,i #aacth ,,congress #ast ,session ,h4 ,r4 #dbb ,,in ,,the ,,house ,,of ,,representatives ,january #be1 #bjac ,mr4 ,franks of ,arizona 7for himself1 ,mr4 ,gosar1 ,mr4 ,schweikert1 ,mr4 ,salmon1 ,mr4 ,mulvaney1 ,mrs4 ,blackburn1 ,mr4 ,messer1 ,mr4 ,la,malfa1 ,mr4 ,hultgren1 and ,mr4 ,weber of ,texas7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide for a credit which is dependent on enactment of ,state qualified scholarship tax credits and which is allowed against the ,federal income tax for charitable contributions to education investment organizations that provide assistance for elementary and secondary education4 #a4 ,short title2 findings 7a7 ,short title ,this ,act may be cited as the ,children's ,hope ,act of #bjac4 7b7 ,findings ,congress finds the following3 7#a7 ,on ,april #d1 #bjaa1 the ,united ,states ,supreme ,court ruled that opponents of ,arizona's private school scholarship tax credit program may not challenge the program on grounds that it violates the ,establishment ,clause of the ,first ,amendment4 7#b7 ,the ,court ruled #e-d in ,garriott v4 ,winn and ,arizona ,christian ,school ,tuition ,organization v4 ,winn against a lawsuit by the ,arizona chapter of the ,american ,civil ,liberties ,union1 which contested a tax credit program giving ,arizona parents choices other than their neighborhood public schools4 7#c7 ,the ,children's ,hope ,act of #bjac builds on the success of the ,arizona private school scholarship tax credit program4 ,thus far1 ,arizona taxpayers have raised more than #dcj million for scholarships since #aiih4 ,in #bjaa alone1 nearly #ge1jjj taxpayers awarded more than #dg million for #be1jjj scholarships to ,arizona children4 #b4 ,tax credit for contributions to education investment organizations 7a7 ,in ,general ,subpart ,b of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf 7relating to other credits7 is amended by inserting after section #cj;,d the following new section3 #cj;,e4 ,contributions to education investment organizations 7a7 ,in ,general ,there shall be allowed as a credit against the tax imposed by this chapter for the taxable year the aggregate amount of qualified contributions for the taxable year4 7b7 ,limitation ,the amount allowed as a credit under subsection 7a7 for a taxable year shall not exceed #ajj 7#bjj in the case of a joint return74 7c7 ,qualified contributions ,for purposes of this section-- 7#a7 ,in general ,the term qualified contribution means a charitable contribution 7as defined by section #agj7;c77 to an education investment organization4 7#b7 ,education investment organization ,the term education investment organization means any organization described in section #agj7;c77#b7 if-- 7,a7 normally not less than #ij percent of the annual cash contributions to such organization are disbursed in the form of grants to students for qualified elementary and secondary education expenses1 and 7,b7 not less than of such disbursements are to students who are eligible for free or reduced-cost lunches under the school lunch program established under the ,richard ,b4 ,russell ,national ,school ,lunch ,act4 7#c7 ,qualified elementary and secondary education expenses ,the term qualified elementary and secondary education expenses has the meaning given such term by section #ecj7;b77#c71 except that child shall be substituted for beneficiary and a child shall be substituted for the designated beneficiary of the trust in clauses 7i7 and 7iii7 of subparagraph 7,a74 7#d7 ,state credit must be taken first 7,a7 ,no credit shall be allowed to a taxpayer under this section for a taxable year unless1 for the taxable year1 the taxpayer is allowed on the taxpayer's ,state tax return the minimum ,state qualified scholarship tax credit 7as defined in section #c of the ,children's ,hope ,act of #bjac74 7,b7 ,no credit shall be allowed to a taxpayer under this section for such taxable year for any contributions that were taken into account for purposes of such ,state qualified scholarship tax credit4 7d7 ,special ,rules 7#a7 ,denial of double benefit ,no deduction shall be allowed under any provision of this chapter for any expense for which a credit is allowed under this section4 7#b7 ,time when contributions deemed made ,for purposes of this section1 a taxpayer shall be deemed to have made a contribution to an education investment organization on the last day of the preceding taxable year if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year 7not including extensions thereof74 4 7b7 ,scholarships from education investment organizations excluded from income ,section #gd of such ,code 7relating to prizes and awards7 is amended by adding at the end the following new subsection3 7d7 ,scholarships from education investment organizations ,gross income does not include amounts received as a scholarship from an education investment organization 7as defined in section #cj;,e7c77#b77 for qualified elementary and secondary education expenses 7as defined in section #cj;,e7c77#c774 ,such scholarship shall not be taken into account for purposes of determining eligibility for any ,federal program4 4 7c7 ,clerical amendment ,the table of sections for such subpart ,b is amended by inserting after the item relating to section #cj;,d the following new item3 ,sec4 #cj;,e4 ,contributions to education investment organizations4 4 7d7 ,effective ,date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjab4 #c4 ,federal scholarship tax credit conditioned on ,state qualified scholarship tax credit 7a7 ,in general ,for purposes of section #cj;,e7c77#d7 of the ,internal ,revenue ,code of #aihf 7as added by section #b of this ,act71 a scholarship tax credit shall not be treated as a ,state qualified scholarship tax credit unless the requirements of subsection 7b7 are met4 7b7 ,requirements relating to ,state qualified scholarship tax credit 7#a7 ,in general ,for purposes of subsection 7a71 the requirements of this subsection are met only if-- 7,a7 the tax credit is for an amount of not less than #bej per taxpayer and is allowed against the ,state income tax 7property tax for those ,states that don't have income tax7 for the amount of voluntary cash contributions made by the taxpayer during the taxable year to a school tuition organization described in paragraph 7#b71 7,b7 the excess of such credit over tax liability may be carried forward for not more than five years1 7,c7 the taxpayer does not require1 as a condition of the contribution1 that the contribution must benefit a specific child1 and 7,d7 such credit is not allowable for direct donations to private schools4 7#b7 ,school tuition organization ,for purposes of paragraph 7#a71 a school tuition organization is described in this paragraph if such organization-- 7,a7 is an organization operating in the ,state and is described in section #eja7;c77#c71 and is exempt from tax under section #eja7;a71 of the ,internal ,revenue ,code of #aihf1 7,b7 expends at least #ij percent of its annual cash contributions for educational scholarships or tuition grants to children to allow them to attend any qualified school chosen at the sole discretion of their parents1 and 7,c7 disburses at least #ij percent of its annual cash contributions within one year of their receipt4 7#c7 ,qualified school ,for purposes of paragraph 7#b71 the term qualified school means any elementary school or secondary school that is located in the ,state in which the taxpayer resides and does not discriminate on the basis of race1 color1 handicap1 familial status1 or national origin and that satisfies the requirements prescribed by ,state law for such schools as of ,december #ca1 #bjaj4 7#d7 ,educational scholarships or tuition grants ,the term educational scholarship or a tuition grant means any scholarship or grant awarded for qualified elementary and secondary education expenses 7as defined in section #cj;,e7c77#c7 of the ,internal ,revenue ,code of #aihf74 7c7 ,state ,for purposes of this section1 the term ,state means any of the several ,states4