Bill Text: GA HB369 | 2011-2012 | Regular Session | Introduced
Bill Title: Student scholarship organizations; education income tax credit; revise provisions
Spectrum: Partisan Bill (Republican 4-0)
Status: (Introduced - Dead) 2011-03-01 - House Second Readers [HB369 Detail]
Download: Georgia-2011-HB369-Introduced.html
11 LC
33 4073
House
Bill 369
By:
Representatives Austin of the
10th,
Jacobs of the
80th,
Sims of the
169th,
and Braddock of the
19th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Titles 20 and 48 of the Official Code of Georgia Annotated, relating,
respectively, to education and revenue and taxation, so as to revise provisions
relating to student scholarship organizations; to revise definitions; to revise
requirements on student scholarship organizations; to provide for penalties; to
revise and change certain provisions regarding the qualified education income
tax credit; to provide for related matters; 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 Chapter 2A, relating to 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
for a period
of not less than one grading period in a
Georgia secondary or primary public school or eligible to enroll in
first
grade, a qualified kindergarten
program,
or
a
pre-kindergarten
program;
provided, however, that if a student is deemed an eligible student pursuant to
this paragraph, he or she shall continue to qualify as such until he or she
graduates, reaches the age of 20, or returns to a public
school.
(2)
'Qualified school or program' means a nonpublic 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 the requirements prescribed by law for private
schools in this state.
(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
for
scholarships or tuition grants at least 90
percent of its annual revenue
received from
donations 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.
20-2A-2.
Each
student scholarship organization:
(1)
Must obligate
for
scholarships or tuition grants at least 90
percent of its annual revenue
received from
donations for scholarships or tuition
grants; however, up to 25 percent of this amount may be carried forward for the
next fiscal
year. Revenue
received by the organization for which no tax credit was received by the donor
pursuant to Code Section 48-7-29.16 is not required to be used for scholarships
or tuition grants;
(2)
Must maintain separate accounts for scholarship funds and operating
funds;
(3)
Must have an independent board of directors of which board members are not
compensated for board service;
(3)(4)
May transfer funds to another student scholarship organization;
(4)(5)
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 and provide such audit to the Department of Revenue
in accordance with Code Section 20-2A-3; and
(5)(6)
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.
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
individual
contributions and tax credits
approved.
Individual contributions shall include contributions made by those filing income
tax returns as a single individual or head of household and those filing joint
returns;
and
(2)
The total number and dollar value of corporate contributions and tax credits
approved;
(3)
The total number and dollar value of scholarships awarded to eligible
students;
(4)
Of the scholarships awarded, the number of eligible students whose family income
is at or below the federal poverty level and the number of eligible students
whose family income does not exceed 200 percent of the federal poverty level;
and
(2)(5)
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)(5)
of Code Section 20-2A-2.
The Department
of Revenue shall post on its website the information received by each student
scholarship organization pursuant to paragraphs (1) through (4) of this
subsection.
(b)
The Department of Revenue shall not require any other information from student
scholarship organizations, except as expressly authorized in this
chapter.
20-2A-4.
The
Department of Revenue shall provide a list of all student scholarship
organizations receiving contributions from businesses and individuals granted a
tax credit under Code Section 48-7-29.16 to the General Assembly by January 30
of each year.
20-2A-5.
The
parent or guardian to whom a scholarship award is granted must restrictively
endorse the scholarship award to the private school for deposit into the account
of the private school. The parent or guardian may not designate any entity or
individual associated with the participating private school as the parent's
attorney in fact to endorse a scholarship
warrant
award.
A participant who fails to comply with this Code section forfeits the
scholarship.
20-2A-6.
The
Department of Education shall maintain on its website a current list of all
student scholarship organizations which have provided notice pursuant to
paragraph
(5)(6)
of Code Section 20-2A-2.
20-2A-7.
(a)(1)
Any student scholarship organization that fails to comply with any requirements
under this chapter shall be given written notice of such failure to comply by
certified mail and shall have 90 days from the receipt of such notice to correct
all deficiencies.
(2)
Upon failure to correct all deficiencies within 90 days, such student
scholarship organization shall:
(A)
Be immediately removed from the Department of Education list provided for in
Code Section 20-2A-6;
(B)
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; and
(C)
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.
(b)
Any student scholarship organization that:
(1)
Awards or restricts the award of a scholarship to a specific eligible student at
the request of a donor; or
(2)
Encourages or facilitates taxpayers to engage in actions that are prohibited by
law
shall
be subject to paragraph (2) of subsection (a) of this Code section.
(c)
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 this chapter shall be guilty of a
misdemeanor."
SECTION
2.
Article
2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating
to imposition, rate, and computation of income taxes, is amended by revising
Code Section 48-7-29.16, relating to qualified education tax credits, 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 taxpayer shall be allowed a credit against the tax imposed by this
chapter for qualified education expenses
of up to 75
percent of such taxpayer's state income tax
liability
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
or other
entity 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;
provided, however, that if a corporation is not subject to income tax liability,
such amount shall be calculated on the tax liability applicable to such
corporation, such as tax liability for the sale of alcoholic beverages or on
insurance premiums.
Such income
tax liability shall only apply to the portion remitted to the state and shall
not include any local tax portion.
(d)
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)
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)
In no event shall the aggregate amount of tax credits allowed under this Code
section exceed $50 million per tax year.
(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
120
days after receiving notice from the department that the requested amount was
preapproved. 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.
The department
shall establish a web-based donation approval process to implement 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.
The department
shall maintain an ongoing, current list on its website of the amount of tax
credits available under this Code section.
(5)
Notwithstanding any laws to the contrary, the department shall not take any
adverse action against donors to student scholarship organizations if the
commissioner preapproved a donation for a tax credit prior to the date the
student scholarship organization is removed from the Department of Education
list pursuant to Code Section 20-2A-7, and all such donations shall remain as
preapproved tax credits subject only to the donor's compliance with paragraph
(3) of this subsection.
(g)
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.
(h)(1)
No credit shall be allowed under this Code section with respect to any amount
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)
The commissioner shall be authorized to promulgate any rules and regulations
necessary to implement and administer the tax provisions of this Code
section."
SECTION
3.
This
Act shall be applicable to all taxable years beginning on or after January 1,
2011.
SECTION
4.
All
laws and parts of laws in conflict with this Act are repealed.