New Mexico 2023 Regular Session

New Mexico House Bill HB266 Compare Versions

Only one version of the bill is available at this time.

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28	28	HOUSE BILL 266
29	29	56
30	30	TH LEGISLATURE
31	31	-
32	32
33	33	STATE
34	34
35	35	OF
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37	37	NEW
38	38
39	39	MEXICO
40	40
41	41	-
42	42	FIRST SESSION
43	43	,
44	44
45	45	2023
46	46	INTRODUCED BY
47	47	D. Wonda Johnson and Patricia A. Lundstrom
48	48	AN ACT
49	49	RELATING TO EDUCATION; ENACTING THE EQUAL EDUCATION OPPORTUNITY
50	50	SCHOLARSHIP ACT; PROVIDING FOR TUITION SCHOLARSHIP
51	51	ORGANIZATIONS TO GRANT EDUCATIONAL SCHOLARSHIPS TO LOW-INCOME
52	52	STUDENTS TO ATTEND CERTAIN PUBLIC AND NONPUBLIC SCHOOLS;
53	53	CREATING INCOME TAX AND CORPORATE INCOME TAX CREDITS FOR
54	54	CONTRIBUTIONS TO TUITION SCHOLARSHIP ORGANIZATIONS THAT PROVIDE
55	55	EDUCATIONAL SCHOLARSHIPS FOR LOW-INCOME STUDENTS TO ATTEND
56	56	PUBLIC OR PRIVATE SCHOOLS OF THE STUDENT'S PARENTS' CHOICE.
57	57	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
58	58	SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1
59	59	through 5 of this act may be cited as the "Equal Education
60	60	Opportunity Scholarship Act".
61	61	SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the
62	62	Equal Education Opportunity Scholarship Act:
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90	90	A. "certification document" means the document
91	91	issued by the department to an organization verifying that the
92	92	organization is a tuition scholarship organization and
93	93	contributions to that organization for equal education
94	94	opportunity scholarships may be claimed as an equal education
95	95	opportunity scholarship tax credit;
96	96	B. "contribution receipt" means a document
97	97	developed by the taxation and revenue department pursuant to
98	98	the Equal Education Opportunity Scholarship Act and provided to
99	99	a tuition scholarship organization that in turn provides the
100	100	document to an individual or corporate contributor that is a
101	101	taxpayer that intends to claim an equal education opportunity
102	102	scholarship tax credit as a receipt for a contribution to the
103	103	tuition scholarship organization;
104	104	C. "department" means the public education
105	105	department;
106	106	D. "educational scholarship" means a tuition grant
107	107	or other grant of funds to an eligible student to cover all or
108	108	part of the costs of that student at a qualified school,
109	109	including transportation costs;
110	110	E. "eligible student" means a student who:
111	111	(1) is enrolled in a state-licensed foster
112	112	care program; or
113	113	(2) is a member of a household for which the
114	114	total annual income does not exceed an amount used to qualify
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143	143	for a reduced-price lunch through the federal school lunch
144	144	programs established pursuant to 42 USCA Sections 1751 through
145	145	1769, as amended; provided that once a student receives a
146	146	scholarship pursuant to the Equal Education Opportunity
147	147	Scholarship Act, the student shall remain eligible regardless
148	148	of household income until the student graduates from high
149	149	school or reaches twenty-one years of age; and
150	150	(3) resides in New Mexico while receiving a
151	151	scholarship from a tuition scholarship organization;
152	152	F. "equal education opportunity scholarship tax
153	153	credit" means the equal education opportunity scholarship
154	154	income tax credit provided in the Income Tax Act and the equal
155	155	education opportunity scholarship corporate income tax credit
156	156	provided in the Corporate Income and Franchise Tax Act;
157	157	G. "parent" means a guardian, custodian or other
158	158	person with authority to act on behalf of a child;
159	159	H. "qualified school" means a public or nonpublic
160	160	elementary, middle or secondary school located in New Mexico to
161	161	which a parent has chosen to send an eligible student;
162	162	I. "relative" means a person related by affinity or
163	163	consanguinity to the third degree;
164	164	J. "tuition grant" means a grant of funds for the
165	165	purpose of covering the costs of tuition for a qualified
166	166	school; and
167	167	K. "tuition scholarship organization" means an
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196	196	organization that provides educational scholarships of up to
197	197	five thousand dollars ($5,000), but that do not exceed five
198	198	thousand dollars ($5,000), to students attending qualified
199	199	schools of their parents' choice and that meets the criteria
200	200	established in the Equal Education Opportunity Scholarship Act.
201	201	SECTION 3. [NEW MATERIAL] TUITION SCHOLARSHIP
202	202	ORGANIZATION--CERTIFICATION.--
203	203	A. An organization may seek certification from the
204	204	department as a tuition scholarship organization by submitting
205	205	an application for certification to the department.
206	206	B. To be certified as a tuition scholarship
207	207	organization by the department, the organization shall provide
208	208	documentation as deemed appropriate by the department to verify
209	209	that:
210	210	(1) the organization has been granted an
211	211	exemption from federal income tax as an organization described
212	212	in Section 501(c)(3) of the Internal Revenue Code of 1986;
213	213	(2) the organization has awarded or intends to
214	214	award educational scholarships to eligible students who are
215	215	attending or plan to attend qualified schools;
216	216	(3) the scholarships are funded from
217	217	contributions that the organization has received in or prior to
218	218	the current calendar year, or anticipates receiving during the
219	219	remainder of the calendar year, and at least ninety percent of
220	220	the contributions received during a calendar year for which the
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249	249	organization issues a contribution receipt to an individual or
250	250	corporate taxpayer for purposes of obtaining an equal education
251	251	opportunity scholarship tax credit is awarded by the
252	252	organization as educational scholarships and all revenue from
253	253	interest or investments is expended solely on educational
254	254	scholarships;
255	255	(4) the organization distributes periodic
256	256	scholarship payments as checks that are issued to an eligible
257	257	student's parent, that are mailed to the qualified school in
258	258	which the eligible student is enrolled and that require the
259	259	endorsement of the parent prior to deposit of the check;
260	260	(5) educational scholarships awarded by the
261	261	organization are portable during the school year and can be
262	262	used at any qualified school that accepts the eligible student
263	263	according to a parent's wishes; provided that the scholarship
264	264	shall be prorated between schools based on the number of days
265	265	attended at each school by the eligible student;
266	266	(6) criminal background checks on all of the
267	267	organization's employees and board members have been conducted
268	268	by the organization, with the understanding that individuals
269	269	who might reasonably pose a risk to the sound fiscal management
270	270	of the funds of the organization shall be excluded from
271	271	employment or governance, and all pertinent findings on
272	272	employees and board members have been provided to the
273	273	department for review and approval;
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302	302	(7) the organization has in place systems to
303	303	provide for financial accountability, including independent
304	304	annual audits that shall be submitted to the department in the
305	305	form of a financial information report that complies with
306	306	generally accepted accounting procedures as specified by the
307	307	department and is certified to be free of material
308	308	misstatements by the certified public accountant who performed
309	309	the audit; and
310	310	(8) the organization is financially viable and
311	311	receives or is likely to receive donations of fifty thousand
312	312	dollars ($50,000) or more during a school year by filing with
313	313	the department prior to the start of the school year a surety
314	314	bond payable to the state in an amount equal to the aggregate
315	315	amount of contributions expected to be received during the
316	316	school year.
317	317	SECTION 4. [NEW MATERIAL] TUITION SCHOLARSHIP
318	318	ORGANIZATION--DUTIES.--
319	319	A. No later than thirty days prior to the start of
320	320	a new school year or the start of a new semester, a tuition
321	321	scholarship organization shall provide to the department the
322	322	names of eligible students who received educational
323	323	scholarships and the students' previous school district or
324	324	charter school affiliation. The tuition scholarship
325	325	organization shall provide verification that the eligible
326	326	students have been awarded an educational scholarship and have
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355	355	enrolled in a private school for the new school year or the new
356	356	semester.
357	357	B. A tuition scholarship organization shall ensure
358	358	that a school participating in the tuition scholarship
359	359	organization's scholarship program certifies that the school:
360	360	(1) is in compliance with all health and
361	361	safety laws or rules that apply to schools;
362	362	(2) holds a valid occupancy permit as required
363	363	by applicable laws;
364	364	(3) does not discriminate in admissions on the
365	365	basis of race, color or national origin;
366	366	(4) provides academic accountability to
367	367	parents of the students in the program by regularly reporting
368	368	to the parent on the student's academic and developmental
369	369	progress;
370	370	(5) ensures that every school employee with
371	371	unsupervised access to students has undergone a background
372	372	check as described in Subsection A of Section 22-10A-5 NMSA
373	373	1978;
374	374	(6) has no paid staff or board members who are
375	375	also staff or board members of the tuition scholarship
376	376	organization or who are relatives of the staff or board members
377	377	of the tuition scholarship organization;
378	378	(7) gives enrollment preference to eligible
379	379	students who were enrolled at the school in the prior year and
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408	408	to siblings of eligible students already admitted to or
409	409	attending the school; and
410	410	(8) is a qualified school and, if the school
411	411	has more applications for educational scholarships from
412	412	eligible students than positions available for students
413	413	receiving scholarships, the school fills the available
414	414	scholarship positions only by using a random selection process.
415	415	C. By June 1 of each year beginning in 2024, a
416	416	tuition scholarship organization shall report the following
417	417	information to the department and the taxation and revenue
418	418	department:
419	419	(1) the name and address of the tuition
420	420	scholarship organization;
421	421	(2) the total number and dollar amount of
422	422	contributions received for which contribution receipts were
423	423	issued during the calendar year ending on December 31 of the
424	424	prior year;
425	425	(3) the total number and dollar amount of all
426	426	educational scholarships awarded during the calendar year
427	427	ending on December 31 of the prior year; and
428	428	(4) the total number and dollar amount of
429	429	educational scholarships awarded to eligible students during
430	430	the calendar year ending on December 31 of the prior year.
431	431	D. A tuition scholarship organization shall:
432	432	(1) provide to each individual and corporate
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461	461	contributor of funds dedicated for educational scholarships a
462	462	contribution receipt that shall be completed according to
463	463	taxation and revenue department requirements;
464	464	(2) maintain a list by the sequential number
465	465	on the contribution receipt identifying to whom each copy is
466	466	issued, the amount and date of the contribution and any other
467	467	information deemed necessary by the taxation and revenue
468	468	department to allow the contributor to receive an equal
469	469	education opportunity scholarship tax credit;
470	470	(3) account for all copies of contribution
471	471	receipts damaged, destroyed, lost or otherwise unusable; and
472	472	(4) provide an annual report to the interim
473	473	legislative education study committee and the public education
474	474	department by June 1 of each year containing information on how
475	475	many scholarships were provided by the tuition scholarship
476	476	organization and the amount of each scholarship.
477	477	SECTION 5. [NEW MATERIAL] DEPARTMENT--DUTIES.--
478	478	A. The department shall administer the Equal
479	479	Education Opportunity Scholarship Act.
480	480	B. The department shall:
481	481	(1) ensure that:
482	482	(a) in school districts with a total
483	483	student enrollment of less than one thousand students, no more
484	484	than nine-tenths percent of a school district's student
485	485	enrollment may utilize a scholarship associated with a donation
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514	514	to a qualified scholarship organization from an individual or
515	515	business entity that claims the allowable tax credit;
516	516	(b) in school districts with a total
517	517	student enrollment between one thousand and four thousand nine
518	518	hundred ninety-nine students, no more than eight-tenths percent
519	519	of a school district's student enrollment may utilize a
520	520	scholarship associated with a donation to a qualified
521	521	scholarship organization from an individual or business entity
522	522	that claims the allowable tax credit;
523	523	(c) for school districts with a total
524	524	student enrollment between five thousand and fourteen thousand
525	525	nine hundred ninety-nine students, no more than six-tenths
526	526	percent of a school district's student enrollment may utilize a
527	527	scholarship associated with a donation to a qualified
528	528	scholarship organization from an individual or business entity
529	529	that claims the allowable tax credit;
530	530	(d) for school districts with a total
531	531	student enrollment between fifteen thousand and twenty-four
532	532	thousand nine hundred ninety-nine students, no more than four-
533	533	tenths percent of a school district's student enrollment may
534	534	utilize a scholarship associated with a donation to a qualified
535	535	scholarship organization from an individual or business entity
536	536	that claims the allowable tax credit;
537	537	(e) for school districts with a total
538	538	student enrollment between twenty-five thousand and forty-nine
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567	567	thousand nine hundred ninety-nine students, no more than three-
568	568	tenths percent of a school district's student enrollment may
569	569	utilize a scholarship associated with a donation to a qualified
570	570	scholarship organization from an individual or business entity
571	571	that claims the allowable tax credit; and
572	572	(f) for school districts with a total
573	573	student enrollment over fifty thousand students, no more than
574	574	two-tenths percent of a school district's student enrollment
575	575	may utilize a scholarship associated with a donation to a
576	576	qualified scholarship organization from an individual or
577	577	business entity that claims the allowable tax credit;
578	578	(2) provide the name of each certified tuition
579	579	scholarship organization to the taxation and revenue department
580	580	by no later than thirty days after issuing the certification
581	581	document to the tuition scholarship organization;
582	582	(3) engage an auditor to conduct a financial
583	583	and program audit of a tuition scholarship organization, at the
584	584	expense of the tuition scholarship organization, if there is
585	585	evidence of fraud or failure to comply with the Equal Education
586	586	Opportunity Scholarship Act;
587	587	(4) deny, suspend or revoke the certification
588	588	of a tuition scholarship organization for purposes of the equal
589	589	education opportunity scholarship tax credit if the department
590	590	determines that the organization has intentionally and
591	591	substantially failed to comply with the requirements of the
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620	620	Equal Education Opportunity Scholarship Act; and
621	621	(5) notify the taxation and revenue department
622	622	if the certification of an organization as a tuition
623	623	scholarship organization is denied, suspended or revoked within
624	624	ten days of the denial, suspension or revocation.
625	625	SECTION 6. A new section of the Income Tax Act is enacted
626	626	to read:
627	627	"[NEW MATERIAL] EQUAL EDUCATION OPPORTUNITY SCHOLARSHIP
628	628	INCOME TAX CREDIT.--
629	629	A. A taxpayer who files a New Mexico income tax
630	630	return and is not a dependent of another taxpayer may claim a
631	631	credit against the income tax liability of the taxpayer for a
632	632	contribution made to a tuition scholarship organization. The
633	633	credit may be approved in an amount equal to eighty percent of
634	634	the total contributions made by the taxpayer to a tuition
635	635	scholarship organization for which contribution receipts have
636	636	been provided by that organization during the taxable year but
637	637	shall not exceed fifty percent of the taxpayer's income tax
638	638	liability for the taxable year. The credit provided in this
639	639	section may be referred to as the "equal education opportunity
640	640	scholarship income tax credit".
641	641	B. To ensure that the department receives the
642	642	information needed to allow an equal education opportunity
643	643	scholarship income tax credit, the department shall develop a
644	644	contribution receipt that requests all of the information
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673	673	needed by the department to determine if a credit is due. The
674	674	contribution receipts shall be sequentially numbered, and a
675	675	charge, not to exceed fifty cents ($.50) per numbered copy, may
676	676	be charged by the department to the tuition scholarship
677	677	organization.
678	678	C. Upon receiving notice from the public education
679	679	department that an organization has been certified as a tuition
680	680	scholarship organization, the department shall provide
681	681	sequentially numbered copies of contribution receipts to the
682	682	tuition scholarship organization to be distributed by the
683	683	tuition scholarship organization to its contributors to
684	684	indicate the recipient, date and value of a contribution to the
685	685	tuition scholarship organization and other information required
686	686	by the department.
687	687	D. The department shall require a taxpayer claiming
688	688	the equal education opportunity scholarship income tax credit
689	689	to submit the numbered copy of the contribution receipt from
690	690	the tuition scholarship organization to which the taxpayer
691	691	contributed money with the taxpayer's application for the
692	692	credit provided by this section.
693	693	E. The equal education opportunity scholarship
694	694	income tax credit shall not be allowed for a contribution that
695	695	is included for the taxable year in the taxpayer's itemized
696	696	deductions, as defined in Section 63 of the Internal Revenue
697	697	Code.
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726	726	F. Married individuals who file separate returns
727	727	for a taxable year in which they could have filed a joint
728	728	return may each claim only one-half of the equal education
729	729	opportunity scholarship income tax credit that would have been
730	730	allowed on a joint return.
731	731	G. A taxpayer may be allocated the right to claim a
732	732	new equal education opportunity scholarship income tax credit
733	733	in proportion to the taxpayer's ownership interest if the
734	734	taxpayer owns an interest in a business entity that is taxed
735	735	for federal income tax purposes as a partnership or limited
736	736	liability company and that business entity has met all of the
737	737	requirements to be eligible for the credit. The total credit
738	738	claimed by all members of the partnership or limited liability
739	739	company shall not exceed the allowable credit pursuant to this
740	740	section.
741	741	H. Any amount of the equal education opportunity
742	742	scholarship income tax credit allowed by the department that
743	743	exceeds fifty percent of the income tax liability of the
744	744	taxpayer in the taxable year in which the credit is first
745	745	claimed may be carried forward for three consecutive taxable
746	746	years.
747	747	I. The department shall compile an annual report on
748	748	the credit allowed pursuant to this section that shall include
749	749	the number of taxpayers approved by the department to receive
750	750	the credit, the aggregate amount of credits approved and any
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779	779	other information necessary to evaluate the credit. The
780	780	department shall present the report to the interim revenue
781	781	stabilization and tax policy committee and the legislative
782	782	finance committee with an analysis of the cost of the tax
783	783	credit.
784	784	J. A taxpayer that claims an equal education
785	785	opportunity scholarship income tax credit pursuant to the
786	786	Income Tax Act shall not also claim an equal education
787	787	opportunity scholarship corporate income tax credit pursuant to
788	788	the Corporate Income and Franchise Tax Act or any other similar
789	789	tax credit for the same contribution to a tuition scholarship
790	790	organization. The equal education opportunity scholarship
791	791	income tax credit shall be applied to the taxpayer's tax
792	792	liability before application of any other tax credit claimed
793	793	for the taxable year by the taxpayer.
794	794	K. As used in this section:
795	795	(1) "contribution receipt" means the document
796	796	developed by the department and issued pursuant to the Equal
797	797	Education Opportunity Scholarship Act by a tuition scholarship
798	798	organization to a contributor;
799	799	(2) "parent" means a guardian, custodian or
800	800	other person with authority to act on behalf of a child; and
801	801	(3) "tuition scholarship organization" means
802	802	an organization that provides educational scholarships to
803	803	students attending qualified schools of their parents' choice
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832	832	and that meets the requirements of the Equal Education
833	833	Opportunity Scholarship Act."
834	834	SECTION 7. A new section of the Corporate Income and
835	835	Franchise Tax Act is enacted to read:
836	836	"[NEW MATERIAL] EQUAL EDUCATION OPPORTUNITY SCHOLARSHIP
837	837	CORPORATE INCOME TAX CREDIT.--
838	838	A. A taxpayer that files a New Mexico corporate
839	839	income tax return may claim a credit against the corporate
840	840	income tax liability of the taxpayer for a contribution made to
841	841	a tuition scholarship organization. The credit may be approved
842	842	in an amount equal to eighty percent of the total contributions
843	843	made by the taxpayer to a tuition scholarship organization for
844	844	which contribution receipts have been provided by that
845	845	organization during the taxable year but shall not exceed fifty
846	846	percent of the taxpayer's corporate income tax liability for
847	847	the taxable year. The credit provided in this section may be
848	848	referred to as the "equal education opportunity scholarship
849	849	corporate income tax credit".
850	850	B. To ensure that the department receives the
851	851	information needed to allow an equal education opportunity
852	852	scholarship corporate income tax credit, the department shall
853	853	develop a contribution receipt that requests all of the
854	854	information needed by the department to determine if a credit
855	855	is due. The contribution receipts shall be sequentially
856	856	numbered, and a charge, not to exceed fifty cents ($.50) per
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885	885	numbered copy, may be charged by the department to the tuition
886	886	scholarship organization.
887	887	C. Upon receiving notice from the public education
888	888	department that an organization has been certified as a tuition
889	889	scholarship organization, the department shall provide
890	890	sequentially numbered copies of contribution receipts to a
891	891	tuition scholarship organization to be distributed by the
892	892	tuition scholarship organization to its contributors to
893	893	indicate the recipient, date and value of a contribution to the
894	894	tuition scholarship organization and other information required
895	895	by the department.
896	896	D. The department shall require a taxpayer claiming
897	897	the equal education opportunity scholarship corporate income
898	898	tax credit to submit the numbered copy of the certification
899	899	document from the tuition scholarship organization to which the
900	900	taxpayer contributed money with the taxpayer's application for
901	901	the credit provided by this section.
902	902	E. The equal education opportunity scholarship
903	903	corporate income tax credit shall not be allowed for a
904	904	contribution that is included for the taxable year in the
905	905	taxpayer's itemized deductions, as defined in Section 63 of the
906	906	Internal Revenue Code.
907	907	F. Any amount of the equal education opportunity
908	908	scholarship corporate income tax credit allowed by the
909	909	department that exceeds fifty percent of the corporate income
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938	938	tax liability of the taxpayer in the taxable year in which the
939	939	credit is first claimed may be carried forward for three
940	940	consecutive taxable years.
941	941	G. The department shall compile an annual report on
942	942	the credit allowed pursuant to this section that shall include
943	943	the number of taxpayers approved by the department to receive
944	944	the credit, the aggregate amount of credits approved and any
945	945	other information necessary to evaluate the credit. The
946	946	department shall present the report to the interim revenue
947	947	stabilization and tax policy committee and the legislative
948	948	finance committee with an analysis of the cost of the tax
949	949	credit.
950	950	H. A taxpayer that claims an equal education
951	951	opportunity scholarship corporate income tax credit pursuant to
952	952	the Corporate Income and Franchise Tax Act shall not also claim
953	953	an equal education opportunity scholarship income tax credit
954	954	pursuant to the Income Tax Act or any other similar tax credit
955	955	for the same contribution to a tuition scholarship
956	956	organization. The equal education opportunity scholarship
957	957	corporate income tax credit shall be applied to the taxpayer's
958	958	tax liability before application of any other tax credit
959	959	claimed for the taxable year by the taxpayer.
960	960	I. As used in this section:
961	961	(1) "contribution receipt" means the document
962	962	issued pursuant to the Equal Education Opportunity Scholarship
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991	991	Act by a tuition scholarship organization to a contributor;
992	992	(2) "parent" means a guardian, custodian or
993	993	other person with authority to act on behalf of a child; and
994	994	(3) "tuition scholarship organization" means
995	995	an organization that provides educational scholarships to
996	996	students attending qualified schools of their parents' choice
997	997	pursuant to the Equal Education Opportunity Scholarship Act."
998	998	SECTION 8. DELAYED REPEAL.--Sections 1 through 7 of this
999	999	act are repealed effective July 1, 2027.
1000	1000	SECTION 9. APPLICABILITY.--The provisions of Sections 6
1001	1001	and 7 of this act apply to taxable years beginning on or after
1002	1002	January 1, 2023 but before January 1, 2027.
1003	1003	SECTION 10. EFFECTIVE DATE.--
1004	1004	A. The effective date of the provisions of Sections
1005	1005	1 through 5 of this act is July 1, 2023.
1006	1006	B. The effective date of the provisions of Sections
1007	1007	6 and 7 of this act is January 1, 2024.
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