Bill Text: AZ HB2098 | 2011 | Fiftieth Legislature 1st Regular | Introduced
Bill Title: School tuition organizations; administration expenses
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-02-09 - Referred to House WM Committee [HB2098 Detail]
Download: Arizona-2011-HB2098-Introduced.html
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REFERENCE TITLE: school tuition organizations; administration expenses |
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State of Arizona House of Representatives Fiftieth Legislature First Regular Session 2011
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HB 2098 |
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Introduced by Representative Heinz
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AN ACT
Amending sections 43-1502, 43-1503, 43-1504, 43-1505, 43-1602 and 43-1603, Arizona Revised Statutes; relating to school tuition organizations.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 43-1502, Arizona Revised Statutes, is amended to read:
43-1502. Certification as a school tuition organization
A. A nonprofit organization in this state that is exempt or has applied for exemption from federal taxation under section 501(c)(3) of the internal revenue code may apply to the department of revenue for certification as a school tuition organization, and the department shall certify the school tuition organization if it meets the requirements prescribed by this chapter. An organization must apply for certification on a form prescribed and furnished on request by the department.
B. The department shall:
1. Maintain a public registry of currently certified school tuition organizations.
2. Make the registry available to the public on request.
3. Post the registry on the department's official website.
C. The department shall send written notice by certified mail to a school tuition organization if the department determines that the school tuition organization has engaged in any of the following activities:
1. Failing or refusing to allocate at least ninety ninety-seven per cent of annual revenues for educational scholarships or tuition grants.
2. Failing or refusing to file the annual reports required by section 43‑1506.
3. Limiting availability of scholarships to students of only one school.
4. Encouraging, facilitating or knowingly permitting taxpayers to engage in actions prohibited by this article.
D. A school tuition organization that receives notice from the department pursuant to subsection C of this section has ninety days to correct the violation identified by the department in the notice. If a school tuition organization fails or refuses to comply after ninety days, the department may remove the organization from the list of certified school tuition organizations and shall make available to the public notice of removal as soon as possible. An organization that is removed from the list of certified school tuition organizations must notify any taxpayer who attempts to make a contribution that the contribution is not eligible for the tax credit and offer to refund all donations received after the date of the notice of termination of certification.
E. A school tuition organization may request an administrative hearing on the revocation of its certification as provided by title 41, chapter 6, article 10. Except as provided in section 41‑1092.08, subsection H, a decision of the department is subject to judicial review pursuant to title 12, chapter 7, article 6.
Sec. 2. Section 43-1503, Arizona Revised Statutes, is amended to read:
43-1503. Operational requirements for school tuition organizations
A. A certified school tuition organization must be established to receive contributions from taxpayers for the purposes of income tax credits under sections 43‑1183 and 43‑1184 and insurance premium tax credits under sections 20‑224.06 and 20‑224.07 and to pay educational scholarships or tuition grants to allow students to attend any qualified school of their parents' or custodians' choice.
B. To be eligible for certification and retain certification, the school tuition organization:
1. Must allocate at least ninety ninety-seven per cent of its annual revenue for educational scholarships or tuition grants.
2. Shall not limit the availability of educational scholarships or tuition grants to only students of one school.
3. Must allow the department of revenue to verify that the educational scholarships and tuition grants that are issued are awarded to students who attend a qualified school.
Sec. 3. Section 43-1504, Arizona Revised Statutes, is amended to read:
43-1504. Special provisions; corporate donations for low-income scholarships; rules
A. A school tuition organization that receives contributions from a corporation for the purposes of section 20‑224.06 or 43‑1183 must use at least ninety ninety-seven per cent of those contributions to provide educational scholarships or tuition grants only to children whose family income does not exceed one hundred eighty-five per cent of the income limit required to qualify a child for reduced price lunches under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1785) and who either:
1. Attended a governmental primary or secondary school as a full-time student as defined in section 15-901 for at least the first one hundred days of the prior fiscal year and transferred from a governmental primary or secondary school to a qualified school.
2. Enroll in a qualified school in a kindergarten program.
3. Received an educational scholarship or tuition grant under paragraph 1 or 2 if the children continue to attend a qualified school in a subsequent year.
B. A child is eligible to receive an educational scholarship or tuition grant under subsection A of this section if the child meets the criteria to receive a reduced price lunch but does not actually claim that benefit.
C. In 2006, a school tuition organization shall not issue an educational scholarship or a tuition grant for the purposes of section 20‑224.06 or 43‑1183 in an amount that exceeds four thousand two hundred dollars for students in a kindergarten program or grades one through eight or five thousand five hundred dollars for students in grades nine through twelve. In each year after 2006, the limitation amount for a scholarship or a grant under this subsection shall be increased by one hundred dollars.
D. A school tuition organization shall require that student beneficiaries use the educational scholarships or tuition grants on a full‑time basis. If a child leaves the school before completing an entire school year, the school shall refund a prorated amount of the educational scholarship or tuition grant to the school tuition organization that issued the scholarship or grant. The school tuition organization shall allocate any refunds it receives under this subsection for educational scholarships or tuition grants in the following year.
E. Students who receive an educational scholarship or tuition grant under this section shall be allowed to attend any qualified school of their parents' choice.
F. The department of revenue, with the cooperation of the department of insurance, shall adopt rules and publish and prescribe forms and procedures necessary for the administration of this section.
Sec. 4. Section 43-1505, Arizona Revised Statutes, is amended to read:
43-1505. Special provisions; corporate donations for displaced students and students with disabilities; definition
A. A school tuition organization that receives contributions for the purposes of section 28‑224.07 20-224.07 or 43‑1184 must use at least ninety ninety‑seven per cent of those contributions to provide educational scholarships or tuition grants to qualified students who either:
1. Received a grant or scholarship under title 15, chapter 8, article 1.2 or 8 in order to attend a qualified school during the 2008‑2009 academic year.
2. Attended a governmental primary or secondary school as a full-time student as defined in section 15‑901 for at least the first one hundred days of the prior fiscal year and transferred from a governmental primary or secondary school to a qualified school.
3. Qualified for an educational scholarship or tuition grant under paragraph 1 or 2 if the qualified student continues to attend a qualified school in a subsequent year.
B. The amount of an educational scholarship or a tuition grant that is issued by a school tuition organization under this section shall not exceed the cost of tuition for the student to attend the qualified school or ninety per cent of the amount of state aid that otherwise would be computed for the student as provided in title 15, chapter 9, article 5, whichever is less. On request from a school tuition organization, the department of education shall provide to the school tuition organization in a timely manner the amount computed for the student under this subsection that represents the ninety per cent limitation prescribed in this subsection.
C. A school tuition organization shall require that student beneficiaries use the educational scholarships or tuition grants on a full‑time basis. If a child leaves the school before completing an entire school year, the school shall refund a prorated amount of the educational scholarship or tuition grant to the school tuition organization that issued the scholarship or grant. The school tuition organization shall allocate any refunds it receives under this subsection for educational scholarships or tuition grants in the following year.
D. Qualified students who receive an educational scholarship or tuition grant under this section shall be allowed to attend any qualified school of their custodians' choice.
E. For the purposes of this section, "qualified student" means a student who has been either:
1. Placed in foster care pursuant to title 8, chapter 5 at any time before the student graduates from high school or obtains a general equivalency diploma.
2. Identified as having a disability under section 504 of the rehabilitation act (29 United States Code section 794) or identified by a school district as a child with a disability as defined in section 15‑761 or a child with a disability who is eligible to receive services from a school district under section 15‑763.
Sec. 5. Section 43-1602, Arizona Revised Statutes, is amended to read:
43-1602. Certification as a school tuition organization
A. A nonprofit organization in this state that is exempt or has applied for exemption from federal taxation under section 501(c)(3) of the internal revenue code may apply to the department of revenue for certification as a school tuition organization, and the department shall certify the school tuition organization if it meets the requirements prescribed by this chapter. An organization must apply for certification on a form prescribed and furnished on request by the department.
B. The department shall:
1. Maintain a public registry of currently certified school tuition organizations.
2. Make the registry available to the public on request.
3. Post the registry on the department's official website.
C. The department shall send written notice by certified mail to a school tuition organization if the department determines that the school tuition organization has engaged in any of the following activities:
1. Failing or refusing to allocate at least ninety ninety-seven per cent of annual revenues for educational scholarships or tuition grants.
2. Failing or refusing to file the annual reports required by section 43‑1604.
3. Limiting availability of scholarships to students of only one school.
4. Encouraging, facilitating or knowingly permitting taxpayers to engage in actions prohibited by this article.
5. Awarding, restricting or reserving educational scholarships or tuition grants for use by a particular student based solely on the recommendation of the donor.
D. A school tuition organization that receives notice from the department pursuant to subsection C of this section has ninety days to correct the violation identified by the department in the notice. If a school tuition organization fails or refuses to comply after ninety days, the department may remove the organization from the list of certified school tuition organizations and shall make available to the public notice of removal as soon as possible. An organization that is removed from the list of certified school tuition organizations must notify any taxpayer who attempts to make a contribution that the contribution is not eligible for the tax credit and offer to refund all donations received after the date of the notice of termination of certification.
E. A school tuition organization may request an administrative hearing on the revocation of its certification as provided by title 41, chapter 6, article 10. Except as provided in section 41‑1092.08, subsection H, a decision of the department is subject to judicial review pursuant to title 12, chapter 7, article 6.
Sec. 6. Section 43-1603, Arizona Revised Statutes, is amended to read:
43-1603. Operational requirements for school tuition organizations; notice; qualified schools
A. A certified school tuition organization must be established to receive contributions from taxpayers for the purposes of income tax credits under section 43‑1089 and to pay educational scholarships or tuition grants to allow students to attend any qualified school of their parents' choice.
B. To be eligible for certification and retain certification, the school tuition organization:
1. Must allocate at least ninety ninety-seven per cent of its annual revenue for educational scholarships or tuition grants.
2. Shall not limit the availability of educational scholarships or tuition grants to only students of one school.
3. May allow donors to recommend student beneficiaries, but shall not award, designate or reserve scholarships solely on the basis of donor recommendations.
4. Shall not allow donors to designate student beneficiaries as a condition of any contribution to the organization, or facilitate, encourage or knowingly permit the exchange of beneficiary student designations in violation of section 43‑1089, subsection F.
C. A school tuition organization shall include the following notice in any printed materials soliciting donations, in applications for scholarships and on its website:
Notice
A school tuition organization cannot award, restrict or reserve scholarships solely on the basis of a donor's recommendation.
A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer's own dependent.
D. In evaluating applications and awarding, designating or reserving scholarships, a school tuition organization:
1. Shall not award, designate or reserve a scholarship solely on the recommendation of any person contributing money to the organization, but may consider the recommendation among other factors.
2. Shall consider the financial need of applicants.
E. A qualified school shall not accept an educational scholarship or tuition grant from a school tuition organization in an amount that exceeds the school's total cost of educating the student in whose name the scholarship or grant is received.
