Children's Hope Act of 2011 - Amends the Internal Revenue Code to allow a tax credit of up to $100 ($200 for joint returns) for charitable contributions to an education investment organization that disburses 90% of its contributions to provide grants to students for elementary and secondary education expenses, if at least 50% of such disbursements go to students who qualify for free or reduced-cost school lunches. Requires a taxpayer claiming such credit, as a condition of eligibility to receive it, to first claim a state qualified scholarship tax credit.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 485 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 485
To amend the Internal Revenue Code of 1986 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 education.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 26, 2011
Mr. Franks of Arizona 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 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 education.
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 ``Children's Hope Act of 2011''.
SEC. 2. TAX CREDIT FOR CONTRIBUTIONS TO EDUCATION INVESTMENT
ORGANIZATIONS.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to other credits) is
amended by inserting after section 30D the following new section:
``SEC. 30E. CONTRIBUTIONS TO EDUCATION INVESTMENT ORGANIZATIONS.
``(a) 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 year.
``(b) Limitation.--The amount allowed as a credit under subsection
(a) for a taxable year shall not exceed $100 ($200 in the case of a
joint return).
``(c) Qualified Contributions.--For purposes of this section--
``(1) In general.--The term `qualified contribution' means
a charitable contribution (as defined by section 170(c)) to an
education investment organization.
``(2) Education investment organization.--The term
`education investment organization' means any organization
described in section 170(c)(2) if--
``(A) normally not less than 90 percent of the
annual cash contributions to such organization are
disbursed in the form of grants to students for
qualified elementary and secondary education expenses,
and
``(B) not less than \1/2\ of such disbursements are
to students who are eligible for free or reduced-cost
lunches under the school lunch program established
under the Richard B. Russell National School Lunch Act.
``(3) Qualified elementary and secondary education
expenses.--The term `qualified elementary and secondary
education expenses' has the meaning given such term by section
530(b)(3), 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 subparagraph (A).
``(4) State credit must be taken first.--
``(A) No credit shall be allowed to a taxpayer
under this section for a taxable year unless, for the
taxable year, the taxpayer is allowed on the taxpayer's
State tax return the minimum State qualified
scholarship tax credit (as defined in section 3 of the
Children's Hope Act of 2011).
``(B) 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 credit.
``(d) Special Rules.--
``(1) 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 section.
``(2) Time when contributions deemed made.--For purposes of
this section, 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 (not including extensions thereof).''.
(b) Scholarships From Education Investment Organizations Excluded
From Income.--Section 74 of such Code (relating to prizes and awards)
is amended by adding at the end the following new subsection:
``(d) Scholarships From Education Investment Organizations.--Gross
income does not include amounts received as a scholarship from an
education investment organization (as defined in section 30E(c)(2)) for
qualified elementary and secondary education expenses (as defined in
section 30E(c)(3)). Such scholarship shall not be taken into account
for purposes of determining eligibility for any Federal program.''.
(c) Clerical Amendment.--The table of sections for such subpart B
is amended by inserting after the item relating to section 30D the
following new item:
``Sec. 30E. Contributions to education investment organizations.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2010.
SEC. 3. FEDERAL SCHOLARSHIP TAX CREDIT CONDITIONED ON STATE QUALIFIED
SCHOLARSHIP TAX CREDIT.
(a) In General.--For purposes of section 30E(c)(4) of the Internal
Revenue Code of 1986 (as added by section 2 of this Act), a scholarship
tax credit shall not be treated as a State qualified scholarship tax
credit unless the requirements of subsection (b) are met.
(b) Requirements Relating to State Qualified Scholarship Tax
Credit.--
(1) In general.--For purposes of subsection (a), the
requirements of this subsection are met only if--
(A) the tax credit is for an amount of not less
than $250 per taxpayer and is allowed against the State
income tax (property tax for those States that don't
have income tax) for the amount of voluntary cash
contributions made by the taxpayer during the taxable
year to a school tuition organization described in
paragraph (2),
(B) the excess of such credit over tax liability
may be carried forward for not more than five years,
(C) the taxpayer does not require, as a condition
of the contribution, that the contribution must benefit
a specific child, and
(D) such credit is not allowable for direct
donations to private schools.
(2) School tuition organization.--For purposes of paragraph
(1), a school tuition organization is described in this
paragraph if such organization--
(A) is an organization operating in the State and
is described in section 501(c)(3), and is exempt from
tax under section 501(a), of the Internal Revenue Code
of 1986,
(B) expends at least 90 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
parents, and
(C) disburses at least 90 percent of its annual
cash contributions within one year of their receipt.
(3) Qualified school.--For purposes of paragraph (2), 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
race, color, handicap, familial status, or national origin and
that satisfies the requirements prescribed by State law for
such schools as of December 31, 2010.
(4) 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 (as defined in section 30E(c)(3)
of the Internal Revenue Code of 1986).
(c) State.--For purposes of this section, the term ``State'' means
any of the several States.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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