Bill Text: VA SB589 | 2016 | Regular Session | Chaptered
Bill Title: Education improvement scholarship tax credit program; extends time for disbursement of donations.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2016-04-20 - Governor: Acts of Assembly Chapter text (CHAP0767) [SB589 Detail]
Download: Virginia-2016-SB589-Chaptered.html
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Be it enacted by the General Assembly of Virginia: 1. That §§58.1-439.26 and 58.1-439.28 of the Code of Virginia are amended and reenacted as follows: §58.1-439.26. Tax credit for donations to certain scholarship foundations. A. Notwithstanding the provisions of §30-19.1:11, for taxable years beginning on or after January 1, 2013, but before January 1, 2028, a person shall be eligible to earn a credit against any tax due under Article 2 (§58.1-320 et seq.) or Article 10 (§58.1-400 et seq.), Chapter 12 (§ 58.1-1200 et seq.), Chapter 25 (§58.1-2500 et seq.), or Article 2 (§58.1-2620 et seq.) of Chapter 26 in an amount equal to 65 percent of the value of the monetary or marketable securities donation made by the person to a scholarship foundation included on the list published annually by the Department of Education in accordance with the provisions of §58.1-439.28. No tax credit shall be allowed under this article if the value of the monetary or marketable securities donation made by an individual is less than $500. In addition, tax credits shall be issued only for the first $125,000 in value of donations made by the individual during the taxable year. The maximum aggregate donations of $125,000 for the taxable year for which tax credits may be issued and the minimum required donation of $500 shall apply on an individual basis. Such limitation on the maximum amount of tax credits issued to an individual shall not apply to credits issued to any business entity, including a sole proprietorship. B. Tax credits shall be issued to persons making monetary or marketable securities donations to scholarship foundations by the Department of Education on a first-come, first-served basis in accordance with procedures established by the Department of Education under the following conditions: 1. The total amount of tax credits that may be issued each fiscal year under this article shall not exceed $25 million. 2. The amount of the credit shall not exceed the person's tax liability pursuant to Article 2 (§58.1-320 et seq.) or Article 10 (§58.1-400 et seq.), Chapter 12 (§58.1-1200 et seq.), Chapter 25 (§58.1-2500 et seq.), or Article 2 (§58.1-2620 et seq.) of Chapter 26, as applicable, for the taxable year for which the credit is claimed. Any credit not usable for the taxable year for which first allowed may be carried over for credit against the taxes imposed upon the person pursuant to Article 2 (§58.1-320 et seq.) or Article 10 (§58.1-400 et seq.), Chapter 12 (§58.1-1200 et seq.), Chapter 25 (§58.1-2500 et seq.), or Article 2 (§58.1-2620 et seq.) of Chapter 26, as applicable, in the next five succeeding taxable years or until the total amount of the tax credit has been taken, whichever is sooner. The amount of any credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company shall be allocated to the individual partners, shareholders, or members, respectively, in proportion to their ownership or interest in such business entities. C. In a form approved by the Department of Education, the
person seeking to make a monetary or marketable securities donation to a
scholarship foundation or a scholarship foundation on behalf of such person
shall request preauthorization for a specified tax credit amount from the
Superintendent of Public Instruction. The Department of Education's
preauthorization notice shall accompany the monetary or marketable securities
donation from the person to the scholarship foundation, which shall, within Preauthorization notices not acted upon by a donor within 180 days of issuance shall be void. No tax credit shall be approved by the Department of Education for activities that are a part of a person's normal course of business. §58.1-439.28. Guidelines for scholarship foundations. A. As a condition for qualification by the Department of
Education, a scholarship foundation, as defined in §58.1-439.25 and included
on the list published annually by the Department of Education pursuant to this
section, shall disburse an amount at least equal to 90 percent of the value of
the donations it receives (for which tax credits were issued under this
article) during each 12-month period ending on June 30 by the immediately
following June 30 for qualified educational expenses through scholarships to
eligible students. Tax-credit-derived funds not used for such scholarships may
only be used for the administrative expenses of the scholarship foundation. Any
scholarship foundation that fails to B. By September 30 of each year beginning in C. In awarding scholarships from tax-credit-derived funds, the scholarship foundation shall (i) provide scholarships for qualified educational expenses only to students whose family's annual household income is not in excess of 300 percent of the current poverty guidelines or eligible students with a disability, (ii) not limit scholarships to students of one school, and (iii) comply with Title VI of the Civil Rights Act of 1964, as amended. Payment of scholarships from tax-credit-derived funds by the eligible scholarship foundation shall be by individual warrant or check made payable to and mailed to the eligible school that the student's parent or legal guardian indicates. In mailing such scholarship payments, the eligible scholarship foundation shall include a written notice to the eligible school that the source of the scholarship was donations made by persons receiving tax credits for the same pursuant to this article. D. Scholarship foundations shall ensure that schools selected by students to which tax-credit-derived funds may be paid (i) are in compliance with the Commonwealth's and locality's health and safety laws and codes; (ii) hold a valid occupancy permit as required by the locality; (iii) comply with Title VI of the Civil Rights Act of 1964, as amended; and (iv) are nonpublic schools that comply with nonpublic school accreditation requirements as set forth in §22.1-19 and administered by the Virginia Council for Private Education or nonpublic schools that maintain an assessment system that annually measures scholarship students' progress in reading and math using a national norm-referenced achievement test, including but not limited to the Stanford Achievement Test, California Achievement Test, and Iowa Test of Basic Skills. Eligible schools shall compile the results of any national norm-referenced achievement test for each of its students receiving tax-credit-derived scholarships and shall provide the respective parents or legal guardians of such students with a copy of the results on an annual basis, beginning with the first year of testing of the student. Such schools also shall annually provide to the Department of Education for each such student the achievement test results, beginning with the first year of testing of the student, and student information that would allow the Department to aggregate the achievement test results by grade level, gender, family income level, number of years of participation in the scholarship program, and race. Beginning with the third year of testing of each such student and test-related data collection, the Department of Education shall ensure that the achievement test results and associated learning gains are published on the Department of Education's website in accordance with such classifications and in an aggregate form as to prevent the identification of any student. Eligible schools shall annually provide to the Superintendent of Public Instruction graduation rates of its students participating in the scholarship program in a manner consistent with nationally recognized standards. In publishing and disseminating achievement test results and other information, the Superintendent of Public Instruction and the Department of Education shall ensure compliance with all student privacy laws. E. The aggregate amount of scholarships provided to each student for any single school year by all eligible scholarship foundations from eligible donations shall not exceed the lesser of (i) the actual qualified educational expenses of the student or (ii) 100 percent of the per-pupil amount distributed to the local school division (in which the student resides) as the state's share of the standards of quality costs using the composite index of ability to pay as defined in the general appropriation act. F. Scholarship foundations shall develop procedures for disbursing scholarships in quarterly or semester payments throughout the school year to ensure scholarships are portable. G. Scholarship foundations that receive donations of
marketable securities for which tax credits were issued under this article
shall be required to sell such securities and convert the donation into cash
immediately, but in no case more than H. Each scholarship foundation with total revenues (including
the value of all donations) (i) in excess of $100,000 for the foundation's most
recent fiscal year ended shall have an audit or review performed by an
independent certified public accountant of the foundation's donations received
in such year for which tax credits were issued under this article I. The Department of Education shall publish annually on its website a list of each scholarship foundation qualified under this article. Once a foundation has been qualified by the Department of Education, it shall remain qualified until the Department removes the foundation from its annual list. The Department of Education shall remove a foundation from the annual list if it no longer meets the requirements of this article. The Department of Education may periodically require a qualified foundation to submit updated or additional information for purposes of determining whether or not the foundation continues to meet the requirements of this article. J. Actions of the Superintendent of Public Instruction or the Department of Education relating to the awarding of tax credits under this article and the qualification of scholarship foundations shall be exempt from the provisions of the Administrative Process Act (§2.2-4000 et seq.). Decisions of the Superintendent of Public Instruction or the Department of Education shall be final and not subject to review or appeal. |
