PRIOR PRINTER'S NOS. 1517, 1627

PRINTER'S NO.  1749

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

1330

Session of

2011

  

  

INTRODUCED BY QUIGLEY, CLYMER, GABLER, COX, ADOLPH, AUMENT, BAKER, BARRAR, BEAR, BENNINGHOFF, BLOOM, BOBACK, BOYD, B. BOYLE, BRADFORD, BRENNAN, CALTAGIRONE, CAUSER, CHRISTIANA, CONKLIN, D. COSTA, P. COSTA, CREIGHTON, CUTLER, DAY, DELOZIER, DeLUCA, DENLINGER, DePASQUALE, DiGIROLAMO, ELLIS, J. EVANS, EVERETT, FARRY, FLECK, GEIST, GERGELY, GIBBONS, GILLEN, GINGRICH, GODSHALL, GRELL, GROVE, HACKETT, HARKINS, HARPER, HARRIS, HEFFLEY, HENNESSEY, HESS, HORNAMAN, HUTCHINSON, KAUFFMAN, M. K. KELLER, W. KELLER, KILLION, KNOWLES, KORTZ, KOTIK, KRIEGER, KULA, MAJOR, MALONEY, MANN, MARSHALL, MARSICO, McGEEHAN, METCALFE, METZGAR, MICCARELLI, MICOZZIE, MILLARD, MILLER, MILNE, MOUL, MURPHY, MURT, MUSTIO, MYERS, M. O'BRIEN, O'NEILL, PAYTON, PEIFER, PETRI, PYLE, QUINN, RAPP, READSHAW, REED, REESE, REICHLEY, ROAE, ROCK, SABATINA, SANTONI, SAYLOR, SCAVELLO, SCHRODER, SHAPIRO, SONNEY, STEPHENS, STERN, STEVENSON, TALLMAN, TAYLOR, TOEPEL, TURZAI, VEREB, VULAKOVICH, WATERS, LAWRENCE, WAGNER, HICKERNELL AND EVANKOVICH, APRIL 11, 2011

  

  

AS REPORTED FROM COMMITTEE ON EDUCATION, HOUSE OF REPRESENTATIVES, AS AMENDED, MAY 3, 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 educational improvement

6

tax credit; and repealing provisions of the Tax Reform Code

7

of 1971 relating to educational improvement tax credit.

8

The General Assembly of the Commonwealth of Pennsylvania

9

hereby enacts as follows:

10

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

11

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

 


1

article to read:

2

ARTICLE XXV-B

3

EDUCATIONAL IMPROVEMENT TAX CREDIT

4

Section 2501-B.  Definitions.

5

The following words and phrases when used in this article

6

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

7

context clearly indicates otherwise:

8

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

9

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

10

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

11

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

12

pass-through entity.

13

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

14

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

15

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

16

the individual performing the services.

17

"Department."  The Department of Community and Economic

18

Development of the Commonwealth.

19

"Educational improvement organization."  A nonprofit entity

20

which:

21

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

22

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

23

26 U.S.C. § 1 et seq.); and

24

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

25

grants to a public school, a chartered school as defined in

26

section 1376.1 or a private school approved under section

27

1376 for innovative educational programs.

28

For purposes of this definition, a nonprofit entity

29

"contributes" its annual cash receipts when it expends or

30

otherwise irrevocably encumbers those funds for expenditure

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1

during the then current fiscal year of the nonprofit entity or

2

during the next succeeding fiscal year of the nonprofit entity.

3

A "nonprofit entity" includes a school district foundation,

4

public school foundation, charter school foundation or cyber

5

charter school foundation.

6

"Eligible prekindergarten student."  A student, including an

7

eligible student with a disability, who is enrolled in a

8

prekindergarten program and is a member of a household with a

9

maximum annual household income as increased by the applicable

10

income allowance.

11

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

12

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

13

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

14

income as increased by the applicable income allowance.

15

"Eligible student with a disability."  A prekindergarten

16

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

17

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

18

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

19

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

20

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

21

(relating to child with a disability).

22

(2)  Needs special education and related services.

23

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

24

school.

25

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

26

of not more than the maximum annual household income.

27

"Household."  An individual living alone or with the

28

following: a spouse, parent and their unemancipated minor

29

children, other unemancipated minor children who are related by

30

blood or marriage or other adults or unemancipated minor

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1

children living in the household who are dependent upon the

2

individual.

3

"Household income."  All moneys or property received of

4

whatever nature and from whatever source derived. The term does

5

not include the following:

6

(1)  Periodic payments for sickness and disability other

7

than regular wages received during a period of sickness or

8

disability.

9

(2)  Disability, retirement or other payments arising

10

under workers' compensation acts, occupational disease acts

11

and similar legislation by any government.

12

(3)  Payments commonly recognized as old-age or

13

retirement benefits paid to persons retired from service

14

after reaching a specific age or after a stated period of

15

employment.

16

(4)  Payments commonly known as public assistance or

17

unemployment compensation payments by a governmental agency.

18

(5)  Payments to reimburse actual expenses.

19

(6)  Payments made by employers or labor unions for

20

programs covering hospitalization, sickness, disability or

21

death, supplemental unemployment benefits, strike benefits,

22

Social Security and retirement.

23

(7)  Compensation received by United States servicemen

24

serving in a combat zone.

25

"Income allowance."

26

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

27

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

28

student, eligible prekindergarten student and dependent

29

member of a household.

30

(ii)  After June 30, 2011, through June 30, 2012,

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1

$12,000 for each eligible student, eligible

2

prekindergarten student and dependent member of a

3

household.

4

(iii)  After June 30, 2012, through June 30, 2013,

5

$15,000 for each eligible student, eligible

6

prekindergarten student and dependent member of a

7

household.

8

(2)  Beginning July 1, 2013, the Department of Community

9

and Economic Development shall annually adjust the income

10

allowance amounts under paragraph (1) to reflect any upward

11

changes in the Consumer Price Index for All Urban Consumers

12

for the Pennsylvania, New Jersey, Delaware and Maryland area

13

in the preceding 12 months and shall immediately submit the

14

adjusted amounts to the Legislative Reference Bureau for

15

publication as a notice in the Pennsylvania Bulletin. 

16

"Innovative educational program."  An advanced academic or

17

similar program that is not part of the regular academic program

18

of a public school but that enhances the curriculum or academic

19

program of a public school, chartered school as defined in

20

section 1376.1(a) or private school approved in accordance with

21

section 1376, or provides prekindergarten programs to public

22

school students, students of a chartered school as defined in

23

section 1376.1(a) or students of a private school approved in

24

accordance with section 1376.

25

"Maximum annual household income."

26

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

27

paragraph (3), the following:

28

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

29

(ii)  After June 30, 2011, through June 30, 2012, not

30

more than $60,000.

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1

(iii)  After June 30, 2012, not more than $75,000.

2

(2)  With respect to an eligible student with a

3

disability, as calculated by multiplying:

4

(i)  the sum of:

5

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

6

and

7

(B)  the applicable income allowance; by

8

(ii)  the applicable support level factor according

9

to the following table:

10

Support Level

Support Level Factor

11

1

1.50

12

2

2.993

13

(3)  Beginning July 1, 2013, the Department of Community

14

and Economic Development shall annually adjust the income

15

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

16

changes in the Consumer Price Index for All Urban Consumers

17

for the Pennsylvania, New Jersey, Delaware and Maryland area

18

in the preceding 12 months and shall immediately submit the

19

adjusted amounts to the Legislative Reference Bureau for

20

publication as a notice in the Pennsylvania Bulletin.

21

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

22

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

23

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

24

company treated as a disregarded entity for Federal income tax

25

purposes or a Pennsylvania S corporation as defined in section

26

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

27

"Prekindergarten program."  A program of instruction for

28

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

29

curriculum aligned with the curriculum of the school with which

30

it is affiliated and that provides:

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1

(1)  a minimum of two hours of instructional and

2

developmental activities per day at least 60 days per school

3

year; or

4

(2)  a minimum of two hours of instructional and

5

developmental activities per day at least 20 days over the

6

summer recess.

7

"Prekindergarten scholarship organization."  A nonprofit

8

entity that:

9

(1)  Either is exempt from Federal taxation under section

10

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

11

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

12

segregated fund by a scholarship organization that has been

13

qualified under section 2502-B.

14

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

15

to a prekindergarten scholarship program by expending or

16

otherwise irrevocably encumbering those funds for

17

distribution during the then current fiscal year of the

18

organization or during the next succeeding fiscal year of the

19

organization.

20

"Prekindergarten scholarship program."  A program to provide

21

tuition to eligible prekindergarten students to attend a

22

prekindergarten program operated by or in conjunction with a

23

school located in this Commonwealth and that includes an

24

application and review process for the purpose of making awards

25

to eligible prekindergarten students and awards scholarships to

26

eligible prekindergarten students without limiting availability

27

to only students of one school.

28

"Public school."  A public prekindergarten where compulsory

29

attendance requirements do not apply or a public kindergarten,

30

elementary school or secondary school at which the compulsory

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1

attendance requirements of this Commonwealth may be met and that

2

meets the applicable requirements of Title VI of the Civil

3

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

4

"Scholarship."  An award under a scholarship program.

5

"Scholarship organization."  A nonprofit entity that:

6

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

7

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

8

26 U.S.C. § 1 et seq.); and

9

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

10

to a scholarship program.

11

For purposes of this definition, a nonprofit entity

12

"contributes" its annual cash receipts to a scholarship program

13

when it expends or otherwise irrevocably encumbers those funds

14

for distribution during the then current fiscal year of the

15

nonprofit entity or during the next succeeding fiscal year of

16

the nonprofit entity.

17

"Scholarship program."  A program to provide tuition to

18

eligible students to attend a school located in this

19

Commonwealth. A scholarship program must include an application

20

and review process for the purpose of making awards to eligible

21

students. The award of scholarships to eligible students shall

22

be made without limiting availability to only students of one

23

school.

24

"School."  A public or nonpublic prekindergarten,

25

kindergarten, elementary school or secondary school at which the

26

compulsory attendance requirements of the Commonwealth may be

27

met and that meets the applicable requirements of Title VI of

28

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

29

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

30

prekindergarten or kindergarten program or, when no

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1

prekindergarten or kindergarten program is provided, the

2

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

3

the school year the student attains 21 years of age or

4

graduation from high school, whichever occurs first.

5

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

6

school that is designated specifically and exclusively for

7

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

8

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

9

following:

10

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

11

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

12

(2)  is accredited by an accrediting association approved

13

by the State Board of Education;

14

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

15

Commonwealth appropriations; or

16

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

17

religious institution or by the Commonwealth or any political

18

subdivision thereof.

19

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

20

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

21

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

22

special education school.

23

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

24

special education school.

25

"Tax credit."  The educational improvement tax credit

26

established under this article.

27

Section 2502-B.  Qualification and application.

28

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

29

III of the Constitution of Pennsylvania, an educational

30

improvement tax credit program is established to enhance the

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1

educational opportunities available to all students in this

2

Commonwealth.

3

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

4

scholarship organization, a prekindergarten scholarship

5

organization or an educational improvement organization must

6

submit information to the department that enables the department

7

to confirm that the organization is exempt from taxation under

8

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

9

Law 99-514, 26 U.S.C. § 1 et seq.).

10

(c)  Scholarship organizations and prekindergarten

11

scholarship organizations.--A scholarship organization or

12

prekindergarten scholarship organization must certify to the

13

department that the organization is eligible to participate in

14

the program established under this article and must agree to

15

annually report the following information to the department by

16

September 1 of each year:

17

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

18

immediately preceding school year to eligible

19

prekindergarten students.

20

(ii)  The total and average amounts of scholarships

21

awarded during the immediately preceding school year to

22

eligible prekindergarten students.

23

(iii)  The number of scholarships awarded during the

24

immediately preceding school year to eligible students in

25

grades kindergarten through eight.

26

(iv)  The total and average amounts of scholarships

27

awarded during the immediately preceding school year to

28

eligible students in grades kindergarten through eight.

29

(v)  The number of scholarships awarded during the

30

immediately preceding school year to eligible students in

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1

grades 9 through 12.

2

(vi)  The total and average amounts of scholarships

3

awarded during the immediately preceding school year to

4

eligible students in grades 9 through 12.

5

(vii)  Where the scholarship organization or

6

prekindergarten scholarship organization collects

7

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

8

and the total dollar amount of scholarships awarded

9

during the immediately preceding school year to residents

10

of each county in which the scholarship organization or

11

prekindergarten scholarship organization awarded

12

scholarships.

13

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

14

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

15

than May 1 of each year, the department shall annually

16

distribute such sample forms, together with the forms on

17

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

18

scholarship organization and prekindergarten scholarship

19

organization.

20

(3)  The department may not require any other information

21

to be provided by scholarship organizations or

22

prekindergarten scholarship organizations, except as

23

expressly authorized in this article.

24

(d)  Educational improvement organization.--

25

(1)  An application submitted by an educational

26

improvement organization must describe its proposed

27

innovative educational program or programs in a form

28

prescribed by the department. In prescribing the form, the

29

department shall consult with the Department of Education as

30

necessary. The department shall review and approve or

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1

disapprove the application. In order to be eligible to

2

participate in the program established under this article, an

3

educational improvement organization must agree to annually

4

report the following information to the department by

5

September 1 of each year:

6

(i)  The name of the innovative educational program

7

or programs and the total amount of the grant or grants

8

made to those programs during the immediately preceding

9

school year.

10

(ii)  A description of how each grant was utilized

11

during the immediately preceding school year and a

12

description of any demonstrated or expected innovative

13

educational improvements.

14

(iii)  The names of the public schools and school

15

districts where innovative educational programs that

16

received grants during the immediately preceding school

17

year were implemented.

18

(iv)  Where the educational improvement organization

19

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

20

total number and the total dollar amount of grants made

21

during the immediately preceding school year for programs

22

at public schools in each county in which the educational

23

improvement organization made grants.

24

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

25

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

26

than May 1 of each year, the department shall annually

27

distribute such sample forms, together with the forms on

28

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

29

educational improvement organization.

30

(3)  The department may not require any other information

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1

to be provided by educational improvement organizations,

2

except as expressly authorized in this article.

3

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

4

scholarship organization, prekindergarten scholarship

5

organization or educational improvement organization that the

6

organization meets the requirements of this article for that

7

fiscal year no later than 60 days after the organization has

8

submitted the information required under this section.

9

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

10

list of each scholarship organization, prekindergarten

11

scholarship organization or educational improvement organization

12

qualified under this section in the Pennsylvania Bulletin. The

13

list shall also be posted and updated as necessary on the

14

publicly accessible Internet website of the department.

15

Section 2503-B.  Application.

16

(a)  Scholarship organization or prekindergarten scholarship

17

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

18

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

19

scholarship organization or prekindergarten scholarship

20

organization that receives the contribution appears on the list

21

established under section 2502-B(f).

22

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

23

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

24

shall receive a tax credit if the department has approved the

25

program provided by the educational improvement organization

26

that receives the contribution.

27

(c)  Availability of tax credits.--Tax credits shall be made

28

available by the department on a first-come-first-served basis

29

within the limitations established under section 2505-B(a).

30

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

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1

scholarship organization, prekindergarten scholarship

2

organization or educational improvement organization shall be

3

made no later than 60 days following the approval of an

4

application under subsection (a) or (b).

5

Section 2504-B.  Tax credit.

6

(a)  Scholarship or educational improvement organizations.--

7

In accordance with section 2505-B(a), the Department of Revenue

8

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

9

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

10

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

11

providing proof of a contribution to a scholarship organization

12

or educational improvement organization in the taxable year in

13

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

14

total amount contributed during the taxable year by the business

15

firm. For the fiscal year 2011-2012, the tax credit shall not

16

exceed $400,000 annually per business firm for contributions

17

made to scholarship organizations and educational improvement

18

organizations. For the fiscal year 2012-2013, the tax credit

19

shall not exceed $750,000 annually per business firm for

20

contributions made to scholarship organizations or educational

21

improvement organizations.

22

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

23

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

24

during the taxable year if the business firm provides a written

25

commitment to provide the scholarship organization or

26

educational improvement organization with the same amount of

27

contribution for two consecutive tax years. The business firm

28

must provide the written commitment under this subsection to the

29

department at the time of application.

30

(c)  Prekindergarten scholarship organizations.--In

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1

accordance with section 2505-B(a), the Department of Revenue

2

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

3

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

4

business firm providing proof of a contribution to a

5

prekindergarten scholarship organization in the taxable year in

6

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

7

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

8

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

9

amount contributed during the taxable year by the business firm. 

10

For the fiscal year 2011-2012, the tax credit shall not exceed

11

$200,000 annually per business firm for contributions made to

12

prekindergarten scholarship organizations. For the fiscal year

13

2012-2013, the tax credit shall not exceed $250,000 annually per

14

business firm for contributions made to prekindergarten

15

scholarship organizations.

16

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

17

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

18

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

19

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

20

tax year in excess of $750,000 for contributions under

21

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

22

receive tax credits in any tax year in excess of $250,000 for

23

contributions under subsection (c).

24

(e)  Pass-through entity.--

25

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

26

approved tax credits under this section, it may elect in

27

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

28

shareholders, members or partners in proportion to the share

29

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

30

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

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1

which the contribution is made or in the taxable year

2

immediately following the year in which the contribution is

3

made. The election shall designate the year in which the

4

transferred tax credits are to be used and shall be made

5

according to procedures established by the Department of

6

Revenue.

7

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

8

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

9

credit under this section for the same contribution.

10

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

11

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

12

tax credit.

13

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

14

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

15

the separate income of that shareholder, member or partner.

16

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

17

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

18

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

19

(g)  Time of application for credits.--

20

(1)  Except as provided in paragraph (2), the department

21

may accept applications for tax credits available during a

22

fiscal year no earlier than July 1 of each fiscal year.

23

(2)  The application of any business firm for tax credits

24

available during a fiscal year as part of the second year of

25

a two-year commitment or as a renewal of a two-year

26

commitment that was fulfilled in the previous fiscal year may

27

be accepted no earlier than May 15 preceding the fiscal year.

28

Section 2505-B.  Limitations.

29

(a)  Amount.--

30

(1)  For the fiscal year 2011-2012, the total aggregate

<--

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1

(1)  (i)  For the fiscal year 2011-2012, the total

<--

2

aggregate amount of all tax credits approved shall not

3

exceed $100,000,000. No less than 75% of the total

<--

4

aggregate amount $100,000,000.

<--

5

(ii)  Not more than $67,000,000 of the total

6

aggregate amount of all tax credits approved shall be

7

used to provide tax credits for contributions from

8

business firms to scholarship organizations, including

<--

9

prekindergarten scholarship organizations. No less than

10

25% of the total aggregate amount organizations.

<--

11

(iii)  Not more than $25,000,000 of the total

12

aggregate amount of all tax credits approved shall be

13

used to provide tax credits for contributions from

14

business firms to educational improvement organizations.

15

(iv)  Not more than $8,000,000 of the total aggregate

<--

16

amount of all tax credits approved shall be used to

17

provide tax credits for contributions from business firms

18

to prekindergarten scholarship organizations.

19

(2)  In the fiscal year 2012-2013, the total aggregate

<--

20

(2)  (i)  In the fiscal year 2012-2013 and each fiscal

<--

21

year thereafter, the total aggregate amount of all tax

22

credits approved shall not exceed $200,000,000.

23

(ii)  Not more than $120,000,000 of the total

<--

24

aggregate amount of all tax credits approved shall be

25

used to provide tax credits for contributions from

26

business firms to scholarship organizations.

27

(iii)  Not more than $60,000,000 of the total

28

aggregate amount of all tax credits approved shall be

29

used to provide tax credits for contributions from

30

business firms to educational improvement organizations.

- 17 -

 


1

(iv)  Not more than $20,000,000 of the total

2

aggregate amount of all tax credits approved shall be

3

used to provide tax credits for contributions from

4

business firms to prekindergarten scholarship

5

organizations.

6

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

<--

7

total aggregate amount of all tax credits approved for

8

contributions from business firms to prekindergarten

9

scholarship programs shall not exceed $8,000,000 in a fiscal

10

year.

11

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

12

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

13

business.

14

(c)  Tax liability.--

15

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

16

granted for any one taxable year may not exceed the tax

17

liability of a business firm.

18

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

19

entity which elects to transfer the credit according to

20

section 2504-B(e), a tax credit granted for any one taxable

21

year and transferred to a shareholder, member or partner may

22

not exceed the tax liability of the shareholder, member or

23

partner.

24

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

25

taxable year the contribution was made or in the year designated

26

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

27

transferred under section 2504-B(e) may not be carried forward

28

or carried back and is not refundable or transferable.

29

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

30

eligible student or eligible prekindergarten student shall not

- 18 -

 


1

be considered to be taxable income for the purposes of Article

2

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

3

Reform Code of 1971.

4

Section 2506-B.  Lists.

5

The Department of Revenue shall provide to the General

6

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

7

organizations, prekindergarten scholarship organizations and

8

educational improvement organizations that receive contributions

9

from business firms granted a tax credit.

10

Section 2507-B.  Guidelines.

11

The department, in consultation with the Department of

12

Education, shall develop guidelines to determine the eligibility

13

of an innovative educational program.

14

Section 2.  Repeals are as follows:

15

(1)  The General Assembly declares that the repeal under

16

paragraph (2) is necessary to effectuate the addition of

17

Article XXV-B of the act.

18

(2)  Article XVII-F and section 2902-E(b) of the act of

19

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

20

1971, are repealed.

21

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

22

severable. If any provision of that article or its application

23

to any person or circumstance is held invalid, the invalidity

24

shall not affect other provisions or applications of that

25

article which can be given effect without the invalid provision

26

or application.

27

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

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