALS AND MATERIALS FOR EXTRA-
CURRICULAR ACTIVITIES.
‘‘(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 school materials contributions of the
taxpayer 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 SCHOOL MATERIALS CONTRIBU-
TION.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified school
materials contribution’ means, with respect to any
taxable year, the amount which would (but for sub-
section (e)) be allowable as a deduction under sec-
tion 170 for—
‘‘(A) any cash contribution to any elemen-
tary or secondary school if such contribution is
designated to be used solely to acquire qualified
school materials,
‘‘(B) any contribution of qualified school
materials to any elementary or secondary
school, and
‘‘(C) any cash contribution to a school ma-
terials organization.
‘‘(2) ELEMENTARY OR SECONDARY SCHOOL.—
The term ‘elementary or secondary school’ means
any 
organization 
described 
in 
section
170(b)(1)(A)(ii) which provides education solely at
or below the 12th grade.
‘‘(3) SCHOOL MATERIALS ORGANIZATION.—
‘‘(A) IN GENERAL.—The term ‘school ma-
terials organization’ means any organization de-
scribed in section 170(c)(2) if—
‘‘(i) the primary function of the orga-
nization is to raise funds for elementary or
secondary schools, and
‘‘(ii) the annual disbursements of the
organization for qualified school materials
which are provided to elementary and sec-
ondary schools are normally not less than
90 percent of the sum of such organiza-
tion’s annual gross income and contribu-
tions and gifts.
‘‘(B) QUALIFIED
SCHOOL
MATERIALS.—
The term ‘qualified school materials’ means—
‘‘(i) instructional materials and equip-
ment, including library books and mate-
rials, computers, and computer software,
and
‘‘(ii) materials and equipment for
school-sponsored extracurricular activities.
‘‘(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
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 2000,
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 1999’ 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.’’.
(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, 1999.
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