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SENATE FLOOR VERSION
March 27, 2023
COMMITTEE SUBSTITUTE
FOR ENGROSSED
HOUSE BILL NO. 1935 By: McCall, Bashore, Baker,
Luttrell, Caldwell (Chad),
Maynard, Echols, McBride,
Hilbert, and Culver of the
House
and
Treat, Jett, Pugh, Daniels,
Bullard, Rogers, Rosino,
Thompson (Kristen),
Bergstrom, McCortney,
Thompson (Roger), Hall,
Coleman, Paxton, Rader,
Seifried, Green, Newhouse,
Stewart, Prieto, Murdock,
Montgomery, Pederson,
Dugger, Pemberton, Weaver,
Stanley, Haste, Garvin,
Stephens, Burns, and Alvo rd
of the Senate
An Act relating to students; creating the Oklahoma
Parental Choice Tax Credit Act; providing short
title; providing legislative intent; defining terms;
creating the Oklahoma Parental Choice Tax Credit
Program; providing purpose ; creating income tax
credit for certain taxpayers beginning in certain tax
year; prescribing maximum credit amount s; directing
taxpayer to retain certain receipts and submit them
upon certain request; authorizing the Oklahoma Tax
Commission to prescribe certain forms; providing for
advancement of certain credit in installments;
providing procedures for claiming credit; authorizing
dual participation in certain program ; authorizing
the Commission to conduct or contract for certain
audit; authorizing prorated recapture of credits
under certain circumstances ; directing certain credit
amount to be reduced if certain event occurs;
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requiring the posting of certain credit amounts;
requiring the State Department of Education to
provide certain notice; directing implementation of
certain system; requiring coordination of a process
to verify student enrollment status; providing for
promulgation of rules; providing immunity fro m
liability for certain actions; a llowing certain
parents to intervene in certain legal proce eding;
prohibiting severability of act provisions; providing
for codification; providing conditional effective
date; and declaring an emergency .
BE IT ENACTED BY THE PE OPLE OF THE STATE OF O KLAHOMA:
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 that
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 s ection of law to be codified
in the Oklahoma Statut es as 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:
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1. “Commission” means the Oklahoma Tax C ommission;
2. “Curriculum” means a complete course of study for a
particular content area or grade level;
3. “Department” means the State Department of Education;
4. “Education service provider ” means a person, business,
public school district, public c harter school, magnet school,
institution within Th e Oklahoma 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 and who is a
member of a household in which the total adjusted gross income
during the preceding tax year does not exceed Two Hundred Fifty
Thousand Dollars ($250,000.00). Eligible student shall include a
student who is enrolled in and attends a private school accredited
by the State Board of Education or another accrediting association
or a student who is educated pursuant to the other means of
education exception provided for in subsection A of Section 10 -105
of Title 70 of the Oklahoma Statutes;
6. “Qualified expense” for the purpose of claiming the credit
authorized by subparagraph a of paragraph 1 of subsection C of this
section means tuition and fees at a private school accredited by the
State Board of Education or another accrediting association;
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7. “Qualified expense” for the purpose of claiming the credit
authorized by subparagraph b of paragraph 1 of subsection C of this
section means the following expenditures:
a. tuition and fees for nonpublic onl ine learning
programs,
b. academic tutoring services provide d by an individual
or a private academic tutoring facility,
c. textbooks, curriculum, or other instructional
materials including, but not limited to, supplemental
materials or associated online in struction required by
an education service provider, and
d. fees for nationally standardized assessments
including, but not limited to, assessments used to
determine college admission and advanced placement
examinations as well as tuition and fees for tuto ring
or preparatory courses for the assessments ; and
8. “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 Choice Tax
Credit Program to provide an income tax credit to a taxpayer for
qualified expenses to support the education of eligi ble students in
this state.
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C. For the tax year 2023 and subsequent tax years, there shall
be allowed against the tax imposed by Section 2355 of Title 68 of
the Oklahoma Statutes a credit for any Oklahoma taxpayer who incurs
a qualified expense on behalf of an eligible student. Provided, the
credit allowed for tax year 2023 shall only be for qua lified
expenses made on or after July 1, 2023. The credit shall be
administered subject to the following:
1. The maximum credit amount shall be:
a. Seven Thousand Five Hundred Dollars ($7,500.00) 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 or the amount of tuition and
fees for the private school, whichever is less , and
b. One Thousand Dollars ($1, 000.00) in qualified expenses
per taxpayer in each tax year if one or more eligible
students is educated pursuant to the othe r means of
education exception provided for in subsection A of
Section 10-105 of Title 70 of the Oklahoma Statutes .
To claim the credit, the taxpayer shall submit to the
Commission receipts for qualified expense s as defined
by paragraph 7 of subsection A of this section;
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2. The taxpayer shall retain all receipts of qualified expenses
as proof of the amounts paid each tax year the credit is claimed and
shall submit them to the Commission up on request; and
3. If the credit exceeds the tax imposed by Sectio n 2355 of
Title 68 of the Oklahoma Statutes, th e excess amount shall be
refunded to the taxpayer.
D. The Commission may prescribe forms for purposes of claiming
the credits authorized by t he Oklahoma Parental Ch oice Tax Credit
Act. The Commission shall c reate 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 s ection be advanced to the
taxpayer in two installments of no t more than Three Thousand Seven
Hundred Fifty Dollars ($3,750.00) per semester for a maxim um credit
of Seven Thousand Five Hundred Dollars ($7,500.00) per tax year or
the amount of tuition and fe es for the private school, whichever is
less. Eligible taxpayers who submit the form and qualify for an
advance shall be approved and paid within sixt y (60) days of
submitting the prescribed form.
E. Taxpayers claiming the credit shall:
1. Only claim the credit for qualified expenses as defined in
paragraphs 6 and 7 of subsection A of this section to prov ide an
education for an eligible student;
2. Ensure no other person is claiming a credit for the eligible
student;
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3. Not claim the credit for an elig ible student who enrolls as
a full-time student in a public school district, public charter
school, public virtual charter s chool, 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 m ay accept a scholarship from the Lindsey
Nicole Henry Scholarshi ps for Students with Disabilities Program
created by Section 13-101.2 of Title 70 of the Oklahoma Statutes
while participating in th e Oklahoma Parental Choice Tax Credit
Program.
G. 1. The Commission shall have the authority to conduc t an
audit or contract for the auditing of receipts fo r qualified
expenses submitted pursuant to subparagraph b of paragraph 1 of
subsection C of this s ection.
2. The Commission shall be authorized to recapture the credits
otherwise authorized by the prov isions of this act on a p rorated
basis if an audit conducted pursuant to this subsectio n shows that
the credit was claimed for expenditures that were no t qualified
expenses or it finds that the taxpayer has claim ed an eligible
student who no longer attends a private school or has enrolled in a
public school in the state.
H. In the event of a failure of revenue pursuant to the
Oklahoma State Finance Act, the tax credits otherwise authorized in
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subsection C of this section shall be reduced proportionately to the
reduction in the amo unt of money appropriated to the State Board of
Education for the financial support of public scho ols for the fiscal
year in which the failure of revenue occurs.
I. The Commission shall make available on its website the
amount of credits claimed each tax year pursuant to subparagraphs a
and b of paragraph 1 of subse ction C of this section.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statu tes as Section 28-102 of Title 70, unless th ere
is created a duplicat ion in numbering, reads as follows:
A. The State Department o f Education shall provide parents,
legal guardians, custodians, o r other persons with legal authority
of eligible students wi th disabilities notice that participation in
the Oklahoma Parental Ch oice 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 ri ghts
parents, legal guard ians, custodians, or other persons with legal
authority of eligible students with disabilities hav e under IDEA and
any applicable state laws and regulations.
B. The Department shall impl ement a commercially viable, cost-
effective, and user-friendly system for users to publicly rate,
review, and share information abo ut education service providers.
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C. The Oklahoma Tax Commission s hall coordinate with the State
Department of Education to de velop a process to review student
enrollment information in order to verify that an eligible student
who is claimed by a taxpayer r eceiving a tax credit is not enrolle d
in a public school in the s tate.
D. The Commission may promulgate rules to implement t he
provisions of the Oklahoma Parental Choic e Tax Credit Act. The
State Board of Education may promulgate rules to implement the
provisions of this section.
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 Departme nt of Education, State Board of Education,
the state, a public school district, a public charter school, a
public virtual charter s chool, or a magnet school based 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 violat ing either the Oklahoma
Constitution or United States Constitution, taxpayers shall be
permitted to intervene for the purposes of defending the Oklaho ma
Parental Choice Tax Credit Program’s constitutionality. Ho wever,
for the purposes of judicial administ ration, a court may requi re
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that all taxpayers file a joint brief so long as they are not
required to join any brief filed on behalf of any named stat e
defendant.
C. The provisions of the Oklahoma Parental Choic e 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
person or circumstances is held invalid, such invalidity shall
invalidate the other provisions or applications of this act.
SECTION 5. The provisions of this act sha ll not become
effective as law unless Enrolled House Bill No. 2775 of the 1st
Session of the 59th Oklahoma Legislature becomes effective as law.
SECTION 6. It being immediately necessary for the preservation
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 a fter its passage and approval.
COMMITTEE REPORT BY: C OMMITTEE ON FINANCE
March 27, 2023 - DO PASS AS AMENDED BY CS