Bill Text For SB0407 - House Floor Version

 1|              HOUSE OF REPRESENTATIVES - FLOOR VERSION                 |
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 2|                          STATE OF OKLAHOMA                            |
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 3|             1st Session of the 57th Legislature (2019)                |
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 4|COMMITTEE SUBSTITUTE                                                   |
  |FOR ENGROSSED                                                          |
 5|SENATE BILL NO. 407                  By: Rader and David of the        |
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  |                                         and                           |
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  |                                         Echols of the House           |
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11|                        COMMITTEE SUBSTITUTE                           |
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12|       [ revenue and taxation  income tax credits  education           |
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13|         improvement grants  scholarship-granting                      |
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14|         organizations  limitations  effective date ]                  |
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18|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:                  |
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19|    SECTION 1.     AMENDATORY     68 O.S. 2011, Section 2357.206, as   |
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20|last amended by Section 1, Chapter 288, O.S.L. 2017 (68 O.S. Supp.     |
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21|2018, Section 2357.206), is amended to read as follows:                |
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22|    Section 2357.206  A.  This act shall be known and may be cited     |
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23|as the "Oklahoma Equal Opportunity Education Scholarship Act".         |
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24|                                                                       |
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arsid14311572 SB407 HFLR                                           Page 1
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 1|    B.  1.  Except as provided in subsection F G of this section,      |
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 2|after August 26, 2011, there shall be allowed a credit for any         |
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 3|taxpayer who makes a contribution to an eligible                       |
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 4|scholarship-granting organization.  The credit shall be equal to       |
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 5|fifty percent (50%) of the total amount of contributions made during   |
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 6|a taxable year, not to exceed One Thousand Dollars ($1,000.00) for     |
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 7|single individuals, Two Thousand Dollars ($2,000.00) for married       |
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 8|individuals filing jointly, or One Hundred Thousand Dollars            |
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 9|($100,000.00) for any taxpayer which is a legal business entity        |
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10|including limited and general partnerships, corporations, subchapter   |
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11|S corporations and limited liability companies, plus any suspended     |
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12|credits pursuant to subparagraph c of paragraph 2 of subsection J of   |
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13|this section; provided, if total credits claimed pursuant to this      |
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14|paragraph exceed the caps established pursuant to paragraph 1 of       |
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15|subsection D F of this section, the credit shall be equal to the       |
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16|taxpayer's proportionate share of the cap for the taxable year, as     |
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17|determined pursuant to subsection H J of this section.                 |
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18|    2.  For any taxpayer who makes a contribution to an eligible       |
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19|scholarship-granting organization and makes a written commitment to    |
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20|contribute the same amount for an additional year, the credit for      |
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21|the first year and the additional year shall be equal to               |
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22|seventy-five percent (75%) of the total amount of the contribution     |
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23|made during a taxable year, not to exceed the amounts established in   |
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24|paragraph 1 of this subsection for the taxable year in which the       |
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arsid14311572 SB407 HFLR                                           Page 2
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 1|credit provided in this subsection is claimed.  The taxpayer shall     |
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 2|provide evidence of the written commitment to the Oklahoma Tax         |
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 3|Commission at the time of filing the refund claim.                     |
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 4|    3.  The credits authorized pursuant to the provisions of this      |
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 5|subsection shall be allocable to the partners, shareholders, members   |
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 6|or other equity owners of a taxpayer that is authorized to be          |
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 7|treated as a partnership for purposes of federal income tax            |
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 8|reporting for the taxable year for which the tax credits authorized    |
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 9|by this subsection are claimed on the applicable return, together      |
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10|with required schedules, forms or reports of the partners,             |
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11|shareholders, members or other equity owners of the taxpayer.  Tax     |
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12|credits which are allocated to such equity owners shall only be        |
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13|limited in amount for the income tax return of a natural person or     |
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14|persons based upon the limitation of the total credit amount to the    |
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15|entity from which the tax credits have been allocated and shall not    |
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16|be limited to One Thousand Dollars ($1,000.00) for single              |
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17|individuals or limited to Two Thousand Dollars ($2,000.00) for         |
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18|married persons filing a joint return.                                 |
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19|    4.  On or before December 31, 2017, and once every four (4)        |
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20|years thereafter, such scholarship-granting organization and           |
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21|educational improvement granting grant organization shall submit to    |
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22|the Oklahoma Tax Commission, Governor, President Pro Tempore of the    |
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23|Senate and the Speaker of the House of Representatives, an audited     |
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24|financial statement for the organization along with information        |
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arsid14311572 SB407 HFLR                                           Page 3
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 1|detailing the benefits, successes or failures of the program.  The     |
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 2|Tax Commission shall publish and make publicly available on its        |
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 3|website the financial statement and information submitted pursuant     |
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 4|to this paragraph.                                                     |
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 5|    C.  1.  Except as provided in subsection F G of this section,      |
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 6|after August 26, 2011, there shall be allowed a credit for any         |
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 7|taxpayer who makes a contribution to an eligible educational           |
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 8|improvement grant organization.  The credit shall be equal to fifty    |
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 9|percent (50%) of the total amount of contributions made during a       |
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10|taxable year, not to exceed One Thousand Dollars ($1,000.00) for       |
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11|single individuals, Two Thousand Dollars ($2,000.00) for married       |
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12|individuals filing jointly, or One Hundred Thousand Dollars            |
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13|($100,000.00) for any taxpayer which is a legal business entity        |
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14|including limited and general partnerships, corporations, subchapter   |
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15|S corporations and limited liability companies, plus any suspended     |
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16|credits pursuant to subparagraph c of paragraph 2 of subsection J of   |
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17|this section; provided, if total credits claimed pursuant to this      |
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18|paragraph exceed the cap established pursuant to paragraph 1 2 of      |
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19|subsection D F of this section, the credit shall be equal to the       |
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20|taxpayer's proportionate share of the cap for the taxable year, as     |
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21|determined pursuant to subsection H J of this section.                 |
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22|    2.  For any taxpayer who makes a contribution to an eligible       |
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23|educational improvement grant organization and makes a written         |
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24|commitment to contribute the same amount for an additional year, the   |
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arsid14311572 SB407 HFLR                                           Page 4
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 1|credit for the first year and the additional year shall be equal to    |
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 2|seventy-five percent (75%) of the total amount of the contribution     |
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 3|made during a taxable year, not to exceed the amounts established in   |
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 4|paragraph 1 2 of subsection F of this subsection section for the       |
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 5|taxable year in which the credit provided in this subsection is        |
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 6|claimed; provided, if total credits claimed pursuant to this           |
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 7|paragraph exceed the cap established pursuant to paragraph 3 of this   |
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 8|subsection, the credit shall be equal to the taxpayer's                |
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 9|proportionate share of the cap for the taxable year, as determined     |
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10|pursuant to subsection H J of this section.  The taxpayer shall        |
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11|provide evidence of the written commitment to the Oklahoma Tax         |
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12|Commission at the time of filing the refund claim.                     |
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13|    3.  The credits authorized pursuant to the provisions of this      |
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14|subsection shall be allocable to the partners, shareholders, members   |
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15|or other equity owners of a taxpayer that is authorized to be          |
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16|treated as a partnership for purposes of federal income tax            |
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17|reporting for the taxable year for which the tax credits authorized    |
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18|by this subsection are claimed on the applicable return, together      |
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19|with required schedules, forms or reports of the partners,             |
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20|shareholders, members or other equity owners of the taxpayer.  Tax     |
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21|credits which are allocated to such equity owners shall only be        |
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22|limited in amount for the income tax return of a natural person or     |
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23|persons based upon the limitation of the total credit amount to the    |
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24|entity from which the tax credits have been allocated and shall not    |
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arsid14311572 SB407 HFLR                                           Page 5
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 1|be limited to One Thousand Dollars ($1,000.00) for single              |
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 2|individuals or limited to Two Thousand Dollars ($2,000.00) for         |
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 3|married persons filing a joint return.                                 |
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 4|    D.  1.  On or after the effective date of this act there shall     |
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 5|be allowed a credit for any taxpayer who makes a contribution to an    |
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 6|eligible public school district.  The credit shall be equal to fifty   |
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 7|percent (50%) of the total amount of contributions made during a       |
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 8|taxable year, not to exceed One Thousand Dollars ($1,000.00) for       |
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 9|single individuals, Two Thousand Dollars ($2,000.00) for married       |
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10|individuals filing jointly or One Hundred Thousand Dollars             |
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11|($100,000.00) for any taxpayer which is a legal business entity        |
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12|including limited and general partnerships, corporations, subchapter   |
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13|S corporations and limited liability companies; provided, if total     |
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14|credits claimed pursuant to this paragraph exceed the caps             |
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15|established pursuant to paragraph 2 of subsection F of this section,   |
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16|the credit shall be equal to the taxpayer's proportionate share of     |
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17|the cap for the taxable year, as determined pursuant to subsection J   |
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18|of this section.                                                       |
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19|    2.  For any taxpayer who makes a contribution to an eligible       |
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20|public school district and makes a written commitment to contribute    |
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21|the same amount for an additional year, the credit for the first       |
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22|year and the additional year shall be equal to seventy-five percent    |
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23|(75%) of the total amount of the contribution made during a taxable    |
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24|year, not to exceed the amounts established in paragraph 2 of          |
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arsid14311572 SB407 HFLR                                           Page 6
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 1|subsection F of this section for the taxable year in which the         |
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 2|credit provided in this subsection is claimed.  The taxpayer shall     |
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 3|provide evidence of the written commitment to the Oklahoma Tax         |
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 4|Commission at the time of filing the refund claim.                     |
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 5|    3.  The credits authorized pursuant to the provisions of this      |
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 6|subsection shall be allocable to the partners, shareholders, members   |
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 7|or other equity owners of a taxpayer that is authorized to be          |
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 8|treated as a partnership for purposes of federal income tax            |
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 9|reporting for the taxable year for which the tax credits authorized    |
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10|by this subsection are claimed on the applicable return, together      |
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11|with required schedules, forms or reports of the partners,             |
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12|shareholders, members or other equity owners of the taxpayer.  Tax     |
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13|credits which are allocated to such equity owners shall only be        |
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14|limited in amount for the income tax return of a natural person or     |
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15|persons based upon the limitation of the total credit amount to the    |
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16|entity from which the tax credits have been allocated and shall not    |
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17|be limited to One Thousand Dollars ($1,000.00) for single              |
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18|individuals or limited to Two Thousand Dollars ($2,000.00) for         |
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19|married persons filing a joint return.                                 |
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20|    4.  Each eligible public school district to which contributions    |
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21|have been made for purposes of the tax credit authorized by this       |
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22|subsection shall annually account for all revenue and expenditures     |
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23|through the Oklahoma Cost Accounting System (OCAS).                    |
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arsid14311572 SB407 HFLR                                           Page 7
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 1|    E.  1.  On or after the effective date of this act, there shall    |
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 2|be allowed a credit for any taxpayer who makes a contribution to an    |
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 3|eligible public school foundation.  The credit shall be equal to       |
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 4|fifty percent (50%) of the total amount of contributions made during   |
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 5|a taxable year, not to exceed One Thousand Dollars ($1,000.00) for     |
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 6|single individuals, Two Thousand Dollars ($2,000.00) for married       |
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 7|individuals filing jointly or One Hundred Thousand Dollars             |
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 8|($100,000.00) for any taxpayer which is a legal business entity        |
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 9|including limited and general partnerships, corporations, subchapter   |
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10|S corporations and limited liability companies; provided, if total     |
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11|credits claimed pursuant to this paragraph exceed the caps             |
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12|established pursuant to paragraph 2 of subsection F of this section,   |
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13|the credit shall be equal to the taxpayer's proportionate share of     |
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14|the cap for the taxable year, as determined pursuant to subsection J   |
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15|of this section.                                                       |
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16|    2.  For any taxpayer who makes a contribution to an eligible       |
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17|public school foundation and makes a written commitment to             |
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18|contribute the same amount for an additional year, the credit for      |
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19|the first year and the additional year shall be equal to               |
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20|seventy-five percent (75%) of the total amount of the contribution     |
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21|made during a taxable year, not to exceed the amounts established in   |
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22|paragraph 2 of subsection F of this section for the taxable year in    |
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23|which the credit provided in this subsection is claimed.  The          |
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24|                                                                       |
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arsid14311572 SB407 HFLR                                           Page 8
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 1|taxpayer shall provide evidence of the written commitment to the       |
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 2|Oklahoma Tax Commission at the time of filing the refund claim.        |
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 3|    3.  The credits authorized pursuant to the provisions of this      |
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 4|subsection shall be allocable to the partners, shareholders, members   |
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 5|or other equity owners of a taxpayer that is authorized to be          |
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 6|treated as a partnership for purposes of federal income tax            |
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 7|reporting for the taxable year for which the tax credits authorized    |
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 8|by this subsection are claimed on the applicable return, together      |
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 9|with required schedules, forms or reports of the partners,             |
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10|shareholders, members or other equity owners of the taxpayer.  Tax     |
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11|credits which are allocated to such equity owners shall only be        |
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12|limited in amount for the income tax return of a natural person or     |
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13|persons based upon the limitation of the total credit amount to the    |
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14|entity from which the tax credits have been allocated and shall not    |
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15|be limited to One Thousand Dollars ($1,000.00) for single              |
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16|individuals or limited to Two Thousand Dollars ($2,000.00) for         |
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17|married persons filing a joint return.                                 |
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18|    4.  On or before December 31, 2020, and once every four (4)        |
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19|years thereafter, such eligible public school foundation shall         |
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20|submit to the Governor, President Pro Tempore of the Senate and the    |
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21|Speaker of the House of Representatives an audited financial           |
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22|statement for the organization along with information detailing the    |
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23|benefits, successes or failures of the programs.                       |
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24|                                                                       |
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arsid14311572 SB407 HFLR                                           Page 9
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 1|    F.  Except as otherwise provided pursuant to subsection H J of     |
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 2|this section, for tax years 2017 2019 and thereafter:                  |
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 3|    1.  The total credits authorized pursuant to subsection B of       |
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 4|this section for all taxpayers shall not exceed Three Million Five     |
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 5|Hundred Thousand Dollars ($3,500,000.00) Fifteen Million Dollars       |
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 6|($15,000,000.00) annually;                                             |
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 7|    2.  The total credits authorized pursuant to subsection            |
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 8|subsections C, D and E of this section for all taxpayers shall not     |
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 9|exceed One Million Five Hundred Thousand Dollars ($1,500,000.00)       |
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10|Fifteen Million Dollars ($15,000,000.00) annually and shall be         |
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11|limited to One Hundred Thousand Dollars ($100,000.00) of credits per   |
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12|public school district annually; and                                   |
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13|    3.  The cap on total credits provided for in this subsection       |
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14|shall be allocated by the Tax Commission as provided in subsection H   |
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15|J of this section.                                                     |
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16|    E. G.  For credits claimed for eligible contributions made         |
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17|during tax year 2014 and thereafter, a credit shall not be allowed     |
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18|by the Oklahoma Tax Commission for contributions made to a             |
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19|scholarship-granting organization or an educational improvement        |
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20|grant organization if that organization's percentage of funds          |
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21|actually awarded is less than ninety percent (90%).  For purposes of   |
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22|this section, the "percentage of funds actually awarded" shall be      |
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23|determined by dividing the total amount of funds actually awarded as   |
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24|educational scholarships or educational improvement grants over the    |
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arsid14311572 SB407 HFLR                                           Page 10
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 1|most recent twenty-four (24) months by the total amount available to   |
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 2|award as educational scholarships or educational improvement grants    |
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 3|over the most recent twenty-four (24) months.                          |
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 4|    F. H.  Any tax credits which are earned by a taxpayer pursuant     |
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 5|to this section during the time period beginning on the effective      |
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 6|date of this act through December 31, 2012, may not be claimed for     |
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 7|any period prior to the taxable year beginning January 1, 2013.  No    |
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 8|credits which accrue during the time period beginning on the           |
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 9|effective date of this act through December 31, 2012, may be used to   |
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10|file an amended tax return for any taxable year prior to the taxable   |
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11|year beginning January 1, 2013.                                        |
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12|    G. I.  As used in this section:                                    |
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13|    1.  "Eligible student" means a child of school age who is          |
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14|lawfully present in the United States and who is a member of a         |
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15|household in which the total annual income during the preceding tax    |
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16|year does not exceed an amount equal to three hundred percent (300%)   |
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17|of the income standard used to qualify for a free or reduced           |
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18|reduced-price school lunch or who, during the immediately preceding    |
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19|school year, attended or, by virtue of the location of such            |
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20|student's place of residence, was eligible to attend a public school   |
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21|in this state which has been identified for school improvement as      |
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22|determined by the State Board of Education pursuant to the             |
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23|requirements of the No Child Left Behind Act of 2001, P.L. No.         |
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24|107-110.  Once a student has received an educational scholarship, as   |
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arsid14311572 SB407 HFLR                                           Page 11
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 1|defined in paragraph 3 of this subsection, the student and any         |
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 2|siblings who are members of the same household shall remain eligible   |
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 3|until they graduate from high school or reach twenty-one (21) years    |
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 4|of age, whichever occurs first;                                        |
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 5|    2.  "Eligible special needs student" means a child who has been    |
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 6|provided services under an Individual Family Service Plan through      |
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 7|the SoonerStart program and during transition was evaluated and        |
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 8|determined to be eligible for school district services, a child of     |
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 9|school age who has attended public school in our state with an         |
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10|individualized education program pursuant to the Individuals With      |
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11|Disabilities Education Act, 20 U.S.C.A., Section 1400 et seq. or a     |
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12|child who has been diagnosed by a clinical professional as having a    |
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13|significant disability that will affect learning and who has been      |
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14|approved by the board of a scholarship-granting organization;          |
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15|    3.  "Educational scholarships" means:                              |
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16|         a.   scholarships to an eligible student of up to Five        |
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17|              Thousand Dollars ($5,000.00) or eighty percent (80%)     |
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18|              of the statewide annual average per-pupil expenditure    |
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19|              as determined by the National Center for Education       |
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20|              Statistics, U.S. Department of Education, whichever is   |
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21|              greater, to cover all or part of the tuition, fees and   |
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22|              transportation costs of a qualified school which is      |
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23|              accredited by the State Board of Education or an         |
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24|                                                                       |
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arsid14311572 SB407 HFLR                                           Page 12
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 1|              accrediting association approved by the Board pursuant   |
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 2|              to Section 3-104 of Title 70 of the Oklahoma Statutes,   |
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 3|         b.   scholarships to an eligible student of up to Five        |
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 4|              Thousand Dollars ($5,000.00) or eighty percent (80%)     |
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 5|              of the statewide annual average per-pupil expenditure    |
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 6|              as determined by the National Center for Education       |
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 7|              Statistics, U.S. Department of Education, whichever is   |
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 8|              greater, to cover the educational costs of a qualified   |
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 9|              school which does not charge tuition, which enrolls      |
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10|              special populations of students and which is             |
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11|              accredited by the State Board of Education or an         |
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12|              accrediting association approved by the Board pursuant   |
  |                                                                       |
13|              to Section 3-104 of Title 70 of the Oklahoma Statutes,   |
  |                                                                       |
14|              or                                                       |
  |                                                                       |
15|         c.   scholarships to an eligible special needs student of     |
  |                                                                       |
16|              up to Twenty-five Thousand Dollars ($25,000.00) to       |
  |                                                                       |
17|              cover all or part of the tuition, fees and               |
  |                                                                       |
18|              transportation costs of a qualified school for           |
  |                                                                       |
19|              eligible special needs students which is accredited by   |
  |                                                                       |
20|              the State Board of Education or an accrediting           |
  |                                                                       |
21|              association approved by the Board pursuant to Section    |
  |                                                                       |
22|              3-104 of Title 70 of the Oklahoma Statutes, or           |
  |                                                                       |
23|         d.   scholarships to a low-income eligible student of up to   |
  |                                                                       |
24|              Five Thousand Dollars ($5,000.00) or ninety percent      |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 13
___________________________________________________________________________

 1|              (90%) of the statewide annual average per-pupil          |
  |                                                                       |
 2|              expenditure as determined by the National Center for     |
  |                                                                       |
 3|              Education Statistics, U.S. Department of Education,      |
  |                                                                       |
 4|              whichever is greater, to cover all or part of the        |
  |                                                                       |
 5|              tuition, fees and transportation costs of a qualified    |
  |                                                                       |
 6|              school which is accredited by the State Board of         |
  |                                                                       |
 7|              Education or an accrediting association approved by      |
  |                                                                       |
 8|              the Board pursuant to Section 3-104 of Title 70 of the   |
  |                                                                       |
 9|              Oklahoma Statutes;                                       |
  |                                                                       |
10|    4.  "Low-income eligible student" means an eligible student or     |
  |                                                                       |
11|eligible special needs student who qualifies for a free or             |
  |                                                                       |
12|reduced-price lunch;                                                   |
  |                                                                       |
13|    5.  "Qualified school" means an early childhood, elementary or     |
  |                                                                       |
14|secondary private school in this state, including schools which        |
  |                                                                       |
15|provide special educational programs for three-year-olds or            |
  |                                                                       |
16|prekindergarten educational programs for four-year-olds, which:        |
  |                                                                       |
17|         a.   is accredited by the State Board of Education or an      |
  |                                                                       |
18|              accrediting association approved by the Board pursuant   |
  |                                                                       |
19|              to Section 3-104 of Title 70 of the Oklahoma Statutes,   |
  |                                                                       |
20|         b.   is in compliance with all applicable health and safety   |
  |                                                                       |
21|              laws and codes,                                          |
  |                                                                       |
22|         c.   has a stated policy against discrimination in            |
  |                                                                       |
23|              admissions on the basis of race, color, national         |
  |                                                                       |
24|              origin or disability, and                                |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 14
___________________________________________________________________________

 1|         d.   ensures academic accountability to parents and           |
  |                                                                       |
 2|              guardians of students through regular progress           |
  |                                                                       |
 3|              reports;                                                 |
  |                                                                       |
 4|    6.  "Qualified school for eligible special needs students" means   |
  |                                                                       |
 5|an early childhood, elementary or secondary private school in a        |
  |                                                                       |
 6|county in this state, including schools which provide special          |
  |                                                                       |
 7|educational programs for three-year-olds or prekindergarten            |
  |                                                                       |
 8|educational programs for four-year-olds;                               |
  |                                                                       |
 9|    7.  "Scholarship-granting organization" means an organization      |
  |                                                                       |
10|which:                                                                 |
  |                                                                       |
11|         a.   is a nonprofit entity exempt from taxation pursuant to   |
  |                                                                       |
12|              the provisions of the Internal Revenue Code, 26          |
  |                                                                       |
13|              U.S.C., Section 501(c)(3),                               |
  |                                                                       |
14|         b.   distributes periodic scholarship payments as checks      |
  |                                                                       |
15|              made out to an eligible student's or eligible special    |
  |                                                                       |
16|              needs student's parent or guardian and mailed to the     |
  |                                                                       |
17|              qualified school where the student is enrolled,          |
  |                                                                       |
18|         c.   spends no more than ten percent (10%) of its annual      |
  |                                                                       |
19|              revenue on expenditures other than educational           |
  |                                                                       |
20|              scholarships as defined in paragraph 3 of this           |
  |                                                                       |
21|              subsection,                                              |
  |                                                                       |
22|         d.   spends each year a portion of its expenditures on        |
  |                                                                       |
23|              educational scholarships for low-income eligible         |
  |                                                                       |
24|              students, as defined in paragraph 4 of this              |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 15
___________________________________________________________________________

 1|              subsection, in an amount equal to or greater than the    |
  |                                                                       |
 2|              percentage of low-income eligible students in the        |
  |                                                                       |
 3|              state,                                                   |
  |                                                                       |
 4|         e.   ensures that scholarships are portable during the        |
  |                                                                       |
 5|              school year and can be used at any qualified school      |
  |                                                                       |
 6|              that accepts the eligible student or at any qualified    |
  |                                                                       |
 7|              school for special needs students that accepts the       |
  |                                                                       |
 8|              eligible special needs student,                          |
  |                                                                       |
 9|         f.   registers with the Oklahoma Tax Commission as a          |
  |                                                                       |
10|              scholarship-granting organization, and                   |
  |                                                                       |
11|         g.   has policies in place to:                                |
  |                                                                       |
12|              (1)  carry out criminal background checks on all         |
  |                                                                       |
13|                   employees and board members to ensure that no       |
  |                                                                       |
14|                   individual is involved with the organization who    |
  |                                                                       |
15|                   might reasonably pose a risk to the appropriate     |
  |                                                                       |
16|                   use of contributed funds, and                       |
  |                                                                       |
17|              (2)  maintain full and accurate records with respect     |
  |                                                                       |
18|                   to the receipt of contributions and expenditures    |
  |                                                                       |
19|                   of those contributions and supply such records      |
  |                                                                       |
20|                   and any other documentation required by the Tax     |
  |                                                                       |
21|                   Commission to demonstrate financial                 |
  |                                                                       |
22|                   accountability;                                     |
  |                                                                       |
23|    8.  "Annual revenue" means the total amount or value of            |
  |                                                                       |
24|contributions received by an organization from taxpayers awarded       |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 16
___________________________________________________________________________

 1|credits during the organization's fiscal year and all amounts earned   |
  |                                                                       |
 2|from interest or investments;                                          |
  |                                                                       |
 3|    9.  "Public school" means public schools as defined in Section     |
  |                                                                       |
 4|1-106 of Title 70 of the Oklahoma Statutes;                            |
  |                                                                       |
 5|    10.  "Eligible public school district" means any public school     |
  |                                                                       |
 6|that is not located within a ten-mile radius of a qualified school     |
  |                                                                       |
 7|in this state, or any public school that is located within a           |
  |                                                                       |
 8|ten-mile radius of a qualified school in this state but offers         |
  |                                                                       |
 9|grade-level instruction different from the qualified school or any     |
  |                                                                       |
10|public school located within a public school district with fewer       |
  |                                                                       |
11|than four thousand five hundred (4,500) students district as defined   |
  |                                                                       |
12|in Section 1-108 of Title 70 of the Oklahoma Statutes;                 |
  |                                                                       |
13|    11.  "Early childhood education program" means a special           |
  |                                                                       |
14|educational program for eligible special needs students who are        |
  |                                                                       |
15|three (3) years of age or a prekindergarten educational program        |
  |                                                                       |
16|provided to children who are at least four (4) years of age but not    |
  |                                                                       |
17|more than five (5) years of age on or before September 1;              |
  |                                                                       |
18|    12.  "Innovative educational program" means an advanced academic   |
  |                                                                       |
19|or academic improvement program that is not part of the regular        |
  |                                                                       |
20|coursework of a public school but that enhances the curriculum or      |
  |                                                                       |
21|academic program of the school or provides early childhood education   |
  |                                                                       |
22|programs to students;                                                  |
  |                                                                       |
23|    13.  "Educational improvement grant" means a grant to an           |
  |                                                                       |
24|eligible public school to implement an innovative educational          |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 17
___________________________________________________________________________

 1|program for students, including the ability for multiple public        |
  |                                                                       |
 2|schools to make an application and be awarded a grant to jointly       |
  |                                                                       |
 3|provide an innovative educational program; and                         |
  |                                                                       |
 4|    14.  "Educational improvement grant organization" means an         |
  |                                                                       |
 5|organization which:                                                    |
  |                                                                       |
 6|         a.   is a nonprofit entity exempt from taxation pursuant to   |
  |                                                                       |
 7|              the provisions of the Internal Revenue Code, 26          |
  |                                                                       |
 8|              U.S.C., Section 501(c)(3), and                           |
  |                                                                       |
 9|         b.   contributes at least ninety percent (90%) of its         |
  |                                                                       |
10|              annual receipts as grants to eligible schools for        |
  |                                                                       |
11|              innovative educational programs.  For purposes of this   |
  |                                                                       |
12|              subparagraph, an educational improvement grant           |
  |                                                                       |
13|              organization contributes its annual cash receipts when   |
  |                                                                       |
14|              it expends or otherwise irrevocably encumbers those      |
  |                                                                       |
15|              funds for expenditure during the then current fiscal     |
  |                                                                       |
16|              year of the organization or during the next succeeding   |
  |                                                                       |
17|              fiscal year of the organization; and                     |
  |                                                                       |
18|    15.  "Eligible public school foundation" means a nonprofit         |
  |                                                                       |
19|entity formed pursuant to Oklahoma law but which is exempt from        |
  |                                                                       |
20|federal income taxation pursuant to either Section 501(c)(3) or        |
  |                                                                       |
21|Section 509(a) of the Internal Revenue Code of 1986, as amended.       |
  |                                                                       |
22|Each public school foundation must be approved by the local board of   |
  |                                                                       |
23|education prior to accepting qualifying donations.                     |
  |                                                                       |
24|                                                                       |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 18
___________________________________________________________________________

 1|    H. J.  Total credits authorized by this section shall be           |
  |                                                                       |
 2|allocated as follows:                                                  |
  |                                                                       |
 3|    1.  By January 10 of the year immediately following each           |
  |                                                                       |
 4|calendar year, a scholarship-granting organization or, an              |
  |                                                                       |
 5|educational improvement grant organization, a public school district   |
  |                                                                       |
 6|or an eligible public school foundation which accepts contributions    |
  |                                                                       |
 7|pursuant to this section shall provide electronically to the Tax       |
  |                                                                       |
 8|Commission information on each contribution accepted during such       |
  |                                                                       |
 9|taxable year.  At least once each taxable year, the                    |
  |                                                                       |
10|scholarship-granting organization or the educational improvement       |
  |                                                                       |
11|grant organization entity making the report shall notify each          |
  |                                                                       |
12|contributor that Oklahoma law provides for a total, statewide cap on   |
  |                                                                       |
13|the amount of income tax credits allowed annually;                     |
  |                                                                       |
14|    2.   a.    If the Tax Commission determines the total combined     |
  |                                                                       |
15|              credits claimed for contributions made to                |
  |                                                                       |
16|              scholarship-granting organizations during the most       |
  |                                                                       |
17|              recently completed calendar year by all taxpayers are    |
  |                                                                       |
18|              in excess of the statewide caps provided in paragraph    |
  |                                                                       |
19|              1 of subsection D F of this section, the Tax             |
  |                                                                       |
20|              Commission shall first allocate any amount of credits    |
  |                                                                       |
21|              not claimed for contributions made to educational        |
  |                                                                       |
22|              improvement-granting organizations authorized pursuant   |
  |                                                                       |
23|              to subsections C, D and E of this section, then shall    |
  |                                                                       |
24|              determine the percentage of the contribution which       |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 19
___________________________________________________________________________

 1|              establishes the proportionate share of the credit        |
  |                                                                       |
 2|              which may be claimed by any taxpayer so that the total   |
  |                                                                       |
 3|              maximum credits authorized by this section are not       |
  |                                                                       |
 4|              exceeded.                                                |
  |                                                                       |
 5|         b.    If the Tax Commission determines the total combined     |
  |                                                                       |
 6|              credits claimed for contributions made to educational    |
  |                                                                       |
 7|              improvement grant organizations authorized pursuant to   |
  |                                                                       |
 8|              subsections C, D and E of this section during the most   |
  |                                                                       |
 9|              recently completed calendar year by all taxpayers are    |
  |                                                                       |
10|              in excess of the statewide caps provided in paragraph    |
  |                                                                       |
11|              2 of subsection D F of this section, the Tax             |
  |                                                                       |
12|              Commission shall first allocate any amount of credits    |
  |                                                                       |
13|              not claimed for contributions made to                    |
  |                                                                       |
14|              scholarship-granting organizations, then shall           |
  |                                                                       |
15|              determine the percentage of the contribution which       |
  |                                                                       |
16|              establishes the proportionate share of the credit        |
  |                                                                       |
17|              which may be claimed by any taxpayer so that the         |
  |                                                                       |
18|              maximum credits authorized by this section are not       |
  |                                                                       |
19|              exceeded.                                                |
  |                                                                       |
20|         c.    Beginning for tax year 2016, credits earned, but not    |
  |                                                                       |
21|              allowed due to the application of statewide caps         |
  |                                                                       |
22|              provided in subsection D F of this section will be       |
  |                                                                       |
23|              considered suspended and authorized to be used in the    |
  |                                                                       |
24|                                                                       |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 20
___________________________________________________________________________

 1|              next immediate tax year and applied to the next year's   |
  |                                                                       |
 2|              statewide cap; and                                       |
  |                                                                       |
 3|    3.  The Tax Commission shall publish the percentage of the         |
  |                                                                       |
 4|contribution which may be claimed as a credit by contributors for      |
  |                                                                       |
 5|the most recently completed calendar year on the Tax Commission        |
  |                                                                       |
 6|website no later than February 15 of each calendar year for            |
  |                                                                       |
 7|contributions made the previous year.  Each scholarship-granting       |
  |                                                                       |
 8|organization or educational improvement grant organization pursuant    |
  |                                                                       |
 9|to subsections B, C, D and E of this section shall notify              |
  |                                                                       |
10|contributors of that amount annually.                                  |
  |                                                                       |
11|    I.  The credit K.  No tax credits authorized by this section       |
  |                                                                       |
12|shall not be used to reduce the tax liability of the taxpayer to       |
  |                                                                       |
13|less than zero (0).                                                    |
  |                                                                       |
14|    J. L.  Any credits authorized by this section allowed but not      |
  |                                                                       |
15|used in any tax year may be carried over, in order, to each of the     |
  |                                                                       |
16|three (3) years following the year of qualification.                   |
  |                                                                       |
17|    K. M.  1.  In order to qualify under this section, an              |
  |                                                                       |
18|educational improvement grant each organization pursuant to            |
  |                                                                       |
19|subsections C and E of this section shall submit an application with   |
  |                                                                       |
20|information to the Oklahoma Tax Commission on a form prescribed by     |
  |                                                                       |
21|the Tax Commission that:                                               |
  |                                                                       |
22|         a.   enables the Tax Commission to confirm that the           |
  |                                                                       |
23|              organization is a nonprofit entity exempt from           |
  |                                                                       |
24|                                                                       |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 21
___________________________________________________________________________

 1|              taxation pursuant to the provisions of the Internal      |
  |                                                                       |
 2|              Revenue Code, 26 U.S.C., Section 501(c)(3) or Section    |
  |                                                                       |
 3|              509(a), and                                              |
  |                                                                       |
 4|         b.   describes the proposed innovative educational program    |
  |                                                                       |
 5|              or programs supported by the organization.               |
  |                                                                       |
 6|    2.  The Tax Commission shall review and approve or disapprove      |
  |                                                                       |
 7|the application, in consultation with the State Department of          |
  |                                                                       |
 8|Education.                                                             |
  |                                                                       |
 9|    3.  In order to maintain eligibility under this section, an        |
  |                                                                       |
10|educational improvement grant organization pursuant to subsections C   |
  |                                                                       |
11|and E of this section shall annually report the following              |
  |                                                                       |
12|information to the Tax Commission by September 1 of each year:         |
  |                                                                       |
13|         a.   the name of the innovative educational program or        |
  |                                                                       |
14|              programs and the total amount of the grant or grants     |
  |                                                                       |
15|              made to those programs during the immediately            |
  |                                                                       |
16|              preceding school year,                                   |
  |                                                                       |
17|         b.   a description of how each grant was utilized during      |
  |                                                                       |
18|              the immediately preceding school year and a              |
  |                                                                       |
19|              description of any demonstrated or expected innovative   |
  |                                                                       |
20|              educational improvements,                                |
  |                                                                       |
21|         c.   the names of the public school and school districts      |
  |                                                                       |
22|              where innovative educational programs that received      |
  |                                                                       |
23|              grants during the immediately preceding school year      |
  |                                                                       |
24|              were implemented,                                        |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 22
___________________________________________________________________________

 1|         d.   where the organization collects information on a         |
  |                                                                       |
 2|              county-by-county basis, and                              |
  |                                                                       |
 3|         e.   the total number and total amount of grants made         |
  |                                                                       |
 4|              during the immediately preceding school year for         |
  |                                                                       |
 5|              innovative educational programs at public school by      |
  |                                                                       |
 6|              each county in which the organization made grants.       |
  |                                                                       |
 7|    4.  The information required under paragraph 3 of this             |
  |                                                                       |
 8|subsection shall be submitted on a form provided by the Tax            |
  |                                                                       |
 9|Commission.  No later than May 1 of each year, the Tax Commission      |
  |                                                                       |
10|shall annually distribute sample forms together with the forms on      |
  |                                                                       |
11|which the reports are required to be made to each approved             |
  |                                                                       |
12|organization.                                                          |
  |                                                                       |
13|    5.  The Tax Commission shall not require any other information     |
  |                                                                       |
14|be provided by an organization, except as expressly authorized in      |
  |                                                                       |
15|this section.                                                          |
  |                                                                       |
16|    L. N.  1.  Beginning in 2020 for the 2019-2020 academic year, in   |
  |                                                                       |
17|order to maintain registration, a scholarship-granting organization    |
  |                                                                       |
18|shall annually report to the Tax Commission by September 1 of each     |
  |                                                                       |
19|year the following information regarding the educational               |
  |                                                                       |
20|scholarships funded by the organization in the previous academic       |
  |                                                                       |
21|year:                                                                  |
  |                                                                       |
22|         a.    the name and address of the scholarship-granting        |
  |                                                                       |
23|              organization,                                            |
  |                                                                       |
24|                                                                       |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 23
___________________________________________________________________________

 1|         b.    the names of the qualifying schools that received       |
  |                                                                       |
 2|              funding for educational scholarships, the total amount   |
  |                                                                       |
 3|              of funds paid to each qualifying school and the total    |
  |                                                                       |
 4|              number of scholarship recipients enrolled in each        |
  |                                                                       |
 5|              qualifying school,                                       |
  |                                                                       |
 6|         c.    the total number and total dollar amount of             |
  |                                                                       |
 7|              contributions received during the previous academic      |
  |                                                                       |
 8|              year,                                                    |
  |                                                                       |
 9|         d.    the total number and total dollar amount of             |
  |                                                                       |
10|              educational scholarships awarded and funded during the   |
  |                                                                       |
11|              previous academic year,                                  |
  |                                                                       |
12|         e.    the total number, total dollar amount and percentage    |
  |                                                                       |
13|              of educational scholarships awarded and funded during    |
  |                                                                       |
14|              the previous academic year disaggregated into the        |
  |                                                                       |
15|              following categories:                                    |
  |                                                                       |
16|              (1)   students who qualify for the federal free and      |
  |                                                                       |
17|                   reduced-price lunch program,                        |
  |                                                                       |
18|              (2)   students who during the immediately preceding      |
  |                                                                       |
19|                   school year attended or who were eligible by        |
  |                                                                       |
20|                   virtue of the residence of the student to attend    |
  |                                                                       |
21|                   a public school in the state which was identified   |
  |                                                                       |
22|                   for school improvement by the State Board of        |
  |                                                                       |
23|                   Education,                                          |
  |                                                                       |
24|              (3)   eligible special needs students, and               |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 24
___________________________________________________________________________

 1|              (4)   students who were first-time recipients of a       |
  |                                                                       |
 2|                   scholarship, including information about the type   |
  |                                                                       |
 3|                   of public or private school the student was         |
  |                                                                       |
 4|                   enrolled in during the entire previous academic     |
  |                                                                       |
 5|                   year,                                               |
  |                                                                       |
 6|         f.    the percentage of the total amount of education         |
  |                                                                       |
 7|              scholarship expenditures spent on low-income eligible    |
  |                                                                       |
 8|              students,                                                |
  |                                                                       |
 9|         g.    the percentage of annual revenue received by the        |
  |                                                                       |
10|              organization from donations which qualify for tax        |
  |                                                                       |
11|              credits pursuant to this section which was not           |
  |                                                                       |
12|              expended on scholarships, and                            |
  |                                                                       |
13|         h.    disaggregated data reported under this subsection       |
  |                                                                       |
14|              shall be reported in accordance with the Student Data    |
  |                                                                       |
15|              Accessibility, Transparency and Accountability Act of    |
  |                                                                       |
16|              2013, Section 3-168 of Title 70 of the Oklahoma          |
  |                                                                       |
17|              Statutes, and The Family Educational Rights and          |
  |                                                                       |
18|              Privacy Act of 1974 (FERPA) 20 U.S.C., Section 1232g.    |
  |                                                                       |
19|    2.  The Tax Commission shall publish and make available on its     |
  |                                                                       |
20|website:                                                               |
  |                                                                       |
21|         a.    the information submitted by the scholarship-granting   |
  |                                                                       |
22|              organization pursuant to paragraph 1 of this             |
  |                                                                       |
23|              subsection,                                              |
  |                                                                       |
24|         b.    a list of participating schools, and                    |
  |                                                                       |
arsid14311572 SB407 HFLR                                           Page 25
___________________________________________________________________________

 1|         c.    all other application information submitted to the      |
  |                                                                       |
 2|              Tax Commission by a scholarship-granting organization,   |
  |                                                                       |
 3|              except that information which would violate the          |
  |                                                                       |
 4|              privacy of an individual.                                |
  |                                                                       |
 5|    3.  A scholarship-granting organization shall annually submit      |
  |                                                                       |
 6|verification to the Tax Commission that the organization still meets   |
  |                                                                       |
 7|the criteria set forth in paragraph 7 of subsection I of this          |
  |                                                                       |
 8|section.                                                               |
  |                                                                       |
 9|    O.  In consultation with the State Department of Education, the    |
  |                                                                       |
10|Tax Commission shall promulgate rules necessary to implement this      |
  |                                                                       |
11|act.  The rules shall include procedures for the registration of a     |
  |                                                                       |
12|scholarship-granting organization or, an educational improvement       |
  |                                                                       |
13|grant organization or a public school foundation for purposes of       |
  |                                                                       |
14|determining if the organization meets the requirements of this act     |
  |                                                                       |
15|or for the revocation of the registration of an organization, if       |
  |                                                                       |
16|applicable, and for notice as required in subsection H J of this       |
  |                                                                       |
17|section.                                                               |
  |                                                                       |
18|    SECTION 2.  This act shall become effective November 1, 2019.      |
  |                                                                       |
19|                                                                       |
  |                                                                       |
20|COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET, dated     |
  |04/11/2019 - DO PASS, As Amended.                                      |
21|                                                                       |
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22|                                                                       |
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23|                                                                       |
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24|                                                                       |
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arsid14311572 SB407 HFLR                                           Page 26
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