Volume cap

(a) In general (1) National Cap For purposes of sections 25F(b)(2) and 45BB(e) of the Internal Revenue Code of 1986 (as added by this Act), the volume cap applicable under this section shall be $10,000,000,000 for calendar year 2026 and each subsequent year thereafter. (2) Allocation of cap (A) In general For each calendar year, the Secretary shall, from the amount allotted under paragraph (1)— (i) subject to subparagraph (C), first reserve, for each State, an amount equal to the sum of the qualifying contributions designated under paragraph (4) with respect to such State in the preceding year; and (ii) next, allocate the remaining amount among the States by allocating to each State the sum of— (I) 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 (in coordination with 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 (II) 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 (in coordination with 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. (B) Minimum allocation Notwithstanding subparagraph (A), no State receiving an allotment under this section may receive less than one-half of one percent of the amount allotted for a calendar year. (C) Initial year For purposes of the first calendar year with respect to which this section applies, the amount allocated to each State under this paragraph shall be determined without respect to subparagraph (A)(i). (3) Allocation and adjustments (A) Initial allocation to States No later than November 1 of the year preceding a year for which there is a volume cap on credits under paragraph (1) (hereafter in this section, the applicable year), or as early as practicable with respect to the first year, the Secretary shall announce the State allocations under paragraph (2) for the applicable year. (B) Reallocation of unclaimed credits On or after July 31 of any applicable year, the Secretary shall— (i) make available any amounts of the volume cap which were allocated to States under paragraph (2) and which have not been claimed; and (ii) allocate such amounts on a first-come, first-serve basis, as determined based on the time (during such calendar year) at which the taxpayer made the qualified contribution with respect to which the allocation is made. (4) Designation by taxpayer (A) In general For purposes of determining the amount of the volume cap allocated to a State under paragraph (2) for any calendar year which has been claimed by taxpayers, the Secretary shall— (i) as part of the system described in subsection (c), require each taxpayer making a qualified contribution to designate the distribution State with respect to such contribution; and (ii) for each State which an allocation has been made under paragraph (2), ensure that the total amount of qualified contributions designated with respect to such State pursuant to clause (i) during such calendar year does not exceed the amount of the volume cap allocated to a State for such calendar year. (B) Binding on scholarship granting organization The designation by the taxpayer of the distribution State pursuant to subparagraph (A)(i) shall be binding on the scholarship granting organization for purposes of any distribution of the qualified contribution made by such taxpayer. (C) Distribution State For purposes of this section, the term distribution State means the State for which the scholarship granting organization shall, pursuant to the requirements under section 4969 of the Internal Revenue Code of 1986, be required to make distributions with respect to eligible students residing in such State. (D) Exception for administrative expenses The requirements applicable to a scholarship granting organization under subparagraphs (B) and (C) shall not apply to such portion of the qualified contributions received by such organization that are used for administrative purposes (as described in section 4969(c)(1)(B) of the Internal Revenue Code of 1986). (b) Annual increases (1) In general In the case of the calendar year after a high use calendar year, the dollar amount otherwise in effect under subsection (a) for such calendar year shall be equal to 105 percent of the dollar amount in effect for such high use calendar year. (2) High use calendar year For purposes of this subsection, the term high use calendar year means any calendar year for which 90 percent or more of the volume cap in effect for such calendar year under subsection (a) is allocated to taxpayers. (3) Prevention of decreases in annual volume cap The volume cap in effect under subsection (a) for any calendar year shall not be less than the volume cap in effect under such subsection for the preceding calendar year. (4) Publication of annual volume cap The Secretary shall make publicly available the dollar amount of the volume cap in effect under subsection (a) for each calendar year. (c) Real-Time information For purposes of this section, the Secretary 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 25F or 45BB of the Internal Revenue Code of 1986, with such information to be updated in real time. (d) Definition For purposes of this section, the term Secretary means the Secretary of the Treasury (or the Secretary's delegate)