MISSISSIPPI LEGISLATURE
2020 Regular Session
To: Education; Ways and Means
By: Representatives Criswell, Hopkins
AN ACT TO CREATE THE MISSISSIPPI CHILD SAFETY ACCOUNT ACT; TO DEFINE CERTAIN TERMS; TO CREATE THE CHILD SAFETY ACCOUNT AND SUPPLEMENTAL EDUCATION SCHOLARSHIP PROGRAM WITHIN THE STATE DEPARTMENT OF EDUCATION FOR THE PURPOSE OF ENCOURAGING DONATIONS FOR PRIVATE SCHOLARSHIPS TO NONPUBLIC SCHOOLS FOR CHILDREN AFFECTED BY SCHOOL SAFETY INCIDENTS; TO DIRECT THE DEPARTMENT TO SELECT AN ORGANIZATION TO SERVE AS THE ADMINISTERING ENTITY OF THE PROGRAM; TO DIRECT THE TRANSFER OF A LOCAL SCHOOL DISTRICT'S SHARE OF STATE ADEQUATE EDUCATION PROGRAM FUNDS TO THE ADMINISTERING AGENCY FOR CHILDREN FOR WHOM A CHILD SAFETY ACCOUNT IS ESTABLISHED; TO PRESCRIBE CERTAIN REQUIREMENTS FOR THE ADMINISTERING ENTITY AND TO DIRECT THE ENTITY TO ISSUE DEBIT CARDS TO CHILDREN FOR WHOM CHILD SAFETY ACCOUNTS HAVE BEEN CREATED; TO PRESCRIBE CERTAIN DUTIES FOR THE ADMINISTERING AGENCY; TO ESTABLISH AN APPLICATION PROCESS FOR CHILD SAFETY ACCOUNTS; TO AUTHORIZE THE CONTINUED USED OF CHILD SAFETY ACCOUNTS FOR COLLEGE OR TRADE SCHOOL EDUCATIONAL EXPENSES; TO ESTABLISH ELIGIBILITY CRITERIA FOR NONPUBLIC SCHOOLS PARTICIPATING IN THE CHILD SAFETY ACCOUNT PROGRAM; TO REQUIRE QUESTIONABLE USES OF A CHILD SAFETY ACCOUNT TO BE REVIEWED BY AN ELIGIBLE EXPENSE REVIEW COMMITTEE; TO REQUIRE A CHILD SAFETY ACCOUNT TO BE CLOSED IN CERTAIN EVENTS; TO PRESCRIBE THE ADMINISTERING ENTITY'S DUTIES RELATED TO SUPPLEMENTAL EDUCATION SCHOLARSHIPS; TO AUTHORIZE QUALIFIED STUDENTS HAVING A CHILD SAFETY ACCOUNT TO APPLY FOR A SUPPLEMENTAL EDUCATION SCHOLARSHIP FROM A SCHOLARSHIP-GRANTING ORGANIZATION TO COVER EXPENSES ABOVE THE AMOUNT OF THE CHILD SAFETY ACCOUNT; TO AUTHORIZE DONATIONS TO BE MADE TO SCHOLARSHIP-GRANTING ORGANIZATIONS; TO AUTHORIZE AN INCOME TAX CREDIT FOR PARENTS WHO PROVIDE SUPPLEMENTAL PAYMENTS TO THEIR STUDENT'S CHILD SAFETY ACCOUNT; TO AUTHORIZE A REFUND TO PARENTS WHEN A CREDIT EXCEEDS THEIR TAX LIABILITY; TO AUTHORIZE AN INCOME TAX CREDIT FOR DONATIONS TO SCHOLARSHIP-GRANTING ORGANIZATIONS; TO PROVIDE THAT UNUSED PORTIONS OF THE CREDIT MAY BE CARRIED FORWARD FIVE CONSECUTIVE YEARS FROM THE CLOSE OF THE TAX YEAR IN WHICH THE CREDIT WAS EARNED; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: SECTION 1. This act shall be known and may be cited as the "Mississippi Child Safety Account Act."
SECTION 2. As used in this act, the following words and phrases have the meanings ascribed in this section unless the context clearly indicates otherwise:
(a) "Administering entity" means the entity selected by the State Department of Education to administer the Child Safety Account Program.
(b) "Board" means the State Board of Education.
(c) "Charter school" means a charter school authorized by the Mississippi Charter School Authorizer Board under Chapter 28, Title 37, Mississippi Code of 1972.
(d) "Child Safety Account" or "account" means an account created and managed by the administering entity for each qualified student who is affected by or involved in a safety incident and applies for a Child Safety Account to pay for eligible expenses.
(e) "Child with a disability" means a student who is identified as having a disability and has an individualized education program (IEP), as defined in Section 37-23-133.
(f) "Department" means the State Department of Education.
(g) "Eligible expense" means an expense necessary for the education of a qualified student. Eligible expenses include, but need not be limited to:
(i) Full-time or part-time tuition at a participating school;
(ii) Instructional materials;
(iii) Tutoring by a supplemental education services provider approved by the State Department of Education;
(iv) Transportation to and from school;
(v) Therapy necessary to cope with the trauma of a safety incident; and
(vi) Tuition at an institution of higher learning.
(h) "Enrolling school district" means the school district
in which a qualified student is enrolled when a safety incident occurs.
(i) "Home instruction program" means a legitimate home instruction program that is not operated for the purpose of avoiding or circumventing the compulsory attendance law and which, for each student being educated in the home instruction program, a certificate of enrollment has been filed with a school attendance officer as required under Section 37-13-91.
(j) "Institution of higher learning" means a state institution of higher learning, a community or junior college, an instate accredited private college or university, or an instate proprietary school that has been issued a certificate of registration by Commission on Proprietary School and College Registration.
(k) "Parent" means the parent, legal guardian or custodian of a qualified student.
(l) "Participating school" means a nonpublic elementary or secondary school, including a nonpublic online school, that is approved for participation by the administering entity under Section 6 of this act.
(m) "Program" means the Child Safety Account and Supplemental Education Scholarship Program created in Section 3 of this act.
(n) "Qualified student" means a student who:
(i) Is enrolled in a public school in Mississippi when a safety incident occurs in the public school;
(ii) Either:
1. Was enrolled in a public school in Mississippi for the school year preceding the year in which the safety incident occurs; or
2. Was not enrolled in a public school, private school or home instruction program during the school year preceding the year in which the safety incident occurs; and
(iii) Is affected directly by or involved in the safety incident but is not the perpetrator.
(o) "Safety incident" means a reported incident that occurs within or on the grounds of a public school of:
(i) Bullying or harassing behavior, as defined in Section 37-11-67;
(ii) Sexual harassment;
(iii) Sexual abuse;
(iv) Sexual misconduct;
(v) Gang activity;
(vi) Fighting;
(vii) Suicide attempt or threat;
(viii) Shooting;
(ix) Drug use;
(x) Any other act of violence; or
(xi) Any other incident that a physician licensed in Mississippi who, after examining a student affected directly by or involved in the incident, finds has the same effect on the student as subparagraphs (i) through (x) above.
(p) "Scholarship-granting organization" means an organization authorized by the administering entity to accept money from donors and award the money from donors to qualified students for Supplemental Education Scholarships.
(q) "State share of adequate education program payments" means the pro rata student portion of an enrolling school district's adequate education program funding for the applicable school year which is allotted by the state. An enrolling school district's local contribution to the adequate education program is not included in the state share of adequate education program funding.
(r) "Supplemental Education Scholarship" means a scholarship provided to a qualified student from a scholarship-granting organization for supplemental payments.
(s) "Supplemental payment" means the payment of an eligible expense above the amount provided through a Child Safety Account.
SECTION 3. (1) There is created in the State Department of Education the Child Safety Account and Supplemental Education Scholarship Program to establish state-funded Child Safety Accounts and encourage the donation of private scholarships to assist parents in paying the eligible expenses incurred in meeting the needs of their children who are affected directly by or involved in, but not perpetrators of, school safety incidents.
(2) Before October 1, 2020, the department shall issue a request for proposals for an organization to administer the program. The State Board of Education shall select and contract with an organization that has demonstrated success in administering financial accounts and is capable of efficiently implementing a system for payment by electronic funds transfer of money from Child Safety Accounts. The board shall select the administering entity and enter into a contract with the administering entity before February 1, 2021, which contract is subject to annual review and renewal.
(3) (a) Upon receiving notice from the administering entity that a Child Safety Account is created for a qualified student who was enrolled in a school district, the department, as soon as practicable, shall transfer to the administering entity an amount equal to the state share of adequate education program payments of the enrolling school district for the school year in which the account is created plus, if the qualified student is a child with a disability, any federal and state aid allocated to the enrolling school district attributable to the qualified student for the school year in which the account is created. The department shall deduct the total amount transferred to the administering entity from the state allocation to the enrolling school district for the school year in which the Child Safety Account is created.
(b) Upon receiving notice from the administering entity that a Child Safety Account is created for a qualified student who was enrolled in a charter school, the department, as soon as practicable, shall transfer to the administering entity an amount equal to the state per student allocation to the charter school for the applicable school year including, if the qualified student is a child with a disability, any amount allocated to the charter school attributable to the qualified student for the school year in which the account is created. The department shall deduct the amount transferred to the administering entity from the state allocation to the charter school for the school year in which the Child Safety Account is created.
(c) Notwithstanding any provision of this subsection to the contrary, in the year that a Child Safety Account initially is created, the department shall prorate the amount transferred to the administering entity under paragraph (a) or (b) of this subsection based on the amount of time remaining in the school year.
(d) The administering entity shall provide information to the department annually concerning the active Child Safety Accounts for the next succeeding school year, and the department shall transfer to the administering entity the amounts described in paragraphs (a) and (b) of this subsection, as applicable for each Child Safety Account, adjusted for the applicable school year.
(4) If the administering entity closes a Child Safety Account pursuant to subsection (2) or (4)(d)(iii) of Section 5 or Section 7 of this act, any funds remaining in the account must be transferred to the State Treasurer for deposit into the State General Fund.
(5) Beginning with the 2020-2021 fiscal year, and each year thereafter, the Legislature shall appropriate to the department the amount required for the transfers to the administering entity for Child Safety Accounts pursuant to subsection (3)(d) of this section. In any fiscal year in which the Legislature does not appropriate a sufficient amount to fully fund the Child Safety Accounts pursuant to subsection (3)(d), the department shall reduce the amount distributed to each Child Safety Account by the same percentage that the deficit bears to the amount required to fully fund the Child Safety Accounts authorized by this section.
SECTION 4. (1) In administering the program, the administering entity shall:
(a) Publicize the program to parents throughout the state, including a description of the qualifications and application process for participating in the program, the operation and lawful use of Child Safety Accounts, the list of participating schools and the availability and use of Supplemental Education Scholarships;
(b) Establish and implement the process by which a parent may apply to receive a Child Safety Account for the parent's qualified student, as provided in Section 5 of this act;
(c) Maintain clear accounting and separate accounts for operational money and money deposited into Child Safety Accounts;
(d) Implement a system for payment by electronic funds transfer of money from Child Safety Accounts and oversee the continuing operations of Child Safety Accounts;
(e) Complete and submit to the department an annual independent financial audit in accordance with timelines set by the department;
(f) Monitor and enforce the lawful use of Child Safety Account money, as provided in Section 7 of this act;
(g) Review and approve schools that apply to participate in the program, as provided in Section 6 of this act;
(h) Provide such information to the department concerning Child Safety Accounts which may be required by the department;
(i) Review, approve and oversee scholarship-granting organizations that participate in the program, as provided in Section 8 of this act; and
(j) Issue tax credit certificates for donations to scholarship-granting organizations for educational scholarships, as provided in Section 11 of this act.
(2) The administering entity may retain from each Child Safety Account up to ten percent (10%) of the amount that it annually receives from the department for each account to offset the costs incurred in administering the program. The contract between the board and the administering entity may not include any additional amount of remuneration to the administering entity from the state.
SECTION 5. (1) To obtain a Child Safety Account through the program, a parent must apply to the administering entity in accordance with the process and timelines established by the administering entity. At a minimum, the application must include: (a) Identification of the school district or charter school in which the parent's child is enrolled at the time of application or was enrolled at the time the safety incident occurred;
(b) An explanation of the safety incident giving rise to the application and evidence that the parent's child meets the definition of a qualified student. If the parent's child was affected directly by or involved in a safety incident, as defined under Section 2 of this act, the documentary evidence must include a statement from the child's doctor;
(c) Evidence that the parent attempted to address or resolve the safety issues involving the parent's child with the enrolling school district or charter school but was unable to reach an agreement or resolution that was satisfactory to the parent within a reasonable time; and
(d) A statement that the parent's child is no longer enrolled in the school district or charter school, or will withdraw from the school district or charter school when the Child Safety Account is approved, and the child is or will be enrolled in a participating school or a home instruction program.
(2) The administering entity shall review each application received. Upon confirming that the applying parent's child is a qualified student and that the qualified student is no longer enrolled in, or will withdraw as soon as practicable from, the enrolling school district or charter school, the administering entity shall create a Child Safety Account for the applying parent. At the time an account is created, the parent must sign a participation agreement created by the administering entity in which the parent agrees to use the money in the account only for eligible expenses and to meet the responsibilities of participating in the program, as identified by the administering entity. If the parent refuses to sign or fails to comply with the agreement, the administering entity must close the Child Safety Account and transfer any money remaining in the account to the State Treasurer for deposit into the State General Fund, as provided under Section 3 of this act.
(3) (a) The administering entity shall provide to each parent who has a Child Safety Account information concerning the operation of the account, including a description of eligible expenses. Upon receiving the transfer of money for the qualified student's account pursuant to Section 3, the administering entity shall issue to the parent a debit card for the qualified student's account. For the interval between creation and funding of the account, if the parent has enrolled or is planning to enroll the qualified student in a participating school, the administering entity shall provide to the parent a letter that confirms the creation of the account for the qualified student, states the amount that is expected to be deposited into the account, and provides the date on which the money is expected to be available to the parent. The parent may present the letter as evidence of future payment to the participating school.
(b) The parent of a qualified student who receives a Child Safety Account may make supplemental payments in addition to the amount provided through the Child Safety Account and may claim a state tax credit for the amount of the supplemental payments as provided in Section 10 of this act.
(4) (a) In accordance with timelines established by the administering entity, the parent of a qualified student who has a Child Safety Account shall confirm with the administering entity annually that the qualified student is enrolled in a participating school or is participating in a home instruction program. A Child Safety Account continues to be active without need for renewal and is funded as provided under Section 3 of this act until the qualified student completes twelfth grade or ceases to be enrolled in a participating school or a participating home instruction program. Any unexpended amount in an account at the end of a school year remains in the account, and the qualified student's parent may expend it on eligible expenses in subsequent school years.
(b) Any accrued interest in a Child Safety Account remains in the account, and the qualified student's parent may expend it on eligible expenses. The money deposited into a qualified student's account and any interest earned on money in the account do not constitute taxable income to the parent.
(c) If a qualified student who has a Child Safety Account ceases to be enrolled in a participating school or home instruction program before completing twelfth grade, the student's parent must notify the administering entity. The administering entity immediately shall close the qualified student's account, and any amount remaining in the account must be transferred to the State Treasurer for deposit into the State General Fund, as provided in Section 3 of this act.
(d) (i) When a qualified student completes twelfth grade, the qualified student or the student's parent shall notify the administering entity. The administering entity shall notify the department that the qualified student has completed twelfth grade, and the department may no longer transfer money to the administering entity for the qualified student's account.
(ii) If, in the notice, the qualified student also notifies the administering entity that the student has enrolled in an institution of higher learning, the administering entity must maintain the qualified student's Child Safety Account as an active account, and the qualified student may use the money in the account for eligible expenses so long as the qualified student remains enrolled in an institution of higher learning. The qualified student shall notify the administering entity when the student ceases to be enrolled in an institution of higher learning.
(iii) The administering entity immediately shall close the qualified student's account, and any amount remaining in the account must be transferred to the State Treasurer for deposit into the State General Fund as provided in Section 3 of this act, if:
1. The notice that the administering entity receives pursuant to subparagraph (i) of this paragraph (d) states that the qualified student has not, or does not specify whether the qualified student has, enrolled in an institution of higher learning; or
2. The administering entity receives notice that the qualified student is no longer enrolled in an institution of higher learning.
SECTION 6. (1) To be eligible to enroll qualified students and receive money from a Child Safety Account, a nonpublic elementary or secondary school must:
(a) Comply with all required health and safety laws of the state;
(b) Comply with all nondiscrimination laws under 42 U.S.C. Sec. 1981;
(c) Ensure that all persons employed by the nonpublic school are permitted to work in a school under state law and are not a threat to student safety; and
(d) Submit to the administering entity an annual independent financial audit that demonstrates the nonpublic school's financial stability.
(2) A nonpublic elementary or secondary school that chooses to participate in the program must submit to the administering entity proof that the nonpublic school meets the eligibility requirements specified in subsection (1) of this section. Upon confirming the information submitted by a nonpublic school, the administering entity shall include the nonpublic school on the published list of participating schools.
(3) The administering entity shall review annually the schools included on the list of participating schools to confirm that each school continues to meet the requirements specified in subsection (1) of this section. The administering entity also shall require each participating school to annually submit evidence that demonstrates that the school appropriately uses the money it receives from a Child Safety Account for the education of the qualified student. The administering entity shall remove a nonpublic school from the list of participating schools if the school no longer meets the requirements specified in subsection (1) of this section, if the school fails to submit evidence of its use of Child Safety Account money, or if the school fails to use Child Safety Account money appropriately for the education of the qualified student.
SECTION 7. (1) The administering entity shall monitor the use of the money deposited into each Child Safety Account. If it appears that a parent or a qualified student uses money in a Child Safety Account for an expense that is not an eligible expense, the administering entity must convene an eligible expense review committee to review the disputed expense. The eligible expense review committee shall consist of:
(a) (i) If the qualified student is enrolled in a participating school, an employee of another participating school that is of the same type as the participating school in which the qualified student is enrolled; or
(ii) If the qualified student is enrolled in an institution of higher learning, an employee of an institution of higher learning;
(b) A person with expertise in home instruction programs; and
(c) An employee of the administering entity.
(2) (a) The eligible expense review committee shall hold an informal hearing with the parent of the qualified student and the qualified student to review the disputed expense.
(b) If the committee determines that the disputed expense is not an eligible expense and that the parent or the qualified student made a good-faith mistake when using the money in the account to pay for the expense, the parent or qualified student must repay the expense to the qualified student's account.
(c) If the committee determines that the disputed expense is not an eligible expense and there is a reasonable basis to find that the parent or the qualified student intended to defraud when using the money in the account for the expense:
(i) 1. If the amount of the disputed expense is less than Two Thousand Dollars ($2,000.00), the parent or the qualified student must repay the amount of the expense to the qualified student's account and the administering entity must prohibit the use of money in the account until the repayment is made. Upon repayment, the parent or the qualified student may continue to use the money in the account.
2. If there is a second disputed expense that is less than Two Thousand Dollars ($2,000.00), following repayment of the disputed expense as provided in item 1. of this section, the administering entity must close the qualified student's account and may not create another Child Safety Account for a child of the parent.
(ii) If the amount of the disputed expense is Two Thousand Dollars ($2,000.00) or more, the administering entity must prohibit the use of money in the account, the parent or the qualified student must repay the amount of the expense to the qualified student's account, and the administering entity must close the qualified student's account immediately and refer the case to the district attorney of the circuit court district in which the child resides. The administering entity may not create another Child Safety Account for a child of the parent.
(3) If the administering entity closes an account as provided in subsection (2) of this section, the administering entity must transfer any amount remaining in the account to the State Treasurer for deposit into the State General Fund as provided in Section 3 of this act.
SECTION 8. (1) The administering entity has the following duties related to Supplemental Education Scholarships:
(a) Identifying scholarship-granting organizations based on reviewing and approving applications received under subsection (2) of this section and preparing and updating and publishing at least annually a list of scholarship-granting organizations;
(b) Overseeing the operation of scholarship-granting organizations, annually reviewing the financial audits submitted by scholarship-granting organizations, and terminating the authority of an organization to operate as a scholarship-granting organization if the organization ceases to meet the requirements specified in subsection (2) of this section or fails to comply with the requirements specified in Section 9 of this act;
(c) Accepting, reviewing applications for, and issuing preliminary and final credit certificates for tax credits pursuant to Section 11 of this act to individuals and corporations that donate money to scholarship-granting organizations; and
(d) Annually notifying the scholarship-granting organizations regarding the amounts of final credit certificates and the donors to whom they are issued.
(2) The administering entity shall accept applications from organizations that seek to be identified as scholarship-granting organizations to provide Supplemental Education Scholarships for qualified students. To be identified as a scholarship-granting organization, an organization must:
(a) Be a nonprofit organization operating in accordance with Section 501(c)(3) of the Internal Revenue Code;
(b) Annually submit to the administering entity an annual independent financial audit within ninety (90) days after the organization's fiscal year ends; and
(c) Annually certify to the administering entity that no more than five percent (5%) of donations received for Supplemental Education Scholarships are used for administration costs by the scholarship-granting organization and no portion of a donation that exceeds the amount of the donation specified in the final tax credit certificate is expended for administration costs.
SECTION 9. (1) (a) A qualified student who has a Child Safety Account or the student's parent on the student's behalf may apply to a scholarship-granting organization for a Supplemental Education Scholarship. A qualified student who receives a Supplemental Education Scholarship from a scholarship-granting organization may use the scholarship money for an eligible expense above the amount credited to the qualified student's Child Safety Account.
(b) The scholarship-granting organization shall award Supplemental Education Scholarships by March 1 for use in the next school year. The organization shall establish a schedule for payment of the scholarship money to the parent of the receiving qualified student or directly to the participating school in which the qualified student is enrolled. A scholarship-granting organization may not issue a Supplemental Education Scholarship that extends longer than one (1) school year.
(c) If a qualified student who receives a Supplemental Education Scholarship transfers enrollment among participating schools during a school year, the scholarship-granting organization must ensure that the scholarship money, prorated for the length of time remaining in the school year, follows the qualified student to the enrolling participating school.
(2) (a) An individual or corporation may make a donation to a scholarship-granting organization under this section if the individual or corporation files a state income tax return and cannot be claimed as a dependent on another tax return. An individual or corporation that seeks to make a donation to a scholarship-granting organization under this section for a Supplemental Education Scholarship and receive a tax credit pursuant to Section 11 of this act for all or a portion of the donation amount must first apply to the administering entity, as provided in Section 11, to receive a preliminary credit certificate. The individual or corporation then may submit the donation with a copy of the preliminary credit certificate to a scholarship-granting organization.
(b) A donor may not direct a donation to a specific individual but may direct that a donation be used:
(i) For tuition only at a specified type of participating school; or
(ii) To award Supplemental Education Scholarships to qualified students who were directly affected by or involved in a specified or specified type of school safety incident.
(c) Upon accepting the donation, the scholarship-granting organization must inform the donor that, if the tax credit amount stated in the preliminary credit certificate is reduced by the administering entity pursuant to Section 11 of this act, the donor may decide at that time whether to request a refund of the donated amount that exceeds the amount of the final approved tax credit or to allow the scholarship-granting organization to use the excess amount for Supplemental Education Scholarships. The scholarship-granting organization shall provide a receipt to the donor for the full amount of the donation.
(3) When a scholarship-granting organization receives the notice of the amounts of final credit certificates from the administering entity, the scholarship-granting organization shall notify each donor who received a preliminary credit certificate and donated an amount in excess of the final credit certificate. The notice must:
(a) Inform the donor of the amount of the excess donation;
(b) Include a form that the donor may use to request a refund of the amount of the donation that exceeds the final credit certificate amount or alternatively, authorize the scholarship-granting organization to retain the excess amount to use for Supplemental Education Scholarships;
(c) Specify that, if the donor does not return the form within fifteen (15) business days after the date the notice is postmarked or sent by email, the scholarship-granting organization must refund the excess amount to the donor;
(d) Inform the donor that the scholarship-granting organization is not allowed to use any of the excess donation amount, if retained, for administrative purposes but must distribute the entire amount as Supplemental Education Scholarships; and
(e) Inform the donor that the donor may not claim the amount of the excess donation as a tax credit but may claim the amount of the excess donation as a charitable contribution deduction under federal and state law.
(4) A scholarship-granting organization shall comply with the request of a donor to refund the amount of a donation that exceeds the amount of the final credit certificate issued to the donor unless the donor does not return the form described in subsection (3) of this section within fifteen (15) days after the notice is postmarked or sent by email. If the scholarship-granting organization retains the excess amount, it may not use any portion of the excess amount to offset the administrative expenses incurred by the organization but must distribute the entire amount as Supplemental Education Scholarships. The scholarship-granting organization shall retain all forms returned by donors for at least five (5) years for auditing purposes.
(5) (a) Each scholarship-granting organization shall submit annually to the administering entity the following information:
(i) Certification that all revenue earned from interest and investments is used for Supplemental Education Scholarships;
(ii) Certification that the entire amount received by the scholarship-granting organization from a donor that exceeds the amount of the final credit certificate issued to the donor is used for Supplemental Education Scholarships and not for administration purposes;
(iii) The number and amount of educational scholarships provided;
(iv) The types of participating schools at which the Supplemental Education Scholarship money is used; and
(v) The safety incidents that directly affected or involved the qualified students who received Supplemental Education Scholarships.
(b) The scholarship-granting organization shall ensure that the information submitted pursuant to paragraph (a) of this subsection does not personally identify a qualifying student who receives a Supplemental Education Scholarship.
SECTION 10. (1) The Legislature declares that the purpose of the income tax credit created in this section is to provide financial incentives to encourage parents of qualified students with Child Safety Accounts, as authorized under Section 5 of this act, to provide supplemental payments necessary for the proper education of the qualified student.
(2) As used in this section, the terms "parent," "qualified student" and "supplemental payment" have the meanings respectively ascribed to those terms in Section 2 of this act.
(3) (a) For the 2020, 2021, 2022, 2023 and 2024 taxable years, a parent is allowed a credit against the tax imposed by this chapter in an amount equal to one hundred percent (100%) of the total amount of supplemental payments paid by the parent in the taxable year.
(b) The amount of credit authorized in this section that exceeds the parent's income taxes due is refunded to the parent.
(4) This section shall stand repealed from and after December 31, 2028.
SECTION 11. (1) The Legislature declares that the purpose of the tax credit created in this section is to provide financial incentives to encourage donations to scholarship-granting organizations for educational scholarships for qualified students with Child Safety Accounts, as authorized under Section 3 of this act.
(2) As used in this section, the following words and phrases have the meanings ascribed in this subsection unless the context clearly indicates otherwise:
(a) "Administering entity" has the same meaning as set forth in Section 2 of this act.
(b) "Department" means the Department of Revenue.
(c) "Final credit certificate" means a statement issued by the administering entity pursuant to subsection (3)(d)(i) of this section certifying that a given donation qualifies for the credit authorized in this section and specifying the final amount of the credit allowed.
(d) "Person" means any individual, firm, corporation, partnership, limited liability company, joint venture, estate, trust, or group or combination acting as a unit which donates money during the taxable year to the scholarship-granting organization.
(e) "Preliminary credit certificate" means a statement issued by the administering entity pursuant to subsection (3)(b) of this section conditionally certifying that a given donation qualifies for the credit authorized in this section and conditionally specifying the amount of the credit allowed.
(f) "Scholarship-granting organization" has the same meaning as set forth in Section 2 of this act.
(g) "Taxpayer" means a person who makes a donation to a scholarship-granting organization.
(3) (a) For the 2020, 2021, 2022, 2023 and 2024 taxable years, at the discretion of the administering entity, there may be allowed to any taxpayer a tax credit with respect to the income taxes imposed by this chapter in the amount determined by the administering entity pursuant to paragraph (b) of this subsection.
(b) The administering entity has the exclusive authority to approve any tax credits allowed pursuant to paragraph (a) of this subsection. The administering entity conditionally shall approve a credit by issuing to the taxpayer a preliminary credit certificate on or before September 1 of the taxable year in which the donation is accepted.
(c) Subject to the limitations set forth in paragraph (d) of this subsection, the administering entity shall determine the amount of a credit authorized in this section in an amount equal to or less than one hundred percent (100%) of the amount donated by the taxpayer to the scholarship-granting organization.
(d) (i) 1. Except as otherwise provided in item 2. of this paragraph (d), the administering entity may not issue a credit certificate if the aggregate sum of credits approved by the administering entity pursuant to this section exceeds One Hundred Million Dollars ($100,000,000.00). If the administering entity receives requests for credit certificates for donations in a calendar year that in the aggregate exceed One Hundred Million Dollars ($100,000,000.00), then the administering entity must proportionally reduce the preliminary credit certificate for each person that made a donation to a scholarship-granting organization in the taxable year so that the aggregate final credit certificates issued by the administering entity do not exceed the cap set forth in this item 1.
2. A taxpayer may not claim the charitable contribution deduction allowed under Section 27-7-22.39 or Section 27-7-22.41 for any part of the donation for which the taxpayer receives a credit certificate. If the credit certificate issued by the administering entity reflects a reduced credit due to the proportional reduction described in item 1. of this subparagraph (i), the taxpayer may claim a charitable contribution deduction for the amount of the donation for which the taxpayer is not receiving a credit certificate.
(ii) Each year that the request for credit certificates for the credit allowed in this section reach ninety percent (90%)of the cap set forth in subparagraph (i), the cap shall increase by twenty-five percent (25%) over the previous year.
(e) Before January 1, 2021, and before January 1 each year thereafter, the administering entity shall report to the Senate Finance Committee and the House Ways and Means Committee regarding all tax credit certificates issued pursuant to this section.
(4) If a taxpayer receiving a credit authorized in this section is a partnership, limited liability company, s corporation, or similar pass-through entity, the taxpayer may allocate the credit among its partners, shareholders, members, or other constituent taxpayers in any manner mutually agreed to by such persons as provided in an executed document. The taxpayer shall certify to the administering entity and the department the amount of credit allocated to each constituent taxpayer, and the administering entity shall issue credit certificates in the appropriate amounts to each partner, shareholder, member, or other constituent taxpayer. Each constituent taxpayer may claim such amount subject to any restrictions set forth in this section.
(5) If a credit authorized in this section approved by the administering entity exceeds the income tax due on the income of the taxpayer for the taxable year, the amount of the credit not used as an offset against the income taxes in such taxable year is not allowed as a refund. The taxpayer may carry forward and apply the unused credit against the income tax due for five (5) consecutive years from the close of the tax year in which the credit was earned, but the taxpayer must apply the credit against the income tax due for the earliest of the taxable years possible. Any amount of the tax credit that is not used after this period is not refundable.
(6) A contribution for which a credit is claimed under this section may not be used as a deduction by the taxpayer for state income tax purposes.
(7) Before December 1, 2020, and before December 1 of each year thereafter, the administering entity shall provide the department an electronic report of the taxpayers receiving a credit for that taxable year which includes the following information:
(a) The taxpayer's name;
(b) The taxpayer's Mississippi tax identification number or social security number;
(c) The amount of the credit allocated; and
(d) The associated pass-through entity name and Mississippi tax identification number if the credit is allocated from a pass-through entity pursuant to subsection (4) of this section.
(8) This section shall stand repealed from and after December 31, 2028.
SECTION 12. Sections 10 and 11 of this act shall be codified as new sections in Chapter 7, Title 27, Mississippi Code of 1972.
SECTION 13. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the income tax laws before the date on which this act becomes effective, whether such claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun thereafter; and the provisions of the income tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.
SECTION 14. This act shall take effect and be in force from and after January 1, 2020.