H1207B1512A09427 SFL:AJC 09/11/14 #90 A09427

 

 

 

 

AMENDMENTS TO HOUSE BILL NO. 1207

Sponsor: REPRESENTATIVE VEREB

Printer's No. 1512

 

1Amend Bill, page 1, line 10, by striking out "further 
2providing for limitations." and inserting

3 further providing for educational improvement tax credit; and
4repealing provisions relating to educational opportunity
5scholarship tax credit.

6Amend Bill, page 1, lines 13 through 21; page 2, lines 1
7through 30; page 3, lines 1 through 19, by striking out all of
8said lines on said pages and inserting

9Section 1. Article XVII-F heading of the act of March 4,
101971 (P.L.6, No.2), known as the Tax Reform Code of 1971, added
11October 9, 2009 (P.L.451, No.48), is amended to read:

12ARTICLE XVII-F

13EDUCATIONAL [IMPROVEMENT TAX CREDIT]

14TAX CREDITS

15Section 2. Section 1701-F of the act, added October 9, 2009
16(P.L.451, No.48), is amended to read:

17Section 1701-F. Scope of article.

18This article establishes the educational improvement [tax 
19credit] and opportunity scholarship tax credits.

20Section 3. The definitions of "business firm," "income
21allowance," "maximum annual household income" and "pass-through
22entity" in section 1702-F of the act, amended or added October
239, 2009 (P.L.451, No.48) and July 2, 2012 (P.L.751, No.85), are
24amended and the section is amended by adding definitions to
25read:

26Section 1702-F. Definitions.

27The following words and phrases when used in this article
28shall have the meanings given to them in this section unless the
29context clearly indicates otherwise:

30"Applicable taxes."  Any of the taxes due under Article III,
31IV, VI, VII, VIII, IX, XV or XX or a tax under Article XVI of
32the act of May 17, 1921 (P.L.682, No.284), known as The
33Insurance Company Law of 1921.

34"Applicant."  An eligible student who applies for a
35scholarship.

1"Assessment."  The Pennsylvania System of School Assessment
2test, the Keystone Exam, an equivalent local assessment or
3another test established by the State Board of Education to meet
4the requirements of section 2603-B(d)(10)(i) of the Public
5School Code of 1949, and required under the No Child Left Behind
6Act of 2001 (Public Law 107-110, 115 Stat. 1425) or its
7successor statute or another test required to achieve other
8standards established by the Department of Education for the
9public school or school district under 22 Pa. Code § 403.3
10(relating to single accountability system).

11"Attendance boundary."  A geographic area of residence used
12by a school district to assign a student to a public school.

13"Average daily membership."  As defined in section 2501(3) of
14the Public School Code of 1949.

15"Business firm." An entity authorized to do business in this
16Commonwealth and subject to taxes imposed under Article III, IV,
17VI, VII, VIII, IX [or XV], XV or XX or a tax under Article XVI 
18of the act of May 17, 1921 (P.L.682, No.284), known as The 
19Insurance Company Law of 1921. The term includes a pass-through
20entity[.], including a pass-through entity, the purpose of which 
21is the making of contributions under this article and whose 
22shareholders, partners or members are composed of owners or 
23employes of other business firms.

24* * *

25"Elementary school."  A school which is not a secondary 
26school.

27* * *

28"Income allowance."

29[(1) As follows:

30(i) Before July 1, 2011, $10,000 for each eligible
31student, eligible pre-kindergarten student and dependent
32member of the household.

33(ii) After June 30, 2011, and through June 30, 2013, 
34$12,000 for each eligible student, eligible pre-
35kindergarten student and dependent member of the
36household.

37(iii) After June 30, 2013, and through June 30,
382014, $15,000 for each eligible student, eligible pre-
39kindergarten student and dependent member of the
40household.

41(2) Beginning July 1 2014, the Department of Community
42and Economic Development shall annually adjust the income
43allowance amounts under paragraph (1) to reflect any upward
44changes in the Consumer Price Index for All Urban Consumers
45for the Pennsylvania, New Jersey, Delaware and Maryland area
46in the preceding 12 months and shall immediately submit the
47adjusted amounts to the Legislative Reference Bureau for
48publication as a notice in the Pennsylvania Bulletin.]

49The base amount of $15,000 for each eligible student,
50eligible pre-kindergarten student and dependent member of the
51household. Beginning July 1, 2014, the department shall annually

1adjust the base amount to reflect upward changes in the Consumer
2Price Index for All Urban Consumers for the Pennsylvania, New
3Jersey, Delaware and Maryland area for the preceding 12 months.
4The department shall immediately submit the adjusted amounts to
5the Legislative Reference Bureau for publication as a notice in
6the Pennsylvania Bulletin.

7* * *

8"Kindergarten."  A one-year formal educational program that
9occurs during the school year immediately prior to first grade.
10The term includes a part-time and a full-time program.

11"Low-achieving school."  A public school that ranked in the
12lowest 15% of the school's designation as an elementary school
13or a secondary school based on combined mathematics and reading
14scores from the annual assessment administered in the previous
15school year and for which the Department of Education has posted
16results on the Department of Education's publicly accessible
17Internet website. The term does not include a charter school,
18cyber charter school or area vocational-technical school.

19"Maximum annual household income."

20(1) [Except as set forth in paragraph (2) and subject to 
21paragraph (3), as follows:

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

23(ii) After June 30, 2011, and through June 30, 2013,
24not more than $60,000.

25(iii) After June 30, 2013, not more than $75,000.]

26Subject to adjustment under paragraphs (2) and (3), the
27amount of $75,000, plus the applicable income allowance.

28(2) With respect to an eligible student with a
29disability, as calculated by multiplying:

30(i) [the sum of:

31(A)] the applicable amount under paragraph (1)[;
32and

33(B) the applicable income allowance]; by

34(ii) the applicable support level factor according
35to the following table:

36Support Level

Support Level Factor

371

1.50

382

2.993

39(3) Beginning July 1, 2014, the [Department of Community
40and Economic Development] department shall annually adjust
41the income amounts under paragraphs (1) and (2) to reflect
42any upward changes in the Consumer Price Index for All Urban
43Consumers for the Pennsylvania, New Jersey, Delaware and
44Maryland area in the preceding 12 months and shall
45immediately submit the adjusted amounts to the Legislative
46Reference Bureau for publication as a notice in the
47Pennsylvania Bulletin.

48"Nonpublic school."  A school which is a nonprofit
49organization and which is located in this Commonwealth. The term
50does not include a public school.

1"Opportunity scholarship organization."  A nonprofit entity
2which:

3(1) Is exempt from Federal taxation under section 501(c)
4(3) of the Internal Revenue Code of 1986 (Public Law 99-514,
526 U.S.C. § 1 et seq.); and

6(2) Contributes at least 80% of the entity's annual cash
7receipts to an opportunity scholarship program.

8For the purposes of this definition, a nonprofit entity
9contributes the entity's cash receipts to an opportunity
10scholarship program when the entity expends or otherwise
11irrevocably encumbers those funds for distribution during the
12then current fiscal year of the nonprofit entity or during the
13next succeeding fiscal year of the nonprofit entity.

14"Opportunity scholarship."  An award given to an applicant to
15pay tuition and school-related fees necessary to attend a
16participating nonpublic school or a participating public school
17located in a school district which is not the recipient's school
18district of residence.

19"Opportunity scholarship program."  A program to provide 
20opportunity scholarships to eligible students who reside within 
21the attendance area of a low-achieving school.

22"Parent."  An individual who:

23(1)  is a resident of this Commonwealth; and

24(2)  either:

25(i) has legal custody or guardianship of a student;
26or

27(ii) keeps in the individual's home a student and
28supports the student gratis as if the student were a
29lineal descendant of the individual.

30"Participating nonpublic school."  A nonpublic school which 
31notifies the Department of Education under section 1711-F that 
32the school wishes to accept opportunity scholarship recipients.

33"Participating public school."  A public school in a school 
34district which notifies the Department of Education under 
35section 1711-F that the school wishes to accept opportunity 
36scholarship recipients. The term does not include a low-
37achieving school.

38"Pass-through entity." A partnership as defined in section
39301(n.0), a single-member limited liability company treated as a
40disregarded entity for Federal income tax purposes or a
41Pennsylvania S corporation as defined in section 301(n.1). The 
42term includes a pass-through entity that owns an interest in a 
43pass-through entity.

44* * *

45"Public School Code of 1949."  The act of March 10, 1949
46(P.L.30, No.14), known as the Public School Code of 1949.

47"Recipient."  An applicant who receives a scholarship.

48* * *

49"School district of residence."  The school district in which
50the student's primary domicile is located.

51* * *

1"Secondary school."  A school with an eleventh grade.

2* * *

3"Student."  An individual who meets all of the following:

4(1) Is school age.

5(2) Is a resident of this Commonwealth.

6(3) Attends or is about to attend a school.

7* * *

8Section 4. Section 1703-F of the act, amended or added
9October 9, 2009 (P.L.451, No.48) and July 2, 2012 (P.L.751, 
10No.48), is amended to read:

11Section 1703-F. Qualification and application by organizations.

12(a) Establishment.--In accordance with section 14 of Article
13III of the Constitution of Pennsylvania, [an educational
14improvement tax credit program is] the educational improvement
15and opportunity scholarship tax credit programs are hereby
16established to enhance the educational opportunities available
17to all students in this Commonwealth.

18(b) Information.--In order to qualify under this article, an 
19educational improvement organization, a scholarship 
20organization, a pre-kindergarten scholarship organization or an 
21[educational improvement] opportunity scholarship organization 
22must submit information to the department that enables the 
23department to confirm that the organization is exempt from 
24taxation under section 501(c)(3) of the Internal Revenue Code of 
251986 (Public Law 99-514, 26 U.S.C. § 1 et seq.).

26(c) Scholarship organizations and pre-kindergarten
27scholarship organizations.--A scholarship organization or pre-
28kindergarten scholarship organization must certify to the
29department that the organization is eligible to participate in
30the educational improvement tax credit program established under
31this article and must agree to annually report the following
32information to the department by September 1 of each year:

33(1) (i) The number of scholarships awarded during the
34immediately preceding school year to eligible pre-
35kindergarten students.

36(ii) The total and average amounts of the
37scholarships awarded during the immediately preceding
38school year to eligible pre-kindergarten students.

39(iii) The number of scholarships awarded during the
40immediately preceding school year to eligible students in
41grades kindergarten through eight.

42(iv) The total and average amounts of the
43scholarships awarded during the immediately preceding
44school year to eligible students in grades kindergarten
45through eight.

46(v) The number of scholarships awarded during the
47immediately preceding school year to eligible students in
48grades nine through 12.

49(vi) The total and average amounts of the
50scholarships awarded during the immediately preceding
51school year to eligible students in grades nine through

112.

2(vii) Where the scholarship organization or pre-
3kindergarten scholarship organization collects
4information on a county-by-county basis, the total number
5and the total amount of scholarships awarded during the
6immediately preceding school year to residents of each
7county in which the scholarship organization or pre-
8kindergarten scholarship organization awarded
9scholarships.

10(viii) The total number of scholarship applications
11processed and the amounts of any application fees
12charged, either per scholarship application or in the
13aggregate through a third-party processor.

14(ix) The organization's Federal Form 990 or other
15Federal form indicating the tax status of the
16organization for Federal tax purposes, if any, and a copy
17of a compilation, review or audit of the organization's
18financial statements conducted by a certified public
19accounting firm.

20(2) The information required under paragraph (1) shall
21be submitted on a form provided by the department. No later
22than May 1 of each year, the department shall annually
23distribute such sample forms, together with the forms on
24which the reports are required to be made, to each listed
25scholarship organization and pre-kindergarten scholarship
26organization.

27(3) The department may not require any other information
28to be provided by scholarship organizations or pre-
29kindergarten scholarship organizations, except as expressly
30authorized in this article.

31(d) Educational improvement organization.--

32(1) An application submitted by an educational
33improvement organization must describe its proposed
34innovative educational program or programs in a form
35prescribed by the department. The department shall consult
36with the Department of Education as necessary. The department
37shall review and approve or disapprove the application. In
38order to be eligible to participate in the educational 
39improvement tax credit program established under this
40article, an educational improvement organization must agree
41to annually report the following information to the
42department by [December 1, 2005, and] September 1 of each
43year [thereafter]:

44(i) The name of the innovative educational program
45or programs and the total amount of the grant or grants
46made to those programs during the immediately preceding
47school year.

48(ii) A description of how each grant was utilized
49during the immediately preceding school year and a
50description of any demonstrated or expected innovative
51educational improvements.

1(iii) The names of the public schools and school
2districts where innovative educational programs that
3received grants during the immediately preceding school
4year were implemented.

5(iv) Where the educational improvement organization
6collects information on a county-by-county basis, the
7total number and the total amount of grants made during
8the immediately preceding school year for programs at
9public schools in each county in which the educational
10improvement organization made grants.

11(v) The organization's Federal Form 990 or other
12Federal form indicating the tax status of the
13organization for Federal tax purposes, if any, and a copy
14of a compilation, review or audit of the organization's
15financial statements conducted by a certified public
16accounting firm.

17(2) The information required under paragraph (1) shall
18be submitted on a form provided by the department. No later
19than [September 1, 2005, and] May 1 of each year
20[thereafter], the department shall annually distribute such
21sample forms, together with the forms on which the reports
22are required to be made, to each listed educational
23improvement organization.

24(3) The department may not require any other information
25to be provided by educational improvement organizations,
26except as expressly authorized in this article.

27(d.1) Opportunity scholarship organizations.--

28(1) An opportunity scholarship organization must enhance
29the educational opportunities available to students in this
30Commonwealth by providing opportunity scholarships to
31eligible students who reside within the attendance boundary
32of low-achieving schools to attend schools which are not low-
33achieving schools and which are not public schools within the
34eligible student's school district of residence. By February
3515 of each year, an opportunity scholarship organization must
36certify to the department that the organization is eligible
37to participate in the opportunity scholarship tax credit
38program.

39(2) An opportunity scholarship organization must agree
40to report the following information on a form provided by the
41department by September 1 of each year:

42(i) The total number of applications for opportunity
43scholarships received during the immediately preceding
44school year from eligible students in grades kindergarten
45through eight.

46(ii) The number of opportunity scholarships awarded
47during the immediately preceding school year to eligible
48students in grades kindergarten through eight.

49(iii) The total and average amounts of the
50opportunity scholarships awarded during the immediately
51preceding school year to eligible students in grades

1kindergarten through eight.

2(iv) The total number of applications for
3opportunity scholarships received during the immediately
4preceding school year from eligible students in grades
5nine through 12.

6(v) The number of opportunity scholarships awarded
7during the immediately preceding school year to eligible
8students in grades nine through 12.

9(vi) The total and average amounts of the
10opportunity scholarships awarded during the immediately
11preceding school year to eligible students in grades nine
12through 12.

13(vii) Where the opportunity scholarship organization
14collects information on a county-by-county basis, the
15total number and the total amount of opportunity
16scholarships awarded during the immediately preceding
17school year to residents of each county in which the
18opportunity scholarship organization awarded opportunity
19scholarships.

20(viii) The number of opportunity scholarships
21awarded during the immediately preceding school year to
22applicants with a household income that does not exceed
23185% of the Federal poverty level.

24(ix) The total and average amounts of opportunity
25scholarships awarded during the immediately preceding
26school year to applicants with a household income that
27does not exceed 185% of the Federal poverty level.

28(x) The number of opportunity scholarships awarded
29during the immediately preceding school year to
30applicants with a household income that does not exceed
31185% of the Federal poverty level and who reside within a
32first class school district.

33(xi) The total and average amounts of opportunity
34scholarships awarded during the immediately preceding
35school year to applicants with a household income that
36does not exceed 185% of the Federal poverty level and who
37reside within a first class school district.

38(xii) The number of opportunity scholarships awarded
39during the immediately preceding school year to
40applicants with a household income that does not exceed
41185% of the Federal poverty level and who reside within a
42school district that was designated as a financial
43recovery school district under Article VI-A of the Public
44School Code of 1949 at the time of the award.

45(xiii) The total and average amounts of opportunity
46scholarships awarded during the immediately preceding
47school year to applicants with a household income that
48does not exceed 185% of the Federal poverty level and who
49reside within a school district that was designated as a
50financial recovery school district under Article VI-A of
51the Public School Code of 1949 at the time of the award.

1(xiv) The total number of opportunity scholarship
2applications processed and the amounts of any application
3fees charged either per opportunity scholarship
4application or in the aggregate through a third-party
5processor.

6(xv) The opportunity scholarship organization's
7Federal Form 990 or other Federal form indicating the tax
8status of the opportunity scholarship organization for
9Federal tax purposes, if any, and a copy of a
10compilation, review or audit of the opportunity
11scholarship organization's financial statements conducted
12by a certified public accounting firm.

13(3) No later than May 1 of each year, the department
14shall annually distribute such sample forms, together with
15the forms on which the reports are required to be made, to
16each listed opportunity scholarship organization.

17(4) The department may not require other information to
18be provided by opportunity scholarship organizations, except
19as expressly authorized in this article.

20(e) Notification.--The department shall notify the
21scholarship organization, pre-kindergarten scholarship
22organization [or], educational improvement organization or 
23opportunity scholarship organization that the organization meets
24the requirements of and is qualified under this article for that
25fiscal year no later than 60 days after the organization has
26submitted the information required under this section.

27(f) Publication.--The department shall annually publish a
28list of each scholarship organization, pre-kindergarten
29scholarship organization [or], educational improvement
30organization and opportunity scholarship organization qualified
31under this section in the Pennsylvania Bulletin. The list shall
32also be posted and updated as necessary on the publicly
33accessible Internet website of the department.

34Section 5. Section 1704-F of the act, added December 9, 2009
35(P.L.451, No.48), is amended to read:

36Section 1704-F. Application by business firms.

37(a) Scholarship organization [or], pre-kindergarten
38scholarship organization or opportunity scholarship 
39organization.--A business firm shall apply to the department for
40a tax credit for contributions to a scholarship organization, 
41pre-kindergarten scholarship organization or opportunity 
42scholarship organization under section 1705-F. A business firm
43shall receive a tax credit under this article if the scholarship
44organization [or], pre-kindergarten scholarship organization or 
45opportunity scholarship organization that receives the
46contribution appears on the list established under section 1703-
47F(f), subject to the limitations in sections 1705-F and 1706-F.

48(b) Educational improvement organization.--A business firm
49must apply to the department for a credit for a contribution to 
50an educational improvement organization under section 1705-F. A
51business firm shall receive a tax credit under this article if

1the department has approved the program provided by the
2educational improvement organization that receives the
3contribution, subject to the limitations in sections 1705-F and 
41706-F.

5(c) Availability of tax credits.--Tax credits under this
6article shall be made available by the department on a first-
7come, first-served basis within the limitation established under
8section 1706-F(a).

9(d) Contributions.--A contribution by a business firm to a
10scholarship organization, pre-kindergarten scholarship 
11organization, opportunity scholarship organization or
12educational improvement organization shall be made no later than
1360 days following the approval of an application under
14subsection (a) or (b).

15(e) Application in the alternative.--At the time of
16application for an educational improvement or opportunity
17scholarship tax credit, the department shall advise a business
18firm that the firm may elect that its application for a
19particular credit should, in the alternative, be deemed an
20application for a different tax credit authorized under this
21section if the business firm's preferred choice of tax credit is
22not available. When a business firm does not receive its
23preferred choice of tax credit, the department shall promptly
24consider the business firm's application in the alternative for
25a different tax credit authorized under this section.

26Section 4. Sections 1705-F and 1706-F of the act, amended
27July 2, 2012 (P.L.751, No.85), are amended to read:

28Section 1705-F. Tax [credit] credits.

29(a) Scholarship or educational improvement organizations.--
30In accordance with section [1706-F(a)] 1706-F, the Department of
31Revenue shall grant a tax credit against any [tax due under
32Article III, IV, VI, VII, VIII, IX or XV or under Article XVI of 
33the act of May 17, 1921 (P.L.682, No.284), known as The 
34Insurance Company Law of 1921,] applicable tax to a business
35firm providing proof of a contribution to a scholarship
36organization or educational improvement organization in the
37taxable year in which the contribution is made [which] in 
38accordance with the following:

39(1) The tax credit shall not exceed 75% of the total
40amount contributed during the taxable year by the business
41firm.

42(2) For fiscal year [2012-2013, the tax credit shall not
43exceed $400,000 annually per business firm for contributions
44made to scholarship organizations or educational improvement
45organizations. For fiscal year 2013-2014] 2014-2015, and each 
46fiscal year thereafter, the tax credit shall not exceed 
47$750,000 annually per business firm for contributions made to 
48scholarship organizations or educational improvement 
49organizations[.] except as provided under subsection (i).

50(a.1) Opportunity scholarship organizations.--In accordance
51with section 1706-F, the Department of Revenue shall grant a tax

1credit against any applicable tax to a business firm providing
2proof of a contribution to an opportunity scholarship
3organization in the taxable year in which the contribution is
4made in accordance with the following:

5(1) The tax credit shall not exceed 75% of the total
6amount contributed during the taxable year by the business
7firm.

8(2) For fiscal year 2014-2015, and each fiscal year
9thereafter, the tax credit shall not exceed $750,000 annually
10per business firm for contributions made to opportunity
11scholarship organizations, except as provided in subsection
12(i).

13(b) Additional amount.--[The] In accordance with section 
141706-F, the Department of Revenue shall grant a tax credit of up
15to 90% of the total amount contributed during the taxable year
16if the business firm provides a written commitment to provide
17the scholarship organization [or], educational improvement
18organization or opportunity scholarship organization with the
19same amount of contribution for two consecutive tax years. The
20business firm must provide the written commitment under this
21subsection to the department at the time of application.

22(c) Pre-kindergarten scholarship organizations.--In
23accordance with section [1706-F(a)] 1706-F, the Department of
24Revenue shall grant a tax credit against any [tax due under
25Article III, IV, VI, VII, VIII, IX or XV or under Article XVI of 
26The Insurance Company Law of 1921] applicable tax to a business
27firm providing proof of a contribution to a pre-kindergarten
28scholarship organization in the taxable year in which the
29contribution is made [which] in accordance with the following:

30(1) The tax credit shall be equal to 100% of the first
31$10,000 contributed during the taxable year by the business
32firm[,] and [which] shall not exceed 90% of the remaining
33amount contributed during the taxable year by the business
34firm.

35(2)  [Such] The tax credit shall not exceed $200,000
36annually per business firm for contributions made to pre-
37kindergarten scholarship organizations, except as provided in 
38subsection (i).

39(d) Combination of tax credits.--[A] In accordance with 
40section 1706-F, a business firm may receive tax credits from the
41Department of Revenue in any tax year for any combination of
42contributions under [subsection (a) or (b) or (c)] subsection 
43(a), (a.1), (b) or (c). [In] Except as provided in subsection 
44(i), in no case may a business firm receive tax credits in any
45tax year in excess of the following:

46(1) [$400,000 for] $750,000 for combined contributions
47[under subsections (a) and (b) made during fiscal year 2012-
482013 or in excess of] to scholarship and educational 
49improvement organizations under subsections (a) and (b).

50(2) $750,000 for contributions [under subsections (a) 
51and (b) made after fiscal year 2012-2013. In no case shall a

1business firm receive tax credits in any tax year in excess
2of] to opportunity scholarship organizations under 
3subsections (a.1) and (b).

4(3)  $200,000 for contributions [under subsection (c)] to 
5pre-kindergarten scholarship organizations under subsection 
6(c).

7(e) Pass-through entity.--

8(1) If a pass-through entity does not intend to use all
9approved tax credits under this section, it may elect in
10writing to [transfer] distribute for no consideration all or
11a portion of the credit to shareholders, members or partners
12in proportion to the [share of the entity's distributive
13income to which] percentage interest of the shareholder,
14member or partner [is entitled for use] in distributions from 
15the pass-through entity, which credits may be used by the 
16shareholders, members or partners in the taxable year in
17which the contribution is made or in the taxable year
18immediately following the year in which the contribution is
19made. The election shall designate the year in which the
20[transferred] distributed credits are to be used and shall be
21made according to procedures established by the Department of
22Revenue. A pass-through entity that received a distribution 
23from a pass-through entity under this paragraph may make a 
24distribution under this paragraph.

25(2) A pass-through entity and a shareholder, member or
26partner of a pass-through entity shall not claim the credit
27under this section for the same contribution.

28(3) The shareholder, member or partner may not carry
29forward, carry back, obtain a refund of or sell or assign the
30credit.

31(4) An individual shareholder, partner or member may
32apply a credit distributed under this section to income
33taxable under Article III to the shareholder, partner or
34member, to the spouse of the shareholder, partner or member
35or to both, if both the shareholder, partner or member and
36the spouse report income on a joint personal income tax
37return.

38(f) Restriction on applicability of credits.--No credits
39granted under this section shall be applied against any tax
40withheld by an employer from an employee under Article III.

41(g) Time of application for credits.--

42(1) Except as provided in paragraph (2), the department
43may accept applications for tax credits available during a
44fiscal year no earlier than July 1 of each fiscal year.

45(2) The application of any business firm for tax credits
46available during a fiscal year as part of the second year of
47a two-year commitment or as a renewal of a two-year 
48commitment which was fulfilled in the previous fiscal year
49may be accepted no earlier than May 15 preceding the fiscal
50year.

51(h) Waiting list.--The department shall maintain a waiting

1list consisting of each business firm which chooses to be
2included on the list and whose application has not been approved
3because all available tax credits have been awarded. A business
4firm that was not awarded a tax credit due to a lack of
5available tax credits shall be notified of and offered a place
6on the waiting list. When tax credits become available, the
7department shall award the tax credits to the business firms in
8the order in which the business firms were placed on the waiting
9list.

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

11(1) If all tax credits authorized under this article for
12contributions to the category of scholarship organizations,
13opportunity scholarship organizations or pre-kindergarten
14scholarship organizations have not been awarded as of October
151 of any fiscal year, then for applications accepted by the
16department from October 1 through November 30 of such fiscal
17year, the limitations set forth in subsections (a), (a.1),
18(c) and (d) relating to the maximum amount of tax credits a
19business firm can receive during a fiscal year for
20contributions to each such category of organizations shall
21not apply. Under this paragraph, the department may accept
22applications under section 1704-F from October 1 through
23November 30 as follows:

24(i) A business firm, including a business firm that
25already applied for the maximum tax credits available
26pursuant to subsections (a) and (d), may apply under
27section 1704-F(a) for up to the total amount of tax
28credits remaining available for contributions to
29scholarship organizations for the fiscal year as set
30forth in section 1706-F(a)(1).

31(ii) A business firm, including a business firm that
32already applied for the maximum tax credits available
33pursuant to subsections (a.1) and (d), may apply under
34section 1704-F(a) for up to the total amount of tax
35credits remaining available for contributions to
36opportunity scholarship organizations for the fiscal year
37as set forth in section 1706-F(a)(3).

38(iii) A business firm, including a business firm
39that already applied for the maximum tax credits
40available pursuant to subsections (c) and (d), may apply
41under section 1704-F(a) for up to the total amount of tax
42credits remaining available for contributions to pre-
43kindergarten scholarship organizations for the fiscal
44year as set forth in section 1706-F(a)(2).

45(2) The provisions of subsection (b) shall not apply to
46applications for tax credits made under this subsection. Tax
47credits awarded under this subsection shall not exceed 75% of
48the total amount contributed during the taxable year by a
49business firm pursuant to an application filed under this
50subsection.

51(3) Prior to the award of tax credits applied for under

1this subsection, the department shall first award tax credits
2applied for by a business firm during the period October 1
3through November 30 in an amount no greater than the maximum
4amount of tax credits for which a business firm is eligible
5under subsections (a), (a.1), (c) and (d). The tax credits
6shall be awarded on a first-come, first-served basis as set
7forth in section 1704-F(c).

8(4) After the department has awarded tax credits under
9paragraph (3), any tax credits remaining available within the
10category of scholarship organizations, opportunity
11scholarship organizations and pre-kindergarten scholarship
12organizations shall be awarded based on the total amount of
13tax credits within each category of organization for which
14applications are received under this subsection from October
151 through November 30 of the fiscal year as follows:

16(i) If the total amount of tax credits applied for
17by all business firms under this subsection does not
18exceed the total amount of tax credits that remained
19available for award within a category as of October 1,
20less those tax credits awarded under subsection (i)(3),
21then each business firm may be awarded the full amount of
22tax credits applied for.

23(ii) If the total amount of tax credits applied for
24by all business firms under this subsection exceeds the
25total amount of tax credits that remained available for
26award within a category as of October 1, less those tax
27credits awarded under subsection (i)(3), then each
28business firm may be awarded an amount of tax credits
29determined by multiplying the amount of tax credits
30applied for by the business firm by a ratio, the
31numerator of which is the total amount of tax credits
32that remained available for award within the category as
33of October 1, less those awarded as set forth in
34subsection (i)(3), and the denominator of which is the
35total amount of tax credits applied for by all business
36firms under this subsection.

37(5) Notwithstanding a temporary increase in maximum tax
38credits available under this subsection, the limitations set
39forth in subsections (a), (a.1), (c) and (d) relating to the
40maximum amount of tax credits a business firm can receive
41during a year for contributions to a category of scholarship
42organizations, opportunity scholarship organizations or pre-
43kindergarten scholarship organizations shall be reinstated
44for all applications accepted by the department on or after
45December 1 of the fiscal year.

46(j) Reallocation of tax credits.--

47(1) Beginning on January 1 of any fiscal year, if any
48tax credits authorized under this article for contributions
49to any of the categories of scholarship organizations,
50opportunity scholarship organizations or pre-kindergarten
51scholarship organizations remain unawarded, such unawarded

1tax credits may be reallocated to any of the categories of
2scholarship organizations, opportunity scholarship
3organizations or pre-kindergarten scholarship organizations
4for which all available tax credits have been awarded. The
5department shall, within ten business days, inform each
6business firm on the waiting list maintained by the
7department under subsection (h) that tax credits remain
8available under another category for which the business firm
9has not yet applied. If a business firm notified under this
10paragraph elects, the department shall reallocate available
11tax credits for award to the business firm in the business
12firm's preferred tax credit category, notwithstanding the
13limitations contained in section 1706-F(a). The amount of tax
14credits to be awarded to a business firm under this paragraph
15shall not exceed the amount of tax credits available for
16reallocation or the maximum amount of tax credits for which a
17business firm is eligible under subsections (a), (a.1), (c)
18and (d). Each business firm shall have ten business days from
19the date of the department's notice to elect a reallocation
20of tax credits under this paragraph. The department shall
21award tax credits on a first-come, first-served basis.

22(2) After the department has awarded tax credits under
23paragraph (1), the department shall accept new applications
24for reallocation of tax credits from any of the categories of
25scholarship organizations, opportunity scholarship
26organizations or pre-kindergarten scholarship organizations
27for which tax credits remain available to the applicant's
28preferred category of scholarship organizations, opportunity
29scholarship organizations or pre-kindergarten scholarship
30organizations for which all available tax credits have been
31awarded, notwithstanding any limitations contained in section
321706-F(a). The amount of tax credits to be awarded to a
33business firm under this paragraph shall not exceed the
34amount of tax credits available for reallocation or the
35maximum amount of tax credits for which a business firm is
36eligible under subsections (a), (a.1), (c) and (d). The
37department shall award tax credits on a first-come, first-
38served basis.

39(3) No tax credits shall be awarded under this
40subsection until the department has completed the award of
41tax credits for applications made under subsection (i).

42(4) The department shall not reallocate tax credits from
43any of the categories of scholarship organizations,
44opportunity scholarship organizations or pre-kindergarten
45scholarship organizations to the category of educational
46improvement organizations.

47(5) Subsections (b) and (g) shall not apply to an
48application for reallocation of tax credits under this
49subsection.

50Section 1706-F. Limitations.

51(a) Amount.--

1(1) The total aggregate amount of all tax credits
2approved for contributions from business firms to scholarship 
3organizations, educational improvement organizations and pre-
4kindergarten scholarship organizations shall not exceed
5$100,000,000 in a fiscal year.

6(i) No less than $60,000,000 of the total aggregate
7amount shall be used to provide tax credits for
8contributions from business firms to scholarship
9organizations.

10(ii) No less than $30,000,000 of the total aggregate
11amount shall be used to provide tax credits for
12contributions from business firms to educational
13improvement organizations.

14[(2) The following apply to specific fiscal years:

15(i) For fiscal years 2004-2005, 2005-2006 and 2006-
162007, the total aggregate amount of all tax credits
17approved for contributions from business firms to pre-
18kindergarten scholarship programs shall not exceed
19$5,000,000 in a fiscal year.

20(ii) For fiscal years 2007-2008, 2008-2009, 2009-
212010, 2010-2011 and 2011-2012, the]

22(iii) The total aggregate amount of all tax credits
23approved for contributions from business firms to pre-
24kindergarten scholarship [programs] organizations shall
25not exceed [$8,000,000] $10,000,000 in a fiscal year.

26[(iii) For fiscal year 2012-2013 and each fiscal
27year thereafter, the]

28(2) The total aggregate amount of all tax credits
29approved for contributions from business firms to [pre-
30kindergarten scholarship programs] opportunity scholarship 
31organizations shall not exceed [$10,000,000] $50,000,000 in a
32fiscal year.

33(b) Activities.--No tax credit shall be approved for
34activities that are a part of a business firm's normal course of
35business.

36(c) Tax liability.--

37(1) Except as provided in paragraph (2), a tax credit
38granted for any one taxable year may not exceed the tax
39liability of a business firm.

40(2) In the case of a credit granted to a pass-through
41entity which elects to [transfer] distribute the credit
42according to section 1705-F(e), a tax credit granted for any
43one taxable year and [transferred] distributed to a
44shareholder, member or partner may not exceed the tax
45liability of the shareholder, member or partner.

46(d) Use.--A tax credit not used by the applicant in the
47taxable year the contribution was made or in the year designated
48by the shareholder, member or partner to whom the credit was
49transferred under section 1705-F(e) may not be carried forward
50or carried back and is not refundable or transferable.

51(e) Nontaxable income.--A scholarship from any category of
 

1organization received by an eligible student or eligible pre-
2kindergarten student shall not be considered to be taxable
3income for the purposes of Article III.

4(f) Financial assistance.--A scholarship from any category
5of organization received by an eligible student or eligible pre-
6kindergarten student shall not constitute an appropriation or
7financial assistance to the school attended by the recipient.

8Section 5. Section 1707-F of the act, added October 9, 2009
9(P.L.451, No.48), is amended to read:

10Section 1707-F. Lists.

11The Department of Revenue shall provide a list of all
12scholarship organizations, pre-kindergarten scholarship
13organizations [and], educational improvement organizations and 
14opportunity scholarship organizations receiving contributions
15from business firms granted a tax credit under this article to
16the General Assembly by June 30th of each year.

17Section 6. The act is amended by adding sections to read:

18Section 1709-F. Opportunity scholarships.

19(a) Notice.--By February 1 of each year, the department
20shall provide all opportunity scholarship organizations with a
21list of the low-achieving schools located within each school
22district.

23(b) Award.--An opportunity scholarship organization may
24award an opportunity scholarship to an applicant who resides
25within the attendance boundary of a low-achieving school to
26attend a participating public school or a participating
27nonpublic school selected by the parent of the applicant. If an
28applicant who received an opportunity scholarship for the prior
29school year resides within the attendance boundary of a school
30that was removed from the list of low-achieving schools provided
31by the department under subsection (a), the applicant may
32receive an opportunity scholarship. The opportunity scholarship
33may be for each year of enrollment in a participating public
34school or participating nonpublic school for up to the lesser of
35five years or until completion of grade 12, provided the
36applicant otherwise remains eligible. In awarding scholarships,
37an opportunity scholarship organization shall give preference to
38any of the following:

39(1) An applicant who received an opportunity scholarship
40for the prior school year.

41(2) An applicant of a household with a household income
42that does not exceed 185% of the Federal poverty level for
43the school year preceding the school year for which the
44application is being made.

45(3) An applicant of a household with a household income
46that does not exceed 185% of the Federal poverty level for
47the school year preceding the school year for which the
48application is being made and who resides within any of the
49following:

50(i) A first class school district.

51(ii) A school district designated as a financial

1recovery school district under Article VI-A of the
2Public School Code of 1949 for the year for which the
3award is made.

4(c) Home schooling.--An opportunity scholarship organization
5shall not award an opportunity scholarship to an applicant for
6enrollment in a home education program under section 1327.1 of
7the Public School Code of 1949.

8(d) Funding.--The aggregate amount of opportunity
9scholarships shall not exceed the aggregate amount of
10contributions made by business firms to the opportunity
11scholarship organization.

12(e) Amount.--

13(1) The maximum amount of an opportunity scholarship
14awarded to an applicant without a disability shall be $8,500.

15(2) The maximum amount of an opportunity scholarship
16awarded to an applicant with a disability shall be $15,000.

17(3) In no case shall the combined amount of the
18opportunity scholarship awarded to a recipient and any
19additional financial assistance provided to the recipient
20exceed the tuition rate and school-related fees for the
21participating public school or participating nonpublic school
22that the recipient will attend.

23Section 1710-F. Low-achieving schools.

24(a) List of low-achieving schools.--By February 1 of each
25year, the Department of Education shall publish on the
26Department of Education's publicly accessible Internet website
27and in the Pennsylvania Bulletin a list of the low-achieving
28schools for the following school year.

29(b) Notice.--By February 1 of each year, the Department of
30Education shall notify every school district identified as
31having at least one low-achieving school of such identification
32and shall furnish the school district with a list of the low-
33achieving schools located within the school district.

34(c) Publication.--Within 15 days of receipt of a
35notification under subsection (b), a school district shall post
36on the district's publicly accessible Internet website notice of
37all of the following:

38(1) A description of the opportunity scholarship
39program.

40(2) Instructions for applying for an opportunity
41scholarship.

42(3) A list of schools in the school district that have
43been designated by the Department of Education as low-
44achieving schools.

45(4) Notice that a parent must directly contact a school
46district of a participating public school or a participating
47nonpublic school if the parent seeks to enroll the student in
48the opportunity scholarship program.

49(d) Notification to parents.--

50(1) Within 15 days of receipt of a notification under
51subsection (b), a school district shall notify the parents of

1each student who is currently attending or residing within
2the attendance boundary of a low-achieving school during the
3school year of the school's designation.

4(2) Upon registration of a kindergarten student, a
5school district shall notify the parents of the kindergarten
6student that the student will be assigned to a low-achieving
7school during the school year of the school's designation.

8(3) The notice shall be in a form provided by the
9Department of Education and shall provide the following
10information regarding the opportunity scholarship program:

11(i) A description of the opportunity scholarship
12program.

13(ii) Instructions for obtaining information about
14applying for an opportunity scholarship under the
15opportunity scholarship program.

16(iii) Notice of the parent's responsibilities with
17regard to applying to a school district of a
18participating public school or a participating nonpublic
19school if the parent seeks to enroll the student in the
20opportunity scholarship program.

21(e) Average daily membership.--

22(1) Notwithstanding any other provision of law to the
23contrary, a recipient who was enrolled in the recipient's
24resident school district or in a charter school, regional
25charter school or cyber charter school when the recipient
26first received an opportunity scholarship shall continue to
27be counted in the average daily membership of the school
28district for a period of one year after enrolling in a
29participating public school or a participating nonpublic
30school.

31(2) During the year referenced in paragraph (1) and each
32school year thereafter, a school district of a participating
33public school in which the recipient is enrolled shall not
34include the recipient in the school district's average daily
35membership.

36Section 1711-F. School participation in program.

37(a) Election.--

38(1) By February 15 of each year, a nonpublic school may
39elect to participate in the opportunity scholarship program
40for the following school year.

41(2) By February 15 of each year, a school district may
42elect to participate in the opportunity scholarship program
43for the following school year.

44(b) Notice.--

45(1) A school district or nonpublic school that elects to
46participate under subsection (a) must notify the Department
47of Education of the district's or nonpublic school's intent
48to participate.

49(2) For a school district, the notice under paragraph
50(1) must be submitted on a form developed by the Department
51of Education and shall specify all of the following:

1(i) Each school within the school district which the
2school district intends to make a participating public
3school.

4(ii) The amount of tuition and school-related fees
5attributable to each available seat. The amount under
6this subparagraph shall not exceed the amount calculated
7under section 2561 of the Public School Code of 1949.

8(3) For a nonpublic school, the notice under paragraph
9(1) must be submitted on a form developed by the Department
10of Education and shall specify the amount of tuition and
11school-related fees attributable to an available seat.

12(c) Tuition rates.--

13(1) No school district of a participating public school
14or participating nonpublic school may charge a recipient a
15higher tuition rate or school-related fee than the school
16district of the participating public school or participating
17nonpublic school would have charged to a similarly situated
18student who is not receiving an opportunity scholarship.

19(2) Notwithstanding the provisions of section 2561 of
20the Public School Code of 1949, a school district of a
21participating public school may charge a recipient a tuition
22rate that is lower than that charged to students who are not
23recipients of opportunity scholarships.

24(d) Participating public school criteria.--The following
25criteria apply to a participating public school:

26(1) Except as otherwise provided in this article, a
27school district shall enroll students in a participating
28public school on a lottery basis from a pool of recipients
29who meet the application deadline set by the Department of
30Education until the participating public school fills the
31school's available seats. The pool may not include a
32recipient who:

33(i) Has been expelled or is in the process of being
34expelled under section 1317.2 or 1318 of the Public
35School Code of 1949 and applicable regulations of the
36State Board of Education.

37(ii) Has been recruited by the school district or
38its representatives for athletic purposes.

39(2) The enrollment of recipients may not place the
40school district in violation of a valid and binding
41desegregation order.

42(3) Priority shall be given to:

43(i) An existing recipient.

44(ii) A recipient who is a sibling of a student
45currently enrolled in the school district.

46(e) Participating nonpublic school criteria.--The following
47criteria apply to a participating nonpublic school:

48(1) The participating nonpublic school may not
49discriminate on a basis which is illegal under Federal or
50State laws applicable to nonpublic schools.

51(2) The participating nonpublic school shall comply with

1section 1521 of the Public School Code of 1949.

2(3) The participating nonpublic school or its
3representatives may not recruit a student for athletic
4purposes.

5(f) Student rules, policies and procedures.--

6(1) Prior to enrollment of a recipient, a school
7district of a participating public school or a participating
8nonpublic school shall inform the parent of a recipient of
9any and all rules, policies and procedures of the
10participating public school or participating nonpublic
11school, including any academic policies, disciplinary rules
12and administrative procedures of the participating public
13school or participating nonpublic school.

14(2) Enrollment of a recipient in a participating public
15school or participating nonpublic school shall constitute
16acceptance of any rules, policies and procedures of the
17participating public school or participating nonpublic
18school.

19(g) Transportation.--

20(1) Transportation of recipients shall be provided under
21section 1361 of the Public School Code of 1949.

22(2) Reimbursement shall be as follows:

23(i) Transportation of a recipient attending a
24participating public school shall be subject to
25reimbursement under section 2541 of the Public School
26Code of 1949.

27(ii) Transportation of a recipient attending a
28participating nonpublic school shall be subject to
29reimbursement under sections 2509.3 and 2541 of the
30Public School Code of 1949.

31(h) Construction.--Nothing in this article shall be
32construed to:

33(1) Prohibit a participating nonpublic school from
34limiting admission to a particular grade level, a single
35gender or areas of concentration of the participating
36nonpublic school, including mathematics, science and the
37arts.

38(2) Authorize the Commonwealth or any of its agencies or
39officers or political subdivisions to impose any additional
40requirements on a participating nonpublic school which are
41not otherwise authorized under the laws of this Commonwealth
42or to require a participating nonpublic school to enroll a
43recipient if the participating nonpublic school does not
44offer appropriate programs or is not structured or equipped
45with the necessary facilities to meet the special needs of
46the recipient or does not offer a particular program
47requested.

48Section 1712-F. Tuition grants by school districts.

49(a) General rule.--The board of school directors of a school
50district may use funds received from the Commonwealth for
51educational purposes to establish a program of tuition grants to

1provide for the education of students who reside within the
2district and attend or will attend a public or nonpublic school
3on a tuition-paying basis.

4(b) Nonpublic school grant amount.--For students who attend
5or will attend a nonpublic school, the grant amount for each
6student shall not exceed the amount of the per pupil State
7subsidy for basic education of the school district of residence.

8(c) Average daily membership.--

9(1) A student who receives a tuition grant under this
10section shall be included in the average daily membership for
11purposes of determining the school district of residence's
12basic education funding.

13(2) A student who receives a grant under this section to
14attend a public school outside the school district awarding
15the tuition grant shall not be included in the average daily
16membership of the school district the student attends.

17(d) Guidelines.--

18(1) The board of school directors of a school district
19shall prepare guidelines on all the following:

20(i) Establishment of an application form and
21approval process.

22(ii) Standards for verification of the accuracy of
23application information.

24(iii) Confirmation of attendance by a student who
25receives a tuition grant.

26(iv) Restrictive endorsement of grant checks by
27parents to the school chosen by the parents.

28(v) Pro rata refunds of grants for students who
29withdraw during the school year.

30(vi) Repayment of refunded grants to the school
31district.

32(vii) Reasonable deadline dates for submission of
33grant applications.

34(2) The board of school directors of a school shall
35announce the award of grants no later than August 1 of the
36school year in which the grants will be utilized.

37(3) Upon receipt of written confirmation of enrollment
38from the student's school of choice, grants shall be paid to
39the parents of a student by a check that may only be endorsed
40to the selected school.

41(4) In the event a student is no longer enrolled prior
42to the completion of the school term, the school shall send
43written notice to the school district.

44(e) Nontaxable.--Grants awarded to students under this
45section shall not:

46(1) Be considered taxable income for purposes of a local
47taxing ordinance or for purposes of Article III.

48(2) Constitute financial assistance or appropriations to
49the school attended by the student.

50(f) Construction.--Nothing in this section shall be
51construed to empower the Commonwealth or a school district or

1any of their agencies or officers to do any of the following:

2(1) Prescribe the course content or admissions criteria
3for any religiously affiliated school.

4(2) Compel any private school to accept or enroll a
5student.

6(3) Impose any additional requirements on any private
7school that are not otherwise authorized.

8(4) Require any school to accept or retain a student if
9the school does not offer programs or is not structured or
10equipped with the necessary facilities to meet the special
11needs of the student or does not offer a particular program
12requested.

13Section 1713-F. Original jurisdiction.

14The Pennsylvania Supreme Court shall have exclusive and
15original jurisdiction to hear a challenge or to render a
16declaratory judgment concerning the constitutionality of this
17article. The Pennsylvania Supreme Court may take such action as
18the court deems appropriate, consistent with the Pennsylvania
19Supreme Court's retaining jurisdiction over such a matter, to
20find facts or to expedite a final judgment in connection with a
21challenge or request for declaratory relief.

22Section 7. Article XVII-G.1 heading and sections 1701-G.1, 
231702-G.1, 1703-G.1, 1704-G.1, 1705-G.1, 1706-G.1 and 1707-G.1, 
24of the act, added July 2, 2012 (P.L.751, No.85), are repealed:

25[ARTICLE XVII-G.1

26EDUCATIONAL OPPORTUNITY SCHOLARSHIP TAX CREDIT

27Section 1701-G.1. Scope of article.

28This article establishes the educational opportunity
29scholarship tax credit.

30Section 1702-G.1. Definitions.

31The following words and phrases when used in this article
32shall have the meanings given to them in this section unless the
33context clearly indicates otherwise:

34"Applicant." An eligible student who applies for a
35scholarship.

36"Assessment." The Pennsylvania System of School Assessment
37test, the Keystone Exam, an equivalent local assessment or
38another test established by the State Board of Education to meet
39the requirements of section 2603-B(d)(10)(i) of the Public
40School Code of 1949 and required under the No Child Left Behind
41Act of 2001 (Public Law 107-110, 115 Stat. 1425) or its
42successor statute or any other test required to achieve other
43standards established by the Department of Education for the
44public school or school district under 22 Pa. Code § 403.3
45(relating to single accountability system).

46"Attendance boundary." A geographic area of residence used
47by a school district to assign a student to a public school.

48"Average daily membership." As defined in section 2501(3) of
49the Public School Code of 1949.

50"Business firm." An entity authorized to do business in this
51Commonwealth and subject to a tax under Article XVI of the act

1of May 17, 1921 (P.L.682, No.284), known as The Insurance
2Company Law of 1921, or taxes imposed under Article III, IV, VI,
3VII, VIII, IX or XV. The term includes a pass-through entity.

4"Contribution." A donation of cash, personal property or
5services, the value of which is the net cost of the donation to
6the donor or the pro rata hourly wage, including benefits, of
7the individual performing the services.

8"Department." The Department of Community and Economic
9Development of the Commonwealth.

10"Elementary school." A school which is not a secondary
11school.

12"Eligible student." A student or a student with a disability
13who:

14(1) resides within the attendance boundary of a low-
15achieving school as of the first day of classes of the school
16year; and

17(2) is a member of a household which has a household
18income no greater than the maximum annual household income
19allowance.

20"Household." An individual who lives alone or with the
21following: a spouse, parent and their unemancipated minor
22children, other unemancipated minor children who are related by
23blood or marriage or other adults or unemancipated minor
24children living in the household who are dependent upon the
25individual.

26"Household income." All moneys or property received by a
27household of whatever nature and from whatever source derived.
28The term does not include the following:

29(1) Periodic payments for sickness and disability other
30than regular wages received during a period of sickness or
31disability.

32(2) Disability, retirement or other payments arising
33under workers' compensation acts, occupational disease acts
34and similar legislation by any government.

35(3) Payments commonly recognized as old-age or
36retirement benefits paid to persons retired from service
37after reaching a specific age or after a stated period of
38employment.

39(4) Payments commonly known as public assistance or
40unemployment compensation payments by a governmental agency.

41(5) Payments to reimburse actual expenses.

42(6) Payments made by employers or labor unions for
43programs covering hospitalization, sickness, disability or
44death, supplemental unemployment benefits, strike benefits,
45Social Security and retirement.

46(7) Compensation received by United States servicemen
47serving in a combat zone.

48"Income allowance."

49(1) The following shall apply:

50(i) After June 30, 2012, and through June 30, 2013,
51$12,000 for each dependent member of the household.

1(ii) After June 30, 2013, and through June 30, 2014,
2$15,000 for each dependent member of the household.

3(2) Beginning July 1, 2014, the Department of Community
4and Economic Development shall annually adjust the income
5allowance amounts under paragraph (1) to reflect any upward
6changes in the Consumer Price Index for All Urban Consumers
7for the Pennsylvania, New Jersey, Delaware and Maryland area
8in the preceding 12 months and shall immediately submit the
9adjusted amounts to the Legislative Reference Bureau for
10publication as a notice in the Pennsylvania Bulletin.

11"Kindergarten." A one-year formal educational program that
12occurs during the school year immediately prior to first grade.
13The term includes a part-time and a full-time program.

14"Low-achieving school." A public school that ranked in the
15lowest 15% of its designation as an elementary school or a
16secondary school based on combined mathematics and reading
17scores from the annual assessment administered in the previous
18school year and for which the Department of Education has posted
19results on its publicly accessible Internet website. The term
20does not include a charter school, cyber charter school or area
21vocational-technical school.

22"Maximum annual household income allowance."

23(1) Except as stated in paragraph (2) and subject to
24adjustment under paragraph (3), the sum of:

25(i) Either:

26(A) after June 30, 2012, and through June 30,
272013, not more than $60,000; or

28(B) after June 30, 2013, not more than $75,000.

29(ii) The applicable income allowance.

30(2) With respect to a student with a disability, as
31calculated by multiplying:

32(i) the applicable amount under paragraph (1); by

33(ii) the applicable support level factor according
34to the following table:

35Support Level

Support Level Factor

361

1.50

372

2.993

38(3) Beginning July 1, 2014, the Department of Community
39and Economic Development shall annually adjust the income
40amounts under paragraphs (1) and (2) to reflect any upward
41changes in the Consumer Price Index for All Urban Consumers
42for the Pennsylvania, New Jersey, Delaware and Maryland area
43in the preceding 12 months and shall immediately submit the
44adjusted amounts to the Legislative Reference Bureau for
45publication as a notice in the Pennsylvania Bulletin.

46"Nonpublic school." A school which is a nonprofit
47organization and which is located in the Commonwealth. The term
48does not include a public school.

49"Parent." An individual who:

50(1) is a resident of the Commonwealth; and

51(2) either:

1(i) has legal custody or guardianship of a student;
2or

3(ii) keeps in his home a student and supports the
4student gratis as if the student were a lineal descendant
5of the individual.

6"Participating nonpublic school." A nonpublic school which
7notifies the Department of Education under section 1710-G.1 that
8it wishes to participate in the program.

9"Participating public school." A public school in a school
10district which notifies the Department of Education under
11section 1710-G.1(b) that it wishes to participate in the
12program. The term shall not include a low-achieving school.

13"Pass-through entity." A partnership as defined in section
14301(n.0), a single-member limited liability company treated as a
15disregarded entity for Federal income tax purposes or a
16Pennsylvania S corporation as defined in section 301(n.1).

17"Public School Code of 1949." The act of March 10, 1949
18(P.L.30, No.14), known as the Public School Code of 1949.

19"Program." The Educational Opportunity Scholarship Tax
20Credit Program established under this article.

21"Recipient." An applicant who receives a scholarship.

22"Scholarship." An award given to an applicant for the
23recipient to pay tuition and school-related fees necessary to
24attend a participating nonpublic school or a participating
25public school located in a school district which is not the
26recipient's school district of residence.

27"Scholarship organization." A nonprofit entity which:

28(1) is exempt from Federal taxation under section
29501(c ) ( 3) of the Internal Revenue Code of 1986 (Public Law
3099-514, 26 U.S.C. § 1 et seq.); and

31(2) contributes at least 80% of its annual cash receipts
32to a scholarship program.

33For purposes of this definition, a nonprofit entity
34"contributes" its annual cash receipts to a scholarship program
35when it expends or otherwise irrevocably encumbers those funds
36for distribution during the then current fiscal year of the
37nonprofit entity or during the next succeeding fiscal year of
38the nonprofit entity.

39"School." An elementary school or a secondary school at
40which the compulsory attendance requirements of the Commonwealth
41may be met and which meets the applicable requirements of Title
42VI of the Civil Rights Act of 1964 (Public Law 88-352, 78 Stat.
43241).

44"School age." The age of an individual from the earliest
45admission age to a school's kindergarten or, when no
46kindergarten is provided, the school's earliest admission age
47for beginners, until the end of the school year the individual
48attains 21 years of age or graduation from high school,
49whichever occurs first.

50"School district of residence." The school district in which

1the student's primary domicile is located.

2"School-related fees." Fees charged by a school to all
3students for books, instructional materials, technology
4equipment and services, uniforms and activities.

5"Secondary school." A school with an eleventh grade.

6"Special education school." A school or program within a
7school that is designated specifically and exclusively for
8students with any of the disabilities listed in 34 CFR § 300.8
9(relating to child with a disability) and meets one of the
10following:

11(1) is licensed under the act of January 28, 1988
12(P.L.24, No.11), known as the Private Academic Schools Act;

13(2) is accredited by an accrediting association approved
14by the State Board of Education;

15(3) is a school for the blind or deaf receiving
16Commonwealth appropriations; or

17(4) is operated by or under the authority of a bona fide
18religious institution or by the Commonwealth or any political
19subdivision thereof.

20"Student." An individual who meets all of the following:

21(1) Is school age.

22(2) Is a resident of this Commonwealth.

23(3) Attends or is about to attend a school.

24"Student with a disability." A student who meets all of the
25following:

26(1) Is either enrolled in a special education school or
27has otherwise been identified, in accordance with 22 Pa. Code
28Ch. 14 (relating to special education services and programs),
29as a "child with a disability" as defined in 34 CFR § 300.8
30(relating to child with a disability).

31(2) Needs special education and related services.

32"Support level." The level of support needed by an eligible
33student with a disability, as provided in the following matrix:

34Support Level 1 - The student is not enrolled in a
35special education school.

36Support Level 2 - The student is enrolled as a student in
37a special education school.

38Section 1703-G.1. Qualification and application.

39(a) Establishment.--The Educational Opportunity Scholarship
40Tax Credit Program is established. The program shall provide tax
41credits to entities that provide contributions to scholarship
42organizations. The scholarship organizations must enhance the
43educational opportunities available to students in this
44Commonwealth by providing scholarships to eligible students who
45reside within the attendance boundary of low-achieving schools
46to attend schools which are not low-achieving schools and which
47are not a public school within the school district of residence.

48(b) Information.--In order to qualify under this article, a
49scholarship organization must submit information to the
50department that enables the department to confirm that the
51scholarship organization is exempt from taxation under section

1501(c)(3) of the Internal Revenue Code of 1986 (Public Law 99-
2514, 26 U.S.C. § 1 et seq.).

3(c) Annual certification of eligibility.--By August 15,
42012, and by February 15, 2013, and each February 15 thereafter,
5a scholarship organization must certify to the department that
6the organization is eligible to participate in the program.

7(d) Report.--

8(1) A scholarship organization must agree to report the
9following information on a form provided by the department by
10September 1, 2013, and each September 1 thereafter:

11(i) The total number of applications for
12scholarships received during the immediately preceding
13school year from eligible students in grades kindergarten
14through eight.

15(ii) The number of scholarships awarded during the
16immediately preceding school year to eligible students in
17grades kindergarten through eight.

18(iii) The total and average amounts of the
19scholarships awarded during the immediately preceding
20school year to eligible students in grades kindergarten
21through eight.

22(iv) The total number of applications for
23scholarships received during the immediately preceding
24school year from eligible students in grades 9 through
2512.

26(v) The number of scholarships awarded during the
27immediately preceding school year to eligible students in
28grades 9 through 12.

29(vi) The total and average amounts of the
30scholarships awarded during the immediately preceding
31school year to eligible students in grades 9 through 12.

32(vii) Where the scholarship organization collects
33information on a county-by-county basis, the total number
34and the total amount of scholarships awarded during the
35immediately preceding school year to residents of each
36county in which the scholarship organization awarded
37scholarships.

38(viii) The number of scholarships awarded during the
39immediately preceding school year to applicants with a
40household income that does not exceed 185% of the Federal
41poverty level.

42(ix) The total and average amounts of the
43scholarships awarded during the immediately preceding
44school year to applicants with a household income that
45does not exceed 185% of the Federal poverty level.

46(x) The number of scholarships awarded during the
47immediately preceding school year to applicants with a
48household income that does not exceed 185% of the Federal
49poverty level and who reside within a first class school
50district.

51(xi) The total and average amounts of the

1scholarships awarded during the immediately preceding
2school year to applicants with a household income that
3does not exceed 185% of the Federal poverty level and who
4reside within a first class school district.

5(xii) The number of scholarships awarded during the
6immediately preceding school year to applicants with a
7household income that does not exceed 185% of the Federal
8poverty level and who reside within a school district
9with an average daily membership greater than 7,500 and
10that receives an advance of its basic education subsidy
11at any time.

12(xiii) The total and average amounts of the
13scholarships awarded during the immediately preceding
14school year to applicants with a household income that
15does not exceed 185% of the Federal poverty level and who
16reside within a school district with an average daily
17membership greater than 7,500 and that receives an
18advance of its basic education subsidy at any time.

19(xiv) The number of scholarships awarded during the
20immediately preceding school year to applicants with a
21household income that does not exceed 185% of the Federal
22poverty level and who reside within a school district
23that receives an advance of its basic education subsidy
24at any time and is either subject to a declaration of
25financial distress under section 691 of the Public School
26Code of 1949 or engaged in litigation against the
27Commonwealth in which the school district seeks financial
28assistance from the Commonwealth to allow the school
29district to continue to operate.

30(xv) The total and average amounts of the
31scholarships awarded during the immediately preceding
32school year to applicants with a household income that
33does not exceed 185% of the Federal poverty level and who
34reside within a school district that receives an advance
35of its basic education subsidy at any time and is either
36subject to a declaration of financial distress under
37section 691 of the Public School Code of 1949 or is
38engaged in litigation against the Commonwealth in which
39the school district seeks financial assistance from the
40Commonwealth to allow the school district to continue to
41operate.

42(xvi) The total number of scholarship applications
43processed and the amounts of any application fees charged
44either per scholarship application or in the aggregate
45through a third-party processor.

46(xvii) The scholarship organization's Federal Form
47990 or other Federal form indicating the tax status of
48the scholarship organization for Federal tax purposes, if
49any, and a copy of a compilation, review or audit of the
50scholarship organization's financial statements conducted
51by a certified public accounting firm.

1(2) No later than May 1, 2013, and each May 1
2thereafter, the department shall annually distribute such
3sample forms, together with the forms on which the reports
4are required to be made, to each listed scholarship
5organization.

6(3) The department may not require any other information
7to be provided by scholarship organizations, except as
8expressly authorized in this article.

9(e) Notification.--The department shall notify a scholarship
10organization that it meets the requirements of this article for
11that fiscal year no later than 60 days after the scholarship
12organization submits the information required under this
13section.

14(f) Publication.--The department shall annually publish a
15list of each scholarship organization qualified under this
16section in the Pennsylvania Bulletin and shall post and update
17the list as necessary on the publicly accessible Internet
18website of the department.

19Section 1704-G.1. Tax credit application.

20(a) Scholarship organization.--A business firm shall apply
21to the department for a tax credit under section 1705-G.1. A
22business firm shall receive a tax credit under this article if
23the scholarship organization that receives the contribution
24appears on the list published under section 1703-G.1(f).

25(b) Availability of tax credits.--Tax credits under this
26article shall be made available by the department on a first-
27come-first-served basis within the limitation established under
28section 1706-G.1(a).

29(c) Contributions.--A contribution by a business firm to a
30scholarship organization shall be made no later than 60 days
31following the approval of an application under subsection (a).

32Section 1705-G.1. Tax credit.

33(a) Scholarship organizations.--

34(1) In accordance with section 1706-G.1(a), the
35Department of Revenue shall grant a tax credit against any
36tax due under Article XVI of the act of May 17, 1921
37(P.L.682, No.284), known as The Insurance Company Law of
381921, or under Article III, IV, VI, VII, VIII, IX or XV to a
39business firm providing proof of a contribution to a
40scholarship organization in the taxable year in which the
41contribution is made, which shall not exceed 75% of the total
42amount contributed during the taxable year by the business
43firm.

44(2) For the fiscal year 2012-2013, the tax credit shall
45not exceed $400,000 annually per business firm for
46contributions made to scholarship organizations.

47(3) For the fiscal years 2013-2014 and each fiscal year
48thereafter, the tax credit shall not exceed $750,000 annually
49per business firm for contributions made to scholarship
50organizations.

51(b) Additional amount.--

1(1) The Department of Revenue shall grant a tax credit
2of up to 90% of the total amount contributed during the
3taxable year if the business firm provides a written
4commitment to provide the scholarship organization with the
5same amount of contribution for two consecutive tax years.

6(2) The business firm must provide the written
7commitment under this subsection to the department at the
8time of application.

9(c) Combination of tax credits.--

10(1) A business firm may receive tax credits from the
11Department of Revenue in any tax year for any combination of
12contributions under subsection (a) or (b).

13(2) In no case may a business firm receive tax credits
14in any tax year:

15(i) in excess of $400,000 for contributions under
16subsections (a) and (b) made during fiscal year 2012-
172013; or

18(ii) in excess of $750,000 for contributions under
19subsections (a) and (b) made during fiscal year 2013-2014
20or any fiscal year thereafter.

21(d) Pass-through entity.--

22(1) If a pass-through entity does not intend to use all
23approved tax credits under this section, it may elect in
24writing to transfer all or a portion of the credit to
25shareholders, members or partners in proportion to the share
26of the entity's distributive income to which the shareholder,
27member or partner is entitled for use in the taxable year in
28which the contribution is made or in the taxable year
29immediately following the year in which the contribution is
30made. The election shall designate the year in which the
31transferred credits are to be used and shall be made
32according to procedures established by the Department of
33Revenue.

34(2) A pass-through entity and a shareholder, member or
35partner of a pass-through entity shall not claim the credit
36under this section for the same contribution.

37(3) The shareholder, member or partner may not carry
38forward, carry back, obtain a refund of or sell or assign the
39credit.

40(e) Restriction on applicability of credits.--No credits
41granted under this section shall be applied against any tax
42withheld by an employer from an employee under Article III.

43(f) Time of application for credits.--

44(1) Except as provided in paragraph (2), the department
45may accept applications for tax credits available during a
46fiscal year no earlier than July 1 of each fiscal year.

47(2) The application of any business firm for tax credits
48available during a fiscal year as part of the second year of
49a two-year commitment or as a renewal of a two-year
50commitment that was fulfilled in the previous fiscal year may
51be accepted no earlier than May 15 preceding the fiscal year.

1Section 1706-G.1. Tax credit limitations.

2(a) Amount.--The total aggregate amount of all tax credits
3approved shall not exceed $50,000,000 in a fiscal year.

4(b) Activities.--No tax credit shall be approved for
5activities that are a part of a business firm's normal course of
6business.

7(c) Tax liability.--

8(1) Except as provided in paragraph (2), a tax credit
9granted for any one taxable year may not exceed the tax
10liability of a business firm.

11(2) In the case of a credit granted to a pass-through
12entity which elects to transfer the credit according to
13section 1705-G.1(d), a tax credit granted for any one taxable
14year and transferred to a shareholder, member or partner may
15not exceed the tax liability of the shareholder, member or
16partner.

17(d) Use.--A tax credit not used by the applicant in the
18taxable year the contribution was made or in the year designated
19by the shareholder, member or partner to whom the credit was
20transferred under section 1705-G.1(d) may not be carried forward
21or carried back and is not refundable or transferable.

22(e) Nontaxable income.--A scholarship received by an
23eligible student shall not be considered to be taxable income
24for the purposes of Article III.

25Section 1707-G.1. Tax credit lists.

26The Department of Revenue shall provide a list of all
27scholarship organizations receiving contributions from business
28firms granted a tax credit under this article to the General
29Assembly by June 30 of each year.]

30Section 8. Section 1708-G.1 of the act, amended or added
31July 2, 2012 (P.L.751, No.85) and July 9, 2013 (P.L.270, No.52),
32is repealed.

33[Section 1708-G.1. Scholarships.

34(a) Notice.--By August 15, 2012, and by February 1 of each
35year thereafter, the department shall provide all scholarship
36organizations with a list of the low-achieving schools located
37within each school district.

38(b) Award.--A scholarship organization may award a
39scholarship to an applicant who resides within the attendance
40boundary of a low-achieving school to attend a participating
41public school or a participating nonpublic school selected by
42the parent of the applicant. If an applicant who received an 
43educational opportunity scholarship under this article for the 
44prior school year resides within the attendance boundary of a 
45school that was removed from the list of low-achieving schools 
46provided by the department under subsection (a), the applicant 
47may receive an educational opportunity scholarship. The 
48scholarship may be for each year of enrollment in a 
49participating public school or participating nonpublic school 
50for up to the lesser of five years or until completion of grade 
5112 provided the applicant otherwise remains eligible. In

1awarding scholarships, a scholarship organization shall give
2preference to any of the following:

3(1) An applicant who received a scholarship for the
4prior school year.

5(2) An applicant of a household with a household income
6that does not exceed 185% of the Federal poverty level for
7the school year preceding the school year for which the
8application is being made.

9(3) An applicant of a household with a household income
10that does not exceed 185% of the Federal poverty level for
11the school year preceding the school year for which the
12application is being made and who resides within any of the
13following:

14(i) a first class school district;

15(ii) a school district with an average daily
16membership greater than 7,500 and that receives an
17advance of its basic education subsidy at any time; or

18(iii) a school district that receives an advance of
19its basic education subsidy at any time and is either
20subject to a declaration of financial distress under
21section 691 of the Public School Code of 1949 or engaged
22in litigation against the Commonwealth in which the
23school district seeks financial assistance from the
24Commonwealth to allow the school district to continue to
25operate.

26(c) Home schooling.--A scholarship organization shall not
27award a scholarship to an applicant for enrollment in a home
28education program under section 1327.1 of the Public School Code
29of 1949.

30(d) Funding.--The aggregate amount of scholarships shall not
31exceed the aggregate amount of contributions made by business
32firms to the scholarship organization.

33(e) Amount.--

34(1) The maximum amount of a scholarship awarded to an
35applicant without a disability shall be $8,500.

36(2) The maximum amount of a scholarship awarded to an
37applicant with a disability shall be $15,000.

38(3) In no case shall the combined amount of the
39scholarship awarded to a recipient and any additional
40financial assistance provided to the recipient exceed the
41tuition rate and school-related fees for the participating
42public school or participating nonpublic school that the
43recipient will attend.

44(f) Taxation.--A scholarship shall not be considered taxable
45income for purposes of Article III or a local taxing ordinance.

46(g) Financial assistance.--A scholarship shall not
47constitute financial assistance or an appropriation to the
48participating public school or the participating nonpublic
49school attended by a recipient.]

50Section 9. Sections 1709-G.1, 1710-G.1, 1711-G.1 and 1712-
51G.1 of the act, added July 2, 2012, are repealed:

1[Section 1709-G.1. Low-achieving schools.

2(a) List of low-achieving schools.--By September 1, 2012,
3and by February 1 of each year thereafter, the Department of
4Education shall publish on its publicly accessible Internet
5website and in the Pennsylvania Bulletin a list of the low-
6achieving schools for the following school year.

7(b) Notice.--By August 1, 2012, and by February 1 of each
8year thereafter, the Department of Education shall notify every
9school district identified as having at least one low-achieving
10school of its designation and shall furnish the school district
11with a list of the low-achieving schools located within the
12school district.

13(c) Publication.--Within 15 days of receipt of a
14notification under subsection (b), a school district shall post
15on its publicly accessible Internet website notice of all of the
16following:

17(1) A description of the program.

18(2) Instructions for applying for a scholarship.

19(3) A list of schools in the school district that have
20been designated by the Department of Education as low-
21achieving schools.

22(4) Notice that a parent must contact directly a school
23district of a participating public school or a participating
24nonpublic school if the parent seeks to enroll the student in
25the program.

26(d) Notification to parents.--

27(1) Within 15 days of receipt of a notification under
28subsection (b), a school district shall notify the parents of
29each student who is currently attending or residing within
30the attendance boundary of a low-achieving school during the
31school year of the school's designation.

32(2) Upon registration of a kindergarten student, a
33school district shall notify the parents of the kindergarten
34student that the student will be assigned to a low-achieving
35school during the school year of the school's designation.

36(3) The notice shall be in a form provided by the
37Department of Education and shall provide the following
38information regarding the program:

39(i) A description of the program.

40(ii) Instructions for obtaining information about
41applying for a scholarship under the program.

42(iii) Notice of the parent's responsibilities with
43regard to applying to a school district of a
44participating public school or a participating nonpublic
45school if the parent seeks to enroll the student in the
46program.

47(e) Average daily membership.--

48(1) Notwithstanding any other provision of law to the
49contrary, a recipient who was enrolled in the recipient's
50resident school district or in a charter school, regional
51charter school or cyber charter school when the recipient

1first received a scholarship shall continue to be counted in
2the average daily membership of the school district for a
3period of one year after enrolling in a participating public
4school or a participating nonpublic school.

5(2) During the year referenced in paragraph (1) and each
6school year thereafter, a school district of a participating
7public school in which the recipient is enrolled shall not
8include the recipient in the school district's average daily
9membership.

10Section 1710-G.1. School participation in program.

11(a) Election.--

12(1) By August 15, 2012, and by February 15 of each year
13thereafter, a nonpublic school may elect to participate in
14the program for the following school year.

15(2) By August 15, 2012, and by February 15 of each year
16thereafter, a school district may elect to participate in the
17program for the following school year.

18(b) Notice.--

19(1) A school district or nonpublic school that elects to
20participate under subsection (a) must notify the Department
21of Education of its intent to participate.

22(2) For a school district, the notice under paragraph
23(1) must be submitted on a form developed by the Department
24of Education and shall specify all of the following:

25(i) Each school within the school district which the
26school district intends to make a participating public
27school.

28(ii) The amount of tuition and school-related fees
29attributable to each available seat. The amount under
30this subparagraph shall not exceed the amount calculated
31under section 2561 of the Public School Code of 1949.

32(3) For a nonpublic school, the notice under paragraph
33(1) must be submitted on a form developed by the Department
34of Education and shall specify the amount of tuition and
35school-related fees attributable to an available seat.

36(c) Tuition rates.--

37(1) No school district of a participating public school
38or participating nonpublic school may charge a recipient a
39higher tuition rate or school-related fee than the
40participating public school or participating nonpublic school
41would have charged to a similarly situated student who is not
42receiving a scholarship.

43(2) Notwithstanding the provisions of section 2561 of
44the Public School Code of 1949, a school district of a
45participating public school may charge a recipient a tuition
46rate that is lower than that charged to students who are not
47recipients of scholarships.

48(d) Participating public school criteria.--The following
49criteria apply to a participating public school:

50(1) Except as otherwise provided in this article, a
51school district shall enroll students in a participating

1public school on a lottery basis from a pool of recipients
2who meet the application deadline set by the Department of
3Education until the participating public school fills its
4available seats. The pool may not include a recipient who:

5(i) has been expelled or is in the process of being
6expelled under section 1317.2 or 1318 of the Public
7School Code of 1949 and applicable regulations of the
8State Board of Education; or

9(ii) has been recruited by the school district or
10its representatives for athletic purposes.

11(2) The enrollment of recipients may not place the
12school district in violation of a valid and binding
13desegregation order.

14(3) Priority shall be given to:

15(i) An existing recipient.

16(ii) A recipient who is a sibling of a student
17currently enrolled in the school district.

18(e) Participating nonpublic school criteria.--The following
19criteria apply to a participating nonpublic school:

20(1) The participating nonpublic school may not
21discriminate on a basis which is illegal under Federal or
22State laws applicable to nonpublic schools.

23(2) The participating nonpublic school shall comply with
24section 1521 of the Public School Code of 1949.

25(3) The participating nonpublic school or its
26representatives may not recruit a student for athletic
27purposes.

28(f) Student rules, policies and procedures.--

29(1) Prior to enrollment of a recipient, a school
30district of a participating public school or a participating
31nonpublic school shall inform the parent of a recipient of
32any and all rules, policies and procedures of the
33participating public school or participating nonpublic
34school, including any academic policies, disciplinary rules
35and administrative procedures of the participating public
36school or participating nonpublic school.

37(2) Enrollment of a recipient in a participating public
38school or participating nonpublic school shall constitute
39acceptance of any rules, policies and procedures of the
40participating public school or participating nonpublic
41school.

42(g) Transportation.--

43(1) Transportation of recipients shall be provided under
44section 1361 of the Public School Code of 1949.

45(2) Reimbursement shall be as follows:

46(i) Transportation of a recipient attending a
47participating public school shall be subject to
48reimbursement under section 2541 of the Public School
49Code of 1949.

50(ii) Transportation of a recipient attending a
51participating nonpublic school shall be subject to

1reimbursement under sections 2509.3 and 2541 of the
2Public School Code of 1949.

3(h) Construction.--Nothing in this article shall be
4construed to:

5(1) Prohibit a participating nonpublic school from
6limiting admission to a particular grade level, a single
7gender or areas of concentration of the participating
8nonpublic school, including mathematics, science and the
9arts.

10(2) Authorize the Commonwealth or any of its agencies or
11officers or political subdivisions to impose any additional
12requirements on a participating nonpublic school which are
13not otherwise authorized under the laws of this Commonwealth
14or to require a participating nonpublic school to enroll a
15recipient if the participating nonpublic school does not
16offer appropriate programs or is not structured or equipped
17with the necessary facilities to meet the special needs of
18the recipient or does not offer a particular program
19requested.

20Section 1711-G.1. Tuition grants by school districts.

21(a) General rule.--The board of school directors of a school
22district may use funds received from the Commonwealth for
23educational purposes to establish a program of tuition grants to
24provide for the education of students who reside within the
25district and attend or will attend a public or nonpublic school
26on a tuition-paying basis.

27(b) Nonpublic school grant amount.--For students who attend
28or will attend a nonpublic school, the grant amount for each
29student shall not exceed the amount of the per pupil State
30subsidy for basic education of the school district of residence.

31(c) Average daily membership.--

32(1) A student who receives a tuition grant under this
33section shall be included in the average daily membership for
34purposes of determining the school district of residence's
35basic education funding.

36(2) A student who receives a grant under this section to
37attend a public school outside the school district awarding
38the tuition grant shall not be included in the average daily
39membership of the school district the student attends.

40(d) Guidelines.--

41(1) The board of school directors of a school district
42shall prepare guidelines establishing an application form and
43approval process, standards for verification as to the
44accuracy of application information, confirmation of
45attendance by a student who receives a tuition grant,
46restrictive endorsement of grant checks by parents to the
47school chosen by the parents, pro rata refunds of grants for
48students who withdraw during the school year, repayment of
49refunded grants to the school district and reasonable
50deadline dates for submission of grant applications.

51(2) The board of school directors of a school shall

1announce the award of grants no later than August 1 of the
2school year in which the grants will be utilized.

3(3) Upon receipt of written confirmation of enrollment
4from the student's school of choice, grants shall be paid to
5the parents of a student by a check that may only be endorsed
6to the selected school.

7(4) In the event a student is no longer enrolled prior
8to the completion of the school term, the school shall send
9written notice thereof to the school district.

10(e) Nontaxable.--Grants awarded to students under this
11section shall not be considered taxable income for purposes of
12any local taxing ordinance or for purposes of Article III, nor
13shall such grants constitute financial assistance or
14appropriations to the school attended by the student.

15(f) Construction.--Nothing in this section shall be
16construed to empower the Commonwealth or any school district or
17any of their agencies or officers to:

18(1) prescribe the course content or admissions criteria
19for any religiously affiliated school;

20(2) compel any private school to accept or enroll a
21student;

22(3) impose any additional requirements on any private
23school that are not otherwise authorized; or

24(4) require any school to accept or retain a student if
25the school does not offer programs or is not structured or
26equipped with the necessary facilities to meet the special
27needs of the student or does not offer a particular program
28requested.

29Section 1712-G.1. Original jurisdiction.

30The Pennsylvania Supreme Court shall have exclusive and
31original jurisdiction to hear any challenge or to render a
32declaratory judgment concerning the constitutionality of this
33article. The Pennsylvania Supreme Court may take such action as
34it deems appropriate, consistent with the Pennsylvania Supreme
35Court's retaining jurisdiction over such a matter, to find facts
36or to expedite a final judgment in connection with such a
37challenge or request for declaratory relief.]

38Section 10. This act shall take effect immediately.

 

See A09427 in
the context
of HB1207