House Bill 1431

AN ACT TO BE KNOWN AS THE MISSISSIPPI CRITICAL NEEDS SCHOOL DISTRICT TAX CREDIT ACT OF 2020; TO DEFINE CERTAIN TERMS; TO ESTABLISH THE MISSISSIPPI CRITICAL NEEDS SCHOOL DISTRICT TAX CREDIT PROGRAM TO ATTRACT FIRST-YEAR TEACHERS TO GEOGRAPHICAL AREAS OF THE STATE WHERE THERE EXISTS A CRITICAL NEED IN PRIMARY AND SECONDARY EDUCATION INSTRUCTION, AND TO RETAIN THOSE FIRST-YEAR TEACHERS AND VETERAN TEACHERS WHO SERVE AS LICENSED TEACHERS IN CRITICAL NEEDS SCHOOL DISTRICTS BY MAKING TAX INCENTIVES AVAILABLE TO THEM; TO PROVIDE THAT THE PROGRAM SHALL BE AVAILABLE TO FIRST-YEAR TEACHERS LICENSED BY THE STATE DEPARTMENT OF EDUCATION WHO ENTER INTO A CONTRACT FOR EMPLOYMENT IN A CRITICAL NEEDS SCHOOL DISTRICT AND COMMIT TO PROVIDE FOUR YEARS OF SERVICE AS A TEACHER IN THAT SCHOOL DISTRICT; TO PROVIDE THAT A FIRST-YEAR TEACHER IN THE PROGRAM IS ELIGIBLE FOR AN INCOME TAX CREDIT IN AN AMOUNT NOT EXCEEDING ONE THOUSAND TWO HUNDRED DOLLARS FOR EACH YEAR OF SERVICE RENDERED IN THE CRITICAL NEEDS SCHOOL DISTRICT DURING THE FOUR-YEAR PERIOD, AND IF THE TEACHER CONTINUES TEACHING IN THAT CRITICAL NEEDS SCHOOL DISTRICT AFTER THE FOUR-YEAR PERIOD, FOR EACH OF THE NEXT FOUR YEARS OF SERVICE RENDERED IN THAT SCHOOL DISTRICT; TO PROVIDE THAT A FIRST-YEAR TEACHER MUST COMPLETE ONE FULL ACADEMIC AND CONTRACTUAL YEAR OF SERVICE AS A LICENSED TEACHER IN A CRITICAL NEEDS SCHOOL DISTRICT IN ORDER TO BE ELIGIBLE FOR THE TAX CREDIT; TO PROVIDE THAT IF A TEACHER WHO IS ELIGIBLE FOR THE TAX CREDIT LEAVES THE CRITICAL NEEDS SCHOOL DISTRICT IN WHICH THE TEACHER WAS EMPLOYED WHEN THE TAX CREDIT WAS INITIALLY GRANTED BEFORE THE END OF THE FOUR-YEAR PERIOD, THE TEACHER SHALL NOT BE ELIGIBLE FOR THE TAX CREDIT FOR THE REMAINDER OF THE FOUR-YEAR PERIOD; TO PROVIDE THAT AFTER A TEACHER COMPLETES FOUR YEARS OF SERVICE IN A CRITICAL NEEDS SCHOOL DISTRICT, THE TEACHER MAY TRANSFER TO ANOTHER CRITICAL NEEDS SCHOOL DISTRICT AND COMMIT TO PROVIDE FOUR YEARS OF SERVICE AS A TEACHER IN THAT SCHOOL DISTRICT, AND WILL BE ELIGIBLE TO RECEIVE THE TAX CREDIT FOR EACH YEAR OF SERVICE RENDERED IN THAT SCHOOL DISTRICT DURING THE FOUR-YEAR PERIOD; TO PROVIDE THAT A FIRST-YEAR TEACHER SHALL BE ELIGIBLE TO RECEIVE THE TAX CREDIT AUTHORIZED IN THE PROGRAM FOR A MAXIMUM OF TEN YEARS DURING WHICH THE TEACHER IS PARTICIPATING IN THE PROGRAM, EXCEPT THAT IF A TEACHER LEAVES THE CRITICAL NEEDS SCHOOL DISTRICT IN WHICH THE TEACHER WAS EMPLOYED WHEN THE TAX CREDIT WAS INITIALLY GRANTED BEFORE THE END OF THE FOUR-YEAR PERIOD, THE MAXIMUM NUMBER OF YEARS FOR WHICH THE TEACHER IS ELIGIBLE TO RECEIVE THE TAX CREDIT SHALL BE REDUCED BY THE NUMBER OF YEARS REMAINING IN THE FOUR-YEAR PERIOD; TO PROVIDE THAT THE PROGRAM SHALL BE AVAILABLE TO VETERAN TEACHERS LICENSED BY THE STATE DEPARTMENT OF EDUCATION WHO ARE SERVING AS A TEACHER IN A CRITICAL NEEDS SCHOOL DISTRICT; TO PROVIDE THAT A VETERAN TEACHER IN THE PROGRAM IS ELIGIBLE FOR AN INCOME TAX CREDIT IN AN AMOUNT NOT EXCEEDING ONE THOUSAND TWO HUNDRED DOLLARS FOR EACH YEAR OF SERVICE RENDERED IN THE CRITICAL NEEDS SCHOOL DISTRICT THROUGH THE END OF THE TENTH YEAR OF SERVICE AS A TEACHER IN THAT SCHOOL DISTRICT; TO PROVIDE THAT A VETERAN TEACHER SHALL BE ELIGIBLE TO RECEIVE THE TAX CREDIT AUTHORIZED IN THE PROGRAM FOR A MAXIMUM OF TEN YEARS DURING WHICH THE TEACHER IS PARTICIPATING IN THE PROGRAM, REDUCED BY THE NUMBER OF YEARS THAT THE TEACHER RENDERED SERVICE AS A TEACHER IN THE CRITICAL NEEDS SCHOOL DISTRICT BEFORE THE 2019-2020 SCHOOL YEAR; TO CREATE NEW SECTION 27-7-22.42, MISSISSIPPI CODE OF 1972, TO ALLOW A CREDIT AGAINST A TAXPAYER'S INCOME TAX LIABILITY FOR SERVICE RENDERED AS A TEACHER IN A CRITICAL NEEDS SCHOOL DISTRICT IN AN AMOUNT NOT TO EXCEED ONE THOUSAND TWO HUNDRED DOLLARS FOR EACH YEAR OF SERVICE RENDERED; 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 Critical Needs School District Tax Credit Act of 2020."

SECTION 2. As used in this act, the following words and phrases have the meanings as defined in this section unless the context clearly indicates otherwise:

(a) "Critical needs school district" means a school district that meets all of the criteria in subparagraphs (i) through (iv) and at least two (2) of the criteria in subparagraphs (v) through (vii), as determined by the State Department of Education:

(i) A graduation rate of less than five percent (5%) of the statewide average, or less than the fifteenth percentile graduation rate of all school districts in the same congressional district;

(ii) An increased transient student rate for students who transfer out of the resident school district of initial enrollment to another school district;

(iii) A high teacher turnover rate;

(iv) A demographic composition with sixty-five percent (65%) or more of low-income students enrolled;

(v) A number of English language learners and special education students in a district that exceeds the statewide district average for those students;

(vi) A shortage of teachers in the critical subject areas of special education, mathematics, science (biology, chemistry and physics) and foreign language (French, German and Spanish);

(vii) Fewer than four (4) National Board Certified or master's degree teachers employed as classroom teachers in the school district.

(b) "First-year teacher" means a licensed teacher who is employed by and teaching in a particular critical needs school district for the first time and has not been previously employed by that school district.

(c) "High teacher turnover rate" means the rate at which personnel, whose primary function is classroom teaching, leave or separate from the school district, or change from their classroom teaching to another position from one (1) school year to another, in excess of ten percent (10%). This rate is determined by comparing the classroom teachers reported in the current year against those reported five (5) years before the current year's count.

(d) "Low-income student" means a definite number of students in a school district that is calculated solely by multiplying the most recent estimate of the school-age poverty rate, as published annually as a percentage for that school district by the United States Census Bureau in the Small Area Income and Poverty Estimates (SAIPE), times the average daily membership (ADM) of the school district. In determining the total number of low-income students, the economic status of any individual student or group of students may not be considered.

(e) "Transient student rate" means the rate at which students change from the resident school district of enrollment to another school district for any reason other than an end-of-the-year promotion.

(f) "Veteran teacher" means a licensed teacher who is employed by and teaching in a particular critical needs school district who was employed by that critical needs school district during the 2019-2020 school year.

SECTION 3. There is established the Mississippi Critical Needs School District Tax Credit Program. The purposes of the program are to attract first-year teachers to geographical areas of the state where there exists a critical need in primary and secondary education instruction, and to retain those first-year teachers and veteran teachers who serve as licensed teachers in critical needs school districts by making tax incentives available to them as provided in this act.

SECTION 4. (1) The Mississippi Critical Needs School District Tax Credit Program shall be available to first-year teachers licensed by the State Department of Education who enter into a contract for employment in a critical needs school district and commit to provide four (4) years of service as a teacher in that school district. A first-year teacher participating in the program is eligible for an income tax credit, as provided in Section 27-7-22.42, in an amount not exceeding One Thousand Two Hundred Dollars ($1,200.00) for each full academic and contractual year of service, as defined by the State Department of Education, rendered in the critical needs school district during the four-year period for which the teacher made a commitment, and if the teacher continues teaching in that critical needs school district after the four-year period, for each of the next four (4) years of service rendered in that school district.

(2) A first-year teacher in the program must complete one (1) full academic and contractual year of service as a licensed teacher in a critical needs school district in order to be eligible for the tax credit authorized in the program. The tax credit may be claimed by the teacher in the taxable year in which the full academic and contractual year of service is completed. In order to remain eligible for the tax credit for four (4) years, a teacher must continue teaching at schools in the same critical needs school district, and may transfer only to other schools in that school district during the four-year period. If a teacher who is eligible for the tax credit leaves the critical needs school district in which the teacher was employed when the tax credit was initially granted before the end of the four-year period, the teacher shall not be eligible for the tax credit for the remainder of the four-year period.

(3) After a first-year teacher completes four (4) years of service in a critical needs school district:

(a) If the teacher continues teaching in that critical needs school district, the teacher will continue to be eligible to receive the tax credit for each of the next four (4) years of service rendered in that school district; or

(b) The teacher may transfer to another critical needs school district and commit to provide four (4) years of service as a teacher in that critical needs school district, and will be eligible to receive the tax credit for each year of service rendered in that school district during the four-year period.

(4) A first-year teacher shall be eligible to receive the tax credit authorized in the program for a maximum of ten (10) years during which the teacher is participating in the program. However, if a teacher leaves the critical needs school district in which the teacher was employed when the tax credit was initially granted before the end of the four-year period, the maximum number of years for which the teacher is eligible to receive the tax credit shall be reduced by the number of years remaining in the four-year period, unless the teacher is employed by a school district other than a critical needs school district during those remaining years.

SECTION 5. (1) The Mississippi Critical Needs School District Tax Credit Program shall be available to veteran teachers licensed by the State Department of Education who are serving as a teacher in a critical needs school district. A veteran teacher in the program is eligible for an income tax credit, as provided in Section 27-7-22.42, in an amount not exceeding One Thousand Two Hundred Dollars ($1,200.00) for each full academic and contractual year of service, as defined by the State Department of Education, rendered in the critical needs school district through the end of the tenth year of service as a teacher in that school district. The tax credit may be claimed by the teacher in the taxable year in which the full academic and contractual year of service is completed.

(2) A veteran teacher shall be eligible to receive the tax credit authorized in the program for a maximum of ten (10) years during which the teacher is participating in the program, reduced by the number of years that the teacher rendered service as a teacher in the critical needs school district before the 2019-2020 school year.

SECTION 6. The following shall be codified as Section 27-7-22.42, Mississippi Code of 1972:

27-7-22.42. A taxpayer shall be allowed a credit against the income taxes imposed under this chapter for service rendered as a teacher in a critical needs school district under the provisions of the Mississippi Critical Needs School District Tax Credit Act of 2020, in an amount not to exceed One Thousand Two Hundred Dollars ($1,200.00) for each full academic and contractual year of service rendered. The tax credit shall not exceed the amount of tax imposed upon the taxpayer for the taxable year reduced by the sum of all other credits allowable to the taxpayer under this chapter, except credit for tax payments made by or on behalf of the taxpayer, and any unused tax credit shall not be allowed to be carried forward to be applied to the taxpayer's tax liability in succeeding taxable years.

SECTION 7. This act shall take effect and be in force from and after July 1, 2020.