Oklahoma 2022 Regular Session

Oklahoma House Bill HB2701 Compare Versions

Version 1 (Old)

Version 2 (New)

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29		-	HOUSE OF REPRESENTATIVES - FLOOR VERSION
30		-
31	28		STATE OF OKLAHOMA
32	29
33	30		1st Session of the 58th Legislature (2021)
34	31
35		-	COMMITTEE SUBSTITUTE
36		-	FOR
37		-	HOUSE BILL NO. 2701 By: Hasenbeck
	32	+	HOUSE BILL 2701 By: Hasenbeck
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	38	+	AS INTRODUCED
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	40	+	An Act relating to revenue and taxation; creating the
	41	+	Oklahoma Taxation Reform Act of 2021; providing for
	42	+	noncodification; and providi ng an effective date.
44	43
45		-	COMMITTEE SUBSTITUTE
46		-
47		-	[ revenue and taxation - Education Investment for
48		-	Oklahoma Act - income tax credits - education
49		-	improvement grant organizations - scholarship-
50		-	granting organizations - effective date ]
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55	48		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
56	49		SECTION 1. NEW LAW A new section of law not to be
57	50		codified in the Oklahoma Statutes reads as follows:
58		-	This act shall be known and may be cited as the "Education
59		-	Investment for Oklahoma Act".
60		-	SECTION 2. AMENDATORY 68 O.S. 2011, Section 2357.206, as
61		-	last amended by Section 1, Chapter 288, O.S.L. 2017 (68 O.S. Supp.
62		-	2020, Section 2357.206), is amended to read as follows:
	51	+	This act shall be known and may be cited a s the "Oklahoma
	52	+	Taxation Reform Act of 2021 ".
	53	+	SECTION 2. This act shall become effective January 1, 2022.
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64		-	HB2701 HFLR Page 2
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89		-
90		-	Section 2357.206 A. This act shall be known and may be cited
91		-	as the "Oklahoma Equal Opportunity Education Scholarship Act".
92		-	B. 1. Except as provided in subsection F H of this section,
93		-	after August 26, 2011, there shall be allowed a credit for any
94		-	taxpayer who makes a contribution to an eligible scholarship -
95		-	granting organization.
96		-	The credit shall be equal to fifty percent (50%) of the total
97		-	amount of contributions made during a taxable year, not to exceed
98		-	One Thousand Dollars ($1,000.00) Two Thousand Eight Hundred Dollars
99		-	($2,800.00) for single individuals, Two Thousand Dollars ($2,000.00)
100		-	Five Thousand Six Hundred Dollars ($5,600.00) for married
101		-	individuals filing jointly, or One Hundred Thousand Dollars
102		-	($100,000.00) for any taxpayer which is a legal business entity
103		-	including limited and general partnerships, corporations, subchapter
104		-	S corporations and limited liability companies , plus any suspended
105		-	credits pursuant to subparagraph d of paragraph 2 of subsection J of
106		-	this section; provided, if total credits claimed pursuant to this
107		-	paragraph exceed the caps cap amount established pursuant to
108		-	paragraph 1 of subsection D F of this section, the credit shal l be
109		-	equal to the taxpayer's proportionate share of the cap for the
110		-	taxable year, as determined pursuant to subsection H J of this
111		-	section.
112		-	2. For any taxpayer who makes a contribution to an eligible
113		-	scholarship-granting organization and makes a written c ommitment to
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141		-	contribute the same amount for an additional year, the credit for
142		-	the first year and the additional year shall be equal to seventy -
143		-	five percent (75%) of the total amount of the contribution made
144		-	during a taxable year, not to exceed the amounts established in
145		-	paragraph 1 of this subsection for the taxable year in which the
146		-	credit provided in this subsection is claimed. The taxpayer shall
147		-	provide evidence of the written commitment to the Oklahoma Tax
148		-	Commission at the time of filing the refund c laim.
149		-	3. The credits authorized pursuant to the provisions of this
150		-	subsection shall be allocable to the partners, shareholders, members
151		-	or other equity owners of a taxpayer that is authorized to be
152		-	treated as a partnership for purposes of federal income t ax
153		-	reporting for the taxable year for which the tax credits authorized
154		-	by this subsection are claimed on the applicable return, together
155		-	with required schedules, forms or reports of the partners,
156		-	shareholders, members or other equity owners of the taxpayer . Tax
157		-	credits which are allocated to such equity owners shall only be
158		-	limited in amount for the income tax return of a natural person or
159		-	persons based upon the limitation of the total credit amount to the
160		-	entity from which the tax credits have been alloca ted and shall not
161		-	be limited to One Thousand Dollars ($1,000.00) Two Thousand Eight
162		-	Hundred Dollars ($2,800.00) for single individuals or limited to Two
163		-	Thousand Dollars ($2,000.00) Five Thousand Six Hundred Dollars
164		-	($5,600.00) for married persons filing a joint return.
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192		-	4. On or before December 31, 2017, and once every four (4)
193		-	years thereafter, such scholarship -granting organization and
194		-	educational improvement granting grant organization shall submit to
195		-	the Oklahoma Tax Commission, Governor, President Pro Tempore of the
196		-	Senate and the Speaker of the House of Representatives , an audited
197		-	financial statement for the organization along with information
198		-	detailing the benefits, successes or failures of the program , and
199		-	make publicly available on its website the financial statement and
200		-	information submitted pursuant to this paragraph .
201		-	C. 1. Except as provided in subsection F H of this section,
202		-	after August 26, 2011, there shall be allowed a credit for any
203		-	taxpayer who makes a contribution to an eligible educatio nal
204		-	improvement grant organization. The
205		-	a. Except as otherwise provided by subparagraph b of this
206		-	paragraph or paragraph 2 of this subsection, the
207		-	credit shall be equal to fifty percent (50%) of the
208		-	total amount of contributions made during a taxable
209		-	year, not to exceed One Thousand Dollars ($1,000.00)
210		-	Two Thousand Eight Hundred Dollars ($2,800.00) for
211		-	single individuals, Two Thousand Dollars ($2,000.00)
212		-	Five Thousand Six Hundred Dollars ($5,600.00) for
213		-	married individuals filing jointly, or One Hundred
214		-	Thousand Dollars ($100,000.00) for any taxpayer which
215		-	is a legal business entity including limited and
216		-
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243		-	general partnerships, corporations, subchapter S
244		-	corporations and limited liability companies , plus any
245		-	suspended credits pursuant to subparagraph d of
246		-	paragraph 2 of subsection J of this section ; provided,
247		-	if total credits claimed pursuant to this paragraph
248		-	subparagraph exceed the cap amount established
249		-	pursuant to subparagraph a of paragraph 1 2 of
250		-	subsection D F of this section, the credit shall be
251		-	equal to the taxpayer's proportionate share of the cap
252		-	for the taxable year, as determined pursuant to
253		-	subsection H J of this section.
254		-	b. If a contribution is made to an eligible educational
255		-	improvement grant organization to benefit a school
256		-	district which has l ess than two thousand (2,000)
257		-	students enrolled on October 1 as determined by the
258		-	State Department of Education, the amount of the
259		-	credit shall be one hundred percent (100%) of the
260		-	amount contributed to an eligible educational
261		-	improvement grant organizatio n, but shall be subject
262		-	to the maximum credit amounts based on filing status
263		-	as prescribed by subparagraph a of this paragraph. A
264		-	person or entity claiming a tax credit pursuant to the
265		-	provisions of this subparagraph may rely on the
266		-	student enrollment inf ormation contained in the State
267		-
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294		-	Department reports as of the date the contribution is
295		-	made. If the taxpayer preserves either an electronic
296		-	file or record created by the State Department of
297		-	Education or produces a document by printing
298		-	information contained in an electronic data file
299		-	originally created by the State Department of
300		-	Education, such information shall be conclusive with
301		-	respect to the student enrollment number for purposes
302		-	of claiming the tax credit authorized by this
303		-	subparagraph or any audit of the taxpayer's income tax
304		-	return; provided, if total credits claimed pursuant to
305		-	this subparagraph exceed the cap amount established
306		-	pursuant to subparagraph a of paragraph 2 of
307		-	subsection F of this section, the credit shall be
308		-	equal to the taxpayer's prop ortionate share of the cap
309		-	for the taxable year, as determined pursuant to
310		-	subsection J of this section.
311		-	2. For any taxpayer who makes a contribution to an eligible
312		-	educational improvement grant organization and makes a written
313		-	commitment to contribute th e same amount for an additional year, the
314		-	credit for the first year and the additional year shall be equal to
315		-	seventy-five percent (75%) of the total amount of the contribution
316		-	made during a taxable year, not to exceed the amounts cap amount
317		-	established in subparagraph a of paragraph 1 2 of subsection F of
318		-
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345		-	this subsection section for the taxable year in which the credit
346		-	provided in this subsection paragraph is claimed; provided, if total
347		-	credits claimed pursuant to this paragraph exceed the cap
348		-	established pursuant to subparagraph a of paragraph 3 2 of this
349		-	subsection F of this section, the credit shall be equal to the
350		-	taxpayer's proportionate share of the cap for the taxable year, as
351		-	determined pursuant to subsection H J of this section. The taxpayer
352		-	shall provide evidence of the written commitment to the Oklahoma Tax
353		-	Commission at the time of filing the refund claim.
354		-	3. The credits authorized pursuant to the provisions of this
355		-	subsection shall be allocable to the partners, shareholders, members
356		-	or other equity owners of a taxpayer that is authorized to be
357		-	treated as a partnership for purposes of federal income tax
358		-	reporting for the taxable year for which the tax credits authorized
359		-	by this subsection are claimed on the applicable return, together
360		-	with required schedules, forms or reports of the partners,
361		-	shareholders, members or other equity owners of the taxpayer. Tax
362		-	credits which are allocated to such equity owners shall only be
363		-	limited in amount for the income tax return of a natural person or
364		-	persons based upon the limitation of the total credit amount to the
365		-	entity from which the tax credits have been allocated and shall not
366		-	be limited to One Thousand Dollars ($1,000.00) Two Thousand Eight
367		-	Hundred Dollars ($2,800.00) for single individuals or limited t o Two
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395		-	Thousand Dollars ($2,000.00) Five Thousand Six Hundred Dollars
396		-	($5,600.00) for married persons filing a joint return.
397		-	D. 1. On or after the effective date of this act, there shall
398		-	be allowed a credit for any taxpayer who makes a contribution to an
399		-	eligible public school district.
400		-	a. Except as otherwise provided by subparagraph b of this
401		-	paragraph or paragraph 2 of this subsection, the
402		-	credit shall be equal to fifty percent (50%) of the
403		-	total amount of contributions made during a taxable
404		-	year, not to exceed Two Thousand Eight Hundred Dollars
405		-	($2,800.00) for single individuals, Five Thousand Six
406		-	Hundred Dollars ($5,600.00) for married individuals
407		-	filing jointly or One Hundred Thousand Dollars
408		-	($100,000.00) for any taxpayer which is a legal
409		-	business entity including limited and general
410		-	partnerships, corporations, subchapter S corporations
411		-	and limited liability companies; provided, if total
412		-	credits claimed pursuant to this subparagraph exceed
413		-	the cap amount established pursuant to subparagraph a
414		-	of paragraph 2 of subsection F of this section, the
415		-	credit shall be equal to the taxpayer's proportionate
416		-	share of the cap for the taxable year, as determined
417		-	pursuant to subsection J of this section.
418		-
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445		-	b. If a contribution is made to a school district which
446		-	has less than two thousand (2,000) students enrolled
447		-	on October 1 as determined by the State Department of
448		-	Education, the amount of the credit shall be one
449		-	hundred percent (100%) of the amount contributed to an
450		-	eligible school district, but shall be subject to the
451		-	maximum credit amounts based on filing status as
452		-	prescribed by subparagraph a of this paragraph. A
453		-	person or entity claiming a tax credit pursuant to the
454		-	provisions of this subparagraph may rely on the
455		-	student enrollment information contained in the Stat e
456		-	Department reports as of the date the contribution is
457		-	made. If the taxpayer preserves either an electronic
458		-	file or record created by the State Department of
459		-	Education or produces a document by printing
460		-	information contained in an electronic data file
461		-	originally created by the State Department of
462		-	Education, such information shall be conclusive with
463		-	respect to the student enrollment number for purposes
464		-	of claiming the tax credit authorized by this
465		-	subparagraph or any audit of the taxpayer's income tax
466		-	return; provided, if total credits claimed pursuant to
467		-	this subparagraph exceed the cap amount established
468		-	pursuant to subparagraph a of paragraph 2 of
469		-
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496		-	subsection F of this section, the credit shall be
497		-	equal to the taxpayer's proportionate share of the cap
498		-	for the taxable year, as determined pursuant to
499		-	subsection J of this section;
500		-	2. Except as otherwise provided by subparagraph a or b of
501		-	paragraph 1 of this subsection, for any taxpayer who makes a
502		-	contribution to an eligible public school district and makes a
503		-	written commitment to contribute the same amount for an additional
504		-	year, the credit for the first year and the additional year shall be
505		-	equal to seventy-five percent (75%) of the total amount of the
506		-	contribution made during a taxable year, not to exceed the cap
507		-	amount established in subparagraph a of paragraph 2 of subsection F
508		-	of this section for the taxable year in which the credit provided in
509		-	this paragraph is claimed. The taxpayer shall provide evidence of
510		-	the written commitment to the Oklahoma Tax C ommission at the time of
511		-	filing the refund claim; provided, if total credits claimed pursuant
512		-	to this paragraph exceed the cap amount established pursuant to
513		-	subparagraph a of paragraph 2 of subsection F of this section, the
514		-	credit shall be equal to the ta xpayer's proportionate share of the
515		-	cap for the taxable year, as determined pursuant to subsection J of
516		-	this section.
517		-	3. The credits authorized pursuant to the provisions of this
518		-	subsection shall be allocable to the partners, shareholders, members
519		-	or other equity owners of a taxpayer that is authorized to be
520		-
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547		-	treated as a partnership for purposes of federal income tax
548		-	reporting for the taxable year for which the tax credits authorized
549		-	by this subsection are claimed on the applicable return, together
550		-	with required schedules, forms or reports of the partners,
551		-	shareholders, members or other equity owners of the taxpayer. Tax
552		-	credits which are allocated to such equity owners shall only be
553		-	limited in amount for the income tax return of a natural person or
554		-	persons based upon the limitation of the total credit amount to the
555		-	entity from which the tax credits have been allocated and shall not
556		-	be limited to Two Thousand Eight Hundred Dollars ($2,800.00) for
557		-	single individuals or limited to Five Thousand Six Hundred Do llars
558		-	($5,600.00) for married persons filing a joint return.
559		-	4. Each eligible public school district to which contributions
560		-	have been made for purposes of the tax credit authorized by this
561		-	subsection shall annually account for all revenue and expenditures
562		-	through the Oklahoma Cost Accounting System (OCAS) and shall
563		-	annually publish on its website the total dollar amount raised
564		-	pursuant to paragraphs 1 and 2 of this subsection along with
565		-	information detailing the benefits, successes or failures of the
566		-	program.
567		-	E. 1. On or after the effective date of this act, there shall
568		-	be allowed a credit for any taxpayer who makes a contribution to an
569		-	eligible public school foundation.
570		-
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597		-	a. Except as otherwise provided by subparagraph b of this
598		-	paragraph or paragraph 2 of this subsection, the
599		-	credit shall be equal to fifty percent (50%) of the
600		-	total amount of contributions made during a taxable
601		-	year, not to exceed Two Thousand Eight Hundred Dollars
602		-	($2,800.00) for single individuals, Five Thousand Six
603		-	Hundred Dollars ($5,6 00.00) for married individuals
604		-	filing jointly or One Hundred Thousand Dollars
605		-	($100,000.00) for any taxpayer which is a legal
606		-	business entity including limited and general
607		-	partnerships, corporations, subchapter S corporations
608		-	and limited liability companie s; provided, if total
609		-	credits claimed pursuant to this subparagraph exceed
610		-	the cap amount established pursuant to subparagraph a
611		-	of paragraph 2 of subsection F of this section, the
612		-	credit shall be equal to the taxpayer's proportionate
613		-	share of the cap for the taxable year, as determined
614		-	pursuant to subsection J of this section.
615		-	b. If a contribution is made to an eligible public school
616		-	foundation to benefit a school district which has less
617		-	than two thousand (2,000) students enrolled on October
618		-	1 as determined by the State Department of Education,
619		-	the amount of the credit shall be one hundred percent
620		-	(100%) of the amount contributed to an eligible public
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647		-
648		-	school foundation, but shall be subject to the maximum
649		-	credit amounts based on filing status as prescribed by
650		-	subparagraph a of this paragraph. A person or entity
651		-	claiming a tax credit pursuant to the provisions of
652		-	this subparagraph may rely on the student enrollment
653		-	information contained in the State Department reports
654		-	as of the date the contribution is made. If the
655		-	taxpayer preserves either an electronic file or record
656		-	created by the State Department of Education or
657		-	produces a document by printing information contained
658		-	in an electronic data file originally created by the
659		-	State Department of Education, such i nformation shall
660		-	be conclusive with respect to the student enrollment
661		-	number for purposes of claiming the tax credit
662		-	authorized by this subparagraph or any audit of the
663		-	taxpayer's income tax return; provided, if total
664		-	credits claimed pursuant to this subpa ragraph exceed
665		-	the cap amount established pursuant to subparagraph a
666		-	of paragraph 2 of subsection F of this section, the
667		-	credit shall be equal to the taxpayer's proportionate
668		-	share of the cap for the taxable year, as determined
669		-	pursuant to subsection J of this section.
670		-	2. Except as otherwise provided by subparagraph a or b of
671		-	paragraph 1 of this subsection, for any taxpayer who makes a
672		-
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698		-
699		-	contribution to an eligible public school foundation and makes a
700		-	written commitment to contribute the same amount for an a dditional
701		-	year, the credit for the first year and the additional year shall be
702		-	equal to seventy-five percent (75%) of the total amount of the
703		-	contribution made during a taxable year, not to exceed the cap
704		-	amount established in subparagraph a of paragraph 2 of subsection F
705		-	of this section for the taxable year in which the credit provided in
706		-	this paragraph is claimed. The taxpayer shall provide evidence of
707		-	the written commitment to the Oklahoma Tax Commission at the time of
708		-	filing the refund claim; provided, if total credits claimed pursuant
709		-	to this paragraph exceed the cap amount established pursuant to
710		-	subparagraph a of paragraph 2 of subsection F of this section, the
711		-	credit shall be equal to the taxpayer's proportionate share of the
712		-	cap for the taxable yea r, as determined pursuant to subsection J of
713		-	this section.
714		-	3. The credits authorized pursuant to the provisions of this
715		-	subsection shall be allocable to the partners, shareholders, members
716		-	or other equity owners of a taxpayer that is authorized to be
717		-	treated as a partnership for purposes of federal income tax
718		-	reporting for the taxable year for which the tax credits authorized
719		-	by this subsection are claimed on the applicable return, together
720		-	with required schedules, forms or reports of the partners,
721		-	shareholders, members or other equity owners of the taxpayer. Tax
722		-	credits which are allocated to such equity owners shall only be
723		-
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749		-
750		-	limited in amount for the income tax return of a natural person or
751		-	persons based upon the limitation of the total credit amount to t he
752		-	entity from which the tax credits have been allocated and shall not
753		-	be limited to Two Thousand Eight Hundred Dollars ($2,800.00) for
754		-	single individuals or limited to Five Thousand Six Hundred Dollars
755		-	($5,600.00) for married persons filing a joint return .
756		-	4. On or before December 31, 2022, and once every four (4)
757		-	years thereafter, such eligible public school foundation shall
758		-	submit to the Oklahoma Tax Commission, Governor, President Pro
759		-	Tempore of the Senate and the Speaker of the House of
760		-	Representatives an audited financial statement for the organization
761		-	along with information detailing the benefits, successes or failures
762		-	of the programs.
763		-	F. Except as otherwise provided pursuant to subsection H J of
764		-	this section, for tax years 2017 2022 and thereafter:
765		-	1. The Unless the cap amount otherwise prescribed by this
766		-	paragraph is adjusted pursuant to paragraph 3 of this subsection,
767		-	the total credits authorized pursuant to subsection B of this
768		-	section for all taxpayers for any tax year beginning on or after
769		-	January 1, 2022, shall not exceed Three Million Five Hundred
770		-	Thousand Dollars ($3,500,000.00) Ten Million Dollars
771		-	($10,000,000.00) annually;
772		-	2. The Unless the cap amount otherwise prescribed by
773		-	subparagraph a of this paragraph is adjusted pursuant to paragra ph 3
774		-
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800		-
801		-	of this subsection, the total credits authorized pursuant to
802		-	subsection subsections C, D and E of this section for all taxpayers
803		-	for any tax year beginning on or after January 1, 2022, shall not
804		-	exceed One Million Five Hundred Thousand Dollars ($1,500 ,000.00):
805		-	a. Twenty Million Dollars ($20,000,000.00) annually,
806		-	b. in addition to the cap amount prescribed by
807		-	subparagraph a of this paragraph, the credit amount
808		-	shall also be limited to Two Hundred Thousand Dollars
809		-	($200,000.00) of credits per public scho ol district
810		-	annually; and
811		-	3. In any tax year when the annual tax credit amount as
812		-	prescribed by either paragraph 1 of this subsection or by
813		-	subparagraph a of paragraph 2 of this subsection for the prior tax
814		-	year is equal to or greater than ninety percent (90%) of the tax
815		-	credit cap amount applicable to that tax year, such tax credit cap
816		-	amount shall increase by twenty -five percent (25%). The adjustment
817		-	shall not be applicable to the amount prescribed by subparagraph b
818		-	of paragraph 2 of this subsection. T he Tax Commission shall publish
819		-	on its website information identifying the tax credit cap amount
820		-	when it is increased pursuant to this paragraph; and
821		-	4. The cap on total credits provided for in this subsection
822		-	shall be allocated by the Tax Commission as p rovided in subsection H
823		-	J of this section.
824		-
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850		-
851		-	E. G. For credits claimed for eligible contributions made
852		-	during tax year 2014 and thereafter, a credit shall not be allowed
853		-	by the Oklahoma Tax Commission for contributions made to a
854		-	scholarship-granting organization or an educational improvement
855		-	grant organization if that organization's percentage of funds
856		-	actually awarded is less than ninety percent (90%). For purposes of
857		-	this section, the "percentage of funds actually awarded" shall be
858		-	determined by dividing the total amount of funds actually awarded as
859		-	educational scholarships or educational improvement grants over the
860		-	most recent twenty-four (24) months by the total amount available to
861		-	award as educational scholarships or educational improvement grants
862		-	over the most recent twenty -four (24) months.
863		-	F. H. Any tax credits which are earned by a taxpayer pursuant
864		-	to this section during the time period beginning on the effective
865		-	date of this act through December 31, 2012, may not be claimed for
866		-	any period prior to the taxable year beginning January 1, 2013. No
867		-	credits which accrue during the time period beginning on the
868		-	effective date of this act through December 31, 2012, may be used to
869		-	file an amended tax return for any taxable year prior to the taxable
870		-	year beginning January 1, 2013.
871		-	G. I. As used in this section:
872		-	1. "Eligible student" means a child of school age who is
873		-	lawfully present in the United States and who is a member of a
874		-	household in which the total annual income during the preceding tax
875		-
876		-	HB2701 HFLR Page 18
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901		-
902		-	year does not exceed an amount equal to three hundred percent (300%)
903		-	two hundred thirty-five percent (235%) of the income standard used
904		-	to qualify for a free or reduced reduced-price school lunch and
905		-	whose custodial parents or legal guardians are not taxpayers who
906		-	make contributions to an eligible scholarship -granting organization
907		-	or who, during the immediately preceding school year, attended or,
908		-	by virtue of the location of such student's place of residence, was
909		-	eligible to attend a public school in this state which has been
910		-	identified for school improvement as determined by the State Board
911		-	of Education pursuant to the requirements of the No Child Left
912		-	Behind Act of 2001, P.L. No. 107 -110. Once a student has received
913		-	an educational scholarship, as defined in paragrap h 3 of this
914		-	subsection, the student and any siblings who are members of the same
915		-	household shall remain eligible until they graduate from high school
916		-	or reach twenty-one (21) years of age, whichever occurs first;
917		-	2. "Eligible special needs student" means a child who has been
918		-	provided services under an Individual Family Service Plan through
919		-	the SoonerStart program and during transition was evaluated and
920		-	determined to be eligible for school district services, a child of
921		-	school age who has attended public sch ool in our state with an
922		-	individualized education program pursuant to the Individuals With
923		-	Disabilities Education Act, 20 U.S.C.A., Section 1400 et seq. or a
924		-	child who has been diagnosed by a clinical professional as having a
925		-
926		-	HB2701 HFLR Page 19
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951		-
952		-	significant disability that wi ll affect learning and who has been
953		-	approved by the board of a scholarship -granting organization;
954		-	3. "Educational scholarships" means:
955		-	a. scholarships to an eligible student of up to Five
956		-	Thousand Dollars ($5,000.00) or eighty percent (80%)
957		-	of the statewide annual average per -pupil expenditure
958		-	as determined by the National Center for Education
959		-	Statistics, U.S. Department of Education, whichever is
960		-	greater, to cover all or part of the tuition, fees and
961		-	transportation costs of a qualified school which is
962		-	accredited by the State Board of Education or an
963		-	accrediting association approved by the Board pursuant
964		-	to Section 3-104 of Title 70 of the Oklahoma Statutes,
965		-	b. scholarships to an eligible student of up to Five
966		-	Thousand Dollars ($5,000.00) or eighty percent (80%)
967		-	of the statewide annual average per -pupil expenditure
968		-	as determined by the National Center for Education
969		-	Statistics, U.S. Department of Education, whichever is
970		-	greater, to cover the educational costs of a qualified
971		-	school which does not charge tuitio n, which enrolls
972		-	special populations of students and which is
973		-	accredited by the State Board of Education or an
974		-	accrediting association approved by the Board pursuant
975		-
976		-	HB2701 HFLR Page 20
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1001		-
1002		-	to Section 3-104 of Title 70 of the Oklahoma Statutes,
1003		-	or
1004		-	c. scholarships to an eligible s pecial needs student of
1005		-	up to Twenty-five Thousand Dollars ($25,000.00) to
1006		-	cover all or part of the tuition, fees and
1007		-	transportation costs of a qualified school for
1008		-	eligible special needs students which is accredited by
1009		-	the State Board of Education or an a ccrediting
1010		-	association approved by the Board pursuant to Section
1011		-	3-104 of Title 70 of the Oklahoma Statutes ,
1012		-	d. scholarships to a low -income eligible student of up to
1013		-	Five Thousand Dollars ($5,000.00) or ninety percent
1014		-	(90%) of the statewide annual average per-pupil
1015		-	expenditure as determined by the National Center for
1016		-	Education Statistics, U.S. Department of Education,
1017		-	whichever is greater, to cover all or part of the
1018		-	tuition, fees and transportation costs of a qualified
1019		-	school which is accredited by the St ate Board of
1020		-	Education or an accrediting association approved by
1021		-	the Board pursuant to Section 3 -104 of Title 70 of the
1022		-	Oklahoma Statutes, or
1023		-	e. scholarships to an eligible military student of up to
1024		-	Five Thousand Dollars ($5,000.00) or eighty percent
1025		-	(80%) of the statewide annual average per pupil
1026		-
1027		-	HB2701 HFLR Page 21
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1052		-
1053		-	expenditure as determined by the National Center for
1054		-	Education Statistics, U.S. Department of Education,
1055		-	whichever is greater, to cover all or part of the
1056		-	tuition, fees and transportation costs of a qualified
1057		-	school for eligible military students which is
1058		-	accredited by the State Board of Education or an
1059		-	accrediting association approved by the Board pursuant
1060		-	to Section 3-104 of Title 70 of the Oklahoma Statutes.
1061		-	As used in this subparagraph, "eligible military
1062		-	student" means a child who has a parent or legal
1063		-	guardian who is serving or has served in the United
1064		-	States Armed Forces on active duty or is actively
1065		-	serving in the United States Reserves or the National
1066		-	Guard;
1067		-	4. "Low-income eligible student" means an eligib le student or
1068		-	eligible special needs student who qualifies for a free or reduced -
1069		-	price lunch;
1070		-	5. "Qualified school" means an early childhood, elementary or
1071		-	secondary private school in this state, including schools which
1072		-	provide special educational program s for three-year-olds or
1073		-	prekindergarten educational programs for four -year-olds, which:
1074		-	a. is accredited by the State Board of Education or an
1075		-	accrediting association approved by the Board pursuant
1076		-	to Section 3-104 of Title 70 of the Oklahoma Statutes,
1077		-
1078		-	HB2701 HFLR Page 22
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1103		-
1104		-	b. is in compliance with all applicable health and safety
1105		-	laws and codes,
1106		-	c. has a stated policy against discrimination in
1107		-	admissions on the basis of race, color, national
1108		-	origin or disability, and
1109		-	d. ensures academic accountability to parents and
1110		-	guardians of students through regular progress
1111		-	reports;
1112		-	6. "Qualified school for eligible special needs students" means
1113		-	an early childhood, elementary or secondary private school in a
1114		-	county in this state, including schools which provide special
1115		-	educational programs for three-year-olds or prekindergarten
1116		-	educational programs for four -year-olds;
1117		-	7. "Scholarship-granting organization" means an organization
1118		-	which:
1119		-	a. is a nonprofit entity exempt from taxation pursuant to
1120		-	the provisions of the Internal Revenue Code, 26
1121		-	U.S.C., Section 501(c)(3),
1122		-	b. distributes periodic scholarship payments as checks
1123		-	made out to an eligible student's or eligible special
1124		-	needs student's parent or guardian and mailed to the
1125		-	qualified school where the student is enrolled,
1126		-	c. spends no more than ten percent (10%) of its annual
1127		-	revenue on expenditures other than educational
1128		-
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1154		-
1155		-	scholarships as defined in paragraph 3 of this
1156		-	subsection,
1157		-	d. spends each year a portion of its expenditures on
1158		-	educational scholarships for low -income eligible
1159		-	students, as defined in paragraph 4 of this
1160		-	subsection, in an amount equal to or greater than the
1161		-	percentage of low-income eligible students in the
1162		-	state,
1163		-	e. ensures that scholarships are portable during the
1164		-	school year and can be used at any qualified school
1165		-	that accepts the eligible student or at any qualified
1166		-	school for special needs students that accepts the
1167		-	eligible special needs student,
1168		-	f. registers with the Oklahoma Tax Commission as a
1169		-	scholarship-granting organization, and
1170		-	g. has policies in place to:
1171		-	(1) carry out criminal background checks on all
1172		-	employees and board members to ensure that no
1173		-	individual is involved with the organization who
1174		-	might reasonably pose a risk to the appropriate
1175		-	use of contributed funds, and
1176		-	(2) maintain full and accurate records wit h respect
1177		-	to the receipt of contributions and expenditures
1178		-	of those contributions and supply such records
1179		-
1180		-	HB2701 HFLR Page 24
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1205		-
1206		-	and any other documentation required by the Tax
1207		-	Commission to demonstrate financial
1208		-	accountability;
1209		-	8. "Annual revenue" means the total amount or val ue of
1210		-	contributions received by an organization from taxpayers awarded
1211		-	credits during the organization's fiscal year and all amounts earned
1212		-	from interest or investments;
1213		-	9. "Public school" means public schools as defined in Section
1214		-	1-106 of Title 70 of th e Oklahoma Statutes;
1215		-	10. "Eligible public school district" means any public school
1216		-	that is not located within a ten -mile radius of a qualified school
1217		-	in this state, or any public school that is located within a ten -
1218		-	mile radius of a qualified school in thi s state but offers grade -
1219		-	level instruction different from the qualified school or any public
1220		-	school located within a public school district with fewer than four
1221		-	thousand five hundred (4,500) students ;
1222		-	11. "Early childhood education program" means a specia l
1223		-	educational program for eligible special needs students who are
1224		-	three (3) years of age or a prekindergarten educational program
1225		-	provided to children who are at least four (4) years of age but not
1226		-	more than five (5) years of age on or before September 1;
1227		-	12. "Innovative educational program" means an advanced academic
1228		-	or academic improvement program that is not part of the regular
1229		-	coursework of a public school but that enhances the curriculum or
1230		-
1231		-	HB2701 HFLR Page 25
1232		-	BOLD FACE denotes Committee Amendments. 1
1233		-	2
1234		-	3
1235		-	4
1236		-	5
1237		-	6
1238		-	7
1239		-	8
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1251		-	20
1252		-	21
1253		-	22
1254		-	23
1255		-	24
1256		-
1257		-	academic program of the school or provides early childhood ed ucation
1258		-	programs to students;
1259		-	13. "Educational improvement grant" means a grant to an
1260		-	eligible public school to implement an innovative educational
1261		-	program for students, including the ability for multiple public
1262		-	schools to make an application and be award ed a grant to jointly
1263		-	provide an innovative educational program; and
1264		-	14. "Educational improvement grant organization" means an
1265		-	organization which:
1266		-	a. is a nonprofit entity exempt from taxation pursuant to
1267		-	the provisions of the Internal Revenue Code, 26
1268		-	U.S.C., Section 501(c)(3), and
1269		-	b. contributes at least ninety percent (90%) of its
1270		-	annual receipts as grants to eligible schools for
1271		-	innovative educational programs. For purposes of this
1272		-	subparagraph, an educational improvement grant
1273		-	organization contribute s its annual cash receipts when
1274		-	it expends or otherwise irrevocably encumbers those
1275		-	funds for expenditure during the then current fiscal
1276		-	year of the organization or during the next succeeding
1277		-	fiscal year of the organization ; and
1278		-	15. "Eligible public schoo l foundation" means a nonprofit
1279		-	entity formed pursuant to Oklahoma law but which is exempt from
1280		-	federal income taxation pursuant to either Section 501(c)(3) or
1281		-
1282		-	HB2701 HFLR Page 26
1283		-	BOLD FACE denotes Committee Amendments. 1
1284		-	2
1285		-	3
1286		-	4
1287		-	5
1288		-	6
1289		-	7
1290		-	8
1291		-	9
1292		-	10
1293		-	11
1294		-	12
1295		-	13
1296		-	14
1297		-	15
1298		-	16
1299		-	17
1300		-	18
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1302		-	20
1303		-	21
1304		-	22
1305		-	23
1306		-	24
1307		-
1308		-	Section 509(a) of the Internal Revenue Code of 1986, as amended.
1309		-	Each public school foundation must be approved by the local board of
1310		-	education prior to accepting qualifying donations .
1311		-	H. J. Total credits authorized by this section shall be
1312		-	allocated as follows:
1313		-	1. By January 10 of the year immediately following each
1314		-	calendar year, a scholarship -granting organization or, an
1315		-	educational improvement grant organization , a public school district
1316		-	or an eligible public school foundation which accepts contributions
1317		-	pursuant to this section shall provide electronically to the Tax
1318		-	Commission information on each contribution accepted during such
1319		-	taxable year. At least once each taxable year, the scholarship-
1320		-	granting organization or the educational improvement grant
1321		-	organization entity making the report shall notify each contributor
1322		-	that Oklahoma law provides for a total, statewide cap on the amount
1323		-	of income tax credits allowed annually;
1324		-	2. a. If the Tax Commission determines the total combined
1325		-	credits claimed for contributions made to scholarship -
1326		-	granting organizations during the most recently
1327		-	completed calendar year by all taxpayers are in excess
1328		-	of the statewide caps cap amount provided in paragraph
1329		-	1 of subsection D F of this section, the Tax
1330		-	Commission shall first allocate any amount of credits
1331		-	not claimed for contributions made to educational
1332		-
1333		-	HB2701 HFLR Page 27
1334		-	BOLD FACE denotes Committee Amendments. 1
1335		-	2
1336		-	3
1337		-	4
1338		-	5
1339		-	6
1340		-	7
1341		-	8
1342		-	9
1343		-	10
1344		-	11
1345		-	12
1346		-	13
1347		-	14
1348		-	15
1349		-	16
1350		-	17
1351		-	18
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1353		-	20
1354		-	21
1355		-	22
1356		-	23
1357		-	24
1358		-
1359		-	improvement-granting organizations authorized pursuant
1360		-	to subsections C, D and E of this section , then shall
1361		-	determine the percentage of the contribution which
1362		-	establishes the proportionate share of the credit
1363		-	which may be claimed by any taxpayer so that the total
1364		-	maximum credits authorized by this section are not
1365		-	exceeded.
1366		-	b. If the Tax Commission determines the total combined
1367		-	credits claimed for contributions made to educational
1368		-	improvement grant organizations authorized pursuant to
1369		-	subsections C, D and E of this se ction during the most
1370		-	recently completed calendar year by all taxpayers are
1371		-	in excess of the statewide caps cap amount provided in
1372		-	subparagraph a of paragraph 2 of subsection D F of
1373		-	this section, the Tax Commission shall first allocate
1374		-	any amount of credit s not claimed for contributions
1375		-	made to scholarship-granting organizations, then shall
1376		-	determine the percentage of the contribution which
1377		-	establishes the proportionate share of the credit
1378		-	which may be claimed by any taxpayer so that the
1379		-	maximum credits authorized by this section are not
1380		-	exceeded.
1381		-	c. If the Tax Commission determines the total combined
1382		-	credits claimed for contributions made to
1383		-
1384		-	HB2701 HFLR Page 28
1385		-	BOLD FACE denotes Committee Amendments. 1
1386		-	2
1387		-	3
1388		-	4
1389		-	5
1390		-	6
1391		-	7
1392		-	8
1393		-	9
1394		-	10
1395		-	11
1396		-	12
1397		-	13
1398		-	14
1399		-	15
1400		-	16
1401		-	17
1402		-	18
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1404		-	20
1405		-	21
1406		-	22
1407		-	23
1408		-	24
1409		-
1410		-	organizations authorized pursuant to subsections C, D
1411		-	and E of this section during the most recently
1412		-	completed calendar year by all taxpayers are in excess
1413		-	of the per-public-school-district cap amount provided
1414		-	in subparagraph b of paragraph 2 of subsection F of
1415		-	this section, the Tax Commission shall first allocate
1416		-	any amount of credits not claimed for contributions
1417		-	made to other organizations authorized pursuant to
1418		-	subsections C, D and E of this section, then shall
1419		-	determine the percentage of the contribution which
1420		-	establishes the proportionate share of the credit
1421		-	which may be claimed by any taxpayer so that the
1422		-	maximum credits authorized by this section are not
1423		-	exceeded.
1424		-	d. Beginning for tax year 2016 2022, credits earned, but
1425		-	not allowed due to the application of statewide caps
1426		-	provided in subsection D F of this section will be
1427		-	considered suspended and authorized to be u sed in the
1428		-	next immediate tax year and applied to the next year's
1429		-	statewide cap; and
1430		-	3. The Tax Commission shall publish the percentage of the
1431		-	contribution which may be claimed as a credit by contributors for
1432		-	the most recently completed calendar year on t he Tax Commission
1433		-	website no later than February 15 of each calendar year for
1434		-
1435		-	HB2701 HFLR Page 29
1436		-	BOLD FACE denotes Committee Amendments. 1
1437		-	2
1438		-	3
1439		-	4
1440		-	5
1441		-	6
1442		-	7
1443		-	8
1444		-	9
1445		-	10
1446		-	11
1447		-	12
1448		-	13
1449		-	14
1450		-	15
1451		-	16
1452		-	17
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1455		-	20
1456		-	21
1457		-	22
1458		-	23
1459		-	24
1460		-
1461		-	contributions made the previous year. Each scholarship-granting
1462		-	organization or educational improvement grant organization
1463		-	authorized pursuant to subsections B, C, D and E of th is section
1464		-	shall notify contributors of that amount annually.
1465		-	I. The credit K. No tax credits authorized by this section
1466		-	shall not be used to reduce the tax liability of the taxpayer to
1467		-	less than zero (0).
1468		-	J. L. Any credits authorized by this section allowed but not
1469		-	used in any tax year may be carried over, in order, to each of the
1470		-	three (3) years following the year of qualification.
1471		-	K. M. 1. In order to qualify under this section, an
1472		-	educational improvement grant each organization authorized pursuant
1473		-	to subsections C and E of this section shall submit an application
1474		-	with information to the Oklahoma Tax Commission on a form prescribed
1475		-	by the Tax Commission that:
1476		-	a. enables the Tax Commission to confirm that the
1477		-	organization is a nonprofit entity exempt from
1478		-	taxation pursuant to the provisions of the Internal
1479		-	Revenue Code, 26 U.S.C., Section 501(c)(3) or Section
1480		-	509(a), and
1481		-	b. describes the proposed innovative educational program
1482		-	or programs supported by the organization.
1483		-
1484		-	HB2701 HFLR Page 30
1485		-	BOLD FACE denotes Committee Amendments. 1
1486		-	2
1487		-	3
1488		-	4
1489		-	5
1490		-	6
1491		-	7
1492		-	8
1493		-	9
1494		-	10
1495		-	11
1496		-	12
1497		-	13
1498		-	14
1499		-	15
1500		-	16
1501		-	17
1502		-	18
1503		-	19
1504		-	20
1505		-	21
1506		-	22
1507		-	23
1508		-	24
1509		-
1510		-	2. The Tax Commission shall revi ew and approve or disapprove
1511		-	the application, in consultation with the State Department of
1512		-	Education.
1513		-	3. In order to maintain eligibility under this section, an
1514		-	educational improvement grant organization authorized pursuant to
1515		-	subsections C and E of this section shall annually report the
1516		-	following information to the Tax Commission and publish on its
1517		-	website by September 1 of each year:
1518		-	a. the name of the innovative educational program or
1519		-	programs and the total amount of the grant or grants
1520		-	made to those programs during the immediately
1521		-	preceding school year,
1522		-	b. a description of how each grant was utilized during
1523		-	the immediately preceding school year and a
1524		-	description of any demonstrated or expected innovative
1525		-	educational improvements,
1526		-	c. the names of the pub lic school and school districts
1527		-	where innovative educational programs that received
1528		-	grants during the immediately preceding school year
1529		-	were implemented,
1530		-	d. where the organization collects information on a
1531		-	county-by-county basis, and
1532		-	e. the total number and total amount of grants made
1533		-	during the immediately preceding school year for
1534		-
1535		-	HB2701 HFLR Page 31
1536		-	BOLD FACE denotes Committee Amendments. 1
1537		-	2
1538		-	3
1539		-	4
1540		-	5
1541		-	6
1542		-	7
1543		-	8
1544		-	9
1545		-	10
1546		-	11
1547		-	12
1548		-	13
1549		-	14
1550		-	15
1551		-	16
1552		-	17
1553		-	18
1554		-	19
1555		-	20
1556		-	21
1557		-	22
1558		-	23
1559		-	24
1560		-
1561		-	innovative educational programs at public school by
1562		-	each county in which the organization made grants.
1563		-	4. The information required under paragraph 3 of this
1564		-	subsection shall be submitted on a form provided by the Tax
1565		-	Commission. No later than May 1 of each year, the Tax Commission
1566		-	shall annually distribute sample forms together with the forms on
1567		-	which the reports are required to be made to each approved
1568		-	organization.
1569		-	5. The Tax Commission shall not require any other information
1570		-	be provided by an organization, except as expressly authorized in
1571		-	this section.
1572		-	L. N. 1. Beginning in 2023 for the 2022 -2023 academic year, in
1573		-	order to maintain registration, a scholarship -granting organization
1574		-	shall annually report to the Tax Commission by September 1 of each
1575		-	year the following information regarding the educational
1576		-	scholarships funded by the organization in the previous academic
1577		-	year:
1578		-	a. the name and address of the scholarship -granting
1579		-	organization,
1580		-	b. the names of the qualifying schools that received
1581		-	funding for educational scholarships, the total amount
1582		-	of funds paid to each qualifying school and the total
1583		-	number of scholarship recipients enrolled in each
1584		-	qualifying school,
1585		-
1586		-	HB2701 HFLR Page 32
1587		-	BOLD FACE denotes Committee Amendments. 1
1588		-	2
1589		-	3
1590		-	4
1591		-	5
1592		-	6
1593		-	7
1594		-	8
1595		-	9
1596		-	10
1597		-	11
1598		-	12
1599		-	13
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1601		-	15
1602		-	16
1603		-	17
1604		-	18
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1606		-	20
1607		-	21
1608		-	22
1609		-	23
1610		-	24
1611		-
1612		-	c. the total number and total dollar amount of
1613		-	contributions received during the previous academic
1614		-	year,
1615		-	d. the total number and total dollar amount of
1616		-	educational scholarships awarded and funded during the
1617		-	previous academic year,
1618		-	e. the total number, total dollar a mount and percentage
1619		-	of educational scholarships awarded and funded during
1620		-	the previous academic year disaggregated into the
1621		-	following categories:
1622		-	(1) low-income eligible students,
1623		-	(2) students who during the immediately preceding
1624		-	school year attended or w ho were eligible by
1625		-	virtue of the residence of the student to attend
1626		-	a public school in the state which was identified
1627		-	for school improvement by the State Board of
1628		-	Education,
1629		-	(3) eligible special needs students, and
1630		-	(4) students who were first -time recipients of a
1631		-	scholarship, including information about the type
1632		-	of public or private school the student was
1633		-	enrolled in during the entire previous academic
1634		-	year,
1635		-
1636		-	HB2701 HFLR Page 33
1637		-	BOLD FACE denotes Committee Amendments. 1
1638		-	2
1639		-	3
1640		-	4
1641		-	5
1642		-	6
1643		-	7
1644		-	8
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1650		-	14
1651		-	15
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1657		-	21
1658		-	22
1659		-	23
1660		-	24
1661		-
1662		-	f. the percentage of annual revenue received by the
1663		-	organization from donations which qualify for t ax
1664		-	credits pursuant to this section which was not
1665		-	expended on scholarships, and
1666		-	g. disaggregated data reported under this subsection
1667		-	shall be redacted if reporting would allow for
1668		-	identification of specific children, and shall be
1669		-	reported in accordance wit h the Student Data
1670		-	Accessibility, Transparency and Accountability Act of
1671		-	2013, Section 3-168(C)(2)(b) of Title 70 of the
1672		-	Oklahoma Statutes, and the Family Educational Rights
1673		-	and Privacy Act of 1974 (FERPA), 20 U.S.C., Section
1674		-	1232g.
1675		-	2. The Tax Commission shall make available on its website:
1676		-	a. the information submitted by the scholarship -granting
1677		-	organization pursuant to paragraph 1 of this
1678		-	subsection,
1679		-	b. a list of participating schools, and
1680		-	c. all other application information submitted to the Tax
1681		-	Commission by a scholarship -granting organization,
1682		-	except that information which would violate the
1683		-	privacy of an individual.
1684		-	3. A scholarship-granting organization shall annually submit
1685		-	verification to the Tax Commission that the organization still meets
1686		-
1687		-	HB2701 HFLR Page 34
1688		-	BOLD FACE denotes Committee Amendments. 1
1689		-	2
1690		-	3
1691		-	4
1692		-	5
1693		-	6
1694		-	7
1695		-	8
1696		-	9
1697		-	10
1698		-	11
1699		-	12
1700		-	13
1701		-	14
1702		-	15
1703		-	16
1704		-	17
1705		-	18
1706		-	19
1707		-	20
1708		-	21
1709		-	22
1710		-	23
1711		-	24
1712		-
1713		-	the criteria set forth in paragraph 7 of subsection I of this
1714		-	section.
1715		-	O. In consultation with the State Department of Education, the
1716		-	Tax Commission shall promulgate rules necessary to implement this
1717		-	act. The rules shall include procedures for the registration of a
1718		-	scholarship-granting organization or, an educational improvement
1719		-	grant organization or a public school foundation for purposes of
1720		-	determining if the organization meets the requirements of this act
1721		-	or for the revocation of the registration of an organi zation, if
1722		-	applicable, and for notice as required in subsection H J of this
1723		-	section.
1724		-	SECTION 3. This act shall become effective November 1, 2021.
1725		-
1726		-	COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET, dated
1727		-	02/25/2021 - DO PASS, As Amended.
	55	+	58-1-6181 AQH 12/30/20