Regular Session 2021-2022 House Bill 1088 P.N. 1122

PRINTER'S NO. 1122

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1088

Session of

2021

INTRODUCED BY GROVE, TOPPER, PICKETT, HAMM, ROTHMAN, LEWIS,

ZIMMERMAN, RYAN, STAATS, BERNSTINE, MILLARD, KAUFFMAN,

WHEELAND, DRISCOLL, ROWE AND GILLEN, APRIL 5, 2021

REFERRED TO COMMITTEE ON EDUCATION, APRIL 5, 2021

AN ACT

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

act relating to the public school system, including certain

provisions applicable as well to private and parochial

schools; amending, revising, consolidating and changing the

laws relating thereto," in educational tax credit, further

providing for definitions, for qualification and application

by organizations, for application by business firms, for tax

credits, for limitations and for opportunity scholarships.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definitions of "economically disadvantaged

school" and "low-achieving school" in section 2002-B of the act

of March 10, 1949 (P.L.30, No.14), known as the Public School

Code of 1949, are amended to read:

Section 2002-B. Definitions.

The following words and phrases when used in this article

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

context clearly indicates otherwise:

* * *

"Economically disadvantaged school." Any school within this

Commonwealth at which at least [75%] 51% of the students

attending the school in the immediately preceding school year

received a scholarship pursuant to this article.

* * *

"Low-achieving school." [A public school that ranked in the

lowest 15% of the school's designation] A public elementary or

secondary school of a school district that is ranked 19% or

below the State's designation as an elementary school or a

secondary school based on combined mathematics and reading

scores from the annual assessment administered in the previous

school year and for which the Department of Education has posted

results on the Department of Education's publicly accessible

Internet website. The term does not include a charter school,

cyber charter school or area career and technical school.

* * *

Section 2. Sections 2003-B(d.3) and (f), 2004-B(a)(2) and

2005-B(b), (c)(2), (d) introductory paragraph, (i), (j)(1) and

(2) of the act are amended to read:

Section 2003-B. Qualification and application by organizations.

* * *

(d.3) [Opportunity scholarship] Scholarship organization for

economically disadvantaged schools.--

(1) [In] Effective July 1, 2021, and thereafter, in

addition to the other requirements of this article, [an

opportunity] a scholarship organization that intends to

provide [opportunity] scholarship awards to applicants of

economically disadvantaged schools must demonstrate a history

of serving schools throughout this Commonwealth and the

capacity to distribute [opportunity] scholarships Statewide

to applicants of economically disadvantaged schools.

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(2) [An opportunity] A scholarship organization must

agree to distribute [opportunity] scholarships to applicants

of economically disadvantaged schools not later than

[December] February 1 of the applicable school year.

(3) Notwithstanding any other provision of this article

to the contrary, the department may not for any school year

qualify more than [one opportunity scholarship organization]

three scholarship organizations for the provision of

[opportunity] scholarships to applicants of economically

disadvantaged schools.

* * *

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

list of each scholarship organization, pre-kindergarten

scholarship organization, educational improvement organization

and [opportunity] scholarship organization for economically

disadvantaged schools qualified under this section in the

Pennsylvania Bulletin. The list shall also be posted and updated

as necessary on the publicly accessible Internet website of the

department. The list shall separately identify the [opportunity]

scholarship [organization that qualifies] organizations for

economically disadvantaged schools that qualify under subsection

(d.3).

Section 2004-B. Application by business firms.

(a) Scholarship organization, pre-kindergarten scholarship

organization or [opportunity] scholarship organization for

economically disadvantaged schools.--

* * *

(2) A business firm that intends to apply to the

department for a tax credit for contributions [to the

opportunity scholarship organization that qualifies under

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section 2003-B(d.3)] for students attending an economically

disadvantaged school must submit an application separate from

an application for tax credits to a scholarship organization,

pre-kindergarten scholarship organization or [other]

[opportunity] scholarship organization for economically

disadvantaged schools. The contribution shall be made to a

designated scholarship organization for economically

disadvantaged schools and shall be separately accounted for

and distributed by the department.

* * *

Section 2005-B. Tax credits.

* * *

(b) Additional amount.--In accordance with section 2006-B,

the Department of Revenue shall grant a tax credit of up to 90%

of the total amount contributed during the taxable year if the

business firm provides a written commitment to provide the

scholarship organization, educational improvement organization

or opportunity scholarship organization with the same amount of

contribution for two consecutive [tax] taxable years. The

business firm must provide the written commitment under this

subsection to the department at the time of application.

accordance with section 2006-B, the Department of Revenue shall

grant a tax credit against any applicable tax to a business firm

providing proof of a contribution to a pre-kindergarten

scholarship organization in the taxable year in which the

contribution is made in accordance with the following:

* * *

(2) [The] For each fiscal year, the tax credit shall not

exceed $200,000 annually per business firm for contributions

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made to pre-kindergarten scholarship organizations, except as

provided in subsection (i).

(d) Combination of tax credits.--In accordance with section

2006-B, a business firm may receive tax credits from the

Department of Revenue in any [tax] fiscal year for any

combination of contributions under subsection (a), (a.1), (b) or

(c). Except as provided in subsection (i), in no case may a

business firm receive tax credits in any [tax] fiscal year in

excess of the following:

* * *

(i) Temporary increase in maximum tax credits available.--

(1) If all tax credits authorized under this article for

contributions to the category of scholarship organizations,

opportunity scholarship organizations or pre-kindergarten

scholarship organizations have not been awarded as of October

1 of any fiscal year, then for applications accepted by the

department from October 1 through November 30 of such fiscal

year, the limitations set forth in subsections (a), (a.1),

business firm can receive during a fiscal year for

contributions to each such category of organizations shall

not apply. Under this paragraph, the department may accept

applications under section 2004-B from October 1 through

November 30 as follows:

(i) A business firm, including a business firm that

already applied for the maximum tax credits available

pursuant to subsections (a) and (d), may apply under

section 2004-B(a) for up to the total amount of tax

credits remaining available for contributions to

scholarship organizations for the fiscal year as set

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forth in section 2006-B(a)(1).

(ii) A business firm, including a business firm that

already applied for the maximum tax credits available

pursuant to subsections (a.1) and (d), may apply under

section 2004-B(a) for up to the total amount of tax

credits remaining available for contributions to

opportunity scholarship organizations for the fiscal year

as set forth in section 2006-B(a)(3).

(iii) A business firm, including a business firm

that already applied for the maximum tax credits

available pursuant to subsections (c) and (d), may apply

under section 2004-B(a) for up to the total amount of tax

credits remaining available for contributions to pre-

kindergarten scholarship organizations for the fiscal

year as set forth in section 2006-B(a)(2).

(2) The provisions of subsection (b) shall not apply to

applications for tax credits made under this subsection. Tax

credits awarded under this subsection shall not exceed 75% of

the total amount contributed during the taxable year by a

business firm pursuant to an application filed under this

subsection.

(3) Prior to the award of tax credits applied for under

this subsection, the department shall first award tax credits

applied for by a business firm during the period October 1

through November 30 in an amount no greater than the maximum

amount of tax credits for which a business firm is eligible

under subsections (a), (a.1), (c) and (d). The tax credits

shall be awarded on a first-come, first-served basis as set

forth in section 2004-B(c).

(4) After the department has awarded tax credits under

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paragraph (3), any tax credits remaining available within the

category of scholarship organizations, opportunity

scholarship organizations and pre-kindergarten scholarship

organizations shall be awarded based on the total amount of

tax credits within each category of organization for which

applications are received under this subsection from October

1 through November 30 of the fiscal year as follows:

(i) If the total amount of tax credits applied for

by all business firms under this subsection does not

exceed the total amount of tax credits that remained

available for award within a category as of October 1,

less those tax credits awarded under paragraph (3), then

each business firm may be awarded the full amount of tax

credits applied for.

(ii) If the total amount of tax credits applied for

by all business firms under this subsection exceeds the

total amount of tax credits that remained available for

award within a category as of October 1, less those tax

credits awarded under paragraph (3), then each business

firm may be awarded an amount of tax credits determined

by multiplying the amount of tax credits applied for by

the business firm by a ratio, the numerator of which is

the total amount of tax credits that remained available

for award within the category as of October 1, less those

awarded as set forth in paragraph (3), and the

denominator of which is the total amount of tax credits

applied for by all business firms under this subsection.

(5) If all tax credits authorized under this article for

contributions to the category of scholarship organizations,

opportunity scholarship organizations or pre-kindergarten

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scholarship organizations have not been awarded as of

November 30 of any fiscal year, then for applications

accepted by the department from December 1 through the end of

the fiscal year, the limitations set forth in subsections

(a), (a.1), (c) and (d) relating to the maximum amount of tax

credits a business firm can receive during a fiscal year for

contributions to each such category of organizations shall

not apply. Under this paragraph, the department may accept

applications under section 2006-B from December 1 through the

end of the fiscal year and shall award tax credits under this

article for contributions to the category of scholarship

organizations, opportunity scholarship organizations or pre-

kindergarten scholarship organizations on a first-come,

first-served basis until all tax credits available for the

fiscal year have been exhausted.

[(5)] (6) Notwithstanding a temporary increase in

maximum tax credits available under this subsection, the

limitations set forth in subsections (a), (a.1), (c) and (d)

relating to the maximum amount of tax credits a business firm

can receive during a year for contributions to a category of

scholarship organizations, opportunity scholarship

organizations or pre-kindergarten scholarship organizations

shall be reinstated for all applications accepted by the

department [on or] after [December 1] June 30 of the fiscal

year.

(j) Reallocation of tax credits.--

(1) Beginning on January 1 of any fiscal year, if any

tax credits authorized under this article for contributions

to any of the categories of scholarship organizations,

opportunity scholarship organizations or pre-kindergarten

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scholarship organizations remain unawarded, such unawarded

tax credits may be reallocated to any of the categories of

scholarship organizations, opportunity scholarship

organizations or pre-kindergarten scholarship organizations

for which all available tax credits have been awarded. The

department shall, within 10 business days, inform each

business firm on the waiting list maintained by the

department under subsection (h) that tax credits remain

available under another category for which the business firm

has not yet applied. If a business firm notified under this

paragraph elects, the department shall reallocate available

tax credits for award to the business firm in the business

firm's preferred tax credit category, notwithstanding the

limitations contained in section 2006-B(a). [The amount of

tax credits to be awarded to a business firm under this

paragraph shall not exceed the amount of tax credits

available for reallocation or the maximum amount of tax

credits for which a business firm is eligible under

subsections (a), (a.1), (c) and (d).] Each business firm

shall have 10 business days from the date of the department's

notice to elect a reallocation of tax credits under this

paragraph. The department shall award tax credits on a first-

come, first-served basis.

(2) After the department has awarded tax credits under

paragraph (1), the department shall accept new applications

for reallocation of tax credits from any of the categories of

scholarship organizations, opportunity scholarship

organizations or pre-kindergarten scholarship organizations

for which tax credits remain available to the applicant's

preferred category of scholarship organizations, opportunity

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scholarship organizations or pre-kindergarten scholarship

organizations for which all available tax credits have been

awarded, notwithstanding any limitations contained in section

2006-B(a)[. The amount of tax credits to be awarded to a

business firm under this paragraph shall not exceed the

amount of tax credits available for reallocation or the

maximum amount of tax credits for which a business firm is

eligible under] or the limitations in subsections (a), (a.1),

first-come, first-served basis.

* * *

Section 3. Section 2006-B(a) and (d.1) of the act, amended

or added November 25, 2020 (P.L.1294, No.136), are amended and

the section is amended by adding a subsection to read:

Section 2006-B. Limitations.

(a) Amount.--

(1) The total aggregate amount of all tax credits

approved for contributions from business firms to scholarship

organizations, educational improvement organizations and pre-

kindergarten scholarship organizations shall not exceed

[$185,000,000] $339,020,000 plus any increased dollar amounts

calculated under subparagraph (i)(B) , (ii)(B) and (iii)(B) in

a fiscal year[.] with each category as follows, plus an

amount sufficient to meet the objectives of section (d.1):

(i) (A) No less than [$135,000,000] $235,000,000 of

the total aggregate amount plus an amount equal to

meet the obligations of section (d.1) shall be used

to provide tax credits for contributions from

business firms to scholarship organizations.

(B) Beginning July 1, 2022, and each July 1

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thereafter, the department shall automatically

increase the tax credit amount by 10% if the amount

used in the prior fiscal year is equal to or greater

than 90% of the tax credit amount approved in the

prior fiscal year or the amount published by the

Legislative Reference Bureau. The department shall

immediately transmit notice of the increased dollar

amounts to the Legislative Reference Bureau for

publication in the Pennsylvania Bulletin.

(ii) (A) No less than [$37,500,000] $59,500,000 of

the total aggregate amount shall be used to provide

tax credits for contributions from business firms to

educational improvement organizations.

(B) Beginning July 1, 2022, and each July 1

thereafter, the department shall automatically

increase the tax credit amount by 10% if the amount

used in the prior fiscal year is equal to or greater

than 90% of the tax credit amount approved in the

prior fiscal year or the amount published by the

Legislative Reference Bureau. The department shall

immediately transmit notice of the increased dollar

amounts to the Legislative Reference Bureau for

publication in the Pennsylvania Bulletin.

(iii) (A) The total aggregate amount of all tax

credits approved for contributions from business

firms to pre-kindergarten scholarship organizations

shall not exceed [$12,500,000] $19,520,000 in a

fiscal year.

(B) Beginning July 1, 2022, and each July 1

thereafter, the department shall automatically

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increase the tax credit amount by 10% if the amount

used in the prior fiscal year is equal to or greater

than 90% of the tax credit amount approved in the

prior fiscal year or the amount published by the

Legislative Reference Bureau. The department shall

immediately transmit notice of the increased dollar

amounts to the Legislative Reference Bureau for

publication in the Pennsylvania Bulletin.

(iv) No less than $25,000,000 of the total aggregate

amount shall be used to provide tax credits for

contributions from business firms to increase the

scholarship amount to students attending and economically

disadvantaged school by up to $2,500 for students

attending grades kindergarten through eight and $5,000

for students attending grades nine through 12 more than

the amount provided during the immediately preceding

school year.

(2) The total aggregate amount of all tax credits

approved for contributions from business firms to opportunity

scholarship organizations shall not exceed [$55,000,000 in a

fiscal year and no less than $5,000,000 of the total

aggregate amount shall be used to provide tax credits for

contributions from business firms to increase the scholarship

amount to students attending an economically disadvantaged

school by up to $1,000 more than the amount provided during

the immediately preceding school year.] $83,500,000.

* * *

(d.1) Economically disadvantaged school.--For a student

attending an economically disadvantaged school, to the extent

that the total amount of scholarships, pre-kindergarten

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scholarships and opportunity scholarships will not exceed the

standard tuition to a nontuition scholarship student.

[(d.1)] (d.2) Pandemic relief.--

(1) A tax credit awarded to a business firm during the

2020-2021 or 2021-2022 fiscal year that cannot be used by the

business firm during the fiscal year in which awarded may be

carried forward and used during the two taxable years

following the taxable year in which the tax credit was

awarded.

(2) Tax credits that are carried forward under this

subsection shall not diminish the total amount of tax credits

that may otherwise be awarded to a business firm under

section 2005-B or that may be awarded to all business firms

in the aggregate under subsection (a).

* * *

Section 4. Section 2009-B(d), (e) and (f) of the act are

amended to read:

Section 2009-B. Opportunity scholarships.

* * *

(d) Funding.--The aggregate amount of opportunity

scholarships shall not exceed the aggregate amount of

contributions made by business firms to [the opportunity]

scholarship [organization] organizations for economically

disadvantaged schools.

(e) Amount.--

(1) [(i) Except as otherwise provided in subparagraph

(ii), the] The maximum amount of an opportunity

scholarship awarded to an applicant without a disability

shall be $8,500.

[(ii) For a student attending an economically

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disadvantaged school, the maximum amount of an

opportunity scholarship awarded to an applicant without a

disability shall be $9,500.]

(2) [(i) Except as otherwise provided in subparagraph

(ii), the] The maximum amount of an opportunity

scholarship awarded to an applicant with a disability

shall be $15,000.

[(ii) For a student attending an economically

disadvantaged school, the maximum amount of an

opportunity scholarship awarded to an applicant with a

disability shall be $16,000.]

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

opportunity scholarship awarded to a recipient and any

additional financial assistance provided to the recipient

exceed the tuition rate and school-related fees for the

participating public school or participating nonpublic school

that the recipient will attend.

(f) Designation, reports and notices.--For purposes of

section 2006-B(d.1):

(1) Each school that desires to be designated as an

economically disadvantaged school for a school year shall

report the following information to the department by the

January 1 preceding the applicable school year:

(i) The total number of students who attend the

school as of the date of the report and are the

recipients of a scholarship under this article.

(ii) The total number of students attending the

school as of the date of the report.

(iii) For start-up fiscal year 2021-2022, the

information in the report required under this paragraph

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shall be based upon the 2021-2022 school year.

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

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

than the October 15 preceding each school year, the

department shall annually distribute or make available

electronically to each school in this Commonwealth the forms

on which the reports are required to be made.

(3) No later than March 1 after a school has submitted

to the department the information required under paragraph

(1), the department shall notify the school whether the

school meets the requirements of, and will be designated as,

an economically disadvantaged school for the applicable

school year.

(4) The department shall annually transmit notice of a

list of each school designated as an economically

disadvantaged school under this section to the Legislative

Reference Bureau for publication in the Pennsylvania

Bulletin. The list shall be posted and updated as necessary

on the department's publicly accessible Internet website.

(5) (i) Each school that has been designated by the

department as an economically disadvantaged school for an

applicable school year shall notify the department by no

later than October 15 of the applicable school year of

the following information for each recipient of a

scholarship registered to attend the school for the

applicable school year:

(A) The recipient's name and address.

(B) The grade of the recipient for the school

year with respect to which the scholarship and

tuition grant shall be received.

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scholarships under this article entitled Education

Tax Credits received by the recipient.

(D) The names and address of the recipient's

parents or guardians.

(E) The amount tuition changed.

(ii) The information submitted in this paragraph

shall be provided to the [opportunity] scholarship

[organization] organizations for economically

disadvantaged schools[.] which shall distribute the funds

in accordance with section 2006-B(d.1).

(iii) Information submitted by a school designated

by the department as an economically disadvantaged school

shall remain confidential and shall not be subject to the

act of February 14, 2008 (P.L.6, No.3), known as the

Right-to-Know Law. The information can be used for

administration of the program.

Section 5. This act shall take effect in 60 days.

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