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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 1935 By: McCall and McBride
COMMITTEE SUBSTITUTE
An Act relating to students; creating the Oklahoma
Parental Choice Tax Credit Act; providing short
title; providing legislative intent; defining terms;
establishing the Oklahoma Parental Choice Tax Cr edit
Program; providing for purpose of program; creating
income tax credit for certain taxpayers; prescribing
maximum credit amount; directing taxpayer to retain
certain receipts; authorizing Tax Commission to
prescribe forms; permitting advancement of certain
credit; listing procedures for taxpayers claiming
credit; authorizing dual participation in certain
programs; authorizing prorated recapture of credits;
suspending credits if certain f unding levels are not
met; reducing credit amount if certain event occurs;
providing for confidentiality of certain records;
requiring Department to provide notice to certain
taxpayers; directing Department to implement certain
system; mandating coordination of a process to verify
student enrollment status; providing for promulgation
of rules; providing immunity from liability for
certain actions; allowing certain parents to
intervene in certain legal proceeding; prohibiting
severability of act provisions; creating the Oklahoma
Student Fund; making the fund a continuing fund ;
stating source of funds; providing for budgeting and
expenditure of monies; stating purpose; requiring
expenditures to be made upon warrants; including
certain schools in funding eligibility ; including
appropriations in per-pupil expenditure calculations;
providing for conditional enactment; providing for
noncodification; providing for codification;
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providing an effective date; and declaring an
emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 28-100 of Title 70, unless there
is created a duplication in numbering, reads as follows:
A. This act shall be known and may be cited as the "Oklahoma
Parental Choice Tax Credit Act".
B. It is the intent of the Legislature that parents, legal
guardians, custodians, and others with legal authority over children
in this state be able to choose educational services that meet the
needs of their individual children. The Legislature affirms tha t
parents and legal guardians are best suited to make choices to help
children in this state reach their full potential and achieve a
brighter future.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes a s Section 28-101 of Title 70, unless there
is created a duplication in numbering, reads as follows:
A. As used in the Oklahoma Parental Choice Tax Credit Act :
1. "Commission" means the Oklahoma Tax Commission ;
2. "Curriculum" means a complete course of study for a
particular content area or grade level;
3. "Department" means the State Department of Education;
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4. "Education service provider" means a person, business,
public school district, public charter school, magnet schoo l,
institution within The Ok lahoma State System of Higher Education, or
organization that provides educational goods and/or services to
eligible students;
5. "Eligible student" means a resident of this state who is
eligible to enroll in a public school in this state. Eligible
student shall include a student who is enrolled in and attends a
private school in the state or a student who is educated pursuant to
the other means of education exception p rovided for in subsection A
of Section 10-105 of Title 70 of the Oklahoma Statutes;
6. "Qualified expense" means the following services:
a. tuition and fees at a pr ivate school accredited by the
State Board of Education or another accrediting
association,
b. tuition and fees for nonpublic online learning
programs,
c. tutoring services provided by an individual or a
private tutoring facility,
d. services contracted for and provided by a public
school district, public charter school, or magnet
school including, but not limited to, classes and
extracurricular activities and progr ams,
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e. textbooks, curriculum, or other instruc tional
materials including, but not limited to, supplemental
materials or associated online instruction required by
an education service provider,
f. fees for nationally standardized assessments
including, but not limited to, assessments used to
determine college admi ssion and advanced placement
examinations as well as tuition and fees for tutoring
or preparatory courses for the assessments, and
g. tuition and fees for concurrent enrollment at an
institution within The Oklahoma State System of Higher
Education; and
7. "Taxpayer" means a biological or adoptive parent,
grandparent, aunt, uncle, legal guardian, custodian, or other person
with legal authority to act on behalf of an eligible student .
B. There is hereby created the Oklahoma Parental Cho ice Tax
Credit Program to provide an income tax credit to a taxpayer for
qualified expenses to support the education of eligible students in
this state.
C. For tax years beginning after January 1, 2023, there shall
be allowed against the tax imposed by Section 2355 of Title 68 of
the Oklahoma Statute s a credit for any Oklahoma taxpayer who incurs
a qualified expense on behalf of an eligible student. The credit
shall be administered subject to the following:
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1. The maximum credit amount shall be:
a. Five Thousand Dollars ($5,000.00) in qualified expenses
per eligible student in each tax year if the eligible
student attends a private school accredited by the
State Board of Education or another accrediting
association, and
b. Two Thousand Five Hundred Dollars ($2,500.00) in
qualified expenses per eligible student in each tax
year if the eligible student is educated pursuant to
the other means of e ducation exception provided for in
subsection A of Section 10-105 of Title 70 of the
Oklahoma Statutes;
2. The taxpayer shall retain all receipts of qualified expenses
as proof of the amounts paid each tax year the credit is claimed;
and
3. If the credit exceeds the tax imposed by Section 2355 of
Title 68 of the Oklahoma Statutes, the excess amount shall be
refunded to the taxpayer.
D. The Commission may prescribe forms for purposes of claiming
the credits authorized by the Oklahoma Parental Choice Tax Credit
Act. The Commission shall create a form for the purpose of allowing
taxpayers to request that the credit amount provided in subparagraph
a of paragraph 1 of subsection C of this section be advanced to the
taxpayer in two installments of not more than Two Thousand Five
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Hundred Dollars ($2,500.00) per semester for a maximum credit of
Five Thousand Dollars ($5,000.00) per tax year. Eligible taxpayers
who submit the form and qualify for an advance shall be approved and
paid within sixty (60) days of submitting the prescribed form .
E. Taxpayers claiming the credit shall:
1. Only claim the credit for qualified expenses as defined in
paragraph 6 of subsection A of this section to provide an education
for an eligible student;
2. Ensure no other person is cla iming a credit for the e ligible
student;
3. Not claim the credit for an eligible student who enrolls as
a full-time student in a publi c school district, public charter
school, public virtual charter school, or magnet school; and
4. Comply with rules and requirements established by the
Commission for administration of the Oklahoma Parental Choice Tax
Credit Program.
F. Eligible students may accept a scholarship from the Li ndsey
Nicole Henry Scholarships for Students with Disabilities Program
created by Section 13 -101.2 of Title 70 of the Oklahoma Statutes
while participating in the Oklahoma Parental Choice Tax Credit
Program.
G. The Commission shall be authorized to recapture the credits
otherwise authorized by the provisions of this act on a prorated
basis if it finds that the taxpayer has claimed an eligible student
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who no longer attends a private school or has enrolled in a public
school in the state or that the credit does not meet the
requirements of the Oklahoma Parental Choice Tax Credit Act.
H. Beginning July 1, 2024, and beginning on each succeeding
July 1 if the amount of money appropriated to the State Board of
Education for the financial support of p ublic schools for the fiscal
year which begins July 1, 2024, is less than the amount of money
appropriated to the State Board of Education for the financial
support of public schools f or the fiscal year ending June 30, 2024,
including funds appropriated pu rsuant to Sections 1, 2, and 3 of
Enrolled House Bill No. 2775 enacted by the 1st Session of the 59th
Oklahoma Legislature , the tax credits otherwise authorized in
subsection C of this section shall be suspended until the amount of
money appropriated to the State Board of Education for the financial
support of public schools is greater than or equal to the amount
appropriated for the fiscal ye ar ending June 30, 2024.
I. In the event of a failure of revenue pursuant to the
Oklahoma State Finance A ct, the tax credits otherwise authorized in
subsection C of this section shall be reduced proportionately to the
reduction in the amount of money appropriated to the State Boar d of
Education for the financial support of public schools for the fiscal
year in which the failure of revenue occurs.
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J. The Tax Commission shall keep all records relat ing to the
Oklahoma Parental Choice Tax Credit Act confidential including, but
not limited to, the Social Security numbers of eligible student s.
SECTION 3. NEW LAW A new se ction of law to be codified
in the Oklahoma Statutes as Section 28 -102 of Title 70, unless there
is created a duplication in numbering, reads as follows:
A. The State Department of Education shall provide parents,
legal guardians, custodians, or ot her persons with legal authority
of eligible students with disabilities notice that participation in
the Oklahoma Parental Choice Tax Credit Program shall have the same
effect as a parental revocation of consent pursuant to 20 U.S.C.,
Sections 1414(a)(1)(D) and 1414(C) of the Individuals with
Disabilities Education Act (IDEA) and an explanation of the righ ts
parents, legal guardians, custodians, or ot her persons with legal
authority of eligible students with disabilities have under IDEA and
any applicable state laws and re gulations.
B. The Department shall implement a commercia lly viable, cost-
effective, and user-friendly system for users to publicly rate,
review, and share information about education service providers.
C. The Oklahoma Tax Commission shall coordinate with the State
Department of Education to develop a process to review student
enrollment information in order to verify that an eligible student
who is claimed by a taxpayer receiving a tax credit is not enrolled
in a public school in the state.
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D. The Commission and Department may promulgate rules to
implement the provisions of the Oklahoma Parental Choice Tax Credit
Act.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 28-103 of Title 70, unless there
is created a duplication in numbering, reads as follows:
A. No liability shall arise on the part of the Oklahoma Tax
Commission, State Department of Education, State Board of Education,
the state, a public school district, a public charter school , a
public virtual charter school, or a magnet school b ased on the award
of or use of a tax credit pursuant to the Oklahoma Parental Choice
Tax Credit Act.
B. If any part of the Oklahoma Parental Choice Tax Credit Act
is challenged in a state court as vio lating either the Oklahoma
Constitution or United States Constitution, taxpayers shall be
permitted to intervene for the purposes of defending the Oklahoma
Parental Choice Tax Credit Program's constitutionality. However,
for the purposes of judicial admin istration, a court may require
that all taxpayers file a joint brief so long as they are not
required to join any brief filed on behalf of any named state
defendant.
C. The provisions of the Oklahoma Parental Choice Tax Credit
Act shall not be severable, and if any provision of the Oklahoma
Parental Choice Tax Credit Act or the application thereof to any
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person or circumstances is held invalid, such invalidity shall
invalidate the other provisions or applications of this act.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 28-104 of Title 70, unless there
is created a duplication in numbering, reads as follows:
There is hereby created in the State Treasury a revolving fund
for the State Board of Education to be designated the "Oklahoma
Student Fund". The fund shall be a continuing fund, not subject to
fiscal year limitations, and shall consist of all monies designated
for deposit to the fund by law. All monies accruing to the credit
of the fund are hereby appropriated and may be budgeted an d expended
by the State Board of Education for the purpose of funding public
school districts as provided in Sections 2 and 3 of Enrolled House
Bill No. 2775 enacted by the 1st Session of the 59th Oklahoma
Legislature. Expenditures from the fund shall be made upon warrants
issued by the State Treasure r against claims filed as prescribed by
law with the Director of the Office of Management and Enterprise
Services for approval and payment.
SECTION 6. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
A. For the purposes of funds appropriated pursuant to Sections
1, 2, and 3 of Enrolled House Bill No. 2775 enacted by the 1st
Session of the 59th Oklahoma Legislature, the Oklahoma School for
the Blind and the Oklahoma School for the Deaf shall be considered
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public schools and public school districts that are eligible to
receive the funds appropriated in Sections 1, 2, and 3 of Enrolled
House Bill No. 2775 enacted by the 1st Session of the 59th Oklahoma
Legislature.
B. The funds appropriated pursuant to Sections 1, 2, and 3 of
Enrolled House Bill No. 2775 enacted by the 1st Session of the 59th
Oklahoma Legislature shall be included in any calculation of per-
pupil expenditure as defined in Section 1 -124 of Title 70 of the
Oklahoma Statutes.
SECTION 7. The provisions of this act shall be contingent upon
the enactment of Enrolled House Bill No. 2775 of the 1st Session of
the 59th Oklahoma Legislature.
SECTION 8. This act shall become effective July 1, 2023.
SECTION 9. It being immediately necessary for the prese rvation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
59-1-7546 JM 02/16/23