[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4505 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
2d Session
S. 4505
To provide one-time grants to parents and guardians for student
education expenses, to establish emergency education freedom grants,
and to provide tax credits for donations to eligible scholarship-
granting organizations, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 6, 2020
Mr. Cruz introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide one-time grants to parents and guardians for student
education expenses, to establish emergency education freedom grants,
and to provide tax credits for donations to eligible scholarship-
granting organizations, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Coronavirus Emergency Education
Grants Act''.
SEC. 2. GRANTS TO PARENTS AND GUARDIANS FOR STUDENT EDUCATION EXPENSES.
(a) In General.--The Secretary, in consultation with the Secretary
of Education, shall establish a program to make one-time direct
payments to parents or guardians to offset the educational expenses
that such individuals incurred in educating their children during the
period of March 2020 to June 2021.
(b) Contents of Program.--The program carried out under subsection
(a) shall have the following requirements:
(1) The Secretary shall make only one payment for each
child. Such payment will be made to the child's legal parent or
guardian. Such payment shall be the lesser of $10,000 or the
combined actual past and future out-of-pocket educational
expenses incurred, or that will be incurred, by the legal
parent or guardian for his or her child's education during the
period of March 2020 to June 2021.
(2) The Secretary shall only make a payment to a parent or
guardian who is a citizen of the United States or lawfully
residing in the United States.
(3) The Secretary shall only make a payment to a parent or
guardian who is the legal parent or guardian of the child.
(4) The Secretary, in consultation with the Secretary of
Education, shall establish a web portal in which the legal
parent or guardian of a child may apply to receive this one-
time payment. The Secretary shall request such information as
is necessary to--
(A) establish a parent or guardian's total out-of-
pocket costs for educating his or her child during the
period of March 2020 to June 2021;
(B) establish the parent or guardian's identity,
establish the parent or guardian's citizenship or
lawful resident status;
(C) establish that parent or guardian is the legal
parent or guardian of the child and the child's
identity; and
(D) establish and maintain the program and prevent
fraud, waste, or abuse of program payments and funds.
(5) The Secretary shall only make payments to legal parents
and guardians that have applied through the web portal and
provided such information as required by the Secretary, in
consultation with the Secretary of Education. The web portal
shall be established within 60 days of the date of enactment of
this Act.
(6) The Secretary shall require parents or guardians who
have received a payment from the program to maintain records of
how such individuals spent the payment. The Secretary shall
develop procedures to audit such records, mitigate fraud,
waste, and abuse within the program, and recoup program funds
and payments from individuals who have committed fraud, waste,
or abuse.
(c) Definitions.--In this section:
(1) Educational expenses.--The term ``educational
expenses''--
(A) means--
(i) tuition for elementary or secondary
education;
(ii) elementary or secondary education
curriculum and curricular materials;
(iii) books or other instructional
materials for elementary or secondary
education;
(iv) online elementary or secondary
education educational materials and expenses
incurred to access these online educational
materials;
(v) tuition for tutoring or elementary or
secondary educational classes outside of the
home, including at a tutoring facility, but
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 an eligible
educational institution as established
by the Secretary; or
(III) is a subject matter expert in
the relevant subject as established by
the Secretary;
(vi) fees for a nationally standardized
norm-referenced achievement test, an advanced
placement examination, or any examination
related to admission to an institution of
higher education;
(vii) fees for dual enrollment in an
institution of higher education; and
(viii) educational therapies for students
with disabilities provided by a licensed or
accredited practitioner or provider, including
occupational, behavioral, physical, and speech-
language therapies; and
(B) includes expenses for the purposes described in
clauses (i) through (viii) of subparagraph (A) in
connection with a homeschool (whether treated as a
homeschool or a private school for purposes of
applicable State law).
(2) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury or the Secretary's delegate.
(d) Authorization and Appropriation.--
(1) In general.--There are authorized to be appropriated,
and there are appropriated, out of any amounts in the Treasury
not otherwise appropriated, such sums as are necessary to
enable the Secretary, in consultation with the Secretary of
Education, to establish and carry out this program.
(2) Emergency designation.--
(A) In general.--The amounts provided by this
section are designated as an emergency requirement
pursuant to section 4(g) of the Statutory Pay-As-You-Go
Act of 2010 (2 U.S.C. 933(g)).
(B) Designation in senate.--In the Senate, this
section is designated as an emergency requirement
pursuant to section 4112(a) of H. Con. Res. 71 (115th
Congress), the concurrent resolution on the budget for
fiscal year 2018.
SEC. 3. EDUCATION FREEDOM SCHOLARSHIPS AND OPPORTUNITY.
(a) Emergency Education Freedom Grants.--
(1) Definitions.--In this subsection:
(A) Definitions from the internal revenue code of
1986.--The definitions in section 25E(c) of the
Internal Revenue Code of 1986, as added by subsection
(b), shall apply to this subsection, except as
otherwise provided.
(B) Emergency education freedom grant funds.--The
term ``emergency education freedom grant funds'' means
the amount of funds available under paragraph (2)(A)
for this subsection that are not reserved under
paragraph (3)(A)(i).
(C) Secretary.--The term ``Secretary'' means the
Secretary of Education.
(D) State.--The term ``State'' means each of the 50
States, the District of Columbia, and the Commonwealth
of Puerto Rico.
(2) Grants.--
(A) Program authorized.--From any amounts
appropriated for section 18003 of division B of the
CARES Act (Public Law 116-136) on or after the date of
enactment of this Act, the Secretary shall,
notwithstanding any other provision of title XVIII of
division B of the CARES Act, use 10 percent of such
amounts to carry out paragraph (3) and award emergency
education freedom grants to States with approved
applications, in order to enable the States to award
subgrants to eligible scholarship-granting
organizations under paragraph (4).
(B) Timing.--The Secretary shall make the
allotments required under this paragraph by not later
than 30 days after the date of enactment of this Act.
(3) Reservation and allotments.--
(A) In general.--From the amounts made available
under paragraph (2)(A), the Secretary shall--
(i) reserve--
(I) one-half of 1 percent for
allotments for the United States Virgin
Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana
Islands, to be distributed among those
outlying areas on the basis of their
relative need, as determined by the
Secretary, in accordance with the
purpose of this subsection; and
(II) one-half of 1 percent of such
amounts for the Secretary of the
Interior, acting through the Bureau of
Indian Education, to be used to provide
subgrants described in paragraph (4) to
eligible scholarship-granting
organizations that serve students
attending elementary schools or
secondary schools operated or funded by
the Bureau of Indian Education; and
(ii) subject to subparagraph (B), allot
each State that submits an approved application
under this subsection the sum of--
(I) the amount that bears the same
relation to 20 percent of the emergency
education freedom grant funds as the
number of individuals aged 5 through 17
in the State, as determined by the
Secretary on the basis of the most
recent satisfactory data, bears to the
number of those individuals, as so
determined, in all such States that
submitted approved applications; and
(II) an amount that bears the same
relationship to 80 percent of the
emergency education freedom grant funds
as the number of individuals aged 5
through 17 from families with incomes
below the poverty line in the State, as
determined by the Secretary on the
basis of the most recent satisfactory
data, bears to the number of those
individuals, as so determined, in all
such States that submitted approved
applications.
(B) Minimum allotment.--No State shall receive an
allotment under this paragraph for a fiscal year that
is less than one-half of 1 percent of the emergency
education freedom grant funds available for such fiscal
year.
(4) Subgrants to eligible scholarship-granting
organizations.--
(A) In general.--A State that receives an allotment
under this subsection shall use the allotment to award
subgrants, on a basis determined appropriate by the
State, to eligible scholarship-granting organizations
in the State.
(B) Initial timing.--
(i) States with existing tax credit
scholarship program.--By not later than 30 days
after receiving an allotment under paragraph
(3)(A)(ii), a State with an existing, as of the
date of application for an allotment under this
subsection, tax credit scholarship program
shall use not less than 50 percent of the
allotment to award subgrants to eligible
scholarship-granting organizations in the
State.
(ii) States without tax credit scholarship
programs.--By not later than 60 days after
receiving an allotment under paragraph
(3)(A)(ii), a State without a tax credit
scholarship program shall use not less than 50
percent of the allotment to award subgrants to
eligible scholarship-granting organizations in
the State.
(C) Uses of funds.--An eligible scholarship-
granting organization that receives a subgrant under
this paragraph--
(i) may reserve not more than 5 percent of
the subgrant funds for public outreach, student
and family support activities, and
administrative expenses related to the
subgrant; and
(ii) shall use not less than 95 percent of
the subgrant funds to provide qualifying
scholarships for qualified expenses only to
individual elementary school and secondary
school students who reside in the State in
which the eligible scholarship-granting
organization is recognized.
(5) Reallocation.--A State shall return to the Secretary
any amounts of the allotment received under this subsection
that the State does not award as subgrants under paragraph (4)
by March 30, 2021, and the Secretary shall reallocate such
funds to the remaining eligible States in accordance with
paragraph (3)(A)(ii).
(6) Rules of construction.--The rules of construction under
section 25E(d) of the Internal Revenue Code of 1986, as added
by subsection (b), shall apply to this subsection in the same
manner as such rules apply to section 25E of such Code, as so
added.
(b) Tax Credits for Contributions to Eligible Scholarship-Granting
Organizations.--
(1) Credit for individuals.--Subpart A of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by adding after section 25D the following new
section:
``SEC. 25E. CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP-GRANTING
ORGANIZATIONS.
``(a) Allowance of Credit.--Subject to section 3(c)(3) of the
Coronavirus Emergency Education Grants Act, in the case of an
individual, there shall be allowed as a credit against the tax imposed
by this chapter for the taxable year an amount equal to the sum of any
qualified contributions made by the taxpayer during the taxable year.
``(b) Amount of Credit.--The credit allowed under subsection (a)
for any taxable year shall not exceed 10 percent of the taxpayer's
adjusted gross income for the taxable year.
``(c) Definitions.--For purposes of this section--
``(1) Eligible scholarship-granting organization.--The term
`eligible scholarship-granting organization' means--
``(A) an organization that--
``(i) is described in section 501(c)(3) and
exempt from taxation under section 501(a),
``(ii) provides qualifying scholarships to
individual elementary and secondary students
who--
``(I) reside in the State in which
the eligible scholarship-granting
organization is recognized, or
``(II) in the case of the Bureau of
Indian Education, are members of a
federally recognized tribe,
``(iii) a State identifies to the Secretary
as an eligible scholarship-granting
organization under section 3(c)(3)(E)(ii) of
the Coronavirus Emergency Education Grants Act,
``(iv) allocates at least 90 percent of
qualified contributions to qualifying
scholarships on an annual basis, and
``(v) provides qualifying scholarships to--
``(I) more than 1 eligible student,
``(II) more than 1 eligible family,
and
``(III) different eligible students
attending more than 1 education
provider, or
``(B) an organization that--
``(i) is described in section 501(c)(3) and
exempt from taxation under section 501(a), and
``(ii) pursuant to State law, was able, as
of January 1, 2021, to receive contributions
that are eligible for a State tax credit if
such contributions are used by the organization
to provide scholarships to individual
elementary and secondary students, including
scholarships for attending private schools.
``(2) Qualified contribution.--The term `qualified
contribution' means a contribution of cash to any eligible
scholarship-granting organization.
``(3) Qualified expense.--The term `qualified expense'
means any educational expense that is--
``(A) for an individual student's elementary or
secondary education, as recognized by the State, or
``(B) for the secondary education component of an
individual elementary or secondary student's career and
technical education, as defined by section 3(5) of the
Carl D. Perkins Career and Technical Education Act of
2006 (20 U.S.C. 2302(5)).
``(4) Qualifying scholarship.--The term `qualifying
scholarship' means a scholarship granted by an eligible
scholarship-granting organization to an individual elementary
or secondary student for a qualified expense.
``(5) State.--The term `State' means each of the 50 States,
the District of Columbia, the Commonwealth of Puerto Rico, the
outlying areas (as defined in section 1121(c) of the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 6331(c)), and
the Department of the Interior (acting through the Bureau of
Indian Education)).
``(d) Rules of Construction.--
``(1) In general.--A qualifying scholarship awarded to a
student from the proceeds of a qualified contribution under
this section shall not be considered assistance to the school
or other educational provider that enrolls, or provides
educational services to, the student or the student's parents.
``(2) Exclusion from income.--Gross income shall not
include any amount received by an individual as a qualifying
scholarship and such amount shall not be taken into account as
income or resources for purposes of determining the eligibility
of such individual or any other individual for benefits or
assistance, or the amount or extent of such benefits or
assistance, under any Federal program or under any State or
local program financed in whole or in part with Federal funds.
``(3) Prohibition of control over nonpublic education
providers.--
``(A)(i) Nothing in this section shall be construed
to permit, allow, encourage, or authorize any Federal
control over any aspect of any private, religious, or
home education provider, whether or not a home
education provider is treated as a private school or
home school under State law.
``(ii) This section shall not be construed to
exclude private, religious, or home education providers
from participation in programs or services under this
section.
``(B) Nothing in this section shall be construed to
permit, allow, encourage, or authorize an entity
submitting a list of eligible scholarship-granting
organizations on behalf of a State pursuant to section
3(c)(3)(E) of the Coronavirus Emergency Education
Grants Act to mandate, direct, or control any aspect of
a private or home education provider, regardless of
whether or not a home education provider is treated as
a private school under State law.
``(C) No participating State or entity acting on
behalf of a State pursuant to section 3(c)(3)(E) of the
Coronavirus Emergency Education Grants Act shall
exclude, discriminate against, or otherwise
disadvantage any education provider with respect to
programs or services under this section based in whole
or in part on the provider's religious character or
affiliation, including religiously based or mission-
based policies or practices.
``(4) Parental rights to use scholarships.--No
participating State or entity acting on behalf of a State
pursuant to section 3(c)(3)(E) of the Coronavirus Emergency
Education Grants Act shall disfavor or discourage the use of
qualifying scholarships for the purchase of elementary and
secondary education services, including those services provided
by private or nonprofit entities, such as faith-based
providers.
``(5) State and local authority.--Nothing in this section
shall be construed to modify a State or local government's
authority and responsibility to fund education.
``(e) Denial of Double Benefit.--The Secretary shall prescribe such
regulations or other guidance to ensure that the sum of the tax
benefits provided by Federal, State, or local law for a qualified
contribution receiving a Federal tax credit in any taxable year does
not exceed the sum of the qualified contributions made by the taxpayer
for the taxable year.
``(f) Carryforward of Credit.--If a tax credit allowed under this
section is not fully used within the applicable taxable year because of
insufficient tax liability on the part of the taxpayer, the unused
amount may be carried forward for a period not to exceed 5 years.
``(g) Election.--This section shall apply to a taxpayer for a
taxable year only if the taxpayer elects to have this section apply for
such taxable year.
``(h) Alternative Minimum Tax.--For purposes of calculating the
alternative minimum tax under section 55, a taxpayer may use any credit
received for a qualified contribution under this section.''.
(2) Clerical amendment.--The table of sections for subpart
A of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by inserting after the item
relating to section 25D the following new item:
``Sec. 25E. Contributions to eligible scholarship-granting
organizations.''.
(3) Credit for corporations.--Subpart D of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by adding at the end the following new section:
``SEC. 45U. CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP-GRANTING
ORGANIZATIONS.
``(a) Allowance of Credit.--Subject to section 3(c)(3) of the
Coronavirus Emergency Education Grants Act, for purposes of section 38,
in the case of a domestic corporation, there shall be allowed as a
credit against the tax imposed by this chapter for the taxable year an
amount equal to the sum of any qualified contributions (as defined in
section 25E(c)(2)) made by such corporation taxpayer during the taxable
year.
``(b) Amount of Credit.--The credit allowed under subsection (a)
for any taxable year shall not exceed 5 percent of the taxable income
(as defined in section 170(b)(2)(D)) of the domestic corporation for
such taxable year.
``(c) Additional Provisions.--For purposes of this section, any
qualified contributions made by a domestic corporation shall be subject
to the provisions of section 25E (including subsection (d) of such
section), to the extent applicable.
``(d) Election.--This section shall apply to a taxpayer for a
taxable year only if the taxpayer elects to have this section apply for
such taxable year.''.
(4) Credit part of general business credit.--Section 38(b)
is amended--
(A) by striking ``plus'' at the end of paragraph
(32);
(B) by striking the period at the end of paragraph
(33) and inserting ``, plus''; and
(C) by adding at the end the following new
paragraph:
``(34) the credit for qualified contributions determined
under section 45U(a).''.
(5) Clerical amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 is amended by adding
at the end the following new item:
``Sec. 45U. Contributions to eligible scholarship-granting
organizations.''.
(6) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 2020.
(c) Education Freedom Scholarships Web Portal and Administration.--
(1) In general.--The Secretary of the Treasury shall, in
coordination with the Secretary of Education, establish, host,
and maintain a web portal that--
(A) lists all eligible scholarship-granting
organizations;
(B) enables a taxpayer to make a qualifying
contribution to 1 or more eligible scholarship-granting
organizations and to immediately obtain both a pre-
approval of a tax credit for that contribution and a
receipt for tax filings;
(C) provides information about the tax benefits
under sections 25E and 45U of the Internal Revenue Code
of 1986; and
(D) enables a State to submit and update
information about its programs and its eligible
scholarship-granting organizations for informational
purposes only, including information on--
(i) student eligibility;
(ii) allowable educational expenses;
(iii) the types of allowable education
providers;
(iv) the percentage of funds an
organization may use for program
administration; and
(v) the percentage of total contributions
the organization awards in a calendar year.
(2) Nonportal contributions.--A taxpayer may opt to make a
contribution directly to an eligible scholarship-granting
organization, instead of through the web portal described in
paragraph (1), provided that the taxpayer, or the eligible
scholarship-granting organization on behalf of the taxpayer,
applies for, and receives, pre-approval for a tax credit from
the Secretary of the Treasury in coordination with the
Secretary of Education.
(3) National and state limitations on credits.--
(A) National limitation.--For each fiscal year, the
total amount of qualifying contributions for which a
credit is allowed under sections 25E and 45U of the
Internal Revenue Code of 1986 shall not exceed
$5,000,000,000.
(B) Allocation of limitation.--
(i) Initial allocations.--For each calendar
year, with respect to the limitation under
subparagraph (A), the Secretary of the
Treasury, in consultation with the Secretary of
Education, shall--
(I) allocate to each State an
amount equal to the sum of the
qualifying contributions made in the
State in the previous year; and
(II) from any amounts remaining
following allocations made under
subclause (I), allocate to each
participating State an amount equal to
the sum of--
(aa) an amount that bears
the same relationship to 20
percent of such remaining
amount as the number of
individuals aged 5 through 17
in the State, as determined by
the Secretary of Education on
the basis of the most recent
satisfactory data, bears to the
number of those individuals in
all such States, as so
determined; and
(bb) an amount that bears
the same relationship to 80
percent of such remaining
amount as the number of
individuals aged 5 through 17
from families with incomes
below the poverty line in the
State, as determined by the
Secretary of Education, on the
basis of the most recent
satisfactory data, bears to the
number of those individuals in
all such States, as so
determined.
(ii) Minimum allocation.--Notwithstanding
clause (i), no State receiving an allocation
under this subsection may receive less than
one-half of 1 percent of the amount allocated
for a fiscal year.
(iii) Alternative allocation.--
(I) In general.--Not later than the
end of the fifth year of the program or
1 year after the end of the first
fiscal year for which the total amount
of credits claimed under section 25E
and section 45U of the Internal Revenue
Code of 1986 is $2,500,000,000 or more,
whichever comes first, the Secretary of
the Treasury, in consultation with the
Secretary of Education, shall, by
regulation, provide for an alternative
allocation method that shall take
effect beginning with the first fiscal
year after such regulation takes
effect.
(II) Alternative allocation
method.--The alternative allocation
method shall be expressed as a formula
based on a combination of the following
data for each State, as reported by the
State to the Secretary of the Treasury:
(aa) The relative
percentage of students in the
State who receive an elementary
or secondary scholarship
through a State program that is
financed through State tax-
credited donations or
appropriations and that permits
the elementary or secondary
scholarship to be used to
attend a private school.
(bb) The total amount of
all elementary and secondary
scholarships awarded through a
State program that is financed
through State tax-credited
donations or appropriations
compared to the total amount of
current State and local
expenditures for free public
education in the State.
(III) Allocation formula.--For any
fiscal year to which subclause (I)
applies, the Secretary of the Treasury,
in consultation with the Secretary of
Education, shall--
(aa) for each State,
allocate an amount equal to the
sum of the qualifying
contributions made in the State
in the previous year;
(bb) allocate \2/3\ of the
remaining amount (after
application of item (aa)) of
the national limitation for
that year using the alternative
allocation method under
subclause (II); and
(cc) allocate \1/3\ of the
remaining amount (after
application of item (aa) and
(bb)) in accordance with clause
(i)(II).
(IV) Ineligibility.--For any fiscal
year to which subclause (I) applies, a
State that does not provide the
Secretary of the Treasury with
information described in subclause (II)
is not eligible to receive an
allocation through the alternative
allocation method under such subclause.
(C) Allowable partnerships.--A State may choose to
administer the allocation it receives under
subparagraph (B) in partnership with 1 or more States,
provided that the eligible scholarship-granting
organizations in each partner State serve students who
reside in all States in the partnership.
(D) Total allocation.--A State's allocation, for
any fiscal year, is the sum of the amount determined
for such State under clauses (i) and (ii) of
subparagraph (B), except as provided in subparagraph
(B)(iii).
(E) Allocation and adjustments.--
(i) Initial allocation to states.--Not
later than November 1 of the year preceding a
year for which there is a national limitation
on credits under subparagraph (A) (referred to
in this subsection as the ``applicable year''),
or as early as practicable with respect to the
first year, the Secretary of the Treasury shall
announce the State allocations under
subparagraph (B) for the applicable year.
(ii) List of eligible scholarship-granting
organizations.--
(I) In general.--Not later than
January 1 of each applicable year, or
as early as practicable with respect to
the first year, each State shall
provide the Secretary of the Treasury a
list of eligible scholarship-granting
organizations, including a
certification that the entity
submitting the list on behalf of the
State has the authority to perform this
function.
(II) Rule of construction.--Neither
this subsection nor any other Federal
law shall be construed as limiting the
entities that may submit the list on
behalf of a State.
(iii) Reallocation of unclaimed credits.--
The Secretary of the Treasury shall reallocate
a State's allocation to other States, in
accordance with subparagraph (B), if the
State--
(I) chooses not to identify
scholarship-granting organizations
under clause (ii) in any applicable
year; or
(II) does not have an existing
eligible scholarship-granting
organization.
(iv) Reallocation.--On or after April 1 of
any applicable year, the Secretary of the
Treasury may reallocate, to 1 or more other
States that have eligible scholarship-granting
organizations in the States, without regard to
subparagraph (B), the allocation of a State for
which the State's allocation has not been
claimed.
(4) Definitions.--Any term used in this subsection which is
also used in section 25E of the Internal Revenue Code of 1986
shall have the same meaning as when used in such section.
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