PRIOR PRINTER'S NO. 226

PRINTER'S NO.  721

  

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

  

  

SENATOR PICCOLA, EDUCATION, AS AMENDED, MARCH 1, 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

"Fund."  The Excess Scholarship Fund established in this

<--

9

subarticle.

10

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

11

determining eligibility for a free or reduced-price lunch under

12

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

13

1751 et seq.).

14

"Kindergarten."  A one-year formal kindergarten program that

<--

15

occurs during the school year immediately prior to first grade.

16

"Local scholarship."  A scholarship that is both:

17

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

18

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

19

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

20

average daily membership.

21

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

22

attend a nonresident public school.

23

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

24

income that does not exceed 1.3 times the Federal poverty line

25

for the school year preceding the school year for which an

26

opportunity scholarship is to be distributed.

27

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

28

located within this Commonwealth where a Commonwealth resident

29

may legally fulfill the compulsory school attendance

30

requirements of this act and that meets the applicable

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1

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

2

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

3

part-time kindergarten program operated by a nonpublic school.

4

"Nonresident public school."  A public school outside a

5

child's resident school district.

6

"Nonresident school district."  A school district other than

7

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

8

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

9

school outside the child's resident school district.

10

"Opportunity scholarship."  An opportunity scholarship

11

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

12

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

13

participating nonpublic school.

14

"Opportunity scholarship program" or "program."  The

15

opportunity scholarship program established under this

16

subarticle.

17

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

18

is awarded an opportunity scholarship under this subarticle.

19

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

20

guardian of a school-age child.

21

"Participating nonpublic school."  A nonpublic school located

22

in this Commonwealth and offering a program of instruction for

23

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

24

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

25

the following criteria:

26

(1)  the nonpublic school is a nonprofit entity that is

<--

27

exempt from Federal taxation under section 501(c)(3) of the

28

Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §

29

1 et seq.);

30

(1) (2)  the nonpublic school does not discriminate in

<--

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1

its admission policies or practices for opportunity

2

scholarship applicants on the basis of measures of

3

achievement or aptitude or status as a handicapped person,

4

provided, however, that an applicant may be required to meet

5

established eligibility criteria for participation in magnet

6

schools or in schools with specialized academic missions; and

7

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

<--

8

all Federal and State laws.

9

"Persistently lowest achieving school."  A public elementary

10

or secondary school within this Commonwealth achieving within

11

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

12

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

13

publicly accessible Internet website. The term does not include

14

a charter school, cyber charter school or, area vocational-

<--

15

technical school, a school that does not draw its student body

<--

16

from a particular attendance boundary or a school with a

17

specialized academic program that has specific admissions

18

criteria.

19

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

20

school-age child resides.

21

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

22

grades 1 through 12.

23

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

24

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

25

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

26

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

27

with a disability).

28

"Total revenue per average daily membership."  A school

29

district's total revenue per average daily membership minus the

<--

30

amount of reimbursement to the school district for pupil

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1

transportation under section 2541.

2

Section 2503-B.  Opportunity scholarship program.

3

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

4

year, the opportunity scholarship program shall be established

5

to provide scholarships to help low-income children pay tuition

6

to attend a nonresident public school or a participating

7

nonpublic school.

8

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

9

phased in as follows:

10

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

11

scholarship program shall be available to low-income children

12

who satisfy both of the following:

13

(i)  Attended Either attended a persistently lowest

<--

14

achieving school during the 2010-2011 school year or will

<--

15

be a kindergarten student during the 2011-2012 school

16

year.

17

(ii)  Will reside within the attendance boundary of a

18

persistently lowest achieving school during the 2011-2012

19

school year.

20

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

21

scholarship program shall be available to low-income children

22

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

23

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

<--

24

both of the following:

25

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

26

school year.

27

(ii)  Will will reside within the attendance boundary

<--

28

of a persistently lowest achieving school during the

29

2012-2013 school year.

30

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

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1

year thereafter, the opportunity scholarship program shall be

2

available to all low-income children residing in this

3

Commonwealth.

4

(c)  List of persistently lowest achieving schools to be

5

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

6

thereafter, the department shall publish on the department's

7

publicly accessible Internet website and in the Pennsylvania

8

Bulletin a list of persistently lowest achieving schools that

9

will be in effect for purposes of this subarticle for the

10

following school year. The department shall publish the list

11

based upon the most recent school year for which data is

12

available.

13

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

14

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

15

thereafter, each school district in this Commonwealth shall

16

provide all residents of the school district with school-age

17

children with notice of the following:

18

(i)  A description of the opportunity scholarship

19

program.

20

(ii)  Instructions for applying for an opportunity

21

scholarship.

22

(iii)  Instructions for applying for a local

23

scholarship where the school district has elected to

24

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

25

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

26

school district have been designated by the department as

27

persistently lowest achieving schools.

28

(v)  Notice that a parent must contact directly the

29

nonresident public school or participating nonpublic

30

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

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1

application instructions.

2

(2)  The school district shall provide such notice by

3

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

4

children and by notice posted on the school district's

5

publicly accessible Internet website. The notice shall be in

6

a form provided by the board.

7

Section 2504-B.  Opportunity scholarship to attend a nonresident

8

public school.

9

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

10

participate in the opportunity scholarship program may receive

11

an opportunity scholarship to pay tuition to attend a

12

nonresident public school that accepts a child's enrollment

13

application under subsection (d).

14

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

15

provide a local scholarship to low-income children residing

16

within the school district to pay tuition to attend a

17

nonresident public school that accepts a child's enrollment

18

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

19

to provide a local scholarship shall:

20

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

21

thereafter, notify all residents of the school district with

22

school-age children of the availability and amount of the

23

local scholarship for the following school year and the

24

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

25

receive the opportunity and local scholarships. The school

26

district shall provide the notice by mail to all residents of

27

the school district with school-age children and by notice

28

posted on the school district's publicly accessible Internet

29

website. The notice may be incorporated into the notice the

30

school district is required to provide under section 2503-

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1

B(d).

2

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

3

thereafter, notify the board of the availability and amount

4

of the local scholarship for the following school year.

5

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

6

board the local scholarship for each low-income child

7

residing in the district who the board determines to be

8

eligible for the local scholarship and who the board confirms

9

has enrolled in a nonresident public school.

10

(4)  Comply with all guidelines developed by the board

11

under section 2509-B.

12

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

13

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

14

thereafter, pursuant to guidelines developed by the board

15

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

16

apply to the board:

17

(i)  For an opportunity scholarship for the following

18

school year.

19

(ii)  For a local scholarship for the following

20

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

21

district has elected to provide a local scholarship under

22

subsection (b).

23

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

24

thereafter, the board shall notify parents whether the

25

scholarships for which the student applied will be awarded

26

for the following school year.

27

(d)  Application for enrollment in a nonresident public

28

school.--

29

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

30

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

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1

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

2

or more nonresident public schools for enrollment of the

3

child for the following school year. The application shall be

4

on a form provided by the nonresident school district.

5

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

6

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

7

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

8

whether the child will be offered enrollment in the

9

requested nonresident public school for the following

10

school year.

11

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

12

parent must provide written notice to the board, the

13

resident school district and the nonresident school

14

district whether the offer of enrollment will be

15

accepted.

16

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

17

public school, the child's resident school district shall

18

determine the public school within the resident school

19

district to which the child will be assigned.

20

(3)  Each school district shall develop guidelines

21

setting forth the terms and conditions under which it will

22

enroll nonresident students receiving opportunity and local

23

scholarships and shall develop an enrollment application form

24

and process. If a school district determines to enroll

25

nonresident students receiving opportunity and local

26

scholarships, the school district must enroll such

27

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

28

provided that:

29

(i)  the nonresident student's enrollment in the

30

nonresident school district would not place either the

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1

nonresident school district or the resident school

2

district in violation of a valid and binding

3

desegregation order;

4

(ii)  the nonresident student has not been expelled

5

nor is the nonresident student in the process of being

6

expelled under section 1317.2 or 1318 and applicable

7

regulations of the State Board of Education; or

<--

8

(iii)  the nonresident student has not been recruited

<--

9

by the school district or its representatives for

10

athletic purposes; or

11

(iii) (iv)  the nonresident student meets the

<--

12

established eligibility criteria for participation in a

13

magnet school or in a public school with a specialized

14

academic mission.

15

(4)  A nonresident school district may give priority in

16

enrollment to a nonresident student who has been awarded a

17

local scholarship.

18

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

19

payment pursuant to the schedule contained in section 2517 to

20

each school district or area vocational-technical school that

21

accepts a nonresident student under the provisions of this

22

subarticle subject to the following terms and conditions:

23

(1)  The Commonwealth shall pay to each school district

24

or area vocational-technical school that accepts a

25

nonresident student, on a tuition basis, the amount

26

determined under section 2506-B.

27

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

28

scholarship recipient and defined as a "student with a

29

disability," services provided to the opportunity

30

scholarship recipient shall be charged against the

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1

Commonwealth's special education subsidy to the resident

2

school district, provided that the resident school

3

district shall not be charged more for services provided

4

to the opportunity scholarship recipient by the

5

nonresident school district than the difference between

6

the current year cost of the services had the opportunity

7

scholarship recipient remained in the resident school

8

district and the sum of the opportunity scholarship, the

9

local scholarship and the per pupil special education

10

funding following the opportunity scholarship recipient.

11

(ii)  The resident school district shall provide the

12

board with documentation of the prior year's cost of

13

services provided to the opportunity scholarship

14

recipient and an estimate of the cost of providing those

15

services in the current year had the opportunity

16

scholarship recipient remained in the resident school

17

district. Any cost not covered by this funding shall be

18

borne by the nonresident school district enrolling the

19

opportunity scholarship recipient.

20

(3)  An opportunity scholarship recipient shall be

21

included in the average daily membership of the opportunity

22

scholarship recipient's resident school district.

23

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

24

district to an opportunity scholarship recipient under this

25

subarticle shall not exceed the sum of the opportunity

26

scholarship and the local scholarship awarded to the opportunity

27

scholarship recipient.

28

(g)  Transportation.--Notwithstanding any provisions of

<--

29

(1)  Notwithstanding any provisions of section 1361 to

<--

30

the contrary, a school district that provides its resident

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1

public school pupils with transportation to and from the

2

resident public schools or to and from any points within or

3

without this Commonwealth in order to provide field trips

4

under section 1361 shall provide a student who resides within

5

the school district but regularly attends a nonresident

6

public school, including a charter school, that is located

7

not more than ten miles from the student's resident school

8

district by the nearest public highway, with transportation

9

to and from such nonresident public school or to and from any

10

points within or without this Commonwealth in order to

11

provide field trips under section 1361.

12

(2)  Transportation of a student under this subsection

<--

13

shall be subject to reimbursement under section 2541.

14

Section 2505-B.  Opportunity scholarships to attend a

15

participating nonpublic school.

16

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

17

eligible to receive an opportunity scholarship under section

18

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

19

attend a participating nonpublic school must:

20

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

21

thereafter, apply to the board for an opportunity scholarship

22

for the following school year pursuant to guidelines

23

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

24

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

25

parents whether the opportunity scholarship will be awarded

26

for the following school year.

27

(2)  Apply for enrollment directly to the participating

28

nonpublic school pursuant to application procedures developed

29

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

30

by July 1 of each year thereafter, a participating nonpublic

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1

school shall provide written confirmation to the board of

2

each opportunity scholarship recipient whose application for

3

enrollment has been accepted for the following school year.

4

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

5

Commonwealth shall provide payment of an opportunity scholarship

6

to the parents of each opportunity scholarship recipient who is

7

enrolled in a participating nonpublic school under the

8

provisions of this subarticle subject to the following terms and

9

conditions:

10

(1)  Opportunity scholarships shall be awarded only for

11

the payment of costs of tuition at a participating nonpublic

12

school within this Commonwealth. Opportunity scholarships

13

shall not be awarded for enrollment in a home education

14

program provided under section 1327.1.

15

(2)  Opportunity scholarships shall be paid to the

16

parents of an opportunity scholarship recipient upon the

17

board's receipt of written confirmation of enrollment from

18

the participating nonpublic school selected by the recipient.

19

The opportunity scholarship award shall be paid by check

20

which may be endorsed by the parents only for payment of

21

tuition at the participating nonpublic school at which the

22

opportunity scholarship recipient's enrollment has been

23

confirmed.

24

(3)  In the event an opportunity scholarship recipient is

25

no longer enrolled in a participating nonpublic school prior

26

to the completion of the school year, the following shall

27

apply:

28

(i)  The participating nonpublic school shall, within

29

15 days of the opportunity scholarship recipient's

30

withdrawal from the participating nonpublic school:

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1

(A)  Provide the board with written notice of the

2

opportunity scholarship recipient's withdrawal from

3

the participating nonpublic school.

4

(B)  Return to the opportunity scholarship

5

recipient's parent the full amount of the opportunity

6

scholarship payment reduced on a pro rata basis by

7

the tuition for the portion of the school year in

8

which the opportunity scholarship recipient was

9

enrolled. The amount returned to the parent under

10

this paragraph shall be paid by check which may be

11

endorsed by the parents only for repayment to the

12

board of the refunded opportunity scholarship award.

13

(ii)  If the parents of the opportunity scholarship

14

recipient fail to submit to the board the full amount of

15

the opportunity scholarship returned to the parents under

16

subparagraph (i) within 15 days of receipt of

17

notification from the board that such payment is due, the

18

board shall impose interest on the unpaid amount,

19

calculated from the due date at the rate determined by

20

the Secretary of Revenue for interest payments on overdue

21

taxes or the refund of taxes as provided in sections 806

22

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

23

known as The Fiscal Code.

24

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

25

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

26

full amount of the required refund to the board within

27

180 days of written demand thereof, the board shall also

28

impose a civil penalty not to exceed the full amount of

29

the annual opportunity scholarship award made to the

30

parents and disqualification from future eligibility for

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1

an opportunity scholarship.

2

(iv)  If the opportunity scholarship recipient

3

enrolls in another participating nonpublic school within

4

the school year for which the opportunity scholarship was

5

awarded, the board shall pay the parent of the

6

opportunity scholarship recipient the opportunity

7

scholarship award prorated for the remaining portion of

8

the school year.

9

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

10

participating nonpublic school which admits an opportunity

11

scholarship recipient:

12

(1)  The participating nonpublic school shall not

13

discriminate on any basis that is illegal under Federal or

14

State law.

15

(2)  The participating nonpublic school shall comply with

16

section 1521, which prohibits discrimination in enrollment on

17

the basis of race or color.

18

(3)  The participating nonpublic school may not recruit

<--

19

any public school student to enroll for athletic purposes.

20

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

<--

21

thereafter, a nonpublic school that desires to enroll

22

opportunity scholarship recipients under this subarticle

23

shall certify to the board that it satisfies the definition

24

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

25

certification shall be on a form developed by the board.

26

(d)  Policies.--Upon request, a participating nonpublic

<--

27

school shall make available for review by the parents of any

28

opportunity scholarship recipient seeking enrollment, its

29

written school policies and procedures related to tuition

30

charges, admissions, academic offerings and requirements,

- 18 -

 


1

discipline, religious instruction, parent involvement and

2

extracurricular activities.

3

(d) (e)  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

- 19 -

 


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

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

<--

8

opportunity scholarship award and the any additional

<--

9

financial assistance provided by the participating nonpublic

10

school exceed the tuition rate for the participating

11

nonpublic school.

12

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

13

participating nonpublic school may charge an opportunity

14

scholarship recipient a higher tuition rate than the rate the

15

nonresident public school or participating nonpublic school

16

would have charged to a student who had not received an

17

opportunity scholarship.

18

(c)  Excess Scholarship Fund.--

19

(1)  The Excess Scholarship Fund is established in the

20

State Treasury and shall be funded by the amount of the

21

opportunity scholarship awarded to an opportunity scholarship

22

recipient under this subarticle in excess of the amount of

23

tuition charged to the opportunity scholarship recipient.

24

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

25

applied toward costs of the opportunity scholarship program

26

beginning in the 2012-2013 school year and each school year

<--

27

thereafter.

28

(d)  Annual appropriations.--

29

(1)  Opportunity scholarships authorized under this

30

subarticle shall be made from annual appropriations made by

- 20 -

 


1

the General Assembly to the department and moneys available

<--

2

in the fund for that purpose.

3

(2)  In the event that insufficient moneys are

4

appropriated available in any fiscal year to provide

<--

5

opportunity scholarships to all eligible opportunity

6

scholarship recipients in the amount authorized, the board

7

shall make pro rata reductions in the amount of the

8

opportunity scholarship provided to each opportunity

9

scholarship recipient.

10

(3)  The total amount of opportunity scholarships

11

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

12

money appropriated for that fiscal year and moneys in the

<--

13

fund.

14

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

15

parent pursuant to this subarticle shall not be considered

16

taxable income for purposes of any local taxing ordinance or for

17

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

18

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

19

opportunity scholarships constitute financial assistance or

20

appropriations to the participating nonpublic school attended by

21

the opportunity scholarship recipient.

22

(f)  Continued eligibility.--

23

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

24

nonresident public school or a participating nonpublic school

25

who received an opportunity scholarship under this subarticle

26

in the prior school year shall receive an opportunity

27

scholarship in each school year of enrollment under the

28

opportunity scholarship program, provided that the child

29

remains eligible.

30

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

- 21 -

 


1

scholarship under this subarticle in the prior school

2

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

3

shall continue to receive a partial scholarship until

4

completing the eighth grade, provided that the child

5

continues to meet all other eligibility requirements.

6

(ii)  In calculating the amount of the partial

7

scholarship, the board shall make a pro rata reduction in

8

the child's opportunity scholarship award based upon the

9

child's household income.

10

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

11

opportunity or local scholarship application or who knowingly

12

falsifies material information on an opportunity or local

13

scholarship application shall be subject to the following

14

penalties:

15

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

16

$1,000.

17

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

18

(relating to unsworn falsification to authorities).

19

(3)  Disqualification from future participation in the

20

opportunity scholarship program.

21

Section 2507-B.  Guidelines.

22

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

23

this section, the board shall establish guidelines that provide

24

the following:

25

(1)  Forms to apply for opportunity and local

26

scholarships, including application and approval processes

27

and deadlines for application and notification.

28

(2)  Procedures to verify the accuracy of the information

29

provided in an opportunity or local scholarship application.

30

(3)  Procedures for school district, school and parent

- 22 -

 


1

notification of opportunity or local scholarship awards.

2

(4)  Procedures for administration of the opportunity and

3

local scholarship programs.

4

(5)  Confirmation of school enrollment by opportunity

5

scholarship recipients.

6

(6)  For an opportunity scholarship recipient enrolled in

7

a participating nonpublic school, restrictive endorsement of

8

opportunity scholarship award checks to the participating

9

nonpublic school in which the opportunity scholarship

10

recipient is enrolled.

11

(7)  Procedures for participating nonpublic schools to

12

pay pro rata refunds of opportunity scholarships to the

13

parents of opportunity scholarship recipients who withdraw

14

from a participating nonpublic school during the school year

15

for which the opportunity scholarship was paid.

16

(8)  Development and distribution of public information

17

concerning the opportunity and local scholarship and

18

interdistrict enrollment programs.

19

(9)  Such other procedures as are necessary to fully

20

implement the opportunity and local scholarship and

21

interdistrict enrollment programs.

22

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

23

statement of policy in the Pennsylvania Bulletin. The board

24

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

25

nonpublic school in this Commonwealth and shall post the

26

guidelines on the department's publicly accessible Internet

27

website.

28

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

29

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

30

guidelines authorized by this subarticle shall not be subject to

- 23 -

 


1

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

2

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

3

guidelines established by the board, and any amendments thereto,

4

shall be exempt from the requirements of the following:

5

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

6

the Regulatory Review Act.

7

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

8

to as the Commonwealth Documents Law.

9

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

10

as the Commonwealth Attorneys Act.

11

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

12

Notwithstanding any other provision of law to the contrary,

13

beginning in the second consecutive school year of enrollment in

14

a nonresident public school or a participating nonpublic school

15

by an opportunity scholarship recipient who was enrolled in the

16

recipient's resident school district or in a charter school or

<--

17

cyber charter school when the recipient first received an

18

opportunity scholarship under this subarticle, the amount of

19

Commonwealth basic education funding paid by the department to

20

the resident school district shall be reduced by an amount equal

21

to the Commonwealth's share of the school district's total

22

revenue per average daily membership.

23

Section 2509-B.  Education Opportunity Board.

24

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

25

Education Opportunity Board is established within the

26

department. The board shall consist of three members appointed

27

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

28

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

29

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

30

political party as the Governor.

- 24 -

 


1

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

2

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

3

term in the same manner as original appointments. Members shall

4

continue to serve after the expiration of their term until the

5

Governor appoints a replacement who is confirmed by a majority

6

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

7

must be residents of this Commonwealth.

8

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

9

chairperson from among the membership of the board.

10

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

11

chairperson or upon request in writing of a majority of the

12

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

13

such quorum shall have the authority to act upon any matter

14

properly before the board unless otherwise specified in this

15

subarticle.

16

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

17

receive no compensation for their services but shall be

18

reimbursed for their actual and necessary expenses incurred in

19

the performance of their official board duties.

20

(f)  Executive director and staff.--

21

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

22

who shall serve as the executive officer and secretary of the

23

board. The board shall employ and fix the reasonable

24

compensation of the executive director.

25

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

26

may employ additional professional and clerical personnel as

27

may be necessary to carry out the duties and responsibilities

28

of the board.

29

(3)  The department shall provide adequate funding, space

30

and equipment to facilitate the activities of the board.

- 25 -

 


1

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

2

General Counsel, shall provide such legal advice and assistance

3

as the board may require.

4

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

5

powers and duties:

6

(1)  Establish guidelines for the administration of the

7

opportunity and local scholarship programs as required under

8

section 2507-B.

9

(2)  Administer the opportunity and local scholarship

10

application and approval processes.

11

(3)  Develop the opportunity and local scholarship

12

application form and any other forms necessary to administer

13

the opportunity and local scholarship programs, including the

14

notice required to be provided by school districts under

15

section 2503-B(d).

16

(4)  Review and verify the income and residence of

17

opportunity and local scholarship applicants.

18

(5)  Announce the award of opportunity and local

19

scholarships for the following school year under sections

20

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

21

(6)  Confirm the enrollment of opportunity scholarship

22

recipients in nonresident public schools and participating

23

nonpublic schools and allocate opportunity scholarship funds

24

to opportunity scholarship recipients.

25

(7)  Beginning after the first school year of

26

implementation of the opportunity scholarship program,

27

prepare a report to be submitted to the Governor and the

28

General Assembly by December 1 of each year, made available

29

to the parents of opportunity scholarship recipients and

30

placed on the department's publicly accessible Internet

- 26 -

 


1

website that includes at least the following information for

2

the prior school year:

3

(i)  The total number of opportunity scholarships

4

requested.

5

(ii)  The total number and total dollar amount of

6

opportunity scholarships awarded, in total and

7

disaggregated by:

8

(A)  Whether the opportunity scholarship

9

recipient attends a nonresident public school or a

10

participating nonpublic school.

11

(B)  Grade level of the opportunity scholarship

12

recipient.

13

(C)  Whether the opportunity scholarship

14

recipient resides in a school district with at least

15

one persistently lowest achieving school.

16

(iii)  The administrative costs of the opportunity

17

scholarship program.

18

(iv)  A listing of nonresident public schools to

19

which opportunity scholarship funds were disbursed on

20

behalf of opportunity scholarship recipients and the

21

amount disbursed to each nonresident public school.

22

(v)  A listing of participating nonpublic schools in

23

which opportunity scholarship recipients enrolled and the

24

number of opportunity scholarship recipients who enrolled

25

in each participating nonpublic school.

26

(vi)  The total number and total dollar amount of

27

local scholarships awarded, disaggregated by the resident

28

school districts that made the local scholarship awards.

29

Section 2510-B.  Study.

30

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

- 27 -

 


1

a study of the effectiveness of the opportunity scholarship

2

program and shall deliver a written report of its findings,

3

including any recommendations for changes to the program, to the

4

Governor, the chairman and minority chairman of the Education

5

Committee of the Senate and the chairman and minority chairman

6

of the Education Committee of the House of Representatives by

7

December 31, 2015.

8

Section 2511-B.  Exclusive jurisdiction of Supreme Court.

9

The Pennsylvania Supreme Court shall have exclusive

10

jurisdiction to hear any challenge or to render a declaratory

11

judgment concerning the constitutionality of this subarticle.

12

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

13

consistent with the Supreme Court's retaining jurisdiction over

14

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

15

connection with such a challenge or request for declaratory

16

relief.

17

Section 2512-B.  Optional local tuition grant program.

18

A school district may, out of funds received from the

19

Commonwealth for educational purposes, establish a program of

20

tuition grants to provide for the education of resident students

21

who wish to attend a nonresident public school or a

22

participating nonpublic school on a tuition basis. A student who

23

receives a tuition grant under this section shall be included in

24

the average daily membership of the student's resident school

25

district for the purpose of providing basic education funding

26

and special education funding under Article XXV.

27

(c)  Educational Improvement Tax Credit

28

Section 2521-B.  Definitions.

29

The following words and phrases when used in this subarticle

30

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

- 28 -

 


1

context clearly indicates otherwise:

2

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

3

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

4

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

5

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

6

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

7

firm shall be included in one of the following groups:

8

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

9

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

10

for tax credits for a contribution to an educational

11

improvement organization that is also a school district

12

foundation, public school foundation, charter school

13

foundation or cyber charter school foundation.

14

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

15

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

16

fiscal year or is applying for tax credits for a contribution

17

to a prekindergarten scholarship organization in the same

18

amount that it had contributed in the most recent fiscal

19

year.

20

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

21

business firm in Group 1 or Group 2.

22

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

23

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

24

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

25

the individual performing the services.

26

"Department."  The Department of Community and Economic

27

Development of the Commonwealth.

28

"Educational improvement organization."  A nonprofit entity

29

which:

30

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

- 29 -

 


1

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

2

26 U.S.C. § 1 et seq.); and

3

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

4

grants to a public school for innovative educational

5

programs.

6

For purposes of this definition, a nonprofit entity

7

"contributes" its annual cash receipts when it expends or

8

otherwise irrevocably encumbers those funds for expenditure

9

during the then current fiscal year of the nonprofit entity or

10

during the next succeeding fiscal year of the nonprofit entity.

11

A "nonprofit entity" includes a school district foundation,

12

public school foundation, charter school foundation or cyber

13

charter school foundation.

14

"Eligible prekindergarten student."  A student, including an

15

eligible student with a disability, who is enrolled in a

16

prekindergarten program and is a member of a household with a

17

maximum annual household income as increased by the applicable

18

income allowance.

19

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

20

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

21

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

22

income as increased by the applicable income allowance.

23

"Eligible student with a disability."  A prekindergarten

24

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

25

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

26

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

27

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

28

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

29

(relating to child with a disability).

30

(2)  Needs special education and related services.

- 30 -

 


1

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

2

school.

3

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

4

of not more than the maximum annual household income.

5

"Household."  An individual living alone or with the

6

following: a spouse, parent and their unemancipated minor

7

children, other unemancipated minor children who are related by

8

blood or marriage or other adults or unemancipated minor

9

children living in the household who are dependent upon the

10

individual.

11

"Household income."  All moneys or property received of

12

whatever nature and from whatever source derived. The term does

13

not include the following:

14

(1)  Periodic payments for sickness and disability other

15

than regular wages received during a period of sickness or

16

disability.

17

(2)  Disability, retirement or other payments arising

18

under workers' compensation acts, occupational disease acts

19

and similar legislation by any government.

20

(3)  Payments commonly recognized as old-age or

21

retirement benefits paid to persons retired from service

22

after reaching a specific age or after a stated period of

23

employment.

24

(4)  Payments commonly known as public assistance or

25

unemployment compensation payments by a governmental agency.

26

(5)  Payments to reimburse actual expenses.

27

(6)  Payments made by employers or labor unions for

28

programs covering hospitalization, sickness, disability or

29

death, supplemental unemployment benefits, strike benefits,

30

Social Security and retirement.

- 31 -

 


1

(7)  Compensation received by United States servicemen

2

serving in a combat zone.

3

"Income allowance."

4

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

5

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

6

student, eligible prekindergarten student and dependent

7

member of a household.

8

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

9

student, eligible prekindergarten student and dependent

10

member of a household.

11

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

12

and Economic Development shall annually adjust the income

13

allowance amounts under paragraph (1) to reflect any upward

14

changes in the Consumer Price Index for All Urban Consumers

15

for the Pennsylvania, New Jersey, Delaware and Maryland area

16

in the preceding 12 months and shall immediately submit the

17

adjusted amounts to the Legislative Reference Bureau for

18

publication as a notice in the Pennsylvania Bulletin.

19

"Innovative educational program."  An advanced academic or

20

similar program that is not part of the regular academic program

21

of a public school but that enhances the curriculum or academic

22

program of the public school or provides prekindergarten

23

programs to public school students.

24

"Maximum annual household income."

25

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

26

paragraph (3), the following:

27

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

28

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

29

(2)  With respect to an eligible student with a

30

disability, as calculated by multiplying:

- 32 -

 


1

(i)  the sum of:

2

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

3

and

4

(B)  the applicable income allowance; by

5

(ii)  the applicable support level factor according

6

to the following table:

7

Support Level

Support Level Factor

8

1

1.50

9

2

2.993

10

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

11

and Economic Development shall annually adjust the income

12

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

13

changes in the Consumer Price Index for All Urban Consumers

14

for the Pennsylvania, New Jersey, Delaware and Maryland area

15

in the preceding 12 months and shall immediately submit the

16

adjusted amounts to the Legislative Reference Bureau for

17

publication as a notice in the Pennsylvania Bulletin.

18

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

19

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

20

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

21

company treated as a disregarded entity for Federal income tax

22

purposes or a Pennsylvania S corporation as defined in section

23

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

24

"Prekindergarten program."  A program of instruction for

25

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

26

curriculum aligned with the curriculum of the school with which

27

it is affiliated and that provides:

28

(1)  a minimum of two hours of instructional and

29

developmental activities per day at least 60 days per school

30

year; or

- 33 -

 


1

(2)  a minimum of two hours of instructional and

2

developmental activities per day at least 20 days over the

3

summer recess.

4

"Prekindergarten scholarship organization."  A nonprofit

5

entity that:

6

(1)  Either is exempt from Federal taxation under section

7

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

8

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

9

segregated fund by a scholarship organization that has been

10

qualified under section 2522-B.

11

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

12

to a prekindergarten scholarship program by expending or

13

otherwise irrevocably encumbering those funds for

14

distribution during the then current fiscal year of the

15

organization or during the next succeeding fiscal year of the

16

organization.

17

"Prekindergarten scholarship program."  A program to provide

18

tuition to eligible prekindergarten students to attend a

19

prekindergarten program operated by or in conjunction with a

20

school located in this Commonwealth and that includes an

21

application and review process for the purpose of making awards

22

to eligible prekindergarten students and awards scholarships to

23

eligible prekindergarten students without limiting availability

24

to only students of one school.

25

"Public school."  A public prekindergarten where compulsory

26

attendance requirements do not apply or a public kindergarten,

27

elementary school or secondary school at which the compulsory

28

attendance requirements of this Commonwealth may be met and that

29

meets the applicable requirements of Title VI of the Civil

30

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

- 34 -

 


1

"Scholarship."  An award under a scholarship program.

2

"Scholarship organization."  A nonprofit entity that:

3

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

4

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

5

26 U.S.C. § 1 et seq.); and

6

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

7

to a scholarship program.

8

For purposes of this definition, a nonprofit entity

9

"contributes" its annual cash receipts to a scholarship program

10

when it expends or otherwise irrevocably encumbers those funds

11

for distribution during the then current fiscal year of the

12

nonprofit entity or during the next succeeding fiscal year of

13

the nonprofit entity.

14

"Scholarship program."  A program to provide tuition to

15

eligible students to attend a school located in this

16

Commonwealth. A scholarship program must include an application

17

and review process for the purpose of making awards to eligible

18

students. The award of scholarships to eligible students shall

19

be made without limiting availability to only students of one

20

school.

21

"School."  A kindergarten, elementary school or secondary

22

school at which the compulsory attendance requirements of the

23

Commonwealth may be met and that meets the applicable

24

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

25

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

26

prekindergarten.

27

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

28

prekindergarten or kindergarten program or, when no

29

prekindergarten or kindergarten program is provided, the

30

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

- 35 -

 


1

the school year the student attains 21 years of age or

2

graduation from high school, whichever occurs first.

3

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

4

school that is designated specifically and exclusively for

5

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

6

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

7

following:

8

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

9

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

10

(2)  is accredited by an accrediting association approved

11

by the State Board of Education;

12

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

13

Commonwealth appropriations; or

14

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

15

religious institution or by the Commonwealth or any political

16

subdivision thereof.

17

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

18

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

19

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

20

special education school.

21

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

22

special education school.

23

"Tax credit."  The educational improvement tax credit

24

established under this subarticle.

25

Section 2522-B.  Qualification and application.

26

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

27

III of the Constitution of Pennsylvania, an educational

28

improvement tax credit program is established to enhance the

29

educational opportunities available to all students in this

30

Commonwealth.

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1

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

2

a scholarship organization, a prekindergarten scholarship

3

organization or an educational improvement organization must

4

submit information to the department that enables the department

5

to confirm that the organization is exempt from taxation under

6

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

7

Law 99-514, 26 U.S.C. § 1 et seq.).

8

(c)  Scholarship organizations and prekindergarten

9

scholarship organizations.--A scholarship organization or

10

prekindergarten scholarship organization must certify to the

11

department that the organization is eligible to participate in

12

the program established under this subarticle and must agree to

13

annually report the following information to the department by

14

September 1 of each year:

15

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

16

immediately preceding school year to eligible

17

prekindergarten students.

18

(ii)  The total and average amounts of scholarships

19

awarded during the immediately preceding school year to

20

eligible prekindergarten students.

21

(iii)  The number of scholarships awarded during the

22

immediately preceding school year to eligible students in

23

grades kindergarten through eight.

24

(iv)  The total and average amounts of scholarships

25

awarded during the immediately preceding school year to

26

eligible students in grades kindergarten through eight.

27

(v)  The number of scholarships awarded during the

28

immediately preceding school year to eligible students in

29

grades 9 through 12.

30

(vi)  The total and average amounts of scholarships

- 37 -

 


1

awarded during the immediately preceding school year to

2

eligible students in grades 9 through 12.

3

(vii)  Where the scholarship organization or

4

prekindergarten scholarship organization collects

5

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

6

and the total dollar amount of scholarships awarded

7

during the immediately preceding school year to residents

8

of each county in which the scholarship organization or

9

prekindergarten scholarship organization awarded

10

scholarships.

11

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

12

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

13

than May 1 of each year, the department shall annually

14

distribute such sample forms, together with the forms on

15

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

16

scholarship organization and prekindergarten scholarship

17

organization.

18

(3)  The department may not require any other information

19

to be provided by scholarship organizations or

20

prekindergarten scholarship organizations, except as

21

expressly authorized in this subarticle.

22

(d)  Educational improvement organization.--

23

(1)  An application submitted by an educational

24

improvement organization must describe its proposed

25

innovative educational program or programs in a form

26

prescribed by the department. In prescribing the form, the

27

department shall consult with the Department of Education as

28

necessary. The department shall review and approve or

29

disapprove the application. In order to be eligible to

30

participate in the program established under this subarticle,

- 38 -

 


1

an educational improvement organization must agree to

2

annually report the following information to the department

3

by September 1 of each year:

4

(i)  The name of the innovative educational program

5

or programs and the total amount of the grant or grants

6

made to those programs during the immediately preceding

7

school year.

8

(ii)  A description of how each grant was utilized

9

during the immediately preceding school year and a

10

description of any demonstrated or expected innovative

11

educational improvements.

12

(iii)  The names of the public schools and school

13

districts where innovative educational programs that

14

received grants during the immediately preceding school

15

year were implemented.

16

(iv)  Where the educational improvement organization

17

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

18

total number and the total dollar amount of grants made

19

during the immediately preceding school year for programs

20

at public schools in each county in which the educational

21

improvement organization made grants.

22

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

23

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

24

than May 1 of each year, the department shall annually

25

distribute such sample forms, together with the forms on

26

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

27

educational improvement organization.

28

(3)  The department may not require any other information

29

to be provided by educational improvement organizations,

30

except as expressly authorized in this subarticle.

- 39 -

 


1

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

2

scholarship organization, prekindergarten scholarship

3

organization or educational improvement organization that the

4

organization meets the requirements of this subarticle for that

5

fiscal year no later than 60 days after the organization has

6

submitted the information required under this section.

7

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

8

list of each scholarship organization, prekindergarten

9

scholarship organization or educational improvement organization

10

qualified under this section in the Pennsylvania Bulletin. The

11

list shall also be posted and updated as necessary on the

12

publicly accessible Internet website of the department.

13

Section 2523-B.  Application.

14

(a)  Scholarship organization or prekindergarten scholarship

15

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

16

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

17

scholarship organization or prekindergarten scholarship

18

organization that receives the contribution appears on the list

19

established under section 2522-B(f).

20

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

21

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

22

shall receive a tax credit if the department has approved the

23

program provided by the educational improvement organization

24

that receives the contribution.

25

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

26

scholarship organization, prekindergarten scholarship

27

organization or educational improvement organization shall be

28

made no later than 60 days following the approval of an

29

application under subsection (a) or (b).

30

Section 2524-B.  Tax credit.

- 40 -

 


1

(a)  Scholarship or educational improvement organizations.--

2

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

3

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

4

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

5

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

6

providing proof of a contribution to a scholarship organization

7

or educational improvement organization in the taxable year in

8

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

9

total amount contributed during the taxable year by the business

10

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

11

business firm for contributions made to scholarship

12

organizations or educational improvement organizations.

13

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

14

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

15

during the taxable year if the business firm provides a written

16

commitment to provide the scholarship organization or

17

educational improvement organization with the same amount of

18

contribution for two consecutive tax years. The business firm

19

must provide the written commitment under this subsection to the

20

department at the time of application.

21

(c)  Prekindergarten scholarship organizations.--In

22

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

23

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

24

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

25

business firm providing proof of a contribution to a

26

prekindergarten scholarship organization in the taxable year in

27

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

28

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

29

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

30

amount contributed during the taxable year by the business firm.

- 41 -

 


1

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

2

firm for contributions made to prekindergarten scholarship

3

organizations.

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

contributions under subsection (c).

12

(e)  Pass-through entity.--

13

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

14

approved tax credits under this section, it may elect in

15

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

16

shareholders, members or partners in proportion to the share

17

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

18

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

19

which the contribution is made or in the taxable year

20

immediately following the year in which the contribution is

21

made. The election shall designate the year in which the

22

transferred tax credits are to be used and shall be made

23

according to procedures established by the Department of

24

Revenue.

25

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

26

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

27

credit under this section for the same contribution.

28

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

29

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

30

tax credit.

- 42 -

 


1

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

2

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

3

the separate income of that shareholder, member or partner.

4

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

5

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

6

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

7

(g)  Time of application for credits.--

8

(1)  The department may accept advance applications

<--

9

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

<--

10

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

11

begin on July 1.

12

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

13

credits available during the fiscal year exceed the total

14

aggregate amount of tax credits available for the fiscal

15

year, the department shall approve applications for tax

16

credits on the following basis, subject to the provisions of

17

section 2523-B:

18

(i)  Group 1 firms whose advance applications were

19

received by July 1 shall be accorded first priority in

20

the approval of tax credit applications. If tax credits

21

applied for by Group 1 firms exceed the total aggregate

22

amount of tax credits available for the program under

23

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

24

rata basis the applications of all Group 1 firms that

25

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

26

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

27

credit under this subparagraph shall not disqualify a

28

Group 1 firm from receiving a 90% tax credit under

29

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

30

would require the Group 1 firm to make a lower

- 43 -

 


1

scholarship contribution in the second year of a two-year

2

commitment.

3

(ii)  If tax credits remain available after credits

4

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

5

whose applications were received by July 1 shall be

6

accorded priority in the approval of applications for the

7

remaining tax credits. If the sum of the tax credits

8

approved under subparagraph (i) and the credits applied

9

for by Group 2 firms exceeds the total aggregate amount

10

of tax credits available for the program under section

11

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

12

the applications for the remaining tax credits submitted

13

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

14

applications of Group 3 firms shall be denied.

15

(iii)  If tax credits remain available on July 1 

<--

16

after credits have been awarded under subparagraphs (i)

17

and (ii), applications of Group 3 firms shall be

18

approved, on a pro rata basis within that group if

<--

19

necessary. Thereafter, the department shall approve the

20

applications of all business firms on a daily basis, 

<--

21

beginning on July 1. If, on any day, the. If, on any day

<--

22

after July 1, the cumulative sum of the tax credits

23

approved under subparagraphs (i) and (ii) and the tax

<--

24

credits applied for on that day by Group 3 firms exceeds

<--

25

the total aggregate amount of tax credits available for

26

the program under section 2525-B, the department shall

27

approve on a pro rata basis the applications received on

28

that day.

29

Section 2525-B.  Limitations.

30

(a)  Amount.--

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1

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

2

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

3

approved shall not exceed $100,000,000 for scholarship

<--

4

organizations and educational improvement organizations shall

5

not exceed $92,000,000 in a fiscal year. No less than 75% of

6

the total aggregate amount of all tax credits approved shall

7

be used to provide tax credits for contributions from

8

business firms to scholarship organizations. No less than 25%

9

of the total aggregate amount of all tax credits approved

10

shall be used to provide tax credits for contributions from

11

business firms to educational improvement organizations.

12

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

13

in the fiscal year 2014-2015 and each fiscal year

14

thereafter, the total aggregate amount of all tax credits

15

available shall equal the total aggregate amount of all

16

tax credits available in the prior fiscal year.

17

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

18

fiscal year in which the total aggregate amount of all

19

tax credits approved for the prior fiscal year is equal

20

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

21

all tax credits available for the prior fiscal year, the

22

total aggregate amount of all tax credits available shall

23

increase by 5%. The department shall publish on its

24

Internet website the total aggregate amount of all tax

25

credits available when the amount is increased under this

26

paragraph.

27

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

28

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

29

approved for contributions from business firms to

30

prekindergarten scholarship programs shall not exceed

- 45 -

 


1

$8,000,000 in a fiscal year.

2

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

3

the fiscal year 2014-2015 and each fiscal year

4

thereafter, the total aggregate amount of all tax credits

5

available to prekindergarten scholarship programs shall

6

equal the total aggregate amount of all tax credits

7

available to prekindergarten scholarship programs in the

8

prior fiscal year.

9

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

10

fiscal year in which the total aggregate amount of all

11

tax credits available is increased under paragraph (2),

12

the total aggregate amount of all tax credits available

13

for prekindergarten scholarship programs shall increase

14

by 5%. The department shall publish on its Internet

15

website the total aggregate amount of all tax credits

16

available for prekindergarten scholarship programs when

17

the amount is increased under this paragraph.

18

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

19

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

20

business.

21

(c)  Tax liability.--

22

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

23

granted for any one taxable year may not exceed the tax

24

liability of a business firm.

25

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

26

entity which elects to transfer the credit according to

27

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

28

year and transferred to a shareholder, member or partner may

29

not exceed the tax liability of the shareholder, member or

30

partner.

- 46 -

 


1

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

2

taxable year the contribution was made or in the year designated

3

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

4

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

5

or carried back and is not refundable or transferable.

6

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

7

eligible student or eligible prekindergarten student shall not

8

be considered to be taxable income for the purposes of Article

9

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

10

Reform Code of 1971.

11

Section 2526-B.  Lists.

12

The Department of Revenue shall provide to the General

13

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

14

organizations, prekindergarten scholarship organizations and

15

educational improvement organizations that receive contributions

16

from business firms granted a tax credit.

17

Section 2527-B.  Guidelines.

18

The department, in consultation with the Department of

19

Education, shall develop guidelines to determine the eligibility

20

of an innovative educational program.

21

Section 2.  Repeals are as follows:

22

(1)  The General Assembly declares that the repeal under

23

paragraph (2) is necessary to effectuate the addition of

24

Article XXV-B of the act.

25

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

26

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

27

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

28

severable. If any provision of that article or its application

29

to any person or circumstance is held invalid, the invalidity

30

shall not affect other provisions or applications of that

- 47 -

 


1

article which can be given effect without the invalid provision

2

or application.

3

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

- 48 -

 


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