STATE OF OKLAHOMA

1st Session of the 52nd Legislature (2009)

SENATE BILL 882	By:	Eason McIntyre and Ford

AS INTRODUCED

An Act relating to revenue and taxation; creating the Oklahoma Equal Opportunity 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; defining terms; providing for carryover of unused credit; requiring Oklahoma 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 Equal Opportunity Education Scholarship Act”.
B.  For tax years beginning after December 31, 2009, there shall be allowed a credit for any taxpayer who makes a contribution to an eligible scholarship-granting organization.  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.  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 one hundred percent (100%) of the total amount of contributions made during a taxable year, not to exceed an amount which is equal to one hundred percent (100%) of the taxpayer’s total tax liability for the taxable year in which the credit provided in this section is claimed.  A credit shall not be allowed for contributions received by 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.  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 shall not exceed Five Million Dollars ($5,000,000.00) 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 student” means a child of school age who:
a.	is lawfully present in the United States and who is a member of a household in which the total annual income during the preceding tax year does not exceed an amount equal to one hundred eighty-five percent (185%) of the income standard used to qualify for a free or reduced school lunch,
b.	has not been enrolled in or attended an elementary or secondary private school in this state within eighteen (18) months preceding the award of an educational scholarship, and
c.	during the immediately preceding school year, attended or, by virtue of the location of such student's place of residence, was eligible to attend a public school in this state which had been identified for school improvement for three (3) or more years as determined by the State Board of Education pursuant to the requirements of the No Child Left Behind Act of 2001, P.L. No. 107-110.
Once a student has received an educational scholarship, as defined in paragraph 2 of this subsection, the student and any siblings who are members of the same household shall remain eligible until they graduate from high school or reach twenty-one (21) years of age, whichever occurs first;
2.  “Eligible special needs student” means a child of school age who has attended public school in our state with an individualized education program pursuant to the Individuals With Disabilities Education Act, 20 U.S.C.A., Section 1400 et seq.;
3.  “Educational scholarships” means
a.	grants to an eligible student of up to Five Thousand Dollars ($5,000.00) or eighty percent (80%) of the average per-pupil expenditure in the school district where the recipient student resides, whichever is greater, to cover all or part of the tuition, fees and transportation costs of a qualified private school 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, or
b.	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 private 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;
4.  “Low-income eligible student” means an eligible student or eligible special needs student who qualifies for a free or reduced-price lunch;
5.  “Qualified school” means an elementary or secondary private school in a county in this state with a population of more than four hundred fifty thousand (450,000) according to the latest Federal Decennial Census which is:
a.	accredited by the State Board of Education or an approved accrediting association approved by the Board pursuant to Section 3-104 of Title 70 of the Oklahoma Statutes,
b.	in compliance with all applicable health and safety laws and codes,
c.	has a stated policy against discrimination in admissions on the basis of race, color, national origin or disability, and
d.	ensures academic accountability to parents and guardians of students through regular progress reports;
6.  "Qualified school for eligible special needs students" means an elementary or secondary private school in a county in this state;
7.  “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 an eligible student’s or eligible special needs student's parent or guardian 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 each year a portion of its expenditures on educational scholarships for low-income eligible students, as defined in paragraph 3 of this subsection, in an amount equal to 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 that accepts the eligible student or qualified school for 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 such records and any other documentation required by the Tax Commission to demonstrate financial accountability; and
8  “Annual revenue” means the total amount or value of contributions received by an organization from taxpayers awarded credits during the organization’s fiscal year 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 Five Million Dollars ($5,000,000.00), the Tax Commission shall notify all scholarship-granting organizations that no additional credit is available for the tax year.
E.  In no event shall the amount of the credit exceed the amount of any tax liability of the taxpayer.
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 November 1, 2009.

52-1-13	JCR	1/15/2009 9:52:06 AM