PRINTER'S NO. 1045
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
72
Session of
2021
INTRODUCED BY KEARNEY, CAPPELLETTI, COSTA, FONTANA, HUGHES,
KANE, MUTH AND L. WILLIAMS, SEPTEMBER 2, 2021
REFERRED TO EDUCATION, SEPTEMBER 2, 2021
AN ACT
Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
act relating to the public school system, including certain
provisions applicable as well to private and parochial
schools; amending, revising, consolidating and changing the
laws relating thereto," in educational tax credits, further
providing for definitions and for qualification and
application by organizations.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "educational improvement
organization," "opportunity scholarship organization," "pre-
kindergarten scholarship organization" and "scholarship
organization" in section 2002-B of the act of March 10, 1949
(P.L.30, No.14), known as the Public School Code of 1949, are
amended to read:
Section 2002-B. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Educational improvement organization." A nonprofit entity
which:
(1) is exempt from Federal taxation under section 501(c)
(3) of the Internal Revenue Code of 1986 (Public Law 99-514,
26 U.S.C. § 1 et seq.); and
(2) contributes at least [80%] 95% of its annual
receipts as grants to a public school, a chartered school as
defined in section 1376.1, or a private school approved under
section 1376, for innovative educational programs.
For purposes of this definition, a nonprofit entity
"contributes" its annual cash receipts when it expends or
otherwise irrevocably encumbers those funds for expenditure
during the then-current fiscal year of the nonprofit entity or
during the next succeeding fiscal year of the nonprofit entity.
A nonprofit entity shall include a school district foundation,
public school foundation, charter school foundation or cyber
charter school foundation.
* * *
"Opportunity scholarship organization." A nonprofit entity
which:
(1) Is exempt from Federal taxation under section 501(c)
(3) of the Internal Revenue Code of 1986 (Public Law 99-514,
26 U.S.C. § 1 et seq.); and
(2) Contributes at least [80%] 95% of the entity's
annual cash receipts to an opportunity scholarship program.
For the purposes of this definition, a nonprofit entity
contributes the entity's cash receipts to an opportunity
scholarship program when the entity expends or otherwise
irrevocably encumbers those funds for distribution during the
then-current fiscal year of the nonprofit entity or during the
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next succeeding fiscal year of the nonprofit entity.
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"Pre-kindergarten scholarship organization." A nonprofit
entity which:
(1) is exempt from Federal taxation under section 501(c)
(3) of the Internal Revenue Code of 1986 or is operated as a
separate segregated fund by a scholarship organization that
has been qualified under section 2003-B; and
(2) contributes at least [80%] 95% of its annual cash
receipts to a pre-kindergarten scholarship program by
expending or otherwise irrevocably encumbering those funds
for distribution during the then-current fiscal year of the
organization or during the next succeeding fiscal year of the
organization.
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"Scholarship organization." A nonprofit entity which:
(1) is exempt from Federal taxation under section 501(c)
(3) of the Internal Revenue Code of 1986; and
(2) contributes at least [80%] 95% of its annual cash
receipts to a scholarship program.
For purposes of this definition, a nonprofit entity
"contributes" its annual cash receipts to a scholarship program
when it expends or otherwise irrevocably encumbers those funds
for distribution during the then-current fiscal year of the
nonprofit entity or during the next succeeding fiscal year of
the nonprofit entity.
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Section 2. Section 2003-B(c), (d) and (d.1) of the act are
amended to read:
Section 2003-B. Qualification and application by organizations.
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(c) Scholarship organizations and pre-kindergarten
scholarship organizations.--A scholarship organization or pre-
kindergarten scholarship organization must certify to the
department that the organization is eligible to participate in
the educational improvement tax credit program established under
this article and must agree to annually report the following
information to the department by November 1 of each year:
(1) (i) The number of scholarships awarded during the
immediately preceding school year to eligible pre-
kindergarten students.
(ii) The total and average amounts of the
scholarships awarded during the immediately preceding
school year to eligible pre-kindergarten students.
(iii) The number of scholarships awarded during the
immediately preceding school year to eligible students in
grades kindergarten through eight.
(iv) The total and average amounts of the
scholarships awarded during the immediately preceding
school year to eligible students in grades kindergarten
through eight.
(v) The number of scholarships awarded during the
immediately preceding school year to eligible students in
grades nine through 12.
(vi) The total and average amounts of the
scholarships awarded during the immediately preceding
school year to eligible students in grades nine through
12.
(vii) Where the scholarship organization or pre-
kindergarten scholarship organization collects
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information on a county-by-county basis, the total number
and the total amount of scholarships awarded during the
immediately preceding school year to residents of each
county in which the scholarship organization or pre-
kindergarten scholarship organization awarded
scholarships.
(viii) The total number of scholarship applications
processed and the amounts of any application fees
charged, either per scholarship application or in the
aggregate through a third-party processor.
(ix) The organization's Federal Form 990 or other
Federal form indicating the tax status of the
organization for Federal tax purposes, if any, and a full
and complete copy of a compilation, review or audit of
the organization's financial statements conducted by a
certified public accounting firm.
(x) The average household income of eligible
students in grades kindergarten through eight who
received scholarships in the immediately preceding school
year.
(xi) The average household income of eligible
students in grades nine through 12 who received
scholarships in the immediately preceding school year.
(xii) Data as determined by the department in
conjunction with the Department of Education tracking the
academic success of eligible students in grades
kindergarten through eight who received scholarships in
the immediately preceding school year.
(xiii) Data as determined by the department in
conjunction with the Department of Education tracking the
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academic success of eligible students in grades nine
through 12 who received scholarships in the immediately
preceding school year.
(xiv) Any other information deemed appropriate by
the department.
(2) The information required under paragraph (1) shall
be submitted on a form provided by the department. No later
than September 1 of each year, the department shall annually
distribute such sample forms, together with the forms on
which the reports are required to be made, to each listed
scholarship organization and pre-kindergarten scholarship
organization.
(3) [The department may not require any other
information to be provided by scholarship organizations or
pre-kindergarten scholarship organizations, except as
expressly authorized in this article.] A scholarship
organization or a pre-kindergarten scholarship organization
is prohibited from charging an application fee to an eligible
student applying for a scholarship.
(d) Educational improvement organization.--
(1) An application submitted by an educational
improvement organization must describe its proposed
innovative educational program or programs in a form
prescribed by the department. The department shall consult
with the Department of Education as necessary. The department
shall review and approve or disapprove the application. In
order to be eligible to participate in the educational
improvement tax credit program established under this
article, an educational improvement organization must agree
to annually report the following information to the
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department by November 1 of each year:
(i) The name of the innovative educational program
or programs and the total amount of the grant or grants
made to those programs during the immediately preceding
school year.
(ii) A description of how each grant was utilized
during the immediately preceding school year and a
description of any demonstrated or expected innovative
educational improvements.
(iii) The names of the public schools and school
districts where innovative educational programs that
received grants during the immediately preceding school
year were implemented.
(iv) Where the educational improvement organization
collects information on a county-by-county basis, the
total number and the total amount of grants made during
the immediately preceding school year for programs at
public schools in each county in which the educational
improvement organization made grants.
(v) The organization's Federal Form 990 or other
Federal form indicating the tax status of the
organization for Federal tax purposes, if any, and a full
and complete copy of a compilation, review or audit of
the organization's financial statements conducted by a
certified public accounting firm.
(vi) Any other information deemed appropriate by the
department.
(2) The information required under paragraph (1) shall
be submitted on a form provided by the department. No later
than September 1 of each year, the department shall annually
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distribute such sample forms, together with the forms on
which the reports are required to be made, to each listed
educational improvement organization.
[(3) The department may not require any other
information to be provided by educational improvement
organizations, except as expressly authorized in this
article.]
(d.1) Opportunity scholarship organizations.--
(1) An opportunity scholarship organization must enhance
the educational opportunities available to students in this
Commonwealth by providing opportunity scholarships to
eligible students who reside within the attendance boundary
of low-achieving schools to attend schools which are not low-
achieving schools and which are not public schools within the
eligible student's school district of residence. By February
15 of each year, an opportunity scholarship organization must
certify to the department that the organization is eligible
to participate in the opportunity scholarship tax credit
program.
(2) An opportunity scholarship organization must agree
to report the following information on a form provided by the
department by November 1 of each year:
(i) The total number of applications for opportunity
scholarships received during the immediately preceding
school year from eligible students in grades kindergarten
through eight.
(ii) The number of opportunity scholarships awarded
during the immediately preceding school year to eligible
students in grades kindergarten through eight.
(iii) The total and average amounts of the
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opportunity scholarships awarded during the immediately
preceding school year to eligible students in grades
kindergarten through eight.
(iv) The total number of applications for
opportunity scholarships received during the immediately
preceding school year from eligible students in grades
nine through 12.
(v) The number of opportunity scholarships awarded
during the immediately preceding school year to eligible
students in grades nine through 12.
(vi) The total and average amounts of the
opportunity scholarships awarded during the immediately
preceding school year to eligible students in grades nine
through 12.
(vii) Where the opportunity scholarship organization
collects information on a county-by-county basis, the
total number and the total amount of opportunity
scholarships awarded during the immediately preceding
school year to residents of each county in which the
opportunity scholarship organization awarded opportunity
scholarships.
(viii) The number of opportunity scholarships
awarded during the immediately preceding school year to
applicants with a household income that does not exceed
185% of the Federal poverty level.
(ix) The total and average amounts of opportunity
scholarships awarded during the immediately preceding
school year to applicants with a household income that
does not exceed 185% of the Federal poverty level.
(x) The number of opportunity scholarships awarded
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during the immediately preceding school year to
applicants with a household income that does not exceed
185% of the Federal poverty level and who reside within a
first class school district.
(xi) The total and average amounts of opportunity
scholarships awarded during the immediately preceding
school year to applicants with a household income that
does not exceed 185% of the Federal poverty level and who
reside within a first class school district.
(xii) The number of opportunity scholarships awarded
during the immediately preceding school year to
applicants with a household income that does not exceed
185% of the Federal poverty level and who reside within a
school district that was designated as a financial
recovery school district under Article VI-A at the time
of the award.
(xiii) The total and average amounts of opportunity
scholarships awarded during the immediately preceding
school year to applicants with a household income that
does not exceed 185% of the Federal poverty level and who
reside within a school district that was designated as a
financial recovery school district under Article VI-A at
the time of the award.
(xiv) The total number of opportunity scholarship
applications processed and the amounts of any application
fees charged either per opportunity scholarship
application or in the aggregate through a third-party
processor.
(xv) The opportunity scholarship organization's
Federal Form 990 or other Federal form indicating the tax
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status of the opportunity scholarship organization for
Federal tax purposes, if any, and a full and complete
copy of a compilation, review or audit of the opportunity
scholarship organization's financial statements conducted
by a certified public accounting firm.
(xvi) The average household income of eligible
students in grades kindergarten through eight who
received scholarships in the immediately preceding school
year.
(xvii) The average household income of eligible
students in grades nine through 12 who received
scholarships in the immediately preceding school year.
(xviii) The number of eligible students in grades
kindergarten through eight who received scholarships in
the immediately preceding school year and attended a low-
achieving school within the past five years.
(xiv) The number of eligible students in grades nine
through 12 who received scholarships in the immediately
preceding school year and attended a low-achieving school
within the past five years.
(xv) Data as determined by the department in
conjunction with the Department of Education tracking the
academic success of eligible students in grades
kindergarten through eight who received scholarships in
the immediately preceding school year.
(xvi) Data as determined by the department in
conjunction with the Department of Education tracking the
academic success of eligible students in grades nine
through twelve who received scholarships in the
immediately preceding school year.
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(xvii) Any other information deemed appropriate by
the department.
(3) No later than September 1 of each year, the
department shall annually distribute such sample forms,
together with the forms on which the reports are required to
be made, to each listed opportunity scholarship organization.
(4) [The department may not require other information to
be provided by opportunity scholarship organizations, except
as expressly authorized in this article.] An opportunity
scholarship organization is prohibited from charging an
application fee to an eligible student applying for a
scholarship.
* * *
Section 3. This act shall take effect in 60 days.
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