HB30INTRODUCED Page 0 Q7NV41-1 By Representative McCampbell RFD: Education Policy First Read: 07-Mar-23 PFD: 23-Feb-23 1 2 3 4 5 Q7NV41-1 02/16/2023 KMS (L)cr 2023-281 Page 1 SYNOPSIS: Under existing law, a public K-12 school or school district that is determined to have poor performance is labeled by the State Superintendent of Education as failing to make adequate progress or as a failing school under the school grading system. Also under existing law, the Alabama Accountability Act of 2013, provides financial assistance through an income tax credit to a parent who transfers a student from a failing public school to a nonfailing public school or nonpublic school of the parent's choice. This bill would change the designation of a failing school to a lowest sixth percent school and the designation of a nonfailing school to a highest 94th percent school for the purposes of school grading and the Alabama Accountability Act of 2013, and would require the State Board of Education to reflect those changes in terminology when amending or adopting rules. A BILL TO BE ENTITLED AN ACT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HB30 INTRODUCEDHB30 INTRODUCED Page 2 To amend Sections 16-6C-2, as amended by Act 2022-374, 2022 Regular Session, 16-6D-3, 16-6D-4, 16-6D-6, 16-6D-8, and 16-6D-9, as amended by Act 2022-390, 2022 Regular Session, Code of Alabama 1975, relating to the public K-12 school grading system and the Alabama Accountability Act of 2013; to change the designation of a failing school to a lowest sixth percent school and the designation of a nonfailing school to a highest 94th percent school; and to require the State Board of Education to reflect those changes in terminology when amending or adopting rules. BE IT ENACTED BY THE LEGISLATURE OF ALABAMA: Section 1. Sections 16-6C-2, as amended by Act 2022-374, 2022 Regular Session, 16-6D-3, 16-6D-4, 16-6D-6, 16-6D-8, and 16-6D-9, as amended by Act 2022-390, 2022 Regular Session, of the Code of Alabama 1975, are amended to read as follows: "§16-6C-2 (a) In addition to any other labels or designations assigned to public schools and public school districts pursuant to a federal, state, school, district, or other assessment or accountability system, the State Superintendent of Education, consistent with this chapter, shall develop a school grading system reflective of school and district performance. The grading system shall utilize the traditional A, B, C, D, or F framework. (1) Schools receiving a grade of "A" are making excellent progress. (2) Schools receiving a grade of "B" are making above 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 HB30 INTRODUCEDHB30 INTRODUCED Page 3 average progress. (3) Schools receiving a grade of "C" are making satisfactory progress. (4) Schools receiving a grade of "D" are making less than satisfactory progress. (5) Schools receiving a grade of "F" are failing to make adequate progress lowest sixth percent schools . (b) In developing this school grading system, the State Superintendent of Education shall seek input from parents, teachers, school administrators, existing State Department of Education advisory groups or task forces, and other education stakeholders on how the system can properly reflect not only the overall academic proficiency of each public school but also the academic improvements made by each public school, along with other key performance indicators that give a total profile of the school or the school system, or both. (c) The State Superintendent of Education shall prescribe the design and content of the school grading system by not later than December 31, 2012. It is the intent of the Legislature that the system be in place by no later than the 2013-2014 school year. The system may not be utilized by the State Superintendent of Education or the State Department of Education until sufficient rules have been adopted by the State Board of Education pursuant to the Alabama Administrative Procedure Act. (d) Using an easy to understand grading scale, the school grading system shall describe achievement in the state, each district, and each school. Additionally, the State 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 HB30 INTRODUCEDHB30 INTRODUCED Page 4 Superintendent of Education shall not be precluded from also assigning grades to school feeder patterns or grades that reflect the fiscal health and fiscal efficiency of a school or school system. (e) The State Superintendent of Education shall make these grades available to the general public and shall post these grades on the website of the State Department of Education as soon as the grades are available. Additionally, appropriate grade information shall be delivered to the parent or guardian of each public school student at least once annually in the same manner that student report cards are currently delivered. (f)(1) Using state-authorized assessments and other key performance indicators that give a total profile of the school or the school system, or both, a school's grade, at a minimum, shall be based on a combination of student achievement scores, achievement gap, college and career readiness, learning gains, and other indicators as determined by the State Superintendent of Education to impact student learning and success. (2) Commencing with the 2021-2022 school year, the academic achievement of each student identified as an English language learner, who has not shown proficiency on ACCESS for EL, or other state approved English proficiency assessment, may not be considered in assigning an academic achievement grade to a school or school system for the first five years of enrollment of the student. The educational progress of each of these students shall continue to be measured in the academic growth category and the progress in English language 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 HB30 INTRODUCEDHB30 INTRODUCED Page 5 proficiency category and, at the end of the five-year period for the student, his or her proficiency shall again be considered in assigning an academic achievement grade to a school or school system on the state A-F school grading system. (3) The State Superintendent of Education may not amend the state Every Student Succeeds Act option for including test scores of English language learners enrolled in United States schools. The option provides as follows: For the first year of enrollment, the test scores shall be reported, but the results on both the reading/language arts and math tests shall be excluded from the federal accountability system; for the second year of enrollment, a measure of student growth on both tests shall be included in the federal accountability system; and for the third year of enrollment, proficiency on both tests shall be included in the federal accountability system. Additionally, the option requires English language learners who have successfully left the English language learner subgroup by attaining English proficiency to be included in that subgroup for accountability purposes for four years. (g) The A-F school grading system shall be consistently applied so that grades of one school or system may be compared to the grades of any other school or system." "§16-6D-3 (a) The Legislature finds and declares all of the following: (1) To further the goals of public education throughout the state, each school system should be able to have maximum 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 HB30 INTRODUCEDHB30 INTRODUCED Page 6 possible flexibility to meet the needs of students and the communities within its jurisdiction. (2) There is a critical need for innovative models of public education that are tailored to the unique circumstances and needs of the students in all schools and communities, and especially in schools and communities that are struggling to improve academic outcomes and close the achievement gap. (3) To better serve students and better use available resources, local boards of education, local school systems, and parents need the ability to explore flexible alternatives in an effort to be more efficient and effective in providing operational and programmatic services. (b) Therefore, it is the intent of the Legislature to do all of the following: (1) Allow school systems greater flexibility in meeting the educational needs of a diverse student population. (2) Improve educational performance through greater individual school autonomy and managerial flexibility with regard to programs and budgetary matters. (3) Encourage innovation in education by providing local school systems and school administrators with greater control over decisions including, but not limited to, budgetary matters, staffing, personnel, scheduling, and educational programming, including curriculum and instruction. (4) Provide financial assistance through an income tax credit to a parent who transfers a student from a failing lowest sixth percent public school to a nonfailing highest 94th percent public school or nonpublic school of the parent's 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 HB30 INTRODUCEDHB30 INTRODUCED Page 7 choice." "§16-6D-4 For the purposes of this chapter, the following terms shall have the following meanings: (1) ACADEMIC YEAR. The 12-month period beginning on July 1 and ending on the following June 30. (2) DEPARTMENT OF REVENUE. The Alabama Department of Revenue. (3) EDUCATIONAL SCHOLARSHIP. A grant made by a scholarship granting organization to an eligible student to cover all or part of the tuition and mandatory fees for one academic year charged by a qualifying school to the eligible student receiving the scholarship; provided, however, that an educational scholarship shall not exceed six thousand dollars ($6,000) for an elementary school student, eight thousand dollars ($8,000) for a middle school student, or ten thousand dollars ($10,000) for a high school student per academic year. The term does not include a lump sum, block grant, or similar payment by a scholarship granting organization to a qualifying school that assigns the responsibility in whole or in part for determining the eligibility of scholarship recipients to the qualifying school or any person or entity other than the scholarship granting organization. (4) ELIGIBLE STUDENT. a. A student who satisfies all of the following: 1. Is a member of a family whose total annual income the calendar year before he or she receives an educational scholarship under this program does not exceed 185 percent of 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 HB30 INTRODUCEDHB30 INTRODUCED Page 8 the federal poverty level, the federally recognized threshold for receiving free or reduced priced lunch, as established from time to time by the U.S. Department of Health and Human Services. 2. Was eligible to attend a public school in the preceding semester or is starting school in Alabama for the first time. 3. Resides in Alabama while receiving an educational scholarship. b. A scholarship granting organization shall determine the eligibility of a student under subparagraph 1. of paragraph a. every other academic year in which a student receives an educational scholarship; provided that if the annual income of the family of a student who has received at least one educational scholarship exceeds 185 percent of the federal poverty level, the existing student shall remain eligible to receive educational scholarships until and unless the annual income of the family of the student exceeds 275 percent of the federal poverty level; provided, further that no student who has received at least one educational scholarship shall be eligible to receive educational scholarships if the annual income of his or her family exceeds 275 percent of the federal poverty level. (5) FAILING SCHOOL. A public K-12 school that is either of the following: a. Is designated as a failing school by the State Superintendent of Education. b. Does not exclusively serve a special population of 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 HB30 INTRODUCEDHB30 INTRODUCED Page 9 students and is listed in the lowest six percent of public K-12 schools based on the state standardized assessment in reading and math. (6)(5) FAMILY. A group of two or more people related by birth, marriage, or adoption, including foster children, who reside together. (7)(6) FLEXIBILITY CONTRACT. A school flexibility contract between the local school system and the State Board of Education wherein a local school system may apply for programmatic flexibility or budgetary flexibility, or both, from state laws, regulations, and policies, including regulations and policies promulgated adopted by the State Board of Education and the State Department of Education. (8)(7) INNOVATION PLAN. The request of a local school system for flexibility and plan for annual accountability measures and five-year targets for all participating schools within the school system. (9)(8) LOCAL BOARD OF EDUCATION. A city or county board of education that exercises management and control of a local school system pursuant to state law. (10)(9) LOCAL SCHOOL SYSTEM. A public agency that establishes and supervises one or more public schools within its geographical limits pursuant to state law. (10) LOWEST SIXTH PERCENT SCHOOL. A public K-12 school that is either of the following: a. Is designated as a lowest sixth percent school by the State Superintendent of Education. b. Does not exclusively serve a special population of 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 HB30 INTRODUCEDHB30 INTRODUCED Page 10 students and is listed in the lowest sixth percent of public K-12 schools based on the state standardized assessment in reading and math. (11) NONPUBLIC SCHOOL. Any nonpublic or private school, including parochial schools, not under the jurisdiction of the State Superintendent of Education and the State Board of Education, providing educational services to children. A nonpublic school provides education to elementary or secondary, or both, students and has notified the Department of Revenue of its intention to participate in the scholarship program and comply with the requirements of the scholarship program. A nonpublic school does not include home schooling. (12) PARENT. The parent or guardian of a student, with authority to act on behalf of the student. For purposes of Section 16-6D-8, the parent or guardian shall claim the student as a dependent on his or her Alabama state income tax return. (13) QUALIFYING SCHOOL. a. Either a public school outside of the resident school district that is not considered failing lowest sixth percent within the meaning of subdivision (5) (10) or any nonpublic school as defined in subdivision (11) and that satisfies the requirements of this subdivision. A qualifying nonpublic school shall be accredited by one of the six regional accrediting agencies or the National Council for Private School Accreditation, Advanc Eed, the American Association of Christian Schools, or one of their partner accrediting agencies. A nonpublic school shall have three 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 HB30 INTRODUCEDHB30 INTRODUCED Page 11 years from the later of the date the nonpublic school notified the Department of Revenue of its intent to participate in the scholarship program or June 10, 2015, to obtain the required accreditation and shall thereafter maintain accreditation as required by this subdivision. During the three-year period described in the immediately preceding sentence, a nonpublic school that is not accredited shall satisfy all of the following conditions until the nonpublic school obtains accreditation: 1. Has been in existence for at least three years. 2. Has daily attendance of at least 85 percent over a two-year period. 3. Has a minimum 180-day school year, or its hourly equivalent. 4. Has a day length of at least six and one-half hours. 5. Requires all students to take the Stanford Achievement Test, or its equivalent. 6. Requires all candidates for graduation to take the American College Test before graduation. 7. Requires students in high school in grades nine through 12 to earn a minimum of 24 credits before graduating, including 16 credits in core subjects, and each awarded credit shall consist of a minimum of 140 instructional hours. 8. Does not subject special education students to the same testing or curricular requirements as regular education students if it is not required in the individual plan for the student. 9. Maintains a website that describes the school, the 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 HB30 INTRODUCEDHB30 INTRODUCED Page 12 instructional program of the school, and the tuition and mandatory fees charged by the school, updated prior to the beginning of each semester. 10. Annually affirms on forms prescribed by the scholarship granting organization and the Department of Revenue its status financially and academically and provide other relative information as required by the scholarship granting organization or as otherwise required in this chapter. b. A nonpublic school that is not accredited and that has not been in existence for at least three years shall nevertheless be considered a qualifying school if, in addition to satisfying the requirements in subparagraphs 2. to 10., inclusive, of paragraph a., the nonpublic school operates under the governance of the board of directors or the equivalent thereof of an accredited nonpublic school. For purposes of the immediately preceding sentence, the term governance shall include, but not be limited to, curriculum oversight, personnel and facility management, and financial management. If, at the conclusion of the three-year period in which a nonpublic school is required to obtain accreditation, a nonpublic school is not accredited, the nonpublic school shall not be considered a qualifying school and shall not receive any funds from a scholarship granting organization until the nonpublic school obtains the accreditation required by this subdivision. (14) SCHOLARSHIP GRANTING ORGANIZATION. An organization that provides or is approved to provide educational 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 HB30 INTRODUCEDHB30 INTRODUCED Page 13 scholarships to eligible students attending qualifying schools of their parents' choice." "§16-6D-6 (a) The innovation plan of a local school system shall include, at a minimum, all of the following: (1) The school year that the local school system expects the school flexibility contract to begin. (2) The list of state laws, regulations, and policies, including rules, regulations, and policies promulgated adopted by the State Board of Education and the State Department of Education, that the local school system is seeking to waive in its school flexibility contract. (3) A list of schools included in the innovation plan of the local school system. (b) A local school system is accountable to the state for the performance of all schools in its system, including innovative schools, under state and federal accountability requirements. (c) A local school system may not, pursuant to this chapter, waive requirements imposed by federal law, requirements related to the health and safety of students or employees, requirements imposed by ethics laws, requirements imposed by the Alabama Child Protection Act of 1999, Chapter 22A of this title, requirements imposed by open records or open meetings laws, requirements related to financial or academic reporting or transparency, requirements designed to protect the civil rights of students or employees, requirements related to the state retirement system or state 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360 361 362 363 364 HB30 INTRODUCEDHB30 INTRODUCED Page 14 health insurance plan, or requirements imposed by Act 2012-482. This chapter may not be construed to allow a local school system to compensate an employee at an annual amount that is less than the amount the employee would otherwise be afforded through the State Minimum Salary Schedule included in the annual Education Trust Fund Appropriations Act. No local school system shall involuntarily remove any rights or privileges acquired by any employee under the Students First Act of 2011, Chapter 24C of this title. Except as provided for a failing lowest sixth percent school pursuant to subsection (e), no plan or program submitted by a local board of education may be used to deny any right or privilege granted to a new employee pursuant to the Students First Act of 2011. (d) No provision of this chapter shall be construed or shall be used to authorize the formation of a charter school. (e) Any provision of subsection (c) to the contrary notwithstanding, nothing in this chapter shall be construed to prohibit the approval of a flexibility contract that gives potential, current, or future employees of a failing lowest sixth percent school within the local school system the option to voluntarily waive any rights or privileges already acquired or that could potentially be acquired as a result of attaining tenure or nonprobationary status, provided, however, that any employee provided this option is also provided the option of retaining or potentially obtaining any rights or privileges provided under the Students First Act, Chapter 24C of this title. (f) The State Department of Education shall finalize 365 366 367 368 369 370 371 372 373 374 375 376 377 378 379 380 381 382 383 384 385 386 387 388 389 390 391 392 HB30 INTRODUCEDHB30 INTRODUCED Page 15 all school data and the local school system shall seek approval of the local board of education before final submission to the State Department of Education and the State Board of Education. (g) The final innovation plan, as recommended by the local superintendent of education and approved by the local board of education, shall accompany the formal submission of the local school system to the State Department of Education. (h) Within 60 days of receiving the final submission, the State Superintendent of Education shall decide whether or not the school flexibility contract and the innovation plan should be approved. If the State Superintendent of Education denies a school flexibility contract and innovation plan, he or she shall provide a written explanation for his or her decision to the local board of education. Likewise, a written letter of approval by the State Superintendent of Education shall be provided to the local board of education that submitted the final school flexibility contract and innovation plan. (i) The State Board of Education shall promulgate adopt any necessary rules and regulations required to implement this chapter including, but not limited to, all of the following: (1) The specification of timelines for submission and approval of the innovation plan and school flexibility contract of a local school system. (2) An authorization for the State Department of Education, upon approval by the State Board of Education after periodic review, to revoke a school flexibility contract for 393 394 395 396 397 398 399 400 401 402 403 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 419 420 HB30 INTRODUCEDHB30 INTRODUCED Page 16 noncompliance or nonperformance, or both, by a local school system. (3) An outline of procedures and necessary steps that a local school system shall follow, upon denial of an original submission, to amend and resubmit an innovation plan and school flexibility contract for approval." "§16-6D-8 (a) To provide educational flexibility and state accountability for students in failing lowest sixth percent schools: (1) For tax years beginning on and after January 1, 2013, an Alabama income tax credit is made available to the parent of a student enrolled in or assigned to attend a failing lowest sixth percent school to help offset the cost of transferring the student to a nonfailing highest 94th percent public school or nonpublic school of the parent's choice. The income tax credit shall be an amount equal to 80 percent of the average annual state cost of attendance for a public K-12 student during the applicable tax year or the actual cost of attending a nonfailing highest 94th percent public school or nonpublic school, whichever is less. The actual cost of attending a nonfailing highest 94th percent public school or nonpublic school shall be calculated by adding together any tuition amounts or mandatory fees charged by the school to the student as a condition of enrolling or of maintaining enrollment in the school. The average annual state cost of attendance for a public K-12 student shall be calculated by dividing the state funds appropriated to the Foundation 421 422 423 424 425 426 427 428 429 430 431 432 433 434 435 436 437 438 439 440 441 442 443 444 445 446 447 448 HB30 INTRODUCEDHB30 INTRODUCED Page 17 Program pursuant to Section 16-13-231(b)(2) by the total statewide number of pupils in average daily membership during the first 20 scholastic days following Labor Day of the preceding school year. For each student who was enrolled in and attended a failing lowest sixth percent school the previous semester whose parent receives an income tax credit under this section, an amount equal to 20 percent of the average annual state cost of attendance for a public K-12 student during the applicable tax year shall be allocated, for as long as the parent receives the tax credit, to the failing lowest sixth percent school from which the student transferred if the student transfers to and remains enrolled in a nonpublic school. No such allocation shall be made in the event the student transfers to or enrolls in a nonfailing highest 94th percent public school. The Department of Education shall determine the best method of ensuring that the foregoing allocation provisions are properly implemented. A parent is allowed a credit against income tax for each taxable year under the terms established in this section. If income taxes owed by such a parent are less than the total credit allowed under this subsection, the taxpayer shall be entitled to a refund or rebate, as the case may be, equal to the balance of the unused credit with respect to that taxable year. (2) Any income tax credit due a parent under this section shall be granted or issued to the parent only upon his or her making application therefor, at such time and in such manner as may be prescribed from time to time by the 449 450 451 452 453 454 455 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 HB30 INTRODUCEDHB30 INTRODUCED Page 18 Department of Revenue. The application process shall include, but not be limited to, certification by the parent that the student was enrolled in or was assigned to attend a failing lowest sixth percent school, certification by the parent that the student was subsequently transferred to, and was enrolled and attended, a nonfailing highest 94th percent public school or nonpublic school of the parent's choice, and proof, satisfactory to the Department of Revenue, of the actual cost of attendance for the student at the nonfailing highest 94th percent public school or nonpublic school. For purposes of the tax credit authorized by this section, costs of attendance does not include any such costs incurred for an academic year prior to the 2013-2014 academic year. The Department of Revenue shall also prescribe the various methods by which income tax credits are to be issued to taxpayers. Income tax credits authorized by this section shall be paid out of sales tax collections made to the Education Trust Fund, and set aside by the Comptroller in the Failing Lowest Sixth Percent Schools Income Tax Credit Account created in subsection (c), in the same manner as refunds of income tax otherwise provided by law, and there is hereby appropriated therefrom, for such purpose, so much as may be necessary to annually pay the income tax credits provided by this section. (3) An application for an income tax credit authorized by this section shall be filed with the Department of Revenue within the time prescribed for filing petitions for refund under Section 40-2A-7. (4) The Department of Revenue shall promulgate adopt 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 493 494 495 496 497 498 499 500 501 502 503 504 HB30 INTRODUCEDHB30 INTRODUCED Page 19 reasonable rules to effectuate the intent of this subsection. (b)(1) The parent of a public school student may request and receive an income tax credit pursuant to this section to reimburse the parent for costs associated with transferring the student from a failing lowest sixth percent school to a nonfailing highest 94th percent public school or nonpublic school of the parent's choice, in any of the following circumstances: a. By assigned school attendance area, if the student spent the prior school year in attendance at a failing lowest sixth percent school and the attendance of the student occurred during a school year in which the designation was in effect. b. The student was in attendance elsewhere in the Alabama public school system and was assigned to a failing lowest sixth percent school for the next school year. c. The student was notified that he or she was assigned to a failing lowest sixth percent school for the next school year. (2) This section does not apply to a student who is enrolled in the Department of Youth Services School District. (3) For the purposes of continuity of educational choice, the tax credit shall be available to parents for those grade levels of the failing lowest sixth percent school from which the student transferred. The parent of a student who transfers from a failing lowest sixth percent school may receive income tax credits for those grade levels enrolled in and attended in the nonfailing highest 94th percent public 505 506 507 508 509 510 511 512 513 514 515 516 517 518 519 520 521 522 523 524 525 526 527 528 529 530 531 532 HB30 INTRODUCEDHB30 INTRODUCED Page 20 school or nonpublic school of the parent's choice transferred to that were included in the failing lowest sixth percent school from which the student transferred, whether or not the failing lowest sixth percent school becomes a nonfailing highest 94th percent school during those years. The parent of such a student shall no longer be eligible for the income tax credit after the student completes the highest grade level in which he or she would otherwise have been enrolled at the failing lowest sixth percent school. Notwithstanding the foregoing, as long as the student remains enrolled in or assigned to attend a failing lowest sixth percent school, the parent may again transfer the student to a nonfailing highest 94th percent public school or nonpublic school of the parent's choice and request and receive an income tax credit as provided in this section. (4) A local school system, for each student enrolled in or assigned to a failing lowest sixth percent school, shall do all of the following: a. Timely notify the parent of the student of all options available under this section as soon as the school of attendance is designated as a failing lowest sixth percent school. b. Offer the parent of the student an opportunity to enroll the student in another public school within the local school system that is not a failing lowest sixth percent school or a failing lowest sixth percent school to which the student has been assigned. (5) The parent of a student enrolled in or assigned to 533 534 535 536 537 538 539 540 541 542 543 544 545 546 547 548 549 550 551 552 553 554 555 556 557 558 559 560 HB30 INTRODUCEDHB30 INTRODUCED Page 21 a school that has been designated as a failing lowest sixth percent school, who decides to transfer the student to a nonfailing highest 94th percent public school, shall first attempt to enroll the student in a nonfailing highest 94th percent public school within the same local system in which the student is already enrolled or assigned to attend before attempting to enroll the student in a nonfailing highest 94th percent public school that has available space in any other local school system in the state. A local school system may accept the student on whatever terms and conditions the system establishes and report the student for purposes of the local school system's funding pursuant to the Foundation Program. (6) For students in the local school system who are participating in the tax credit program, the local school system shall provide locations and times to take all statewide assessments required by law. (7) Students with disabilities who are eligible to receive services from the local school system under federal or state law, and who participate in the tax credit program, remain eligible to receive services from the local school system as provided by federal or state law. (8) If a parent enrolls a student in a nonfailing highest 94th percent public school within the same local school system, and that system provides transportation services for other enrolled students, transportation costs to the nonfailing highest 94th percent public school shall be the responsibility of the local school system. Local school systems may negotiate transportation options with a parent to 561 562 563 564 565 566 567 568 569 570 571 572 573 574 575 576 577 578 579 580 581 582 583 584 585 586 587 588 HB30 INTRODUCEDHB30 INTRODUCED Page 22 minimize system costs. If a parent enrolls a student in a nonpublic school or in a nonfailing highest 94th percent public school within another local school system, regardless of whether that system provides transportation services for other enrolled students, transportation of the student shall be the responsibility of the parent. (9) The State Department of Education shall promulgate adopt reasonable rules to effectuate the intent of this subsection. Rules shall include penalties for noncompliance. (c) There is created within the Education Trust Fund a separate account named the Failing Lowest Sixth Percent Schools Income Tax Credit Account. The Commissioner of Revenue shall certify to the Comptroller the amount of income tax credits due to parents under this section and the Comptroller shall transfer into the Failing Lowest Sixth Percent Schools Income Tax Credit Account only the amount from sales tax revenues within the Education Trust Fund that is sufficient for the Department of Revenue to use to cover the income tax credits for the applicable tax year. The Commissioner of Revenue shall distribute the funds in the Failing Lowest Sixth Percent Schools Income Tax Credit Account to parents pursuant to this section. (d)(1) Nothing in this section or chapter shall be construed to force any public school, school system, or school district or any nonpublic school, school system, or school district to enroll any student. (2) A public school, school system, or school district or any nonpublic school, school system, or school district may 589 590 591 592 593 594 595 596 597 598 599 600 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 HB30 INTRODUCEDHB30 INTRODUCED Page 23 develop the terms and conditions under which it will allow a student whose parent receives an income tax credit pursuant to this section to be enrolled, but such terms and conditions may not discriminate on the basis of the race, gender, religion, color, disability status, or ethnicity of the student or of the student's parent. (3) Nothing in this section shall be construed to authorize the violation of or supersede the authority of any court ruling that applies to the public school, school system, or school district, specifically any federal court order related to the desegregation of the local school system's student population." "§16-6D-9 (a)(1) An individual taxpayer who files a state income tax return and is not claimed as a dependent of another taxpayer, a taxpayer subject to the corporate income tax levied by Chapter 18 of Title 40, an Alabama S corporation as defined in Section 40-18-160, or a Subchapter K entity as defined in Section 40-18-1 may claim a credit for a contribution made to a scholarship granting organization. If the credit is claimed by an Alabama S corporation or Subchapter K entity, the credit shall pass through to and may be claimed by any taxpayer eligible to claim a credit under this subdivision who is a shareholder, partner, or member thereof, based on the taxpayer's pro rata or distributive share, respectively, of the credit. (2) The tax credit may be claimed by an individual taxpayer or a married couple filing jointly in an amount equal 617 618 619 620 621 622 623 624 625 626 627 628 629 630 631 632 633 634 635 636 637 638 639 640 641 642 643 644 HB30 INTRODUCEDHB30 INTRODUCED Page 24 to 100 percent of the total contributions the taxpayer made to a scholarship granting organization for educational scholarships during the taxable year for which the credit is claimed, up to 100 percent of the tax liability of the individual taxpayer, not to exceed one hundred thousand dollars ($100,000) per individual taxpayer or married couple filing jointly. For purposes of this section, an individual taxpayer includes an individual who is a shareholder of an Alabama S corporation or a partner or member of a Subchapter K entity that made a contribution to a scholarship granting organization. (3) The tax credit may be claimed by a taxpayer subject to the Alabama corporate income tax in an amount equal to 100 percent of the total contributions the taxpayer made to a scholarship granting organization for educational scholarships during the taxable year for which the credit is claimed, up to 100 percent of the tax liability of the taxpayer. (4) A taxpayer subject to the Alabama corporate income tax, an individual taxpayer, or a married couple filing jointly may carry forward a tax credit earned under the tax credit scholarship program for up to three taxable years. (5) The cumulative amount of tax credits issued pursuant to subdivision (2) and subdivision (3) shall not exceed thirty million dollars ($30,000,000) annually, based on the calendar year. A taxpayer making one or more otherwise tax-creditable contributions before the due date, with extensions, of a timely filed 2014 tax return may elect to treat all or a portion of such contributions as applying to 645 646 647 648 649 650 651 652 653 654 655 656 657 658 659 660 661 662 663 664 665 666 667 668 669 670 671 672 HB30 INTRODUCEDHB30 INTRODUCED Page 25 and creditable against its 2014 Alabama income tax liability, if the taxpayer properly reserves the credit on the website of the Department of Revenue or another method provided by the Department of Revenue. The amount creditable against the taxpayer's 2014 income tax liability shall be limited to the lesser of the amount so designated or the remaining balance, if any, of the cumulative amount of the twenty-five million dollars ($25,000,000) of tax credits available for the 2014 calendar year. No such contribution and election by a taxpayer to reserve tax credits against the remaining balance of the cumulative amount of tax credits available for 2014 shall preclude the taxpayer from making additional contributions in 2015 and reserving those amounts against the cumulative amount of tax credits available for 2015. The Department of Revenue shall develop a procedure to ensure that this cap is not exceeded and shall also prescribe the various methods by which these credits are to be issued. (6) No credit may be claimed for a contribution made to a scholarship granting organization if the contribution is restricted or conditioned in any way by the donor including, but not limited to, requiring the scholarship granting organization to direct all or part of the contribution to a particular qualifying school or to grant an educational scholarship to a particular eligible student. (b)(1) ADMINISTRATIVE ACCOUNTABILITY STANDARDS. All scholarship granting organizations shall do all of the following: a. Notify the Department of Revenue of their intent to 673 674 675 676 677 678 679 680 681 682 683 684 685 686 687 688 689 690 691 692 693 694 695 696 697 698 699 700 HB30 INTRODUCEDHB30 INTRODUCED Page 26 provide educational scholarships to eligible students. b. Demonstrate to the Department of Revenue that they have been granted exemption from the federal income tax as an organization described in Section 501(c)(3) of the Internal Revenue Code, as in effect from time to time. c. Distribute periodic educational scholarship payments as checks made out and mailed to or directly deposited with the school where the student is enrolled. d. Provide a Department of Revenue approved receipt to taxpayers for contributions made to the scholarship granting organization. e. Ensure that all determinations with respect to the eligibility of a student to receive an educational scholarship shall be made by the scholarship granting organization. A scholarship granting organization shall not delegate any responsibility for determining the eligibility of a student for an educational scholarship or any other requirements it is subject to under this chapter to any qualifying school or an entity affiliated therewith. f. Ensure that at least 95 percent of their revenue from donations is expended on educational scholarships, and that all revenue from interest or investments is expended on educational scholarships. A scholarship granting organization may expend up to five percent of its revenue from donations on administrative and operating expenses in the calendar year of the donation or in any subsequent calendar year. g. Ensure that scholarship funds on hand at the beginning of a calendar year are expended on educational 701 702 703 704 705 706 707 708 709 710 711 712 713 714 715 716 717 718 719 720 721 722 723 724 725 726 727 728 HB30 INTRODUCEDHB30 INTRODUCED Page 27 scholarships within three calendar years. Any scholarship funds on hand at the beginning of a calendar year that are not expended on educational scholarships within three calendar years shall be turned over to and deposited with the State Department of Education for the benefit of its At-Risk Student Program to be distributed to local boards of education on the basis determined by the State Department of Education in furtherance of support to underperforming schools. h. Ensure that at least 75 percent of first-time recipients of educational scholarships were not continuously enrolled in a private school during the previous academic year. i. Cooperate with the Department of Revenue to conduct criminal background checks on all of their employees and board members and exclude from employment or governance any individual who may reasonably pose a risk to the appropriate use of contributed funds. j. Ensure that educational scholarships are portable during the academic year and can be used at any qualifying school that accepts the eligible student according to the wishes of the parent. If an eligible student transfers to another qualifying school during an academic year, the educational scholarship amount may be prorated. k. Publicly report to the Department of Revenue by September 1 of each year all of the following information prepared by a certified public accountant regarding their educational scholarships funded in the previous academic year: 1. The name and address of the scholarship granting 729 730 731 732 733 734 735 736 737 738 739 740 741 742 743 744 745 746 747 748 749 750 751 752 753 754 755 756 HB30 INTRODUCEDHB30 INTRODUCED Page 28 organization. 2. The total number and total dollar amount of contributions received during the previous academic year. 3. The total number and total dollar amount of educational scholarships awarded and funded during the previous academic year, the total number and total dollar amount of educational scholarships awarded and funded during the previous academic year for students qualifying for the federal free and reduced-price lunch program, and the percentage of first-time recipients of educational scholarships who were enrolled in a public school during the previous academic year. l. Publicly report to the Department of Revenue, by the 15th day after the close of each calendar quarter, all of the following information about educational scholarships granted during the quarter: 1. The total number of scholarships awarded and funded. 2. The names of the qualifying schools that received funding for educational scholarships, the total amount of funds paid to each qualifying school, and the total number of scholarship recipients enrolled in each qualifying school. 3. The total number of eligible students zoned to attend a failing lowest sixth percent school who received educational scholarships from the scholarship granting organization. 4. The total number of first time scholarship recipients who were continuously enrolled in a nonpublic school prior to receiving an educational scholarship from that 757 758 759 760 761 762 763 764 765 766 767 768 769 770 771 772 773 774 775 776 777 778 779 780 781 782 783 784 HB30 INTRODUCEDHB30 INTRODUCED Page 29 scholarship granting organization. m. Ensure that educational scholarships are not provided for eligible students to attend a school with paid staff or board members, or relatives thereof, in common with the scholarship granting organization. n. Ensure that educational scholarships are provided in a manner that does not discriminate based on the gender, race, or disability status of the scholarship applicant or his or her parent. o. Ensure that educational scholarships are provided only to eligible students who are zoned to attend a failing lowest sixth percent school so that the eligible student can attend a qualifying school. To ensure compliance with the immediately preceding sentence, the local board of education for the county or municipality in which an eligible student applying for an educational scholarship resides, upon written request by a parent, shall provide written verification that a particular address is in the attendance zone of a specified public school. The State Department of Education shall provide written verification of enrollment in a failing lowest sixth percent school under this chapter. With respect to first time educational scholarship recipients, scholarship granting organizations shall give priority to eligible students zoned to attend failing lowest sixth percent schools over eligible students not zoned to attend failing lowest sixth percent schools. Any scholarship funds unaccounted for on July 31st of each calendar year may be made available to eligible students to defray the costs of attending a qualifying school, whether 785 786 787 788 789 790 791 792 793 794 795 796 797 798 799 800 801 802 803 804 805 806 807 808 809 810 811 812 HB30 INTRODUCEDHB30 INTRODUCED Page 30 or not the student is zoned to attend a failing lowest sixth percent school. Any provision of this section to the contrary notwithstanding, once an eligible student receives an educational scholarship under this program, scholarship funds may be made available to the student for educational scholarships until the student graduates from high school or reaches 19 years of age, regardless of whether the student is zoned to attend a failing lowest sixth percent school, subject to the income eligibility requirements of paragraph b. of subdivision (4) of Section 16-6D-4. p. Ensure that no donations are directly made to benefit specifically designated scholarship recipients or to particular qualifying schools. q. Submit to the Department of Revenue annual verification of the scholarship granting organization's policies and procedures used to determine scholarship eligibility. The verification shall confirm that the scholarship granting organization, and not one or more qualifying schools accepting educational scholarship recipients or scholarship funds, is determining whether scholarship applicants are eligible to receive educational scholarships. The verification shall also confirm that the scholarship granting organization is giving priority to receive an educational scholarship to eligible students zoned to attend failing lowest sixth percent schools. r. Submit to the Department of Revenue annual verification that none of its actions or policies restricts a parent's educational choice by limiting or prohibiting the enrollment of eligible students in a qualifying school if 813 814 815 816 817 818 819 820 821 822 823 824 825 826 827 828 829 830 831 832 833 834 835 836 837 838 839 840 841 HB30 INTRODUCEDHB30 INTRODUCED Page 31 those eligible students received educational scholarships from other scholarship granting organizations. (2) FINANCIAL ACCOUNTABILITY STANDARDS. a. All scholarship granting organizations shall demonstrate their financial accountability by doing all of the following: 1. Annually submitting to the Department of Revenue a financial information report for the scholarship granting organization that complies with uniform financial accounting standards established by the Department of Revenue and conducted by a certified public accountant. 2. Having the auditor certify that the report is free of material misstatements. b. All qualifying nonpublic schools shall demonstrate financial viability, if they are to receive donations of fifty thousand dollars ($50,000) or more during the academic year, by doing either of the following: 1. Filing with the scholarship granting organization prior to receipt of the first educational scholarship payment for that academic year a surety bond payable to the scholarship granting organization in an amount equal to the aggregate amount of scholarship funds expected to be received during the academic year. 2. Filing with the scholarship granting organization prior to receipt of the first educational scholarship payment for that academic year financial information that demonstrates the financial viability of the qualifying nonpublic school. (c)(1) Each scholarship granting organization shall 842 843 844 845 846 847 848 849 850 851 852 853 854 855 856 857 858 859 860 861 862 863 864 865 866 867 868 869 HB30 INTRODUCEDHB30 INTRODUCED Page 32 annually collect and submit to the Department of Revenue with the annual report required by paragraph k. of subdivision (1) of subsection (b) written verification from qualifying nonpublic schools that accept its educational scholarship students that those schools do all of the following: a. Comply with all health and safety laws or codes that otherwise apply to nonpublic schools. b. Hold a valid occupancy permit if required by the municipality. c. Certify compliance with nondiscrimination policies set forth in 42 U.S.C. § 1981. d. Conduct criminal background checks on employees and then do all of the following: 1. Exclude from employment any person not permitted by state law to work in a public school. 2. Exclude from employment any person who may reasonably pose a threat to the safety of students. (2) By August 1 of each year, each qualifying nonpublic school shall provide to each scholarship granting organization from which it receives educational scholarships verification that the qualifying nonpublic school is in compliance with the Alabama Child Protection Act of 1999, Chapter 22A of this title. Any qualifying nonpublic school failing to timely provide such annual verification shall be prohibited from participating in the scholarship program. Each scholarship granting organization shall annually submit to the Department of Revenue with the annual report required by paragraph k. of subdivision (1) of subsection (b) copies of the written 870 871 872 873 874 875 876 877 878 879 880 881 882 883 884 885 886 887 888 889 890 891 892 893 894 895 896 897 HB30 INTRODUCEDHB30 INTRODUCED Page 33 verifications it receives from each qualifying nonpublic school. (3) ACADEMIC ACCOUNTABILITY STANDARDS. There shall be sufficient information about the academic impact educational scholarship tax credits have on students participating in the tax credit scholarship program in order to allow parents and taxpayers to measure the achievements of the tax credit scholarship program, and therefore: a. Each scholarship granting organization shall ensure that qualifying schools that accept its educational scholarship students shall do all of the following: 1. Annually administer either the state achievement tests or nationally recognized norm-referenced tests that measure learning gains in math and language arts to all students receiving an educational scholarship in grades that require testing under the accountability testing laws of the state for public schools, in order that the state can compare the academic achievement and learning gains of students receiving educational scholarships with students of the same socioeconomic and educational backgrounds who are taking the state achievement tests or nationally norm-referenced tests. 2. Allow the costs of the testing requirement to be covered by the educational scholarships distributed by the scholarship granting organizations. 3. Provide the parents of each student who was tested with a copy of the results of the tests on an annual basis, beginning with the first year of testing. 4. Provide the test results to the Department of 898 899 900 901 902 903 904 905 906 907 908 909 910 911 912 913 914 915 916 917 918 919 920 921 922 923 924 925 HB30 INTRODUCEDHB30 INTRODUCED Page 34 Revenue on an annual basis, beginning with the first year of testing. 5. Report student information that allows the state to aggregate data by grade level, gender, family income level, and race. 6. Provide graduation rates of those students benefitting from educational scholarships to the Department of Revenue or an organization chosen by the state in a manner consistent with nationally recognized standards. 7. Ensure that a student who receives an educational scholarship conforms to the attendance requirements of the qualifying school. If a student fails to conform, the qualifying school shall immediately communicate the failure to the applicable scholarship granting organization. b.1. The Department of Revenue shall select an independent research organization, which may be a public or private entity or university, to analyze the results of the testing required by paragraph a. every other academic year. The cost of analyzing and reporting on the test results to the Department of Revenue by the independent research organization shall be borne by all scholarship granting organizations in proportion to the total scholarship donations received for the two calendar years prior to the report being published. Scholarship granting organizations may receive and use funds from outside sources to pay for its share of the biennial report. 2. The independent research organization shall report to the Department of Revenue every other year on the learning 926 927 928 929 930 931 932 933 934 935 936 937 938 939 940 941 942 943 944 945 946 947 948 949 950 951 952 953 HB30 INTRODUCEDHB30 INTRODUCED Page 35 gains of students receiving educational scholarships and the report shall be aggregated by the grade level, gender, family income level, number of years of participation in the tax credit scholarship program, and race of the student receiving an educational scholarship. The report shall also include, to the extent possible, a comparison of the learning gains of students participating in the tax credit scholarship program to the statewide learning gains of public school students with socioeconomic and educational backgrounds similar to those students participating in the tax credit scholarship program. 3. The first report under this paragraph shall be submitted to the Department of Revenue by September 1, 2016. Each biennial report thereafter shall be submitted to the Department of Revenue on September 1 of the year the report is due. All biennial reports required by this paragraph shall be published on the website of the Department of Revenue. 4. Each scholarship granting organization shall collect all test results from qualifying schools accepting its scholarship recipients and turn over such test results to the independent research organization described in this paragraph by August 15 of each calendar year. 5. The sharing and reporting of student learning gain data under this paragraph shall conform to the requirements of the Family Educational Rights and Privacy Act, 20 U.S.C. § 1232g., and shall be for the sole purpose of creating the biennial report required by this paragraph. All parties shall preserve the confidentially of such information as required by law. The biennial report shall not disaggregate data to a 954 955 956 957 958 959 960 961 962 963 964 965 966 967 968 969 970 971 972 973 974 975 976 977 978 979 980 981 HB30 INTRODUCEDHB30 INTRODUCED Page 36 level that could identify qualifying schools participating in the tax credit scholarship program or disclose the academic level of individual students. 6. At the same time the biennial report under subparagraph 2. is submitted to the Department of Revenue, it shall be submitted to the Chair of the Senate Education Policy Committee and the Chair of the House Education Policy Committee. (d)(1) The Department of Revenue shall adopt rules and procedures consistent with this section as necessary. (2) The Department of Revenue shall provide a standardized format for a receipt to be issued by a scholarship granting organization to a taxpayer to indicate the value of a contribution received. The Department of Revenue shall require a taxpayer to provide a copy of the receipt when claiming the tax credit pursuant to this section. (3) The Department of Revenue shall provide a standardized format for a scholarship granting organization to report the information required in paragraphs k. and l. of subdivision (1) of subsection (b). (4) The Department of Revenue may conduct either a financial review or audit of a scholarship granting organization. (5) The Department of Revenue may bar a scholarship granting organization or a qualifying school from participating in the tax credit scholarship program if the Department of Revenue establishes that the scholarship granting organization or the qualifying school has 982 983 984 985 986 987 988 989 990 991 992 993 994 995 996 997 998 999 1000 1001 1002 1003 1004 1005 1006 1007 1008 1009 HB30 INTRODUCEDHB30 INTRODUCED Page 37 intentionally and substantially failed to comply with the requirements in subsection (b) or subsection (c). (6) If the Department of Revenue decides to bar a scholarship granting organization or a qualifying school from the tax credit scholarship program, the Department of Revenue shall notify affected educational scholarship students and their parents of the decision as quickly as possible. (7) The Department of Revenue shall publish and routinely update, on the website of the department, a list of scholarship granting organizations in the state, by county. (8) The Department of Revenue shall publish and make publicly available on its website all annual and quarterly reports required to be filed with it by scholarship granting organizations under paragraphs k. and l. of subdivision (1) of subsection (b). (e)(1) All schools participating in the tax credit scholarship program shall be required to operate in Alabama. (2) All schools participating in the tax credit scholarship program shall comply with all state laws that apply to public schools regarding criminal background checks for employees and exclude from employment any person not permitted by state law to work in a public school. (3) All qualifying nonpublic schools participating in the tax credit scholarship program shall maintain a website that describes the school, the instructional program of the school, and the tuition and mandatory fees charged by the school, updated prior to the beginning of each semester. (4) The amount of a scholarship awarded a student to 1010 1011 1012 1013 1014 1015 1016 1017 1018 1019 1020 1021 1022 1023 1024 1025 1026 1027 1028 1029 1030 1031 1032 1033 1034 1035 1036 1037 HB30 INTRODUCEDHB30 INTRODUCED Page 38 attend a nonpublic school may not exceed the total sum of tuition and mandatory fees normally charged a student to attend the nonpublic school for the same attendance period. The amount of a scholarship awarded a student to attend a public school may not exceed the total state appropriation provided for a student to attend the public school for the same attendance period. (f) The tax credit provided in this section may be first claimed for the 2013 tax year, but may not be claimed for any tax year prior to the 2013 tax year. (g)(1) Nothing in this section shall be construed to force any public school, school system, or school district or any nonpublic school, school system, or school district to enroll any student. No qualifying school may enter into any agreement, whether oral or written, with a scholarship granting organization that would prohibit or limit an eligible student from enrolling in the school based on the identity of the scholarship granting organization from which the eligible student received an educational scholarship. (2) A public school, school system, or school district or any nonpublic school, school system, or school district may develop the terms and conditions under which it will allow a student who receives a scholarship from a scholarship granting organization pursuant to this section to be enrolled, but such terms and conditions may not discriminate on the basis of the race, gender, religion, disability status, or ethnicity of the student or of the student's parent. (3) Nothing in this section shall be construed to 1038 1039 1040 1041 1042 1043 1044 1045 1046 1047 1048 1049 1050 1051 1052 1053 1054 1055 1056 1057 1058 1059 1060 1061 1062 1063 1064 1065 HB30 INTRODUCEDHB30 INTRODUCED Page 39 authorize the violation of or supersede the authority of any court ruling that applies to the public school, school system, or school district, specifically any federal court order related to the desegregation of the local school system's student population. (h) Nothing in this chapter shall affect or change the athletic eligibility rules of student athletes governed by the Alabama High School Athletic Association or similar association." Section 2. Commencing on the effective date of this act, the State Board of Education shall refer to any public K-12 school or school district that is determined to have poor performance or is failing to make adequate progress as a lowest sixth percent school, in lieu of a failing school, and shall refer to a nonfailing school as an upper 94th percent school, when amending rules or adopting rules. Section 3. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law. 1066 1067 1068 1069 1070 1071 1072 1073 1074 1075 1076 1077 1078 1079 1080 1081 1082 1083 1084