PRINTER'S NO.  226

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

1

Session of

2011

  

  

INTRODUCED BY PICCOLA, WILLIAMS, SCARNATI, PILEGGI, FOLMER, BROWNE, SMUCKER, ALLOWAY, ERICKSON, RAFFERTY, EICHELBERGER, PIPPY, D. WHITE, MENSCH, BRUBAKER, WASHINGTON AND STACK, JANUARY 26, 2011

  

  

REFERRED TO EDUCATION, JANUARY 26, 2011  

  

  

  

AN ACT

  

1

Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An

2

act relating to the public school system, including certain

3

provisions applicable as well to private and parochial

4

schools; amending, revising, consolidating and changing the

5

laws relating thereto," providing for opportunity

6

scholarships; establishing the Excess Scholarship Fund;

7

providing for educational improvement tax credit; and

8

repealing provisions of the Tax Reform Code of 1971 relating

9

to educational improvement tax credit.

10

The General Assembly of the Commonwealth of Pennsylvania

11

hereby enacts as follows:

12

Section 1.  The act of March 10, 1949 (P.L.30, No.14), known

13

as the Public School Code of 1949, is amended by adding an

14

article to read:

15

ARTICLE XXV-B

16

OPPORTUNITY SCHOLARSHIPS AND

17

EDUCATIONAL IMPROVEMENT TAX CREDIT

18

(a)  Preliminary Provisions

19

Section 2501-B.  Short title.

20

This article shall be known and may be cited as the

 


1

Opportunity Scholarship and Educational Improvement Tax Credit

2

Act.

3

(b)  Opportunity Scholarships

4

Section 2501.1-B.  Legislative findings.

5

The General Assembly finds that:

6

(1)  Pursuant to section 14 of Article III of the

7

Constitution of Pennsylvania, the General Assembly has the

8

responsibility to provide for the maintenance and support of

9

a thorough and efficient system of public education to serve

10

the needs of this Commonwealth.

11

(2)  Parents are best suited to choose the most

12

appropriate means of education for their school-age children.

13

(3)  Providing diverse educational opportunities for the

14

children of this Commonwealth is a civic and civil rights

15

imperative and a matter of serious concern.

16

(4)  The importance of providing educational choices that

17

will meet the needs of parents, and the need to maintain and

18

support an effective system of education, make it imperative

19

to provide for the increased availability of diverse

20

opportunities, including both public and nonpublic programs

21

of education, to benefit all citizens of this Commonwealth.

22

(5)  Public schools are the foundation of the system of

23

education in this Commonwealth. Further, Pennsylvania's

24

longstanding tradition of local control of public education

25

allows communities to adapt their public school programs to

26

meet local needs. For these reasons, a robust program of

27

interdistrict school choice is a critical means of providing

28

families with increased educational options within the

29

traditional public school system.

30

(6)  The accessibility to families of nonpublic

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1

educational alternatives decreases the burden on the

2

Commonwealth and local school districts and increases the

3

range of educational choices available to Pennsylvania

4

families, thus providing a benefit to all citizens of this

5

Commonwealth.

6

(7)  It is the long-term goal of the General Assembly to

7

offer assistance to all families in this Commonwealth, so as

8

to provide every child in this Commonwealth with diverse

9

educational opportunities and options.

10

(8)  As an initial step toward the long-term goal of

11

offering assistance to all Pennsylvania families, this

12

subarticle provides assistance to disadvantaged school-age

13

children in this Commonwealth who would otherwise attend

14

persistently lowest achieving schools.

15

(9)  Many disadvantaged school-age children in this

16

Commonwealth enjoy comparatively fewer educational

17

opportunities or options than school-age children who possess

18

greater economic means.

19

(10)  The programs of educational choice provided in this

20

subarticle are elements of an overall program of providing

21

funds to increase the availability of educational

22

opportunities for school-age children in this Commonwealth.

23

(11)  A comparatively far greater proportion of public

24

funds are and, upon implementation of an educational choice

25

program, will continue to be devoted to the benefit of

26

children enrolled in the public schools of this Commonwealth.

27

Therefore, an opportunity scholarship program that offers

28

assistance to parents who choose to enroll their children in

29

participating nonpublic schools should be viewed as an

30

integral part of the Commonwealth's overall program of

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1

educational funding and not as an isolated individual

2

program.

3

(12)  A program of financial assistance to enhance

4

educational choice in this Commonwealth, as one element of

5

the Commonwealth's plan for the funding of diverse

6

educational opportunities for the citizens of this

7

Commonwealth, will better prepare Commonwealth citizens to

8

compete for employment opportunities, will foster development

9

of a more capable and better-educated work force and will

10

better enable the Commonwealth to fulfill its obligation of

11

providing children with the opportunity to receive a quality

12

education.

13

Section 2502-B.  Definitions.

14

The following words and phrases when used in this subarticle

15

shall have the meanings given to them in this section unless the

16

context clearly indicates otherwise:

17

"Assessment."  The Pennsylvania System of School Assessment

18

test, the Keystone Exam, an equivalent local assessment or

19

another test established by the State Board of Education to meet

20

the requirements of section 2603-B(d)(10)(i) and required under

21

the No Child Left Behind Act of 2001 (Public Law 107-110, 115

22

Stat. 1425) or its successor Federal statute or required to

23

achieve other standards established by the department for the

24

public school or school district under 22 Pa. Code § 403.3

25

(relating to single accountability system).

26

"Average daily membership."  A school district's average

27

daily membership as defined in section 2501(3).

28

"Board."  The Education Opportunity Board established under

29

this subarticle.

30

"Department."  The Department of Education of the

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1

Commonwealth.

2

"Excess Scholarship Fund" or "Fund."  The Excess Scholarship

3

Fund established in this subarticle.

4

"Federal poverty line."  The official Federal poverty line as

5

defined in section 673(2) of Subtitle B of the Community

6

Services Block Grant Act (Public Law 97-35, 95 Stat. 511), as

7

adjusted from time to time.

8

"Household income."  Income as used for the purposes of

9

determining eligibility for a free or reduced-price lunch under

10

the Richard B. Russell National School Lunch Act (60 Stat. 230,

11

1751 et seq.).

12

"Local scholarship."  A scholarship that is both:

13

(1)  Funded by the local revenues of a low-income child's

14

resident school district in an amount equal to at least 35%

15

of the school district's share of its total revenue per

16

average daily membership.

17

(2)  Applied toward the low-income child's tuition to

18

attend a nonresident public school.

19

"Low-income child."  A school-age child with a household

20

income that does not exceed 1.3 times the Federal poverty line

21

for the school year preceding the school year for which an

22

opportunity scholarship is to be distributed.

23

"Nonpublic school."  A school, other than a public school,

24

located within this Commonwealth where a Commonwealth resident

25

may legally fulfill the compulsory school attendance

26

requirements of this act and that meets the applicable

27

requirements of Title VI of the Civil Rights Act of 1964 (Public

28

law 88-352, 78 Stat. 241). The term also includes a full-time or

29

part-time kindergarten program operated by a nonpublic school.

30

"Nonresident public school."  A public school outside a

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1

child's resident school district.

2

"Nonresident school district."  A school district other than

3

the school district in which a school-age child resides.

4

"Nonresident student."  A school-age child attending a public

5

school outside the child's resident school district.

6

"Opportunity scholarship."  An opportunity scholarship

7

awarded to a low-income child under this subarticle to pay

8

tuition for the child to attend a nonresident public school or a

9

participating nonpublic school.

10

"Opportunity scholarship program" or "program."  The

11

opportunity scholarship program established under this

12

subarticle.

13

"Opportunity scholarship recipient."  A low-income child who

14

is awarded an opportunity scholarship under this subarticle.

15

"Parent."  A Commonwealth resident who is a parent or

16

guardian of a school-age child.

17

"Participating nonpublic school."  A nonpublic school located

18

in this Commonwealth and offering a program of instruction for

19

kindergarten through 12th grade, or a combination of grades,

20

that certifies to the board under section 2505-B that it meets

21

the following criteria:

22

(1)  the nonpublic school does not discriminate in its

23

admission policies or practices for opportunity scholarship

24

applicants on the basis of measures of achievement or

25

aptitude or status as a handicapped person, provided,

26

however, that an applicant may be required to meet

27

established eligibility criteria for participation in magnet

28

schools or in schools with specialized academic missions; and

29

(2)  the nonpublic school is in full compliance with all

30

Federal and State laws.

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1

"Persistently lowest achieving school."  A public elementary

2

or secondary school within this Commonwealth achieving within

3

the lowest measured group of 5% on the most recent assessment

4

for which data is posted on the Department of Education's

5

publicly accessible Internet website. The term does not include

6

a charter school, cyber charter school or area vocational-

7

technical school.

8

"Resident school district."  The school district in which a

9

school-age child resides.

10

"School-age child."  A child enrolling in kindergarten or in

11

grades 1 through 12.

12

"Student with a disability."  A school-age child who has been

13

identified, in accordance with 22 Pa. Code Ch. 14 (relating to

14

special education services and programs), as a "child with a

15

disability," as defined in 34 CFR § 300.8 (relating to a child

16

with a disability).

17

"Total revenue per average daily membership."  A school

18

district's total revenue per average daily membership.

19

Section 2503-B.  Opportunity scholarship program.

20

(a)  Establishment.--Beginning with the 2011-2012 school

21

year, the opportunity scholarship program shall be established

22

to provide scholarships to help low-income children pay tuition

23

to attend a nonresident public school or a participating

24

nonpublic school.

25

(b)  Phase-in.--The opportunity scholarship program shall be

26

phased in as follows:

27

(1)  During the 2011-2012 school year, the opportunity

28

scholarship program shall be available to low-income children

29

who satisfy both of the following:

30

(i)  Attended a persistently lowest achieving school

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1

during the 2010-2011 school year.

2

(ii)  Will reside within the attendance boundary of a

3

persistently lowest achieving school during the 2011-2012

4

school year.

5

(2)  During the 2012-2013 school year, the opportunity

6

scholarship program shall be available to low-income children

7

who qualified for the program for the 2011-2012 school year

8

under paragraph (1) and to low-income children who satisfy

9

both of the following:

10

(i)  Attended a nonpublic school during the 2010-2011

11

school year.

12

(ii)  Will reside within the attendance boundary of a

13

persistently lowest achieving school during the 2012-2013

14

school year.

15

(3)  During the 2013-2014 school year and each school

16

year thereafter, the opportunity scholarship program shall be

17

available to all low-income children residing in this

18

Commonwealth.

19

(c)  List of persistently lowest achieving schools to be

20

published.--By April 1, 2011, and by February 1 of each year

21

thereafter, the department shall publish on the department's

22

publicly accessible Internet website and in the Pennsylvania

23

Bulletin a list of persistently lowest achieving schools that

24

will be in effect for purposes of this subarticle for the

25

following school year. The department shall publish the list

26

based upon the most recent school year for which data is

27

available.

28

(d)  Notice to residents with school-age children.--

29

(1)  By May 1, 2011, and by March 1 of each year

30

thereafter, each school district in this Commonwealth shall

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1

provide all residents of the school district with school-age

2

children with notice of the following:

3

(i)  A description of the opportunity scholarship

4

program.

5

(ii)  Instructions for applying for an opportunity

6

scholarship.

7

(iii)  Instructions for applying for a local

8

scholarship where the school district has elected to

9

provide a local scholarship under section 2504-B(b).

10

(iv)  A statement as to whether any schools in the

11

school district have been designated by the department as

12

persistently lowest achieving schools.

13

(v)  Notice that a parent must contact directly the

14

nonresident public school or participating nonpublic

15

school in which the parent's child seeks to enroll for

16

application instructions.

17

(2)  The school district shall provide such notice by

18

mail to all residents of the school district with school-age

19

children and by notice posted on the school district's

20

publicly accessible Internet website. The notice shall be in

21

a form provided by the board.

22

Section 2504-B.  Opportunity scholarship to attend a nonresident

23

public school.

24

(a)  Eligibility.--A low-income child who is eligible to

25

participate in the opportunity scholarship program may receive

26

an opportunity scholarship to pay tuition to attend a

27

nonresident public school that accepts a child's enrollment

28

application under subsection (d).

29

(b)  Local scholarship.--A school district may elect to

30

provide a local scholarship to low-income children residing

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1

within the school district to pay tuition to attend a

2

nonresident public school that accepts a child's enrollment

3

application under subsection (d). A school district that elects

4

to provide a local scholarship shall:

5

(1)  By May 1, 2011, and by March 1 of each year

6

thereafter, notify all residents of the school district with

7

school-age children of the availability and amount of the

8

local scholarship for the following school year and the

9

process by which a low-income child may apply to the board to

10

receive the opportunity and local scholarships. The school

11

district shall provide the notice by mail to all residents of

12

the school district with school-age children and by notice

13

posted on the school district's publicly accessible Internet

14

website. The notice may be incorporated into the notice the

15

school district is required to provide under section 2503-

16

B(d).

17

(2)  By May 1, 2011, and by March 1 of each year

18

thereafter, notify the board of the availability and amount

19

of the local scholarship for the following school year.

20

(3)  When directed to do so by the board, pay to the

21

board the local scholarship for each low-income child

22

residing in the district who the board determines to be

23

eligible for the local scholarship and who the board confirms

24

has enrolled in a nonresident public school.

25

(4)  Comply with all guidelines developed by the board

26

under section 2509-B.

27

(c)  Application for opportunity and local scholarships.--

28

(1)  By June 1, 2011, and by April 1 of each year

29

thereafter, pursuant to guidelines developed by the board

30

under section 2509-B, the parent of a low-income child may

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1

apply to the board:

2

(i)  For an opportunity scholarship for the following

3

school year.

4

(ii)  For a local scholarship for the following

5

school year, where the low-income child's resident school

6

district has elected to provide a local scholarship under

7

subsection (b).

8

(2)  By July 1, 2011, and by May 1 of each year

9

thereafter, the board shall notify parents whether the

10

scholarships for which the student applied will be awarded

11

for the following school year.

12

(d)  Application for enrollment in a nonresident public

13

school.--

14

(1)  By July 15, 2011, and by June 1 of each year

15

thereafter, the parent of a low-income child who has been

16

awarded a scholarship under subsection (c) may apply to one

17

or more nonresident public schools for enrollment of the

18

child for the following school year. The application shall be

19

on a form provided by the nonresident school district.

20

(2)  (i)  The nonresident school district shall provide

21

written notice to the parent and the board by August 1,

22

2011, and by July 1 of each year thereafter, as to

23

whether the child will be offered enrollment in the

24

requested nonresident public school for the following

25

school year.

26

(ii)  Within ten days of receipt of the notice, the

27

parent must provide written notice to the board, the

28

resident school district and the nonresident school

29

district whether the offer of enrollment will be

30

accepted.

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1

(iii)  If the child is not enrolled in a nonresident

2

public school, the child's resident school district shall

3

determine the public school within the resident school

4

district to which the child will be assigned.

5

(3)  Each school district shall develop guidelines

6

setting forth the terms and conditions under which it will

7

enroll nonresident students receiving opportunity and local

8

scholarships and shall develop an enrollment application form

9

and process. If a school district determines to enroll

10

nonresident students receiving opportunity and local

11

scholarships, the school district must enroll such

12

nonresident students on a first-applied-first-accepted basis,

13

provided that:

14

(i)  the nonresident student's enrollment in the

15

nonresident school district would not place either the

16

nonresident school district or the resident school

17

district in violation of a valid and binding

18

desegregation order;

19

(ii)  the nonresident student has not been expelled

20

nor is the nonresident student in the process of being

21

expelled under section 1317.2 or 1318 and applicable

22

regulations of the State Board of Education; or

23

(iii)  the nonresident student meets the established

24

eligibility criteria for participation in a magnet school

25

or in a public school with a specialized academic

26

mission.

27

(4)  A nonresident school district may give priority in

28

enrollment to a nonresident student who has been awarded a

29

local scholarship.

30

(e)  Commonwealth payments.--The Commonwealth shall make

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1

payment pursuant to the schedule contained in section 2517 to

2

each school district or area vocational-technical school that

3

accepts a nonresident student under the provisions of this

4

subarticle subject to the following terms and conditions:

5

(1)  The Commonwealth shall pay to each school district

6

or area vocational-technical school that accepts a

7

nonresident student, on a tuition basis, the amount

8

determined under section 2506-B.

9

(2)  (i)  For a nonresident student who is an opportunity

10

scholarship recipient and defined as a "student with a

11

disability," services provided to the opportunity

12

scholarship recipient shall be charged against the

13

Commonwealth's special education subsidy to the resident

14

school district, provided that the resident school

15

district shall not be charged more for services provided

16

to the opportunity scholarship recipient by the

17

nonresident school district than the difference between

18

the current year cost of the services had the opportunity

19

scholarship recipient remained in the resident school

20

district and the sum of the opportunity scholarship, the

21

local scholarship and the per pupil special education

22

funding following the opportunity scholarship recipient.

23

(ii)  The resident school district shall provide the

24

board with documentation of the prior year's cost of

25

services provided to the opportunity scholarship

26

recipient and an estimate of the cost of providing those

27

services in the current year had the opportunity

28

scholarship recipient remained in the resident school

29

district. Any cost not covered by this funding shall be

30

borne by the nonresident school district enrolling the

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1

opportunity scholarship recipient.

2

(3)  An opportunity scholarship recipient shall be

3

included in the average daily membership of the opportunity

4

scholarship recipient's resident school district.

5

(f)  Limitation.--The tuition charged by a nonresident school

6

district to an opportunity scholarship recipient under this

7

subarticle shall not exceed the sum of the opportunity

8

scholarship and the local scholarship awarded to the opportunity

9

scholarship recipient.

10

(g)  Transportation.--Notwithstanding any provisions of

11

section 1361 to the contrary, a school district that provides

12

its resident public school pupils with transportation to and

13

from the resident public schools or to and from any points

14

within or without this Commonwealth in order to provide field

15

trips under section 1361 shall provide a student who resides

16

within the school district but regularly attends a nonresident

17

public school, including a charter school, that is located not

18

more than ten miles from the student's resident school district

19

by the nearest public highway, with transportation to and from

20

such nonresident public school or to and from any points within

21

or without this Commonwealth in order to provide field trips

22

under section 1361.

23

Section 2505-B.  Opportunity scholarships to attend a

24

participating nonpublic school.

25

(a)  Eligibility.--The parent of a low-income child who is

26

eligible to receive an opportunity scholarship under section

27

2503-B and desires to apply for an opportunity scholarship to

28

attend a participating nonpublic school must:

29

(1)  By June 1, 2011, and by April 1 of each year

30

thereafter, apply to the board for an opportunity scholarship

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1

for the following school year pursuant to guidelines

2

developed by the board under section 2509-B. By July 1, 2011,

3

and by May 1 of each year thereafter, the board shall notify

4

parents whether the opportunity scholarship will be awarded

5

for the following school year.

6

(2)  Apply for enrollment directly to the participating

7

nonpublic school pursuant to application procedures developed

8

by the participating nonpublic school. By August 1, 2011, and

9

by July 1 of each year thereafter, a participating nonpublic

10

school shall provide written confirmation to the board of

11

each opportunity scholarship recipient whose application for

12

enrollment has been accepted for the following school year.

13

(b)  Payment of opportunity scholarship awards.--The

14

Commonwealth shall provide payment of an opportunity scholarship

15

to the parents of each opportunity scholarship recipient who is

16

enrolled in a participating nonpublic school under the

17

provisions of this subarticle subject to the following terms and

18

conditions:

19

(1)  Opportunity scholarships shall be awarded only for

20

the payment of costs of tuition at a participating nonpublic

21

school within this Commonwealth. Opportunity scholarships

22

shall not be awarded for enrollment in a home education

23

program provided under section 1327.1.

24

(2)  Opportunity scholarships shall be paid to the

25

parents of an opportunity scholarship recipient upon the

26

board's receipt of written confirmation of enrollment from

27

the participating nonpublic school selected by the recipient.

28

The opportunity scholarship award shall be paid by check

29

which may be endorsed by the parents only for payment of

30

tuition at the participating nonpublic school at which the

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1

opportunity scholarship recipient's enrollment has been

2

confirmed.

3

(3)  In the event an opportunity scholarship recipient is

4

no longer enrolled in a participating nonpublic school prior

5

to the completion of the school year, the following shall

6

apply:

7

(i)  The participating nonpublic school shall, within

8

15 days of the opportunity scholarship recipient's

9

withdrawal from the participating nonpublic school:

10

(A)  Provide the board with written notice of the

11

opportunity scholarship recipient's withdrawal from

12

the participating nonpublic school.

13

(B)  Return to the opportunity scholarship

14

recipient's parent the full amount of the opportunity

15

scholarship payment reduced on a pro rata basis by

16

the tuition for the portion of the school year in

17

which the opportunity scholarship recipient was

18

enrolled. The amount returned to the parent under

19

this paragraph shall be paid by check which may be

20

endorsed by the parents only for repayment to the

21

board of the refunded opportunity scholarship award.

22

(ii)  If the parents of the opportunity scholarship

23

recipient fail to submit to the board the full amount of

24

the opportunity scholarship returned to the parents under

25

subparagraph (i) within 15 days of receipt of

26

notification from the board that such payment is due, the

27

board shall impose interest on the unpaid amount,

28

calculated from the due date at the rate determined by

29

the Secretary of Revenue for interest payments on overdue

30

taxes or the refund of taxes as provided in sections 806

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1

and 806.1 of the act of April 9, 1929 (P.L.343, No.176),

2

known as The Fiscal Code.

3

(iii)  If a parent who is required to submit a refund

4

to the board under subparagraph (ii) fails to submit the

5

full amount of the required refund to the board within

6

180 days of written demand thereof, the board shall also

7

impose a civil penalty not to exceed the full amount of

8

the annual opportunity scholarship award made to the

9

parents and disqualification from future eligibility for

10

an opportunity scholarship.

11

(iv)  If the opportunity scholarship recipient

12

enrolls in another participating nonpublic school within

13

the school year for which the opportunity scholarship was

14

awarded, the board shall pay the parent of the

15

opportunity scholarship recipient the opportunity

16

scholarship award prorated for the remaining portion of

17

the school year.

18

(c)  Enrollment requirements.--The following shall apply to a

19

participating nonpublic school which admits an opportunity

20

scholarship recipient:

21

(1)  The participating nonpublic school shall not

22

discriminate on any basis that is illegal under Federal or

23

State law.

24

(2)  The participating nonpublic school shall comply with

25

section 1521, which prohibits discrimination in enrollment on

26

the basis of race or color.

27

(3)  By June 1, 2011, and by April 1 of each year

28

thereafter, a nonpublic school that desires to enroll

29

opportunity scholarship recipients under this subarticle

30

shall certify to the board that it satisfies the definition

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1

of "participating nonpublic school" in section 2502-B. Such

2

certification shall be on a form developed by the board.

3

(d)  Construction.--Nothing in this subarticle shall be

4

construed to:

5

(1)  Prohibit a participating nonpublic school from

6

limiting admission to a particular grade level, a single

7

gender or to areas of concentration of the participating

8

nonpublic school, including, but not limited to, mathematics,

9

science and the arts.

10

(2)  Empower the Commonwealth or any of its agencies or

11

officers or political subdivisions to impose any additional

12

requirements on any participating nonpublic school which are

13

not otherwise authorized under the laws of this Commonwealth

14

or to require any participating nonpublic school to enroll

15

any opportunity scholarship recipient if the participating

16

nonpublic school does not offer appropriate programs or is

17

not structured or equipped with the necessary facilities to

18

meet the special needs of the opportunity scholarship

19

recipient or does not offer a particular program requested.

20

Section 2506-B.  Amount of opportunity scholarship.

21

(a)  Calculation.--

22

(1)  The amount of the opportunity scholarship shall

23

equal 100% of the Commonwealth's share of the resident school

24

district's total revenue per average daily membership of the

25

prior school year.

26

(2)  (i)  For a student enrolling in a participating

27

nonpublic school in kindergarten or grades one through

28

eight, the board shall give priority in awarding

29

opportunity scholarships to students enrolling in

30

participating nonpublic schools that provide the student

- 18 -

 


1

with additional financial assistance that is either equal

2

to the amount of the opportunity scholarship award or is

3

in an amount that, when combined with the opportunity

4

scholarship award, is equal to the full tuition rate for

5

the participating nonpublic school.

6

(ii)  In no case shall the combined amount of the

7

opportunity scholarship award and the additional

8

financial assistance provided by the participating

9

nonpublic school exceed the tuition rate for the

10

participating nonpublic school.

11

(b)  Limitation.--No nonresident public school or

12

participating nonpublic school may charge an opportunity

13

scholarship recipient a higher tuition rate than the rate the

14

nonresident public school or participating nonpublic school

15

would have charged to a student who had not received an

16

opportunity scholarship.

17

(c)  Excess Scholarship Fund.--

18

(1)  The Excess Scholarship Fund is established in the

19

State Treasury and shall be funded by the amount of the

20

opportunity scholarship awarded to an opportunity scholarship

21

recipient under this subarticle in excess of the amount of

22

tuition charged to the opportunity scholarship recipient.

23

(2)  The fund shall be administered by the board and

24

applied toward costs of the opportunity scholarship program

25

beginning in the 2012-2013 school year.

26

(d)  Annual appropriations.--

27

(1)  Opportunity scholarships authorized under this

28

subarticle shall be made from annual appropriations made by

29

the General Assembly to the department for that purpose.

30

(2)  In the event that insufficient moneys are

- 19 -

 


1

appropriated in any fiscal year to provide opportunity

2

scholarships to all eligible opportunity scholarship

3

recipients in the amount authorized, the board shall make pro

4

rata reductions in the amount of the opportunity scholarship

5

provided to each opportunity scholarship recipient.

6

(3)  The total amount of opportunity scholarships

7

provided in any fiscal year shall be limited to the amount of

8

money appropriated for that fiscal year.

9

(e)  Nontaxable.--Opportunity scholarship funds received by a

10

parent pursuant to this subarticle shall not be considered

11

taxable income for purposes of any local taxing ordinance or for

12

purposes of Article III of the act of March 4, 1971 (P.L.6,

13

No.2), known as the Tax Reform Code of 1971, nor shall such

14

opportunity scholarships constitute financial assistance or

15

appropriations to the participating nonpublic school attended by

16

the opportunity scholarship recipient.

17

(f)  Continued eligibility.--

18

(1)  Subject to subsection (d), a child enrolled in a

19

nonresident public school or a participating nonpublic school

20

who received an opportunity scholarship under this subarticle

21

in the prior school year shall receive an opportunity

22

scholarship in each school year of enrollment under the

23

opportunity scholarship program, provided that the child

24

remains eligible.

25

(2)  (i)  If a child who received an opportunity

26

scholarship under this subarticle in the prior school

27

year ceases to qualify as a low-income child, the child

28

shall continue to receive a partial scholarship until

29

completing the eighth grade, provided that the child

30

continues to meet all other eligibility requirements.

- 20 -

 


1

(ii)  In calculating the amount of the partial

2

scholarship, the board shall make a pro rata reduction in

3

the child's opportunity scholarship award based upon the

4

child's household income.

5

(g)  Penalties.--Any person who fraudulently submits an

6

opportunity or local scholarship application or who knowingly

7

falsifies material information on an opportunity or local

8

scholarship application shall be subject to the following

9

penalties:

10

(1)  Imposition by the board of a civil penalty of up to

11

$1,000.

12

(2)  Prosecution for violation of 18 Pa.C.S. § 4904

13

(relating to unsworn falsification to authorities).

14

(3)  Disqualification from future participation in the

15

opportunity scholarship program.

16

Section 2507-B.  Guidelines.

17

(a)  Requirements.--Within 30 days of the effective date of

18

this section, the board shall establish guidelines that provide

19

the following:

20

(1)  Forms to apply for opportunity and local

21

scholarships, including application and approval processes

22

and deadlines for application and notification.

23

(2)  Procedures to verify the accuracy of the information

24

provided in an opportunity or local scholarship application.

25

(3)  Procedures for school district, school and parent

26

notification of opportunity or local scholarship awards.

27

(4)  Procedures for administration of the opportunity and

28

local scholarship programs.

29

(5)  Confirmation of school enrollment by opportunity

30

scholarship recipients.

- 21 -

 


1

(6)  For an opportunity scholarship recipient enrolled in

2

a participating nonpublic school, restrictive endorsement of

3

opportunity scholarship award checks to the participating

4

nonpublic school in which the opportunity scholarship

5

recipient is enrolled.

6

(7)  Procedures for participating nonpublic schools to

7

pay pro rata refunds of opportunity scholarships to the

8

parents of opportunity scholarship recipients who withdraw

9

from a participating nonpublic school during the school year

10

for which the opportunity scholarship was paid.

11

(8)  Development and distribution of public information

12

concerning the opportunity and local scholarship and

13

interdistrict enrollment programs.

14

(9)  Such other procedures as are necessary to fully

15

implement the opportunity and local scholarship and

16

interdistrict enrollment programs.

17

(b)  Publication.--The guidelines shall be published as a

18

statement of policy in the Pennsylvania Bulletin. The board

19

shall mail a copy of the guidelines to each school district and

20

nonpublic school in this Commonwealth and shall post the

21

guidelines on the department's publicly accessible Internet

22

website.

23

(c)  State Board of Education.--Notwithstanding any other

24

provision of law to the contrary, the programs, procedures and

25

guidelines authorized by this subarticle shall not be subject to

26

review, regulation or approval by the State Board of Education.

27

(d)  Exemption of guidelines from certain laws.--The initial

28

guidelines established by the board, and any amendments thereto,

29

shall be exempt from the requirements of the following:

30

(1)  The act of June 25, 1982 (P.L.633, No.181), known as

- 22 -

 


1

the Regulatory Review Act.

2

(2)  The act of July 31, 1968 (P.L.769, No.240), referred

3

to as the Commonwealth Documents Law.

4

(3)  The act of October 15, 1980 (P.L.950, No.164), known

5

as the Commonwealth Attorneys Act.

6

Section 2508-B.  Reduction in amount of school aid.

7

Notwithstanding any other provision of law to the contrary,

8

beginning in the second consecutive school year of enrollment in

9

a nonresident public school or a participating nonpublic school

10

by an opportunity scholarship recipient who was enrolled in the

11

recipient's resident school district when the recipient first

12

received an opportunity scholarship under this subarticle, the

13

amount of Commonwealth basic education funding paid by the

14

department to the resident school district shall be reduced by

15

an amount equal to the Commonwealth's share of the school

16

district's total revenue per average daily membership.

17

Section 2509-B.  Education Opportunity Board.

18

(a)  Establishment.--An independent board to be known as the

19

Education Opportunity Board is established within the

20

department. The board shall consist of three members appointed

21

by the Governor with the advice and consent of a majority of the

22

members elected to the Senate. The Governor may appoint no more

23

than two members to the board who are members of the same

24

political party as the Governor.

25

(b)  Terms of members.--Members of the board shall serve a

26

term of four years. Vacancies shall be filled for an unexpired

27

term in the same manner as original appointments. Members shall

28

continue to serve after the expiration of their term until the

29

Governor appoints a replacement who is confirmed by a majority

30

of the members elected to the Senate. All members of the board

- 23 -

 


1

must be residents of this Commonwealth.

2

(c)  Chairperson.--The Governor shall annually select a

3

chairperson from among the membership of the board.

4

(d)  Meetings.--Meetings shall be held at the call of the

5

chairperson or upon request in writing of a majority of the

6

board. A majority shall constitute a quorum and a majority of

7

such quorum shall have the authority to act upon any matter

8

properly before the board unless otherwise specified in this

9

subarticle.

10

(e)  Compensation prohibited.--Members of the board shall

11

receive no compensation for their services but shall be

12

reimbursed for their actual and necessary expenses incurred in

13

the performance of their official board duties.

14

(f)  Executive director and staff.--

15

(1)  There shall be an executive director of the board

16

who shall serve as the executive officer and secretary of the

17

board. The board shall employ and fix the reasonable

18

compensation of the executive director.

19

(2)  The executive director, with approval of the board,

20

may employ additional professional and clerical personnel as

21

may be necessary to carry out the duties and responsibilities

22

of the board.

23

(3)  The department shall provide adequate funding, space

24

and equipment to facilitate the activities of the board.

25

(g)  Legal advice and assistance.--The Governor, through his

26

General Counsel, shall provide such legal advice and assistance

27

as the board may require.

28

(h)  Powers and duties.--The board shall have the following

29

powers and duties:

30

(1)  Establish guidelines for the administration of the

- 24 -

 


1

opportunity and local scholarship programs as required under

2

section 2507-B.

3

(2)  Administer the opportunity and local scholarship

4

application and approval processes.

5

(3)  Develop the opportunity and local scholarship

6

application form and any other forms necessary to administer

7

the opportunity and local scholarship programs, including the

8

notice required to be provided by school districts under

9

section 2503-B(d).

10

(4)  Review and verify the income and residence of

11

opportunity and local scholarship applicants.

12

(5)  Announce the award of opportunity and local

13

scholarships for the following school year under sections

14

2504-B(c) and 2505-B(a).

15

(6)  Confirm the enrollment of opportunity scholarship

16

recipients in nonresident public schools and participating

17

nonpublic schools and allocate opportunity scholarship funds

18

to opportunity scholarship recipients.

19

(7)  Beginning after the first school year of

20

implementation of the opportunity scholarship program,

21

prepare a report to be submitted to the Governor and the

22

General Assembly by December 1 of each year, made available

23

to the parents of opportunity scholarship recipients and

24

placed on the department's publicly accessible Internet

25

website that includes at least the following information for

26

the prior school year:

27

(i)  The total number of opportunity scholarships

28

requested.

29

(ii)  The total number and total dollar amount of

30

opportunity scholarships awarded, in total and

- 25 -

 


1

disaggregated by:

2

(A)  Whether the opportunity scholarship

3

recipient attends a nonresident public school or a

4

participating nonpublic school.

5

(B)  Grade level of the opportunity scholarship

6

recipient.

7

(C)  Whether the opportunity scholarship

8

recipient resides in a school district with at least

9

one persistently lowest achieving school.

10

(iii)  The administrative costs of the opportunity

11

scholarship program.

12

(iv)  A listing of nonresident public schools to

13

which opportunity scholarship funds were disbursed on

14

behalf of opportunity scholarship recipients and the

15

amount disbursed to each nonresident public school.

16

(v)  A listing of participating nonpublic schools in

17

which opportunity scholarship recipients enrolled and the

18

number of opportunity scholarship recipients who enrolled

19

in each participating nonpublic school.

20

(vi)  The total number and total dollar amount of

21

local scholarships awarded, disaggregated by the resident

22

school districts that made the local scholarship awards.

23

Section 2510-B.  Study.

24

Following the 2014-2015 school year, the board shall conduct

25

a study of the effectiveness of the opportunity scholarship

26

program and shall deliver a written report of its findings,

27

including any recommendations for changes to the program, to the

28

Governor, the chairman and minority chairman of the Education

29

Committee of the Senate and the chairman and minority chairman

30

of the Education Committee of the House of Representatives by

- 26 -

 


1

December 31, 2015.

2

Section 2511-B.  Exclusive jurisdiction of Supreme Court.

3

The Pennsylvania Supreme Court shall have exclusive

4

jurisdiction to hear any challenge or to render a declaratory

5

judgment concerning the constitutionality of this subarticle.

6

The Supreme Court may take such action as it deems appropriate,

7

consistent with the Supreme Court's retaining jurisdiction over

8

such a matter, to find facts or to expedite a final judgment in

9

connection with such a challenge or request for declaratory

10

relief.

11

Section 2512-B.  Optional local tuition grant program.

12

A school district may, out of funds received from the

13

Commonwealth for educational purposes, establish a program of

14

tuition grants to provide for the education of resident students

15

who wish to attend a nonresident public school or a

16

participating nonpublic school on a tuition basis. A student who

17

receives a tuition grant under this section shall be included in

18

the average daily membership of the student's resident school

19

district for the purpose of providing basic education funding

20

and special education funding under Article XXV.

21

(c)  Educational Improvement Tax Credit

22

Section 2521-B.  Definitions.

23

The following words and phrases when used in this subarticle

24

shall have the meanings given to them in this section unless the

25

context clearly indicates otherwise:

26

"Business firm."  An entity authorized to do business in this

27

Commonwealth and subject to taxes imposed under Article III, IV,

28

VI, VII, VIII, IX or XV of the act of March 4, 1971 (P.L.6,

29

No.2), known as the Tax Reform Code of 1971. The term includes a

30

pass-through entity. For purposes of this subarticle, a business

- 27 -

 


1

firm shall be included in one of the following groups:

2

(1)  Group 1 includes any business firm that is either

3

entering the second year of a two-year commitment or applying

4

for tax credits for a contribution to an educational

5

improvement organization that is also a school district

6

foundation, public school foundation, charter school

7

foundation or cyber charter school foundation.

8

(2)  Group 2 includes any business firm that is renewing

9

a two-year commitment that was fulfilled in the most recent

10

fiscal year or is applying for tax credits for a contribution

11

to a prekindergarten scholarship organization in the same

12

amount that it had contributed in the most recent fiscal

13

year.

14

(3)  Group 3 includes any business firm other than a

15

business firm in Group 1 or Group 2.

16

"Contribution."  A donation of cash, personal property or

17

services, the value of which is the net cost of the donation to

18

the donor or the pro rata hourly wage, including benefits, of

19

the individual performing the services.

20

"Department."  The Department of Community and Economic

21

Development of the Commonwealth.

22

"Educational improvement organization."  A nonprofit entity

23

which:

24

(1)  is exempt from Federal taxation under section 501(c)

25

(3) of the Internal Revenue Code of 1986 (Public Law 99-514,

26

26 U.S.C. § 1 et seq.); and

27

(2)  contributes at least 80% of its annual receipts as

28

grants to a public school for innovative educational

29

programs.

30

For purposes of this definition, a nonprofit entity

- 28 -

 


1

"contributes" its annual cash receipts when it expends or

2

otherwise irrevocably encumbers those funds for expenditure

3

during the then current fiscal year of the nonprofit entity or

4

during the next succeeding fiscal year of the nonprofit entity.

5

A "nonprofit entity" includes a school district foundation,

6

public school foundation, charter school foundation or cyber

7

charter school foundation.

8

"Eligible prekindergarten student."  A student, including an

9

eligible student with a disability, who is enrolled in a

10

prekindergarten program and is a member of a household with a

11

maximum annual household income as increased by the applicable

12

income allowance.

13

"Eligible student."  A school-age student, including an

14

eligible student with a disability, who is enrolled in a school

15

and is a member of a household with a maximum annual household

16

income as increased by the applicable income allowance.

17

"Eligible student with a disability."  A prekindergarten

18

student or a school-age student who meets all of the following:

19

(1)  Is either enrolled in a special education school or

20

has otherwise been identified, in accordance with 22 Pa. Code

21

Ch. 14 (relating to special education services and programs),

22

as a "child with a disability," as defined in 34 CFR § 300.8

23

(relating to child with a disability).

24

(2)  Needs special education and related services.

25

(3)  Is enrolled in a prekindergarten program or in a

26

school.

27

(4)  Is a member of a household with a household income

28

of not more than the maximum annual household income.

29

"Household."  An individual living alone or with the

30

following: a spouse, parent and their unemancipated minor

- 29 -

 


1

children, other unemancipated minor children who are related by

2

blood or marriage or other adults or unemancipated minor

3

children living in the household who are dependent upon the

4

individual.

5

"Household income."  All moneys or property received of

6

whatever nature and from whatever source derived. The term does

7

not include the following:

8

(1)  Periodic payments for sickness and disability other

9

than regular wages received during a period of sickness or

10

disability.

11

(2)  Disability, retirement or other payments arising

12

under workers' compensation acts, occupational disease acts

13

and similar legislation by any government.

14

(3)  Payments commonly recognized as old-age or

15

retirement benefits paid to persons retired from service

16

after reaching a specific age or after a stated period of

17

employment.

18

(4)  Payments commonly known as public assistance or

19

unemployment compensation payments by a governmental agency.

20

(5)  Payments to reimburse actual expenses.

21

(6)  Payments made by employers or labor unions for

22

programs covering hospitalization, sickness, disability or

23

death, supplemental unemployment benefits, strike benefits,

24

Social Security and retirement.

25

(7)  Compensation received by United States servicemen

26

serving in a combat zone.

27

"Income allowance."

28

(1)  Subject to paragraph (2), the amount of:

29

(i)  Before July 1, 2011, $10,000 for each eligible

30

student, eligible prekindergarten student and dependent

- 30 -

 


1

member of a household.

2

(ii)  After June 30, 2011, $12,000 for each eligible

3

student, eligible prekindergarten student and dependent

4

member of a household.

5

(2)  Beginning July 1, 2012, the Department of Community

6

and Economic Development shall annually adjust the income

7

allowance amounts under paragraph (1) to reflect any upward

8

changes in the Consumer Price Index for All Urban Consumers

9

for the Pennsylvania, New Jersey, Delaware and Maryland area

10

in the preceding 12 months and shall immediately submit the

11

adjusted amounts to the Legislative Reference Bureau for

12

publication as a notice in the Pennsylvania Bulletin.

13

"Innovative educational program."  An advanced academic or

14

similar program that is not part of the regular academic program

15

of a public school but that enhances the curriculum or academic

16

program of the public school or provides prekindergarten

17

programs to public school students.

18

"Maximum annual household income."

19

(1)  Except as stated in paragraph (2) and subject to

20

paragraph (3), the following:

21

(i)  Before July 1, 2011, not more than $50,000.

22

(ii)  After June 30, 2011, not more than $60,000.

23

(2)  With respect to an eligible student with a

24

disability, as calculated by multiplying:

25

(i)  the sum of:

26

(A)  the applicable amount under paragraph (1);

27

and

28

(B)  the applicable income allowance; by

29

(ii)  the applicable support level factor according

30

to the following table:

- 31 -

 


1

Support Level

Support Level Factor

2

1

1.50

3

2

2.993

4

(3)  Beginning July 1, 2012, the Department of Community

5

and Economic Development shall annually adjust the income

6

amounts under paragraphs (1) and (2) to reflect any upward

7

changes in the Consumer Price Index for All Urban Consumers

8

for the Pennsylvania, New Jersey, Delaware and Maryland area

9

in the preceding 12 months and shall immediately submit the

10

adjusted amounts to the Legislative Reference Bureau for

11

publication as a notice in the Pennsylvania Bulletin.

12

"Pass-through entity."  A partnership as defined in section

13

301(n.0) of the act of March 4, 1971 (P.L.6, No.2), known as the

14

Tax Reform Code of 1971, a single-member limited liability

15

company treated as a disregarded entity for Federal income tax

16

purposes or a Pennsylvania S corporation as defined in section

17

301(n.1) of the Tax Reform Code of 1971.

18

"Prekindergarten program."  A program of instruction for

19

three-year-old or four-year-old students that utilizes a

20

curriculum aligned with the curriculum of the school with which

21

it is affiliated and that provides:

22

(1)  a minimum of two hours of instructional and

23

developmental activities per day at least 60 days per school

24

year; or

25

(2)  a minimum of two hours of instructional and

26

developmental activities per day at least 20 days over the

27

summer recess.

28

"Prekindergarten scholarship organization."  A nonprofit

29

entity that:

30

(1)  Either is exempt from Federal taxation under section

- 32 -

 


1

501(c)(3) of the Internal Revenue Code of 1986 (Public Law

2

99-514, 26 U.S.C. § 1 et seq.) or is operated as a separate

3

segregated fund by a scholarship organization that has been

4

qualified under section 2522-B.

5

(2)  Contributes at least 80% of its annual cash receipts

6

to a prekindergarten scholarship program by expending or

7

otherwise irrevocably encumbering those funds for

8

distribution during the then current fiscal year of the

9

organization or during the next succeeding fiscal year of the

10

organization.

11

"Prekindergarten scholarship program."  A program to provide

12

tuition to eligible prekindergarten students to attend a

13

prekindergarten program operated by or in conjunction with a

14

school located in this Commonwealth and that includes an

15

application and review process for the purpose of making awards

16

to eligible prekindergarten students and awards scholarships to

17

eligible prekindergarten students without limiting availability

18

to only students of one school.

19

"Public school."  A public prekindergarten where compulsory

20

attendance requirements do not apply or a public kindergarten,

21

elementary school or secondary school at which the compulsory

22

attendance requirements of this Commonwealth may be met and that

23

meets the applicable requirements of Title VI of the Civil

24

Rights Act of 1964 (Public Law 88-352, 78 Stat. 241).

25

"Scholarship."  An award under a scholarship program.

26

"Scholarship organization."  A nonprofit entity that:

27

(1)  is exempt from Federal taxation under section 501(c)

28

(3) of the Internal Revenue Code of 1986 (Public Law 99-514,

29

26 U.S.C. § 1 et seq.); and

30

(2)  contributes at least 80% of its annual cash receipts

- 33 -

 


1

to a scholarship program.

2

For purposes of this definition, a nonprofit entity

3

"contributes" its annual cash receipts to a scholarship program

4

when it expends or otherwise irrevocably encumbers those funds

5

for distribution during the then current fiscal year of the

6

nonprofit entity or during the next succeeding fiscal year of

7

the nonprofit entity.

8

"Scholarship program."  A program to provide tuition to

9

eligible students to attend a school located in this

10

Commonwealth. A scholarship program must include an application

11

and review process for the purpose of making awards to eligible

12

students. The award of scholarships to eligible students shall

13

be made without limiting availability to only students of one

14

school.

15

"School."  A kindergarten, elementary school or secondary

16

school at which the compulsory attendance requirements of the

17

Commonwealth may be met and that meets the applicable

18

requirements of Title VI of the Civil Rights Act of 1964 (Public

19

Law 88-352, 78 Stat. 241), or a public or nonpublic

20

prekindergarten.

21

"School age."  From the earliest admission age to a school's

22

prekindergarten or kindergarten program or, when no

23

prekindergarten or kindergarten program is provided, the

24

school's earliest admission age for beginners, until the end of

25

the school year the student attains 21 years of age or

26

graduation from high school, whichever occurs first.

27

"Special education school."  A school or program within a

28

school that is designated specifically and exclusively for

29

students with any of the disabilities listed in 34 CFR § 300.8

30

(relating to child with a disability) and meets one of the

- 34 -

 


1

following:

2

(1)  is licensed under the act of January 28, 1988

3

(P.L.24, No.11), known as the Private Academic Schools Act;

4

(2)  is accredited by an accrediting association approved

5

by the State Board of Education;

6

(3)  is a school for the blind or deaf receiving

7

Commonwealth appropriations; or

8

(4)  is operated by or under the authority of a bona fide

9

religious institution or by the Commonwealth or any political

10

subdivision thereof.

11

"Support level."  The level of support needed by an eligible

12

student with a disability, as stated in the following matrix:

13

(1)  Support level 1. The student is not enrolled in a

14

special education school.

15

(2)  Support level 2. The student is enrolled in a

16

special education school.

17

"Tax credit."  The educational improvement tax credit

18

established under this subarticle.

19

Section 2522-B.  Qualification and application.

20

(a)  Establishment.--In accordance with section 14 of Article

21

III of the Constitution of Pennsylvania, an educational

22

improvement tax credit program is established to enhance the

23

educational opportunities available to all students in this

24

Commonwealth.

25

(b)  Information.--In order to qualify under this subarticle,

26

a scholarship organization, a prekindergarten scholarship

27

organization or an educational improvement organization must

28

submit information to the department that enables the department

29

to confirm that the organization is exempt from taxation under

30

section 501(c)(3) of the Internal Revenue Code of 1986 (Public

- 35 -

 


1

Law 99-514, 26 U.S.C. § 1 et seq.).

2

(c)  Scholarship organizations and prekindergarten

3

scholarship organizations.--A scholarship organization or

4

prekindergarten scholarship organization must certify to the

5

department that the organization is eligible to participate in

6

the program established under this subarticle and must agree to

7

annually report the following information to the department by

8

September 1 of each year:

9

(1)  (i)  The number of scholarships awarded during the

10

immediately preceding school year to eligible

11

prekindergarten students.

12

(ii)  The total and average amounts of scholarships

13

awarded during the immediately preceding school year to

14

eligible prekindergarten students.

15

(iii)  The number of scholarships awarded during the

16

immediately preceding school year to eligible students in

17

grades kindergarten through eight.

18

(iv)  The total and average amounts of scholarships

19

awarded during the immediately preceding school year to

20

eligible students in grades kindergarten through eight.

21

(v)  The number of scholarships awarded during the

22

immediately preceding school year to eligible students in

23

grades 9 through 12.

24

(vi)  The total and average amounts of scholarships

25

awarded during the immediately preceding school year to

26

eligible students in grades 9 through 12.

27

(vii)  Where the scholarship organization or

28

prekindergarten scholarship organization collects

29

information on a county-by-county basis, the total number

30

and the total dollar amount of scholarships awarded

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1

during the immediately preceding school year to residents

2

of each county in which the scholarship organization or

3

prekindergarten scholarship organization awarded

4

scholarships.

5

(2)  The information required under paragraph (1) shall

6

be submitted on a form provided by the department. No later

7

than May 1 of each year, the department shall annually

8

distribute such sample forms, together with the forms on

9

which the reports are required to be made, to each listed

10

scholarship organization and prekindergarten scholarship

11

organization.

12

(3)  The department may not require any other information

13

to be provided by scholarship organizations or

14

prekindergarten scholarship organizations, except as

15

expressly authorized in this subarticle.

16

(d)  Educational improvement organization.--

17

(1)  An application submitted by an educational

18

improvement organization must describe its proposed

19

innovative educational program or programs in a form

20

prescribed by the department. In prescribing the form, the

21

department shall consult with the Department of Education as

22

necessary. The department shall review and approve or

23

disapprove the application. In order to be eligible to

24

participate in the program established under this subarticle,

25

an educational improvement organization must agree to

26

annually report the following information to the department

27

by September 1 of each year:

28

(i)  The name of the innovative educational program

29

or programs and the total amount of the grant or grants

30

made to those programs during the immediately preceding

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1

school year.

2

(ii)  A description of how each grant was utilized

3

during the immediately preceding school year and a

4

description of any demonstrated or expected innovative

5

educational improvements.

6

(iii)  The names of the public schools and school

7

districts where innovative educational programs that

8

received grants during the immediately preceding school

9

year were implemented.

10

(iv)  Where the educational improvement organization

11

collects information on a county-by-county basis, the

12

total number and the total dollar amount of grants made

13

during the immediately preceding school year for programs

14

at public schools in each county in which the educational

15

improvement organization made grants.

16

(2)  The information required under paragraph (1) shall

17

be submitted on a form provided by the department. No later

18

than May 1 of each year, the department shall annually

19

distribute such sample forms, together with the forms on

20

which the reports are required to be made, to each listed

21

educational improvement organization.

22

(3)  The department may not require any other information

23

to be provided by educational improvement organizations,

24

except as expressly authorized in this subarticle.

25

(e)  Notification.--The department shall notify the

26

scholarship organization, prekindergarten scholarship

27

organization or educational improvement organization that the

28

organization meets the requirements of this subarticle for that

29

fiscal year no later than 60 days after the organization has

30

submitted the information required under this section.

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1

(f)  Publication.--The department shall annually publish a

2

list of each scholarship organization, prekindergarten

3

scholarship organization or educational improvement organization

4

qualified under this section in the Pennsylvania Bulletin. The

5

list shall also be posted and updated as necessary on the

6

publicly accessible Internet website of the department.

7

Section 2523-B.  Application.

8

(a)  Scholarship organization or prekindergarten scholarship

9

organization.--A business firm shall apply to the department for

10

a tax credit. A business firm shall receive a tax credit if the

11

scholarship organization or prekindergarten scholarship

12

organization that receives the contribution appears on the list

13

established under section 2522-B(f).

14

(b)  Educational improvement organization.--A business firm

15

must apply to the department for a tax credit. A business firm

16

shall receive a tax credit if the department has approved the

17

program provided by the educational improvement organization

18

that receives the contribution.

19

(c)  Contributions.--A contribution by a business firm to a

20

scholarship organization, prekindergarten scholarship

21

organization or educational improvement organization shall be

22

made no later than 60 days following the approval of an

23

application under subsection (a) or (b).

24

Section 2524-B.  Tax credit.

25

(a)  Scholarship or educational improvement organizations.--

26

In accordance with section 2525-B(a), the Department of Revenue

27

shall grant a tax credit against any tax due under Article III,

28

IV, VI, VII, VIII, IX or XV of the act of March 4, 1971 (P.L.6,

29

No.2), known as the Tax Reform Code of 1971, to a business firm

30

providing proof of a contribution to a scholarship organization

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1

or educational improvement organization in the taxable year in

2

which the contribution is made which shall not exceed 75% of the

3

total amount contributed during the taxable year by the business

4

firm. The tax credit shall not exceed $300,000 annually per

5

business firm for contributions made to scholarship

6

organizations or educational improvement organizations.

7

(b)  Additional amount.--The Department of Revenue shall

8

grant a tax credit of up to 90% of the total amount contributed

9

during the taxable year if the business firm provides a written

10

commitment to provide the scholarship organization or

11

educational improvement organization with the same amount of

12

contribution for two consecutive tax years. The business firm

13

must provide the written commitment under this subsection to the

14

department at the time of application.

15

(c)  Prekindergarten scholarship organizations.--In

16

accordance with section 2525-B(a), the Department of Revenue

17

shall grant a tax credit against any tax due under Article III,

18

IV, VI, VII, VIII, IX or XV of the Tax Reform Code of 1971 to a

19

business firm providing proof of a contribution to a

20

prekindergarten scholarship organization in the taxable year in

21

which the contribution is made which shall be equal to 100% of

22

the first $10,000 contributed during the taxable year by the

23

business firm, and which shall not exceed 90% of the remaining

24

amount contributed during the taxable year by the business firm.

25

The tax credit shall not exceed $150,000 annually per business

26

firm for contributions made to prekindergarten scholarship

27

organizations.

28

(d)  Combination of tax credits.--A business firm may receive

29

tax credits from the Department of Revenue in any tax year for

30

any combination of contributions under subsection (a), (b) or

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1

(c). In no case may a business firm receive tax credits in any

2

tax year in excess of $300,000 for contributions under

3

subsections (a) and (b). In no case shall a business firm

4

receive tax credits in any tax year in excess of $150,000 for

5

contributions under subsection (c).

6

(e)  Pass-through entity.--

7

(1)  If a pass-through entity does not intend to use all

8

approved tax credits under this section, it may elect in

9

writing to transfer all or a portion of the tax credit to

10

shareholders, members or partners in proportion to the share

11

of the entity's distributive income to which the shareholder,

12

member or partner is entitled for use in the taxable year in

13

which the contribution is made or in the taxable year

14

immediately following the year in which the contribution is

15

made. The election shall designate the year in which the

16

transferred tax credits are to be used and shall be made

17

according to procedures established by the Department of

18

Revenue.

19

(2)  A pass-through entity and a shareholder, member or

20

partner of a pass-through entity shall not claim the tax

21

credit under this section for the same contribution.

22

(3)  The shareholder, member or partner may not carry

23

forward, carry back, obtain a refund of or sell or assign the

24

tax credit.

25

(4)  The shareholder, member or partner may claim the

26

credit on a joint return, but the tax credit may not exceed

27

the separate income of that shareholder, member or partner.

28

(f)  Restriction on applicability of credits.--No tax credits

29

shall be applied against any tax withheld by an employer from an

30

employee under Article III of the Tax Reform Code of 1971.

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1

(g)  Time of application for credits.--

2

(1)  The department may accept advance applications

3

beginning on May 15 from business firms in Group 1 and Group

4

2 for tax credits available during a fiscal year that is to

5

begin on July 1.

6

(2)  If, on July 1 of a fiscal year, applications for tax

7

credits available during the fiscal year exceed the total

8

aggregate amount of tax credits available for the fiscal

9

year, the department shall approve applications for tax

10

credits on the following basis, subject to the provisions of

11

section 2523-B:

12

(i)  Group 1 firms whose advance applications were

13

received by July 1 shall be accorded first priority in

14

the approval of tax credit applications. If tax credits

15

applied for by Group 1 firms exceed the total aggregate

16

amount of tax credits available for the program under

17

section 2525-B, the department shall approve on a pro

18

rata basis the applications of all Group 1 firms that

19

applied by July 1, and the applications of Group 2 and

20

Group 3 firms shall be denied. Approval of a reduced tax

21

credit under this subparagraph shall not disqualify a

22

Group 1 firm from receiving a 90% tax credit under

23

subsection (b) even if the amount of tax credit approved

24

would require the Group 1 firm to make a lower

25

scholarship contribution in the second year of a two-year

26

commitment.

27

(ii)  If tax credits remain available after credits

28

have been awarded under subparagraph (i), Group 2 firms

29

whose applications were received by July 1 shall be

30

accorded priority in the approval of applications for the

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1

remaining tax credits. If the sum of the tax credits

2

approved under subparagraph (i) and the credits applied

3

for by Group 2 firms exceeds the total aggregate amount

4

of tax credits available for the program under section

5

2525-B, the department shall approve on a pro rata basis

6

the applications for the remaining tax credits submitted

7

by all Group 2 firms that applied by July 1, and the

8

applications of Group 3 firms shall be denied.

9

(iii)  If tax credits remain available after credits

10

have been awarded under subparagraphs (i) and (ii),

11

applications of Group 3 firms shall be approved on a

12

daily basis, beginning on July 1. If, on any day, the sum

13

of the tax credits approved under subparagraphs (i) and

14

(ii) and the tax credits applied for on that day by Group

15

3 firms exceeds the total aggregate amount of tax credits

16

available for the program under section 2525-B, the

17

department shall approve on a pro rata basis the

18

applications received on that day.

19

Section 2525-B.  Limitations.

20

(a)  Amount.--

21

(1)  For the fiscal years 2011-2012, 2012-2013 and

22

2013-2014, the total aggregate amount of all tax credits

23

approved shall not exceed $100,000,000 in a fiscal year. No

24

less than 75% of the total aggregate amount of all tax

25

credits approved shall be used to provide tax credits for

26

contributions from business firms to scholarship

27

organizations. No less than 25% of the total aggregate amount

28

of all tax credits approved shall be used to provide tax

29

credits for contributions from business firms to educational

30

improvement organizations.

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1

(2)  (i)  Subject to adjustment under subparagraph (ii),

2

in the fiscal year 2014-2015 and each fiscal year

3

thereafter, the total aggregate amount of all tax credits

4

available shall equal the total aggregate amount of all

5

tax credits available in the prior fiscal year.

6

(ii)  Beginning in the fiscal year 2014-2015, in any

7

fiscal year in which the total aggregate amount of all

8

tax credits approved for the prior fiscal year is equal

9

to or greater than 90% of the total aggregate amount of

10

all tax credits available for the prior fiscal year, the

11

total aggregate amount of all tax credits available shall

12

increase by 5%. The department shall publish on its

13

Internet website the total aggregate amount of all tax

14

credits available when the amount is increased under this

15

paragraph.

16

(3)  For the fiscal years 2011-2012, 2012-2013 and

17

2013-2014, the total aggregate amount of all tax credits

18

approved for contributions from business firms to

19

prekindergarten scholarship programs shall not exceed

20

$8,000,000 in a fiscal year.

21

(4)  (i)  Subject to adjustment in subparagraph (ii), in

22

the fiscal year 2014-2015 and each fiscal year

23

thereafter, the total aggregate amount of all tax credits

24

available to prekindergarten scholarship programs shall

25

equal the total aggregate amount of all tax credits

26

available to prekindergarten scholarship programs in the

27

prior fiscal year.

28

(ii)  Beginning in the fiscal year 2014-2015, in any

29

fiscal year in which the total aggregate amount of all

30

tax credits available is increased under paragraph (2),

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1

the total aggregate amount of all tax credits available

2

for prekindergarten scholarship programs shall increase

3

by 5%. The department shall publish on its Internet

4

website the total aggregate amount of all tax credits

5

available for prekindergarten scholarship programs when

6

the amount is increased under this paragraph.

7

(b)  Activities.--No tax credit shall be approved for

8

activities that are a part of a business firm's normal course of

9

business.

10

(c)  Tax liability.--

11

(1)  Except as provided in paragraph (2), a tax credit

12

granted for any one taxable year may not exceed the tax

13

liability of a business firm.

14

(2)  In the case of a credit granted to a pass-through

15

entity which elects to transfer the credit according to

16

section 2524-B(e), a tax credit granted for any one taxable

17

year and transferred to a shareholder, member or partner may

18

not exceed the tax liability of the shareholder, member or

19

partner.

20

(d)  Use.--A tax credit not used by the applicant in the

21

taxable year the contribution was made or in the year designated

22

by the shareholder, member or partner to whom the credit was

23

transferred under section 2524-B(e) may not be carried forward

24

or carried back and is not refundable or transferable.

25

(e)  Nontaxable income.--A scholarship received by an

26

eligible student or eligible prekindergarten student shall not

27

be considered to be taxable income for the purposes of Article

28

III of the act of March 4, 1971 (P.L.6, No.2), known as the Tax

29

Reform Code of 1971.

30

Section 2526-B.  Lists.

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1

The Department of Revenue shall provide to the General

2

Assembly, by June 30 of each year, a list of all scholarship

3

organizations, prekindergarten scholarship organizations and

4

educational improvement organizations that receive contributions

5

from business firms granted a tax credit.

6

Section 2527-B.  Guidelines.

7

The department, in consultation with the Department of

8

Education, shall develop guidelines to determine the eligibility

9

of an innovative educational program.

10

Section 2.  Repeals are as follows:

11

(1)  The General Assembly declares that the repeal under

12

paragraph (2) is necessary to effectuate the addition of

13

Article XXV-B of the act.

14

(2)  Article XVII-F of the act of March 4, 1971 (P.L.6,

15

No.2), known as the Tax Reform Code of 1971, is repealed.

16

Section 3.  The provisions of Article XXV-B of the act are

17

severable. If any provision of that article or its application

18

to any person or circumstance is held invalid, the invalidity

19

shall not affect other provisions or applications of that

20

article which can be given effect without the invalid provision

21

or application.

22

Section 4.  This act shall take effect in 60 days.

- 46 -