Title: Short Title: Revenue and taxation; creating the Oklahoma Special Education Scholarship Act; effective date
Author: Oklahoma House of Reps
Last saved by: mattisonkr

STATE OF OKLAHOMA

1st Session of the 53rd Legislature (2011)

HOUSE BILL 1747	By:	Nelson

AS INTRODUCED

An Act relating to revenue and taxation; creating the Oklahoma Special Education Scholarship Act; providing short title; providing for specified credit against income tax liability; specifying amount of credit for certain contribution by specified taxpayer type and limiting credit; providing conditions under which credit shall not be allowed; limiting total amount of credits allowed annually; defining terms; requiring Oklahoma Tax Commission to maintain certain list for purposes of allocating credit; establishing criteria for reserving credit; requiring Tax Commission to notify certain entities under certain circumstances; providing for carryover of unused credit; requiring Tax Commission to promulgate rules in consultation with State Department of Education; providing for codification; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 2357.206 of Title 68, unless there is created a duplication in numbering, reads as follows:
A.  This act shall be known and may be cited as the “Oklahoma Special Education Scholarship Act”.
B.  1.  For tax years beginning after December 31, 2011, there shall be allowed a credit for any taxpayer who makes a contribution to an eligible scholarship-granting organization, as follows:
a.	the credit against the tax imposed by subsections B, C and F of Section 2355 of Title 68 of the Oklahoma Statutes shall be equal to one hundred percent (100%) of the total amount of contributions made during a taxable year, not to exceed One Thousand Dollars ($1,000.00) for each taxpayer or Two Thousand Dollars ($2,000.00) for married individuals filing jointly for the taxable year in which the credit provided in this section is claimed, and
b.	the credit against the tax imposed by subsections D and E of Section 2355 of Title 68 of the Oklahoma Statutes shall be equal to a percentage of the total amount of contributions made as specified in this subparagraph.  For the first tax year in which a taxpayer makes an eligible contribution, the credit shall be equal to eighty percent (80%) of the amount of the contribution.  For the second and subsequent years a taxpayer makes an eligible contribution the credit shall be equal to ninety percent (90%) of any amount equal to or less than the amount of the contribution made during the first year and eighty percent (80%) of any amount which is greater than the contribution made during the first year; provided, no credit authorized by this subparagraph shall exceed an amount which is equal to One Hundred Thousand Dollars ($100,000.00) for the taxable year in which the credit provided in this section is claimed.
2.  A credit shall not be allowed for contributions made to a scholarship-granting organization in any month in which it has actually awarded less than ninety percent (90%) of funds available and dedicated for educational scholarships.  The percentage of funds actually awarded, compared to the total available and dedicated for educational scholarships, shall be measured as a monthly average over the most recent twenty-four-month period.
3.  The total credits authorized by subparagraph b of paragraph 1 of this subsection against the taxes imposed by subsections D and E of Section 2355 of Title 68 of the Oklahoma Statutes shall not exceed Ten Million Dollars ($10,000,000.00) annually, to be allocated by the Oklahoma Tax Commission as provided in subsection D of this section.
C.  As used in this section:
1.  “Eligible special-needs student” means a child of school age who has attended a public school in the state with an individualized education program pursuant to the Individuals With Disabilities Education Act, 20 U.S.C.A., Section 1400 et seq.;
2.  “Educational scholarships” means grants to an eligible special-needs student of up to Twenty-five Thousand Dollars ($25,000.00) to cover all or part of the tuition, fees and transportation costs of a qualified school for eligible special-needs students which is accredited by the State Board of Education or an accrediting association approved by the Board pursuant to Section 3-104 of Title 70 of the Oklahoma Statutes;
3.  “Low-income eligible student” means an eligible special-needs student who qualifies for a free or reduced-price lunch;
4.  "Qualified school for eligible special-needs students" means an elementary or secondary private school located in this state;
5.  “Scholarship-granting organization” means an organization which:
a.	is a nonprofit entity exempt from taxation pursuant to the provisions of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3),
b.	distributes periodic scholarship payments as checks made out to the parent or guardian of an eligible special-needs student and mailed to the qualified school where the student is enrolled,
c.	spends no more than ten percent (10%) of its annual revenue on expenditures other than educational scholarships as defined in paragraph 2 of this subsection,
d.	spends a portion of its expenditures each year on educational scholarships for low-income eligible students, as defined in paragraph 3 of this subsection, in an amount equal to or greater than the percentage of low-income eligible students in the state,
e.	ensures that scholarships are portable during the school year and can be used at any qualified school for eligible special-needs students that accepts the eligible special-needs student, and
f.	has policies in place to:
(1)	carry out criminal background checks on all employees and board members to ensure that no individual is involved with the organization who might reasonably pose a risk to the appropriate use of contributed funds, and
(2)	maintain full and accurate records with respect to the receipt of contributions and expenditures of those contributions and supply the records and any other documentation required by the Tax Commission to demonstrate financial accountability; and
6.  “Annual revenue” means the total amount or value of contributions received by an organization from taxpayers awarded credits during the fiscal year of the organization and all amounts earned from interest or investments.
D.  1.  In order to allocate the total credits authorized by this section against the taxes imposed by subsections D and E of Section 2355 of Title 68 of the Oklahoma Statutes, the Tax Commission shall maintain a list of the total credits reserved during any taxable year.  Credits shall be considered reserved only when:
a.	a scholarship-granting organization has received a pledge from a taxpayer to make a specified donation, and
b.	the scholarship-granting organization has deposited the funds pledged within seven (7) business days from the date the pledge was received.
2.  When the amount of total credits reserved has reached Ten Million Dollars ($10,000,000.00), the Tax Commission shall notify all scholarship-granting organizations that no additional credit is available for the tax year.
E.  The credit authorized by this section shall not be used to reduce the tax liability of the taxpayer to less than zero (0).
F.  Any credits allowed but not used in any tax year may be carried over, in order, to each of the three (3) years following the year of qualification.
G.  In consultation with the State Department of Education, the Tax Commission shall promulgate rules necessary to implement this act.
SECTION 2.  This act shall become effective January 1, 2012.

53-1-6262	KB	01/18/11

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