Trial Engrossment of Amendment A02521 to House Bill 1642 P.N. 1832, Regular Session 2021-2022

A02521

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1642

Session of

2021

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

ZIMMERMAN, THOMAS, PENNYCUICK AND LEWIS, JUNE 16, 2021

REFERRED TO COMMITTEE ON EDUCATION, JUNE 16, 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 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.

* * *

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

1 and ending June 30.

* * *

"Taxable 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) Section

2003-B(c) and (d.1) of the act are amended by adding paragraphs

and subsection (d.3) is amended to read:

Section 2003-B. Qualification and application by organizations.

* * *

scholarship organizations.--A scholarship organization or pre-

kindergarten scholarship organization must certify to the

department that the organization is eligible to participate in

the educational improvement tax credit program established under

this article and must agree to annually report the following

information to the department by November 1 of each year:

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

immediately preceding school year to eligible pre-

kindergarten students.

(ii) The total and average amounts of the

scholarships awarded during the immediately preceding

school year to eligible pre-kindergarten students.

(iii) The number of scholarships awarded during the

immediately preceding school year to eligible students in

grades kindergarten through eight.

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(iv) The total and average amounts of the

scholarships awarded during the immediately preceding

school year to eligible students in grades kindergarten

through eight.

(v) The number of scholarships awarded during the

immediately preceding school year to eligible students in

grades nine through 12.

(vi) The total and average amounts of the

scholarships awarded during the immediately preceding

school year to eligible students in grades nine through

12.

(vii) Where the scholarship organization or pre-

kindergarten scholarship organization collects

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

and the total amount of scholarships awarded during the

immediately preceding school year to residents of each

county in which the scholarship organization or pre-

kindergarten scholarship organization awarded

scholarships.

(viii) The total number of scholarship applications

processed and the amounts of any application fees

charged, either per scholarship application or in the

aggregate through a third-party processor.

(ix) The organization's Federal Form 990 or other

Federal form indicating the tax status of the

organization for Federal tax purposes, if any, and a copy

of a compilation, review or audit of the organization's

financial statements conducted by a certified public

accounting firm.

(1.1) Beginning in the 2022-2023 fiscal year, the

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following additional information based upon the immediately

preceding school year shall be included in the annual

reports:

(i) For each scholarship award:

(A) The name of the school the recipient

attended.

(B) The amount of the scholarship the recipient

received.

fees charged to the recipient after accounting for

the scholarship award.

(D) The household income of the recipient's

household members reported in ranges determined by

the department.

(ii) The information provided under subparagraph (i)

shall not include personally identifiable information.

(2) The information required under [paragraph]

paragraphs (1) and (1.1) shall be submitted on a form

provided by the department. No later than September 1 of each

year, the department shall annually distribute such sample

forms, together with the forms on which the reports are

required to be made, to each listed scholarship organization

and pre-kindergarten scholarship organization.

(2.1) The department shall annually post the information

required under paragraphs (1) and (1.1) in a downloadable

spreadsheet on the department's publicly accessible Internet

website.

(3) The department may not require any other information

to be provided by scholarship organizations or pre-

kindergarten scholarship organizations, except as expressly

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authorized in this article.

* * *

(d.1) Opportunity scholarship organizations.--

(1) An opportunity scholarship organization must enhance

the educational opportunities available to students in this

Commonwealth by providing opportunity scholarships to

eligible students who reside within the attendance boundary

of low-achieving schools to attend schools which are not low-

achieving schools and which are not public schools within the

eligible student's school district of residence. By February

15 of each year, an opportunity scholarship organization must

certify to the department that the organization is eligible

to participate in the opportunity scholarship tax credit

program.

(2) An opportunity scholarship organization must agree

to report the following information on a form provided by the

department by November 1 of each year:

(i) The total number of applications for opportunity

scholarships received during the immediately preceding

school year from eligible students in grades kindergarten

through eight.

(ii) The number of opportunity scholarships awarded

during the immediately preceding school year to eligible

students in grades kindergarten through eight.

(iii) The total and average amounts of the

opportunity scholarships awarded during the immediately

preceding school year to eligible students in grades

kindergarten through eight.

(iv) The total number of applications for

opportunity scholarships received during the immediately

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preceding school year from eligible students in grades

nine through 12.

(v) The number of opportunity scholarships awarded

during the immediately preceding school year to eligible

students in grades nine through 12.

(vi) The total and average amounts of the

opportunity scholarships awarded during the immediately

preceding school year to eligible students in grades nine

through 12.

(vii) Where the opportunity scholarship organization

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

total number and the total amount of opportunity

scholarships awarded during the immediately preceding

school year to residents of each county in which the

opportunity scholarship organization awarded opportunity

scholarships.

(viii) The number of opportunity scholarships

awarded during the immediately preceding school year to

applicants with a household income that does not exceed

185% of the Federal poverty level.

(ix) The total and average amounts of opportunity

scholarships awarded during the immediately preceding

school year to applicants with a household income that

does not exceed 185% of the Federal poverty level.

(x) The number of opportunity scholarships awarded

during the immediately preceding school year to

applicants with a household income that does not exceed

185% of the Federal poverty level and who reside within a

first class school district.

(xi) The total and average amounts of opportunity

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scholarships awarded during the immediately preceding

school year to applicants with a household income that

does not exceed 185% of the Federal poverty level and who

reside within a first class school district.

(xii) The number of opportunity scholarships awarded

during the immediately preceding school year to

applicants with a household income that does not exceed

185% of the Federal poverty level and who reside within a

school district that was designated as a financial

recovery school district under Article VI-A at the time

of the award.

(xiii) The total and average amounts of opportunity

scholarships awarded during the immediately preceding

school year to applicants with a household income that

does not exceed 185% of the Federal poverty level and who

reside within a school district that was designated as a

financial recovery school district under Article VI-A at

the time of the award.

(xiv) The total number of opportunity scholarship

applications processed and the amounts of any application

fees charged either per opportunity scholarship

application or in the aggregate through a third-party

processor.

(xv) The opportunity scholarship organization's

Federal Form 990 or other Federal form indicating the tax

status of the opportunity scholarship organization for

Federal tax purposes, if any, and a copy of a

compilation, review or audit of the opportunity

scholarship organization's financial statements conducted

by a certified public accounting firm.

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(2.1) Beginning in the 2022-2023 fiscal year, the

following additional information based upon the immediately

preceding school year shall be included in the annual

reports:

(i) For each opportunity scholarship award:

(A) The name of the school the recipient

attended.

(B) The amount of the scholarship the recipient

received.

fees charged to the recipient after accounting for

the scholarship award.

(D) The household income of the recipient's

household members reported in ranges determined by

the department.

(ii) The information provided under subparagraph (i)

shall not include any personally identifiable

information.

(3) No later than September 1 of each year, the

department shall annually distribute such sample forms,

together with the forms on which the reports are required to

be made, to each listed opportunity scholarship organization.

(3.1) The department shall annually post the information

required under paragraphs (2) and (2.1) in a downloadable

spreadsheet on the department's publicly accessible Internet

website.

(4) The department may not require other information to

be provided by opportunity scholarship organizations, except

as expressly authorized in this article.

* * *

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

economically disadvantaged schools.--

(1) [In] Effective July 1, 2020, 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

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 scholarship organization,

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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 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:

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

and educational improvement organizations under subsections

(a) and (b).

(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

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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

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

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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

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),

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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 $225,000,000 plus an amount to meet the

obligations of subsection (d.2) in a fiscal year.

(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.

(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

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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.] $50,000,000.

* * *

(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 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.]

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

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

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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

applicable school year shall notify the department by no

later than October 15 of the applicable school year of

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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).

(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.

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