Bill Text: GA HB100 | 2009-2010 | Regular Session | Comm Sub

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Bill Title: Education; student scholarship organizations; provisions

Spectrum: Partisan Bill (Republican 5-0)

Status: (Vetoed) 2009-05-11 - Veto V2 [HB100 Detail]

Download: Georgia-2009-HB100-Comm_Sub.html

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09 LC 18 8120S

House Bill 100 (COMMITTEE SUBSTITUTE)

By: Representatives Ehrhart of the 36th, Casas of the 103rd, Lunsford of the 110th, and Lindsey of the 54th

A BILL TO BE ENTITLED
AN ACT

To amend Title 20 and Title 48 of the Official Code of Georgia Annotated, relating, respectively, to education and revenue and taxation, so as to revise and change certain provisions regarding educational improvement and student scholarship organizations; to change certain definitions; to change certain requirements regarding operation and taxation of student scholarship organizations; to provide for criminal penalties regarding student scholarship organization requirements; to revise and change certain provisions regarding the qualified education income tax credit; to provide an effective date; to provide for applicability; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Title 20 of the Official Code of Georgia Annotated, relating to education, is amended by revising Code Section 20-2A-1, relating to definitions regarding student scholarship organizations, as follows:

"20-2A-1.

As used in this chapter, the term:

(1) 'Eligible student' means a student who is a Georgia resident enrolled in a Georgia secondary or primary public school or eligible to enroll in a qualified kindergarten program or pre-kindergarten program. A student who was an eligible student at the time he or she first received an educational scholarship or tuition grant shall remain an eligible student so long as the student receives an educational scholarship or tuition grant from a student scholarship organization.

(2) 'Qualified school or program' means a nonpublic pre-kindergarten program, primary school, or secondary school that:

(A) Is accredited or in the process of becoming accredited by one or more entities listed in subparagraph (A) of paragraph (6) of Code Section 20-3-519; and

(B) Is located in this state;, adheres to the provisions of the federal Civil Rights Act of 1964, and satisfies

(C) Complies with the antidiscrimination provisions of 42 U.S.C. Section 1981;

(D) Complies with all health and safety laws or codes that apply to private schools; and

(E) Satisfies the requirements prescribed by law for private schools in this state.

The Department of Education shall not require any information from a qualified school or program other than that information which nonpublic pre-kindergarten programs or primary and secondary schools are required to provide to the Department of Education under this chapter.

(3) 'Student scholarship organization' means a charitable organization in this state that:

(A) Is exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code and allocates obligates 90 percent of its annual revenue for scholarships or tuition grants to allow students to attend any qualified school of their parents' choice; and

(B) Provides educational scholarships or tuition grants to eligible students without limiting availability to only students of one school.

(4) 'Obligate' means to provide funds for scholarships or tuition grants in one or more of the following ways:

(A) The student scholarship organization actually transfers funds to a recipient within the fiscal year;

(B) The student scholarship organization awards a full or partial single-year or multi-year scholarship to a recipient during the fiscal year, although payment may not be scheduled until a subsequent period, provided that any funds associated with such award are kept in a scholarship fund account or investment account rather than in the student scholarship organization's operating bank account;

(C) The student scholarship organization transfers funds from its operating account to a scholarship fund account or investment account to fund future obligations under a multi-year scholarship that is awarded in the current or a previous fiscal year;

(D) The student scholarship organization transfers funds from its operating account to a scholarship fund account or investment account to fund scholarships at a specific school or a group of schools in the following fiscal year, regardless of whether any specific recipients have been determined or named in the current calendar year;

(E) The student scholarship organization transfers funds from its operating account to a scholarship fund account or investment account that the board of directors of the student scholarship organization has irrevocable dedicated to the provision of scholarships or tuition grants to eligible students yet to be identified; or

(F) The student scholarship organization transfers funds to another student scholarship organization.

Notwithstanding the provisions of this paragraph, a transfer that is obligated pursuant to this chapter shall not be counted as contributions or scholarship awards in any other fiscal year."

SECTION 2.

Said title is further amended by revising Code Section 20-2A-2, relating to requirements regarding student scholarship organizations; as follows:

"20-2A-2.

Each student scholarship organization:

(1) Must obligate 90 percent of its annual revenue for scholarships or tuition grants; however, up to 25 percent of this amount may be carried forward for the next fiscal year;

(2) Must maintain separate accounts for scholarship funds and operating funds;

(3) May transfer funds to another student scholarship organization;

(4) Must conduct an audit of its accounts by an independent certified public accountant within 120 days after the completion of the student scholarship organization's fiscal year verifying that it obligated 90 percent of its annual revenue for scholarships or tuition grants and provide such audit to the Department of Revenue in accordance with Code Section 20-2A-3; and

(5) Must annually submit notice to the Department of Education in accordance with department guidelines of its participation as a student scholarship organization under this chapter."

SECTION 3.

Said title is further amended by revising Code Section 20-2A-3, relating to taxation requirements for student scholarship organizations, as follows:

"20-2A-3.

(a) Each student scholarship organization must report to the Department of Revenue, on a form provided by the Department of Revenue, by January 12 of each tax year the following:

(1) The total number and dollar value of contributions and tax credits approved; and

(2) A list of donors, including the dollar value of each donation and the dollar value of each approved tax credit.

Such report shall also include a copy of the audit conducted pursuant to paragraph (4) of Code Section 20-2A-2.

(b) The Department of Revenue shall not require any other information from student scholarship organizations, except as expressly authorized in this chapter. All information or reports provided by student scholarship organizations to the Department of Revenue shall be confidential taxpayer information, governed by Code Sections 48-2-15, 48-7-60, and 48-7-61, whether it relates to the donor or the student scholarship organization.

(c) Any student scholarship organization that fails to comply with its obligations under Code Section 20-2A-2 shall:

(1) Be immediately removed from the Department of Education list provided for in Code Section 20-2A-6;

(2) Be required to cease all operations as a student scholarship organization and transfer all scholarship account funds to a properly operating student scholarship organization within 30 calendar days of receipt of notice from the Department of Revenue;

(3) Have all applications for preapproval of tax credits under Code Section 48-7-29.16 rejected by the Department of Revenue on or after the date the Department of Education removes the student scholarship organization from its list provided for in Code Section 20-2A-6; and

(4) Notwithstanding any laws to the contrary, the Department of Revenue shall not take any adverse action against donors to such student scholarship organizations if the Department of Revenue preapproved a donation for a tax credit prior to the date the student scholarship organization is removed from the Department of Education list, and all such donations shall remain as preapproved tax credits subject only to the donor's compliance with Code Section 48-7-29.16.

(d) Any officer or director of a student scholarship organization found to have actively participated in a student scholarship organization's intentional violation of its obligations under Code Section 20-2A-2 shall be guilty of a misdemeanor."

SECTION 4.

Title 48 of the Official Code of Georgia Annotated, relating to revenue and taxation, is amended by revising Code Section 48-7-29.16, relating to the qualified education income tax credit, as follows:

"48-7-29.16.

(a) As used in this Code section, the term:

(1) 'Qualified education expense' means the expenditure of funds by the taxpayer during the tax year for which a credit under this Code section is claimed and allowed to a student scholarship organization operating pursuant to Chapter 2A of Title 20 which are used for tuition and fees for a qualified school or program.

(2) 'Qualified school or program' shall have the same meaning as in paragraph (2) of Code Section 20-2A-1.

(3) 'Student scholarship organization' shall have the same meaning as in paragraph (3) of Code Section 20-2A-1.

(b) An individual A taxpayer shall be allowed a credit against the tax imposed by this chapter for qualified education expenses in the amount actually expended or 75 percent of the taxpayer's income tax liability, whichever is less. as follows:

(1) In the case of a single individual or a head of household, the actual amount expended or $1,000.00 per tax year, whichever is less; or

(2) In the case of a married couple filing a joint return, the actual amount expended or $2,500.00 per tax year, whichever is less.

(c) A corporation shall be allowed a credit against the tax imposed by this chapter for qualified education expenses in an amount not to exceed the actual amount expended or 75 percent of the corporation's income tax liability, whichever is less.

(d)(c) The tax credit shall not be allowed if the taxpayer designates the taxpayer's qualified education expense for the direct benefit of any dependent of the taxpayer.

(e)(d) In no event shall the total amount of the tax credit under this Code section for a taxable year exceed the taxpayer's income tax liability. Any unused tax credit shall be allowed the taxpayer against the succeeding five years' tax liability. No such credit shall be allowed the taxpayer against prior years' tax liability.

(f)(1)(e)(1) In no event shall the aggregate amount of tax credits allowed under this Code section the following exceed $50 million per tax year:

(A) Tax credits allowed under this Code section; and

(B) Amounts deducted from taxable net income by taxpayers as charitable contributions to student scholarship organizations for purposes of Chapter 2A of Title 20 when that taxpayer also claims and is granted a tax credit under this Code section regarding such amounts.

(2) The commissioner shall allow the tax credits on a first come, first served basis.

(3) For the purposes of paragraph (1) of this subsection, a student scholarship organization shall notify a potential donor of the requirements of this Code section. Before making a contribution to a student scholarship organization, the taxpayer shall notify the department of the total amount of contributions that the taxpayer intends to make to the student scholarship organization. The commissioner shall preapprove or deny the requested amount within 30 15 days after receiving the request from the taxpayer. In order to receive a tax credit under this Code section, the taxpayer shall make the contribution to the student scholarship organization within 30 business days after receiving notice immediately following seven days from the date on which the department that the requested amount was preapproved the contribution. If the taxpayer does not comply with this paragraph, the commissioner shall not include this preapproved contribution amount when calculating the limit prescribed in paragraph (1) of this subsection.

(4) Preapproval of contributions by the commissioner shall be based solely on the availability of tax credits subject to the aggregate total limit established under paragraph (1) of this subsection and the designated student scholarship organization being listed on the Department of Education's website pursuant to Code Section 20-2A-6.

(g)(f)(1) In order for the taxpayer to claim the student scholarship organization tax credit under this Code section, a letter of confirmation of donation issued by the student scholarship organization to which the contribution was made shall be attached to the taxpayer's tax return. However, in the event the taxpayer files an electronic return, such confirmation shall only be required to be electronically attached to the return if the Internal Revenue Service allows such attachments when the data is transmitted to the department. In the event the taxpayer files an electronic return and such confirmation is not attached because the Internal Revenue Service does not, at the time of such electronic filing, allow electronic attachments to the Georgia return, such confirmation shall be maintained by the taxpayer and made available upon request by the commissioner. The letter of confirmation of donation shall contain the taxpayer's name, address, tax identification number, the amount of the contribution, the date of the contribution, and the amount of the credit.

(2) The student scholarship organization shall provide a copy of each letter of confirmation of donation to the Department of Revenue on a monthly basis. The Department of Revenue shall then correlate the letters of confirmation with its preapproved taxpayer request form. In the event a tax credit has been preapproved by the Department of Revenue but the taxpayer failed to comply with its donation obligations under paragraph (3) of subsection (e) of this Code section, then the aggregate amount of tax credits available shall be adjusted accordingly.

(3) The Department of Revenue shall list on its website the amount of tax credits available under this Code section and update the listing quarterly.

(h)(1)(g)(1) The No credit shall be allowed under this Code section with respect to without regard to whether any amount was deducted from taxable net income by the taxpayer as a charitable contribution to a bona fide charitable organization qualified under Section 501(c)(3) of the Internal Revenue Code.

(2) The amount of any scholarship received by an eligible student or eligible pre-kindergarten student shall be excluded from taxable net income for Georgia income tax purposes.

(i)(h) The commissioner shall be authorized to promulgate any rules and regulations necessary to implement and administer the tax provisions of this Code section."

SECTION 5.

This Act shall become effective upon its approval by the Governor or upon its becoming law without such approval. Section 4 of this Act shall be applicable to all taxable years beginning on or after January 1, 2009.

SECTION 6.

All laws and parts of laws in conflict with this Act are repealed.