Relative to the definition of a scholarship organization for purposes of the education tax credit.
The fiscal impact of HB 1128 is significant, with projections indicating an increase in state revenue ranging from $1.5 million to $5.1 million annually starting in FY 2025. This revenue is anticipated to be generated from contributions to scholarship organizations, which businesses and individuals can claim as tax credits against various state taxes. As the current approved scholarship organization is incorporated outside the state, passing this bill would disqualify it and redirect funding to local organizations, enhancing state revenues through enhanced control over charitable activities.
House Bill 1128 proposes a revision to the definition of 'scholarship organization' in the context of the Education Tax Credit (ETC) program in New Hampshire. The bill stipulates that only charitable organizations formally incorporated in New Hampshire can qualify for this designation. This change is aimed at ensuring that the scholarship organizations benefitting from state tax credits are local entities, thereby potentially fostering local educational support and resources. The bill is set to take effect on July 1, 2024, if passed.
The preliminary sentiment surrounding HB 1128 appears to be cautiously supportive among local stakeholders, particularly those advocating for in-state charities to receive support through tax credits. However, concerns may arise about the implications for existing organizations that may not meet the new criteria after the bill's enactment. Ideally, proponents see this as a way to bolster local economies and educational frameworks, while critics could argue it limits options for students reliant on scholarships from established organizations.
Notable points of contention include the potential displacement of established scholarship organizations that currently operate under the existing definition. Critics may view the bill as restrictive, adversely affecting the ability of diverse educational options in New Hampshire, particularly for underserved communities that rely on aid from these organizations. The fact that only a single organization will qualify under the new criterion raises questions about the equitable distribution of educational resources, framing the discussion in the broader context of access and choice in education.