House Bill 87, titled the Educational Choice for Children Act (ECCA), makes North Carolina opt in to a new federal tax credit under section 25F of the Internal Revenue Code for individuals who contribute to qualifying scholarship granting organizations. The bill directs the State Education Assistance Authority (SEAA) to identify, certify, submit, and publish a list of eligible scholarship granting organizations located in North Carolina, and to coordinate with other state agencies, including the Department of Revenue, as needed to administer the program.
The bill also requires the SEAA to comply with federal regulations so North Carolina can participate beginning with taxable years after December 31, 2026. It authorizes the SEAA to adopt rules by July 1, 2026, or within 120 days after federal regulations are published, whichever is later. Qualifying organizations on the list may use contributions to provide scholarships for qualified elementary and secondary education expenses, including home school expenses, to the extent allowed by federal law.
Impact
H87 amends Chapter 116 of the General Statutes by expanding the powers of the State Education Assistance Authority and creating a new part governing state compliance with the federal scholarship tax credit. It establishes a state process for identifying eligible scholarship granting organizations, publishing the list publicly, and certifying the state’s authority to the U.S. Treasury. The practical effect is to create the state-level administrative framework needed for North Carolina residents to claim the federal tax credit for donations to approved scholarship organizations, while also opening the door for scholarships to support private school and home school expenses where federal law permits.
Sentiment
The bill appears to have broad support for its general goal of expanding educational choice, as reflected in the strong early House vote margins and final concurrence vote. At the same time, the voting history shows meaningful opposition and repeated attempts to amend or table amendments, suggesting the measure was politically significant and contested. Overall, the sentiment in the recorded votes is favorable but not unanimous, with supporters prevailing on the core bill and opponents remaining organized enough to force multiple recorded votes.
Contention
The main points of contention likely centered on the creation of a state-administered pathway for private scholarship donations tied to school choice, including whether the state should participate in the federal tax credit at all and how broadly scholarship funds could be used. The repeated amendment votes and motions to table amendments indicate disagreement over the bill’s details and scope, even though the final version passed. Supporters likely viewed the bill as expanding educational opportunity for families, while opponents likely raised concerns about public policy implications for public education, tax administration, and the use of scholarships for nonpublic and home school expenses.
Directs the commissioner of taxation and finance to help entities to elect to participate in the federal tax credit for elementary and secondary scholarships known as the Educational Choice for Children Act of 2025.
"Opportunity Scholarship Act"; establishes pilot program in Department of Treasury providing tax credits to taxpayers contributing to scholarships for low-income children.
"Opportunity Scholarship Act"; establishes pilot program in Department of Treasury providing tax credits to taxpayers contributing to scholarships for low-income children.