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SENATE DOCKET, NO. 1635 FILED ON: 1/19/2023
SENATE . . . . . . . . . . . . . . No. 1812
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Ryan C. Fattman
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act establishing an empowerment scholarship tax credit to expand educational opportunities
and fair access to quality education for low-and-moderate-income students.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :Ryan C. FattmanWorcester and Hampden 1 of 7
SENATE DOCKET, NO. 1635 FILED ON: 1/19/2023
SENATE . . . . . . . . . . . . . . No. 1812
By Mr. Fattman, a petition (accompanied by bill, Senate, No. 1812) of Ryan C. Fattman for
legislation to establish an empowerment scholarship tax credit to expand educational
opportunities and fair access to quality education for low-and-moderate-income students.
Revenue.
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 1864 OF 2021-2022.]
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act establishing an empowerment scholarship tax credit to expand educational opportunities
and fair access to quality education for low-and-moderate-income students.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Section 6 of chapter 62 of the General Laws, as appearing in the 2020
2Official Edition, is hereby amended by inserting after paragraph (w) the following new
3subsection:-
4 (x) (1) A taxpayer making a qualified donation to a qualified scholarship program offered
5to qualifying students to an accredited Massachusetts tuition-based school providing elementary
6and/or secondary education, shall be allowed a refundable credit against the taxes imposed by
7this chapter.
8 (2) As used in this subsection, the following words have the following meanings:- 2 of 7
9 “Qualified donation”, a monetary donation to a “qualified scholarship program”.
10 “Qualified scholarship program”, a means-tested scholarship program offered and
11maintained by any Massachusetts accredited tuition-based school providing elementary and/or
12secondary education.
13 “Qualifying students”, students residing in the Commonwealth of Massachusetts who
14would otherwise be accepted to any of the afore-referenced tuition-based schools but for the
15inability to afford tuition, fees and related education expenses, specifically only students whose
16household income levels do not exceed a specified amount or who are in foster care or out-of-
17home care.
18 “Accredited Massachusetts tuition-based school providing elementary and/or secondary
19education”, any elementary, middle or high school located in the Commonwealth of
20Massachusetts which has any nationally- or state-recognized accreditation and which maintains a
21means-based scholarship program for students who would otherwise be accepted to the school
22but for the inability to afford tuition, fees and related education expenses.
23 “Taxpayer”, a taxpayer subject to an excise under this chapter.
24 (3) A taxpayer making a qualified donation to a qualified scholarship program shall be
25allowed a refundable credit against the taxes imposed by this chapter. The credit shall be equal
26to 30 per cent of the amount of the qualified donation. The amount of the credit that may be
27claimed by a taxpayer for each qualified donation shall not exceed $250,000. 3 of 7
28 (4) If the amount of the credit allowed under this subsection exceeds the taxpayer’s
29liability, the commissioner shall treat the excess as an overpayment and shall pay the taxpayer
30the entire amount of the excess.
31 (5) All or any tax credits issued in accordance with this section may be in addition to any
32charitable deductions claimed on the taxpayer’s federal income tax return for the same qualified
33donations.
34 (6) Any tax credits which arise under this section from the qualified donation by a pass-
35through tax entity such as a trust, estate, partnership, corporation, limited partnership, limited
36liability partnership, limited liability corporation, subchapter S organization, or other fiduciary,
37shall be used either by such entity in the event it is the taxpayer on behalf of such entity or by the
38member, partner, shareholder, or beneficiary, as the case may be, in proportion to its interest in
39such entity in the even that income, deductions, and tax liability passes through such entity to
40such member, partner, shareholder, or beneficiary. Such tax credits may not be claimed by both
41the entity and the member, partner, shareholder, or beneficiary, for the same donation.
42 (7) Any tax credits which arise under this chapter from the qualified donations by a
43married couple shall be used only if the spouses file a joint return, if both spouses are required to
44file Massachusetts income tax returns. If only one spouse is required to file a Massachusetts
45income tax return, that spouse may claim the credit allowed by this chapter on a separate return.
46 (8) The secretaries of education and administration and finance, acting jointly and in
47writing, shall authorize tax credits under this subsection together with subsection 38II of chapter
4863. The total cumulative value of the tax credits authorized pursuant to this section and said
49section 38II of said chapter 63 shall not exceed $20,000,000 annually. No credits shall be 4 of 7
50allowed under this subsection except to the extent authorized in this paragraph. The
51commissioner, after consulting with the secretaries concerning, among other things, the increased
52access to education opportunities’ objectives of this section, shall adopt regulations governing
53applications for and other administration of the tax credits.
54 SECTION 2. Section 38 of Chapter 63 of the General Laws, as appearing in the 2020
55Official Edition, is hereby amended by inserting after Section 38HH the following new
56subsection: -
57 Section 38II. (a) As used in this subsection, the following words have the following
58meanings:-
59 “Qualified donation”, a monetary donation to a “qualified scholarship program”.
60 “Qualified scholarship program”, a means-tested scholarship program offered and
61maintained by any Massachusetts accredited tuition-based school providing elementary and/or
62secondary education.
63 “Qualifying students”, students residing in the Commonwealth of Massachusetts who
64would otherwise be accepted to any of the afore-referenced tuition-based schools but for the
65inability to afford tuition, fees and related education expenses.
66 “Accredited Massachusetts tuition-based school providing elementary and/or secondary
67education”, any elementary, middle or high school located in the Commonwealth of
68Massachusetts which has any nationally- or state-recognized accreditation and which maintains a
69means-based scholarship program for students who would otherwise be accepted to the school
70but for the inability to afford tuition, fees and related education expenses. 5 of 7
71 “Taxpayer”, a taxpayer subject to an excise under this chapter.
72 (b) A taxpayer making a qualified donation to a qualified scholarship program shall be
73allowed a refundable credit against the taxes imposed by this chapter. The credit shall be equal
74to 30 per cent of the amount of the qualified donation. The amount of the credit that may be
75claimed by a taxpayer for each qualified donation shall not exceed $250,000.
76 (c) If the amount of the credit allowed under this subsection exceeds the taxpayer’s
77liability, the commissioner shall treat the excess as an overpayment and shall pay the taxpayer
78the entire amount of the excess.
79 (d) All or any tax credits issued in accordance with this section may be in addition to any
80charitable deductions claimed on the taxpayer’s federal income tax return for the same qualified
81donations.
82 (e) Any tax credits which arise under this section from the qualified donation by a pass-
83through tax entity such as a trust, estate, partnership, corporation, limited partnership, limited
84liability partnership, limited liability corporation, subchapter S organization, or other fiduciary,
85shall be used either by such entity in the event it is the taxpayer on behalf of such entity or by the
86member, partner, shareholder, or beneficiary, as the case may be, in proportion to its interest in
87such entity in the even that income, deductions, and tax liability passes through such entity to
88such member, partner, shareholder, or beneficiary. Such tax credits may not be claimed by both
89the entity and the member, partner, shareholder, or beneficiary, for the same donation.
90 (f) Any tax credits which arise under this chapter from the qualified donations by a
91married couple shall be used only if the spouses file a joint return, if both spouses are required to 6 of 7
92file Massachusetts income tax returns. If only one spouse is required to file a Massachusetts
93income tax return, that spouse may claim the credit allowed by this chapter on a separate return.
94 (g) The secretaries of education and administration and finance, acting jointly and in
95writing, shall authorize tax credits under this subsection together with subsection (x) of section 6
96of chapter 62. The total cumulative value of the tax credits authorized pursuant to this section
97and said subsection (x) shall not exceed $20,000,000 annually. No credits shall be allowed under
98this subsection except to the extent authorized in this paragraph. The commissioner of revenue,
99after consulting with the secretaries concerning, among other things, the increased access to
100education opportunities’ objectives of this section, shall adopt regulations governing applications
101for and other administration of the tax credits.
102 SECTION 3. (a) Within 2 years after the effective date of this act, and annually
103thereafter, the state auditor shall issue an economic analysis report on the performance of this tax
104credit to the House and Senate Committees on Ways and Means and to the Joint Committee on
105Revenue. An economic analysis shall include, but not be limited to, a good faith estimate, on
106both a direct and indirect basis, as to the:
107 (A) Net change in state revenue; and
108 (B) Net change in state expenditures, which shall include, but not be limited to, costs of
109administering the tax credit; and
110 (C) Net change in economic activity; and
111 (D) Net change in public benefit. 7 of 7
112 (b) Within 2 years after the effective date of this act, and annually thereafter, each
113recipient school with a qualified scholarship program must report annually to the Department of
114Revenue, the following:
115 (A) The total number and dollar value of individual contributions; and
116 (B) The total number and dollar value of corporate contributions; and
117 (C) The total number and dollar value of scholarships awarded to eligible students.
118 SECTION 4. Sections 1 and 2 shall be effective for tax years beginning on and after
119January 1, 2023.