1Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An<-
2act relating to tax reform and State taxation by codifying
3and enumerating certain subjects of taxation and imposing
4taxes thereon; providing procedures for the payment,
5collection, administration and enforcement thereof; providing
6for tax credits in certain cases; conferring powers and
7imposing duties upon the Department of Revenue, certain
8employers, fiduciaries, individuals, persons, corporations
9and other entities; prescribing crimes, offenses and
10penalties," in educational improvement tax credit, further
11providing for definitions <-and for limitations.

12Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
13act relating to tax reform and State taxation by codifying
14and enumerating certain subjects of taxation and imposing
15taxes thereon; providing procedures for the payment,
16collection, administration and enforcement thereof; providing
17for tax credits in certain cases; conferring powers and
18imposing duties upon the Department of Revenue, certain
19employers, fiduciaries, individuals, persons, corporations
20and other entities; prescribing crimes, offenses and
21penalties," further providing for educational improvement tax
22credit; and repealing provisions relating to educational
23opportunity scholarship tax credit; and, in city

1revitalization and improvement zones, further providing for
2definitions.

3The General Assembly of the Commonwealth of Pennsylvania
4hereby enacts as follows:

5Section 1. The definition of "public school" in section<-
61702-F of the act of March 4, 1971 (P.L.6, No.2), known as the
7Tax Reform Code of 1971, added October 9, 2009 (P.L.451, No.48),
8is amended and the section is amended by adding a definition to
9read:

10Section 1702-F. Definitions.

11The following words and phrases when used in this article
12shall have the meanings given to them in this section unless the
13context clearly indicates otherwise:

14* * *

15"Career and technical school." A public secondary school
16established under the provisions of Article XVIII of the act of
17March 10, 1949 (P.L.30, No.14), known as the Public School Code
18of 1949.

19* * *

20"Public school." A public pre-kindergarten where compulsory
21attendance requirements do not apply or a public kindergarten,
22elementary school [or], secondary school or career and technical
23school at which the compulsory attendance requirements of this
24Commonwealth may be met and which meets the applicable
25requirements of Title VI of the Civil Rights Act of 1964 (Public
26Law 88-352, 78 Stat. 241).

27* * *

<-28Section 2. Section 1706-F(a) of the act, amended July 2,
292012 (P.L.751, No.85), is amended to read:

30Section 1706-F. Limitations.

1(a) Amount.--

2(1) The total aggregate amount of all tax credits
3approved shall not exceed $100,000,000 in a fiscal year. No
4less than $60,000,000 of the total aggregate amount shall be
5used to provide tax credits for contributions from business
6firms to scholarship organizations. No less than $30,000,000
7of the total aggregate amount shall be used to provide tax
8credits for contributions from business firms to educational
9improvement organizations.

10(2) The following apply to specific fiscal years:

11(i) For fiscal years 2004-2005, 2005-2006 and 2006-
122007, the total aggregate amount of all tax credits
13approved for contributions from business firms to pre-
14kindergarten scholarship programs shall not exceed
15$5,000,000 in a fiscal year.

16(ii) For fiscal years 2007-2008, 2008-2009, 2009-
172010, 2010-2011 and 2011-2012, the total aggregate amount
18of all tax credits approved for contributions from
19business firms to pre-kindergarten scholarship programs
20shall not exceed $8,000,000 in a fiscal year.

21(iii) For fiscal year 2012-2013 and each fiscal year
22thereafter, the total aggregate amount of all tax credits
23approved for contributions from business firms to pre-
24kindergarten scholarship programs shall not exceed
25$10,000,000 in a fiscal year.

26(3) (i) From the tax credits for contributions by
27business firms to educational improvement organizations,
2810% of the available amount shall initially be set aside
29for contributions by business firms to educational
30improvement organizations that provide donations to

1career and technical schools and shall be distributed in
2accordance with section 1705-F(g).

3(ii) Tax credits remaining from the amount set aside
4in subparagraph (i) after July 1 of each year shall be
5made available to business firms for contributions to any
6educational improvement organization and shall be
7distributed in accordance with section 1705-F(g).

8* * *

9Section 3 2 3. This act shall take effect in 60 days.

10Section 1. Article XVII-F heading of the act of March 4,<-
111971 (P.L.6, No.2), known as the Tax Reform Code of 1971, added
12October 9, 2009 (P.L.451, No.48), is amended to read:

13ARTICLE XVII-F

14EDUCATIONAL [IMPROVEMENT TAX CREDIT]

15TAX CREDITS

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

18Section 1701-F. Scope of article.

19This article establishes the educational improvement [tax 
20credit] and opportunity scholarship tax credits.

21Section 3. The definitions of "business firm," "income
22allowance," "maximum annual household income," "pass-through
23entity," "pre-kindergarten program" and "public school" in
24section 1702-F of the act, amended or added October 9, 2009
25(P.L.451, No.48) and July 2, 2012 (P.L.751, No.85), are amended
26and the section is amended by adding definitions to read:

27Section 1702-F. Definitions.

28The following words and phrases when used in this article
29shall have the meanings given to them in this section unless the
30context clearly indicates otherwise:

1"Applicable taxes."  Any of the taxes due under Article III,
2IV, VI, VII, VIII, IX, XV or XX or a tax under Article XVI of
3the act of May 17, 1921 (P.L.682, No.284), known as The
4Insurance Company Law of 1921.

5"Applicant."  An eligible student who applies for a
6scholarship.

7"Assessment."  The Pennsylvania System of School Assessment
8test, the Keystone Exam, an equivalent local assessment or
9another test established by the State Board of Education to meet
10the requirements of section 2603-B(d)(10)(i) of the Public
11School Code of 1949, and required under the No Child Left Behind
12Act of 2001 (Public Law 107-110, 115 Stat. 1425) or its
13successor statute or another test required to achieve other
14standards established by the Department of Education for the
15public school or school district under 22 Pa. Code § 403.3
16(relating to single accountability system).

17"Attendance boundary."  A geographic area of residence used
18by a school district to assign a student to a public school.

19"Average daily membership."  As defined in section 2501(3) of
20the Public School Code of 1949.

21"Business firm." An entity authorized to do business in this
22Commonwealth and subject to taxes imposed under Article III, IV,
23VI, VII, VIII, IX [or XV], XV or XX or a tax under Article XVI 
24of the act of May 17, 1921 (P.L.682, No.284), known as The 
25Insurance Company Law of 1921. The term includes a pass-through
26entity[.], including a pass-through entity, the purpose of which 
27is the making of contributions under this article and whose 
28shareholders, partners or members are composed of owners or 
29employes of other business firms.

30"Career and technical school." A public secondary school

1established under the provisions of Article XVIII of the act of
2March 10, 1949 (P.L.30, No.14), known as the Public School Code
3of 1949.

4* * *

5"Elementary school."  A school which is not a secondary 
6school.

7* * *

8"Income allowance."

9[(1) As follows:

10(i) Before July 1, 2011, $10,000 for each eligible
11student, eligible pre-kindergarten student and dependent
12member of the household.

13(ii) After June 30, 2011, and through June 30, 2013, 
14$12,000 for each eligible student, eligible pre-
15kindergarten student and dependent member of the
16household.

17(iii) After June 30, 2013, and through June 30,
182014, $15,000 for each eligible student, eligible pre-
19kindergarten student and dependent member of the
20household.

21(2) Beginning July 1 2014, the Department of Community
22and Economic Development shall annually adjust the income
23allowance amounts under paragraph (1) to reflect any upward
24changes in the Consumer Price Index for All Urban Consumers
25for the Pennsylvania, New Jersey, Delaware and Maryland area
26in the preceding 12 months and shall immediately submit the
27adjusted amounts to the Legislative Reference Bureau for
28publication as a notice in the Pennsylvania Bulletin.]

29The base amount of $15,000 for each eligible student,
30eligible pre-kindergarten student and dependent member of the

1household. Beginning July 1, 2014, the department shall annually
2adjust the base amount to reflect upward changes in the Consumer
3Price Index for All Urban Consumers for the Pennsylvania, New
4Jersey, Delaware and Maryland area for the preceding 12 months.
5The department shall immediately submit the adjusted amounts to
6the Legislative Reference Bureau for publication as a notice in
7the Pennsylvania Bulletin.

8* * *

9"Kindergarten."  A one-year formal educational program that
10occurs during the school year immediately prior to first grade.
11The term includes a part-time and a full-time program.

12"Low-achieving school."  A public school that ranked in the
13lowest 15% of the school's designation as an elementary school
14or a secondary school based on combined mathematics and reading
15scores from the annual assessment administered in the previous
16school year and for which the Department of Education has posted
17results on the Department of Education's publicly accessible
18Internet website. The term does not include a charter school,
19cyber charter school or area vocational-technical school.

20"Maximum annual household income."

21(1) [Except as set forth in paragraph (2) and subject to 
22paragraph (3), as follows:

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

24(ii) After June 30, 2011, and through June 30, 2013,
25not more than $60,000.

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

27Subject to adjustment under paragraphs (2) and (3), the
28amount of $75,000, plus the applicable income allowance.

29(2) With respect to an eligible student with a
30disability, as calculated by multiplying:

1(i) [the sum of:

2(A)] the applicable amount under paragraph (1)[;
3and

4(B) the applicable income allowance]; by

5(ii) the applicable support level factor according
6to the following table:

7Support Level	Support Level Factor
81	1.50
92	2.993

10(3) Beginning July 1, 2014, the [Department of Community
11and Economic Development] department shall annually adjust
12the income amounts under paragraphs (1) and (2) to reflect
13any upward changes in the Consumer Price Index for All Urban
14Consumers for the Pennsylvania, New Jersey, Delaware and
15Maryland area in the preceding 12 months and shall
16immediately submit the adjusted amounts to the Legislative
17Reference Bureau for publication as a notice in the
18Pennsylvania Bulletin.

19"Nonpublic school."  A school which is a nonprofit
20organization and which is located in this Commonwealth. The term
21does not include a public school.

22"Opportunity scholarship organization."  A nonprofit entity
23which:

24(1) Is exempt from Federal taxation under section 501(c)
25(3) of the Internal Revenue Code of 1986 (Public Law 99-514,
2626 U.S.C. § 1 et seq.); and

27(2) Contributes at least 80% of the entity's annual cash
28receipts to an opportunity scholarship program.

29For the purposes of this definition, a nonprofit entity
30contributes the entity's cash receipts to an opportunity

1scholarship program when the entity expends or otherwise
2irrevocably encumbers those funds for distribution during the
3then current fiscal year of the nonprofit entity or during the
4next succeeding fiscal year of the nonprofit entity.

5"Opportunity scholarship."  An award given to an applicant to
6pay tuition and school-related fees necessary to attend a
7participating nonpublic school or a participating public school
8located in a school district which is not the recipient's school
9district of residence.

10"Opportunity scholarship program."  A program to provide 
11opportunity scholarships to eligible students who reside within 
12the attendance area of a low-achieving school.

13"Parent."  An individual who:

14(1)  is a resident of this Commonwealth; and

15(2)  either:

16(i) has legal custody or guardianship of a student;
17or

18(ii) keeps in the individual's home a student and
19supports the student gratis as if the student were a
20lineal descendant of the individual.

21"Participating nonpublic school."  A nonpublic school which 
22notifies the Department of Education under section 1711-F that 
23the school wishes to accept opportunity scholarship recipients.

24"Participating public school."  A public school in a school 
25district which notifies the Department of Education under 
26section 1711-F that the school wishes to accept opportunity 
27scholarship recipients. The term does not include a low-
28achieving school.

29"Pass-through entity." A partnership as defined in section
30301(n.0), a single-member limited liability company treated as a

1disregarded entity for Federal income tax purposes or a
2Pennsylvania S corporation as defined in section 301(n.1). The 
3term includes a pass-through entity that owns an interest in a 
4pass-through entity.

5"Pre-kindergarten program." A program of instruction for
6three-year-old [or], four-year-old, five-year-old or six-year-
7old students, other than a kindergarten, that utilizes a
8curriculum aligned with the curriculum of the school with which
9it is affiliated and which provides one of the following:

10(1) A minimum of two hours of instructional and
11developmental activities per day at least 60 days per school
12year.

13(2) A minimum of two hours of instructional and
14developmental activities per day at least 20 days over the
15summer recess.

16* * *

17"Public school." A public pre-kindergarten where compulsory
18attendance requirements do not apply or a public kindergarten,
19elementary school [or], secondary school or career and technical 
20school at which the compulsory attendance requirements of this
21Commonwealth may be met and which meets the applicable
22requirements of Title VI of the Civil Rights Act of 1964 (Public
23Law 88-352, 78 Stat. 241).

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

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

27* * *

28"School district of residence."  The school district in which
29the student's primary domicile is located.

30* * *

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.85), 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

1this article and must agree to annually report the following
2information to the department by September 1 of each year:

3(1) (i) The number of scholarships awarded during the
4immediately preceding school year to eligible pre-
5kindergarten students.

6(ii) The total and average amounts of the
7scholarships awarded during the immediately preceding
8school year to eligible pre-kindergarten students.

9(iii) The number of scholarships awarded during the
10immediately preceding school year to eligible students in
11grades kindergarten through eight.

12(iv) The total and average amounts of the
13scholarships awarded during the immediately preceding
14school year to eligible students in grades kindergarten
15through eight.

16(v) The number of scholarships awarded during the
17immediately preceding school year to eligible students in
18grades nine through 12.

19(vi) The total and average amounts of the
20scholarships awarded during the immediately preceding
21school year to eligible students in grades nine through
2212.

23(vii) Where the scholarship organization or pre-
24kindergarten scholarship organization collects
25information on a county-by-county basis, the total number
26and the total amount of scholarships awarded during the
27immediately preceding school year to residents of each
28county in which the scholarship organization or pre-
29kindergarten scholarship organization awarded
30scholarships.

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

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

11(2) The information required under paragraph (1) shall
12be submitted on a form provided by the department. No later
13than May 1 of each year, the department shall annually
14distribute such sample forms, together with the forms on
15which the reports are required to be made, to each listed
16scholarship organization and pre-kindergarten scholarship
17organization.

18(3) The department may not require any other information
19to be provided by scholarship organizations or pre-
20kindergarten scholarship organizations, except as expressly
21authorized in this article.

22(d) Educational improvement organization.--

23(1) An application submitted by an educational
24improvement organization must describe its proposed
25innovative educational program or programs in a form
26prescribed by the department. The department shall consult
27with the Department of Education as necessary. The department
28shall review and approve or disapprove the application. In
29order to be eligible to participate in the educational 
30improvement tax credit program established under this

1article, an educational improvement organization must agree
2to annually report the following information to the
3department by [December 1, 2005, and] September 1 of each
4year [thereafter]:

5(i) The name of the innovative educational program
6or programs and the total amount of the grant or grants
7made to those programs during the immediately preceding
8school year.

9(ii) A description of how each grant was utilized
10during the immediately preceding school year and a
11description of any demonstrated or expected innovative
12educational improvements.

13(iii) The names of the public schools and school
14districts where innovative educational programs that
15received grants during the immediately preceding school
16year were implemented.

17(iv) Where the educational improvement organization
18collects information on a county-by-county basis, the
19total number and the total amount of grants made during
20the immediately preceding school year for programs at
21public schools in each county in which the educational
22improvement organization made grants.

23(v) The organization's Federal Form 990 or other
24Federal form indicating the tax status of the
25organization for Federal tax purposes, if any, and a copy
26of a compilation, review or audit of the organization's
27financial statements conducted by a certified public
28accounting firm.

29(2) The information required under paragraph (1) shall
30be submitted on a form provided by the department. No later

1than [September 1, 2005, and] May 1 of each year
2[thereafter], the department shall annually distribute such
3sample forms, together with the forms on which the reports
4are required to be made, to each listed educational
5improvement organization.

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

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

10(1) An opportunity scholarship organization must enhance
11the educational opportunities available to students in this
12Commonwealth by providing opportunity scholarships to
13eligible students who reside within the attendance boundary
14of low-achieving schools to attend schools which are not low-
15achieving schools and which are not public schools within the
16eligible student's school district of residence. By February
1715 of each year, an opportunity scholarship organization must
18certify to the department that the organization is eligible
19to participate in the opportunity scholarship tax credit
20program.

21(2) An opportunity scholarship organization must agree
22to report the following information on a form provided by the
23department by September 1 of each year:

24(i) The total number of applications for opportunity
25scholarships received during the immediately preceding
26school year from eligible students in grades kindergarten
27through eight.

28(ii) The number of opportunity scholarships awarded
29during the immediately preceding school year to eligible
30students in grades kindergarten through eight.

1(iii) The total and average amounts of the
2opportunity scholarships awarded during the immediately
3preceding school year to eligible students in grades
4kindergarten through eight.

5(iv) The total number of applications for
6opportunity scholarships received during the immediately
7preceding school year from eligible students in grades
8nine through 12.

9(v) The number of opportunity scholarships awarded
10during the immediately preceding school year to eligible
11students in grades nine through 12.

12(vi) The total and average amounts of the
13opportunity scholarships awarded during the immediately
14preceding school year to eligible students in grades nine
15through 12.

16(vii) Where the opportunity scholarship organization
17collects information on a county-by-county basis, the
18total number and the total amount of opportunity
19scholarships awarded during the immediately preceding
20school year to residents of each county in which the
21opportunity scholarship organization awarded opportunity
22scholarships.

23(viii) The number of opportunity scholarships
24awarded during the immediately preceding school year to
25applicants with a household income that does not exceed
26185% of the Federal poverty level.

27(ix) The total and average amounts of opportunity
28scholarships awarded during the immediately preceding
29school year to applicants with a household income that
30does not exceed 185% of the Federal poverty level.

1(x) The number of opportunity scholarships awarded
2during the immediately preceding school year to
3applicants with a household income that does not exceed
4185% of the Federal poverty level and who reside within a
5first class school district.

6(xi) The total and average amounts of opportunity
7scholarships awarded during the immediately preceding
8school year to applicants with a household income that
9does not exceed 185% of the Federal poverty level and who
10reside within a first class school district.

11(xii) The number of opportunity scholarships awarded
12during the immediately preceding school year to
13applicants with a household income that does not exceed
14185% of the Federal poverty level and who reside within a
15school district that was designated as a financial
16recovery school district under Article VI-A of the Public
17School Code of 1949 at the time of the award.

18(xiii) The total and average amounts of opportunity
19scholarships awarded during the immediately preceding
20school year to applicants with a household income that
21does not exceed 185% of the Federal poverty level and who
22reside within a school district that was designated as a
23financial recovery school district under Article VI-A of
24the Public School Code of 1949 at the time of the award.

25(xiv) The total number of opportunity scholarship
26applications processed and the amounts of any application
27fees charged either per opportunity scholarship
28application or in the aggregate through a third-party
29processor.

30(xv) The opportunity scholarship organization's

1Federal Form 990 or other Federal form indicating the tax
2status of the opportunity scholarship organization for
3Federal tax purposes, if any, and a copy of a
4compilation, review or audit of the opportunity
5scholarship organization's financial statements conducted
6by a certified public accounting firm.

7(3) No later than May 1 of each year, the department
8shall annually distribute such sample forms, together with
9the forms on which the reports are required to be made, to
10each listed opportunity scholarship organization.

11(4) The department may not require other information to
12be provided by opportunity scholarship organizations, except
13as expressly authorized in this article.

14(e) Notification.--The department shall notify the
15scholarship organization, pre-kindergarten scholarship
16organization [or], educational improvement organization or 
17opportunity scholarship organization that the organization meets
18the requirements of and is qualified under this article for that
19fiscal year no later than 60 days after the organization has
20submitted the information required under this section.

21(f) Publication.--The department shall annually publish a
22list of each scholarship organization, pre-kindergarten
23scholarship organization [or], educational improvement
24organization and opportunity scholarship organization qualified
25under this section in the Pennsylvania Bulletin. The list shall
26also be posted and updated as necessary on the publicly
27accessible Internet website of the department.

28Section 5. Section 1704-F of the act, added October 9, 2009
29(P.L.451, No.48), is amended to read:

30Section 1704-F. Application by business firms.

1(a) Scholarship organization [or], pre-kindergarten
2scholarship organization or opportunity scholarship 
3organization.--A business firm shall apply to the department for
4a tax credit for contributions to a scholarship organization, 
5pre-kindergarten scholarship organization or opportunity 
6scholarship organization under section 1705-F. A business firm
7shall receive a tax credit under this article if the scholarship
8organization [or], pre-kindergarten scholarship organization or 
9opportunity scholarship organization that receives the
10contribution appears on the list established under section 1703-
11F(f), subject to the limitations in sections 1705-F and 1706-F.

12(b) Educational improvement organization.--A business firm
13must apply to the department for a credit for a contribution to 
14an educational improvement organization under section 1705-F. A
15business firm shall receive a tax credit under this article if
16the department has approved the program provided by the
17educational improvement organization that receives the
18contribution, subject to the limitations in sections 1705-F and 
191706-F.

20(c) Availability of tax credits.--Tax credits under this
21article shall be made available by the department on a first-
22come, first-served basis within the limitation established under
23section 1706-F(a).

24(d) Contributions.--A contribution by a business firm to a
25scholarship organization, pre-kindergarten scholarship 
26organization, opportunity scholarship organization or
27educational improvement organization shall be made no later than
2860 days following the approval of an application under
29subsection (a) or (b).

30(e) Application in the alternative.--At the time of

1application for an educational improvement or opportunity
2scholarship tax credit, the department shall advise a business
3firm that the firm may elect that its application for a
4particular credit should, in the alternative, be deemed an
5application for a different tax credit authorized under this
6section if the business firm's preferred choice of tax credit is
7not available. When a business firm does not receive its
8preferred choice of tax credit, the department shall promptly
9consider the business firm's application in the alternative for
10a different tax credit authorized under this section.

11Section 6. Sections 1705-F and 1706-F of the act, amended
12July 2, 2012 (P.L.751, No.85), are amended to read:

13Section 1705-F. Tax [credit] credits.

14(a) Scholarship or educational improvement organizations.--
15In accordance with section [1706-F(a)] 1706-F, the Department of
16Revenue shall grant a tax credit against any [tax due under
17Article III, IV, VI, VII, VIII, IX or XV or under Article XVI of 
18the act of May 17, 1921 (P.L.682, No.284), known as The 
19Insurance Company Law of 1921,] applicable tax to a business
20firm providing proof of a contribution to a scholarship
21organization or educational improvement organization in the
22taxable year in which the contribution is made [which] in 
23accordance with the following:

24(1) The tax credit shall not exceed 75% of the total
25amount contributed during the taxable year by the business
26firm.

27(2) For fiscal year [2012-2013, the tax credit shall not
28exceed $400,000 annually per business firm for contributions
29made to scholarship organizations or educational improvement
30organizations. For fiscal year 2013-2014] 2014-2015, and each
 

1fiscal year thereafter, the tax credit shall not exceed 
2$750,000 annually per business firm for contributions made to 
3scholarship organizations or educational improvement 
4organizations[.] except as provided under subsection (i).

5(a.1) Opportunity scholarship organizations.--In accordance
6with section 1706-F, the Department of Revenue shall grant a tax
7credit against any applicable tax to a business firm providing
8proof of a contribution to an opportunity scholarship
9organization in the taxable year in which the contribution is
10made in accordance with the following:

11(1) The tax credit shall not exceed 75% of the total
12amount contributed during the taxable year by the business
13firm.

14(2) For fiscal year 2014-2015, and each fiscal year
15thereafter, the tax credit shall not exceed $750,000 annually
16per business firm for contributions made to opportunity
17scholarship organizations, except as provided in subsection
18(i).

19(b) Additional amount.--[The] In accordance with section 
201706-F, the Department of Revenue shall grant a tax credit of up
21to 90% of the total amount contributed during the taxable year
22if the business firm provides a written commitment to provide
23the scholarship organization [or], educational improvement
24organization or opportunity scholarship organization with the
25same amount of contribution for two consecutive tax years. The
26business firm must provide the written commitment under this
27subsection to the department at the time of application.

28(c) Pre-kindergarten scholarship organizations.--In
29accordance with section [1706-F(a)] 1706-F, the Department of
30Revenue shall grant a tax credit against any [tax due under

1Article III, IV, VI, VII, VIII, IX or XV or under Article XVI of 
2The Insurance Company Law of 1921] applicable tax to a business
3firm providing proof of a contribution to a pre-kindergarten
4scholarship organization in the taxable year in which the
5contribution is made [which] in accordance with the following:

6(1) The tax credit shall be equal to 100% of the first
7$10,000 contributed during the taxable year by the business
8firm[,] and [which] shall not exceed 90% of the remaining
9amount contributed during the taxable year by the business
10firm. At the time of application, a business firm may provide 
11a written commitment to the department to provide the pre-
12kindergarten scholarship organization with at least the same 
13amount of contribution for two consecutive years.

14(2)  [Such] The tax credit shall not exceed $200,000
15annually per business firm for contributions made to pre-
16kindergarten scholarship organizations, except as provided in 
17subsection (i).

18(d) Combination of tax credits.--[A] In accordance with 
19section 1706-F, a business firm may receive tax credits from the
20Department of Revenue in any tax year for any combination of
21contributions under [subsection (a) or (b) or (c)] subsection 
22(a), (a.1), (b) or (c). [In] Except as provided in subsection 
23(i), in no case may a business firm receive tax credits in any
24tax year in excess of the following:

25(1) [$400,000 for] $750,000 for combined contributions
26[under subsections (a) and (b) made during fiscal year 2012-
272013 or in excess of] to scholarship and educational 
28improvement organizations under subsections (a) and (b).

29(2) $750,000 for contributions [under subsections (a) 
30and (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.

1(4) An individual shareholder, partner or member may
2apply a credit distributed under this section to income
3taxable under Article III to the shareholder, partner or
4member, to the spouse of the shareholder, partner or member
5or to both, if both the shareholder, partner or member and
6the spouse report income on a joint personal income tax
7return.

8(f) Restriction on applicability of credits.--No credits
9granted under this section shall be applied against any tax
10withheld by an employer from an employee under Article III.

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

12(1) Except as provided in paragraph (2), the department
13may accept applications for tax credits available during a
14fiscal year no earlier than July 1 of each fiscal year.

15(2) The application of any business firm for tax credits
16available during a fiscal year as part of the second year of
17a two-year commitment or as a renewal of a two-year 
18commitment which was fulfilled in the previous fiscal year
19may be accepted no earlier than May 15 preceding the fiscal
20year.

21(h) Waiting list.--The department shall maintain a waiting
22list consisting of each business firm which chooses to be
23included on the list and whose application has not been approved
24because all available tax credits have been awarded. A business
25firm that was not awarded a tax credit due to a lack of
26available tax credits shall be notified of and offered a place
27on the waiting list. When tax credits become available, the
28department shall award the tax credits to the business firms in
29the order in which the business firms were placed on the waiting
30list.

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

2(1) If all tax credits authorized under this article for
3contributions to the category of scholarship organizations,
4opportunity scholarship organizations or pre-kindergarten
5scholarship organizations have not been awarded as of October
61 of any fiscal year, then for applications accepted by the
7department from October 1 through November 30 of such fiscal
8year, the limitations set forth in subsections (a), (a.1),
9(c) and (d) relating to the maximum amount of tax credits a
10business firm can receive during a fiscal year for
11contributions to each such category of organizations shall
12not apply. Under this paragraph, the department may accept
13applications under section 1704-F from October 1 through
14November 30 as follows:

15(i) A business firm, including a business firm that
16already applied for the maximum tax credits available
17pursuant to subsections (a) and (d), may apply under
18section 1704-F(a) for up to the total amount of tax
19credits remaining available for contributions to
20scholarship organizations for the fiscal year as set
21forth in section 1706-F(a)(1).

22(ii) A business firm, including a business firm that
23already applied for the maximum tax credits available
24pursuant to subsections (a.1) and (d), may apply under
25section 1704-F(a) for up to the total amount of tax
26credits remaining available for contributions to
27opportunity scholarship organizations for the fiscal year
28as set forth in section 1706-F(a)(3).

29(iii) A business firm, including a business firm
30that already applied for the maximum tax credits

1available pursuant to subsections (c) and (d), may apply
2under section 1704-F(a) for up to the total amount of tax
3credits remaining available for contributions to pre-
4kindergarten scholarship organizations for the fiscal
5year as set forth in section 1706-F(a)(2).

6(2) The provisions of subsection (b) shall not apply to
7applications for tax credits made under this subsection. Tax
8credits awarded under this subsection shall not exceed 75% of
9the total amount contributed during the taxable year by a
10business firm pursuant to an application filed under this
11subsection.

12(3) Prior to the award of tax credits applied for under
13this subsection, the department shall first award tax credits
14applied for by a business firm during the period October 1
15through November 30 in an amount no greater than the maximum
16amount of tax credits for which a business firm is eligible
17under subsections (a), (a.1), (c) and (d). The tax credits
18shall be awarded on a first-come, first-served basis as set
19forth in section 1704-F(c).

20(4) After the department has awarded tax credits under
21paragraph (3), any tax credits remaining available within the
22category of scholarship organizations, opportunity
23scholarship organizations and pre-kindergarten scholarship
24organizations shall be awarded based on the total amount of
25tax credits within each category of organization for which
26applications are received under this subsection from October
271 through November 30 of the fiscal year as follows:

28(i) If the total amount of tax credits applied for
29by all business firms under this subsection does not
30exceed the total amount of tax credits that remained

1available for award within a category as of October 1,
2less those tax credits awarded under subsection (i)(3),
3then each business firm may be awarded the full amount of
4tax credits applied for.

5(ii) If the total amount of tax credits applied for
6by all business firms under this subsection exceeds the
7total amount of tax credits that remained available for
8award within a category as of October 1, less those tax
9credits awarded under subsection (i)(3), then each
10business firm may be awarded an amount of tax credits
11determined by multiplying the amount of tax credits
12applied for by the business firm by a ratio, the
13numerator of which is the total amount of tax credits
14that remained available for award within the category as
15of October 1, less those awarded as set forth in
16subsection (i)(3), and the denominator of which is the
17total amount of tax credits applied for by all business
18firms under this subsection.

19(5) Notwithstanding a temporary increase in maximum tax
20credits available under this subsection, the limitations set
21forth in subsections (a), (a.1), (c) and (d) relating to the
22maximum amount of tax credits a business firm can receive
23during a year for contributions to a category of scholarship
24organizations, opportunity scholarship organizations or pre-
25kindergarten scholarship organizations shall be reinstated
26for all applications accepted by the department on or after
27December 1 of the fiscal year.

28(j) Reallocation of tax credits.--

29(1) Beginning on January 1 of any fiscal year, if any
30tax credits authorized under this article for contributions

1to any of the categories of scholarship organizations,
2opportunity scholarship organizations or pre-kindergarten
3scholarship organizations remain unawarded, such unawarded
4tax credits may be reallocated to any of the categories of
5scholarship organizations, opportunity scholarship
6organizations or pre-kindergarten scholarship organizations
7for which all available tax credits have been awarded. The
8department shall, within ten business days, inform each
9business firm on the waiting list maintained by the
10department under subsection (h) that tax credits remain
11available under another category for which the business firm
12has not yet applied. If a business firm notified under this
13paragraph elects, the department shall reallocate available
14tax credits for award to the business firm in the business
15firm's preferred tax credit category, notwithstanding the
16limitations contained in section 1706-F(a). The amount of tax
17credits to be awarded to a business firm under this paragraph
18shall not exceed the amount of tax credits available for
19reallocation or the maximum amount of tax credits for which a
20business firm is eligible under subsections (a), (a.1), (c)
21and (d). Each business firm shall have ten business days from
22the date of the department's notice to elect a reallocation
23of tax credits under this paragraph. The department shall
24award tax credits on a first-come, first-served basis.

25(2) After the department has awarded tax credits under
26paragraph (1), the department shall accept new applications
27for reallocation of tax credits from any of the categories of
28scholarship organizations, opportunity scholarship
29organizations or pre-kindergarten scholarship organizations
30for which tax credits remain available to the applicant's

1preferred category of scholarship organizations, opportunity
2scholarship organizations or pre-kindergarten scholarship
3organizations for which all available tax credits have been
4awarded, notwithstanding any limitations contained in section
51706-F(a). The amount of tax credits to be awarded to a
6business firm under this paragraph shall not exceed the
7amount of tax credits available for reallocation or the
8maximum amount of tax credits for which a business firm is
9eligible under subsections (a), (a.1), (c) and (d). The
10department shall award tax credits on a first-come, first-
11served basis.

12(3) No tax credits shall be awarded under this
13subsection until the department has completed the award of
14tax credits for applications made under subsection (i).

15(4) The department shall not reallocate tax credits from
16any of the categories of scholarship organizations,
17opportunity scholarship organizations or pre-kindergarten
18scholarship organizations to the category of educational
19improvement organizations.

20(5) Subsections (b) and (g) shall not apply to an
21application for reallocation of tax credits under this
22subsection.

23Section 1706-F. Limitations.

24(a) Amount.--

25(1) The total aggregate amount of all tax credits
26approved for contributions from business firms to scholarship 
27organizations, educational improvement organizations and pre-
28kindergarten scholarship organizations shall not exceed
29$100,000,000 in a fiscal year.

30(i) No less than $60,000,000 of the total aggregate

1amount shall be used to provide tax credits for
2contributions from business firms to scholarship
3organizations.

4(ii) No less than $30,000,000 of the total aggregate
5amount shall be used to provide tax credits for
6contributions from business firms to educational
7improvement organizations.

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

9(i) For fiscal years 2004-2005, 2005-2006 and 2006-
102007, the total aggregate amount of all tax credits
11approved for contributions from business firms to pre-
12kindergarten scholarship programs shall not exceed
13$5,000,000 in a fiscal year.

14(ii) For fiscal years 2007-2008, 2008-2009, 2009-
152010, 2010-2011 and 2011-2012, the]

16(iii) The total aggregate amount of all tax credits
17approved for contributions from business firms to pre-
18kindergarten scholarship [programs] organizations shall
19not exceed [$8,000,000] $10,000,000 in a fiscal year.

20[(iii) For fiscal year 2012-2013 and each fiscal
21year thereafter, the]

22(2) The total aggregate amount of all tax credits
23approved for contributions from business firms to [pre-
24kindergarten scholarship programs] opportunity scholarship 
25organizations shall not exceed [$10,000,000] $50,000,000 in a
26fiscal year.

27(b) Activities.--No tax credit shall be approved for
28activities that are a part of a business firm's normal course of
29business.

30(c) Tax liability.--

1(1) Except as provided in paragraph (2), a tax credit
2granted for any one taxable year may not exceed the tax
3liability of a business firm.

4(2) In the case of a credit granted to a pass-through
5entity which elects to [transfer] distribute the credit
6according to section 1705-F(e), a tax credit granted for any
7one taxable year and [transferred] distributed to a
8shareholder, member or partner may not exceed the tax
9liability of the shareholder, member or partner.

10(d) Use.--A tax credit not used by the applicant in the
11taxable year the contribution was made or in the year designated
12by the shareholder, member or partner to whom the credit was
13transferred under section 1705-F(e) may not be carried forward
14or carried back and is not refundable or transferable.

15(e) Nontaxable income.--A scholarship from any category of 
16organization received by an eligible student or eligible pre-
17kindergarten student shall not be considered to be taxable
18income for the purposes of Article III.

19(f) Financial assistance.--A scholarship from any category
20of organization received by an eligible student or eligible pre-
21kindergarten student shall not constitute an appropriation or
22financial assistance to the school attended by the recipient.

23Section 7. Section 1707-F of the act, added October 9, 2009
24(P.L.451, No.48), is amended to read:

25Section 1707-F. Lists.

26The Department of Revenue shall provide a list of all
27scholarship organizations, pre-kindergarten scholarship
28organizations [and], educational improvement organizations and 
29opportunity scholarship organizations receiving contributions
30from business firms granted a tax credit under this article to

1the General Assembly by June 30th of each year.

2Section 8. The act is amended by adding sections to read:

3Section 1709-F. Opportunity scholarships.

4(a) Notice.--By February 1 of each year, the department
5shall provide all opportunity scholarship organizations with a
6list of the low-achieving schools located within each school
7district.

8(b) Award.--An opportunity scholarship organization may
9award an opportunity scholarship to an applicant who resides
10within the attendance boundary of a low-achieving school to
11attend a participating public school or a participating
12nonpublic school selected by the parent of the applicant. If an
13applicant who received an opportunity scholarship for the prior
14school year resides within the attendance boundary of a school
15that was removed from the list of low-achieving schools provided
16by the department under subsection (a), the applicant may
17receive an opportunity scholarship. The opportunity scholarship
18may be for each year of enrollment in a participating public
19school or participating nonpublic school for up to the lesser of
20five years or until completion of grade 12, provided the
21applicant otherwise remains eligible. In awarding scholarships,
22an opportunity scholarship organization shall give preference to
23any of the following:

24(1) An applicant who received an opportunity scholarship
25for the prior school year.

26(2) An applicant of a household with a household income
27that does not exceed 185% of the Federal poverty level for
28the school year preceding the school year for which the
29application is being made.

30(3) An applicant of a household with a household income

1that does not exceed 185% of the Federal poverty level for
2the school year preceding the school year for which the
3application is being made and who resides within any of the
4following:

5(i) A first class school district.

6(ii) A school district designated as a financial
7recovery school district under Article VI-A of the
8Public School Code of 1949 for the year for which the
9award is made.

10(c) Home schooling.--An opportunity scholarship organization
11shall not award an opportunity scholarship to an applicant for
12enrollment in a home education program under section 1327.1 of
13the Public School Code of 1949.

14(d) Funding.--The aggregate amount of opportunity
15scholarships shall not exceed the aggregate amount of
16contributions made by business firms to the opportunity
17scholarship organization.

18(e) Amount.--

19(1) The maximum amount of an opportunity scholarship
20awarded to an applicant without a disability shall be $8,500.

21(2) The maximum amount of an opportunity scholarship
22awarded to an applicant with a disability shall be $15,000.

23(3) In no case shall the combined amount of the
24opportunity scholarship awarded to a recipient and any
25additional financial assistance provided to the recipient
26exceed the tuition rate and school-related fees for the
27participating public school or participating nonpublic school
28that the recipient will attend.

29Section 1710-F. Low-achieving schools.

30(a) List of low-achieving schools.--By February 1 of each

1year, the Department of Education shall publish on the
2Department of Education's publicly accessible Internet website
3and in the Pennsylvania Bulletin a list of the low-achieving
4schools for the following school year.

5(b) Notice.--By February 1 of each year, the Department of
6Education shall notify every school district identified as
7having at least one low-achieving school of such identification
8and shall furnish the school district with a list of the low-
9achieving schools located within the school district.

10(c) Publication.--Within 15 days of receipt of a
11notification under subsection (b), a school district shall post
12on the district's publicly accessible Internet website notice of
13all of the following:

14(1) A description of the opportunity scholarship
15program.

16(2) Instructions for applying for an opportunity
17scholarship.

18(3) A list of schools in the school district that have
19been designated by the Department of Education as low-
20achieving schools.

21(4) Notice that a parent must directly contact a school
22district of a participating public school or a participating
23nonpublic school if the parent seeks to enroll the student in
24the opportunity scholarship program.

25(d) Notification to parents.--

26(1) Within 15 days of receipt of a notification under
27subsection (b), a school district shall notify the parents of
28each student who is currently attending or residing within
29the attendance boundary of a low-achieving school during the
30school year of the school's designation.

1(2) Upon registration of a kindergarten student, a
2school district shall notify the parents of the kindergarten
3student that the student will be assigned to a low-achieving
4school during the school year of the school's designation.

5(3) The notice shall be in a form provided by the
6Department of Education and shall provide the following
7information regarding the opportunity scholarship program:

8(i) A description of the opportunity scholarship
9program.

10(ii) Instructions for obtaining information about
11applying for an opportunity scholarship under the
12opportunity scholarship program.

13(iii) Notice of the parent's responsibilities with
14regard to applying to a school district of a
15participating public school or a participating nonpublic
16school if the parent seeks to enroll the student in the
17opportunity scholarship program.

18(e) Average daily membership.--

19(1) Notwithstanding any other provision of law to the
20contrary, a recipient who was enrolled in the recipient's
21resident school district or in a charter school, regional
22charter school or cyber charter school when the recipient
23first received an opportunity scholarship shall continue to
24be counted in the average daily membership of the school
25district for a period of one year after enrolling in a
26participating public school or a participating nonpublic
27school.

28(2) During the year referenced in paragraph (1) and each
29school year thereafter, a school district of a participating
30public school in which the recipient is enrolled shall not

1include the recipient in the school district's average daily
2membership.

3Section 1711-F. School participation in program.

4(a) Election.--

5(1) By February 15 of each year, a nonpublic school may
6elect to participate in the opportunity scholarship program
7for the following school year.

8(2) By February 15 of each year, a school district may
9elect to participate in the opportunity scholarship program
10for the following school year.

11(b) Notice.--

12(1) A school district or nonpublic school that elects to
13participate under subsection (a) must notify the Department
14of Education of the district's or nonpublic school's intent
15to participate.

16(2) For a school district, the notice under paragraph
17(1) must be submitted on a form developed by the Department
18of Education and shall specify all of the following:

19(i) Each school within the school district which the
20school district intends to make a participating public
21school.

22(ii) The amount of tuition and school-related fees
23attributable to each available seat. The amount under
24this subparagraph shall not exceed the amount calculated
25under section 2561 of the Public School Code of 1949.

26(3) For a nonpublic school, the notice under paragraph
27(1) must be submitted on a form developed by the Department
28of Education and shall specify the amount of tuition and
29school-related fees attributable to an available seat.

30(c) Tuition rates.--

1(1) No school district of a participating public school
2or participating nonpublic school may charge a recipient a
3higher tuition rate or school-related fee than the school
4district of the participating public school or participating
5nonpublic school would have charged to a similarly situated
6student who is not receiving an opportunity scholarship.

7(2) Notwithstanding the provisions of section 2561 of
8the Public School Code of 1949, a school district of a
9participating public school may charge a recipient a tuition
10rate that is lower than that charged to students who are not
11recipients of opportunity scholarships.

12(d) Participating public school criteria.--The following
13criteria apply to a participating public school:

14(1) Except as otherwise provided in this article, a
15school district shall enroll students in a participating
16public school on a lottery basis from a pool of recipients
17who meet the application deadline set by the Department of
18Education until the participating public school fills the
19school's available seats. The pool may not include a
20recipient who:

21(i) Has been expelled or is in the process of being
22expelled under section 1317.2 or 1318 of the Public
23School Code of 1949 and applicable regulations of the
24State Board of Education.

25(ii) Has been recruited by the school district or
26its representatives for athletic purposes.

27(2) The enrollment of recipients may not place the
28school district in violation of a valid and binding
29desegregation order.

30(3) Priority shall be given to:

1(i) An existing recipient.

2(ii) A recipient who is a sibling of a student
3currently enrolled in the school district.

4(e) Participating nonpublic school criteria.--The following
5criteria apply to a participating nonpublic school:

6(1) The participating nonpublic school may not
7discriminate on a basis which is illegal under Federal or
8State laws applicable to nonpublic schools.

9(2) The participating nonpublic school shall comply with
10section 1521 of the Public School Code of 1949.

11(3) The participating nonpublic school or its
12representatives may not recruit a student for athletic
13purposes.

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

15(1) Prior to enrollment of a recipient, a school
16district of a participating public school or a participating
17nonpublic school shall inform the parent of a recipient of
18any and all rules, policies and procedures of the
19participating public school or participating nonpublic
20school, including any academic policies, disciplinary rules
21and administrative procedures of the participating public
22school or participating nonpublic school.

23(2) Enrollment of a recipient in a participating public
24school or participating nonpublic school shall constitute
25acceptance of any rules, policies and procedures of the
26participating public school or participating nonpublic
27school.

28(g) Transportation.--

29(1) Transportation of recipients shall be provided under
30section 1361 of the Public School Code of 1949.

1(2) Reimbursement shall be as follows:

2(i) Transportation of a recipient attending a
3participating public school shall be subject to
4reimbursement under section 2541 of the Public School
5Code of 1949.

6(ii) Transportation of a recipient attending a
7participating nonpublic school shall be subject to
8reimbursement under sections 2509.3 and 2541 of the
9Public School Code of 1949.

10(h) Construction.--Nothing in this article shall be
11construed to:

12(1) Prohibit a participating nonpublic school from
13limiting admission to a particular grade level, a single
14gender or areas of concentration of the participating
15nonpublic school, including mathematics, science and the
16arts.

17(2) Authorize the Commonwealth or any of its agencies or
18officers or political subdivisions to impose any additional
19requirements on a participating nonpublic school which are
20not otherwise authorized under the laws of this Commonwealth
21or to require a participating nonpublic school to enroll a
22recipient if the participating nonpublic school does not
23offer appropriate programs or is not structured or equipped
24with the necessary facilities to meet the special needs of
25the recipient or does not offer a particular program
26requested.

27Section 1712-F. Tuition grants by school districts.

28(a) General rule.--The board of school directors of a school
29district may use funds received from the Commonwealth for
30educational 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

1district.

2(vii) Reasonable deadline dates for submission of
3grant applications.

4(2) The board of school directors of a school shall
5announce the award of grants no later than August 1 of the
6school year in which the grants will be utilized.

7(3) Upon receipt of written confirmation of enrollment
8from the student's school of choice, grants shall be paid to
9the parents of a student by a check that may only be endorsed
10to the selected school.

11(4) In the event a student is no longer enrolled prior
12to the completion of the school term, the school shall send
13written notice to the school district.

14(e) Nontaxable.--Grants awarded to students under this
15section shall not:

16(1) Be considered taxable income for purposes of a local
17taxing ordinance or for purposes of Article III.

18(2) Constitute financial assistance or appropriations to
19the school attended by the student.

20(f) Construction.--Nothing in this section shall be
21construed to empower the Commonwealth or a school district or
22any of their agencies or officers to do any of the following:

23(1) Prescribe the course content or admissions criteria
24for any religiously affiliated school.

25(2) Compel any private school to accept or enroll a
26student.

27(3) Impose any additional requirements on any private
28school that are not otherwise authorized.

29(4) Require any school to accept or retain a student if
30the school does not offer programs or is not structured or

1equipped with the necessary facilities to meet the special
2needs of the student or does not offer a particular program
3requested.

4Section 1713-F. Original jurisdiction.

5The Pennsylvania Supreme Court shall have exclusive and
6original jurisdiction to hear a challenge or to render a
7declaratory judgment concerning the constitutionality of this
8article. The Pennsylvania Supreme Court may take such action as
9the court deems appropriate, consistent with the Pennsylvania
10Supreme Court's retaining jurisdiction over such a matter, to
11find facts or to expedite a final judgment in connection with a
12challenge or request for declaratory relief.

13Section 9. Article XVII-G.1 heading and sections 1701-G.1, 
141702-G.1, 1703-G.1, 1704-G.1, 1705-G.1, 1706-G.1 and 1707-G.1, 
15of the act, added July 2, 2012 (P.L.751, No.85), are repealed:

16[ARTICLE XVII-G.1

17EDUCATIONAL OPPORTUNITY SCHOLARSHIP TAX CREDIT

18Section 1701-G.1. Scope of article.

19This article establishes the educational opportunity
20scholarship tax credit.

21Section 1702-G.1. Definitions.

22The following words and phrases when used in this article
23shall have the meanings given to them in this section unless the
24context clearly indicates otherwise:

25"Applicant." An eligible student who applies for a
26scholarship.

27"Assessment." The Pennsylvania System of School Assessment
28test, the Keystone Exam, an equivalent local assessment or
29another test established by the State Board of Education to meet
30the requirements of section 2603-B(d)(10)(i) of the Public

1School Code of 1949 and required under the No Child Left Behind
2Act of 2001 (Public Law 107-110, 115 Stat. 1425) or its
3successor statute or any other test required to achieve other
4standards established by the Department of Education for the
5public school or school district under 22 Pa. Code § 403.3
6(relating to single accountability system).

7"Attendance boundary." A geographic area of residence used
8by a school district to assign a student to a public school.

9"Average daily membership." As defined in section 2501(3) of
10the Public School Code of 1949.

11"Business firm." An entity authorized to do business in this
12Commonwealth and subject to a tax under Article XVI of the act
13of May 17, 1921 (P.L.682, No.284), known as The Insurance
14Company Law of 1921, or taxes imposed under Article III, IV, VI,
15VII, VIII, IX or XV. The term includes a pass-through entity.

16"Contribution." A donation of cash, personal property or
17services, the value of which is the net cost of the donation to
18the donor or the pro rata hourly wage, including benefits, of
19the individual performing the services.

20"Department." The Department of Community and Economic
21Development of the Commonwealth.

22"Elementary school." A school which is not a secondary
23school.

24"Eligible student." A student or a student with a disability
25who:

26(1) resides within the attendance boundary of a low-
27achieving school as of the first day of classes of the school
28year; and

29(2) is a member of a household which has a household
30income no greater than the maximum annual household income

1allowance.

2"Household." An individual who lives alone or with the
3following: a spouse, parent and their unemancipated minor
4children, other unemancipated minor children who are related by
5blood or marriage or other adults or unemancipated minor
6children living in the household who are dependent upon the
7individual.

8"Household income." All moneys or property received by a
9household of whatever nature and from whatever source derived.
10The term does not include the following:

11(1) Periodic payments for sickness and disability other
12than regular wages received during a period of sickness or
13disability.

14(2) Disability, retirement or other payments arising
15under workers' compensation acts, occupational disease acts
16and similar legislation by any government.

17(3) Payments commonly recognized as old-age or
18retirement benefits paid to persons retired from service
19after reaching a specific age or after a stated period of
20employment.

21(4) Payments commonly known as public assistance or
22unemployment compensation payments by a governmental agency.

23(5) Payments to reimburse actual expenses.

24(6) Payments made by employers or labor unions for
25programs covering hospitalization, sickness, disability or
26death, supplemental unemployment benefits, strike benefits,
27Social Security and retirement.

28(7) Compensation received by United States servicemen
29serving in a combat zone.

30"Income allowance."

1(1) The following shall apply:

2(i) After June 30, 2012, and through June 30, 2013,
3$12,000 for each dependent member of the household.

4(ii) After June 30, 2013, and through June 30, 2014,
5$15,000 for each dependent member of the household.

6(2) Beginning July 1, 2014, the Department of Community
7and Economic Development shall annually adjust the income
8allowance amounts under paragraph (1) to reflect any upward
9changes in the Consumer Price Index for All Urban Consumers
10for the Pennsylvania, New Jersey, Delaware and Maryland area
11in the preceding 12 months and shall immediately submit the
12adjusted amounts to the Legislative Reference Bureau for
13publication as a notice in the Pennsylvania Bulletin.

14"Kindergarten." A one-year formal educational program that
15occurs during the school year immediately prior to first grade.
16The term includes a part-time and a full-time program.

17"Low-achieving school." A public school that ranked in the
18lowest 15% of its designation as an elementary school or a
19secondary school based on combined mathematics and reading
20scores from the annual assessment administered in the previous
21school year and for which the Department of Education has posted
22results on its publicly accessible Internet website. The term
23does not include a charter school, cyber charter school or area
24vocational-technical school.

25"Maximum annual household income allowance."

26(1) Except as stated in paragraph (2) and subject to
27adjustment under paragraph (3), the sum of:

28(i) Either:

29(A) after June 30, 2012, and through June 30,
302013, not more than $60,000; or

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

2(ii) The applicable income allowance.

3(2) With respect to a student with a disability, as
4calculated by multiplying:

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

6(ii) the applicable support level factor according
7to the following table:

8Support Level	Support Level Factor
91	1.50
102	2.993

11(3) Beginning July 1, 2014, the Department of Community
12and Economic Development shall annually adjust the income
13amounts under paragraphs (1) and (2) to reflect any upward
14changes in the Consumer Price Index for All Urban Consumers
15for the Pennsylvania, New Jersey, Delaware and Maryland area
16in the preceding 12 months and shall immediately submit the
17adjusted amounts to the Legislative Reference Bureau for
18publication as a notice in the Pennsylvania Bulletin.

19"Nonpublic school." A school which is a nonprofit
20organization and which is located in the Commonwealth. The term
21does not include a public school.

22"Parent." An individual who:

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

24(2) either:

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

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

30"Participating nonpublic school." A nonpublic school which

1notifies the Department of Education under section 1710-G.1 that
2it wishes to participate in the program.

3"Participating public school." A public school in a school
4district which notifies the Department of Education under
5section 1710-G.1(b) that it wishes to participate in the
6program. The term shall not include a low-achieving school.

7"Pass-through entity." A partnership as defined in section
8301(n.0), a single-member limited liability company treated as a
9disregarded entity for Federal income tax purposes or a
10Pennsylvania S corporation as defined in section 301(n.1).

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

13"Program." The Educational Opportunity Scholarship Tax
14Credit Program established under this article.

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

16"Scholarship." An award given to an applicant for the
17recipient to pay tuition and school-related fees necessary to
18attend a participating nonpublic school or a participating
19public school located in a school district which is not the
20recipient's school district of residence.

21"Scholarship organization." A nonprofit entity which:

22(1) is exempt from Federal taxation under section
23501(c ) ( 3) of the Internal Revenue Code of 1986 (Public Law
2499-514, 26 U.S.C. § 1 et seq.); and

25(2) contributes at least 80% of its annual cash receipts
26to a scholarship program.

27For purposes of this definition, a nonprofit entity
28"contributes" its annual cash receipts to a scholarship program
29when it expends or otherwise irrevocably encumbers those funds
30for distribution during the then current fiscal year of the

1nonprofit entity or during the next succeeding fiscal year of
2the nonprofit entity.

3"School." An elementary school or a secondary school at
4which the compulsory attendance requirements of the Commonwealth
5may be met and which meets the applicable requirements of Title
6VI of the Civil Rights Act of 1964 (Public Law 88-352, 78 Stat.
7241).

8"School age." The age of an individual from the earliest
9admission age to a school's kindergarten or, when no
10kindergarten is provided, the school's earliest admission age
11for beginners, until the end of the school year the individual
12attains 21 years of age or graduation from high school,
13whichever occurs first.

14"School district of residence." The school district in which
15the student's primary domicile is located.

16"School-related fees." Fees charged by a school to all
17students for books, instructional materials, technology
18equipment and services, uniforms and activities.

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

20"Special education school." A school or program within a
21school that is designated specifically and exclusively for
22students with any of the disabilities listed in 34 CFR § 300.8
23(relating to child with a disability) and meets one of the
24following:

25(1) is licensed under the act of January 28, 1988
26(P.L.24, No.11), known as the Private Academic Schools Act;

27(2) is accredited by an accrediting association approved
28by the State Board of Education;

29(3) is a school for the blind or deaf receiving
30Commonwealth appropriations; or

1(4) is operated by or under the authority of a bona fide
2religious institution or by the Commonwealth or any political
3subdivision thereof.

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

5(1) Is school age.

6(2) Is a resident of this Commonwealth.

7(3) Attends or is about to attend a school.

8"Student with a disability." A student who meets all of the
9following:

10(1) Is either enrolled in a special education school or
11has otherwise been identified, in accordance with 22 Pa. Code
12Ch. 14 (relating to special education services and programs),
13as a "child with a disability" as defined in 34 CFR § 300.8
14(relating to child with a disability).

15(2) Needs special education and related services.

16"Support level." The level of support needed by an eligible
17student with a disability, as provided in the following matrix:

18Support Level 1 - The student is not enrolled in a
19special education school.

20Support Level 2 - The student is enrolled as a student in
21a special education school.

22Section 1703-G.1. Qualification and application.

23(a) Establishment.--The Educational Opportunity Scholarship
24Tax Credit Program is established. The program shall provide tax
25credits to entities that provide contributions to scholarship
26organizations. The scholarship organizations must enhance the
27educational opportunities available to students in this
28Commonwealth by providing scholarships to eligible students who
29reside within the attendance boundary of low-achieving schools
30to attend schools which are not low-achieving schools and which

1are not a public school within the school district of residence.

2(b) Information.--In order to qualify under this article, a
3scholarship organization must submit information to the
4department that enables the department to confirm that the
5scholarship organization is exempt from taxation under section
6501(c)(3) of the Internal Revenue Code of 1986 (Public Law 99-
7514, 26 U.S.C. § 1 et seq.).

8(c) Annual certification of eligibility.--By August 15,
92012, and by February 15, 2013, and each February 15 thereafter,
10a scholarship organization must certify to the department that
11the organization is eligible to participate in the program.

12(d) Report.--

13(1) A scholarship organization must agree to report the
14following information on a form provided by the department by
15September 1, 2013, and each September 1 thereafter:

16(i) The total number of applications for
17scholarships received during the immediately preceding
18school year from eligible students in grades kindergarten
19through eight.

20(ii) The number of scholarships awarded during the
21immediately preceding school year to eligible students in
22grades kindergarten through eight.

23(iii) The total and average amounts of the
24scholarships awarded during the immediately preceding
25school year to eligible students in grades kindergarten
26through eight.

27(iv) The total number of applications for
28scholarships received during the immediately preceding
29school year from eligible students in grades 9 through
3012.

1(v) The number of scholarships awarded during the
2immediately preceding school year to eligible students in
3grades 9 through 12.

4(vi) The total and average amounts of the
5scholarships awarded during the immediately preceding
6school year to eligible students in grades 9 through 12.

7(vii) Where the scholarship organization collects
8information on a county-by-county basis, the total number
9and the total amount of scholarships awarded during the
10immediately preceding school year to residents of each
11county in which the scholarship organization awarded
12scholarships.

13(viii) The number of scholarships awarded during the
14immediately preceding school year to applicants with a
15household income that does not exceed 185% of the Federal
16poverty level.

17(ix) The total and average amounts of the
18scholarships awarded during the immediately preceding
19school year to applicants with a household income that
20does not exceed 185% of the Federal poverty level.

21(x) The number of scholarships awarded during the
22immediately preceding school year to applicants with a
23household income that does not exceed 185% of the Federal
24poverty level and who reside within a first class school
25district.

26(xi) The total and average amounts of the
27scholarships awarded during the immediately preceding
28school year to applicants with a household income that
29does not exceed 185% of the Federal poverty level and who
30reside within a first class school district.

1(xii) The number of scholarships awarded during the
2immediately preceding school year to applicants with a
3household income that does not exceed 185% of the Federal
4poverty level and who reside within a school district
5with an average daily membership greater than 7,500 and
6that receives an advance of its basic education subsidy
7at any time.

8(xiii) The total and average amounts of the
9scholarships awarded during the immediately preceding
10school year to applicants with a household income that
11does not exceed 185% of the Federal poverty level and who
12reside within a school district with an average daily
13membership greater than 7,500 and that receives an
14advance of its basic education subsidy at any time.

15(xiv) The number of scholarships awarded during the
16immediately preceding school year to applicants with a
17household income that does not exceed 185% of the Federal
18poverty level and who reside within a school district
19that receives an advance of its basic education subsidy
20at any time and is either subject to a declaration of
21financial distress under section 691 of the Public School
22Code of 1949 or engaged in litigation against the
23Commonwealth in which the school district seeks financial
24assistance from the Commonwealth to allow the school
25district to continue to operate.

26(xv) The total and average amounts of the
27scholarships awarded during the immediately preceding
28school year to applicants with a household income that
29does not exceed 185% of the Federal poverty level and who
30reside within a school district that receives an advance

1of its basic education subsidy at any time and is either
2subject to a declaration of financial distress under
3section 691 of the Public School Code of 1949 or is
4engaged in litigation against the Commonwealth in which
5the school district seeks financial assistance from the
6Commonwealth to allow the school district to continue to
7operate.

8(xvi) The total number of scholarship applications
9processed and the amounts of any application fees charged
10either per scholarship application or in the aggregate
11through a third-party processor.

12(xvii) The scholarship organization's Federal Form
13990 or other Federal form indicating the tax status of
14the scholarship organization for Federal tax purposes, if
15any, and a copy of a compilation, review or audit of the
16scholarship organization's financial statements conducted
17by a certified public accounting firm.

18(2) No later than May 1, 2013, and each May 1
19thereafter, the department shall annually distribute such
20sample forms, together with the forms on which the reports
21are required to be made, to each listed scholarship
22organization.

23(3) The department may not require any other information
24to be provided by scholarship organizations, except as
25expressly authorized in this article.

26(e) Notification.--The department shall notify a scholarship
27organization that it meets the requirements of this article for
28that fiscal year no later than 60 days after the scholarship
29organization submits the information required under this
30section.

1(f) Publication.--The department shall annually publish a
2list of each scholarship organization qualified under this
3section in the Pennsylvania Bulletin and shall post and update
4the list as necessary on the publicly accessible Internet
5website of the department.

6Section 1704-G.1. Tax credit application.

7(a) Scholarship organization.--A business firm shall apply
8to the department for a tax credit under section 1705-G.1. A
9business firm shall receive a tax credit under this article if
10the scholarship organization that receives the contribution
11appears on the list published under section 1703-G.1(f).

12(b) Availability of tax credits.--Tax credits under this
13article shall be made available by the department on a first-
14come-first-served basis within the limitation established under
15section 1706-G.1(a).

16(c) Contributions.--A contribution by a business firm to a
17scholarship organization shall be made no later than 60 days
18following the approval of an application under subsection (a).

19Section 1705-G.1. Tax credit.

20(a) Scholarship organizations.--

21(1) In accordance with section 1706-G.1(a), the
22Department of Revenue shall grant a tax credit against any
23tax due under Article XVI of the act of May 17, 1921
24(P.L.682, No.284), known as The Insurance Company Law of
251921, or under Article III, IV, VI, VII, VIII, IX or XV to a
26business firm providing proof of a contribution to a
27scholarship organization in the taxable year in which the
28contribution is made, which shall not exceed 75% of the total
29amount contributed during the taxable year by the business
30firm.

1(2) For the fiscal year 2012-2013, the tax credit shall
2not exceed $400,000 annually per business firm for
3contributions made to scholarship organizations.

4(3) For the fiscal years 2013-2014 and each fiscal year
5thereafter, the tax credit shall not exceed $750,000 annually
6per business firm for contributions made to scholarship
7organizations.

8(b) Additional amount.--

9(1) The Department of Revenue shall grant a tax credit
10of up to 90% of the total amount contributed during the
11taxable year if the business firm provides a written
12commitment to provide the scholarship organization with the
13same amount of contribution for two consecutive tax years.

14(2) The business firm must provide the written
15commitment under this subsection to the department at the
16time of application.

17(c) Combination of tax credits.--

18(1) A business firm may receive tax credits from the
19Department of Revenue in any tax year for any combination of
20contributions under subsection (a) or (b).

21(2) In no case may a business firm receive tax credits
22in any tax year:

23(i) in excess of $400,000 for contributions under
24subsections (a) and (b) made during fiscal year 2012-
252013; or

26(ii) in excess of $750,000 for contributions under
27subsections (a) and (b) made during fiscal year 2013-2014
28or any fiscal year thereafter.

29(d) Pass-through entity.--

30(1) If a pass-through entity does not intend to use all

1approved tax credits under this section, it may elect in
2writing to transfer all or a portion of the credit to
3shareholders, members or partners in proportion to the share
4of the entity's distributive income to which the shareholder,
5member or partner is entitled for use in the taxable year in
6which the contribution is made or in the taxable year
7immediately following the year in which the contribution is
8made. The election shall designate the year in which the
9transferred credits are to be used and shall be made
10according to procedures established by the Department of
11Revenue.

12(2) A pass-through entity and a shareholder, member or
13partner of a pass-through entity shall not claim the credit
14under this section for the same contribution.

15(3) The shareholder, member or partner may not carry
16forward, carry back, obtain a refund of or sell or assign the
17credit.

18(e) Restriction on applicability of credits.--No credits
19granted under this section shall be applied against any tax
20withheld by an employer from an employee under Article III.

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

22(1) Except as provided in paragraph (2), the department
23may accept applications for tax credits available during a
24fiscal year no earlier than July 1 of each fiscal year.

25(2) The application of any business firm for tax credits
26available during a fiscal year as part of the second year of
27a two-year commitment or as a renewal of a two-year
28commitment that was fulfilled in the previous fiscal year may
29be accepted no earlier than May 15 preceding the fiscal year.

30Section 1706-G.1. Tax credit limitations.

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

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

6(c) Tax liability.--

7(1) Except as provided in paragraph (2), a tax credit
8granted for any one taxable year may not exceed the tax
9liability of a business firm.

10(2) In the case of a credit granted to a pass-through
11entity which elects to transfer the credit according to
12section 1705-G.1(d), a tax credit granted for any one taxable
13year and transferred to a shareholder, member or partner may
14not exceed the tax liability of the shareholder, member or
15partner.

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

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

24Section 1707-G.1. Tax credit lists.

25The Department of Revenue shall provide a list of all
26scholarship organizations receiving contributions from business
27firms granted a tax credit under this article to the General
28Assembly by June 30 of each year.]

29Section 10. Section 1708-G.1 of the act, amended or added
30July 2, 2012 (P.L.751, No.85) and July 9, 2013 (P.L.270, No.52),

1is repealed.

2[Section 1708-G.1. Scholarships.

3(a) Notice.--By August 15, 2012, and by February 1 of each
4year thereafter, the department shall provide all scholarship
5organizations with a list of the low-achieving schools located
6within each school district.

7(b) Award.--A scholarship organization may award a
8scholarship to an applicant who resides within the attendance
9boundary of a low-achieving school to attend a participating
10public school or a participating nonpublic school selected by
11the parent of the applicant. If an applicant who received an 
12educational opportunity scholarship under this article for the 
13prior school year resides within the attendance boundary of a 
14school that was removed from the list of low-achieving schools 
15provided by the department under subsection (a), the applicant 
16may receive an educational opportunity scholarship. The 
17scholarship may be for each year of enrollment in a 
18participating public school or participating nonpublic school 
19for up to the lesser of five years or until completion of grade 
2012 provided the applicant otherwise remains eligible. In
21awarding scholarships, a scholarship organization shall give
22preference to any of the following:

23(1) An applicant who received a scholarship for the
24prior school year.

25(2) An applicant of a household with a household income
26that does not exceed 185% of the Federal poverty level for
27the school year preceding the school year for which the
28application is being made.

29(3) An applicant of a household with a household income
30that does not exceed 185% of the Federal poverty level for

1the school year preceding the school year for which the
2application is being made and who resides within any of the
3following:

4(i) a first class school district;

5(ii) a school district with an average daily
6membership greater than 7,500 and that receives an
7advance of its basic education subsidy at any time; or

8(iii) a school district that receives an advance of
9its basic education subsidy at any time and is either
10subject to a declaration of financial distress under
11section 691 of the Public School Code of 1949 or engaged
12in litigation against the Commonwealth in which the
13school district seeks financial assistance from the
14Commonwealth to allow the school district to continue to
15operate.

16(c) Home schooling.--A scholarship organization shall not
17award a scholarship to an applicant for enrollment in a home
18education program under section 1327.1 of the Public School Code
19of 1949.

20(d) Funding.--The aggregate amount of scholarships shall not
21exceed the aggregate amount of contributions made by business
22firms to the scholarship organization.

23(e) Amount.--

24(1) The maximum amount of a scholarship awarded to an
25applicant without a disability shall be $8,500.

26(2) The maximum amount of a scholarship awarded to an
27applicant with a disability shall be $15,000.

28(3) In no case shall the combined amount of the
29scholarship awarded to a recipient and any additional
30financial assistance provided to the recipient exceed the

1tuition rate and school-related fees for the participating
2public school or participating nonpublic school that the
3recipient will attend.

4(f) Taxation.--A scholarship shall not be considered taxable
5income for purposes of Article III or a local taxing ordinance.

6(g) Financial assistance.--A scholarship shall not
7constitute financial assistance or an appropriation to the
8participating public school or the participating nonpublic
9school attended by a recipient.]

10Section 11. Sections 1709-G.1, 1710-G.1, 1711-G.1 and 1712-
11G.1 of the act, added July 2, 2012 (P.L.751, No.85), are
12repealed:

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

14(a) List of low-achieving schools.--By September 1, 2012,
15and by February 1 of each year thereafter, the Department of
16Education shall publish on its publicly accessible Internet
17website and in the Pennsylvania Bulletin a list of the low-
18achieving schools for the following school year.

19(b) Notice.--By August 1, 2012, and by February 1 of each
20year thereafter, the Department of Education shall notify every
21school district identified as having at least one low-achieving
22school of its designation and shall furnish the school district
23with a list of the low-achieving schools located within the
24school district.

25(c) Publication.--Within 15 days of receipt of a
26notification under subsection (b), a school district shall post
27on its publicly accessible Internet website notice of all of the
28following:

29(1) A description of the program.

30(2) Instructions for applying for a scholarship.

1(3) A list of schools in the school district that have
2been designated by the Department of Education as low-
3achieving schools.

4(4) Notice that a parent must contact directly a school
5district of a participating public school or a participating
6nonpublic school if the parent seeks to enroll the student in
7the program.

8(d) Notification to parents.--

9(1) Within 15 days of receipt of a notification under
10subsection (b), a school district shall notify the parents of
11each student who is currently attending or residing within
12the attendance boundary of a low-achieving school during the
13school year of the school's designation.

14(2) Upon registration of a kindergarten student, a
15school district shall notify the parents of the kindergarten
16student that the student will be assigned to a low-achieving
17school during the school year of the school's designation.

18(3) The notice shall be in a form provided by the
19Department of Education and shall provide the following
20information regarding the program:

21(i) A description of the program.

22(ii) Instructions for obtaining information about
23applying for a scholarship under the program.

24(iii) Notice of the parent's responsibilities with
25regard to applying to a school district of a
26participating public school or a participating nonpublic
27school if the parent seeks to enroll the student in the
28program.

29(e) Average daily membership.--

30(1) Notwithstanding any other provision of law to the

1contrary, a recipient who was enrolled in the recipient's
2resident school district or in a charter school, regional
3charter school or cyber charter school when the recipient
4first received a scholarship shall continue to be counted in
5the average daily membership of the school district for a
6period of one year after enrolling in a participating public
7school or a participating nonpublic school.

8(2) During the year referenced in paragraph (1) and each
9school year thereafter, a school district of a participating
10public school in which the recipient is enrolled shall not
11include the recipient in the school district's average daily
12membership.

13Section 1710-G.1. School participation in program.

14(a) Election.--

15(1) By August 15, 2012, and by February 15 of each year
16thereafter, a nonpublic school may elect to participate in
17the program for the following school year.

18(2) By August 15, 2012, and by February 15 of each year
19thereafter, a school district may elect to participate in the
20program for the following school year.

21(b) Notice.--

22(1) A school district or nonpublic school that elects to
23participate under subsection (a) must notify the Department
24of Education of its intent to participate.

25(2) For a school district, the notice under paragraph
26(1) must be submitted on a form developed by the Department
27of Education and shall specify all of the following:

28(i) Each school within the school district which the
29school district intends to make a participating public
30school.

1(ii) The amount of tuition and school-related fees
2attributable to each available seat. The amount under
3this subparagraph shall not exceed the amount calculated
4under section 2561 of the Public School Code of 1949.

5(3) For a nonpublic school, the notice under paragraph
6(1) must be submitted on a form developed by the Department
7of Education and shall specify the amount of tuition and
8school-related fees attributable to an available seat.

9(c) Tuition rates.--

10(1) No school district of a participating public school
11or participating nonpublic school may charge a recipient a
12higher tuition rate or school-related fee than the
13participating public school or participating nonpublic school
14would have charged to a similarly situated student who is not
15receiving a scholarship.

16(2) Notwithstanding the provisions of section 2561 of
17the Public School Code of 1949, a school district of a
18participating public school may charge a recipient a tuition
19rate that is lower than that charged to students who are not
20recipients of scholarships.

21(d) Participating public school criteria.--The following
22criteria apply to a participating public school:

23(1) Except as otherwise provided in this article, a
24school district shall enroll students in a participating
25public school on a lottery basis from a pool of recipients
26who meet the application deadline set by the Department of
27Education until the participating public school fills its
28available seats. The pool may not include a recipient who:

29(i) has been expelled or is in the process of being
30expelled under section 1317.2 or 1318 of the Public

1School Code of 1949 and applicable regulations of the
2State Board of Education; or

3(ii) has been recruited by the school district or
4its representatives for athletic purposes.

5(2) The enrollment of recipients may not place the
6school district in violation of a valid and binding
7desegregation order.

8(3) Priority shall be given to:

9(i) An existing recipient.

10(ii) A recipient who is a sibling of a student
11currently enrolled in the school district.

12(e) Participating nonpublic school criteria.--The following
13criteria apply to a participating nonpublic school:

14(1) The participating nonpublic school may not
15discriminate on a basis which is illegal under Federal or
16State laws applicable to nonpublic schools.

17(2) The participating nonpublic school shall comply with
18section 1521 of the Public School Code of 1949.

19(3) The participating nonpublic school or its
20representatives may not recruit a student for athletic
21purposes.

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

23(1) Prior to enrollment of a recipient, a school
24district of a participating public school or a participating
25nonpublic school shall inform the parent of a recipient of
26any and all rules, policies and procedures of the
27participating public school or participating nonpublic
28school, including any academic policies, disciplinary rules
29and administrative procedures of the participating public
30school or participating nonpublic school.

1(2) Enrollment of a recipient in a participating public
2school or participating nonpublic school shall constitute
3acceptance of any rules, policies and procedures of the
4participating public school or participating nonpublic
5school.

6(g) Transportation.--

7(1) Transportation of recipients shall be provided under
8section 1361 of the Public School Code of 1949.

9(2) Reimbursement shall be as follows:

10(i) Transportation of a recipient attending a
11participating public school shall be subject to
12reimbursement under section 2541 of the Public School
13Code of 1949.

14(ii) Transportation of a recipient attending a
15participating nonpublic school shall be subject to
16reimbursement under sections 2509.3 and 2541 of the
17Public School Code of 1949.

18(h) Construction.--Nothing in this article shall be
19construed to:

20(1) Prohibit a participating nonpublic school from
21limiting admission to a particular grade level, a single
22gender or areas of concentration of the participating
23nonpublic school, including mathematics, science and the
24arts.

25(2) Authorize the Commonwealth or any of its agencies or
26officers or political subdivisions to impose any additional
27requirements on a participating nonpublic school which are
28not otherwise authorized under the laws of this Commonwealth
29or to require a participating nonpublic school to enroll a
30recipient if the participating nonpublic school does not

1offer appropriate programs or is not structured or equipped
2with the necessary facilities to meet the special needs of
3the recipient or does not offer a particular program
4requested.

5Section 1711-G.1. Tuition grants by school districts.

6(a) General rule.--The board of school directors of a school
7district may use funds received from the Commonwealth for
8educational purposes to establish a program of tuition grants to
9provide for the education of students who reside within the
10district and attend or will attend a public or nonpublic school
11on a tuition-paying basis.

12(b) Nonpublic school grant amount.--For students who attend
13or will attend a nonpublic school, the grant amount for each
14student shall not exceed the amount of the per pupil State
15subsidy for basic education of the school district of residence.

16(c) Average daily membership.--

17(1) A student who receives a tuition grant under this
18section shall be included in the average daily membership for
19purposes of determining the school district of residence's
20basic education funding.

21(2) A student who receives a grant under this section to
22attend a public school outside the school district awarding
23the tuition grant shall not be included in the average daily
24membership of the school district the student attends.

25(d) Guidelines.--

26(1) The board of school directors of a school district
27shall prepare guidelines establishing an application form and
28approval process, standards for verification as to the
29accuracy of application information, confirmation of
30attendance by a student who receives a tuition grant,

1restrictive endorsement of grant checks by parents to the
2school chosen by the parents, pro rata refunds of grants for
3students who withdraw during the school year, repayment of
4refunded grants to the school district and reasonable
5deadline dates for submission of grant applications.

6(2) The board of school directors of a school shall
7announce the award of grants no later than August 1 of the
8school year in which the grants will be utilized.

9(3) Upon receipt of written confirmation of enrollment
10from the student's school of choice, grants shall be paid to
11the parents of a student by a check that may only be endorsed
12to the selected school.

13(4) In the event a student is no longer enrolled prior
14to the completion of the school term, the school shall send
15written notice thereof to the school district.

16(e) Nontaxable.--Grants awarded to students under this
17section shall not be considered taxable income for purposes of
18any local taxing ordinance or for purposes of Article III, nor
19shall such grants constitute financial assistance or
20appropriations to the school attended by the student.

21(f) Construction.--Nothing in this section shall be
22construed to empower the Commonwealth or any school district or
23any of their agencies or officers to:

24(1) prescribe the course content or admissions criteria
25for any religiously affiliated school;

26(2) compel any private school to accept or enroll a
27student;

28(3) impose any additional requirements on any private
29school that are not otherwise authorized; or

30(4) require any school to accept or retain a student if

1the school does not offer programs or is not structured or
2equipped with the necessary facilities to meet the special
3needs of the student or does not offer a particular program
4requested.

5Section 1712-G.1. Original jurisdiction.

6The Pennsylvania Supreme Court shall have exclusive and
7original jurisdiction to hear any challenge or to render a
8declaratory judgment concerning the constitutionality of this
9article. The Pennsylvania Supreme Court may take such action as
10it deems appropriate, consistent with the Pennsylvania Supreme
11Court's retaining jurisdiction over such a matter, to find facts
12or to expedite a final judgment in connection with such a
13challenge or request for declaratory relief.]

14Section 12. The definition of "contracting authority" in 
15section 1802-C of the act, added July 9, 2013 (P.L.270, 
16No.52),is amended to read:

17Section 1802-C. Definitions.

18The following words and phrases when used in this article
19shall have the meanings given to them in this section unless the
20context clearly indicates otherwise:

21* * *

22"Contracting authority." An authority established under 53
23Pa.C.S. Ch. 56 (relating to municipal authorities) by a city, 
24borough, township or home rule county for the purpose of:

25(1) designating zones; and

26(2) engaging in the construction, including related site
27preparation and infrastructure, reconstruction or renovation
28of facilities.

29* * *

30Section 13. This act shall take effect immediately.