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Statute
as Passed
As
Enacted
Chapter
30.5. School Scholarship Tax Credit
Sec. 1. As used in this chapter,
"credit" refers to a credit granted under this chapter.
Sec. 2. As used in this chapter, "pass
through entity" has the meaning set forth in IC 6-3-1-35.
Sec. 3. As used in this chapter, "scholarship
granting organization" refers to an organization that:
(1)
is exempt from federal income taxation under Section 501(c)(3) of the
Internal Revenue Code; and
(2) conducts a school
scholarship program.
Sec. 4. As used in this chapter, "school
scholarship program" refers to a scholarship program certified by the
department of education under IC 20-51.
Sec. 5. As used in this chapter, "state tax
liability" means a taxpayer's total tax liability that is incurred
under:
(1) IC 6-3-1 through
IC 6-3-7 (the adjusted gross income tax);
(2) IC 6-5.5 (the
financial institutions tax); and
(3) IC 27-1-18-2 (the
insurance premiums tax);
as computed after the application of the credits that under IC 6-3.1-1-2
are to be applied before the credit provided by this chapter.
Sec. 6. As used in this chapter,
"taxpayer" means an individual or entity that has any state tax
liability.
Sec. 7. A taxpayer that makes a contribution to a
scholarship granting organization for use by the scholarship granting
organization in a school scholarship program is entitled to a credit
against the taxpayer's state tax liability in the taxable year in which
the taxpayer makes the contribution.
Sec. 8. The amount of a taxpayer's credit is equal
to fifty percent (50%) of the amount of the contribution made to the
scholarship granting organization for a school scholarship program.
Sec. 9. A taxpayer is not entitled to a carryover,
carryback, or refund of an unused credit.
Sec. 10. If a pass through entity is entitled to a
credit under section 7 of this chapter but does not have state tax
liability against which the tax credit may be applied, a shareholder,
partner, or member of the pass through entity is entitled to a tax credit
equal to:
(1) the tax credit
determined for the pass through entity for the taxable year; multiplied by
(2) the percentage of the
pass through entity's distributive income to which the shareholder,
partner, or member is entitled.
Sec. 11. To apply a credit against the taxpayer's
state tax liability, a taxpayer must claim the credit on the taxpayer's
annual state tax return or returns in the manner prescribed by the
department. The taxpayer shall submit to the department the information
that the department determines is necessary for the department to
determine whether the taxpayer is eligible for the credit.
Sec. 12. A contribution shall be treated as having
been made for use in a school scholarship program if:
(1) the contribution is
made directly to a scholarship granting organization; and
(2) either:
(A)
not later than the date of the contribution, the taxpayer designates in
writing to the scholarship granting organization that the contribution is
to be used only for a school scholarship program; or
(B)
the scholarship granting organization provides the taxpayer with written
confirmation that the contribution will be dedicated solely for use in a
school scholarship program.
Sec. 13. The total amount of tax credits awarded
under this chapter may not exceed two million five hundred thousand
dollars ($2,500,000) in any state fiscal year.
Sec.
14. The department, on an Internet web site used by the department to
provide information to the public, shall provide the following
information:
(1) The application for
the credit provided in this chapter.
(2) A timeline for
receiving the credit provided in this chapter.
(3) The total amount of
credits awarded under this chapter during the current state fiscal year.
Sec. 15. The department shall adopt rules under IC 4-22-2
to implement this chapter.
A
RT
ICLE 51. SCHOOL SCHOLARSHIPS
Chapter 1. Definitions
Sec. 1. The definitions in this chapter apply
throughout this article.
Sec. 2. "Agreement" refers to an
agreement between the department and an applicant that applies for
certification of a school scholarship program.
Sec. 3. "Contribution" refers to a
contribution to a scholarship granting organization for use in a school
scholarship program.
Sec. 4. (a) "Cost of education" means
the tuition and fees that would otherwise be charged by a participating
school to:
(1) an eligible student;
or
(2) a parent of an
eligible student.
(b) In the case of an eligible pupil who attends a
public school, the term includes any transfer tuition charged to the
eligible student or a parent of the eligible student.
Sec. 5. "Eligible student" refers to an
individual who:
(1) has legal settlement
in Indiana;
(2) is at least five (5)
years of age and less than twenty-two (22) years of age on the date in the
school year specified in IC 20-33-2-7;
(3) either has been or is
currently enrolled in a participating school;
(4) either:
(A)
is a member of a household with an annual income of not more than two
hundred percent (200%) of the amount required for the individual to
qualify for the federal free or reduced price lunch program; or
(B)
received a scholarship under this article in the immediately preceding
school year or the immediately preceding term of the current school year
and qualified under clause (A) in the first year that the individual
received a scholarship under this article; and
(5) meets at least one (1)
of the following conditions:
(A)
The individual is enrolling in kindergarten.
(B)
The individual was enrolled in a public school during the school year
preceding the first school year for which a scholarship granting
organization provides a scholarship to the individual.
(C)
The individual received a scholarship in the previous year from a
nonprofit scholarship granting organization that qualifies for
certification as a school scholarship program.
(D)
The individual received a school scholarship for the previous school year.
Sec. 6. (a) "Participating school"
refers to a public or nonpublic school that:
(1) an eligible student is
required to pay tuition or transfer tuition to attend;
(2)
voluntarily agrees to enroll an eligible student;
(3) is accredited by
either the state board or a national or regional accreditation agency that
is recognized by the state board; and
(4) administers the tests
under the Indiana statewide testing for educational progress (ISTEP)
program or administers another nationally recognized and norm-referenced
assessment of the school's students.
(b) The term does not include a public school in a
school corporation where the eligible student has legal settlement under
IC 20-26-11.
Sec. 7. "Scholarship granting
organization" refers to an organization that:
(1) is exempt from federal
income taxation under Section 501(c)(3) of the Internal Revenue Code; and
(2) is organized at least
in part to grant school scholarships.
Sec. 8. "School scholarship" refers to a
grant to pay only the cost of education for an eligible student as
determined for the school year (as defined in IC 20-18-2-17) for
which the scholarship will be granted.
Chapter 2. Exchange of Information; Rules
Sec. 1. The department shall maintain a publicly
available list of the school scholarship programs certified by the
department. The list must contain names, addresses, and any other
information that the department determines is necessary for the public to
determine which scholarship granting organizations conduct school
scholarship programs. A current list must be posted on an Internet web
site used by the department to provide information to the public.
Chapter 3. Scholarship Granting Organizations;
Certification; Administration of Contributions
Sec. 1. (a) A program qualifies for certification
as a school scholarship program if:
(1) the program:
(A)
is administered by a scholarship granting organization; and
(B)
has the primary purpose of providing school scholarships to eligible
students; and
(2) the scholarship
granting organization administering the program:
(A)
applies to the department on the form and in the manner prescribed by the
department; and
(B)
enters into an agreement with the department to comply with this article.
(b) A program may not be certified as a school
scholarship program if the program:
(1) limits a recipient of
a school scholarship to attending specific participating schools; or
(2) limits the ability of
a recipient of a school scholarship to change attendance from one (1)
participating school to another participating school.
Sec. 2. The department shall certify all programs
that meet the qualifications under section 1 of this chapter as school
scholarship programs.
Sec. 3. An agreement entered into under section 1
of this chapter between the department and a scholarship granting
organization must require the scholarship granting organization to do the
following:
(1) Provide a receipt to
taxpayers for contributions made to the scholarship granting organization
that will be used in a school scholarship program. The department of state
revenue shall prescribe a standardized form for the receipt issued under
this subdivision. The receipt must indicate the value of the contribution
and part of the contribution being designated for use in a school
scholarship program.
(2) Distribute at least
ninety percent (90%) of the total amount of contributions as school
scholarships to eligible students.
(3) Distribute one hundred
percent (100%) of any income earned on contributions as school
scholarships to eligible students.
(4) Conduct criminal
background checks on all the scholarship granting organization's employees
and board members and exclude from employment or governance any individual
who might reasonably pose a risk to the appropriate use of contributed
funds.
(5) Make the reports
required by this chapter.
Sec. 4. An agreement entered into under section 1
of this chapter may not prohibit a scholarship granting organization from
receiving contributions other than contributions described in section 3(1)
of this chapter.
Sec. 5. An agreement entered into under section 1
of this chapter must prohibit a scholarship granting organization from
distributing school scholarships for use by an eligible student to:
(1) enroll in a school
that has:
(A)
paid staff or board members; or
(B)
relatives of paid staff or board members;
in common with the
scholarship granting support organization;
(2) enroll in a school
that the scholarship granting organization knows does not qualify as a
participating school; or
(3) pay for the cost of
education for a public school where the eligible student is entitled to
enroll without the payment of tuition.
Sec. 6. (a) A scholarship granting organization
certified under this chapter must publicly report to the department by
August 1 of each year the following information regarding the
organization's scholarships awarded in the previous school year:
(1) The name and address
of the scholarship granting organization.
(2) The total number and
total dollar amount of contributions received during the previous school
year.
(3) The:
(A)
total number and total dollar amount of scholarships awarded during the
previous school year; and
(B)
total number and total dollar amount of school scholarships awarded during
the previous school year.
The report must be certified under penalties of perjury by the chief
executive officer of the scholarship granting organization.
(b) A scholarship granting organization certified
under this chapter shall contract with an independent certified public
accountant for an annual financial audit of the scholarship granting
organization. The scholarship granting organization must provide a copy of
the annual financial audit to the department and must make the annual
financial audit available to a member of the public upon request.
Sec. 7. The department shall prescribe a
standardized form for scholarship granting organizations to report
information required under this chapter.
Sec. 8. The department may, in a proceeding under
IC 4-21.5, suspend or terminate the certification of an organization
as a scholarship granting organization if the department establishes
that the scholarship granting organization has intentionally and
substantially failed to comply with the requirements of this article or an
agreement entered into under this article.
Sec. 9. If the department suspends or terminates
the certification of an organization as a scholarship granting
organization, the department shall notify affected eligible students and
their parents of the decision as quickly as possible. An eligible student
affected by a suspension or termination of a scholarship granting
organization's certification remains an eligible student under this
article until the end of the school year after the school year in which
the scholarship granting organization's certification is suspended or
terminated, regardless of whether the scholarship student currently meets
the definition of an eligible student.
Sec. 10. The department may conduct either a
financial review or an audit of a scholarship granting organization
certified under this chapter if the department of state revenue has
evidence of fraud.
Sec. 11. The department shall adopt rules under IC 4-22-2
to implement this article.
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