S.Amdt. 4123

SA 4123. Ms. HIRONO submitted an amendment intended to be proposed to
amendment SA 3951 submitted by Ms. Collins and intended to be proposed
to the bill H.R. 4016, making appropriations for the Department of
Defense for the fiscal year ending September 30, 2026, and for other
purposes; which was ordered to lie on the table; as follows:

At the appropriate place, insert the following:
Sec. __. (a) Section 25F of the Internal Revenue Code of
1986 is amended--
(1) in subsection (c), by striking paragraph (1) and
inserting the following:
``(1) Covered state.--
``(A) In general.--The term `covered State' means one of
the States, or the District of Columbia, that--
``(i) for a calendar year, voluntarily elects to
participate under this section and to identify scholarship
granting organizations in the State, in accordance with
subsection (g), and

[[Page S8929]]

``(ii) as applicable, agrees to make any payments described
in subparagraph (C) to the Secretary.
``(B) Exception for fraud.--The term `covered State' shall
not include any State that, for the preceding calendar year,
had identified a scholarship granting organization under
subsection (g) that, pursuant to an investigation described
in subsection (h)(2)(A), was subsequently determined by the
Treasury Inspector General for Tax Administration to have
committed fraud.
``(C) Clawback.--In the case of a State described in
subparagraph (B), the State shall make payment to the
Secretary in an amount equal to the total amount of qualified
contributions received by the scholarship granting
organization described in such subparagraph during any
calendar year in which the Treasury Inspector General for Tax
Administration has determined that such organization
committed fraud.'',
(2) by redesignating subsection (h) as subsection (i), and
(3) by inserting after subsection (g) the following new
subsection:
``(h) Review by Treasury Inspector General for Tax
Administration.--
``(1) Reports.--The Treasury Inspector General for Tax
Administration shall annually submit a report to the
applicable Congressional committees detailing the amount of
qualified contributions that each scholarship granting
organization in each State received during the preceding
calendar year pursuant to this section.
``(2) Investigations.--The Treasury Inspector General for
Tax Administration shall--
``(A) investigate cases of fraud committed by scholarship
granting organizations (including employees of such
organizations) that have received qualified contributions
pursuant to this section, and
``(B) annually submit a report to the applicable
Congressional committees regarding the cases described in
subparagraph (A).
``(3) Applicable congressional committees.--For purposes of
this subsection, the term `applicable Congressional
committees' means--
``(A) the Committees on Finance and Health, Education,
Labor, and Pensions of the Senate, and
``(B) the Committees on Ways and Means and Education and
the Workforce of the House of Representatives.''.
(b) The amendments made by subsection (a) shall apply to
taxable years beginning after December 31, 2026.
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