Regular Session 2021-2022 House Bill 1642 P.N. 2232

PRIOR PRINTER'S NO. 1832

PRINTER'S NO. 2232

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1642

Session of

2021

INTRODUCED BY WHITE, ROTHMAN, RYAN, KAUFFMAN, GROVE, DRISCOLL,

ZIMMERMAN, THOMAS, PENNYCUICK, LEWIS, POLINCHOCK AND ROWE,

JUNE 16, 2021

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,

OCTOBER 4, 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 credits, 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 definition of "economically disadvantaged

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, is amended and

the section is amended by adding definitions to read:

SECTION 1. THE DEFINITIONS OF "ECONOMICALLY DISADVANTAGED

SCHOOL" AND "HOUSEHOLD INCOME" 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 AND THE SECTION IS AMENDED BY ADDING

DEFINITIONS TO READ:

Section 2002-B. Definitions.

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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 OF AT LEAST $1,000 pursuant to this

article.

* * *

"Fiscal year." The Commonwealth's fiscal year beginning July

1 and ending June 30.

* * *

"HOUSEHOLD INCOME." ALL MONEY OR PROPERTY RECEIVED OF

WHATEVER NATURE AND FROM WHATEVER SOURCE DERIVED. THE TERM DOES

NOT INCLUDE THE FOLLOWING:

(1) PERIODIC PAYMENTS FOR SICKNESS AND DISABILITY OTHER

THAN REGULAR WAGES RECEIVED DURING A PERIOD OF SICKNESS OR

DISABILITY.

(2) DISABILITY, RETIREMENT OR OTHER PAYMENTS ARISING

UNDER WORKERS' COMPENSATION ACTS, OCCUPATIONAL DISEASE ACTS

AND SIMILAR LEGISLATION BY ANY GOVERNMENT.

(3) PAYMENTS COMMONLY RECOGNIZED AS OLD-AGE OR

RETIREMENT BENEFITS PAID TO PERSONS RETIRED FROM SERVICE

AFTER REACHING A SPECIFIC AGE OR AFTER A STATED PERIOD OF

EMPLOYMENT.

(4) PAYMENTS COMMONLY KNOWN AS PUBLIC ASSISTANCE OR

UNEMPLOYMENT COMPENSATION PAYMENTS BY A GOVERNMENTAL AGENCY.

(5) PAYMENTS TO REIMBURSE ACTUAL EXPENSES.

(6) PAYMENTS MADE BY EMPLOYERS OR LABOR UNIONS FOR

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PROGRAMS COVERING HOSPITALIZATION, SICKNESS, DISABILITY OR

DEATH, SUPPLEMENTAL UNEMPLOYMENT BENEFITS, STRIKE BENEFITS,

SOCIAL SECURITY AND RETIREMENT.

(7) COMPENSATION RECEIVED BY UNITED STATES SERVICEMEN

SERVING IN A COMBAT ZONE.

(8) PAYMENTS RECEIVED FROM A GOVERNMENTAL AGENCY TO

RELIEVE THE ECONOMIC EFFECTS OF THE COVID-19 PANDEMIC.

* * *

"Taxable "TAX year." A taxpayer's annual accounting period

or, if a return is made for a period of less than 12 months, the

period for which the return is made.

Section 2. Sections 2003-B(d.3) and 2004-B(a)(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, 2020 2022 , 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.

(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

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

qualify more than one [opportunity] scholarship organization

for the provision of [opportunity] scholarships to applicants

of economically disadvantaged schools.

* * *

Section 2004-B. Application by business firms.

(a) Scholarship organization, pre-kindergarten scholarship

organization or opportunity scholarship organization.--

* * *

(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

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] ANOTHER scholarship

organization, pre-kindergarten scholarship organization or

[other] opportunity scholarship organization. The

contribution shall be made to the designated scholarship

organization for the economically disadvantaged schools and

shall be separately accounted for and distributed by the

designated scholarship organization.

* * *

Section 3. Section 2005-B(b), (c)(2), (d), (i)(5) and (j)(1)

and (2) of the act are amended and subsection (i) is amended by

adding a paragraph to read:

SECTION 3. SECTION 2005-B(I)(5) AND (J)(1) AND (2) OF THE

ACT ARE AMENDED AND SUBSECTION (I) IS AMENDED BY ADDING A

PARAGRAPH TO READ:

Section 2005-B. Tax credits.

* * *

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(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

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:

(1) $750,000 for combined contributions to scholarship

and educational improvement organizations under subsections

(a) and (b).

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(2) $750,000 for contributions to opportunity

scholarship organizations under subsections (a.1) and (b).

(3) $200,000 for contributions to pre-kindergarten

scholarship organizations under subsection (c).

* * *

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

* * *

(4.1) 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 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 2004-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) 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

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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

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

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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

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 4. Section 2006-B(a) of the act, AMENDED JUNE 30,

2021 (P.L.158, NO.26), is 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 plus an amount to meet the obligations of

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subsection (d.2) [$225,000,000] $230,000,000 in a fiscal

year. THE FOLLOWING SHALL APPLY:

(i) No less than $135,000,000 $175,000,000 of the

total aggregate amount plus an amount to meet the

obligations of subsection (d.2) shall be used to provide

tax credits for contributions from business firms to

scholarship organizations.

(ii) No less than $37,500,000 of the total aggregate

amount shall be used to provide tax credits for

contributions from business firms to educational

improvement organizations.

(iii) 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 in a fiscal year.

(IV) 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 OR PRE-KINDERGARTEN SCHOLARSHIP BY $2,000 OR,

IN THE CASE OF A SCHOLARSHIP FOR A STUDENT ATTENDING A

SECONDARY SCHOOL, BY $4,000, FOR A STUDENT ATTENDING AN

ECONOMICALLY DISADVANTAGED SCHOOL, TO THE EXTENT THAT THE

TOTAL AMOUNT OF SCHOLARSHIPS, PRE-KINDERGARTEN

SCHOLARSHIPS AND OPPORTUNITY SCHOLARSHIPS WILL NOT EXCEED

THE LESSER OF $8,500 OR THE SCHOOL'S TUITION.

(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

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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.] $50,000,000 IN A

FISCAL YEAR .

* * *

(d.2) Economically disadvantaged school.-- For a student

attending an economically disadvantaged school, to the extent

that the total amount of scholarships, pre-kindergarten

scholarships and opportunity scholarships will not exceed the

lesser of $8,500 or the school's tuition, the amount of the

scholarship or pre-kindergarten scholarship granted under this

article shall be increased by $2,000 or, in the case of a

scholarship for a student attending a secondary school, by

$4,000.

* * *

Section 5. Section 2009-B(e) and (f)(1) and (5) of the act

are amended to read:

SECTION 5. SECTION 2009-B(E) AND (F)(5) OF THE ACT ARE

AMENDED TO READ:

Section 2009-B. Opportunity scholarships.

* * *

(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

disadvantaged school, the maximum amount of an

opportunity scholarship awarded to an applicant without a

disability shall be $9,500.]

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(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.2):

(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 2019-2020, the

information in the report required under this paragraph

shall be based upon the 2019-2020 school year.

* * *

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

department as an economically disadvantaged school for an

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applicable school year shall notify the department by no

later than [October 15] NOVEMBER 30 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.

scholarships under this article entitled to

educational tax credits that were received by the

recipient.

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

parents or guardians.

(E) The amount of tuition charged.

(ii) The information submitted in this paragraph

shall be provided to the [opportunity] scholarship

organization for economically disadvantaged schools who

shall distribute the money in accordance with section

2006-B(d.2) 2003-B(D.3) .

(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 6. This act shall take effect in 60 days. JULY 1,

2022, OR IMMEDIATELY, WHICHEVER IS LATER.

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