Legislative Update – June 20, 2015

Both the House and the Senate returned this week to address the Capital Reserve Fund (H.3702) and the Supplemental Spending Bill (H.4230) which represents overages in state revenues.  The General Appropriations Bill (H.3701), along with the two items mentioned above, are now in the Conference Committee on the budget – see below for details.

The House and Senate must now work out the differences between their versions of the budget which will include the language in the provisos detailed below, i.e. the language in the provisos below is not yet final.  The budget as a whole will then go to the Governor.  The House and Senate will then return again to address any vetoes, e.g. it will likely be over a week before we know for certain what the final version of the budget will look like.  Note that both the House and Senate versions of the increase the Base Student Cost to $2,220 so it is likely that this increase will hold.

HOUSE OF REPRESENTATIVES

On Wednesday, June 17
th
, the full House addressed the following items:

H.3702 (Capital Reserve Fund) is a joint resolution to appropriate monies from the Capital Reserve Fund for Fiscal Year 2014-2015, and to allow unexpended funds appropriated to be carried forward to succeeding fiscal years and expended for the same purposes. This bill received third reading in the Senate and was returned to the House on Tuesday, June 16th.  The major difference between the Senate and House versions revolve around school bus purchases:

  • Senate version: $17 million for bus purchases
  • House version: 12.9 million for bus purchases

The House then voted not to concur with the Senate’s changes meaning this bill will now go to the Conference Committee on the budget.

H.4230 (Supplemental Funding Bill) is a bill to amendthe annual General Appropriations Bill for fiscal year 2015-2016, so as to make supplemental appropriations by providing targeted increases in general fund appropriations and to make necessary conforming proviso amendments. This bill received third reading and was sent to the Senate.   The House version of the bill includes the following provisions related to K-12 education:

Note that bolded and underlined language is new language introduced by the House.

EDUCATION IMPROVEMENT ACT

  • Modernize Vocational Equipment: $6.5 million.
  • Reading Coaches: $4.9 million
  • EEDA: $10 million

Proviso 1.68 (Exception Needs Scholarship) added foster children to the definition of eligible students and total funding was increased from eight million dollars to twelve million dollars with eight million going to scholarship funding organizations and four million going to individual tax credits:

‘Foster child’ means a child who is currently or was during the preceding school year, a resident at a Child Caring Facility, Foster Home, or Residential Group Care Home as defined by Section 63-1-40;

Increases expenditures from $8 million to $12 million, e.g.
B)(1)   A person is entitled to a tax credit against income taxes imposed pursuant to Chapter 6, Title 12, or bank taxes imposed pursuant to Chapter 11, Title 12 for the amount of cash and the monetary value of any publicly traded securities the person contributes to a nonprofit scholarship funding organization up to the limits of this paragraph if:
(a)   the contribution is used to provide grants for tuition to exceptional needs children or foster children enrolled in eligible schools who qualify for these grants under the provisions of this paragraph; and
(b)   the person does not designate a specific child or school as the beneficiary of the contribution.
(2)   An individual is entitled to a refundable tax credit against income taxes imposed pursuant to Chapter 6, Title 12, or bank taxes imposed pursuant to Chapter 11, Title 12 for the amount of cash and the monetary value of any publicly traded securities, not exceeding ten thousand dollars per child, the individual contributes as tuition for exceptional needs children or foster children within their custody or care and enrolled in eligible schools who qualify for these grants under the provisions of this paragraph. However, if a child within the care and custody of an individual receives a tuition scholarship from a nonprofit scholarship funding organization, then the individual may only claim a credit equal to the difference of ten thousand dollars and the amount of the scholarship.
(C)   Grants may be awarded by a scholarship funding organization in an amount not exceeding ten thousand dollars or the total cost of tuition, whichever is less, for qualifying students with exceptional needs or qualifying foster children to attend an independent school. Before awarding any grant, a scholarship funding organization must receive written documentation documenting that the qualifying student is an exceptional needs child or foster child. Upon approving the application, the scholarship funding organization must issue a check to the eligible school in the name of the qualifying student. In the event that the qualifying student leaves or withdraws from the school for any reason before the end of the semester or school year and does not reenroll within thirty days, then the eligible school must return a prorated amount of the grant to the scholarship funding organization based on the number of days the qualifying student was enrolled in the school during the semester or school year within sixty days of the qualifying students departure.
(D)(1)(a)   The tax credits authorized by subsection (B) may not exceed cumulatively a total of twelve million dollars for contributions made on behalf of exceptional needs students and foster children. The cumulative maximum total for credits authorized by subsection (B)(1) may not exceed eight million dollars and the cumulative maximum total for credits authorized by subsection (B)(2) may not exceed four million dollars. If the department determines that the total of such credits claimed by all taxpayers exceeds either limit amount, it shall allow credits only up to those amounts on a first come, first served basis.

This bill is now in conference committee on the budget – see below for the Senate version of this bill.

SENATE

The Senate Finance Committee met on Wednesday, June 17th to address the following item:

H.4230 (Supplemental Funding Bill) is a bill to the annual General Appropriations Bill for fiscal year 2015-2016, so as to make supplemental appropriations by providing targeted increases in general fund appropriations and to make necessary conforming proviso amendments.  This bill received third reading in the Senate and is now in the Conference Committee on the budget.  The Senate version of this bill (detailed above) was amended to address the following items:

EDUCATION IMPROVEMENT ACT

  • Modernize Vocational Equipment: $6.5 million.
  • Reading Coaches: $4.9 million
  • EEDA: $2.4 million
  • Transition funds (hold harmless) $7.6 million

Proviso 1.68 (Exceptional Needs Tax Credit) was reduced from 12 million in the house version to 10 million total with five million going to Scholarship Funding Organizations and five million dollars going to individual tax credits.  The Senate Finance Committee also removed foster children from the definition of eligible student.

Note that bolded and underlined language represents changes from the House version.

(A)(3)   Foster child means a child who is currently or was during the preceding school year, a resident at a Child Caring Facility, Foster Home, or Residential Group Care Home as defined by Section 63-1-40; and
B)(1)   A person is entitled to a tax credit against income taxes imposed pursuant to Chapter 6, Title 12, or bank taxes imposed pursuant to Chapter 11, Title 12 for the amount of cash and the monetary value of any publicly traded securities the person contributes to a nonprofit scholarship funding organization up to the limits of this paragraph if:
(a)   the contribution is used to provide grants for tuition to exceptional needs children or foster children enrolled in eligible schools who qualify for these grants under the provisions of this paragraph; and
(b)   the person does not designate a specific child or school as the beneficiary of the contribution.
(2)   An individual is entitled to a refundable tax credit against income taxes imposed pursuant to Chapter 6, Title 12, or bank taxes imposed pursuant to Chapter 11, Title 12 for the amount of cash and the monetary value of any publicly traded securities, not exceeding ten thousand dollars per child, the individual contributes as tuition for exceptional needs children or foster children within their custody or care and enrolled in eligible schools who qualify for these grants under the provisions of this paragraph. However, if a child within the care and custody of an individual receives a tuition scholarship from a nonprofit scholarship funding organization, then the individual may only claim a credit equal to the difference of ten thousand dollars and the amount of the scholarship.
(C)   Grants may be awarded by a scholarship funding organization in an amount not exceeding ten thousand dollars or the total cost of tuition, whichever is less, for qualifying students with exceptional needs or qualifying foster children to attend an independent school. Before awarding any grant, a scholarship funding organization must receive written documentation documenting that the qualifying student is an exceptional needs child or foster child. Upon approving the application, the scholarship funding organization must issue a check to the eligible school in the name of the qualifying student. In the event that the qualifying student leaves or withdraws from the school for any reason before the end of the semester or school year and does not reenroll within thirty days, then the eligible school must return a prorated amount of the grant to the scholarship funding organization based on the number of days the qualifying student was enrolled in the school during the semester or school year within sixty days of the qualifying students departure.
(D)(1)(a)   The tax credits authorized by subsection (B) may not exceed cumulatively a total of twelve ten million dollars for contributions made on behalf of exceptional needs students and foster children. The cumulative maximum total for credits authorized by subsection (B)(1) may not exceed eight five million dollars and the cumulative maximum total for credits authorized by subsection (B)(2) may not exceed four five million dollars. If the department determines that the total of such credits claimed by all taxpayers exceeds either limit amount, it shall allow credits only up to those amounts on a first come, first served basis.

Language was also added to prevent an individual from claiming both a scholarship and a tax credit.

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