ACR 229

Introduced by Assembly Member Hoover
(Coauthors: Assembly Members Castillo, Hadwick, and Sanchez)
 Relative to the federal Education Freedom Tax Credit.
the federal Education Freedom Tax Credit
Federal Education Freedom Tax Credit.
This measure would urge Governor Gavin Newsom to exercise his executive authority to promptly submit California’s election to participate in the federal Education Freedom Tax Credit program, as provided.
WHEREAS, The federal Education Freedom Tax Credit, established in Section 70411 of Public Law 119-21 and codified in Section 25F of Title 26 of the United States Code, provides a nonrefundable dollar-for-dollar federal tax credit of up to $1,700 per individual taxpayer (with carryforward for up to five years) for cash contributions to qualifying scholarship granting organizations (SGOs); and
WHEREAS, This program enables SGOs to award scholarships to K–12 pupils from households with income up to 300 percent of the area median income, covering approximately 90 percent of pupils nationwide, for qualified educational expenses, including tuition, tutoring, textbooks, supplies, transportation, technology, and special education services; and
WHEREAS, California’s public K–12 schools serve approximately 5,800,000 pupils, with roughly 64 percent identified as socioeconomically disadvantaged; and
WHEREAS, Participation in this program would provide critical additional resources to California families, particularly low- and middle-income households, without any cost to state taxpayers or reduction in public school funding; and
WHEREAS, Data from similar state-level tax credit scholarship programs demonstrates substantial increases in private donations to SGOs and expanded scholarship opportunities for pupils. Nationally, the federal Education Freedom Tax Credit is projected to generate billions of dollars in new scholarship funding annually, with every $1 billion potentially supporting tuition for approximately 77,000 pupils or tutoring for more than 300,000 pupils; and
WHEREAS, Analysis indicates that if California opts in, the state could access up to $4.91 billion in scholarship contributions between 2027 and 2029 alone, directly benefiting hundreds of thousands of California pupils and families; and
WHEREAS, Failure to opt in risks a significant decline in donations to California-based SGOs, as taxpayers nationwide can still claim the federal tax credit, but will direct contributions to SGOs in participating states, resulting in scholarship funds flowing out of California to benefit pupils elsewhere; and
WHEREAS, As of June 2026, 30 or more states have already opted in to the program, positioning their pupils to receive these new scholarship resources while California pupils stand to lose out without swift action. Participating states include Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New York, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming; now, therefore, be it
 Resolved by the Assembly of the State of California, the Senate thereof concurring,  That the Legislature urges Governor Gavin Newsom to exercise his executive authority to promptly submit California’s election to participate in the federal Education Freedom Tax Credit program of the United States Department of the Treasury and the United States Internal Revenue Service, including the annual submission of a list of qualifying California SGOs that meet all federal requirements; and be it further
 Resolved,  That the Legislature urges the Governor and relevant state agencies to take all necessary steps to designate and approve qualifying SGOs and ensure full compliance with federal guidelines so that California families can benefit starting January 1, 2027; and be it further
 Resolved,  That the Chief Clerk of the Assembly transmit copies of this resolution to the Governor of California, the Superintendent of Public Instruction, each member of the California congressional delegation, and to the author for appropriate distribution.