PRIOR PRINTER'S NOS. 226, 721

PRINTER'S NO.  1031

  

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 CORMAN, APPROPRIATIONS, RE-REPORTED AS AMENDED, APRIL 11, 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

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

<--

28

income that does not exceed three times the Federal poverty line

29

for the school year immediately preceding the school year for

30

which an opportunity scholarship is to be distributed.

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1

"Middle-income scholarship."  A middle-income scholarship

2

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

3

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

4

participating nonpublic school.

5

"Middle-income scholarship recipient."  A middle-income child

6

who is awarded a middle-income scholarship under this

7

subarticle.

8

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

9

located within this Commonwealth where a Commonwealth resident

10

may legally fulfill the compulsory school attendance

11

requirements of this act and that meets the applicable

12

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

13

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

14

part-time kindergarten program operated by a nonpublic school.

15

"Nonresident public school."  A public school outside a

16

child's resident school district.

17

"Nonresident school district."  A school district other than

18

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

19

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

20

school outside the child's resident school district.

21

"Opportunity scholarship."  An opportunity scholarship

22

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

23

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

24

participating nonpublic school.

25

"Opportunity scholarship program" or "program."  The

26

opportunity scholarship program established under this

27

subarticle.

28

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

29

is awarded an opportunity scholarship under this subarticle.

30

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

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1

guardian of a school-age child.

2

"Participating nonpublic school."  A nonpublic school located

3

in this Commonwealth and offering a program of instruction for

4

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

5

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

6

the following criteria:

7

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

8

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

9

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

10

1 et seq.);

11

(2)  the nonpublic school does not discriminate in its

12

admission policies or practices for opportunity scholarship

13

applicants on the basis of measures of achievement or

14

aptitude or status as a handicapped person, provided,

15

however, that an applicant may be required to meet

16

established eligibility criteria for participation in magnet

17

schools or in schools with specialized academic missions; and

18

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

19

Federal and State laws applicable to nonpublic schools on the

<--

20

date prior to the effective date of this section.

21

"Persistently lowest achieving school."  A public elementary or

22

secondary school within this Commonwealth achieving within the

<--

23

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

24

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

25

accessible Internet website. The term does not include a charter

26

school, cyber charter school, area vocational-technical school,

27

a school that does not draw its student body from a particular

28

attendance boundary or a school with a specialized academic

29

program that has specific admissions criteria. that is among the

<--

30

lowest performing 5% of schools. To determine the lowest

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1

performing 5% of schools, the department shall:

2

(1)  consider all public schools in this Commonwealth,

3

with the exception of charter schools, cyber charter schools,

4

area vocational-technical schools, schools that do not draw

5

their student body from a particular attendance boundary and

6

schools with specialized academic programs with specific

7

admissions criteria;

8

(2)  exclude schools that have made adequate yearly

9

progress or were determined to be making progress for at

10

least one of the two most recent school years or that have

11

not been measured for adequate yearly progress in one of the

12

two most recent school years;

13

(3)  rank all remaining schools based upon their

14

performance on the most recent assessment for which data is

15

posted on the department's publicly accessible Internet

16

website; and

17

(4)  include the lowest-performing 144 schools ranked

18

under paragraph (3) on a list of persistently lowest-

19

achieving schools.

20

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

21

school-age child resides.

22

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

23

grades 1 through 12.

24

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

25

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

26

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

27

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

28

with a disability).

29

"Total revenue per average daily membership."  A school

30

district's total revenue per average daily membership minus the

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1

amount of reimbursement to the school district for pupil

2

transportation under section sections 2509.3 and 2541.

<--

3

Section 2503-B.  Opportunity scholarship program.

4

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

5

year, the opportunity scholarship program shall be established

6

to provide scholarships to help low-income children pay tuition

7

to attend a nonresident public school or a participating

8

nonpublic school.

9

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

10

phased in as follows:

11

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

12

scholarship program shall be available to low-income children

13

who satisfy both of the following:

14

(i)   Either attended a persistently lowest achieving

15

school during the 2010-2011 school year or will be a

16

kindergarten student during the 2011-2012 school year.

17

(ii)  Will reside within the attendance boundary of a

18

persistently lowest achieving school during as of the

<--

19

first day of classes of the 2011-2012 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 will 

24

reside within the attendance boundary of a persistently

25

lowest achieving school during as of the first day of classes

<--

26

of the 2012-2013 school year.

27

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

<--

28

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

<--

29

school year thereafter, the opportunity scholarship

30

program shall be available to all low-income children

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1

residing in this Commonwealth., provided that the

<--

2

aggregate amount of all opportunity scholarships awarded

3

for the 2013-2014 school year and for each school year

4

thereafter to low-income children who do not reside

5

within the attendance boundary of a persistently lowest

6

achieving school as of the first day of classes of the

7

school year shall not exceed $250,000,000.

8

(ii)  Nothing in this paragraph shall be construed to

9

limit the amount of opportunity scholarships awarded to

10

low-income children who were eligible for opportunity

11

scholarships in the 2011-2012 and 2012-2013 school years

12

or who reside within the attendance boundary of a

13

persistently lowest achieving school as of the first day

14

of classes of a school year.

15

(c)  List of persistently lowest achieving schools to be

16

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

17

thereafter, the department shall publish on the department's

18

publicly accessible Internet website and in the Pennsylvania

19

Bulletin a list of persistently lowest achieving schools that

20

will be in effect for purposes of this subarticle for the

21

following school year. The department shall publish the list

22

based upon the most recent school year for which data is

23

available.

24

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

<--

25

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

<--

26

thereafter For each school year, by a date established by the

<--

27

board, each school district in this Commonwealth shall

28

provide all residents of the school district with school-age

<--

29

children with post on its publicly accessible Internet

<--

30

website notice of the following:

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1

(i)  A description of the opportunity scholarship

2

program.

3

(ii)  Instructions for applying for an opportunity

4

scholarship.

5

(iii)  Instructions for applying for a local

6

scholarship where the school district has elected to

7

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

8

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

9

school district have been designated by the department as

10

persistently lowest achieving schools.

11

(v)  Notice that a parent must contact directly the

12

nonresident public school or participating nonpublic

13

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

14

application instructions.

15

(2)  The school district shall provide such notice by

<--

16

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

17

children and by notice posted on the school district's

18

publicly accessible Internet website. The notice shall be in

19

a form provided by the board.

20

Section 2504-B.  Opportunity scholarship to attend a nonresident

21

public school.

22

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

23

participate in the opportunity scholarship program may receive

24

an opportunity scholarship to pay tuition to attend a

25

nonresident public school that accepts a child's enrollment

26

application under subsection (d).

27

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

28

provide a local scholarship to low-income children residing

29

within the school district to pay tuition to attend a

30

nonresident public school that accepts a child's enrollment

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1

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

2

to provide a local scholarship shall:

3

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

<--

4

thereafter a date established by the board, notify all

<--

5

residents of the school district with school-age children of

<--

6

the availability and amount of the local scholarship for the

7

following school year and the process by which a low-income

8

child may apply to the board to receive the opportunity and

9

local scholarships. The school district shall provide the

<--

10

notice by mail to all residents of the school district with

11

school-age children and by notice posted post the notice on

<--

12

the school district's publicly accessible Internet website.

13

The notice may be incorporated into the notice the school

14

district is required to provide under section 2503-B(d).

15

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

<--

16

thereafter a date established by the board, notify the board

<--

17

of the availability and amount of the local scholarship for

18

the following school year.

19

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

20

board the local scholarship for each low-income child

21

residing in the district who the board determines to be

22

eligible for the local scholarship and who the board confirms

23

has enrolled in a nonresident public school.

24

(4)  Comply with all guidelines developed by the board

25

under section 2509-B.

26

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

27

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

<--

28

thereafter, a date established by the board and pursuant to

<--

29

guidelines developed by the board under section 2509-B, the

30

parent of a low-income child may apply to the board:

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1

(i)  For an opportunity scholarship for the following

2

school year.

3

(ii)  For a local scholarship for the following

4

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

5

district has elected to provide a local scholarship under

6

subsection (b).

7

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

<--

8

thereafter a date established by the board, the board shall

<--

9

notify parents whether the scholarships for which the student

10

applied will be awarded for the following school year.

11

(d)  Application for enrollment in a nonresident public

12

school.--

13

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

<--

14

thereafter a date established by the board, the parent of a

<--

15

low-income child who has been awarded a scholarship under

16

subsection (c) may apply to one or more nonresident public

17

schools for enrollment of the child for the following school

18

year. The application shall be on a form provided by the

19

nonresident school district.

20

(2)  (i)  The By a date established by the board, the 

<--

21

nonresident school district shall provide written notice

22

to the parent and the board by August 1, 2011, and by

<--

23

July 1 of each year thereafter, as to whether the child

24

will be offered enrollment in the requested nonresident

25

public school for the following school year.

26

(ii)  Within ten days of receipt of the notice By a

<--

27

date established by the board, the parent must provide

28

written notice to the board, the resident school district

29

and the nonresident school district whether the offer of

30

enrollment will be accepted.

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1

(iii)  By a date established by the board, the board

<--

2

shall provide the resident school district and the

3

nonresident school district with written confirmation of

4

the opportunity scholarship recipient's enrollment in the

5

nonresident school district.

6

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

<--

7

nonresident public school, the child's resident school

8

district shall determine the public school within the

9

resident school district to which the child will be

10

assigned.

11

(3)  Each school district shall develop guidelines

12

setting forth the terms and conditions under which it will

13

enroll nonresident students receiving opportunity and local

14

scholarships and shall develop an enrollment application form

15

and process. If a school district determines to enroll

16

nonresident students receiving opportunity and local

17

scholarships, the school district must enroll such

18

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

<--

19

random basis from a pool of applicants who meet the

<--

20

application deadline established by the board, provided that:

21

(i)  the nonresident student's enrollment in the

22

nonresident school district would not place either the

23

nonresident school district or the resident school

24

district in violation of a valid and binding

25

desegregation order;

26

(ii)  the nonresident student has not been expelled

27

nor is the nonresident student in the process of being

28

expelled under section 1317.2 or 1318 and applicable

29

regulations of the State Board of Education;

30

(iii)  the nonresident student has not been recruited

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1

by the school district or its representatives for

2

athletic purposes; or

3

(iv)  the nonresident student meets the established

4

eligibility criteria for participation in a magnet school

5

or in a public school with a specialized academic

6

mission.

7

(4)  A nonresident school district may give priority in

8

enrollment to a nonresident student who has been awarded a

9

local scholarship.

10

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

11

payment pursuant to the schedule contained in section 2517 to

12

each school district or area vocational-technical school that

13

accepts a nonresident student under the provisions of this

14

subarticle subject to the following terms and conditions:

15

(1)  The Commonwealth shall pay to each school district

16

or area vocational-technical school that accepts a

17

nonresident student, on a tuition basis, the amount

18

determined under section 2506-B.

19

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

20

scholarship recipient and defined as a "student with a

21

disability," services provided to the opportunity

22

scholarship recipient shall be charged against the

23

Commonwealth's special education subsidy to the resident

24

school district, provided that the resident school

25

district shall not be charged more for services provided

26

to the opportunity scholarship recipient by the

27

nonresident school district than the difference between

28

the current year cost of the services had the opportunity

29

scholarship recipient remained in the resident school

30

district and the sum of the opportunity scholarship, the

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1

local scholarship and the per pupil special education

2

funding following the opportunity scholarship recipient.

3

(ii)  The resident school district shall provide the

4

board with documentation of the prior year's cost of

5

services provided to the opportunity scholarship

6

recipient and an estimate of the cost of providing those

7

services in the current year had the opportunity

8

scholarship recipient remained in the resident school

9

district. Any cost not covered by this funding shall be

10

borne by the nonresident school district enrolling the

11

opportunity scholarship recipient.

12

(3)  An opportunity scholarship recipient shall be

13

included in the average daily membership of the opportunity

14

scholarship recipient's resident school district.

15

(4)  In the event an opportunity scholarship recipient

<--

16

withdraws from a nonresident school district prior to the

17

completion of the school year, the following shall apply:

18

(i)  The nonresident school district shall, within 15

19

days of the opportunity scholarship recipient's

20

withdrawal from the nonresident school district, provide

21

the board with written notice of the opportunity

22

scholarship recipient's withdrawal from the nonresident

23

school district.

24

(ii)  The resident school district, nonresident

25

school district or participating nonpublic school in

26

which the opportunity scholarship recipient subsequently

27

enrolls shall notify the board within five days of the

28

opportunity scholarship recipient's enrollment.

29

(iii)  Within 30 days after receiving the notice

30

required under subparagraph (ii), the board shall do the

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1

following:

2

(A)  If the opportunity scholarship recipient

3

enrolls in the resident school district or a

4

nonresident school district, pay the resident school

5

district or nonresident school district the full

6

amount of the opportunity scholarship payment reduced

7

on a pro rata basis for the portion of the school

8

year in which the opportunity scholarship recipient

9

was enrolled in another school.

10

(B)  If the opportunity scholarship recipient

11

enrolls in a participating nonpublic school, pay the

12

opportunity scholarship recipient's parent the full

13

amount of the opportunity scholarship payment reduced

14

on a pro rata basis for the portion of the school

15

year in which the opportunity scholarship recipient

16

was enrolled in another school. Such payment shall be

17

made to the parents of the opportunity scholarship

18

recipient pursuant to the provisions of section

19

2505-B(b).

20

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

21

district to an opportunity scholarship recipient under this

22

subarticle shall not exceed the sum of the opportunity

23

scholarship and the local scholarship, if applicable, awarded to

<--

24

the opportunity scholarship recipient.

25

(g)  Transportation.--

26

(1)  Notwithstanding any provisions of section 1361 to

27

the contrary, a school district that provides its resident

28

public school pupils with transportation to and from the

29

resident public schools or to and from any points within or

30

without this Commonwealth in order to provide field trips

- 17 -

 


1

under section 1361 shall provide a student who resides within

2

the school district but regularly attends a nonresident

3

public school, including a charter school, that is located

4

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

5

district by the nearest public highway, with transportation

6

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

7

points within or without this Commonwealth in order to

8

provide field trips under section 1361.

9

(2)  Transportation of a student under this subsection

10

shall be subject to reimbursement under section 2541.

11

Section 2505-B.  Opportunity scholarships scholarship to attend

<--

12

a participating nonpublic school.

13

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

14

eligible to receive an opportunity scholarship under section

15

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

16

attend a participating nonpublic school must:

17

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

<--

18

thereafter a date established by the board, apply to the

<--

19

board for an opportunity scholarship for the following school

20

year pursuant to guidelines developed by the board under

21

section 2509-B. By July 1, 2011, and by May 1 of each year

<--

22

thereafter a date established by the board, the board shall

<--

23

notify parents whether the opportunity scholarship will be

24

awarded for the following school year.

25

(2)  Apply for enrollment directly to the participating

26

nonpublic school pursuant to application procedures developed

27

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

<--

28

by July 1 of each year thereafter a date established by the

<--

29

board, a participating nonpublic school shall provide written

30

confirmation to the board of each opportunity scholarship

- 18 -

 


1

recipient whose application for enrollment has been accepted

2

for the following school year. By a date established by the

<--

3

board, the board shall provide the opportunity scholarship

4

recipient's resident school district with written

5

confirmation of the opportunity scholarship recipient's

6

enrollment in the participating nonpublic school.

7

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

8

Commonwealth shall provide payment of an opportunity scholarship

9

to the parents of each opportunity scholarship recipient who is

10

enrolled in a participating nonpublic school under the

11

provisions of this subarticle subject to the following terms and

12

conditions:

13

(1)  Opportunity scholarships shall be awarded only for

14

the payment of costs of tuition at a participating nonpublic

15

school within this Commonwealth. Opportunity scholarships

16

shall not be awarded for enrollment in a home education

17

program provided under section 1327.1.

18

(2)  Opportunity scholarships shall be paid to the

19

parents of an opportunity scholarship recipient upon the

20

board's receipt of written confirmation of enrollment from

21

the participating nonpublic school selected by the recipient.

22

The opportunity scholarship award shall be paid by check

23

which may be endorsed by the parents only for payment of

24

tuition at the participating nonpublic school at which the

25

opportunity scholarship recipient's enrollment has been

26

confirmed.

27

(3)  In the event an opportunity scholarship recipient is

<--

28

no longer enrolled in withdraws from a participating

<--

29

nonpublic school prior to the completion of the school year,

30

the following shall apply:

- 19 -

 


1

(i)  The participating nonpublic school shall, within

2

15 days of the opportunity scholarship recipient's

3

withdrawal from the participating nonpublic school:

4

(A)  Provide the board with written notice of the

5

opportunity scholarship recipient's withdrawal from

6

the participating nonpublic school.

7

(B)  Return to the opportunity scholarship

<--

8

recipient's parent board the full amount of the

<--

9

opportunity scholarship payment reduced on a pro rata

10

basis by the tuition for the portion of the school

11

year in which the opportunity scholarship recipient

12

was enrolled. The amount returned to the parent under

<--

13

this paragraph shall be paid by check which may be

14

endorsed by the parents only for repayment to the

15

board of the refunded opportunity scholarship award.

16

(ii)  If the parents of the opportunity scholarship

<--

17

recipient fail to submit to the board the full amount of

18

the opportunity scholarship returned to the parents under

19

subparagraph (i) within 15 days of receipt of

20

notification from the board that such payment is due 

21

participating nonpublic school fails to submit to the

<--

22

board the amount required to be paid under subparagraph

23

(i), the board shall impose interest on the unpaid

24

amount, calculated from the due date at the rate

25

determined by the Secretary of Revenue for interest

26

payments on overdue taxes or the refund of taxes as

27

provided in sections 806 and 806.1 of the act of April 9,

28

1929 (P.L.343, No.176), known as The Fiscal Code.

29

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

<--

30

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

- 20 -

 


1

full amount of the required refund to the board within

2

180 days of written demand thereof, the board shall also

3

impose a civil penalty not to exceed the full amount of

4

the annual opportunity scholarship award made to the

5

parents and disqualification from future eligibility for

6

an opportunity scholarship.

7

(iv) (iii)  If the opportunity scholarship recipient

<--

8

enrolls in another participating nonpublic school within

9

the school year for which the opportunity scholarship was

10

awarded, the board shall pay the parent of the

11

opportunity scholarship recipient the opportunity

12

scholarship award prorated for the remaining portion of

13

the school year.

14

(4)  In the event an opportunity scholarship recipient is

<--

15

expelled from a participating nonpublic school prior to the

16

completion of the school year and the opportunity scholarship

17

recipient subsequently enrolls in his resident school

18

district, the board shall pay the resident school district

19

the opportunity scholarship award prorated for the remaining

20

portion of the school year. The resident school district

21

shall apply this amount toward providing educational services

22

for the opportunity scholarship recipient, which may include,

23

but shall not be limited to, an alternative assignment or

24

alternative education services.

25

(b.1)  Penalties.--

26

(1)  Each opportunity scholarship check issued under this

27

section shall contain the following statement:

28

"Failure to endorse this check as directed by the

29

board may subject the endorser to civil penalties and

30

criminal prosecution."

- 21 -

 


1

(2)  A parent's endorsement or use of an opportunity

2

scholarship check in a manner other than as directed by the

3

department may subject the parent to the following penalties:

4

(i)  A civil penalty equal to 300% of the full amount

5

of the annual opportunity scholarship award made to the

6

parent.

7

(ii)  Disqualification from future eligibility for an

8

opportunity scholarship.

9

(iii)  Criminal prosecution.

10

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

11

participating nonpublic school which admits an opportunity

12

scholarship recipient:

13

(1)  The participating nonpublic school shall not

14

discriminate on any basis that is illegal under Federal or

15

State law laws applicable to nonpublic schools on the date

<--

16

prior to the effective date of this section.

17

(2)  The participating nonpublic school shall comply with

18

section 1521, which prohibits discrimination in enrollment on

19

the basis of race or color.

20

(3)  The participating nonpublic school may not recruit

21

any public school student to enroll for athletic purposes.

22

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

<--

23

thereafter For each school year, by a date established by the

<--

24

board, a nonpublic school that desires to enroll opportunity

25

scholarship recipients under this subarticle shall certify to

26

the board that it satisfies the definition of "participating

27

nonpublic school" in section 2502-B. Such certification shall

28

be on a form developed by the board.

29

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

30

school shall make available for review by the parents of any

- 22 -

 


1

opportunity scholarship recipient seeking enrollment, its

2

written school policies and procedures related to tuition

3

charges, admissions, academic offerings and requirements,

4

discipline, religious instruction, parent involvement, 

<--

5

standardized testing, the release of results of standardized

6

tests administered by the participating nonpublic school and

7

extracurricular activities. and suspension and expulsion of

<--

8

students, including educational accommodations and counseling

9

offered to students and parents.

10

(e)  Assessments.--

11

(1)  (i)  Each participating nonpublic school shall

12

administer annually an assessment or a nationally normed

13

standardized achievement test in reading/language arts

14

and mathematics to each opportunity scholarship recipient

15

attending the participating nonpublic school in grades 3,

16

5, 8 and 11.

17

(ii)  To comply with this paragraph, a participating

18

nonpublic school may either administer an assessment or

19

administer a nationally normed standardized achievement

20

test chosen by the participating nonpublic school from a

21

list established under paragraph (2).

22

(2)  The board shall establish a list of at least eight

23

nationally normed standardized achievement tests from which

24

the participating nonpublic school shall select a test to be

25

administered if the participating nonpublic school does not

26

choose to administer an assessment.

27

(3)  Each participating nonpublic school shall:

28

(i)  Release each opportunity scholarship recipient's

29

individual results on the assessment or nationally normed

30

standardized achievement test administered to opportunity

- 23 -

 


1

scholarship recipients under paragraph (1) to the parent

2

of the opportunity scholarship recipient.

3

(ii)  If the participating nonpublic school has a

4

publicly accessible Internet website, post on the website

5

the participating nonpublic school's aggregate results on

6

the assessment or nationally normed standardized

7

achievement test administered to opportunity scholarship

8

recipients under paragraph (1), provided that the

9

participating nonpublic school shall not post results

10

that reveal the identity of any individual student.

11

(4)  The participating nonpublic school shall bear the

12

cost of the testing administered under this subsection and

13

shall not impose an assessment or testing fee on an

14

opportunity scholarship recipient.

15

 (e) (f)  Construction.--Nothing in this subarticle shall be

<--

16

construed to:

17

(1)  Prohibit a participating nonpublic school from

18

limiting admission to a particular grade level, a single

19

gender or to areas of concentration of the participating

20

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

21

science and the arts.

22

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

23

officers or political subdivisions to impose any additional

24

requirements on any participating nonpublic school which are

25

not otherwise authorized under the laws of this Commonwealth

26

or to require any participating nonpublic school to enroll

27

any opportunity scholarship recipient if the participating

28

nonpublic school does not offer appropriate programs or is

29

not structured or equipped with the necessary facilities to

30

meet the special needs of the opportunity scholarship

- 24 -

 


1

recipient or does not offer a particular program requested.

2

Section 2506-B.  Amount of opportunity scholarship.

3

(a)  Calculation.--

4

(1)  The amount of the opportunity scholarship shall

5

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

6

district's total revenue per average daily membership of the

7

prior school year.

8

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

9

opportunity scholarship award and any additional financial

10

assistance provided by the a participating nonpublic school

<--

11

exceed the tuition rate for the participating nonpublic

12

school.

13

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

14

participating nonpublic school may charge an opportunity

15

scholarship recipient a higher tuition rate than the rate the

16

nonresident public school or participating nonpublic school

17

would have charged to a student who had not received an

18

opportunity scholarship.

19

(c)  Excess Scholarship Fund.--

20

(1)  The Excess Scholarship Fund is established in the

21

State Treasury and shall be funded by the amount of the

22

opportunity scholarship awarded to an opportunity scholarship

23

recipient under this subarticle in excess of the amount of

24

tuition charged to the opportunity scholarship recipient.

25

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

26

applied toward costs of the opportunity scholarship program

<--

27

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

28

thereafter. applied as follows:

<--

29

(i)  During the 2012-2013 school year and each school

30

year thereafter, money in the fund shall be applied

- 25 -

 


1

toward the costs of the opportunity scholarship program,

2

subject to subparagraph (ii).

3

(ii)  During the 2014-2015 school year and each

4

school year thereafter, one-half of the money in the fund

5

shall be applied toward costs of the following programs:

6

(A)  One-half of the money under this

7

subparagraph shall be applied to the public school

8

demonstration grant program. Any unused grant funding

9

shall be added to the total amount of funds available

10

for the middle-income scholarship program.

11

(B)  One-half of the money under this

12

subparagraph shall be applied toward the costs of the

13

middle-income scholarship program.

14

(d)  Annual appropriations.--

15

(1)  Opportunity scholarships authorized under this

16

subarticle shall be made from annual appropriations made by

17

the General Assembly to the department and moneys available

18

in the fund for that purpose.

19

(2)  In Subject to section 2503-B(b)(3), in the event

<--

20

that insufficient moneys are available in any fiscal year to

21

provide opportunity scholarships to all eligible opportunity

22

scholarship recipients in the amount authorized, the board

23

shall make pro rata reductions in the amount of the

24

opportunity scholarship provided to each opportunity

25

scholarship recipient.

26

(3)  The total amount of opportunity scholarships

27

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

28

money appropriated for that fiscal year and moneys in the

29

fund.

30

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

- 26 -

 


1

parent pursuant to this subarticle shall not be considered

2

taxable income for purposes of any local taxing ordinance or for

3

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

4

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

5

opportunity scholarships constitute financial assistance or

6

appropriations to the participating nonpublic school attended by

7

the opportunity scholarship recipient.

8

(f)  Continued eligibility.--

9

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

10

nonresident public school or a participating nonpublic school

11

who received an opportunity scholarship under this subarticle

12

in the prior school year shall receive an opportunity

13

scholarship in each school year of enrollment under the

14

opportunity scholarship program, provided that the child

15

remains eligible.

16

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

17

scholarship under this subarticle in the prior school

18

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

19

shall continue to receive a partial scholarship until

20

completing the eighth grade, provided that the child

21

continues to meet all other eligibility requirements.

22

(ii)  In calculating the amount of the partial

23

scholarship, the board shall make a pro rata reduction in

24

the child's opportunity scholarship award based upon the

25

child's household income.

26

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

27

opportunity or local scholarship application or who knowingly

28

falsifies material information on an opportunity or local

29

scholarship application shall be subject to the following

30

penalties:

- 27 -

 


1

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

2

$1,000.

3

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

4

(relating to unsworn falsification to authorities).

5

(3)  Disqualification from future participation in the

6

opportunity scholarship program.

7

(h)  Residence in more than one school district within a

<--

8

school year.--Where an opportunity scholarship recipient resides

9

within more than one school district during a school year, the

10

amount of the opportunity scholarship shall be charged against

11

each resident school district on a pro rata basis.

12

Section 2507-B.  Guidelines.

13

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

14

this section, the board shall establish guidelines that provide

15

the following:

16

(1)  Forms to apply for opportunity and local

17

scholarships, including application and approval processes

18

and deadlines for application and notification.

19

(2)  Procedures to verify the accuracy of the information

20

provided in an opportunity or local scholarship application.

21

(3)  Procedures for school district, school and parent

22

notification of opportunity or local scholarship awards.

23

(4)  Procedures for administration of the opportunity and

24

local scholarship programs.

25

(5)  Confirmation of school enrollment by opportunity

26

scholarship recipients.

27

(6)  Procedures for making payment of opportunity

<--

28

scholarship awards, including policies and procedures to

29

minimize the likelihood of fraud or misuse of opportunity

30

scholarship funds. For an opportunity scholarship recipient

- 28 -

 


1

enrolled in a participating nonpublic school, the procedures

<--

2

shall include restrictive endorsement of opportunity

3

scholarship award checks to the participating nonpublic

4

school in which the opportunity scholarship recipient is

5

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

board when an opportunity scholarship recipient withdraws 

<--

10

from a participating nonpublic school during the school year

11

for which the opportunity scholarship was paid.

12

(8)  Development and distribution of public information

13

concerning the opportunity and local scholarship and

14

interdistrict enrollment programs.

15

(9)  Procedures to determine the eligibility of homeless

<--

16

students for opportunity scholarships under this subarticle,

17

consistent with the Stewart B. McKinney Homeless Assistance

18

Act (Public Law 100-77, 101 Stat. 482) or a successor Federal

19

statute.

20

(10)  Deadline dates for actions required to be taken by

21

the board, the department, school districts, participating

22

nonpublic schools and parents under this subarticle.

23

(9) (11)  Such other procedures as are necessary to fully

<--

24

implement the opportunity and local scholarship and

25

interdistrict enrollment programs.

26

(12)  A list of at least eight nationally normed

<--

27

standardized achievement tests from which a participating

28

nonpublic school may select a test to be administered

29

pursuant to section 2505-B(e). The initial list developed by

30

the board shall, at a minimum, include the following:

- 29 -

 


1

California Achievement Test, Comprehensive Testing Program

2

(CTPIV), Iowa Test of Basic Skills, Metropolitan Achievement

3

Test, Peabody Achievement Individual Test - Revised Version,

4

Stanford Achievement Test, Terra Nova and Woodcock Johnson

5

Revised Tests of Achievement III.

6

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

7

statement of policy in the Pennsylvania Bulletin. The board

8

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

<--

9

nonpublic school in this Commonwealth and shall post the

10

guidelines on the department's publicly accessible Internet

11

website.

12

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

13

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

14

guidelines authorized by this subarticle shall not be subject to

15

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

16

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

17

guidelines established by the board, and any amendments thereto,

18

shall be exempt from the requirements of the following:

19

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

20

the Regulatory Review Act.

21

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

22

to as the Commonwealth Documents Law.

23

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

24

as the Commonwealth Attorneys Act.

25

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

26

Notwithstanding any other provision of law to the contrary,

27

beginning in the second consecutive school year of enrollment in

28

a nonresident public school or a participating nonpublic school

29

by an opportunity scholarship recipient who was enrolled in the

30

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

- 30 -

 


1

cyber charter school when the recipient first received an

2

opportunity scholarship under this subarticle, the amount of

3

Commonwealth basic education funding paid by the department to

4

the resident school district shall be reduced by an amount equal

5

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

6

revenue per average daily membership.

7

Section 2509-B.  Education Opportunity Board.

8

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

9

Education Opportunity Board is established within the

10

department. The board shall consist of three members appointed

11

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

12

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

13

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

14

political party as the Governor.

15

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

16

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

17

term in the same manner as original appointments. Members shall

18

continue to serve after the expiration of their term until the

19

Governor appoints a replacement who is confirmed by a majority

20

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

21

must be residents of this Commonwealth.

22

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

23

chairperson from among the membership of the board.

24

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

25

chairperson or upon request in writing of a majority of the

26

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

27

such quorum shall have the authority to act upon any matter

28

properly before the board unless otherwise specified in this

29

subarticle.

30

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

- 31 -

 


1

receive no compensation for their services but shall be

2

reimbursed for their actual and necessary expenses incurred in

3

the performance of their official board duties.

4

(f)  Executive director and staff.--

5

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

6

who shall serve as the executive officer and secretary of the

7

board. The board shall employ and fix the reasonable

8

compensation of the executive director.

9

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

10

may employ additional professional and clerical personnel as

11

may be necessary to carry out the duties and responsibilities

12

of the board.

13

(3)  The department shall provide adequate funding, space

14

and equipment to facilitate the activities of the board.

15

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

16

General Counsel, shall provide such legal advice and assistance

17

as the board may require.

18

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

19

powers and duties:

20

(1)  Establish guidelines for the administration of the

21

opportunity and local scholarship programs as required under

22

section 2507-B.

23

(2)  Administer the opportunity and local scholarship

24

application and approval processes.

25

(3)  Develop the opportunity and local scholarship

26

application form and any other forms necessary to administer

27

the opportunity and local scholarship programs, including the

28

notice required to be provided by school districts under

29

section 2503-B(d).

30

(4)  Review and verify the income and residence of

- 32 -

 


1

opportunity and local scholarship applicants.

2

(5)  Announce the award of opportunity and local

3

scholarships for the following school year under sections

4

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

5

(6)  Confirm the enrollment of opportunity scholarship

6

recipients in nonresident public schools and participating

7

nonpublic schools and allocate opportunity scholarship funds

8

to opportunity scholarship recipients.

9

(7)  Make payment of opportunity scholarship awards as

<--

10

provided in sections 2504-B and 2505-B.

11

(8)  Notify school districts that elect to create a local

12

scholarship when payment must be made under section 2504-

13

B(b).

14

(7) (9)  Beginning after the first school year of

<--

15

implementation of the opportunity scholarship program,

16

prepare a report to be submitted to the Governor and the

17

General Assembly by December 1 of each year, made available

18

to the parents of opportunity scholarship recipients and

19

placed on the department's publicly accessible Internet

20

website that includes at least the following information for

21

the prior school year:

22

(i)  The total number of opportunity scholarships

23

requested.

24

(ii)  The total number and total dollar amount of

25

opportunity scholarships awarded, in total and

26

disaggregated by:

27

(A)  Whether the opportunity scholarship

28

recipient attends a nonresident public school or a

29

participating nonpublic school.

30

(B)  Grade level of the opportunity scholarship

- 33 -

 


1

recipient.

2

(C)  Whether the opportunity scholarship

3

recipient resides in a school district with at least

4

one persistently lowest achieving school.

5

(iii)  The administrative costs of the opportunity

6

scholarship program.

7

(iv)  A listing of nonresident public schools to

8

which opportunity scholarship funds were disbursed on

9

behalf of opportunity scholarship recipients and the

10

amount disbursed to each nonresident public school.

11

(v)  A listing of participating nonpublic schools in

12

which opportunity scholarship recipients enrolled and the

13

number of opportunity scholarship recipients who enrolled

14

in each participating nonpublic school.

15

(vi)  The total number and total dollar amount of

16

local scholarships awarded, disaggregated by the resident

17

school districts that made the local scholarship awards.

18

(10)  For the 2014-2015 school year and each school year

<--

19

thereafter, administer and announce the award of public

20

school choice demonstration grants to eligible school

21

districts as provided under section 2513-B, and annually

22

redistribute any remaining funds from the public school

23

choice demonstration grants program to the middle-income

24

scholarship program.

25

(11)  For the 2014-2015 school year and each school year

26

thereafter, administer the middle-income scholarship program.

27

Section 2510-B.  Study.

28

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

29

a study of the effectiveness of the opportunity scholarship

30

program and shall deliver a written report of its findings,

- 34 -

 


1

including any recommendations for changes to the program, to the

2

Governor, the chairman and minority chairman of the Education

3

Committee of the Senate and the chairman and minority chairman

4

of the Education Committee of the House of Representatives by

5

December 31, 2015.

6

Section 2511-B.  Exclusive jurisdiction of Supreme Court.

7

The Pennsylvania Supreme Court shall have exclusive

8

jurisdiction to hear any challenge or to render a declaratory

9

judgment concerning the constitutionality of this subarticle.

10

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

11

consistent with the Supreme Court's retaining jurisdiction over

12

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

13

connection with such a challenge or request for declaratory

14

relief.

15

Section 2512-B.  Optional local tuition grant program.

16

A school district may, out of funds received from the

17

Commonwealth for educational purposes, establish a program of

18

tuition grants to provide for the education of resident students

19

who wish to attend a nonresident public school or a

20

participating nonpublic school on a tuition basis. A student who

21

receives a tuition grant under this section shall be included in

22

the average daily membership of the student's resident school

23

district for the purpose of providing basic education funding

24

and special education funding under Article XXV.

25

Section 2513-B.  Public school choice demonstration grant

<--

26

program.

27

(a)  Establishment.--A school district may, out of funds

28

received by the board under section 2506-B(c)(2)(ii)(A) and

29

available State and local funds, establish a program of tuition

30

grants to provide for the education of resident students who

- 35 -

 


1

wish to attend a nonresident public school.

2

(b)  Limit.--No grant award issued by the board to a school

3

district under this section shall exceed $500,000.

4

(c)  Procedure.--Grant applications shall only be received,

5

reviewed and allocated by the board during an annual two-week

6

grant review process to begin on July 1 and end on July 15 of

7

each calendar year.

8

(d)  Eligibility.--To be eligible for grants under this

9

program, the school district shall:

10

(1)  Submit an application to the board at a date to be

11

determined by the board requesting a public school choice

12

demonstration grant.

13

(2)  Submit a statement of the amount of the grant

14

sought, including the estimated number of tuition grants to

15

be distributed.

16

(3)  Demonstrate a commitment of funds received from both

17

local sources and the Commonwealth for educational purposes

18

of at least $3 for every $1 of grant funds issued under

19

section 2506-B(c)(2)(ii)(A).

20

(4)  Meet any other requirements as set by the board.

21

(e)  Average daily membership.--A student who receives a

22

tuition grant under this section shall be included in the

23

average daily membership of the student's resident school

24

district for the purpose of providing basic education funding

25

and special education funding under Article XXV.

26

Section 2514-B.  Middle-income scholarship program.

27

(a)  Establishment.--Beginning with the 2014-2015 school

28

year, the board shall establish a middle-income scholarship

29

program to provide scholarships to help middle-income children

30

in this Commonwealth pay tuition to attend a nonresident public

- 36 -

 


1

school or participating nonpublic school. The board shall make

2

annual middle-income scholarship awards on a pro rata basis from

3

the funding provided under section 2506-B(c)(2)(ii)(B).

4

(b)  Notice.--

5

(1)  By a date determined by the board, each school

6

district in this Commonwealth shall provide all residents of

7

the school district with notice of the following:

8

(i)  A description of the middle-income scholarship

9

program.

10

(ii)  Instructions for applying for a middle-income

11

scholarship.

12

(iii)  Notice that a parent must contact directly the

13

nonresident public school or participating nonpublic

14

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

15

application instructions.

16

(2)  The school district shall provide the notice to all

17

residents of the school district by notice posted on the

18

school district's publicly accessible Internet website. The

19

notice shall be in a form provided by the board.

20

(c)  Regulations.--In promulgating regulations for the

21

administration of the middle-income scholarship, the board shall

22

develop application and enrollment processes and procedures

23

substantively similar to sections 2504-B and 2505-B. Regulations

24

shall be subject to review in accordance with the act of June

25

25, 1982 (P.L.633, No.181), known as the Regulatory Review Act.

26

(d)  Limitation.--

27

(1)  No nonresident public school or participating

28

nonpublic school may charge a middle-income scholarship

29

recipient a higher tuition rate than the rate the nonresident

30

public school or participating nonpublic school would have

- 37 -

 


1

charged to a student who had not received a middle-income

2

scholarship.

3

(2)  The combined amount of the middle-income scholarship

4

award and any additional financial assistance provided by the

5

participating nonpublic school shall not exceed the tuition

6

rate for the participating nonpublic school.

7

(e)  Applicability.--The provisions of sections 2505-B(c),

8

(d), (e) and (f) and 2506-B(e), (g) and (h) shall apply to the

9

middle-income scholarship program established under this

10

section.

11

(c)  Educational Improvement Tax Credit

12

Section 2521-B.  Definitions.

13

The following words and phrases when used in this subarticle

14

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

15

context clearly indicates otherwise:

16

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

17

Commonwealth and subject to taxes imposed under Article XVI of

<--

18

the act of May 17, 1921 (P.L.682, No.284), known as The

19

Insurance Company Law of 1921, or Article III, IV, VI, VII,

20

VIII, IX or XV of the act of March 4, 1971 (P.L.6, No.2), known

21

as the Tax Reform Code of 1971. The term includes a pass-through

22

entity. For purposes of this subarticle, a business firm shall

23

be included in one of the following groups:

24

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

<--

25

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

<--

26

for tax credits for a contribution to an educational

27

improvement organization that is also a school district

28

foundation, public school foundation, charter school

29

foundation or cyber charter school foundation.

30

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

- 38 -

 


1

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

2

fiscal year or is applying for tax credits for a contribution

3

to a prekindergarten scholarship organization in the same

4

amount that it had contributed in the most recent fiscal

5

year.

6

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

7

business firm in Group 1 or Group 2.

8

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

9

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

10

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

11

the individual performing the services.

12

"Department."  The Department of Community and Economic

13

Development of the Commonwealth.

14

"Educational improvement organization."  A nonprofit entity

15

which:

16

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

17

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

18

26 U.S.C. § 1 et seq.); and

19

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

20

grants to a public school for innovative educational

21

programs.

22

For purposes of this definition, a nonprofit entity

23

"contributes" its annual cash receipts when it expends or

24

otherwise irrevocably encumbers those funds for expenditure

25

during the then current fiscal year of the nonprofit entity or

26

during the next succeeding fiscal year of the nonprofit entity.

27

A "nonprofit entity" includes a school district foundation,

28

public school foundation, charter school foundation or cyber

29

charter school foundation.

30

"Eligible prekindergarten student."  A student, including an

- 39 -

 


1

eligible student with a disability, who is enrolled in a

2

prekindergarten program and is a member of a household with a

3

maximum annual household income as increased by the applicable

4

income allowance.

5

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

6

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

7

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

8

income as increased by the applicable income allowance.

9

"Eligible student with a disability."  A prekindergarten

10

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

11

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

12

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

13

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

14

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

15

(relating to child with a disability).

16

(2)  Needs special education and related services.

17

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

18

school.

19

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

20

of not more than the maximum annual household income.

21

"Household."  An individual living alone or with the

22

following: a spouse, parent and their unemancipated minor

23

children, other unemancipated minor children who are related by

24

blood or marriage or other adults or unemancipated minor

25

children living in the household who are dependent upon the

26

individual.

27

"Household income."  All moneys or property received of

28

whatever nature and from whatever source derived. The term does

29

not include the following:

30

(1)  Periodic payments for sickness and disability other

- 40 -

 


1

than regular wages received during a period of sickness or

2

disability.

3

(2)  Disability, retirement or other payments arising

4

under workers' compensation acts, occupational disease acts

5

and similar legislation by any government.

6

(3)  Payments commonly recognized as old-age or

7

retirement benefits paid to persons retired from service

8

after reaching a specific age or after a stated period of

9

employment.

10

(4)  Payments commonly known as public assistance or

11

unemployment compensation payments by a governmental agency.

12

(5)  Payments to reimburse actual expenses.

13

(6)  Payments made by employers or labor unions for

14

programs covering hospitalization, sickness, disability or

15

death, supplemental unemployment benefits, strike benefits,

16

Social Security and retirement.

17

(7)  Compensation received by United States servicemen

18

serving in a combat zone.

19

"Income allowance."

20

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

21

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

22

student, eligible prekindergarten student and dependent

23

member of a household.

24

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

25

student, eligible prekindergarten student and dependent

26

member of a household.

27

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

28

and Economic Development shall annually adjust the income

29

allowance amounts under paragraph (1) to reflect any upward

30

changes in the Consumer Price Index for All Urban Consumers

- 41 -

 


1

for the Pennsylvania, New Jersey, Delaware and Maryland area

2

in the preceding 12 months and shall immediately submit the

3

adjusted amounts to the Legislative Reference Bureau for

4

publication as a notice in the Pennsylvania Bulletin.

5

"Innovative educational program."  An advanced academic or

6

similar program that is not part of the regular academic program

7

of a public school but that enhances the curriculum or academic

8

program of the public school or provides prekindergarten

9

programs to public school students.

10

"Maximum annual household income."

11

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

12

paragraph (3), the following:

13

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

14

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

15

(2)  With respect to an eligible student with a

16

disability, as calculated by multiplying:

17

(i)  the sum of:

18

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

19

and

20

(B)  the applicable income allowance; by

21

(ii)  the applicable support level factor according

22

to the following table:

23

Support Level

Support Level Factor

24

1

1.50

25

2

2.993

26

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

27

and Economic Development shall annually adjust the income

28

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

29

changes in the Consumer Price Index for All Urban Consumers

30

for the Pennsylvania, New Jersey, Delaware and Maryland area

- 42 -

 


1

in the preceding 12 months and shall immediately submit the

2

adjusted amounts to the Legislative Reference Bureau for

3

publication as a notice in the Pennsylvania Bulletin.

4

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

5

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

6

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

7

company treated as a disregarded entity for Federal income tax

8

purposes or a Pennsylvania S corporation as defined in section

9

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

10

"Prekindergarten program."  A program of instruction for

11

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

12

curriculum aligned with the curriculum of the school with which

13

it is affiliated and that provides:

14

(1)  a minimum of two hours of instructional and

15

developmental activities per day at least 60 days per school

16

year; or

17

(2)  a minimum of two hours of instructional and

18

developmental activities per day at least 20 days over the

19

summer recess.

20

"Prekindergarten scholarship organization."  A nonprofit

21

entity that:

22

(1)  Either is exempt from Federal taxation under section

23

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

24

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

25

segregated fund by a scholarship organization that has been

26

qualified under section 2522-B.

27

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

28

to a prekindergarten scholarship program by expending or

29

otherwise irrevocably encumbering those funds for

30

distribution during the then current fiscal year of the

- 43 -

 


1

organization or during the next succeeding fiscal year of the

2

organization.

3

"Prekindergarten scholarship program."  A program to provide

4

tuition to eligible prekindergarten students to attend a

5

prekindergarten program operated by or in conjunction with a

6

school located in this Commonwealth and that includes an

7

application and review process for the purpose of making awards

8

to eligible prekindergarten students and awards scholarships to

9

eligible prekindergarten students without limiting availability

10

to only students of one school.

11

"Public school."  A public prekindergarten where compulsory

12

attendance requirements do not apply or a public kindergarten,

13

elementary school or secondary school at which the compulsory

14

attendance requirements of this Commonwealth may be met and that

15

meets the applicable requirements of Title VI of the Civil

16

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

17

"Scholarship."  An award under a scholarship program.

18

"Scholarship organization."  A nonprofit entity that:

19

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

20

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

21

26 U.S.C. § 1 et seq.); and

22

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

23

to a scholarship program.

24

For purposes of this definition, a nonprofit entity

25

"contributes" its annual cash receipts to a scholarship program

26

when it expends or otherwise irrevocably encumbers those funds

27

for distribution during the then current fiscal year of the

28

nonprofit entity or during the next succeeding fiscal year of

29

the nonprofit entity.

30

"Scholarship program."  A program to provide tuition to

- 44 -

 


1

eligible students to attend a school located in this

2

Commonwealth. A scholarship program must include an application

3

and review process for the purpose of making awards to eligible

4

students. The award of scholarships to eligible students shall

5

be made without limiting availability to only students of one

6

school.

7

"School."  A kindergarten, elementary school or secondary

8

school at which the compulsory attendance requirements of the

9

Commonwealth may be met and that meets the applicable

10

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

11

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

12

prekindergarten.

13

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

14

prekindergarten or kindergarten program or, when no

15

prekindergarten or kindergarten program is provided, the

16

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

17

the school year the student attains 21 years of age or

18

graduation from high school, whichever occurs first.

19

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

20

school that is designated specifically and exclusively for

21

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

22

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

23

following:

24

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

25

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

26

(2)  is accredited by an accrediting association approved

27

by the State Board of Education;

28

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

29

Commonwealth appropriations; or

30

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

- 45 -

 


1

religious institution or by the Commonwealth or any political

2

subdivision thereof.

3

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

4

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

5

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

6

special education school.

7

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

8

special education school.

9

"Tax credit."  The educational improvement tax credit

10

established under this subarticle.

11

Section 2522-B.  Qualification and application.

12

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

13

III of the Constitution of Pennsylvania, an educational

14

improvement tax credit program is established to enhance the

15

educational opportunities available to all students in this

16

Commonwealth.

17

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

18

a scholarship organization, a prekindergarten scholarship

19

organization or an educational improvement organization must

20

submit information to the department that enables the department

21

to confirm that the organization is exempt from taxation under

22

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

23

Law 99-514, 26 U.S.C. § 1 et seq.).

24

(c)  Scholarship organizations and prekindergarten

25

scholarship organizations.--A scholarship organization or

26

prekindergarten scholarship organization must certify to the

27

department that the organization is eligible to participate in

28

the program established under this subarticle and must agree to

29

annually report the following information to the department by

30

September 1 of each year:

- 46 -

 


1

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

2

immediately preceding school year to eligible

3

prekindergarten students.

4

(ii)  The total and average amounts of scholarships

5

awarded during the immediately preceding school year to

6

eligible prekindergarten students.

7

(iii)  The number of scholarships awarded during the

8

immediately preceding school year to eligible students in

9

grades kindergarten through eight.

10

(iv)  The total and average amounts of scholarships

11

awarded during the immediately preceding school year to

12

eligible students in grades kindergarten through eight.

13

(v)  The number of scholarships awarded during the

14

immediately preceding school year to eligible students in

15

grades 9 through 12.

16

(vi)  The total and average amounts of scholarships

17

awarded during the immediately preceding school year to

18

eligible students in grades 9 through 12.

19

(vii)  Where the scholarship organization or

20

prekindergarten scholarship organization collects

21

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

22

and the total dollar amount of scholarships awarded

23

during the immediately preceding school year to residents

24

of each county in which the scholarship organization or

25

prekindergarten scholarship organization awarded

26

scholarships.

27

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

28

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

29

than May 1 of each year, the department shall annually

30

distribute such sample forms, together with the forms on

- 47 -

 


1

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

2

scholarship organization and prekindergarten scholarship

3

organization.

4

(3)  The department may not require any other information

5

to be provided by scholarship organizations or

6

prekindergarten scholarship organizations, except as

7

expressly authorized in this subarticle.

8

(d)  Educational improvement organization.--

9

(1)  An application submitted by an educational

10

improvement organization must describe its proposed

11

innovative educational program or programs in a form

12

prescribed by the department. In prescribing the form, the

13

department shall consult with the Department of Education as

14

necessary. The department shall review and approve or

15

disapprove the application. In order to be eligible to

16

participate in the program established under this subarticle,

17

an educational improvement organization must agree to

18

annually report the following information to the department

19

by September 1 of each year:

20

(i)  The name of the innovative educational program

21

or programs and the total amount of the grant or grants

22

made to those programs during the immediately preceding

23

school year.

24

(ii)  A description of how each grant was utilized

25

during the immediately preceding school year and a

26

description of any demonstrated or expected innovative

27

educational improvements.

28

(iii)  The names of the public schools and school

29

districts where innovative educational programs that

30

received grants during the immediately preceding school

- 48 -

 


1

year were implemented.

2

(iv)  Where the educational improvement organization

3

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

4

total number and the total dollar amount of grants made

5

during the immediately preceding school year for programs

6

at public schools in each county in which the educational

7

improvement organization made grants.

8

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

9

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

10

than May 1 of each year, the department shall annually

11

distribute such sample forms, together with the forms on

12

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

13

educational improvement organization.

14

(3)  The department may not require any other information

15

to be provided by educational improvement organizations,

16

except as expressly authorized in this subarticle.

17

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

18

scholarship organization, prekindergarten scholarship

19

organization or educational improvement organization that the

20

organization meets the requirements of this subarticle for that

21

fiscal year no later than 60 days after the organization has

22

submitted the information required under this section.

23

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

24

list of each scholarship organization, prekindergarten

25

scholarship organization or educational improvement organization

26

qualified under this section in the Pennsylvania Bulletin. The

27

list shall also be posted and updated as necessary on the

28

publicly accessible Internet website of the department.

29

Section 2523-B.  Application.

30

(a)  Scholarship organization or prekindergarten scholarship

- 49 -

 


1

organization.--A In order to receive a tax credit, a business

<--

2

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

<--

3

firm shall receive a tax credit if the scholarship organization

4

or prekindergarten scholarship organization that receives the

5

contribution appears on the list established under section 2522-

6

B(f).

7

(b)  Educational improvement organization.--A In order to

<--

8

receive a tax credit, a business firm must shall apply to the

<--

9

department for a tax credit. A business firm shall receive a tax

<--

10

credit if the department has approved the program provided by

11

the educational improvement organization that receives the

12

contribution.

13

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

14

scholarship organization, prekindergarten scholarship

15

organization or educational improvement organization shall be

16

made no later than 60 days following the approval of an

17

application under subsection (a) or (b).

18

Section 2524-B.  Tax credit.

19

(a)  Scholarship or educational improvement organizations.--

20

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

21

shall grant a tax credit against any tax due under either

<--

22

Article XVI of the act of May 17, 1921 (P.L.682, No.284), known

23

as The Insurance Company Law of 1921, or Article III, IV, VI,

24

VII, VIII, IX or XV of the act of March 4, 1971 (P.L.6, No.2),

25

known as the Tax Reform Code of 1971, to a business firm

26

providing proof of a contribution to a scholarship organization

27

or educational improvement organization in the taxable year in

28

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

29

total amount contributed during the taxable year by the business

30

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

- 50 -

 


1

business firm for contributions made to scholarship

2

organizations or educational improvement organizations.

3

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

4

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

5

during the taxable year if the business firm provides a written

6

commitment to provide the scholarship organization or

7

educational improvement organization with the same amount of

8

contribution for two consecutive tax years. The business firm

9

must provide the written commitment under this subsection to the

10

department at the time of application.

11

(c)  Prekindergarten scholarship organizations.--In

12

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

13

shall grant a tax credit against any tax due under either

<--

14

Article XVI of the Insurance Company Law of 1921 or Article III,

15

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

16

business firm providing proof of a contribution to a

17

prekindergarten scholarship organization in the taxable year in

18

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

19

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

20

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

21

amount contributed during the taxable year by the business firm.

22

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

23

firm for contributions made to prekindergarten scholarship

24

organizations.

25

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

26

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

27

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

28

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

29

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

30

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

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1

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

2

contributions under subsection (c).

3

(e)  Pass-through entity.--

4

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

5

approved tax credits under this section, it may elect in

6

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

7

shareholders, members or partners in proportion to the share

8

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

9

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

10

which the contribution is made or in the taxable year

11

immediately following the year in which the contribution is

12

made. The election shall designate the year in which the

13

transferred tax credits are to be used and shall be made

14

according to procedures established by the Department of

15

Revenue.

16

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

17

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

18

credit under this section for the same contribution.

19

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

20

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

21

tax credit.

22

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

23

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

24

the separate income of that shareholder, member or partner.

25

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

26

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

27

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

28

(g)  Time of application for credits.--

29

(1)  The department may accept applications beginning on

30

May 15 from business firms for tax credits available during a

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1

fiscal year that is to begin on July 1.

2

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

3

credits available during the fiscal year exceed the total

4

aggregate amount of tax credits available for the fiscal

5

year, the department shall approve applications for tax

6

credits on the following basis, subject to the provisions of

7

section 2523-B:

8

(i)  Group 1 firms whose advance applications were

<--

9

received by July 1 shall be accorded first priority in

10

the approval of tax credit applications. If tax credits

11

applied for by Group 1 firms exceed the total aggregate

12

amount of tax credits available for the program under

13

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

14

rata basis the applications of all Group 1 firms that

15

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

16

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

17

credit under this subparagraph shall not disqualify a

18

Group 1 firm from receiving a 90% tax credit under

19

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

20

would require the Group 1 firm to make a lower

21

scholarship contribution in the second year of a two-year

22

commitment.

23

(ii)  If tax credits remain available after credits

24

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

25

whose applications were received by July 1 shall be

26

accorded priority in the approval of applications for the

27

remaining tax credits. If the sum of the tax credits

28

approved under subparagraph (i) and the credits applied

29

for by Group 2 firms exceeds the total aggregate amount

30

of tax credits available for the program under section

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1

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

2

the applications for the remaining tax credits submitted

3

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

4

applications of Group 3 firms shall be denied.

5

(iii)  If tax credits remain available on July 1 

6

after credits have been awarded under subparagraphs (i)

7

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

8

approved, on a pro rata basis within that group if

9

necessary. Thereafter, the department shall approve the

10

applications of all business firms on a daily basis. If,

11

on any day after July 1, the cumulative sum of the tax

12

credits approved and the tax credits applied for on that

13

day exceeds the total aggregate amount of tax credits

14

available for the program under section 2525-B, the

15

department shall approve on a pro rata basis the

16

applications received on that day.

17

Section 2525-B.  Limitations.

18

(a)  Amount.--

19

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

20

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

21

approved for scholarship organizations and educational

22

improvement organizations shall not exceed $92,000,000 in a

23

fiscal year. No less than 75% of the total aggregate amount

24

of all tax credits approved shall be used to provide tax

25

credits for contributions from business firms to scholarship

26

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

27

of all tax credits approved shall be used to provide tax

28

credits for contributions from business firms to educational

29

improvement organizations.

30

(i)  From the tax credits for contributions by

<--

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1

business firms to educational improvement organizations,

2

20% of the available amount shall initially be set aside

3

for contributions by business firms to educational

4

improvement organizations that are also school district

5

foundations, public school foundations, charter school

6

foundations or cyber charter school foundations and shall

7

be distributed in accordance with section 2524-B(g).

8

(ii)  Tax credits remaining from the amount set aside

9

in subparagraph (i) after July 1 of each year shall be

10

made available to business firms for contributions to any

11

educational improvement organization and shall be

12

distributed in accordance with section 2524-B(g).

13

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

14

in the fiscal year 2014-2015 and each fiscal year

15

thereafter, the total aggregate amount of all tax credits

16

available shall equal the total aggregate amount of all

17

tax credits available in the prior fiscal year.

18

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

19

fiscal year in which the total aggregate amount of all

20

tax credits approved for the prior fiscal year is equal

21

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

22

all tax credits available for the prior fiscal year, the

23

total aggregate amount of all tax credits available shall

24

increase by 5%. The department shall publish on its

25

Internet website the total aggregate amount of all tax

26

credits available when the amount is increased under this

27

paragraph.

28

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

29

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

30

approved for contributions from business firms to

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1

prekindergarten scholarship programs shall not exceed

2

$8,000,000 in a fiscal year.

3

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

4

the fiscal year 2014-2015 and each fiscal year

5

thereafter, the total aggregate amount of all tax credits

6

available to prekindergarten scholarship programs shall

7

equal the total aggregate amount of all tax credits

8

available to prekindergarten scholarship programs in the

9

prior fiscal year.

10

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

11

fiscal year in which the total aggregate amount of all

12

tax credits available is increased under paragraph (2),

13

the total aggregate amount of all tax credits available

14

for prekindergarten scholarship programs shall increase

15

by 5%. The department shall publish on its Internet

16

website the total aggregate amount of all tax credits

17

available for prekindergarten scholarship programs when

18

the amount is increased under this paragraph.

19

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

20

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

21

business.

22

(c)  Tax liability.--

23

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

24

granted for any one taxable year may not exceed the tax

25

liability of a business firm.

26

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

27

entity which elects to transfer the credit according to

28

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

29

year and transferred to a shareholder, member or partner may

30

not exceed the tax liability of the shareholder, member or

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1

partner.

2

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

3

taxable year the contribution was made or in the year designated

4

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

5

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

6

or carried back and is not refundable or transferable.

7

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

8

eligible student or eligible prekindergarten student shall not

9

be considered to be taxable income for the purposes of Article

10

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

11

Reform Code of 1971.

12

Section 2526-B.  Lists.

13

The Department of Revenue shall provide to the General

14

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

15

organizations, prekindergarten scholarship organizations and

16

educational improvement organizations that receive contributions

17

from business firms granted a tax credit.

18

Section 2527-B.  Guidelines.

19

The department, in consultation with the Department of

20

Education, shall develop guidelines to determine the eligibility

21

of an innovative educational program.

22

Section 2.  Repeals are as follows:

23

(1)  The General Assembly declares that the repeal under

24

paragraph (2) is necessary to effectuate the addition of

25

Article XXV-B of the act.

26

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

27

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

28

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

29

severable. If any provision of that article or its application

30

to any person or circumstance is held invalid, the invalidity

- 57 -

 


1

shall not affect other provisions or applications of that

2

article which can be given effect without the invalid provision

3

or application.

4

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

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