HB 2427 -- School Choice Tax Credit Act

Sponsor:  Jones (89)

This bill establishes the School Choice Tax Credit Act which,
beginning with the 2011 tax year, authorizes an income tax credit
for a taxpayer who donates to a scholarship-granting
organization.  The credit will be for the amount of the donation
up to 50% of the taxpayer's tax liability.  A corporation may
also claim the credit for up to 50% of its tax liability with a
$300,000 maximum.  The credit is nonrefundable but may be carried
forward for three years.  The cumulative amount of tax credits
cannot exceed $10 million per fiscal year.  The Department of
Revenue must allow a taxpayer to divert a prorated amount of
state income tax withholdings to a scholarship-granting
organization under procedures developed by the department.

Eligibility standards for students receiving scholarships include
being eligible to attend public school in the preceding semester
or beginning school in the state for the first time and a family
income that does not exceed two and one-half times the level
which qualifies the student for the federal Free or Reduced Price
Lunch Program.

A scholarship-granting organization must meet requirements
regarding tax-exempt status, fiscal soundness, percentage of
revenues devoted to educational scholarships, ensuring that a
specified percentage of its students were not previously enrolled
in a nonpublic school, handling of scholarship checks, and public
reporting.  Participating schools must operate in the state of
Missouri, comply with health and safety laws, certify that they
do not discriminate in admissions, and provide accountability to
the parent by regularly reporting on the student's progress.
They must also comply with laws that require criminal background
checks for employees and exclude anyone from employment who is
not permitted by state law to work in a nonpublic school.

Scholarship-granting organizations must not grant scholarships
for eligible students to attend a school that has paid staff or
board members or relatives in common with the scholarship-
granting organization.

The Department of Revenue must provide a standardized format for
a receipt to be issued by an organization and for the required
informational report.  The department is authorized to conduct a
financial review or audit of an organization if it possesses
evidence of fraud and may bar an organization from participating
in the program if the department determines that the organization
has intentionally and substantially failed to comply with the
bill's requirements.  If debarment occurs, the department must
notify the affected scholarship students and their parents as
quickly as possible.

Missouri House of Representatives
95th General Assembly, 2nd Regular Session
Last Updated September 14, 2010 at 3:14 pm