Alabama 2023 Regular Session

Alabama House Bill HB30 Latest Draft

Bill / Introduced Version Filed 01/01/0001

                            HB30INTRODUCED
Page 0
Q7NV41-1
By Representative McCampbell
RFD: Education Policy
First Read: 07-Mar-23
PFD: 23-Feb-23
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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.
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