Bill Text: PA HB1679 | 2011-2012 | Regular Session | Introduced

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Bill Title: Providing for educational choice, for opportunity scholarships and for educational improvement tax credit; and repealing provisions of the Tax Reform Code of 1971 relating to educational improvement tax credit.

Spectrum: Partisan Bill (Republican 13-0)

Status: (Introduced - Dead) 2011-06-25 - Referred to EDUCATION [HB1679 Detail]

Download: Pennsylvania-2011-HB1679-Introduced.html

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PRINTER'S NO. 2210
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1679 Session of2011
INTRODUCED BY SCHRODER, BLOOM, CHRISTIANA, COX, DENLINGER, EVERETT, GINGRICH, HENNESSEY, KILLION, METCALFE, RAPP AND SWANGER, JUNE 25, 2011
REFERRED TO COMMITTEE ON EDUCATION, JUNE 25, 2011
AN ACT
Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
act relating to the public school system, including certain
provisions applicable as well to private and parochial
schools; amending, revising, consolidating and changing the
laws relating thereto," providing for educational choice, for
opportunity scholarships and for educational improvement tax
credit; and repealing provisions of the Tax Reform Code of
1971 relating to educational improvement tax credit.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 10, 1949 (P.L.30, No.14), known
as the Public School Code of 1949, is amended by adding a
section to read:
Section 1310.2. Educational Choice.
Beginning with the school year 2011-2012, every public school
student in this Commonwealth shall be permitted to attend the
public school selected by the student's parents, unless:
(1) the public school selected has no additional attendance
slots available and the district so notifies the Department of
Education and the student within time limitations established by
the Department of Education for this purpose;
(2) the student's attendance would place either the
receiving school district or the student's district of residence
in violation of a valid and binding desegregation order;
(3) the public school requested does not offer appropriate
programs or is not structured or equipped with the necessary
facilities to meet the special needs of the student or does not
offer a particular program requested;
(4) the student has been expelled or is in the process of
being expelled pursuant to section 1318 and applicable
regulations of the State Board of Education; or
(5) the student does not meet the established eligibility
criteria for participation in magnet schools or in schools with
specialized academic missions.
Section 2. The act is amended by adding an article to read:
ARTICLE XXV-B
OPPORTUNITY SCHOLARSHIPS AND
EDUCATIONAL IMPROVEMENT TAX CREDIT
(a) Preliminary Provisions
Section 2501-B. Short title.
This article shall be known and may be cited as the
Opportunity Scholarship and Educational Improvement Tax Credit
Act.
(b) Opportunity Scholarships
Section 2501.1-B. Legislative findings.
The General Assembly finds that:
(1) Pursuant to section 14 of Article III of the
Constitution of Pennsylvania, the General Assembly has the
responsibility to provide for the maintenance and support of
a thorough and efficient system of public education to serve
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the needs of this Commonwealth.
(2) Parents are best suited to choose the most
appropriate means of education for their school-age children.
(3) Providing diverse educational opportunities for the
children of this Commonwealth is a civic and civil rights
imperative and a matter of serious concern.
(4) The importance of providing educational choices that
will meet the needs of parents, and the need to maintain and
support an effective system of education, make it imperative
to provide for the increased availability of diverse
opportunities, including both public and nonpublic programs
of education, to benefit all citizens of this Commonwealth.
(5) Public schools are the foundation of the system of
education in this Commonwealth. Further, Pennsylvania's
longstanding tradition of local control of public education
allows communities to adapt their public school programs to
meet local needs. For these reasons, a robust program of
interdistrict school choice is a critical means of providing
families with increased educational options within the
traditional public school system.
(6) The accessibility to families of nonpublic
educational alternatives decreases the burden on the
Commonwealth and local school districts and increases the
range of educational choices available to Pennsylvania
families, thus providing a benefit to all citizens of this
Commonwealth.
(7) It is the intent of the General Assembly to offer
assistance to all families in this Commonwealth, so as to
provide every child in this Commonwealth with diverse
educational opportunities and options.
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(8) The programs of educational choice provided in this
subarticle are elements of an overall program of providing
funds to increase the availability of educational
opportunities for school-age children in this Commonwealth.
(9) A comparatively far greater proportion of public
funds are and, upon implementation of an educational choice
program, will continue to be devoted to the benefit of
children enrolled in the public schools of this Commonwealth.
Therefore, an opportunity scholarship program that offers
assistance to parents who choose to enroll their children in
participating nonpublic schools should be viewed as an
integral part of the Commonwealth's overall program of
educational funding and not as an isolated individual
program.
(10) A program of financial assistance to enhance
educational choice in this Commonwealth, as one element of
the Commonwealth's plan for the funding of diverse
educational opportunities for the citizens of this
Commonwealth, will better prepare Commonwealth citizens to
compete for employment opportunities, will foster development
of a more capable and better-educated work force and will
better enable the Commonwealth to fulfill its obligation of
providing children with the opportunity to receive a quality
education.
Section 2502-B. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Assessment." The Pennsylvania System of School Assessment
test, the Keystone Exam, an equivalent local assessment or
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another test established by the State Board of Education to meet
the requirements of section 2603-B(d)(10)(i) and required under
the No Child Left Behind Act of 2001 (Public Law 107-110, 115
Stat. 1425) or its successor Federal statute or required to
achieve other standards established by the department for the
public school or school district under 22 Pa. Code § 403.3
(relating to single accountability system).
"Average daily membership." A school district's average
daily membership as defined in section 2501(3).
"Board." The Education Opportunity Board established under
this subarticle.
"Department." The Department of Education of the
Commonwealth.
"Kindergarten." A one-year formal kindergarten program that
occurs during the school year immediately prior to first grade.
"Local scholarship." A scholarship that is both:
(1) Funded by the local revenues of a child's resident
school district in an amount equal to at least 35% of the
school district's share of its total revenue per average
daily membership.
(2) Applied toward the child's tuition to attend a
nonresident public school.
"Nonpublic school." A school, other than a public school,
located within this Commonwealth where a Commonwealth resident
may legally fulfill the compulsory school attendance
requirements of this act and that meets the applicable
requirements of Title VI of the Civil Rights Act of 1964 (Public
law 88-352, 78 Stat. 241). The term also includes a full-time or
part-time kindergarten program operated by a nonpublic school.
"Nonresident public school." A public school outside a
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child's resident school district.
"Nonresident school district." A school district other than
the school district in which a school-age child resides.
"Nonresident student." A school-age child attending a public
school outside the child's resident school district.
"Opportunity scholarship." An opportunity scholarship
awarded to a child under this subarticle to pay tuition for the
child to attend a nonresident public school or a participating
nonpublic school.
"Opportunity scholarship program" or "program." The
opportunity scholarship program established under this
subarticle.
"Opportunity scholarship recipient." A child who is awarded
an opportunity scholarship under this subarticle.
"Parent." A Commonwealth resident who is a parent or
guardian of a school-age child.
"Participating nonpublic school." A nonpublic school located
in this Commonwealth and offering a program of instruction for
kindergarten through 12th grade, or a combination of grades,
that certifies to the board under section 2505-B that it meets
the following criteria:
(1) the nonpublic school is a nonprofit entity that is
exempt from Federal taxation under section 501(c)(3) of the
Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
1 et seq.);
(2) the nonpublic school does not discriminate in its
admission policies or practices for opportunity scholarship
applicants on the basis of measures of achievement or
aptitude or status as a handicapped person, provided,
however, that an applicant may be required to meet
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established eligibility criteria for participation in magnet
schools or in schools with specialized academic missions; and
(3) the nonpublic school is in full compliance with all
Federal and State laws applicable to nonpublic schools on the
date prior to the effective date of this section.
"Persistently lowest achieving school." A public elementary
or secondary school within this Commonwealth that is among the
lowest performing 5% of schools. To determine the lowest
performing 5% of schools, the department shall:
(1) consider all public schools in this Commonwealth,
with the exception of charter schools, cyber charter schools,
area vocational-technical schools, schools that do not draw
their student body from a particular attendance boundary and
schools with specialized academic programs with specific
admissions criteria;
(2) exclude schools that have made adequate yearly
progress or were determined to be making progress for at
least one of the two most recent school years or that have
not been measured for adequate yearly progress in one of the
two most recent school years;
(3) rank all remaining schools based upon their
performance on the most recent assessment for which data is
posted on the department's publicly accessible Internet
website; and
(4) include the lowest-performing 144 schools ranked
under paragraph (3) on a list of persistently lowest-
achieving schools.
"Resident school district." The school district in which a
school-age child resides.
"School-age child." A child enrolling in kindergarten or in
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grades 1 through 12.
"Student with a disability." A school-age child who has been
identified, in accordance with 22 Pa. Code Ch. 14 (relating to
special education services and programs), as a "child with a
disability," as defined in 34 CFR § 300.8 (relating to a child
with a disability).
"Total revenue per average daily membership." A school
district's total revenue per average daily membership minus the
amount of reimbursement to the school district for pupil
transportation under sections 2509.3 and 2541.
Section 2503-B. Opportunity scholarship program.
(a) Establishment.--Beginning with the 2011-2012 school
year, the opportunity scholarship program shall be established
to provide scholarships to help children pay tuition to attend a
nonresident public school or a participating nonpublic school.
(b) Eligibility.--During the 2011-2012 school year, the
opportunity scholarship program shall be available to children
who satisfy both of the following:
(1) Either attended a persistently lowest achieving
school during the 2010-2011 school year or will be a
kindergarten student during the 2011-2012 school year in a
persistently lowest achieving school.
(2) Will reside within the attendance boundary of a
persistently lowest achieving school as of the first day of
classes of the 2011-2012 school year.
(3) (i) During the 2013-2014 school year and each
school year thereafter, the opportunity scholarship
program shall be available to all school-age children
residing in this Commonwealth, provided that the
aggregate amount of all opportunity scholarships awarded
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for the 2013-2014 school year and for each school year
thereafter to children who do not reside within the
attendance boundary of a persistently lowest achieving
school as of the first day of classes of the school year
shall not exceed $2,000,000,000.
(ii) Nothing in this paragraph shall be construed to
limit the amount of opportunity scholarships awarded to
children who were eligible for opportunity scholarships
in the 2011-2012 and 2012-2013 school years or who reside
within the attendance boundary of a persistently lowest
achieving school as of the first day of classes of a
school year.
(c) List of persistently lowest achieving schools to be
published.--By April 1, 2011, and by February 1 of each year
thereafter, the department shall publish on the department's
publicly accessible Internet website and in the Pennsylvania
Bulletin a list of persistently lowest achieving schools that
will be in effect for purposes of this subarticle for the
following school year. The department shall publish the list
based upon the most recent school year for which data is
available.
(d) Notice.--
(1) For each school year, by a date established by the
department, each school district in this Commonwealth shall
post on its publicly accessible Internet website notice of
the following:
(i) A description of the opportunity scholarship
program.
(ii) Instructions for applying for an opportunity
scholarship.
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(iii) Instructions for applying for a local
scholarship where the school district has elected to
provide a local scholarship under section 2504-B(b).
(iv) A statement as to whether any schools in the
school district have been designated by the department as
persistently lowest achieving schools.
(v) Notice that a parent must contact directly the
nonresident public school or participating nonpublic
school in which the parent's child seeks to enroll for
application instructions.
(2) The notice shall be in a form provided by the
department.
Section 2504-B. Opportunity scholarship to attend a nonresident
public school.
(a) Eligibility.--A child who is eligible to participate in
the opportunity scholarship program may receive an opportunity
scholarship to pay tuition to attend a nonresident public school
that accepts a child's enrollment application under subsection
(d).
(b) Local scholarship.--A school district may elect to
provide a local scholarship to children residing within the
school district to pay tuition to attend a nonresident public
school that accepts a child's enrollment application under
subsection (d). A school district that elects to provide a local
scholarship shall:
(1) By a date established by the department, notify all
residents of the school district of the availability and
amount of the local scholarship for the following school year
and the process by which a child may apply to the department
to receive the opportunity and local scholarships. The school
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district shall post the notice on the school district's
publicly accessible Internet website. The notice may be
incorporated into the notice the school district is required
to provide under section 2503-B(d).
(2) By a date established by the department, notify the
department of the availability and amount of the local
scholarship for the following school year.
(3) When directed to do so by the board, pay to the
department the local scholarship for each child residing in
the district who the department determines to be eligible for
the local scholarship and who the department confirms has
enrolled in a nonresident public school.
(4) Comply with all guidelines developed by the
department under section 2509-B.
(c) Application for opportunity and local scholarships.--
(1) By a date established by the department and pursuant
to guidelines developed by the department under section
2509.1-B, the parent of a child may apply to the department:
(i) For an opportunity scholarship for the following
school year.
(ii) For a local scholarship for the following
school year, where the child's resident school district
has elected to provide a local scholarship under
subsection (b).
(2) By a date established by the department, the board
shall notify parents whether the scholarships for which the
student applied will be awarded for the following school
year.
(d) Application for enrollment in a nonresident public
school.--
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(1) By a date established by the department, the parent
of a child who has been awarded a scholarship under
subsection (c) may apply to one or more nonresident public
schools for enrollment of the child for the following school
year. The application shall be on a form provided by the
nonresident school district.
(2) (i) By a date established by the department, the
nonresident school district shall provide written notice
to the parent and the department as to whether the child
will be offered enrollment in the requested nonresident
public school for the following school year.
(ii) By a date established by the department, the
parent must provide written notice to the department, the
resident school district and the nonresident school
district whether the offer of enrollment will be
accepted.
(iii) By a date established by the department, the
department shall provide the resident school district and
the nonresident school district with written confirmation
of the opportunity scholarship recipient's enrollment in
the nonresident school district.
(iv) If the child is not enrolled in a nonresident
public school, the child's resident school district shall
determine the public school within the resident school
district to which the child will be assigned.
(3) (i) Each school district shall develop guidelines
setting forth the terms and conditions under which it
will enroll nonresident students receiving opportunity
and local scholarships and shall develop an enrollment
application form and process.
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(ii) The guidelines may provide for the denial on
enrollment based on specific, reasonable operational
limitations that have been reviewed and preapproved by
the department.
(4) A school district that enrolls nonresident students
receiving opportunity and local scholarships must enroll such
nonresident students on a random basis from a pool of
applicants who meet the application deadline established by
the department, provided that:
(i) the nonresident student's enrollment in the
nonresident school district would not place either the
nonresident school district or the resident school
district in violation of a valid and binding
desegregation order;
(ii) the nonresident student has not been expelled
nor is the nonresident student in the process of being
expelled under section 1317.2 or 1318 and applicable
regulations of the State Board of Education;
(iii) the nonresident student has not been recruited
by the school district or its representatives for
athletic purposes;
(iv) the nonresident student meets the established
eligibility criteria for participation in a magnet school
or in a public school with a specialized academic
mission; or
(v) the guidelines developed by the school district
are satisfied.
(5) A nonresident school district may give priority in
enrollment to a nonresident student who has been awarded a
local scholarship.
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(e) Commonwealth payments.--The Commonwealth shall make
payment pursuant to the schedule contained in section 2517 to
each school district or area vocational-technical school that
accepts a nonresident student under the provisions of this
subarticle subject to the following terms and conditions:
(1) The Commonwealth shall pay to each school district
or area vocational-technical school that accepts a
nonresident student, on a tuition basis, the amount
determined under section 2506-B.
(2) (i) For a nonresident student who is an opportunity
scholarship recipient and defined as a "student with a
disability," services provided to the opportunity
scholarship recipient shall be charged against the
Commonwealth's special education subsidy to the resident
school district, provided that the resident school
district shall not be charged more for services provided
to the opportunity scholarship recipient by the
nonresident school district than the difference between
the current year cost of the services had the opportunity
scholarship recipient remained in the resident school
district and the sum of the opportunity scholarship, the
local scholarship and the per pupil special education
funding following the opportunity scholarship recipient.
(ii) The resident school district shall provide the
department with documentation of the prior year's cost of
services provided to the opportunity scholarship
recipient and an estimate of the cost of providing those
services in the current year had the opportunity
scholarship recipient remained in the resident school
district. Any cost not covered by this funding shall be
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borne by the nonresident school district enrolling the
opportunity scholarship recipient.
(3) An opportunity scholarship recipient shall be
included in the average daily membership of the opportunity
scholarship recipient's resident school district.
(4) In the event an opportunity scholarship recipient
withdraws from a nonresident school district prior to the
completion of the school year, the following shall apply:
(i) The nonresident school district shall, within 15
days of the opportunity scholarship recipient's
withdrawal from the nonresident school district, provide
the department with written notice of the opportunity
scholarship recipient's withdrawal from the nonresident
school district.
(ii) The resident school district, nonresident
school district or participating nonpublic school in
which the opportunity scholarship recipient subsequently
enrolls shall notify the department within five days of
the opportunity scholarship recipient's enrollment.
(iii) Within 30 days after receiving the notice
required under subparagraph (ii), the department shall do
the following:
(A) If the opportunity scholarship recipient
enrolls in the resident school district or a
nonresident school district, pay the resident school
district or nonresident school district the full
amount of the opportunity scholarship payment reduced
on a pro rata basis for the portion of the school
year in which the opportunity scholarship recipient
was enrolled in another school.
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(B) If the opportunity scholarship recipient
enrolls in a participating nonpublic school, pay the
opportunity scholarship recipient's parent the full
amount of the opportunity scholarship payment reduced
on a pro rata basis for the portion of the school
year in which the opportunity scholarship recipient
was enrolled in another school. Such payment shall be
made to the parents of the opportunity scholarship
recipient pursuant to the provisions of section
2505-B(b).
(f) Limitation.--The tuition charged by a nonresident school
district to an opportunity scholarship recipient under this
subarticle shall not exceed the sum of the opportunity
scholarship and the local scholarship, if applicable, awarded to
the opportunity scholarship recipient.
(g) Transportation.--
(1) Notwithstanding any provisions of section 1361 to
the contrary, a school district that provides its resident
public school pupils with transportation to and from the
resident public schools or to and from any points within or
without this Commonwealth in order to provide field trips
under section 1361 shall provide a student who resides within
the school district but regularly attends a nonresident
public school, including a charter school, that is located
not more than ten miles from the student's resident school
district by the nearest public highway, with transportation
to and from such nonresident public school or to and from any
points within or without this Commonwealth in order to
provide field trips under section 1361.
(2) Transportation of a student under this subsection
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shall be subject to reimbursement under section 2541.
Section 2505-B. Opportunity scholarship to attend a
participating nonpublic school.
(a) Eligibility.--The parent of a child who is eligible to
receive an opportunity scholarship under section 2503-B and
desires to apply for an opportunity scholarship to attend a
participating nonpublic school must:
(1) By a date established by the department, apply to
the department for an opportunity scholarship for the
following school year pursuant to guidelines developed by the
department under section 2509-B. By a date established by the
department, the department shall notify parents whether the
opportunity scholarship will be awarded for the following
school year.
(2) Apply for enrollment directly to the participating
nonpublic school pursuant to application procedures developed
by the participating nonpublic school. By a date established
by the department, a participating nonpublic school shall
provide written confirmation to the department of each
opportunity scholarship recipient whose application for
enrollment has been accepted for the following school year.
By a date established by the department, the department shall
provide the opportunity scholarship recipient's resident
school district with written confirmation of the opportunity
scholarship recipient's enrollment in the participating
nonpublic school.
(b) Payment of opportunity scholarship awards.--The
Commonwealth shall provide payment of an opportunity scholarship
to the parents of each opportunity scholarship recipient who is
enrolled in a participating nonpublic school under the
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provisions of this subarticle subject to the following terms and
conditions:
(1) Opportunity scholarships shall be awarded only for
the payment of costs of tuition at a participating nonpublic
school within this Commonwealth. Opportunity scholarships
shall not be awarded for enrollment in a home education
program provided under section 1327.1.
(2) Opportunity scholarships shall be paid to the
parents of an opportunity scholarship recipient upon the
department's receipt of written confirmation of enrollment
from the participating nonpublic school selected by the
recipient. The opportunity scholarship award shall be paid by
check which may be endorsed by the parents only for payment
of tuition at the participating nonpublic school at which the
opportunity scholarship recipient's enrollment has been
confirmed.
(3) In the event an opportunity scholarship recipient
withdraws from a participating nonpublic school prior to the
completion of the school year, the following shall apply:
(i) The participating nonpublic school shall, within
15 days of the opportunity scholarship recipient's
withdrawal from the participating nonpublic school:
(A) Provide the department with written notice
of the opportunity scholarship recipient's withdrawal
from the participating nonpublic school.
(B) Return to the department the full amount of
the opportunity scholarship payment reduced on a pro
rata basis by the tuition for the portion of the
school year in which the opportunity scholarship
recipient was enrolled.
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(ii) If the participating nonpublic school fails to
submit to the department the amount required to be paid
under subparagraph (i), the department shall impose
interest on the unpaid amount, calculated from the due
date at the rate determined by the Secretary of Revenue
for interest payments on overdue taxes or the refund of
taxes as provided in sections 806 and 806.1 of the act of
April 9, 1929 (P.L.343, No.176), known as The Fiscal
Code.
(iii) If the opportunity scholarship recipient
enrolls in another participating nonpublic school within
the school year for which the opportunity scholarship was
awarded, the department shall pay the parent of the
opportunity scholarship recipient the opportunity
scholarship award prorated for the remaining portion of
the school year.
(4) In the event an opportunity scholarship recipient is
expelled from a participating nonpublic school prior to the
completion of the school year and the opportunity scholarship
recipient subsequently enrolls in his resident school
district, the department shall pay the resident school
district the opportunity scholarship award prorated for the
remaining portion of the school year. The resident school
district shall apply this amount toward providing educational
services for the opportunity scholarship recipient, which may
include, but shall not be limited to, an alternative
assignment or alternative education services.
(b.1) Penalties.--
(1) Each opportunity scholarship check issued under this
section shall contain the following statement:
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"Failure to endorse this check as directed by the
Department of Education may subject the endorser to
civil penalties and criminal prosecution."
(2) A parent's endorsement or use of an opportunity
scholarship check in a manner other than as directed by the
department may subject the parent to the following penalties:
(i) A civil penalty equal to 300% of the full amount
of the annual opportunity scholarship award made to the
parent.
(ii) Disqualification from future eligibility for an
opportunity scholarship.
(iii) Criminal prosecution.
(c) Enrollment requirements.--The following shall apply to a
participating nonpublic school which admits an opportunity
scholarship recipient:
(1) The participating nonpublic school shall not
discriminate on any basis that is illegal under Federal or
State laws applicable to nonpublic schools on the date prior
to the effective date of this section.
(2) The participating nonpublic school shall comply with
section 1521, which prohibits discrimination in enrollment on
the basis of race or color.
(3) The participating nonpublic school may not recruit
any public school student to enroll for athletic purposes.
(4) For each school year, by a date established by the
department, a nonpublic school that desires to enroll
opportunity scholarship recipients under this subarticle
shall certify to the department that it satisfies the
definition of "participating nonpublic school" in section
2502-B. Such certification shall be on a form developed by
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the department.
(d) Policies.--Upon request, a participating nonpublic
school shall make available for review by the parents of any
opportunity scholarship recipient seeking enrollment, its
written school policies and procedures related to tuition
charges, admissions, academic offerings and requirements,
discipline, religious instruction, parent involvement,
standardized testing, the release of results of standardized
tests administered by the participating nonpublic school and
extracurricular activities and suspension and expulsion of
students, including educational accommodations and counseling
offered to students and parents.
(e) Assessments.--
(1) (i) Each participating nonpublic school shall
administer annually an assessment or a nationally normed
standardized achievement test in reading/language arts
and mathematics to each opportunity scholarship recipient
attending the participating nonpublic school in grades 3,
5, 8 and 11.
(ii) To comply with this paragraph, a participating
nonpublic school may either administer an assessment or
administer a nationally normed standardized achievement
test chosen by the participating nonpublic school from a
list established under paragraph (2).
(2) The department shall establish a list of at least
eight nationally normed standardized achievement tests from
which the participating nonpublic school shall select a test
to be administered if the participating nonpublic school does
not choose to administer an assessment.
(3) Each participating nonpublic school shall:
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(i) Release each opportunity scholarship recipient's
individual results on the assessment or nationally normed
standardized achievement test administered to opportunity
scholarship recipients under paragraph (1) to the parent
of the opportunity scholarship recipient.
(ii) If the participating nonpublic school has a
publicly accessible Internet website, post on the website
the participating nonpublic school's aggregate results on
the assessment or nationally normed standardized
achievement test administered to opportunity scholarship
recipients under paragraph (1), provided that the
participating nonpublic school shall not post results
that reveal the identity of any individual student.
(4) The participating nonpublic school shall bear the
cost of the testing administered under this subsection and
shall not impose an assessment or testing fee on an
opportunity scholarship recipient.
(f) Construction.--Nothing in this subarticle shall be
construed to:
(1) Prohibit a participating nonpublic school from
limiting admission to a particular grade level, a single
gender or to areas of concentration of the participating
nonpublic school, including, but not limited to, mathematics,
science and the arts.
(2) Empower the Commonwealth or any of its agencies or
officers or political subdivisions to impose any additional
requirements on any participating nonpublic school which are
not otherwise authorized under the laws of this Commonwealth
or to require any participating nonpublic school to enroll
any opportunity scholarship recipient if the participating
20110HB1679PN2210 - 22 -
nonpublic school does not offer appropriate programs or is
not structured or equipped with the necessary facilities to
meet the special needs of the opportunity scholarship
recipient or does not offer a particular program requested.
Section 2506-B. Amount of opportunity scholarship.
(a) Calculation.--
(1) The amount of the opportunity scholarship shall be
$5,000.
(2) In no case shall the combined amount of the
opportunity scholarship award and any additional financial
assistance provided by a participating nonpublic school
exceed the tuition rate for the participating nonpublic
school.
(b) Limitation.--No nonresident public school or
participating nonpublic school may charge an opportunity
scholarship recipient a higher tuition rate than the rate the
nonresident public school or participating nonpublic school
would have charged to a student who had not received an
opportunity scholarship.
(c) (Reserved).
(d) Annual appropriations.--Opportunity scholarships
authorized under this subarticle shall be made from annual
appropriations made by the General Assembly to the department
and moneys available in the fund for that purpose.
(e) Nontaxable.--Opportunity scholarship funds received by a
parent pursuant to this subarticle shall not be considered
taxable income for purposes of any local taxing ordinance or for
purposes of Article III of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, nor shall such
opportunity scholarships constitute financial assistance or
20110HB1679PN2210 - 23 -
appropriations to the participating nonpublic school attended by
the opportunity scholarship recipient.
(f) Continued eligibility.--Subject to subsection (d), a
child enrolled in a nonresident public school or a participating
nonpublic school who received an opportunity scholarship under
this subarticle in the prior school year shall receive an
opportunity scholarship in each school year of enrollment under
the opportunity scholarship program, provided that the child
remains eligible.
(g) Penalties.--Any person who fraudulently submits an
opportunity or local scholarship application or who knowingly
falsifies material information on an opportunity or local
scholarship application shall be subject to the following
penalties:
(1) Imposition by the board of a civil penalty of up to
$1,000.
(2) Prosecution for violation of 18 Pa.C.S. § 4904
(relating to unsworn falsification to authorities).
(3) Disqualification from future participation in the
opportunity scholarship program.
(h) Residence in more than one school district within a
school year.--Where an opportunity scholarship recipient resides
within more than one school district during a school year, the
amount of the opportunity scholarship shall be charged against
each resident school district on a pro rata basis.
Section 2507-B. (Reserved).
Section 2508-B. Reduction in amount of school aid.
Notwithstanding any other provision of law to the contrary,
beginning in the second consecutive school year of enrollment in
a nonresident public school or a participating nonpublic school
20110HB1679PN2210 - 24 -
by an opportunity scholarship recipient who was enrolled in the
recipient's resident school district or in a charter school or
cyber charter school when the recipient first received an
opportunity scholarship under this subarticle, the amount of
Commonwealth basic education funding paid by the department to
the resident school district shall be reduced by an amount equal
to the Commonwealth's share of the school district's total
revenue per average daily membership.
Section 2509-B. Education Opportunity Board.
(a) Establishment.--The Education Opportunity Board is
established within the department. The board shall consist of
three members appointed by the Governor with the advice and
consent of a majority of the members elected to the Senate. The
Governor may appoint no more than two members to the board who
are members of the same political party as the Governor.
(b) Terms of members.--Members of the board shall serve a
term of four years. Vacancies shall be filled for an unexpired
term in the same manner as original appointments. Members shall
continue to serve after the expiration of their term until the
Governor appoints a replacement who is confirmed by a majority
of the members elected to the Senate. All members of the board
must be residents of this Commonwealth.
(c) Chairperson.--The Governor shall annually select a
chairperson from among the membership of the board.
(d) Meetings.--Meetings shall be held at the call of the
chairperson or upon request in writing of a majority of the
board. A majority shall constitute a quorum and a majority of
such quorum shall have the authority to act upon any matter
properly before the board unless otherwise specified in this
subarticle.
20110HB1679PN2210 - 25 -
(e) Compensation prohibited.--Members of the board shall
receive no compensation for their services but shall be
reimbursed for their actual and necessary expenses incurred in
the performance of their official board duties.
(f) Executive director and staff.--
(1) There shall be an executive director of the board
who shall serve as the executive officer and secretary of the
board. The board shall employ and fix the reasonable
compensation of the executive director.
(2) The executive director, with approval of the board,
may employ additional professional and clerical personnel as
may be necessary to carry out the duties and responsibilities
of the board.
(3) The department shall provide adequate funding, space
and equipment to facilitate the activities of the board.
(g) Legal advice and assistance.--The Governor, through his
General Counsel, shall provide such legal advice and assistance
as the board may require.
(h) Powers and duties.--The board shall have the following
powers and duties:
(1) Advise the department concerning the implementation
and administration of the opportunity scholarship, local
scholarship, public school choice demonstration grant and
middle-income scholarship programs.
(2) Approve, by a majority vote, the guidelines
established by the department under section 2507-B.
(3) Prepare a report to be submitted by December 1,
2012, and by December 1 of each year thereafter, to the
chairman and minority chairman of the Education Committee of
the Senate and the chairman and minority chairman of the
20110HB1679PN2210 - 26 -
Education Committee of the House of Representatives
describing the manner in which the board carries out its
powers and duties under this subsection.
(i) Staff.--The department shall provide, from existing
personnel of the department, adequate staffing to facilitate the
responsibilities of the board.
Section 2509.1-B. Powers and duties of department.
The department shall have the following powers and duties:
(1) Establish guidelines for the administration of the
opportunity and local scholarship programs, subject to the
approval of the board, as required under section 2507-B.
(2) Administer the opportunity and local scholarship
application and approval processes.
(3) Develop the opportunity and local scholarship
application form and any other forms necessary to administer
the opportunity and local scholarship programs, including the
notice required to be provided by school districts under
section 2503-B(d).
(4) Review and verify the residence of opportunity and
local scholarship applicants.
(5) Announce the award of opportunity and local
scholarships for the following school year under sections
2504-B(c) and 2505-B(a).
(6) Confirm the enrollment of opportunity scholarship
recipients in nonresident public schools and participating
nonpublic schools and allocate opportunity scholarship funds
to opportunity scholarship recipients.
(7) Make payment of opportunity scholarship awards as
provided in sections 2504-B and 2505-B.
(8) Notify school districts that elect to create a local
20110HB1679PN2210 - 27 -
scholarship when payment must be made under section 2504-
B(b).
(9) Make payment to nonresident public schools of local
scholarships paid to the department under section 2504-B(b)
(3).
(10) Beginning after the first school year of
implementation of the opportunity scholarship program,
prepare a report to be submitted to the Governor and the
General Assembly by December 1 of each year, made available
to the parents of opportunity scholarship recipients and
placed on the department's publicly accessible Internet
website that includes at least the following information for
the prior school year:
(i) The total number of opportunity scholarships
requested.
(ii) The total number and total dollar amount of
opportunity scholarships awarded, in total and
disaggregated by:
(A) Whether the opportunity scholarship
recipient attends a nonresident public school or a
participating nonpublic school.
(B) Grade level of the opportunity scholarship
recipient.
(C) Whether the opportunity scholarship
recipient resides in a school district with at least
one persistently lowest achieving school.
(iii) The administrative costs of the opportunity
scholarship program.
(iv) A listing of nonresident public schools to
which opportunity scholarship funds were disbursed on
20110HB1679PN2210 - 28 -
behalf of opportunity scholarship recipients and the
amount disbursed to each nonresident public school.
(v) A listing of participating nonpublic schools in
which opportunity scholarship recipients enrolled and the
number of opportunity scholarship recipients who enrolled
in each participating nonpublic school.
(vi) The total number and total dollar amount of
local scholarships awarded, disaggregated by the resident
school districts that made the local scholarship awards.
(11) For the 2014-2015 school year and each school year
thereafter, administer and announce the award of public
school choice demonstration grants to eligible school
districts as provided under section 2513-B.
Section 2510-B. Study.
Following the 2014-2015 school year, the department shall
conduct a study of the effectiveness of the opportunity
scholarship program and shall deliver a written report of its
findings, including any recommendations for changes to the
program, to the Governor, the chairman and minority chairman of
the Education Committee of the Senate and the chairman and
minority chairman of the Education Committee of the House of
Representatives by December 31, 2015.
Section 2511-B. (Reserved).
Section 2512-B. Optional local tuition grant program.
A school district may, out of funds received from the
Commonwealth for educational purposes, establish a program of
tuition grants to provide for the education of resident students
who wish to attend a nonresident public school or a
participating nonpublic school on a tuition basis. A student who
receives a tuition grant under this section shall be included in
20110HB1679PN2210 - 29 -
the average daily membership of the student's resident school
district for the purpose of providing basic education funding
and special education funding under Article XXV.
Section 2513-B. Public school choice demonstration grant
program.
(a) Establishment.--A school district may, out of funds
received by the board under section 2506-B(c)(2)(ii)(A) and
available State and local funds, establish a program of tuition
grants to provide for the education of resident students who
wish to attend a nonresident public school.
(b) Limit.--No grant award issued by the board to a school
district under this section shall exceed $500,000.
(c) Procedure.--Grant applications shall only be received,
reviewed and allocated by the board during an annual two-week
grant review process to begin on July 1 and end on July 15 of
each calendar year.
(d) Eligibility.--To be eligible for grants under this
program, the school district shall:
(1) Submit an application to the board at a date to be
determined by the board requesting a public school choice
demonstration grant.
(2) Submit a statement of the amount of the grant
sought, including the estimated number of tuition grants to
be distributed.
(3) Demonstrate a commitment of funds received from both
local sources and the Commonwealth for educational purposes
of at least $3 for every $1 of grant funds issued under
section 2506-B(c)(2)(ii)(A).
(4) Meet any other requirements as set by the board.
(e) Average daily membership.--A student who receives a
20110HB1679PN2210 - 30 -
tuition grant under this section shall be included in the
average daily membership of the student's resident school
district for the purpose of providing basic education funding
and special education funding under Article XXV.
(c) Educational Improvement Tax Credit
Section 2521-B. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Business firm." An entity authorized to do business in this
Commonwealth and subject to taxes imposed under Article III, IV,
VI, VII, VIII, IX or XV of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971. The term includes a
pass-through entity.
"Contribution." A donation of cash, personal property or
services, the value of which is the net cost of the donation to
the donor or the pro rata hourly wage, including benefits, of
the individual performing the services.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Educational improvement organization." A nonprofit entity
which:
(1) is exempt from Federal taxation under section 501(c)
(3) of the Internal Revenue Code of 1986 (Public Law 99-514,
26 U.S.C. § 1 et seq.); and
(2) contributes at least 80% of its annual receipts as
grants to a public school, a chartered school as defined in
section 1376.1 or a private school approved under section
1376 for innovative educational programs.
For purposes of this definition, a nonprofit entity
20110HB1679PN2210 - 31 -
"contributes" its annual cash receipts when it expends or
otherwise irrevocably encumbers those funds for expenditure
during the then current fiscal year of the nonprofit entity or
during the next succeeding fiscal year of the nonprofit entity.
A "nonprofit entity" includes a school district foundation,
public school foundation, charter school foundation or cyber
charter school foundation.
"Eligible prekindergarten student." A student, including an
eligible student with a disability, who is enrolled in a
prekindergarten program and is a member of a household with a
maximum annual household income as increased by the applicable
income allowance.
"Eligible student." A school-age student, including an
eligible student with a disability, who:
(1) is enrolled in a school or a home education program
provided under section 1327.1; and
(2) is a member of a household with a maximum annual
household income as increased by the applicable income
allowance.
"Eligible student with a disability." A prekindergarten
student or a school-age student who meets all of the following:
(1) Is either enrolled in a special education school or
has otherwise been identified, in accordance with 22 Pa. Code
Ch. 14 (relating to special education services and programs),
as a "child with a disability," as defined in 34 CFR § 300.8
(relating to child with a disability).
(2) Needs special education and related services.
(3) Is enrolled in a prekindergarten program or in a
school.
(4) Is a member of a household with a household income
20110HB1679PN2210 - 32 -
of not more than the maximum annual household income.
"Household." An individual living alone or with the
following: a spouse, parent and their unemancipated minor
children, other unemancipated minor children who are related by
blood or marriage or other adults or unemancipated minor
children living in the household who are dependent upon the
individual.
"Household income." All moneys or property received of
whatever nature and from whatever source derived. The term does
not include the following:
(1) Periodic payments for sickness and disability other
than regular wages received during a period of sickness or
disability.
(2) Disability, retirement or other payments arising
under workers' compensation acts, occupational disease acts
and similar legislation by any government.
(3) Payments commonly recognized as old-age or
retirement benefits paid to persons retired from service
after reaching a specific age or after a stated period of
employment.
(4) Payments commonly known as public assistance or
unemployment compensation payments by a governmental agency.
(5) Payments to reimburse actual expenses.
(6) Payments made by employers or labor unions for
programs covering hospitalization, sickness, disability or
death, supplemental unemployment benefits, strike benefits,
Social Security and retirement.
(7) Compensation received by United States servicemen
serving in a combat zone.
"Income allowance."
20110HB1679PN2210 - 33 -
(1) Subject to paragraph (2), the amount of:
(i) Before July 1, 2011, $10,000 for each eligible
student, eligible prekindergarten student and dependent
member of a household.
(ii) After June 30, 2011, through June 30, 2012,
$12,000 for each eligible student, eligible
prekindergarten student and dependent member of a
household.
(iii) After June 30, 2012, through June 30, 2013,
$15,000 for each eligible student, eligible
prekindergarten student and dependent member of a
household.
(2) Beginning July 1, 2013, the Department of Community
and Economic Development shall annually adjust the income
allowance amounts under paragraph (1) to reflect any upward
changes in the Consumer Price Index for All Urban Consumers
for the Pennsylvania, New Jersey, Delaware and Maryland area
in the preceding 12 months and shall immediately submit the
adjusted amounts to the Legislative Reference Bureau for
publication as a notice in the Pennsylvania Bulletin.
"Innovative educational program." An advanced academic or
similar program that is not part of the regular academic program
of a public school but that enhances the curriculum or academic
program of a public school, chartered school as defined in
section 1376.1(a) or private school approved in accordance with
section 1376, or provides prekindergarten programs to public
school students, students of a chartered school as defined in
section 1376.1(a) or students of a private school approved in
accordance with section 1376.
"Maximum annual household income."
20110HB1679PN2210 - 34 -
(1) Except as stated in paragraph (2) and subject to
paragraph (3), the following:
(i) Before July 1, 2011, not more than $50,000.
(ii) After June 30, 2011, through June 30, 2012, not
more than $60,000.
(iii) After June 30, 2012, not more than $75,000.
(2) With respect to an eligible student with a
disability, as calculated by multiplying:
(i) the sum of:
(A) the applicable amount under paragraph (1);
and
(B) the applicable income allowance; by
(ii) the applicable support level factor according
to the following table:
Support Level Support Level Factor
1 1.50
2 2.993
(3) Beginning July 1, 2013, the Department of Community
and Economic Development shall annually adjust the income
amounts under paragraphs (1) and (2) to reflect any upward
changes in the Consumer Price Index for All Urban Consumers
for the Pennsylvania, New Jersey, Delaware and Maryland area
in the preceding 12 months and shall immediately submit the
adjusted amounts to the Legislative Reference Bureau for
publication as a notice in the Pennsylvania Bulletin.
"Pass-through entity." A partnership as defined in section
301(n.0) of the act of March 4, 1971 (P.L.6, No.2), known as the
Tax Reform Code of 1971, a single-member limited liability
company treated as a disregarded entity for Federal income tax
purposes or a Pennsylvania S corporation as defined in section
20110HB1679PN2210 - 35 -
301(n.1) of the Tax Reform Code of 1971.
"Prekindergarten program." A program of instruction for
three-year-old or four-year-old students that utilizes a
curriculum aligned with the curriculum of the school with which
it is affiliated and that provides:
(1) a minimum of two hours of instructional and
developmental activities per day at least 60 days per school
year; or
(2) a minimum of two hours of instructional and
developmental activities per day at least 20 days over the
summer recess.
"Prekindergarten scholarship organization." A nonprofit
entity that:
(1) Either is exempt from Federal taxation under section
501(c)(3) of the Internal Revenue Code of 1986 (Public Law
99-514, 26 U.S.C. § 1 et seq.) or is operated as a separate
segregated fund by a scholarship organization that has been
qualified under section 2522-B.
(2) Contributes at least 80% of its annual cash receipts
to a prekindergarten scholarship program by expending or
otherwise irrevocably encumbering those funds for
distribution during the then current fiscal year of the
organization or during the next succeeding fiscal year of the
organization.
"Prekindergarten scholarship program." A program to provide
tuition to eligible prekindergarten students to attend a
prekindergarten program operated by or in conjunction with a
school located in this Commonwealth and that includes an
application and review process for the purpose of making awards
to eligible prekindergarten students and awards scholarships to
20110HB1679PN2210 - 36 -
eligible prekindergarten students without limiting availability
to only students of one school.
"Program." The educational improvement tax credit program
established by this subarticle.
"Public school." A public prekindergarten where compulsory
attendance requirements do not apply or a public kindergarten,
elementary school or secondary school at which the compulsory
attendance requirements of this Commonwealth may be met and that
meets the applicable requirements of Title VI of the Civil
Rights Act of 1964 (Public Law 88-352, 78 Stat. 241).
"Scholarship." An award under a scholarship program.
"Scholarship organization." A nonprofit entity that:
(1) is exempt from Federal taxation under section 501(c)
(3) of the Internal Revenue Code of 1986 (Public Law 99-514,
26 U.S.C. § 1 et seq.); and
(2) contributes at least 80% of its annual cash receipts
to a scholarship program.
For purposes of this definition, a nonprofit entity
"contributes" its annual cash receipts to a scholarship program
when it expends or otherwise irrevocably encumbers those funds
for distribution during the then current fiscal year of the
nonprofit entity or during the next succeeding fiscal year of
the nonprofit entity.
"Scholarship program." A program to provide tuition to
eligible students to attend a school or to participate in a home
education program provided under section 1327.1 located in this
Commonwealth. A scholarship program must include an application
and review process for the purpose of making awards to eligible
students. The award of scholarships to eligible students shall
be made without limiting availability to only students of one
20110HB1679PN2210 - 37 -
school or home education program.
"School." A public or nonpublic prekindergarten,
kindergarten, elementary school or secondary school at which the
compulsory attendance requirements of the Commonwealth may be
met and that meets the applicable requirements of Title VI of
the Civil Rights Act of 1964 (Public Law 88-352, 78 Stat. 241).
"School age." From the earliest admission age to a school's
prekindergarten or kindergarten program or, when no
prekindergarten or kindergarten program is provided, the
school's earliest admission age for beginners, until the end of
the school year the student attains 21 years of age or
graduation from high school, whichever occurs first.
"Special education school." A school or program within a
school that is designated specifically and exclusively for
students with any of the disabilities listed in 34 CFR § 300.8
(relating to child with a disability) and meets one of the
following:
(1) is licensed under the act of January 28, 1988
(P.L.24, No.11), known as the Private Academic Schools Act;
(2) is accredited by an accrediting association approved
by the State Board of Education;
(3) is a school for the blind or deaf receiving
Commonwealth appropriations; or
(4) is operated by or under the authority of a bona fide
religious institution or by the Commonwealth or any political
subdivision thereof.
"Support level." The level of support needed by an eligible
student with a disability, as stated in the following matrix:
(1) Support level 1. The student is not enrolled in a
special education school.
20110HB1679PN2210 - 38 -
(2) Support level 2. The student is enrolled in a
special education school.
"Tax credit." The educational improvement tax credit
established under this subarticle.
Section 2522-B. Qualification and application.
(a) Establishment.--In accordance with section 14 of Article
III of the Constitution of Pennsylvania, an educational
improvement tax credit program is established to enhance the
educational opportunities available to all students in this
Commonwealth.
(b) Information.--In order to qualify under this subarticle,
a scholarship organization, a prekindergarten scholarship
organization or an educational improvement organization must
submit information to the department that enables the department
to confirm that the organization is exempt from taxation under
section 501(c)(3) of the Internal Revenue Code of 1986 (Public
Law 99-514, 26 U.S.C. § 1 et seq.).
(c) Scholarship organizations and prekindergarten
scholarship organizations.--A scholarship organization or
prekindergarten scholarship organization must certify to the
department that the organization is eligible to participate in
the program and must agree to annually report the following
information to the department by September 1 of each year:
(1) (i) The number of scholarships awarded during the
immediately preceding school year to eligible students in
a prekindergarten program.
(ii) The total and average amounts of scholarships
awarded during the immediately preceding school year to
eligible students in a prekindergarten program.
(iii) The number of scholarships awarded during the
20110HB1679PN2210 - 39 -
immediately preceding school year to eligible students in
grades kindergarten through eight.
(iv) The total and average amounts of scholarships
awarded during the immediately preceding school year to
eligible students in grades kindergarten through eight.
(v) The number of scholarships awarded during the
immediately preceding school year to eligible students in
grades 9 through 12.
(vi) The total and average amounts of scholarships
awarded during the immediately preceding school year to
eligible students in grades 9 through 12.
(vii) Where the scholarship organization or
prekindergarten scholarship organization collects
information on a county-by-county basis, the total number
and the total dollar amount of scholarships awarded
during the immediately preceding school year to residents
of each county in which the scholarship organization or
prekindergarten scholarship organization awarded
scholarships.
(2) The information required under paragraph (1) shall
be submitted on a form provided by the department. No later
than May 1 of each year, the department shall annually
distribute such sample forms, together with the forms on
which the reports are required to be made, to each listed
scholarship organization and prekindergarten scholarship
organization.
(3) The department may not require any other information
to be provided by scholarship organizations or
prekindergarten scholarship organizations, except as
expressly authorized in this article.
20110HB1679PN2210 - 40 -
(d) Educational improvement organization.--
(1) An application submitted by an educational
improvement organization must describe its proposed
innovative educational program or programs in a form
prescribed by the department. In prescribing the form, the
department shall consult with the Department of Education as
necessary. The department shall review and approve or
disapprove the application. In order to be eligible to
participate in the program, an educational improvement
organization must agree to annually report the following
information to the department by September 1 of each year:
(i) The name of the innovative educational program
or programs and the total amount of the grant or grants
made to those programs during the immediately preceding
school year.
(ii) A description of how each grant was utilized
during the immediately preceding school year and a
description of any demonstrated or expected innovative
educational improvements.
(iii) The names of the public schools and school
districts where innovative educational programs that
received grants during the immediately preceding school
year were implemented.
(iv) Where the educational improvement organization
collects information on a county-by-county basis, the
total number and the total dollar amount of grants made
during the immediately preceding school year for programs
at public schools in each county in which the educational
improvement organization made grants.
(2) The information required under paragraph (1) shall
20110HB1679PN2210 - 41 -
be submitted on a form provided by the department. No later
than May 1 of each year, the department shall annually
distribute such sample forms, together with the forms on
which the reports are required to be made, to each listed
educational improvement organization.
(3) The department may not require any other information
to be provided by educational improvement organizations,
except as expressly authorized in this article.
(e) Notification.--The department shall notify the
scholarship organization, prekindergarten scholarship
organization or educational improvement organization that the
organization meets the requirements of this article for that
fiscal year no later than 60 days after the organization has
submitted the information required under this section.
(f) Publication.--The department shall annually publish a
list of each scholarship organization, prekindergarten
scholarship organization or educational improvement organization
qualified under this section in the Pennsylvania Bulletin. The
list shall also be posted and updated as necessary on the
publicly accessible Internet website of the department.
Section 2523-B. Application.
(a) Scholarship organization or prekindergarten scholarship
organization.--A business firm shall apply to the department for
a tax credit. A business firm shall receive a tax credit if the
scholarship organization or prekindergarten scholarship
organization that receives the contribution appears on the list
established under section 2522-B(f).
(b) Educational improvement organization.--A business firm
must apply to the department for a tax credit. A business firm
shall receive a tax credit if the department has approved the
20110HB1679PN2210 - 42 -
program provided by the educational improvement organization
that receives the contribution.
(c) Availability of tax credits.--Tax credits shall be made
available by the department on a first-come-first-served basis
within the limitations established under section 2525-B(a).
(d) Contributions.--A contribution by a business firm to a
scholarship organization, prekindergarten scholarship
organization or educational improvement organization shall be
made no later than 60 days following the approval of an
application under subsection (a) or (b).
Section 2524-B. Tax credit.
(a) Scholarship or educational improvement organizations.--
In accordance with section 2525-B(a), the Department of Revenue
shall grant a tax credit against any tax due under Article III,
IV, VI, VII, VIII, IX or XV of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, to a business firm
providing proof of a contribution to a scholarship organization
or educational improvement organization in the taxable year in
which the contribution is made which shall not exceed 75% of the
total amount contributed during the taxable year by the business
firm. For the fiscal year 2011-2012, the tax credit shall not
exceed $400,000 annually per business firm for contributions
made to scholarship organizations and educational improvement
organizations. For the fiscal year 2012-2013, the tax credit
shall not exceed $750,000 annually per business firm for
contributions made to scholarship organizations or educational
improvement organizations.
(b) Additional amount.--The Department of Revenue shall
grant a tax credit of up to 90% of the total amount contributed
during the taxable year if the business firm provides a written
20110HB1679PN2210 - 43 -
commitment to provide the scholarship organization or
educational improvement organization with the same amount of
contribution for two consecutive tax years. The business firm
must provide the written commitment under this subsection to the
department at the time of application.
(c) Prekindergarten scholarship organizations.--In
accordance with section 2525-B(a), the Department of Revenue
shall grant a tax credit against any tax due under Article III,
IV, VI, VII, VIII, IX or XV of the Tax Reform Code of 1971 to a
business firm providing proof of a contribution to a
prekindergarten scholarship organization in the taxable year in
which the contribution is made which shall be equal to 100% of
the first $10,000 contributed during the taxable year by the
business firm, and which shall not exceed 90% of the remaining
amount contributed during the taxable year by the business firm.
For the fiscal year 2011-2012, the tax credit shall not exceed
$200,000 annually per business firm for contributions made to
prekindergarten scholarship organizations. For the fiscal year
2012-2013, the tax credit shall not exceed $250,000 annually per
business firm for contributions made to prekindergarten
scholarship organizations.
(d) Combination of tax credits.--A business firm may receive
tax credits from the Department of Revenue in any tax year for
any combination of contributions under subsection (a), (b) or
(c). In no case may a business firm receive tax credits in any
tax year in excess of $750,000 for contributions under
subsections (a) and (b). In no case shall a business firm
receive tax credits in any tax year in excess of $250,000 for
contributions under subsection (c).
(e) Pass-through entity.--
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(1) If a pass-through entity does not intend to use all
approved tax credits under this section, it may elect in
writing to transfer all or a portion of the tax credit to
shareholders, members or partners in proportion to the share
of the entity's distributive income to which the shareholder,
member or partner is entitled for use in the taxable year in
which the contribution is made or in the taxable year
immediately following the year in which the contribution is
made. The election shall designate the year in which the
transferred tax credits are to be used and shall be made
according to procedures established by the Department of
Revenue.
(2) A pass-through entity and a shareholder, member or
partner of a pass-through entity shall not claim the tax
credit under this section for the same contribution.
(3) The shareholder, member or partner may not carry
forward, carry back, obtain a refund of or sell or assign the
tax credit.
(4) The shareholder, member or partner may claim the
credit on a joint return, but the tax credit may not exceed
the separate income of that shareholder, member or partner.
(f) Restriction on applicability of credits.--No tax credits
shall be applied against any tax withheld by an employer from an
employee under Article III of the Tax Reform Code of 1971.
(g) Time of application for credits.--
(1) Except as provided in paragraph (2), the department
may accept applications for tax credits available during a
fiscal year no earlier than July 1 of each fiscal year.
(2) The application of any business firm for tax credits
available during a fiscal year as part of the second year of
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a two-year commitment or as a renewal of a two-year
commitment that was fulfilled in the previous fiscal year may
be accepted no earlier than May 15 preceding the fiscal year.
Section 2525-B. Limitations.
(a) Amount.--
(1) (i) For the fiscal year 2011-2012, the total
aggregate amount of all tax credits approved shall not
exceed $100,000,000.
(ii) Not more than $67,000,000 of the total
aggregate amount of all tax credits approved shall be
used to provide tax credits for contributions from
business firms to scholarship organizations.
(iii) Not more than $25,000,000 of the total
aggregate amount of all tax credits approved shall be
used to provide tax credits for contributions from
business firms to educational improvement organizations.
(iv) Not more than $8,000,000 of the total aggregate
amount of all tax credits approved shall be used to
provide tax credits for contributions from business firms
to prekindergarten scholarship organizations.
(2) (i) In the fiscal year 2012-2013 and each fiscal
year thereafter, the total aggregate amount of all tax
credits approved shall not exceed $200,000,000.
(ii) Not more than $120,000,000 of the total
aggregate amount of all tax credits approved shall be
used to provide tax credits for contributions from
business firms to scholarship organizations.
(iii) Not more than $60,000,000 of the total
aggregate amount of all tax credits approved shall be
used to provide tax credits for contributions from
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business firms to educational improvement organizations.
(iv) Not more than $20,000,000 of the total
aggregate amount of all tax credits approved shall be
used to provide tax credits for contributions from
business firms to prekindergarten scholarship
organizations.
(b) Activities.--No tax credit shall be approved for
activities that are a part of a business firm's normal course of
business.
(c) Tax liability.--
(1) Except as provided in paragraph (2), a tax credit
granted for any one taxable year may not exceed the tax
liability of a business firm.
(2) In the case of a credit granted to a pass-through
entity which elects to transfer the credit according to
section 2524-B(e), a tax credit granted for any one taxable
year and transferred to a shareholder, member or partner may
not exceed the tax liability of the shareholder, member or
partner.
(d) Use.--A tax credit not used by the applicant in the
taxable year the contribution was made or in the year designated
by the shareholder, member or partner to whom the credit was
transferred under section 2524-B(e) may not be carried forward
or carried back and is not refundable or transferable.
(e) Nontaxable income.--A scholarship received by an
eligible student or eligible prekindergarten student shall not
be considered to be taxable income for the purposes of Article
III of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971.
Section 2526-B. Lists.
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The Department of Revenue shall provide to the General
Assembly, by June 30 of each year, a list of all scholarship
organizations, prekindergarten scholarship organizations and
educational improvement organizations that receive contributions
from business firms granted a tax credit.
Section 2527-B. Guidelines.
The department, in consultation with the Department of
Education, shall develop guidelines to determine the eligibility
of an innovative educational program.
(d) Miscellaneous Provisions
Section 2531-B. Construction.
Nothing in this article shall be construed to empower the
Commonwealth or any of its agencies or officers or political
subdivisions to impose any additional requirements on any
nonpublic school which are not otherwise authorized under the
laws of this Commonwealth or to require any nonpublic school to
accept a student if the nonpublic school does not offer
appropriate programs or is not structured or equipped with the
necessary facilities to meet the special needs of the student or
does not offer a particular program requested.
Section 3. Repeals are as follows:
(1) The General Assembly declares that the repeal under
paragraph (2) is necessary to effectuate the addition of
Article XXV-B of the act.
(2) Article XVII-F of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is repealed.
Section 4. The provisions of Article XXV-B of the act are
severable. If any provision of that article or its application
to any person or circumstance is held invalid, the invalidity
shall not affect other provisions or applications of that
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article which can be given effect without the invalid provision
or application.
Section 5. This act shall take effect in 60 days.
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