HCS/HB 349 - This act establishes the "Missouri Empowerment Scholarship Accounts Program".
Any taxpayer who makes a qualifying contribution, as defined in the act, to an educational assistance organization (EAO) may claim a tax credit equal to the amount of the contribution. The tax credit shall not exceed 50% of the taxpayer's tax liability for the year in which the credit is claimed, but the remaining credit may be carried forward for the next four subsequent tax years.
The cumulative amount of tax credits available each year shall not exceed $50 million, to be adjusted annually by the State Treasurer to account for inflation based on the Consumer Price Index, as described in the act, up to a maximum total amount of $75 million.
The Treasurer shall establish a procedure to award the tax credits on a first-come, first-served basis to all EAOs. The Treasurer shall establish a period of time in which each EAO shall award all or a specified percentage of its tax credits for qualifying contributions. If an EAO fails to use the required amount of tax credits, the Treasurer may reallocate unused credits to other EAOs. The Treasurer may establish any number of distribution and reallocation periods per year.
Contributions may not be designated for particular students.
This act shall be effective only in any fiscal year after a fiscal year in which the amount appropriated to fund public school pupil transportation expenses equals or exceeds forty percent of the amount required to fully fund transportation aid funding under current law for the year 2021. Whenever the amount appropriated for a fiscal year falls below such amount, no scholarship grants shall be awarded under the act. (Section 135.713)
Each EAO shall notify the Treasurer of its intent to provide scholarship accounts to qualified students, as defined in the act; demonstrate that it is a tax exempt 501(c)(3) organization; and shall provided Treasurer-approved receipts to taxpayers for contributions.
EAOs shall distribute grants to scholarship accounts of qualified students, giving first priority to students with Individualized Education Plans and students who qualify for free and reduced price lunch, and second priority to students whose households do not exceed 200% of the standard used to qualify for free and reduced price lunch.
EAOs shall ensure that their revenues and expenses are within limits described in the act.
Payments shall be distributed into scholarship accounts once or four times per year, as requested by parents. The total amount of payments to each qualified student shall not exceed the state adequacy target as calculated in current law for determining state aid to schools.
EAOs shall comply with accountability requirements related to disclosing criminal background checks, financial viability, student achievement testing data, student graduation and college attendance rates, and parental satisfaction survey data, as described in the act.
While ensuring compliance with student privacy laws, the Treasurer shall collect test results and publish such results and graduation rate data on a state website beginning after the third year of data collection.
EAOs may contract with private financial management firms to manage scholarship accounts with the supervision of the Treasurer. (Section 135.714)
The Treasurer shall provide a standardized format for receipts issued by EAOs for contributions to the program, a copy of which shall be required by the Department of Revenue when claiming a tax credit. The Treasurer shall provide a standardized format for EAOs to report information required for such receipts.
The Treasurer or State Auditor may investigate fraud committed by EAOs if the Treasurer has evidence of such fraud. The Treasurer may bar EAOs from participating in the program by establishing that the EAO intentionally and substantially failed to comply with certain requirements of the act. The EAO shall notify affected students and their parents as soon as possible after an EAO is barred.
The Treasurer shall issue a report on the state of the program, including information on EAO finances and educational outcomes, five years after the program goes into effect.
This act establishes the Missouri Empowerment Scholarship Accounts Fund. The Treasurer shall be the custodian of the Fund and may approve disbursements. Two percent of qualifying contributions shall be deposited in the funds for marketing and administrative expenses or the costs incurred in administering the program, whichever is less. (Section 135.716)
The Sunset Act shall not apply to the act. (Section 135.719)
Parents of qualified students may establish a Missouri Empowerment Scholarship Account for the student by entering into a written agreement with an EAO. The agreement shall provide that the student shall be enrolled in a qualified school, as described in the act, and that the student will not be enrolled in a public school or charter school in the student's district of residence. The agreement shall restrict the student's use of scholarship account funds to educational expenses listed in the act.
Scholarship accounts under the program are renewable annually until the student completes high school and submits required test scores to the Treasurer. Funds in a scholarship account shall revert back to the EAO if a student withdraws from a qualified school or is disqualified from the program. At the end of each year, unused funds shall remain in each scholarship account until the student graduates, at which point remaining funds shall be returned to the EAO for redistribution. (Section 166.705)
Beginning in the 2023-24 school year, the Treasurer shall conduct or contract for annual audits of scholarship accounts. The Treasurer may conduct or contract for further random or quarterly audits.
Parents, students, and vendors may be disqualified from the program if they are found to have committed an intentional program violation that consists of any misrepresentation or material violation. A parent may appeal the Treasurer's decision to remove the parent or student from eligibility.
The Treasurer may refer cases of substantial misuse of moneys to the Attorney General if there is evidence of fraud.
The Treasurer shall promulgate rules to implement procedures for examining the use of accounts, reviewing accounts, creating a fraud reporting online service and hotline, and requiring EAOs to post a surety bond. (Section 166.710)
A person commits a Class A misdemeanor if the person is found to have knowingly used program funds for a purpose not specified in the act. Financial institutions shall not be liable for providing scholarship account information to the Treasurer unless the institution knowingly and maliciously provided false information. (Section 166.715)
The act shall not be construed to permit governmental control or supervision of qualified schools other than public schools.
For the first five years following the effective date of the act, students who participate in the program shall continue to be counted in the weighted average daily attendance for the student's resident public school district or charter school, until the student no longer receives grant money in a scholarship account, until the student becomes counted in the weighted average daily attendance of another public or charter school, or until the student graduates. EAOs and the Treasurer shall provide the Department of Elementary and Secondary Education the information necessary for the calculation of state aid to resident public schools and charter schools.
In any legal proceeding challenging a requirement place upon qualified schools pursuant to the provisions of the act, the State shall have the burden of proving that the law is necessary and does not pose an undue burden. (Section 166.720)
This act is similar to SB 30 (2021), SB 251 (2021), SCS/SB 296 (2021), SCS/SB 581 (2020), HB 1733 (2020), and HCS/HB 2068(2020) and provisions in SCS/SBs 55, 23, & 25 (2021), and HB 729 (2021).