SB 654 Creates the Missouri Special Needs Scholarship Tax Credit Program
Sponsor: Crowell
LR Number: 3216S.01I Fiscal Note:
Committee: Governmental Accountability and Fiscal Oversight
Last Action: 1/13/2010 - Second Read and Referred S Governmental Accountability and Fiscal Oversight Committee Journal Page: S115
Title: Calendar Position:
Effective Date: August 28, 2010

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Current Bill Summary

SB 654 - This act creates the Missouri Special Needs Scholarship Tax Credit Program, to be administered by the Department of Economic Development. The program provides grants to elementary and secondary education students through scholarship granting organizations to cover all or part of the costs at a qualified public or non-public school, including transportation. Scholarships are to be portable during the school year and may be prorated if a student changes schools. Students who may receive scholarships through the program include, but are not limited to, students with an individualized education program who are mentally handicapped, speech and language impaired, deaf or hard of hearing, visually impaired, dual sensory impaired, physically impaired, emotionally handicapped, specific learning disabled, diagnosed with an autism spectrum disorder, or hospitalized or homebound due to illness or disability. Students must also have attended public school in Missouri the preceding semester or will be attending school for the first time. Any eligible student who receives an educational scholarship and attends a non-public school will be included in the weighted average daily attendance calculation of the school district the student attended immediately prior to receiving the scholarship for each year the student receives the scholarship.

Beginning with tax year 2010, a taxpayer as described in the act may claim a tax credit against the taxpayer's state tax liability in an amount equal to eighty percent of the taxpayer's contribution to a scholarship granting organization. The amount of tax credits per taxpayer is limited to $800,000 per year. The amount of tax credits claimed cannot exceed fifty percent of a taxpayer's state tax liability for the tax year in which it is claimed. An unclaimed tax credit may be carried over to the next four succeeding tax years until the full credit is claimed. Tax credits granted under the program are transferable as described in the act.

The director of the Department of Economic Development will determine which organizations may be classified as scholarship granting organizations. A scholarship granting organization that participates in the program must meet certain requirements and follow certain procedures as described in the act. An organization must spend at least 90% of its revenue from donations on educational scholarships and spend all revenue from interest or investments on educational scholarships. In addition, an organization must distribute scholarship payments as checks to parents and provide a Department of Economic Development-approved receipt to taxpayers who contribute. An organization must demonstrate financial accountability and viability as described in the act. An organization must also cooperate with the Department to conduct criminal background checks on its employees and board members and not employ individuals who could pose a risk to the use of contributed funds. The Department may hold a hearing before the director to bar a scholarship granting organization from participating in the program if it believes the organization has intentionally and substantially failed to comply with the requirements of the program. A scholarship granting organization may appeal to the Administrative Hearing Commission.

Participating schools must comply with health and safety laws that apply to non-public schools, hold a valid occupancy permit if required, certify they will comply with 42 USC 1981, and regularly report on the students' progress to parents. Schools must also operate in Missouri and comply with state laws regarding criminal background checks for employees; they must not employ individuals prohibited by state law from working in a non-public school.

The Department of Economic Development must conduct a study of the program using non-state funds. The Department may contract with qualified researchers to conduct the study. The state auditor is granted the power to audit any school district within the state in the same manner as any agency of the state. The school district must pay for the cost of the audit. No school district can be audited under this provision more than once in any three calendar or fiscal years.

The provisions of this act expire in six years unless reauthorized.

This act is similar to Senate Bill 85 (2009), Senate Bill 993 (2008) and House Bill 1886 (2008).