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STATE OF OKLAHOMA
2nd Session of the 59t h Legislature (2024)
HOUSE BILL 3911 By: Caldwell (Chad)
AS INTRODUCED
An Act relating to revenue and taxation; amending
Section 2, Chapter 278, O.S.L. 2023 (70 O.S. S upp.
2023, Section 28-101), which relates to tax credits
for certain school related expenditures; modifying
definitions; providing tax credit amount based upon
certain housing status; modifying cap amounts;
modifying procedures related to application process;
providing for installments; providing for priority of
allocations; providing for reallocation; provid ing
for exemption from income tax; and declaring an
emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 2, Chapter 278, O.S.L.
2023 (70 O.S. Supp. 2023, Section 28 -101), is amended to read as
follows:
Section 28-101. 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 g rade 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 school, 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 or is
expected to enroll in a private school accredited by the State Board
of Education or another accrediting associ ation or a student who is
educated pursuant to the other mea ns of education exception pr ovided
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 subparag raph a of paragraph 1 of subsection C of this
section means tuition and fees at a priva te school accredited by the
State Board of Education or another accrediting association;
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 expendi tures:
a. tuition and fees for nonpublic online learning
programs, online or in person,
b. academic tutoring services provide d by an individual
or a private academic tutoring facility,
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c. textbooks, curriculum, or other instructional
materials including, but not limited to, supplemental
materials or associated online instruction required by
an education service provid er, and
d. fees for nationally standardized assessments
including, but not li mited to, assessments used to
determine college admission and advanced placement
examinations as well as tuition and fees for tutoring
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 eligible students in
this state.
C. For the tax year 2024 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 i ncurs
a qualified expense on behalf of an eligible student, to be
administered subject to the followi ng amounts for each tax year:
1. If the eligible student attends a private scho ol accredited
by the State Board of Education or another accrediting assoc iation,
the maximum credit amount shall be:
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a. (1) Seven Thousand Five Hundred Dollars ($7,500.00)
or the amount of tuition and fees for the private
school, whichever is less, if the eligible
student is a member of a household in which the
total adjusted gross income during the second
preceding tax year does not exceed Seventy-five
Thousand Dollars ($75,000.00),
(2) Seven Thousand Dollars ($7,000.00) or the amount
of tuition and fees for the private schoo l,
whichever is less, if the eligible student is a
member of a household in which the total adjusted
gross income during the second preceding tax year
is more than Seventy-five Thousand Dollars
($75,000.00) but does not exceed One Hundred
Fifty Thousand Dollars ($150,000.00),
(3) Six Thousand Five Hundre d Dollars ($6,500.00) or
the amount of tuition and fees for the private
school, whichever is less, if the eligible
student is a member of a household in which the
total adjusted gross in come during the second
preceding tax year is more than One Hundred Fifty
Thousand Dollars ($150,000.00) but does not
exceed Two Hundred Twenty-five Thousand Dollars
($225,000.00),
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(4) Six Thousand Dollars ($6,000.00) or the amount of
tuition and fees for the private school,
whichever is less, if the eligible student is a
member of a household in which the total adjusted
gross income during the second preceding tax year
is more than Two Hundred Twenty-five Thousand
Dollars ($225,000.00) but does not exceed Two
Hundred Fifty Thousand Dollars ($250,000.00), or
(5) Five Thousand Dollars ($5,000.00) or the amount
of tuition and fees for the private school,
whichever is less, if the el igible student is a
member of a household in which the total adjusted
gross income during the second preceding tax year
is more than Two Hundred Fifty Thousand Dollars
($250,000.00), and
b. One Thousand Dollars ($1,000.00) in qualified expenses
per eligible student in each tax year if the eligible
student is educated pursuant to the other means of
education exception provided for in subsection A of
Section 10-105 of Title 70 of the Okl ahoma 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. If the eligible student attends a private school, accredited
by the State Board of Education or another accrediting association,
that exclusively services students experiencing homelessness, the
credit amount shall be Seven Thousand Five Hundred Dollars
($7,500.00) or the amount of the cost to educate the eligible
student at the private school , whichever is less;
3. The taxpayer shall retain all receipts of qualified expenses
as proof of the amounts paid each tax year the credit is claime d and
shall submit them to the Commission upon request; and
3. 4. If the credit exceeds the tax imposed by Section 2355 of
Title 68 of the Oklahoma Statutes, th e excess amount shall be
refunded to the taxpayer.
D. 1. a. For tax year 2024, the total amount of credits
authorized by subparagraph a of paragraph 1 of
subsection C of this section shall not exceed One
Hundred Fifty Million Dollars ($150,000,000.00).
b. For tax year 2025, the total amount of credits
authorized by subparagraph a of paragraph 1 of
subsection C of this section shall not exceed Two
Hundred Million Dollars ($200,000,000.00).
c. For tax year 2026, and subsequent tax years, the total
amount of credits aut horized by subparagraph a of
paragraph 1 of subsection C of this section shall n ot
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exceed Two Hundred Fifty Million Dol lars
($250,000,000.00).
2. For tax year 2025, and subsequent tax years, the total
amount of credits authorized by subparagraph b of para graph 1 of
subsection C of this section shall not exceed Five Million Dollars
($5,000,000.00).
E. The Commission shall prescribe applications for the purposes
of claiming the credits authorized by the Oklahoma Parental Choice
Tax Credit Act and a deadline by which applications shall be
submitted. To ensure educational continuity for students, the
application process shall be administered based on the school year.
The first application aligned to the school year shall open on May
1, 2024, for school year 2024-2025. In school year 2025-2026 and
subsequent years, the application shall open on March 15. For any
eligible student who is a member of a household in which the total
federal adjusted gross income does not exceed One Hundred Fifty
Thousand Dollars ($150,000.00), applications shall be submitted to
the Tax Commission within the first si xty (60) days of the
application period to receive priority consideration . Any taxpayer
who receives an allocation of tax credits shall also hav e priority
consideration in any subsequent cycle provided that an application
is submitted within the first sixty (60) days of the application
period. A taxpayer claiming the credit authorized by subparagraph a
of paragraph 1 of subsection C of this section shall submit an
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application prescribed by the Commission to receive the credit in
two installments, one per school semester to be p aid no later than
August 30 and January 15, each of which shall be half of the
expected amount of tuition and fe es for the private school based on
the affidavit enrollment verification form submitted pursuant to
this subsection, but in no event shall an installment payment exceed
half the amount of the credit authorized by sub paragraph a of
paragraph 1 of subsection C of this section. A taxpayer claiming
the credit authorized by subparagraph a of p aragraph 1 of subsection
C of this section shall submit to the Commission an affidavit
enrollment application form from the private school in which the
eligible student is enrolled or is expected to enroll with the
tuition and fees to be charged t he taxpayer for the applicable
school year. The Commission shall make the installments based on
the expected amount of tuition and fee amounts on the enrollment
verification form submitted pursuant to this subsection.
E. In reviewing the event there are mor e applications submitted
by eligible taxpayers to determine whether they qualify for a credit
authorized by subparagraph a of paragraph 1 of subsection C of this
section, than credits are available pursuant to subsection D of this
section, then the Commission shall give fir st preference in making
installments authorizing credits to eligible students of taxpayers
who qualify pursuant to divisions ( 1) and (2) of subparagraph a of
paragraph 1 of subsection C of this section. The Commission shall
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make the installments based on the expected amount of tuition and
fee amounts on the affidavit submitted purs uant to this subsection:
1. First, received the credit the prior year ;
2. Second, qualify pursuant to division s (1) and (2) of
subparagraph a of paragraph 1 of subsection C of this section ; or
3. Third, are siblings of eligible studen ts of taxpayers who
received the credit in the prior year .
F. 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 provide an
education for an eligible student;
2. Ensure no other person is claiming a credit for the eligible
student;
3. Not claim the credit for an eligible 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; and
5. Notify the Commission not later than the thirtieth day after
the date on which the eligible student:
a. enrolls in a public school, including an open -
enrollment charter school,
b. graduates from high school, or
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c. is no longer participating in the program for any
reason.
G. Eligible students may accept a scholarship from the Lindsey
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.
H. 1. The Commission shall have the authority to:
1. Have the authority to conduct an audit or contract for the
auditing of receipts for qualified expenses submitted pursuant to
subparagraph b of paragraph 1 of subsection C of this section;
2. The Commission shall be Be authorized to recapture the
credits otherwise authorized by the provisions of this act on a
prorated basis if an audit conducted pursuant to this subsection
shows that the credit was claimed for expenditures that wer e not
qualified expenses or it finds that the taxpa yer has claimed an
eligible student who no longer attends a private school or has
enrolled in a public school in the state; and
3. Reallocate credits within thirty (30) days of receipt of
notice from a taxpayer pursuant to paragraph 5 of subsection F of
this section to the next eligible taxpayer in line when a taxpayer,
on behalf of an eligible student in the program, chooses not to
participate, is no longer eligible to part icipate, or chooses to
forgo participation in the program for any reason .
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I. In the event of a failure of revenue pursuant to the
Oklahoma State Finance Act, 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 Board of
Education for the financial support of public schools for the fiscal
year in which the failure of revenue occurs.
J. The Commission shall make available on its website the
amount of credits claimed each t ax year pursuant to subparagraphs a
and b of paragraph 1 of subsection C of this section.
K. Credits received under this act do not constitute taxable
income to a taxpayer who received the credit on behalf of a child
participating in the program. The Commission shall not issue any
Form 1099s to taxpayers.
SECTION 2. 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 after its passage and approval.
59-2-9834 MAH 01/18/24