Oklahoma 2025 Regular Session

Oklahoma Senate Bill SB684 Compare Versions

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29-HOUSE OF REPRESENTATIVES - FLOOR VERSION
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31-STATE OF OKLAHOMA
32-
33-1st Session of the 60th Legislature (2025)
3427
3528 ENGROSSED SENATE
3629 BILL NO. 684 By: Paxton and Daniels of the
3730 Senate
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3932 and
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4134 Hilbert of the House
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4740 An Act relating to income tax credit; amending
4841 Section 2, Chapter 278, O.S.L. 2023, as amended by
4942 Section 3, Chapter 277, O.S.L. 2024 (70 O.S. Supp.
5043 2024, Section 28-101), which relates to the Oklahoma
5144 Parental Choice Tax Credit Act; defining term;
5245 modifying definition; modifying tax years for which
5346 certain annual credit limit is enforced; prescribing
5447 procedure for enforcement of annual limit; increasing
5548 the annual credit limitation by the amount of certain
5649 unused credit; requiring the Department of Human
5750 Services and the Oklahoma Health Care Authority to
5851 verify certain claims by applicants upon request;
5952 modifying application period for certain school
6053 years; requiring the payment of full credit amount by
6154 certain date; modifying preference for taxpayers who
6255 received credit in prior years; stipulating that
6356 authorization to reallocate credit is before certain
6457 date; requiring participating private schools to
6558 provide certain information to the Oklahoma Tax
6659 Commission; updating statutory references; updating
6760 statutory language; providing an effective date ; and
6861 declaring an emergency .
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7366 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
67+SECTION 1. AMENDATORY Section 2, Chapter 278, O.S.L.
68+2023, as amended by Section 3, Chapter 277, O.S.L. 2024 (70 O.S.
69+Supp. 2024, Section 28 -101), is amended to read as follows:
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101-SECTION 1. AMENDATORY Section 2, Chapter 278, O.S.L.
102-2023, as amended by Section 3, Chapter 277, O.S.L. 2024 (70 O.S.
103-Supp. 2024, Section 28 -101), is amended to read as follows:
10496 Section 28-101. A. As used in the Oklahoma Parental Choice Tax
10597 Credit Act:
10698 1. “Accrediting association ” means a legal entity, or that part
10799 of a legal entity, that meets the accreditation requirements set by
108100 the State Board of Education or another accrediting association
109101 approved by the State Board of Education;
110102 2. “Commission” means the Oklahoma Tax Commission;
111103 2. 3. “Curriculum” means a complete course of study for a
112104 particular content area or grade level;
113105 3. 4. “Department” means the State Department of Education;
114106 4. 5. “Education service provider ” means a person, busines s,
115107 public school district, public charter school, magnet school, or
116108 organization that provides educational goods and/or services to
117109 eligible students in this state;
118110 5. 6. “Eligible student” means a resident of this state who is
119111 eligible to enroll in a pub lic school in this state. Eligible
120112 student shall include a student who is enrolled in and attends or is
121113 expected to enroll in a private school in this state accredited by
122114 the State Board of Education or another accrediting association or a
123115 student who is educated pursuant to the other means of education
116+exception provided for in subsection A of Section 10 -105 of this
117+title;
118+6. 7. “Qualified expense” for the purpose of claimi ng the
119+credit authorized by paragraph 1 of subsection C of this section
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151-exception provided for in subsection A of Section 10 -105 of this
152-title;
153-6. 7. “Qualified expense” for the purpose of claiming the
154-credit authorized by paragraph 1 of subsection C of this section
155146 means tuition and fees at a private school in this state accredited
156147 by the State Board of Education or another accrediting association.
157148 Such private school shall comply with the provisions of subsection L
158149 of this section. Provided, the amount of tuition and fees
159150 considered a qualified expense pursuant to this paragraph shall not
160151 include tuition and fees paid with any scholarship or tuition and
161152 fees discounted or otherwise reduced by t he school;
162153 7. 8. “Qualified expense” for the purpose of claiming the
163154 credit authorized by paragraph 2 of subsection C of this section
164155 means the following expenditures:
165156 a. tuition and fees for nonpublic learning programs,
166157 online or in person,
167158 b. academic tutoring services provided by an individual
168159 or a private academic tutoring facility ,
169160 c. textbooks, curriculum, or other instructional
170161 materials including, but not limited to, supplemental
171162 materials or associated online instruction required by
172163 an education service provider, and
173164 d. fees for nationally standardized assessments
174165 including, but not limited to, assessments used to
166+determine college admission and advanced placement
167+examinations as well as tuition and fees for tutoring
168+or preparatory courses for the assessments; and
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202-determine college admission and advanced placement
203-examinations as well as tuition and fees for tutoring
204-or preparatory courses for the assessments; and
205195 8. 9. “Taxpayer” means a biological or adoptive parent,
206196 grandparent, aunt, uncle, legal guardian, custodian, or other person
207197 with legal authority to act on behalf of an eligible student.
208198 B. There is hereby created the Oklahoma Parental C hoice Tax
209199 Credit Program to provide an income tax credit to a taxpayer for
210200 qualified expenses to support the education of eligible students in
211201 this state.
212202 C. For the tax year 2024 and subsequent tax years, and fiscal
213203 year 2026 and subsequent fiscal years, there shall be allowed
214204 against the tax imposed by Section 2355 of Title 68 of the Oklahoma
215205 Statutes a credit for any Oklahoma taxpayer who incurs a qualified
216206 expense on behalf of an eligible student, to be administered subject
217207 to the following amounts:
218208 1. If the eligible student attends a private school in this
219209 state accredited by the State Board of Education or another
220210 accrediting association, the annual maximum credit amount for tax
221211 year 2024, fiscal year 2026, and each subsequent fiscal year shall
222212 be:
223213 a. Seven Thousand Five Hundred Dollars ($7,500.00) or the
224214 amount of tuition and fe es for the private school,
225215 whichever is less, if the combined adjusted gross
216+income of the parents or legal guardians of the
217+eligible student during the second preceding tax year
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253-income of the parents or legal guardians of the
254-eligible student during th e second preceding tax year
255244 does not exceed Seventy -five Thousand Dollars
256245 ($75,000.00),
257246 b. Seven Thousand Dollars ($7,000.00) or the amount of
258247 tuition and fees for the private school, whichever is
259248 less, if the combined adjusted gross income of the
260249 parents or legal guardians of the eligible student
261250 during the second preceding tax year is more than
262251 Seventy-five Thousand Dollars ($75,000.00) but does
263252 not exceed One Hundred Fifty Thousand Dollars
264253 ($150,000.00),
265254 c. Six Thousand Five Hundred Dollars ($6,500.00) or the
266255 amount of tuition and fees for the private school,
267256 whichever is less, if the combined adjusted gros s
268257 income of the parents or legal guardians of the
269258 eligible student during the second preceding tax year
270259 is more than One Hundred Fifty Thousand Dollars
271260 ($150,000.00) but does not exceed Two Hundred Twenty -
272261 five Thousand Dollars ($225,000.00),
273262 d. Six Thousand Dollars ($6,000.00) or the amount of
274263 tuition and fees for the private school, whichever is
275264 less, if the combined adjusted gross income of the
276265 parents or legal guardians of the eligible student
266+during the second preceding tax year is more than Two
267+Hundred Twenty-five Thousand Dollars ($225,000.00) but
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304-during the second preceding tax year is more than Two
305-Hundred Twenty-five Thousand Dollars ($225,000.00) but
306294 does not exceed Two Hundred Fifty Thousand Dollars
307295 ($250,000.00), or
308296 e. Five Thousand Dollars ($5,000.00) or the amount of
309297 tuition and fees for the private school, whichever is
310298 less, if the combined adjusted gross income of the
311299 parents or legal guardians of the eligible student
312300 during the second preceding tax year is more than Two
313301 Hundred Fifty Thousand Dollars ($250,000.00);
314302 2. For tax year 2024 and subsequent tax years, the maximum
315303 credit amount shall be On e Thousand Dollars ($1,000.00) in qualified
316304 expenses per eligible student in each tax year if the eligible
317305 student is educated pursuant to the other means of education
318306 exception provided for in subsection A of Section 10 -105 of this
319307 title. To claim the cr edit, the taxpayer shall submit to the
320308 Commission receipts for qualified expenses as defined by paragraph 7
321309 8 of subsection A of this section;
322310 3. If the eligible student att ends a private school in this
323311 state, accredited by the State Board of Education or another
324312 accrediting association, that exclusively serves students
325313 experiencing homelessness, the credit amount shall be Seven Thousand
326314 Five Hundred Dollars ($7,500.00) or the amount of the cost to
315+educate the eligible student at the private school, whiche ver is
316+less;
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354-educate the eligible student at the private school, whichever is
355-less;
356343 4. If the eligible student attends a private school in this
357344 state, accredited by the State Board of Education or another
358345 accrediting association, that primarily serves financially
359346 disadvantaged students, the credit amount shall be the maximum
360347 credit amount authorized by paragraph 1 of this subsection or the
361348 amount of the cost to educate the eligible student at the private
362349 school, whichever is less. The cost to educate the eligible student
363350 shall be equal to the average cost to educate all stud ents attending
364351 the private school, which shall be calculated by dividing the
365352 private school’s total expenditures in the previous year by the
366353 total enrollment in the previous school year. A private school
367354 shall be deemed to be primarily serving financially disadvantaged
368355 students if ninety percent (90%) of the private school ’s admissions
369356 are based on enrolling students whose gross family income is two
370357 hundred fifty percent (250%) of the federal poverty threshold or
371358 below;
372359 5. The taxpayer shall retain all re ceipts of qualified expenses
373360 as proof of the amounts paid each tax year the credit is claimed and
374361 shall submit them to the Commission upon request;
375362 6. If the credit exceeds the tax imposed by Section 2355 of
376363 Title 68 of the Oklahoma Statutes, the excess a mount shall be
377364 refunded to the taxpayer; and
365+7. Credits claimed by a taxpayer pursuant to the provisions of
366+this section shall not be used to offset or pay the following:
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405-7. Credits claimed by a taxpayer pursuant to the provisions of
406-this section shall not be used to offset o r pay the following:
407393 a. delinquent tax liability,
408394 b. accrued penalty or interest from the failure to file a
409395 report or return,
410396 c. accrued penalty or interest from the failure to pay a
411397 state tax within the statutory period allowed for its
412398 payment,
413399 d. tax liability of the taxpayer from any prior tax year,
414400 or
415401 e. any debt, unpaid fine, final judgment, or claim fil ed
416402 with the Commission by a qualified entity as defined
417403 in Section 205.2 of Title 68 of the Oklahoma Statutes.
418404 D. 1. a. For tax year 2024, the total amount of credits
419405 authorized by paragraph 1 of subsection C of this
420406 section shall not exceed One Hundred Fi fty Million
421407 Dollars ($150,000,000.00).
422408 b. For the period of January 1, 2025, through June 30,
423409 2025, the total amount of credits authorized by
424410 paragraph 1 of subsection C of t his section shall not
425411 exceed One Hundred Million Dollars ($100,000,000.00).
426412 The Commission shall not require a taxpayer who
427413 received a credit pursuant to paragraph 1 of
428414 subsection C of this section in tax year 2024 to
415+reapply for a credit payable during the period
416+described in this subparagraph. The Commission shall
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456-reapply for a credit payable during the period
457-described in this subparagraph. The Commission shall
458443 base the credit amount payable for the spring 2025 on
459444 the fall 2024 installment disbursement payment amount.
460445 c. For fiscal year 2026 and subsequent fiscal years, the
461446 total amount of credits au thorized by paragraph 1 of
462447 subsection C of this section shall not exceed Two
463448 Hundred Fifty Million Dollars ($250,000,000.00).
464449 2. For tax year 2025 2026 and subsequent tax years, the total
465450 amount of credits authorized by paragraph 2 of subsection C of this
466451 section shall not exceed Five Million Dollars ($5,000,000.00). The
467452 Oklahoma Tax Commission shall annually calculate and publish a
468453 percentage by which the credits authorized by this section shall be
469454 reduced so the total amount of credits used to offset ta x does not
470455 exceed the annual limit. The formula to be used for the percentage
471456 adjustment shall be Five Million Dollars ($5,000,000.00) divided by
472457 the amount of credit claimed in the second preceding tax year. In
473458 the event the total tax credits authorized by this section exceed
474459 the annual limit in any tax year, the Tax Commission shall permit
475460 any excess but shall factor such excess into the percentage
476461 adjustment formula for subsequent tax years.
477462 3. If a taxpayer, on behalf of an eligible student in the
478463 program, chooses not to participate, is no longer eligible to
479464 participate, or choose s to forgo participation in the program for
465+any reason, the credit authorized by paragraph 1 of subsection C of
466+this section but not used and not reallocated pursuant to paragraph
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507-any reason, the credit authorized by paragraph 1 of subsection C of
508-this section but not used and not reall ocated pursuant to paragraph
509493 3 of subsection H of this section shall be added to the subsequent
510494 fiscal year limitation as provided in paragraph 1 of this
511495 subsection.
512496 E. The Commission shall prescribe applications for the purposes
513497 of claiming the credits authorized by the Oklaho ma Parental Choice
514498 Tax Credit Act and a deadline by which applications shall be
515499 submitted. A taxpayer claiming the credit authorized by paragraph 1
516500 of subsection C of this section shall submit an application
517501 prescribed by the Commission to receive the credit in two
518502 installments, each of which shall be half of the expected amount of
519503 tuition and fees for the private school based on the enrollment
520504 verification form submitted pursuant to this subsection, but in no
521505 event shall an installment a payment exceed the amount of the credit
522506 authorized by paragraph 1 of subsection C of this section. If an
523507 eligible taxpayer provides documentation on the application that he
524508 or she is a recipient of income -based government benefits including
525509 the Supplemental Nutrition Assistance Program (SNAP), Temporary
526510 Assistance for Needy Families (TANF), or SoonerCare the Oklahoma
527511 Medicaid Program commonly known as SoonerCare , the eligible taxpayer
528512 shall not be required to provide additional income verification.
529513 The Department of Human Services and the Oklahoma Health Care
530514 Authority shall, upon request by the Oklaho ma Tax Commission, verify
515+whether an applicant receives income -based government benefits. The
516+taxpayer shall provide authorization for the Oklahoma Tax Commission
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558-whether an applicant receives income -based government benefits. The
559-taxpayer shall provide authorization for the Oklahoma Ta x Commission
560543 to disclose application data to the Department of Human Services
561544 and/or the Oklahoma Health Care Authority, and for Department of
562545 Human Services and/or the Oklahoma Health Care Authority to provide
563546 confirmation of benefits to the Oklahoma Tax Commission for purposes
564547 of verifying that the taxpayer is a current recipient of SNAP, TANF ,
565548 or Oklahoma Medicaid Program benefits; provided, the information
566549 shall not be used for any other purpose. A taxpayer claiming the
567550 credit authorized by paragraph 1 of subsection C of this section
568551 shall submit to the Commission an enrollment verification form from
569552 the private school in which the eligible student is enrolled or is
570553 expected to enroll with the tuition and fees to be charged the
571554 taxpayer for the applicable school year. In rev iewing applications
572555 submitted by eligible taxpayers to determine whether they qual ify
573556 for a credit authorized by paragraph 1 of subsection C of this
574557 section, the Commission shall give first preference in making
575558 installments payments to taxpayers who qualify pursuant to
576559 subparagraphs a and b of paragraph 1 of subsection C of this
577560 section. The Commission shall give second preference in making
578561 payments to taxpayers who qualify and have received the credit in
579562 the prior year. For credits issued in the 2025-2026 2026-2027
580563 school year and subsequent school years, the application period
581564 shall be open on February 15 March 15 through June 15 prior to the
565+beginning of each school year. For any eligible student whose
566+parents or legal guardians have a combined adjusted gross income
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609-beginning of each school year. For any eligible student whose
610-parents or legal guardians have a combined adjusted gross income
611593 that does not exceed One Hundred Fifty Thousand Dollars
612594 ($150,000.00) or qualified and received credit in the prior year ,
613595 applications shall be submitted to the Commission within the first
614596 sixty (60) days of the opening of the application pe riod to receive
615597 priority consideration. For students enrolled in the full school
616598 year, the full credit amount authorized for the school year shall be
617599 paid in two installments, one per school semester, to be paid no
618600 later than August 30 and January 15, each of which shall be half of
619601 the total expected amount of tuition and fees on the e nrollment
620602 verification form submitted pursuant to this subsection .
621603 F. In the event there are more applications submitted by
622604 eligible taxpayers for a credit authorized by par agraph 1 of
623605 subsection C of this section than available credits pursuant to
624606 subsection D of this section, then the Commission shall give first
625607 preference in authorizing credits for eligible students of taxpayers
626608 who qualify pursuant to subparagraphs a and b of paragraph 1 of
627609 subsection C of this section and have received the credit in t he
628610 prior year.
629611 G. Taxpayers claiming the credit shall:
630612 1. Only claim the credit for qualified expenses as defined in
631613 paragraphs 6 7 and 7 8 of subsection A of this section to provide an
632614 education for an eligible student;
615+2. Ensure no other person is cla iming a credit for the eligible
616+student;
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660-2. Ensure no other person is claiming a credit for the eligible
661-student;
662643 3. Not claim the credit for an eligible student who enrolls as
663644 a full-time student in a public school district, public charter
664645 school, public virtual charter school, or magnet school;
665646 4. Comply with rules and requ irements established by the
666647 Commission for administration of the Oklahoma Parental Choice Tax
667648 Credit Program; and
668649 5. Notify the Commission not later than thirty (30) days af ter
669650 the date on which the eligible student:
670651 a. enrolls in a public school, includi ng an open-
671652 enrollment charter school,
672653 b. enrolls in a nonaccredited private school,
673654 c. graduates from high school, or
674655 d. is no longer utilizing credits authorized by paragraph
675656 1 of subsection C of this section for any reason.
676657 H. G. Eligible students may a ccept a scholarship from the
677658 Lindsey Nicole Henry Scholarships for Students with Disabilities
678659 Program created by Section 13 -101.2 of this title while
679660 participating in the Okl ahoma Parental Choice Tax Credit Program.
680661 I. H. 1. The Commission shall have the authority to conduct an
681662 audit or contract for the auditing of receipts for qualified
682663 expenses submitted pursuant to paragraph 2 of subsection C of this
683664 section.
665+2. The Commission shall be authorized to recapture the credits
666+otherwise authorized by the pr ovisions of the Oklahoma Parental
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711-2. The Commission shall be authorized to recapture the credits
712-otherwise authorized by the provisions of the Oklahoma Parental
713693 Choice Tax Credit Act on a prorated basis if an audit conducted
714694 pursuant to this subsection shows that the credit was claimed for
715695 expenditures that were not qualified expenses or it finds that the
716696 taxpayer has claimed an e ligible student who no longer attends a
717697 private school or has enrolled in a public school in the state.
718698 3. The Commission shall be authorized to reallocate credits for
719699 the current application year to the next eligible taxpayer in line
720700 when a taxpayer, on behalf of an eligible student in the program,
721701 chooses not to participate, is no longer eligible to participate, or
722702 chooses to forgo participation in the program for any reaso n no
723703 later than September 1 following the opening of the application
724704 period of each year.
725705 4. The Commission shall provide notification of approval status
726706 to applicants within thirty (30) days of closure of the application
727707 window. Notice to applicants with an eligible student, whose
728708 parents or legal guardians have a combined adjusted g ross income of
729709 more than One Hundred Fifty Thousand Dollars ($150,000.00), shall be
730710 sent within thirty (30) days or no later than thirty (30) days after
731711 the last day of the p riority consideration period.
732712 J. I. In the event of a failure of revenue pursuant to the
733713 Oklahoma State Finance Act, the tax credits otherwise authorized in
734714 subsection C of this section shall be reduced proportionately to the
715+reduction in the amount of money appropriated to the State Board of
735716
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762-reduction in the amount of money appropriated to the State Board of
763742 Education for the financial support of publ ic schools for the fiscal
764743 year in which the failure of revenue occurs.
765744 K. J. The Commission shall make available on its website to be
766745 updated monthly:
767746 1. The total amount o f credits claimed each year pursuant to
768747 paragraphs 1 through 4 of subsection C of this section;
769748 2. The amount of credits claimed and number of students awarded
770749 each fiscal year pursuant to paragraph 1 of subsection C of this
771750 section disaggregated by income categories;
772751 3. The total amount of credits claimed and number of students
773752 awarded who attended a public school in the semester immediately
774753 preceding the school year for which the application is made each
775754 year; and
776755 4. The total number of applications de nied and total amount of
777756 credits the denied applications represent for each fiscal year.
778757 L. K. Credits received pursuant to the Oklahoma Parental Choice
779758 Tax Credit Act shall not constitute taxable income to a taxpayer who
780759 received the credit on behalf of an eligible student.
781760 L. No later than June 15 of each year, each participating
782761 private school shall electronically provide information to confirm
783762 student enrollment and tuition information for the fall and spring
784763 semesters of the preceding school year and any other information
785764 requested by the Oklahoma Tax Commission. Failure to provide this
786765
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813791 information may result in denial of private school participation in
814792 subsequent school years.
815793 SECTION 2. This act shall become effective July 1, 2025.
816794 SECTION 3. It being immediately necessary for the preservation
817795 of the public peace, health or safety, an emergency is hereby
818796 declared to exist, by reason whereof this act shall take effect and
819797 be in full force from and after its passage a nd approval.
798+Passed the Senate the 13th day of March, 2025.
820799
821-COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET , dated
822-04/16/2025 - DO PASS.
800+
801+
802+ Presiding Officer of the Senate
803+
804+
805+Passed the House of Representatives the ____ day of __________,
806+2025.
807+
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810+ Presiding Officer of the House
811+ of Representatives
812+