HB328: HB328 Revenue and taxation; increase annual aggregate limit for tax credits available for certain contributions to student scholarship organizations

26 HB 328/AP House Bill 328 (AS PASSED HOUSE AND SENATE) By: Representatives Carpenter of the 4th, Hilton of the 48th, Carson of the 46th, Ridley of the 6th, Gaines of the 120th, and others A BILL TO BE ENTITLED AN ACT To amend Titles 20 and 48 of the Official Code of Georgia Annotated, relating to education1 and revenue and taxation, respectively, so as to revise provisions for student eligibility and2 maximum scholarship amounts; to provide for military students a nd students with3 Individualized Education Programs (IEPs), Section 504 Plans, or other designated4 disabilities; to provide for such designation; to prohibit members of the General Assembly5 and their spouses from receiving income from student scholarship organizations that receive6 certain contributions; to provide for an alternative method for the deposit of a scholarship7 award; to prohibit virtual instruction to out-of-system students if the local school system has8 a College and Career Ready Performance Index average below 65 f or the previous two9 school years; to prohibit out-of-system students from being cou nted toward equalization10 funds received by a local school system; to require local schoo l systems that enroll11 out-of-system students to compile a list of such out-of-system students; to increase the annual12 aggregate limit of tax credits allowed for certain contribution s to student scholarship13 organizations; to increase the annual aggregate amount of such tax credits allowed for14 business enterprises for state insurance premium tax liability; to increase the annual15 aggregate limit for tax credits available for qualified education donations; to prohibit the use16 of special district mass transportation sales and use taxes for the provision of free or reduced17 fares for public transit services; to provide for time limits upon the recalling of an election18 for approval of special districts for transit purposes sales an d use tax (Transit SPLOST)19 within nonattainment areas upon failure to approve; to provide for related matters; to provide20 for effective dates and applicability; to repeal conflicting laws; and for other purposes.21 H. B. 328 - 1 - 26 HB 328/AP BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:22 SECTION 1.23 Title 20 of the Official Code of Georgia Annotated, relating to education, is amended in24 Chapter 2A, relating to student scholarship organizations, by revising paragraph (1) of Code25 Section 20-2A-1, relating to definitions, as follows:26 "(1) 'Eligible student' means a student who is a Georgia resident who, immediately prior27 to receiving a scholarship or tuition grant under Code Section 20-2A-2 and enrolling in28 a qualified school or program, was enrolled in and attended for at least six weeks a29 Georgia secondary or primary public school or who is eligible to enroll in a qualified first30 grade, kindergarten program, or pre-kindergarten program; provided, however, that, if a31 student is deemed an eligible student pursuant to this paragraph, he or she shall continue32 to qualify as such until he or she graduates, reaches the age of 20, or returns to a public33 school, whichever occurs first; and provided, further, that the enrollment and six-week34 public school attendance requirements shall be waived in the ca se of a student whose35 parent is an active duty military service member stationed in Georgia during the previous36 year; a student with an Individualized Education Program (IEP) or a Section 504 Plan or37 who has been diagnosed with dyslexia, autism spectrum disorder, speech-language delay38 and disorder, hearing loss, or another intellectual and developmental disability designated39 by the Department of Education pursuant to Code Section 20-2A-2 ; or a student who,40 based on the school attendance zone of his or her primary resid ence, is or would be41 assigned to a public school that the Office of Student Achievem ent determines to be a42 low-performing school, who is the subject of officially documented cases of school based43 physical violence or student related verbal abuse threatening physical harm, or who was44 enrolled in a home study program meeting the requirements of su bsection (c) of Code45 Section 20-2-690 for at least one year immediately prior to rec eiving a scholarship or46 tuition grant under Code Section 20-2A-2."47 H. B. 328 - 2 - 26 HB 328/AP SECTION 2.48 Said title is further amended in said chapter by revising parag raph (1) of Code Section49 20-2A-2, relating to requirements for student scholarship organizations, as follows:50 "(1) With respect to the first $1.5 million of its annual revenue received from donations51 for scholarships or tuition grants, including interest earned on deposits and investments52 of scholarship funds or tuition grants, shall obligate at least 92 percent of such revenue53 for scholarships or tuition grants; with respect to its annual revenue received from54 donations for scholarships or tuition grants in excess of $1.5 million and up to and55 including $10 million, including interest earned on deposits an d investments of56 scholarship funds or tuition grants, shall obligate at least 94 percent of such revenue for57 scholarships or tuition grants; with respect to its annual revenue received from donations58 for scholarships or tuition grants in excess of $10 million and up to and including $2059 million, including interest earned on deposits and investments of scholarship funds or60 tuition grants, shall obligate at least 95 percent of such revenue for scholarships or tuition61 grants; and, with respect to its annual revenue received from donations for scholarships62 or tuition grants in excess of $20 million, including interest earned on deposits and63 investments of scholarship funds or tuition grants, shall oblig ate at least 96 percent of64 such revenue for scholarships or tuition grants. On or before the end of the calendar year65 following the calendar year in which a student scholarship organization receives revenues66 from donations and obligates them for the awarding of scholarships or tuition grants, the67 student scholarship organization shall designate the obligated revenues for specific68 student recipients. Once the student scholarship organization designates obligated69 revenues for specific student recipients, in the case of multiyear scholarships or tuition70 grants, the student scholarship organization may distribute the entire obligated and71 designated revenues to a qualified school or program to be held in accordance with72 Department of Revenue rules for distribution to the specified recipients during the years73 in which the recipients are projected in writing by the private school to be enrolled at the74 H. B. 328 - 3 - 26 HB 328/AP qualified school or program. In making a multiyear distribution to a qualified school or75 program, the student scholarship organization shall require that if the designated student76 becomes ineligible or for any other reason the qualified school or program elects not to77 continue disbursement of the multiyear scholarship or tuition g rant to the designated78 student for all the projected years, then the qualified school or program shall immediately79 return the remaining funds to the student scholarship organizat ion. Once the student80 scholarship organization designates obligated revenues for specific student recipients, in81 the case of multiyear scholarships or tuition grants for which the student scholarship82 organization distributes the obligated and designated revenues to a qualified school or83 program annually rather than the entire amount, if the designat ed student becomes84 ineligible or for any other reason the student scholarship orga nization elects not to85 continue disbursement for all years, then the student scholarsh ip organization shall86 designate any remaining previously obligated revenues for a new specific student87 recipient on or before the end of the following calendar year. Unless the student has an88 Individualized Education Program (IEP) or a Section 504 Plan or has been diagnosed89 with dyslexia, autism spectrum disorder, speech-language delay and disorder, hearing90 loss, or another intellectual and developmental disability (IDD ) designated by the91 Department of Education pursuant to this paragraph, the T h e maximum scholarship92 amount given by the student scholarship organization in any given year shall not exceed93 the average state and local expenditures per student in fall en rollment in public94 elementary and secondary education for this state. The Department of Education shall95 determine and publish such amount and such designated IDDs annually, no later than96 January 1;"97 SECTION 3.98 Said title is further amended in said chapter by adding a new Code section to read as follows:99 H. B. 328 - 4 - 26 HB 328/AP "20-2A-2.2.100 No member of the General Assembly or a spouse of a member of the General Assembly101 shall receive any income from a student scholarship organization during a taxable year in102 which such organization receives a contribution for which a tax credit pursuant to Code103 Section 48-7-29.16 was approved."104 SECTION 4.105 Said title is further amended in said chapter by revising Code Section 20-2A-5, relating to106 parent or guardian endorsement of award required, as follows:107 "20-2A-5.108 The parent or guardian to whom a scholarship award is granted must restrictively endorse109 the scholarship award to the private school for deposit into the account of the private school110 or authorize by electronic signature for the deposit to be made into the account of the111 private school consistent with regulations issued by the Depart ment of Revenue . The112 parent or guardian may not designate any entity or individual a ssociated with the113 participating private school as the parent's attorney in fact to endorse a scholarship award. 114 A participant who fails to comply with this Code section forfeits the scholarship."115 SECTION 5.116 Said title is further amended in Part 4 of Article 6 of Chapter 2, relating to financing relative117 to the "Quality Basic Education Act," by revising Code Section 20-2-167.2 as follows:118 "20-2-167.2.119 (a) As used in this Code section, the term:120 (1) 'Out-of-system student' means a student who is enrolled in a local school system and121 receives virtual instruction from a virtual school within the such local school system, but122 who resides in another local school system.123 H. B. 328 - 5 - 26 HB 328/AP (2) 'Virtual instruction' means online instruction for grades kindergarten through 12.124 Such term shall not include virtual instruction received throug h the Georgia Virtual125 School established pursuant to Code Section 20-2-319.1 or the clearing-house established126 pursuant to Code Section 20-2-319.3, or through a state charter school which provides127 virtual instruction.128 (3) 'Virtual school' means a school within a local school system which provides virtual129 instruction.130 (b) A local school system that provides virtual instruction through a virtual school whose131 total student enrollment is composed of more than 5 percent out-of-system students shall:132 (1) Ensure that 90 percent of funds earned pursuant to this ar ticle for out-of-system133 students are expended for costs for virtual instruction for such out-of-system students and134 shall return any excess funds to the state treasury which are n ot expended for such135 purposes; and136 (2) Include in the virtual school and local school system's Co llege and Career Ready137 Performance Index data academic achievement results for out-of-system students; and138 (3) Not provide virtual instruction to out-of-system students in the current academic year139 if the local school system or its virtual school has failed to maintain an average of 65 or140 above on the College and Career Ready Performance Index over the previous two school141 years.142 (c) Each local school system that enrolls any out-of-system st udents shall compile a143 complete list of such out-of-system students as of October 1 and March 1 of each year. No144 local school system shall include any such out-of-system student in any count for purposes145 related to qualifying for equalization funds pursuant to Code Section 20-2-165.146 (c)(d) This Code section shall not be subject to waiver pursuant to Code Section 20-2-82147 for a strategic waivers school system, Code Section 20-2-2063.2 for a charter system, Code148 Section 20-2-2065 for a charter school, or Code Section 20-2-244."149 H. B. 328 - 6 - 26 HB 328/AP SECTION 6.150 Title 48 of the Official Code of Georgia Annotated, relating re venue and taxation, is151 amended in Chapter 7, relating to income tax imposition, rate, computation, exemptions, and152 credits, by revising paragraphs (1) and (1.1) of subsection (f) of Code Section 48-7-29.16,153 relating to tax credits for contributions to student scholarship organizations, as follows:154 "(f)(1) The aggregate amount of tax credits allowed under this Code section shall not155 exceed:156 (A) Fifty-eight million dollars for the year ending on December 31, 2018;157 (B) For 2019 through 2022, $100 million per year; and158 (C) For 2023 and all subsequent years, $120 $150 million per year.159 (1.1) In no event shall the aggregate amount of tax credits al lowed under this Code160 section to all business enterprises for state insurance premium tax liability owed pursuant161 to Code Section 33-8-4 exceed $6 million 6 percent of the aggregate amount of tax162 credits allowed under this Code section for any year as provided in paragraph (1) of this163 subsection."164 SECTION 7.165 Said title is further amended in said chapter by revising parag raph (1) of subsection (f) of166 Code Section 48-7-29.21, relating to tax credits for donations to nonprofit corporations167 awarding grants to public schools, as follows:168 "(f)(1) In no event shall the aggregate amount of tax credits a llowed under this Code169 section exceed: $25 million per calendar year170 (A) $5 million for the tax year ending on December 31, 2023; or171 (B) $15 million for the tax year 2024, and for all subsequent tax years."172 H. B. 328 - 7 - 26 HB 328/AP SECTION 8.173 Said title is further amended in Chapter 8, relating to sales a nd use taxes, by revising174 paragraph (4) of Code Section 48-8-260, relating to definitions relative to special district175 mass transportation sales and use tax, as follows:176 "(4) 'Transportation purposes' means and includes:177 (A) Roads, bridges, public transit, rails, airports, buses, se aports, including without178 limitation road, street, and bridge purposes pursuant to paragraph (1) of subsection (b)179 of Code Section 48-8-121, and all accompanying infrastructure and services necessary180 to provide access to these such transportation facilities, including new general181 obligation debt and other multiyear obligations issued to finan ce such purposes but182 excluding purposes of providing free or reduced fares for public transit services;183 (B) The retirement of previously incurred general obligation debt with respect only to184 such purposes as identified in subparagraph (A) of this paragraph;185 (C) A capital outlay project or projects under subparagraph (a )(1)(M) of Code186 Section 48-8-111, with respect only to such purposes as identified in subparagraph (A)187 of this paragraph; or188 (D) Any combination of two or more of the foregoing."189 SECTION 9.190 Said title is further amended is said chapter by revising subs ection (c) of Code Section191 48-8-269.46, relating to ballot question, expenses of election, resubmission of question, and192 general obligation debt for special districts within nonattainm ent areas relative to special193 districts for transit purposes sales and use tax (Transit SPLOST), by revising subsection (c)194 as follows:195 "(c) Where such question is not approved by the voters, the cou nty may resubmit such196 question from time to time upon compliance with the requirements of this article and after197 the passage of eight years from the date the special election was previously held."198 H. B. 328 - 8 - 26 HB 328/AP SECTION 10.199 (a) Except as provide in subsection (b) of this section, this Act shall become effective on200 July 1, 2026, and shall be applicable to all taxable years begi nning on or after January 1,201 2027.202 (b) Section 5 of this Act shall become effective on July 1, 2026,203 SECTION 11.204 All laws and parts of laws in conflict with this Act are repealed.205 H. B. 328 - 9 -