Please wait while the document is loaded.

A00886
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
800
Session of
2019
INTRODUCED BY TURZAI, MILLARD, REESE, HICKERNELL, ROTHMAN, FEE,
RYAN, GREINER, PYLE, PICKETT, ZIMMERMAN, BENNINGHOFF,
READSHAW, KAUFFMAN, WARNER, BERNSTINE, STAATS, SONNEY,
MASSER, B. MILLER, SCHLEGEL CULVER, SIMMONS, MACKENZIE,
EVERETT, SCHEMEL, NESBIT, LAWRENCE, TOPPER, SANKEY,
F. KELLER, MENTZER, NELSON, DIAMOND, DRISCOLL, FRITZ,
HENNESSEY, MALONEY, GROVE, ROZZI, BARRAR, WHEELAND, SAYLOR,
HERSHEY, TOEPEL, GABLER, SCHMITT, KORTZ, DeLUCA AND
OBERLANDER, MARCH 18, 2019
REFERRED TO COMMITTEE ON EDUCATION, MARCH 18, 2019
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 limitations.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "educational improvement
organization," "eligible pre-kindergarten student," "eligible
student," "eligible student with a disability," "maximum annual
household income," "opportunity scholarship organization,"
"pass-through entity," "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, amended June 22, 2018 (P.L.241,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
No.39), are amended and the section is amended by adding a
definition 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:
* * *
"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%] 90% 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.
* * *
"Eligible pre-kindergarten student." A student, including an
eligible student with a disability, who is enrolled in a pre-
kindergarten program and is either:
(1) a member of a household with a maximum annual household
income as increased by the applicable income allowance[.]; or
A00886 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) received a scholarship or opportunity scholarship in any
prior year.
"Eligible student." A school-age student, including an
eligible student with a disability, who is enrolled in a school
and is either:
(1) a member of a household with a maximum annual household
income as increased by the applicable income allowance[.]; or
(2) received a scholarship or opportunity scholarship in any
prior year.
"Eligible student with a disability." A pre-kindergarten
student or a school-age student who meets all of the following:
(1) Is enrolled in a special education school or has
otherwise been identified, in accordance with 22 Pa. Code Ch.
14 (relating to special education services and programs), as
a "child with a disability," as defined in 34 CFR § 300.8
(relating to child with a disability).
(2) Needs special education and related services.
(3) Is enrolled in a pre-kindergarten program or in a
school.
(4) Is either a member of a household with a household
income of not more than the maximum annual household income
or received a scholarship or opportunity scholarship in any
prior year.
* * *
"Maximum annual household income."
(1) Subject to adjustment under paragraphs (2) and (3),
the amount of [$85,000] $95,000, plus the applicable income
allowance.
(2) With respect to an eligible student with a
disability, as calculated by multiplying:
A00886 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(i) the applicable amount under paragraph (1); by
(ii) the applicable support level factor according
to the following table:
Support Level Support Level Factor
1 1.50
2 2.993
(3) Beginning July 1, 2014, the department shall
annually adjust the income amounts under paragraphs (1) and
(2) to reflect any upward changes in the Consumer Price Index
for All Urban Consumers for the Pennsylvania, New Jersey,
Delaware and Maryland area in the preceding 12 months and
shall immediately submit the adjusted amounts to the
Legislative Reference Bureau for publication as a notice in
the Pennsylvania Bulletin.
* * *
"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%] 90% 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
next succeeding fiscal year of the nonprofit entity.
* * *
"Pass-through entity." A partnership as defined in section
A00886 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
301(n.0) of the act of March 4, 1971 (P.L.6, No.2), known as the
Tax Reform Code of 1971, a single-member limited liability
company treated as a disregarded entity for Federal income tax
purposes or a Pennsylvania S corporation as defined in section
301(n.1) of the Tax Reform Code of 1971. The term includes a
pass-through entity that owns an interest in a pass-through
entity. The term also includes a qualified Subchapter S trust.
"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%] 90% 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.
* * *
"Qualified Subchapter S trust." As defined in section
1361(d)(3) of the Internal Revenue Code of 1986.
* * *
"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%] 90% 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
A00886 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
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.
* * *
Section 2. Section 2006-B(a) of the act, amended June 22,
2018 (P.L.241, No.39), is amended to read:
Section 2006-B. Limitations.
(a) Amount.--
(1) The total aggregate amount of all tax credits
approved for contributions from business firms to scholarship
organizations, educational improvement organizations and pre-
kindergarten scholarship organizations shall not exceed
[$160,000,000] $260,000,000 plus any increased dollar amounts
calculated under subparagraph (i)(A) in a fiscal year[.],
with each category as follows:
(i) No less than [$110,000,000] $210,000,000 of the
total aggregate amount shall be used to provide tax
credits for contributions from business firms to
scholarship organizations. The following shall apply:
(A) Beginning July 1, 2019, the department shall
annually increase the dollar amounts under this
subparagraph if more than 90% of the total aggregate
amount of tax credits under this subparagraph was
used by taxpayers during the prior fiscal year and
the General Assembly has not otherwise enacted an
increase to the dollar amount under this
subparagraph . The amount of the increase required
under this clause for the total aggregate amount
under this subparagraph shall be 10% and shall be
A00886 - 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
allocated to the program under this subparagraph.
(B) The department shall immediately submit the
increased dollar amounts under clause (A) to the
Legislative Reference Bureau for publication as a
notice in the Pennsylvania Bulletin.
(ii) No less than $37,500,000 of the total aggregate
amount shall be used to provide tax credits for
contributions from business firms to educational
improvement organizations.
(iii) The total aggregate amount of all tax credits
approved for contributions from business firms to pre-
kindergarten scholarship organizations shall not exceed
$12,500,000 in a fiscal year.
(2) The total aggregate amount of all tax credits
approved for contributions from business firms to opportunity
scholarship organizations shall not exceed $50,000,000 in a
fiscal year.
* * *
Section 3. The amendment of the definition of "pass-through
entity" in section 2002-B of the act shall apply retroactively
to January 1, 2015.
Section 3 4. This act shall take effect July 1, 2019, or
immediately, whichever is later.
A00886 - 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23