07 LC 21
9279
House
Bill 400
By:
Representatives Ehrhart of the
36th,
Scott of the
2nd,
Casas of the
103rd,
Graves of the
12th,
and May of the
111th
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 provide for a
program of educational improvement; to provide for definitions; to provide for
student scholarship organizations; to provide for educational improvement
organizations; to provide for the Student Scholarship Organization and Education
Improvement Organization Board; to provide for applications; to provide for
accounting; to provide for procedures; to provide for an income tax credit with
respect to qualified education expenses; to provide for conditions and
limitations; to provide for powers, duties, and authority of the state revenue
commissioner with respect to the foregoing; 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 adding a new chapter to read as follows:
"CHAPTER
2A
20-2A-1.
As
used in this chapter, the term:
(1)
'Board' means the Student Scholarship Organization and Educational Improvement
Organization Board created pursuant to Code Section 20-2A-4.
(2)
'Educational improvement 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 90 percent of its annual revenue for the support of
extracurricular activities, character education, art instruction, music
instruction, foreign language instruction, innovative educational programs, or
charter schools; and
(B)
Provides its support of extracurricular activities, character education, art
instruction, music instruction, foreign language instruction, innovative
education programs, or charter schools without limiting availability to only
students of one school.
(3)
'Eligible student' means a student who is:
(A)
A Georgia resident enrolled in a Georgia secondary or primary school or eligible
to enroll in a qualified kindergarten program or pre-kindergarten program;
and
(B)(i)
A member of a household whose total annual income does not exceed the PeachCare
threshold, which, except as otherwise provided in this chapter, is 200 percent
of the most recently published federal poverty guidelines in the federal
register by the United States Department of Health and Human Services;
or
(ii)
Suffers from one or more of the following disabilities:
(I)
Autism;
(II)
Blindness;
(III)
Deafness or hard of hearing;
(IV)
Emotional and behavioral disorder;
(V)
Intellectual disability;
(VI)
Orthopedic impairment;
(VII)
Other health impairment;
(VIII)
Specific learning disability;
(IX)
Speech-language impairment;
(X)
Traumatic brain injury; or
(XI)
Visual impairment.
(4)
'Extracurricular activity' means a school sponsored activity that requires
enrolled students to pay a fee in order to participate, including fees
for:
(A)
Band uniforms;
(B)
Equipment or uniforms for varsity athletic activities;
(C)
Scientific laboratory materials; or
(D)
In-state or out-of-state trips that are solely for competitive
events.
Extracurricular
activities do not include any senior trips or events that are recreational,
amusement, or tourist activities.
(5)
'Innovative education program' means an advanced academic or similar program or
a program of instruction in music, the arts, or a foreign language that is not
part of the regular academic program of a public school but enhances the
curriculum or academic program of the public school or provides pre-kindergarten
programs to public school students.
(6)
'Qualified school or program' means a nongovernmental primary school or
secondary school that:
(A)
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;
(B)
Annually administers and makes available to the public the aggregate test scores
of its students on a nationally standardized norm-referenced achievement
test;
(C)
Requires all teaching staff and personnel that have unsupervised contact with
students to be fingerprinted;
(D)
Provides the student scholarship organization, upon request, all documentation
necessary for the students´ participation, including the fee schedules;
and
(E)
Is academically accountable to the parent by:
(i)
At a minimum, providing the parent with a written explanation of the
student´s progress;
(ii)
Administering or making provisions for a student to take an annual placement
test;
(iii)
Cooperating with the parents of scholarship students who chose to participate in
state-wide assessments; and
(iv)
Employing teachers who have regular and direct contact with each student at the
school´s physical location.
(7)
'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 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.
20-2A-2.
Each
student scholarship organization:
(1)
Shall provide fingerprints of its owners and operators to be run through a state
and federal criminal history check;
(2)
Must obligate 100 percent of its funds; however, up to 25 percent of the total
contribution may be carried forward for the next fiscal year;
(3)
Must maintain separate accounts for scholarship funds and operating
funds;
(4)
May transfer funds to another student scholarship organization with the prior
approval of the board; and
(5)
Must provide 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.
20-2A-3.
Each
educational improvement organization:
(1)
Shall provide fingerprints of its owners and operators to be run through a state
and federal criminal history check;
(2)
Must obligate 100 percent of its funds; however, up to 25 percent of the total
contribution may be carried forward for the next fiscal year;
(3)
Must maintain separate accounts for scholarship funds and operating
funds;
(4)
May transfer funds to another educational improvement organization with the
prior approval of the board; and
(5)
Must provide an audit of its accounts by an independent certified public
accountant within 120 days after the completion of the educational improvement
organization´s fiscal year.
20-2A-4.
(a)
There is created the Student Scholarship Organization and Educational
Improvement Organization Board. The board shall consist of nine members. Three
members each shall be appointed by the Governor, Lieutenant Governor, and the
Speaker of the House of Representatives. Each member shall be appointed for
term of four years and until such member´s successor is appointed and
qualified.
(b)
It shall be the duty of the board to:
(1)
Review and approve the applications of eligible student scholarship
organizations and educational improvement organizations;
(2)
Issue certificates of eligibility to student scholarship organizations and
educational improvement organizations;
(3)
Distribute tax credit certificates, on forms provided by the state revenue
commissioner, to board approved student scholarship organizations and
educational improvement organizations for distribution to contributing
taxpayers;
(4)
Maintain records of all data submitted by student scholarship organizations and
educational improvement organizations to the board as required under the terms
of this chapter;
(5)
Post and update as necessary a list of all student scholarship organizations and
educational improvement organizations approved under this Code section on the
publicly accessible website of the State of Georgia, www.georgia.gov;
and
(6)
Promulgate any rules and regulations necessary to implement and administer the
tax provisions of this chapter.
20-2A-5.
(a)
Each student scholarship organization shall submit to the board, on a form
provided by the board, information that enables the board to confirm that the
organization is exempt from taxation under Section 501(c)(3) of the Internal
Revenue Code and must certify to board that it is eligible to participate in the
program.
(b)(1)
Each educational improvement organization shall submit an application to the
board, on a form provided by the board, information that enables the board to
confirm that the organization is exempt from taxation under Section 501(c)(3) of
the Internal Revenue Code and must certify to board that it is eligible to
participate in the program.
(2)
The educational improvement organization shall submit with its application a
description of the proposed extracurricular activity or activities, character
education program or programs, art instruction program or programs, music
instruction program or programs, foreign language instruction program or
programs, innovative education program or programs, or charter schools on a form
provided by the board. The board shall consult with the local boards of
education as necessary and shall review and approve or deny the
application.
20-2A-6.
(a)
Each student scholarship organization shall report to the board, on a form
provided by the board, by January 12 of each tax year the
following:
(1)
The name and address of members and chairpersons of the board of the student
scholarship organization;
(2)
The total number and dollar value of contributions and tax credits
approved;
(3)
A list of the individual donors, including the dollar value of each donation and
the dollar value of each approved tax credit;
(4)
Total number of children utilizing tuition grants;
(5)
Name and address of each represented school receiving grants, details of number
of tuition grant students, and total dollar value of grants utilized at each
school served by the student scholarship organization;
(6)
The number of scholarships awarded during the immediately preceding school year
to eligible pre-kindergarten students;
(7)
The total and average amounts of scholarships awarded during the immediately
preceding school year to eligible pre-kindergarten students;
(8)
The number of scholarships awarded during the immediately preceding school year
to eligible students in kindergarten through grade eight;
(9)
The total and average amounts of the scholarships awarded during the immediately
preceding school year to eligible students in kindergarten through grade
eight;
(10)
The number of scholarships awarded during the immediately preceding school year
to eligible students in grades nine through 12; and
(11)
The total and average amounts of the scholarships awarded during the immediately
preceding school year to eligible students in grades nine through
12.
(b)
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 the individual donors, including the dollar value of each donation and
the dollar value of each approved tax credit.
(c)
Neither the board nor the Department of Revenue shall require any other
information from student scholarship organizations, except as expressly
authorized in this chapter.
20-2A-7.
(a)
Each educational improvement organization shall report to the board, on a form
provided by the board, by January 12 of each tax year the
following:
(1)
The total number and dollar value of contributions and tax credits
approved;
(2)
A list of the individual donors, including the dollar value of each donation and
the dollar value of each approved tax credit;
(3)
The names of the public schools and school districts that received grants during
the immediately preceding school year; and
(4)
A description of how each grant was utilized during the immediately preceding
school year.
(b)
The educational improvement organization shall 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 the individual donors, including the dollar value of each donation and
the dollar value of each approved tax credit.
(c)
Neither the board nor the Department of Revenue shall require any other
information from educational improvement organizations, except as expressly
authorized in this chapter.
20-2A-8.
The
Department of Revenue shall provide a list of all student scholarship
organizations and educational improvement organizations receiving contributions
from businesses and individuals granted a tax credit under Code Section
48-7-29.13 to the General Assembly by January 30 of each year.
20-2A-9.
Each
qualified school or program shall report to the appropriate educational
improvement organization, on a form provided by the board:
(1)
The total number of fees and cash contributions payments received during the
previous calendar year;
(2)
The total dollar amount of fees and contributions received by the school during
the previous calendar year;
(3)
The total dollar amount of fees and contributions spent during the previous
calendar year; and
(4)
A description of how the contribution dollars were spent during the immediately
preceding school year, including a breakdown of the dollar amounts spent on each
extracurricular activity, character education program, art instruction program,
music instruction program, foreign language instruction program, or innovative
education program.
20-2A-10.
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. A participant who fails to
comply with this Code section forfeits the scholarship.
20-2A-11.
Contingent
upon available funds, an eligible student may continue in the scholarship
program so long as such student´s family income level does not exceed 300
percent of the federal poverty level."
SECTION
2.
Title
48 of the Official Code of Georgia Annotated, relating to revenue and taxation,
is amended by adding a new Code Section to read as follows:
"48-7-29.13.
(a)
As used in this Code section, the term 'qualified education expense' means the
expenditure of funds by the taxpayer to a student scholarship organization or
educational improvement organization operating pursuant to Chapter 2A of Title
20.
(b)
An individual taxpayer shall be allowed a credit against the tax imposed by this
chapter for qualified educational expenses as follows:
(1)
For private schools:
(A)
$500.00 per year for a single individual or a head of household; or
(B)
$1,000.00 per tax year for a married couple filing a joint return;
or
(2)
For public schools:
(A)
$250.00 per year for a single individual or a head of household; or
(B)
$500.00 per year for a married couple filing a joint return.
(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)
The tax credit shall not be allowed if the taxpayer designates the
taxpayer´s qualified educational 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)
In no event shall the aggregate amount of tax credits allowed under this Code
section exceed $50 million per tax year with 2 percent of such aggregate amount
reserved for small businesses as defined under paragraph (2) of Code Section
50-5-121.
(g)
The commissioner shall preapprove tax credits subject to subsection (d) of this
Code section.
(h)
The commissioner shall allow the tax credits on a first come, first served
basis.
(i)
For the purposes of subsection (f) of the Code section, before making a
contribution to a student scholarship organization or educational improvement
organization, the taxpayer shall notify the student scholarship organization or
educational improvement organization of the total amount of contributions that
the taxpayer intends to make to the student scholarship organization or
educational improvement organization. Before accepting the contribution, the
student scholarship organization or educational improvement organization shall
request preapproval from the commissioner for the taxpayer´s intended
contribution amount. The commissioner shall preapprove or deny the requested
amount within 20 days after receiving the request from the student scholarship
organization or educational improvement organization. If the commissioner
preapproves the request, the student scholarship organization or educational
improvement organization shall immediately notify the taxpayer that the
requested amount was preapproved by the commissioner. In order to receive a tax
credit under this subsection, the taxpayer shall make the contribution to the
student scholarship organization or educational improvement organization within
20 days after receiving notice from the student scholarship organization or
educational improvement organization that the requested amount was preapproved.
If the student scholarship organization or educational improvement organization
does not receive the preapproved contribution from the taxpayer within the
required 20 days, the student scholarship organization or educational
improvement organization shall immediately notify the department, and the
commissioner shall no longer include this preapproved contribution amount when
calculating the limit prescribed in subsection (f) of this Code
section.
(j)
Preapproval of contributions by the commissioner shall be based solely on the
availability of tax credits subject to the aggregate total limit established
under subsection (f) of this Code section.
(k)
In order for the taxpayer to claim the student scholarship organization or
educational improvement organization tax credit under this Code section, a tax
credit certificate issued by the student scholarship organization or educational
improvement organization to which the contribution was made shall be attached to
the taxpayer´s tax return. The tax credit certificate shall contain the
taxpayer´s name, address, tax identification number, the amount of the
contribution, and the amount of the credit. The commissioner shall provide tax
credit certificates for issuance to the Student Scholarship Organization and
Educational Improvement Organization Board created under Code Section
20-2A-4.
(l)(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.
(m)
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 become effective upon its approval by the Governor or upon its
becoming law without such approval and shall be applicable to all taxable years
beginning on or after January 1, 2007.
SECTION
4.
All
laws and parts of laws in conflict with this Act are repealed.