Missouri Senate

Introduced

For all tax years beginning on or after January 1, 2017, a taxpayer may make a qualifying contribution to an educational assistance organization and claim a tax credit, as described in the act. The tax credit is for one hundred percent of the amount of the contribution. The tax credit may be carried forward for four years and may not be transferred, sold, or assigned. The annual cumulative amount of tax credits is limited at $50 million, which will be adjusted for inflation. The Director of the Department of Economic Development must establish a procedure to apportion the amount of tax credits amongst all educational assistance organizations. The Director may reapportion those tax credits to educational assistance organizations that have used all, or a certain percentage, of their tax credits. (Section 135.713)

An educational assistance organization must meet certain requirements, including notifying the Department of Economic Development of its intent to provide scholarship accounts; being a 501(c)(3) organization; providing a receipt to taxpayers for contributions; ensuring that funds are used as specified in the act; distributing scholarship payments four times per year in an amount not to exceed the state adequacy target; providing the Department of Economic Development, upon request, with criminal background checks on all employees and board members; and demonstrating financial accountability and viability, as described in the act.

Each educational assistance organization must publicly report to the Department, by June first annually, the name and address of the organization, the name and address of each student who opened a scholarship account, the total number and dollar amount of contributions during the previous calendar year, the total number and dollar amount of scholarship accounts opened during the previous calendar year, and the total number and dollar amount of scholarship accounts opened during the previous year to students eligible for free and reduced lunch. (Section 135.714)

The Department of Economic Development must provide standardized forms for program participants. It may conduct a financial review or audit of any educational assistance organization if it possesses evidence of fraud. In addition, the Department may bar an educational assistance organization from participating if it has failed to comply with program requirements. (Section 135.716)

The provisions of the Missouri Sunset Act shall not apply to the program.

A student is eligible to receive funds in a Missouri Empowerment Scholarship Account if he or she meets any of the following criteria: is identified as having a disability, as described in the act; is the child of a parent in active military service; or is a ward of the state. To be eligible, a student must also have attended a public school under circumstances set forth in the act or is eligible to begin kindergarten.

The student's parent or guardian shall only use the money in the account for certain expenses related to the qualified student's education, as described in the act.

The parent of a qualified student must sign an agreement to enroll the qualified student in a qualified nonpublic or home school to receive an education for the student in certain subjects; not enroll the student in a school operated by a district or in a charter school; release the district of residence from the obligation of educating the student; use the Missouri Empowerment Scholarship Account money for only specified purposes; and not use the funds for computer hardware or consumable education supplies.

The scholarship accounts are renewable on an annual basis upon request of the parent of a qualified student. Qualified students shall remain eligible for renewal until the student completes high school. If a qualified student withdraws from the program by enrolling in a school other than a qualified school, or is disqualified from the program for violations specified in the act, the scholarship account shall be closed and any remaining funds shall be returned to the educational assistance organization for redistribution to other qualified students. When a student withdraws from the program, the responsibility for providing an education for that student transfers back to the student's district of residence.

The funds remaining in the scholarship account at the end of a school year shall remain in the account for the following school year. Any funds remaining in the account after graduation may be used for the purposes of higher education as described in the act. Any funds remaining in the account after graduation from an eligible postsecondary institution or after a period of four years following graduation, whichever occurs first, shall be returned to the educational assistance organization for redistribution to other qualified students.(Section 166.705)

A qualified student that is a ward of the state who receives a scholarship will continue to be eligible to receive his or her scholarship upon a legal adoption.

A qualified student receiving a scholarship must be reimbursed for reasonable transportation costs incurred or must receive the mileage rate prescribed by the Internal Revenue Service for allowable expenses for motor vehicle use expressed as an amount per mile.

The Department of Elementary and Secondary Education must conduct or contract for an annual audit of accounts to ensure compliance. A parent or guardian may be disqualified from program participation if, after a hearing before the Commissioner of Education, the parent or guardian is found to have committed an intentional program violation. The Department may refer cases of substantial misuse of moneys to the Attorney General. (Section 166.710)

A person commits a Class A misdemeanor if they are found to have knowingly used moneys for any purposes other than those set forth in the act. (Section 166.715)

This act is substantially similar to provisions contained in SB 32 (2017), SB 609 (2016), SB 531 (2015), and HCS/HBs 1589 & 2307 (2016).

JAMIE ANDREWS