SB 612
Establishes the Missouri Empowerment Scholarship Accounts Program
LR Number:
Last Action:
5/18/2018 - Informal Calendar S Bills for Perfection--SB 612-Koenig, with SCS, SS#2 for SCS, SA 2, SSA 1 for SA 2 & SA 1 to SSA 1 for SA 2 (pending)
Journal Page:
SCS SB 612
Calendar Position:
Effective Date:
August 28, 2018

Current Bill Summary

SS#2/SCS/SB 612 - This act establishes the Missouri Empowerment Scholarship Accounts Program, creates provisions relating to innovation schools, and modifies provisions relating to travel hardships for public school pupils.

MISSOURI EMPOWERMENT SCHOLARSHIP ACCOUNTS PROGRAM: For all tax years beginning on or after January 1, 2019, 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 100% of the amount of the contribution and the amount of the tax credit claimed shall not exceed 50% of the taxpayer's state tax liability for the tax year for which the credit is claimed.

A taxpayer who is subject to the federal alternative minimum tax and who claims a deduction under 26 U.S.C. Section 170 shall be ineligible to claim a tax credit under the act. Any taxpayer or owner of a pass-through entity who claims a deduction under 26 U.S.C. Section 170 for a qualifying contribution under the act shall be ineligible to claim a tax credit under the act.

Tax credits authorized under the program may not be transferred, sold, or assigned, and are not refundable. The annual cumulative amount of tax credits is limited at $25 million, which shall be adjusted for inflation. The State Treasurer may adopt rules, policies, and procedures to ensure that taxpayers may claim all the tax credits possible up to the cumulative amount of tax credits available in any one calendar year. (Section 135.713)

An educational assistance organization shall meet the following requirements:

• Notify the State Treasurer of its intent to provide scholarship accounts;

• Be a 501(c)(3) organization;

• Provide a receipt to taxpayers for contributions;

• Ensure that funds are used as specified in the act;

• Distribute scholarship payments four times per year in an amount not to exceed 1.5 times state adequacy target;

• Provide the State Treasurer, upon request, with criminal background checks on all employees and board members; and

• Demonstrate financial accountability and viability, as described in the act.

A qualified student that is or was a ward of the juvenile court, as defined in the act, shall be eligible to receive a total grant amount equal to the state adequacy target. The grant amount for all other qualified students shall be determined by the following table:

If the student's household The grant amount shall be:

income is:

0% - 100% of poverty level equal to the state adequacy

target times 1.5

101% - 250% of poverty level equal to the state adequacy


251% - 350% of poverty level equal to the state adequacy

target times .90

351% - 375% of poverty level equal to the state adequacy

target times .70

376% - 400% of poverty level equal to the state adequacy

target times .50

401% of poverty level $0

or higher

Each educational assistance organization shall publicly report to the State Treasurer, by June 1st 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, and the total number and dollar amount of scholarship accounts opened during the previous calendar year. (Section 135.714)

The State Treasurer shall provide standardized forms for program participants. The State Treasurer or State Auditor may conduct an investigation of any educational assistance organization if it possesses evidence of fraud. In addition, the State Treasurer may bar an educational assistance organization from participating if the organization has failed to comply with program requirements.

The State Treasurer shall issue a report on the state of the program five years after it goes into effect. (Section 135.716)

The provisions of the Missouri Sunset Act shall not apply to the program. (Section 135.719)

A student is eligible to receive funds in a Missouri Empowerment Scholarship Account if he or she is identified as having a disability, as described in the act, is a child of a parent in active military service, or is a ward of the state. To be eligible, a student shall also have attended a public school under circumstances set forth in the act or be eligible to begin kindergarten. (Section 166.700)

The student's parent 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 shall sign an agreement with an educational assistance organization to enroll the qualified student in a qualified school to receive an education for the student in certain subjects; not enroll the student, other than a student that is in the custody of the state, in a school operated by the qualified student's district of residence or in a charter school; release the district of residence from the obligation of educating the student while the student is enrolled in the program; use the Missouri Empowerment Scholarship Account money for only specified purposes; and not use the funds for consumable education supplies or tuition at a private school located outside of the state.

The scholarship accounts are renewable on an annual basis upon request of the parent of a qualified student. A qualified student 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 the qualified student graduates from a qualified school that is a high school shall be returned to the educational assistance organization for redistribution to other qualified students. (Section 166.705)

Beginning in the 2020-2021 school year, the State Treasurer shall conduct or contract for an annual audit of accounts to ensure compliance. A parent may be disqualified from program participation if the State Treasurer determines that the parent is found to have committed an intentional program violation. The State Treasurer may refer cases of substantial misuse of moneys to the Attorney General. (Section 166.710)

Parents of qualified students in 3rd-12th grade shall annually have the qualified student take a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examination related to college or university admissions that assesses reading and mathematics. Qualified schools shall ensure that such tests and examinations are administered during the same time frame and at the same rate that public schools of the state administer the same tests and examinations. (Section 166.715)

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 166.720)

TRAVEL HARDSHIPS FOR PUBLIC SCHOOL PUPILS: This act also changes the process by which travel hardships are granted to public school pupils.

A parent or guardian of any pupil residing in any school district of the state is authorized to submit an application to the Commissioner of Education requesting that the pupil and any sibling of the pupil be assigned to another school district if the pupil is eligible and meets certain conditions as described in the amendment.

The act specifies that the driving distance from the pupil's residence to his or her attendance center in the district of residence shall be 15 miles or more by the shortest route available. The new attendance center shall be at least 5 miles closer in actual driving distance to the pupil's residence, and the attendance of the pupil shall not cause the classroom in the receiving district to exceed the number of pupils per class set by the receiving district.

The Commissioner is required to assign pupils in the order in which applications are received. Once granted, the hardship assignment shall continue until the pupil, and any siblings of the pupil attending the same attendance center, completes his or her course of study in the receiving district or the parent or guardian withdraws the pupil. If withdrawn, subsequent grants of applications are discretionary.

A pupil who is not currently enrolled in a public school district becomes eligible to apply after the pupil has enrolled in and completed a full school year in a public school in his or her district of residence.

A school district that is assigned a pupil may charge a nonresident tuition rate. The board of education of the district in which the pupil resides shall pay the tuition of the pupil reassigned, which shall not exceed the pro rata cost of instruction of the attendance center the pupil would have attended in the pupil's district of residence. If the amount of tuition paid by the district of residence is less than the nonresident tuition rate set by the receiving school district, the balance shall be paid by the parents or guardians of the pupil. No pupil shall be assigned under the provisions of the amendment unless tuition is paid in full. (Section 167.125)

This act shall become effective on July 1st following the school year in which the foundation formula is fully funded. (Section B)

This act contains provisions similar to SB 565 (2018), SCS/SB 709 (2018), HB 1639 (2018), HB 2283 (2018), SS#2/SCS/SB 313 (2017), SB 476 (2017), HB 926 (2017) and to provisions contained in SCS/SB 32 (2017), HB 868 (2017), SB 609 (2016), HCS/HBs 1589 & 2307 (2016), and SB 531 (2015).