,,ii #aaith ,,congress #ast ,session ,s4 #ahac ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #bj1 #bjbe,mr4 ,scott of ,south ,carolina introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to allow a credit against tax for charitable donations for the creation or expansion of charter schools4 #a4 ,short title ,this ,act may be cited as the ,high-,quality ,charter ,schools ,act4 #b4 ,tax credit for contributions to eligible charter school organizations 7a7 ,in general ,subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #be;,e the following new section3 #be;,f4 ,contributions to eligible charter school organizations 7a7 ,allowance of credit ,in the case of an individual who is a citizen or resident of the ,united ,states 7as defined in section #ggja7;a77#i771 there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to #ge percent of the amount of qualified contributions made by the taxpayer during the taxable year4 7b7 ,amount of credit ,the credit allowed under subsection 7a7 in any taxable year shall not exceed an amount equal to the greater of-- 7#a7 #aj percent of the adjusted gross income of the taxpayer for the taxable year1 or 7#b7 #e1jjj4 7c7 ,definitions ,for purposes of this section-- 7#a7 ,charter school ,the term charter school has the meaning given such term in section #dcaj of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbba;i74 7#b7 ,eligible charter school organization 7,a7 ,in general ,the term eligible charter school organization means an entity which-- 7i7 is described in section #eja7;c77#c7 and exempt from tax under section #eja7;a7 and is not a private foundation1 7ii7 is a charter management organization 7as defined in section #dcaj of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbba;i771 or a charter school1 that-- 7,i7 7aa7 has received a grant for the replication or expansion of high-quality charter schools under section #dcje7;b7 of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #gbba;d7b771 or 7bb7 manages or operates a charter school that has been supported under such a grant1 or 7,,ii7 has been selected by a ,state for eligibility under this section based on a determination by the ,state that the entity is in the highest #aj percent of charter management organizations 7as so defined7 or charter schools1 as the case may be1 for student performance in the ,state1 7iii7 separate from any other funds or contributions received by the entity1 maintains and accounts for any contributions made by any person for the purpose of the creation or expansion of charter schools operated or managed by such entity1 7iv7 obtains from an independent certified public accountant annual financial and compliance audits1 and 7v7 certifies to the ,secretary 7at such time1 and in such form and manner1 as the ,secretary may prescribe7 that the audit described in clause 7iv7 has been completed4 7,b7 ,independent certified public accountant ,for purposes of subparagraph 7,a71 the term independent certified public accountant means1 with respect to an organization1 a certified public accountant who is not a person described in section #dfe7;b77#c77;,a7 with respect to such organization or any employee of such organization4 7#c7 ,qualified contribution ,the term qualified contribution means a charitable contribution 7as defined by section #agj7;c77 to an eligible charter school organization in the form of cash or marketable securities for the purpose of the creation or expansion of charter schools managed or operated by such organization4 7d7 ,denial of double benefit ,any qualified contribution for which a credit is allowed under this section shall not be taken into account as a charitable contribution for purposes of section #agj4 7e7 ,carryforward of unused credit 7#a7 ,in general ,if the credit allowable under subsection 7a7 for any taxable year exceeds the limitation imposed by section #bf7;a7 for such taxable year reduced by the sum of the credits allowable under this subpart 7other than this section1 section #bc1 and section #be;,d71 such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection 7a7 for such taxable year4 7#b7 ,limitation ,no credit may be carried forward under this subsection to any taxable year following the fifth taxable year after the taxable year in which the credit arose4 ,for purposes of the preceding sentence1 credits shall be treated as used on a first-in first-out basis4 7f7 ,application of volume cap 7#a7 ,in general ,subject to paragraph 7#b71 a qualified contribution shall not be taken into account under this section if such contribution would result in the aggregate amount of credits claimed under this section exceeding the volume cap established under section #d of the ,high-,quality ,charter ,schools ,act4 7#b7 ,state allocations ,for purposes of the allocation made to a ,state pursuant to subparagraph 7,a7 of section #d7;a77#a7 of the ,high-,quality ,charter ,schools ,act1 if a qualified contribution made by an individual residing in such ,state would result in the aggregate amount of credits claimed under this section by individuals residing in such ,state exceeding the allocation made to such ,state pursuant to such subparagraph1 such contribution shall only be taken into account under this section if such contribution does not result in the aggregate amount of credits claimed by individuals pursuant to subparagraph 7,b7 of such section exceeding the amount made available pursuant to such subparagraph4 4 7b7 ,clerical amendment ,the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #be;,e the following new item3 ,sec4 #be;,f4 ,contributions to eligible charter school organizations4 4 #c4 ,failure of eligible charter school organization to make expenditures 7a7 ,in general ,chapter #db of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subchapter3 ,i ,eligible ,charter ,school ,organizations ,sec4 #difi4 ,failure to expend receipts4 #difi4 ,failure to expend receipts 7a7 ,in general ,in the case of any eligible charter school organization 7as defined in section #be;,f7c77#b77 which has been determined by the ,secretary to have failed to satisfy the requirement under subsection 7b7 for any taxable year1 any contribution made to such organization during the first taxable year beginning after the date of such determination shall not be treated as a qualified contribution 7as defined in section #be;,f7c77#c77 for purposes of section #be;,f4 7b7 ,requirement ,the requirement described in this subsection is that the amount of qualified contributions of the eligible charter school organization for the taxable year which are expended before the expenditure deadline with respect to such receipts shall not be less than the required expenditure amount with respect to such taxable year4 7c7 ,definitions ,for purposes of this section-- 7#a7 ,required expenditure amount 7,a7 ,in general ,the required expenditure amount with respect to a taxable year is the amount equal to #ajj percent of qualified contributions for such taxable year-- 7i7 reduced by the sum of such qualified contributions that are retained for reasonable administrative expenses for the taxable year or are carried to the succeeding taxable year under subparagraph 7,c71 and 7ii7 increased by the amount of the carryover under subparagraph 7,c7 from the preceding taxable year4 7,b7 ,safe harbor for reasonable administrative expenses ,for purposes of subparagraph 7,a77i71 if the percentage of total qualified contributions to an eligible charter school organization for a taxable year which are used for administrative purposes related to activities for the creation or expansion of charter schools 7as defined in section #be;,f7c77#a77 operated or managed by such organization is equal to or less than #aj percent1 such expenses shall be deemed to be reasonable for purposes of such subparagraph4 7,c7 ,carryover ,with respect to the amount of the total qualified contributions to an eligible charter school organization with respect to any taxable year1 an amount not greater than #ae percent of such amount may1 at the election of such organization1 be carried to the succeeding taxable year4 7#b7 ,expenditures ,the term expenditures includes amounts which are formally committed but not expended4 ,a formal commitment described in the preceding sentence may include qualified contributions set aside for the creation or expansion of charter schools operated or managed by such organization for more than one year4 7#c7 ,expenditure deadline ,the expenditure deadline with respect to qualified contributions for a taxable year is the first day of the fifth taxable year following the taxable year in which such qualified contributions are received by the eligible charter school organization4 7#d7 ,qualified contributions ,the term qualified contributions means contributions eligible for the credit under section #be;,f4 4 7b7 ,clerical amendment ,the table of subchapters for chapter #db of such ,code is amended by adding at the end the following new item3 ,subchapter ,i4 ,eligible ,charter ,school ,organizations 4 #d4 ,volume cap 7a7 ,allocation 7#a7 ,in general ,for purposes of section #be;,f7f7 of the ,internal ,revenue ,code of #aihf 7as added by this ,act71 the volume cap applicable with respect to such section shall be #e1jjj1jjj1jjj of tax credits for taxable years beginning in calendar year #bjbf and each subsequent year thereafter1 with such amount to be allocated as follows3 7,a7 #aj1jjj1jjj of tax credits shall be allocated to each ,state 7as defined in section #ggja7;a77#aj7 of the ,internal ,revenue ,code of #aihf71 with such amount to be made available1 in the manner described in subsection 7b71 for any individual residing in such ,state to claim the credit allowed under section #be;,f of the ,internal ,revenue ,code of #aihf with respect to any qualified contributions 7as defined in such section7 made by such individual during any taxable year beginning during such calendar year4 7,b7 ,with respect to the amount remaining after the allocation under subparagraph 7,a71 such amount 7as adjusted pursuant to paragraph 7#c77 shall be made available1 in the manner described in subsection 7b71 for any individual to claim the credit allowed under section #be;,f of the ,internal ,revenue ,code of #aihf with respect to any qualified contributions made by such individual during any taxable year beginning during such calendar year4 7#b7 ,carryover ,the amount of any allotment to a ,state under paragraph 7#a77;,a7 for any calendar year which is not claimed by taxpayers described in such paragraph during such calendar year shall be added to the allotment provided under paragraph 7#a77;,b7 for the subsequent calendar year4 7#c7 ,increase in nationwide volume cap ,for purposes of paragraph 7#a77;,b71 if the ,secretary determines during any calendar year that the amount of tax credits allowable under section #be;,f with respect to qualified contributions made during such calendar year is equal to or greater than #ij percent of the total amount made available under such paragraph for such calendar year1 such amount shall be increased by an amount equal to #e percent of the total amount made available under such paragraph as of ,january #a of such calendar year1 with such increase to remain in effect for the subsequent calendar year4 7b7 ,first-,come1 first-,serve ,for purposes of applying the volume cap under this section1 such volume cap shall be applied based on a first-come1 first-serve basis1 as determined based on the date on which the taxpayer made the qualified contribution4 7c7 ,real-,time information ,for purposes of this section1 the ,secretary of the ,treasury 7or the ,secretary's delegate7 shall develop a system to track the amount of qualified contributions made during the calendar year for which a credit may be claimed under section #be;,f of the ,internal ,revenue ,code of #aihf1 with such information to be updated in real time4 #e4 ,organizational and parental autonomy 7a7 ,prohibition of control over eligible charter school organizations 7#a7 ,in general ,an eligible charter school organization shall not1 by virtue of participation under any provision of this ,act or any amendment made by this ,act1 be regarded as acting on behalf of any governmental entity4 7#b7 ,maximum freedom ,to the extent permissible by law1 this ,act1 and any amendment made by this ,act1 shall be construed to allow eligible charter school organizations maximum freedom to provide for the needs of the students served by the charter schools operated or managed by the organization without governmental control4 7b7 ,definitions ,for purposes of this section1 the terms charter school and eligible charter school organization shall have the same meanings given such terms under section #be;,f7c7 of the ,internal ,revenue ,code of #aihf 7as added by section #b7;a7 of this ,act74 #f4 ,effective date ,the amendments made by this ,act shall apply to taxable years beginning after ,december #ca1 #bjbe4