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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 2701 By: Hasenbeck
COMMITTEE SUBSTITUTE
[ revenue and taxation - Education Investment for
Oklahoma Act - income tax credits - education
improvement grant organizations - scholarship-
granting organizations - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of l aw not to be
codified in the Oklahoma Statutes reads as follows:
This act shall be known and may be cited as the "Education
Investment for Oklahoma Act".
SECTION 2. AMENDATORY 68 O.S. 2011, Section 2357.206, as
last amended by Section 1, Chapter 288, O.S.L. 2017 (68 O.S. Supp.
2020, Section 2357.206), is amended to read as follows:
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Section 2357.206 A. This act shall be known and may be cited
as the "Oklahoma Equal Opportunity Education Scholarship Act".
B. 1. Except as provided in subsection F H of this section,
after August 26, 2011, there shall be allowed a credit for any
taxpayer who makes a contribution to an eligible scholarship -
granting organization.
The credit shall be equal to fifty percent (50%) of the total
amount of contributions made during a taxable year, not to exceed
One Thousand Dollars ($1,000.00) Two Thousand Eight Hundred Dollars
($2,800.00) for single individuals, Two Thousand Dollars ($2,000.00)
Five Thousand Six Hundred Dollars ($5,600.00) for married
individuals filing jointly, or One Hundred Thousand Dollars
($100,000.00) for any taxpayer which is a legal business entity
including limited and general partnerships, corporations, subchapter
S corporations and limited liability companies , plus any suspended
credits pursuant to subparagraph d of paragraph 2 of subsection J of
this section; provided, if total credits claimed pursuant to this
paragraph exceed the caps cap amount established pursuant to
paragraph 1 of subsection D F of this section, the credit shal l be
equal to the taxpayer's proportionate share of the cap for the
taxable year, as determined pursuant to subsection H J of this
section.
2. For any taxpayer who makes a contribution to an eligible
scholarship-granting organization and makes a written c ommitment to
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contribute the same amount for an additional year, the credit for
the first year and the additional year shall be equal to seventy -
five percent (75%) of the total amount of the contribution made
during a taxable year, not to exceed the amounts established in
paragraph 1 of this subsection for the taxable year in which the
credit provided in this subsection is claimed. The taxpayer shall
provide evidence of the written commitment to the Oklahoma Tax
Commission at the time of filing the refund c laim.
3. The credits authorized pursuant to the provisions of this
subsection shall be allocable to the partners, shareholders, members
or other equity owners of a taxpayer that is authorized to be
treated as a partnership for purposes of federal income t ax
reporting for the taxable year for which the tax credits authorized
by this subsection are claimed on the applicable return, together
with required schedules, forms or reports of the partners,
shareholders, members or other equity owners of the taxpayer . Tax
credits which are allocated to such equity owners shall only be
limited in amount for the income tax return of a natural person or
persons based upon the limitation of the total credit amount to the
entity from which the tax credits have been alloca ted and shall not
be limited to One Thousand Dollars ($1,000.00) Two Thousand Eight
Hundred Dollars ($2,800.00) for single individuals or limited to Two
Thousand Dollars ($2,000.00) Five Thousand Six Hundred Dollars
($5,600.00) for married persons filing a joint return.
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4. On or before December 31, 2017, and once every four (4)
years thereafter, such scholarship -granting organization and
educational improvement granting grant organization shall submit to
the Oklahoma Tax Commission, Governor, President Pro Tempore of the
Senate and the Speaker of the House of Representatives , an audited
financial statement for the organization along with information
detailing the benefits, successes or failures of the program , and
make publicly available on its website the financial statement and
information submitted pursuant to this paragraph .
C. 1. Except as provided in subsection F H of this section,
after August 26, 2011, there shall be allowed a credit for any
taxpayer who makes a contribution to an eligible educatio nal
improvement grant organization. The
a. Except as otherwise provided by subparagraph b of this
paragraph or paragraph 2 of this subsection, the
credit shall be equal to fifty percent (50%) of the
total amount of contributions made during a taxable
year, not to exceed One Thousand Dollars ($1,000.00)
Two Thousand Eight Hundred Dollars ($2,800.00) for
single individuals, Two Thousand Dollars ($2,000.00)
Five Thousand Six Hundred Dollars ($5,600.00) for
married individuals filing jointly, or One Hundred
Thousand Dollars ($100,000.00) for any taxpayer which
is a legal business entity including limited and
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general partnerships, corporations, subchapter S
corporations and limited liability companies , plus any
suspended credits pursuant to subparagraph d of
paragraph 2 of subsection J of this section ; provided,
if total credits claimed pursuant to this paragraph
subparagraph exceed the cap amount established
pursuant to subparagraph a of paragraph 1 2 of
subsection D F of this section, the credit shall be
equal to the taxpayer's proportionate share of the cap
for the taxable year, as determined pursuant to
subsection H J of this section.
b. If a contribution is made to an eligible educational
improvement grant organization to benefit a school
district which has l ess than two thousand (2,000)
students enrolled on October 1 as determined by the
State Department of Education, the amount of the
credit shall be one hundred percent (100%) of the
amount contributed to an eligible educational
improvement grant organizatio n, but shall be subject
to the maximum credit amounts based on filing status
as prescribed by subparagraph a of this paragraph. A
person or entity claiming a tax credit pursuant to the
provisions of this subparagraph may rely on the
student enrollment inf ormation contained in the State
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Department reports as of the date the contribution is
made. If the taxpayer preserves either an electronic
file or record created by the State Department of
Education or produces a document by printing
information contained in an electronic data file
originally created by the State Department of
Education, such information shall be conclusive with
respect to the student enrollment number for purposes
of claiming the tax credit authorized by this
subparagraph or any audit of the taxpayer's income tax
return; provided, if total credits claimed pursuant to
this subparagraph exceed the cap amount established
pursuant to subparagraph a of paragraph 2 of
subsection F of this section, the credit shall be
equal to the taxpayer's prop ortionate share of the cap
for the taxable year, as determined pursuant to
subsection J of this section.
2. For any taxpayer who makes a contribution to an eligible
educational improvement grant organization and makes a written
commitment to contribute th e same amount for an additional year, the
credit for the first year and the additional year shall be equal to
seventy-five percent (75%) of the total amount of the contribution
made during a taxable year, not to exceed the amounts cap amount
established in subparagraph a of paragraph 1 2 of subsection F of
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this subsection section for the taxable year in which the credit
provided in this subsection paragraph is claimed; provided, if total
credits claimed pursuant to this paragraph exceed the cap
established pursuant to subparagraph a of paragraph 3 2 of this
subsection F of this section, the credit shall be equal to the
taxpayer's proportionate share of the cap for the taxable year, as
determined pursuant to subsection H J of this section. The taxpayer
shall provide evidence of the written commitment to the Oklahoma Tax
Commission at the time of filing the refund claim.
3. The credits authorized pursuant to the provisions of this
subsection shall be allocable to the partners, shareholders, members
or other equity owners of a taxpayer that is authorized to be
treated as a partnership for purposes of federal income tax
reporting for the taxable year for which the tax credits authorized
by this subsection are claimed on the applicable return, together
with required schedules, forms or reports of the partners,
shareholders, members or other equity owners of the taxpayer. Tax
credits which are allocated to such equity owners shall only be
limited in amount for the income tax return of a natural person or
persons based upon the limitation of the total credit amount to the
entity from which the tax credits have been allocated and shall not
be limited to One Thousand Dollars ($1,000.00) Two Thousand Eight
Hundred Dollars ($2,800.00) for single individuals or limited t o Two
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Thousand Dollars ($2,000.00) Five Thousand Six Hundred Dollars
($5,600.00) for married persons filing a joint return.
D. 1. On or after the effective date of this act, there shall
be allowed a credit for any taxpayer who makes a contribution to an
eligible public school district.
a. Except as otherwise provided by subparagraph b of this
paragraph or paragraph 2 of this subsection, the
credit shall be equal to fifty percent (50%) of the
total amount of contributions made during a taxable
year, not to exceed Two Thousand Eight Hundred Dollars
($2,800.00) for single individuals, Five Thousand Six
Hundred Dollars ($5,600.00) for married individuals
filing jointly or One Hundred Thousand Dollars
($100,000.00) for any taxpayer which is a legal
business entity including limited and general
partnerships, corporations, subchapter S corporations
and limited liability companies; provided, if total
credits claimed pursuant to this subparagraph exceed
the cap amount established pursuant to subparagraph a
of paragraph 2 of subsection F of this section, the
credit shall be equal to the taxpayer's proportionate
share of the cap for the taxable year, as determined
pursuant to subsection J of this section.
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b. If a contribution is made to a school district which
has less than two thousand (2,000) students enrolled
on October 1 as determined by the State Department of
Education, the amount of the credit shall be one
hundred percent (100%) of the amount contributed to an
eligible school district, but shall be subject to the
maximum credit amounts based on filing status as
prescribed by subparagraph a of this paragraph. A
person or entity claiming a tax credit pursuant to the
provisions of this subparagraph may rely on the
student enrollment information contained in the Stat e
Department reports as of the date the contribution is
made. If the taxpayer preserves either an electronic
file or record created by the State Department of
Education or produces a document by printing
information contained in an electronic data file
originally created by the State Department of
Education, such information shall be conclusive with
respect to the student enrollment number for purposes
of claiming the tax credit authorized by this
subparagraph or any audit of the taxpayer's income tax
return; provided, if total credits claimed pursuant to
this subparagraph exceed the cap amount established
pursuant to subparagraph a of paragraph 2 of
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subsection F of this section, the credit shall be
equal to the taxpayer's proportionate share of the cap
for the taxable year, as determined pursuant to
subsection J of this section;
2. Except as otherwise provided by subparagraph a or b of
paragraph 1 of this subsection, for any taxpayer who makes a
contribution to an eligible public school district and makes a
written commitment to contribute the same amount for an additional
year, the credit for the first year and the additional year shall be
equal to seventy-five percent (75%) of the total amount of the
contribution made during a taxable year, not to exceed the cap
amount established in subparagraph a of paragraph 2 of subsection F
of this section for the taxable year in which the credit provided in
this paragraph is claimed. The taxpayer shall provide evidence of
the written commitment to the Oklahoma Tax C ommission at the time of
filing the refund claim; provided, if total credits claimed pursuant
to this paragraph exceed the cap amount established pursuant to
subparagraph a of paragraph 2 of subsection F of this section, the
credit shall be equal to the ta xpayer's proportionate share of the
cap for the taxable year, as determined pursuant to subsection J of
this section.
3. The credits authorized pursuant to the provisions of this
subsection shall be allocable to the partners, shareholders, members
or other equity owners of a taxpayer that is authorized to be
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treated as a partnership for purposes of federal income tax
reporting for the taxable year for which the tax credits authorized
by this subsection are claimed on the applicable return, together
with required schedules, forms or reports of the partners,
shareholders, members or other equity owners of the taxpayer. Tax
credits which are allocated to such equity owners shall only be
limited in amount for the income tax return of a natural person or
persons based upon the limitation of the total credit amount to the
entity from which the tax credits have been allocated and shall not
be limited to Two Thousand Eight Hundred Dollars ($2,800.00) for
single individuals or limited to Five Thousand Six Hundred Do llars
($5,600.00) for married persons filing a joint return.
4. Each eligible public school district to which contributions
have been made for purposes of the tax credit authorized by this
subsection shall annually account for all revenue and expenditures
through the Oklahoma Cost Accounting System (OCAS) and shall
annually publish on its website the total dollar amount raised
pursuant to paragraphs 1 and 2 of this subsection along with
information detailing the benefits, successes or failures of the
program.
E. 1. On or after the effective date of this act, there shall
be allowed a credit for any taxpayer who makes a contribution to an
eligible public school foundation.
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a. Except as otherwise provided by subparagraph b of this
paragraph or paragraph 2 of this subsection, the
credit shall be equal to fifty percent (50%) of the
total amount of contributions made during a taxable
year, not to exceed Two Thousand Eight Hundred Dollars
($2,800.00) for single individuals, Five Thousand Six
Hundred Dollars ($5,6 00.00) for married individuals
filing jointly or One Hundred Thousand Dollars
($100,000.00) for any taxpayer which is a legal
business entity including limited and general
partnerships, corporations, subchapter S corporations
and limited liability companie s; provided, if total
credits claimed pursuant to this subparagraph exceed
the cap amount established pursuant to subparagraph a
of paragraph 2 of subsection F of this section, the
credit shall be equal to the taxpayer's proportionate
share of the cap for the taxable year, as determined
pursuant to subsection J of this section.
b. If a contribution is made to an eligible public school
foundation to benefit a school district which has less
than two thousand (2,000) students enrolled on October
1 as determined by the State Department of Education,
the amount of the credit shall be one hundred percent
(100%) of the amount contributed to an eligible public
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school foundation, but shall be subject to the maximum
credit amounts based on filing status as prescribed by
subparagraph a of this paragraph. A person or entity
claiming a tax credit pursuant to the provisions of
this subparagraph may rely on the student enrollment
information contained in the State Department reports
as of the date the contribution is made. If the
taxpayer preserves either an electronic file or record
created by the State Department of Education or
produces a document by printing information contained
in an electronic data file originally created by the
State Department of Education, such i nformation shall
be conclusive with respect to the student enrollment
number for purposes of claiming the tax credit
authorized by this subparagraph or any audit of the
taxpayer's income tax return; provided, if total
credits claimed pursuant to this subpa ragraph exceed
the cap amount established pursuant to subparagraph a
of paragraph 2 of subsection F of this section, the
credit shall be equal to the taxpayer's proportionate
share of the cap for the taxable year, as determined
pursuant to subsection J of this section.
2. Except as otherwise provided by subparagraph a or b of
paragraph 1 of this subsection, for any taxpayer who makes a
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contribution to an eligible public school foundation and makes a
written commitment to contribute the same amount for an a dditional
year, the credit for the first year and the additional year shall be
equal to seventy-five percent (75%) of the total amount of the
contribution made during a taxable year, not to exceed the cap
amount established in subparagraph a of paragraph 2 of subsection F
of this section for the taxable year in which the credit provided in
this paragraph is claimed. The taxpayer shall provide evidence of
the written commitment to the Oklahoma Tax Commission at the time of
filing the refund claim; provided, if total credits claimed pursuant
to this paragraph exceed the cap amount established pursuant to
subparagraph a of paragraph 2 of subsection F of this section, the
credit shall be equal to the taxpayer's proportionate share of the
cap for the taxable yea r, as determined pursuant to subsection J of
this section.
3. The credits authorized pursuant to the provisions of this
subsection shall be allocable to the partners, shareholders, members
or other equity owners of a taxpayer that is authorized to be
treated as a partnership for purposes of federal income tax
reporting for the taxable year for which the tax credits authorized
by this subsection are claimed on the applicable return, together
with required schedules, forms or reports of the partners,
shareholders, members or other equity owners of the taxpayer. Tax
credits which are allocated to such equity owners shall only be
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limited in amount for the income tax return of a natural person or
persons based upon the limitation of the total credit amount to t he
entity from which the tax credits have been allocated and shall not
be limited to Two Thousand Eight Hundred Dollars ($2,800.00) for
single individuals or limited to Five Thousand Six Hundred Dollars
($5,600.00) for married persons filing a joint return .
4. On or before December 31, 2022, and once every four (4)
years thereafter, such eligible public school foundation shall
submit to the Oklahoma Tax Commission, Governor, President Pro
Tempore of the Senate and the Speaker of the House of
Representatives an audited financial statement for the organization
along with information detailing the benefits, successes or failures
of the programs.
F. Except as otherwise provided pursuant to subsection H J of
this section, for tax years 2017 2022 and thereafter:
1. The Unless the cap amount otherwise prescribed by this
paragraph is adjusted pursuant to paragraph 3 of this subsection,
the total credits authorized pursuant to subsection B of this
section for all taxpayers for any tax year beginning on or after
January 1, 2022, shall not exceed Three Million Five Hundred
Thousand Dollars ($3,500,000.00) Ten Million Dollars
($10,000,000.00) annually;
2. The Unless the cap amount otherwise prescribed by
subparagraph a of this paragraph is adjusted pursuant to paragra ph 3
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of this subsection, the total credits authorized pursuant to
subsection subsections C, D and E of this section for all taxpayers
for any tax year beginning on or after January 1, 2022, shall not
exceed One Million Five Hundred Thousand Dollars ($1,500 ,000.00):
a. Twenty Million Dollars ($20,000,000.00) annually,
b. in addition to the cap amount prescribed by
subparagraph a of this paragraph, the credit amount
shall also be limited to Two Hundred Thousand Dollars
($200,000.00) of credits per public scho ol district
annually; and
3. In any tax year when the annual tax credit amount as
prescribed by either paragraph 1 of this subsection or by
subparagraph a of paragraph 2 of this subsection for the prior tax
year is equal to or greater than ninety percent (90%) of the tax
credit cap amount applicable to that tax year, such tax credit cap
amount shall increase by twenty -five percent (25%). The adjustment
shall not be applicable to the amount prescribed by subparagraph b
of paragraph 2 of this subsection. T he Tax Commission shall publish
on its website information identifying the tax credit cap amount
when it is increased pursuant to this paragraph; and
4. The cap on total credits provided for in this subsection
shall be allocated by the Tax Commission as p rovided in subsection H
J of this section.
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E. G. For credits claimed for eligible contributions made
during tax year 2014 and thereafter, a credit shall not be allowed
by the Oklahoma Tax Commission for contributions made to a
scholarship-granting organization or an educational improvement
grant organization if that organization's percentage of funds
actually awarded is less than ninety percent (90%). For purposes of
this section, the "percentage of funds actually awarded" shall be
determined by dividing the total amount of funds actually awarded as
educational scholarships or educational improvement grants over the
most recent twenty-four (24) months by the total amount available to
award as educational scholarships or educational improvement grants
over the most recent twenty -four (24) months.
F. H. Any tax credits which are earned by a taxpayer pursuant
to this section during the time period beginning on the effective
date of this act through December 31, 2012, may not be claimed for
any period prior to the taxable year beginning January 1, 2013. No
credits which accrue during the time period beginning on the
effective date of this act through December 31, 2012, may be used to
file an amended tax return for any taxable year prior to the taxable
year beginning January 1, 2013.
G. I. As used in this section:
1. "Eligible student" means a child of school age who is
lawfully present in the United States and who is a member of a
household in which the total annual income during the preceding tax
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year does not exceed an amount equal to three hundred percent (300%)
two hundred thirty-five percent (235%) of the income standard used
to qualify for a free or reduced reduced-price school lunch and
whose custodial parents or legal guardians are not taxpayers who
make contributions to an eligible scholarship -granting organization
or who, during the immediately preceding school year, attended or,
by virtue of the location of such student's place of residence, was
eligible to attend a public school in this state which has been
identified for school improvement as determined by the State Board
of Education pursuant to the requirements of the No Child Left
Behind Act of 2001, P.L. No. 107 -110. Once a student has received
an educational scholarship, as defined in paragrap h 3 of this
subsection, the student and any siblings who are members of the same
household shall remain eligible until they graduate from high school
or reach twenty-one (21) years of age, whichever occurs first;
2. "Eligible special needs student" means a child who has been
provided services under an Individual Family Service Plan through
the SoonerStart program and during transition was evaluated and
determined to be eligible for school district services, a child of
school age who has attended public sch ool in our state with an
individualized education program pursuant to the Individuals With
Disabilities Education Act, 20 U.S.C.A., Section 1400 et seq. or a
child who has been diagnosed by a clinical professional as having a
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significant disability that wi ll affect learning and who has been
approved by the board of a scholarship -granting organization;
3. "Educational scholarships" means:
a. scholarships to an eligible student of up to Five
Thousand Dollars ($5,000.00) or eighty percent (80%)
of the statewide annual average per -pupil expenditure
as determined by the National Center for Education
Statistics, U.S. Department of Education, whichever is
greater, to cover all or part of the tuition, fees and
transportation costs of a qualified school which is
accredited by the State Board of Education or an
accrediting association approved by the Board pursuant
to Section 3-104 of Title 70 of the Oklahoma Statutes,
b. scholarships to an eligible student of up to Five
Thousand Dollars ($5,000.00) or eighty percent (80%)
of the statewide annual average per -pupil expenditure
as determined by the National Center for Education
Statistics, U.S. Department of Education, whichever is
greater, to cover the educational costs of a qualified
school which does not charge tuitio n, which enrolls
special populations of students and which is
accredited by the State Board of Education or an
accrediting association approved by the Board pursuant
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to Section 3-104 of Title 70 of the Oklahoma Statutes,
or
c. scholarships to an eligible s pecial needs student of
up to Twenty-five Thousand Dollars ($25,000.00) to
cover all or part of the tuition, fees and
transportation costs of a qualified school for
eligible special needs students which is accredited by
the State Board of Education or an a ccrediting
association approved by the Board pursuant to Section
3-104 of Title 70 of the Oklahoma Statutes ,
d. scholarships to a low -income eligible student of up to
Five Thousand Dollars ($5,000.00) or ninety percent
(90%) of the statewide annual average per-pupil
expenditure as determined by the National Center for
Education Statistics, U.S. Department of Education,
whichever is greater, to cover all or part of the
tuition, fees and transportation costs of a qualified
school which is accredited by the St ate Board of
Education or an accrediting association approved by
the Board pursuant to Section 3 -104 of Title 70 of the
Oklahoma Statutes, or
e. scholarships to an eligible military student of up to
Five Thousand Dollars ($5,000.00) or eighty percent
(80%) of the statewide annual average per pupil
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expenditure as determined by the National Center for
Education Statistics, U.S. Department of Education,
whichever is greater, to cover all or part of the
tuition, fees and transportation costs of a qualified
school for eligible military students which is
accredited by the State Board of Education or an
accrediting association approved by the Board pursuant
to Section 3-104 of Title 70 of the Oklahoma Statutes.
As used in this subparagraph, "eligible military
student" means a child who has a parent or legal
guardian who is serving or has served in the United
States Armed Forces on active duty or is actively
serving in the United States Reserves or the National
Guard;
4. "Low-income eligible student" means an eligib le student or
eligible special needs student who qualifies for a free or reduced -
price lunch;
5. "Qualified school" means an early childhood, elementary or
secondary private school in this state, including schools which
provide special educational program s for three-year-olds or
prekindergarten educational programs for four -year-olds, which:
a. is accredited by the State Board of Education or an
accrediting association approved by the Board pursuant
to Section 3-104 of Title 70 of the Oklahoma Statutes,
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b. is in compliance with all applicable health and safety
laws and codes,
c. has a stated policy against discrimination in
admissions on the basis of race, color, national
origin or disability, and
d. ensures academic accountability to parents and
guardians of students through regular progress
reports;
6. "Qualified school for eligible special needs students" means
an early childhood, elementary or secondary private school in a
county in this state, including schools which provide special
educational programs for three-year-olds or prekindergarten
educational programs for four -year-olds;
7. "Scholarship-granting organization" means an organization
which:
a. is a nonprofit entity exempt from taxation pursuant to
the provisions of the Internal Revenue Code, 26
U.S.C., Section 501(c)(3),
b. distributes periodic scholarship payments as checks
made out to an eligible student's or eligible special
needs student's parent or guardian and mailed to the
qualified school where the student is enrolled,
c. spends no more than ten percent (10%) of its annual
revenue on expenditures other than educational
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scholarships as defined in paragraph 3 of this
subsection,
d. spends each year a portion of its expenditures on
educational scholarships for low -income eligible
students, as defined in paragraph 4 of this
subsection, in an amount equal to or greater than the
percentage of low-income eligible students in the
state,
e. ensures that scholarships are portable during the
school year and can be used at any qualified school
that accepts the eligible student or at any qualified
school for special needs students that accepts the
eligible special needs student,
f. registers with the Oklahoma Tax Commission as a
scholarship-granting organization, and
g. has policies in place to:
(1) carry out criminal background checks on all
employees and board members to ensure that no
individual is involved with the organization who
might reasonably pose a risk to the appropriate
use of contributed funds, and
(2) maintain full and accurate records wit h respect
to the receipt of contributions and expenditures
of those contributions and supply such records
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and any other documentation required by the Tax
Commission to demonstrate financial
accountability;
8. "Annual revenue" means the total amount or val ue of
contributions received by an organization from taxpayers awarded
credits during the organization's fiscal year and all amounts earned
from interest or investments;
9. "Public school" means public schools as defined in Section
1-106 of Title 70 of th e Oklahoma Statutes;
10. "Eligible public school district" means any public school
that is not located within a ten -mile radius of a qualified school
in this state, or any public school that is located within a ten -
mile radius of a qualified school in thi s state but offers grade -
level instruction different from the qualified school or any public
school located within a public school district with fewer than four
thousand five hundred (4,500) students ;
11. "Early childhood education program" means a specia l
educational program for eligible special needs students who are
three (3) years of age or a prekindergarten educational program
provided to children who are at least four (4) years of age but not
more than five (5) years of age on or before September 1;
12. "Innovative educational program" means an advanced academic
or academic improvement program that is not part of the regular
coursework of a public school but that enhances the curriculum or
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academic program of the school or provides early childhood ed ucation
programs to students;
13. "Educational improvement grant" means a grant to an
eligible public school to implement an innovative educational
program for students, including the ability for multiple public
schools to make an application and be award ed a grant to jointly
provide an innovative educational program; and
14. "Educational improvement grant organization" means an
organization which:
a. is a nonprofit entity exempt from taxation pursuant to
the provisions of the Internal Revenue Code, 26
U.S.C., Section 501(c)(3), and
b. contributes at least ninety percent (90%) of its
annual receipts as grants to eligible schools for
innovative educational programs. For purposes of this
subparagraph, an educational improvement grant
organization contribute s its annual cash receipts when
it expends or otherwise irrevocably encumbers those
funds for expenditure during the then current fiscal
year of the organization or during the next succeeding
fiscal year of the organization ; and
15. "Eligible public schoo l foundation" means a nonprofit
entity formed pursuant to Oklahoma law but which is exempt from
federal income taxation pursuant to either Section 501(c)(3) or
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Section 509(a) of the Internal Revenue Code of 1986, as amended.
Each public school foundation must be approved by the local board of
education prior to accepting qualifying donations .
H. J. Total credits authorized by this section shall be
allocated as follows:
1. By January 10 of the year immediately following each
calendar year, a scholarship -granting organization or, an
educational improvement grant organization , a public school district
or an eligible public school foundation which accepts contributions
pursuant to this section shall provide electronically to the Tax
Commission information on each contribution accepted during such
taxable year. At least once each taxable year, the scholarship-
granting organization or the educational improvement grant
organization entity making the report shall notify each contributor
that Oklahoma law provides for a total, statewide cap on the amount
of income tax credits allowed annually;
2. a. If the Tax Commission determines the total combined
credits claimed for contributions made to scholarship -
granting organizations during the most recently
completed calendar year by all taxpayers are in excess
of the statewide caps cap amount provided in paragraph
1 of subsection D F of this section, the Tax
Commission shall first allocate any amount of credits
not claimed for contributions made to educational
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improvement-granting organizations authorized pursuant
to subsections C, D and E of this section , then shall
determine the percentage of the contribution which
establishes the proportionate share of the credit
which may be claimed by any taxpayer so that the total
maximum credits authorized by this section are not
exceeded.
b. If the Tax Commission determines the total combined
credits claimed for contributions made to educational
improvement grant organizations authorized pursuant to
subsections C, D and E of this se ction during the most
recently completed calendar year by all taxpayers are
in excess of the statewide caps cap amount provided in
subparagraph a of paragraph 2 of subsection D F of
this section, the Tax Commission shall first allocate
any amount of credit s not claimed for contributions
made to scholarship-granting organizations, then shall
determine the percentage of the contribution which
establishes the proportionate share of the credit
which may be claimed by any taxpayer so that the
maximum credits authorized by this section are not
exceeded.
c. If the Tax Commission determines the total combined
credits claimed for contributions made to
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organizations authorized pursuant to subsections C, D
and E of this section during the most recently
completed calendar year by all taxpayers are in excess
of the per-public-school-district cap amount provided
in subparagraph b of paragraph 2 of subsection F of
this section, the Tax Commission shall first allocate
any amount of credits not claimed for contributions
made to other organizations authorized pursuant to
subsections C, D and E of this section, then shall
determine the percentage of the contribution which
establishes the proportionate share of the credit
which may be claimed by any taxpayer so that the
maximum credits authorized by this section are not
exceeded.
d. Beginning for tax year 2016 2022, credits earned, but
not allowed due to the application of statewide caps
provided in subsection D F of this section will be
considered suspended and authorized to be u sed in the
next immediate tax year and applied to the next year's
statewide cap; and
3. The Tax Commission shall publish the percentage of the
contribution which may be claimed as a credit by contributors for
the most recently completed calendar year on t he Tax Commission
website no later than February 15 of each calendar year for
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contributions made the previous year. Each scholarship-granting
organization or educational improvement grant organization
authorized pursuant to subsections B, C, D and E of th is section
shall notify contributors of that amount annually.
I. The credit K. No tax credits authorized by this section
shall not be used to reduce the tax liability of the taxpayer to
less than zero (0).
J. L. Any credits authorized by this section allowed but not
used in any tax year may be carried over, in order, to each of the
three (3) years following the year of qualification.
K. M. 1. In order to qualify under this section, an
educational improvement grant each organization authorized pursuant
to subsections C and E of this section shall submit an application
with information to the Oklahoma Tax Commission on a form prescribed
by the Tax Commission that:
a. enables the Tax Commission to confirm that the
organization is a nonprofit entity exempt from
taxation pursuant to the provisions of the Internal
Revenue Code, 26 U.S.C., Section 501(c)(3) or Section
509(a), and
b. describes the proposed innovative educational program
or programs supported by the organization.
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2. The Tax Commission shall revi ew and approve or disapprove
the application, in consultation with the State Department of
Education.
3. In order to maintain eligibility under this section, an
educational improvement grant organization authorized pursuant to
subsections C and E of this section shall annually report the
following information to the Tax Commission and publish on its
website by September 1 of each year:
a. the name of the innovative educational program or
programs and the total amount of the grant or grants
made to those programs during the immediately
preceding school year,
b. a description of how each grant was utilized during
the immediately preceding school year and a
description of any demonstrated or expected innovative
educational improvements,
c. the names of the pub lic school and school districts
where innovative educational programs that received
grants during the immediately preceding school year
were implemented,
d. where the organization collects information on a
county-by-county basis, and
e. the total number and total amount of grants made
during the immediately preceding school year for
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innovative educational programs at public school by
each county in which the organization made grants.
4. The information required under paragraph 3 of this
subsection shall be submitted on a form provided by the Tax
Commission. No later than May 1 of each year, the Tax Commission
shall annually distribute sample forms together with the forms on
which the reports are required to be made to each approved
organization.
5. The Tax Commission shall not require any other information
be provided by an organization, except as expressly authorized in
this section.
L. N. 1. Beginning in 2023 for the 2022 -2023 academic year, in
order to maintain registration, a scholarship -granting organization
shall annually report to the Tax Commission by September 1 of each
year the following information regarding the educational
scholarships funded by the organization in the previous academic
year:
a. the name and address of the scholarship -granting
organization,
b. the names of the qualifying schools that received
funding for educational scholarships, the total amount
of funds paid to each qualifying school and the total
number of scholarship recipients enrolled in each
qualifying school,
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c. the total number and total dollar amount of
contributions received during the previous academic
year,
d. the total number and total dollar amount of
educational scholarships awarded and funded during the
previous academic year,
e. the total number, total dollar a mount and percentage
of educational scholarships awarded and funded during
the previous academic year disaggregated into the
following categories:
(1) low-income eligible students,
(2) students who during the immediately preceding
school year attended or w ho were eligible by
virtue of the residence of the student to attend
a public school in the state which was identified
for school improvement by the State Board of
Education,
(3) eligible special needs students, and
(4) students who were first -time recipients of a
scholarship, including information about the type
of public or private school the student was
enrolled in during the entire previous academic
year,
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f. the percentage of annual revenue received by the
organization from donations which qualify for t ax
credits pursuant to this section which was not
expended on scholarships, and
g. disaggregated data reported under this subsection
shall be redacted if reporting would allow for
identification of specific children, and shall be
reported in accordance wit h the Student Data
Accessibility, Transparency and Accountability Act of
2013, Section 3-168(C)(2)(b) of Title 70 of the
Oklahoma Statutes, and the Family Educational Rights
and Privacy Act of 1974 (FERPA), 20 U.S.C., Section
1232g.
2. The Tax Commission shall make available on its website:
a. the information submitted by the scholarship -granting
organization pursuant to paragraph 1 of this
subsection,
b. a list of participating schools, and
c. all other application information submitted to the Tax
Commission by a scholarship -granting organization,
except that information which would violate the
privacy of an individual.
3. A scholarship-granting organization shall annually submit
verification to the Tax Commission that the organization still meets
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the criteria set forth in paragraph 7 of subsection I of this
section.
O. In consultation with the State Department of Education, the
Tax Commission shall promulgate rules necessary to implement this
act. The rules shall include procedures for the registration of a
scholarship-granting organization or, an educational improvement
grant organization or a public school foundation for purposes of
determining if the organization meets the requirements of this act
or for the revocation of the registration of an organi zation, if
applicable, and for notice as required in subsection H J of this
section.
SECTION 3. This act shall become effective November 1, 2021.
COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET, dated
02/25/2021 - DO PASS, As Amended.