MISSISSIPPI LEGISLATURE
2007 Regular Session
To: Education; Ways and Means
By: Representative Moore, Wells-Smith
AN ACT TO CREATE THE "MISSISSIPPI PUT PARENTS IN CHARGE ACT"; TO PROVIDE CREDITS FOR CERTAIN TAXES AND LICENSE FEES FOR TUITION PAID TO PUBLIC OR INDEPENDENT SCHOOLS; TO PROVIDE CREDITS FOR CERTAIN TAXES AND LICENSE FEES FOR CONTRIBUTIONS TO SCHOLARSHIP GRANTING ORGANIZATIONS; TO PROVIDE FOR THE REGULATION, REGISTRATION AND REPORTING OF SCHOLARSHIP GRANTING ORGANIZATIONS; TO PROVIDE FOR REPORTING AND ACCOUNTABILITY OF THE IMPLEMENTATION OF THIS ACT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act may be cited as the "Mississippi Put Parents in Charge Act."
SECTION 2. The purposes of this act are to:
(a) Restore parental control of education;
(b) Improve public school performance; and
(c) Expand educational opportunities for children of families in poverty.
SECTION 3. As used in this act, the following words and phrases have the meanings ascribed in this section unless the context clearly indicates otherwise:
(a) "Average state per pupil expenditure" means, as applicable, an amount determined annually by the State Department of Education before December 15 of each year. It should be an estimate of spending for the then current school year, but may not be lower than actual per pupil spending for the preceding school year or higher than one hundred ten percent (110%) of actual per pupil spending for the preceding school year. The commission shall determine an amount for qualifying students in kindergarten through Grade 8 and an amount for qualifying students in Grade 9 through Grade 12. The commission shall divide the state's total expenditures for public education for the applicable group by the total number of students in the applicable group.
(b) "State's total expenditures for public education" means all direct and indirect expenditures by the state for the applicable group, regardless of the source of funds but excluding federal funds and local funds, and including, but not limited to, expenditures by the State Department of Education, disbursements to school districts for capital improvements funded from sources other than state bond issues, and expenditures for debt service on state bonds issued to fund school district capital improvements. (c) "Total number of students" means the total number of public school students in the state as calculated by using the average daily attendance formula. Expenditures by the state for public education which can not be attributed to a particular group shall be allocated two-thirds (2/3) to the kindergarten through Grade 8 group and one-third (1/3) to the Grade 9 through Grade 12 group.
(d) "Commission" means the State Tax Commission.
(e) "Independent school" means a school, other than a public school, at which the compulsory attendance requirements of Section 37-13-91 may be met and which does not discriminate based on the grounds of race, color or national origin. The term "independent school" includes home schools.
(f) "Public school" means any public school in this state which is in session each school year for at least one hundred eighty (180) school days.
(g) "Qualifying student" means an individual:
(i) Who is enrolled at an independent school as a full-time student, as determined by the school, for which the school has a release of information form or who is taught at home;
(ii) Who is a resident of this state, and, if enrolled in a public school, is not a resident of the school district operating that public school;
(iii) Who is in kindergarten through Grade 12; and
(iv) Whose parent's or legal guardian's taxable income for Mississippi income tax purposes for the immediately preceding tax year is Seventy-Five Thousand Dollars ($75,000.00) or less. For purposes of determining if an individual is a qualifying student, the amount of Seventy-five Thousand Dollars ($75,000.00) must be increased by Five Thousand Dollars ($5,000.00) for each exemption in excess of two (2) that is claimed on the income tax return of the parents or legal guardian.
(h) "Receipt" means a document that a school issues to the person who makes a tuition payment on behalf of a qualifying student. The commission shall develop the form of the document, the content of which must be limited to and include: the name and address of the school; the name, address and social security number of the qualifying student on whose behalf the tuition was paid; the name of the person paying the tuition; the names of all other persons who have paid tuition, in chronological order, during the then current calendar year on behalf of the qualifying student before the payment for which the receipt is being issued and including the total tuition paid by the named person; and the date and amount of tuition paid and the aggregate amount of tuition paid for the qualifying student. The document also must contain in the chronological listing the date and amount of
tuition paid or to be paid, as evidenced by the notice of scholarship award required to be submitted to the school as provided in Section 15(2) of this act, by a scholarship granting organization if the source of funds for the scholarship is monies for which a credit may be claimed under this act. For a student taught at home, the term "receipt" means a document issued by the entity receiving a payment for tuition, which contains: the name of the entity receiving the payment; the identity of the goods or services purchased; the date and amount of tuition paid; and, if the receipt is for personal services, the person's taxpayer identification number.
(i) "Release of information form" means a form developed by a school which states that a parent or the legal guardian of the qualifying student consents to the release of the information contained in the receipt and is consistent with the requirements of 20 USCS 1232g, Family Educational Rights and Privacy Act of 1974.
(j) "Scholarship granting organization" means an organization that is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, gives scholarships to qualifying students from contributions that may be claimed as a credit under this act, is organized under Mississippi law and has complied with of this act.
(k) "School" means a public school or independent school.
(l) "State" means the government of the State of Mississippi.
(m) "Tuition" means the amount charged for attending a public school when the student is not a resident of the school district or for attending an independent school. Tuition includes fees necessary for attending the respective school including, but not limited to, enrollment fees and transportation fees. For students taught at home, tuition means expenses incurred for tutors, textbooks, school supplies, computers including hardware and software, fees for membership in an association that sets the academic standards for the student's home schooling program and academic lessons including, but not limited to, science, math, music and art. Expenses for tutors or academic lessons may be included in tuition only if the person providing the tutoring or academic lessons is a person other than the student's parent or legal guardian and who meets the requirements for providing the service as set by the standard-setting entity for that student's home school program. Tuition does not include athletic fees.
SECTION 4. The commission may promulgate regulations to aid in the performance of its duties under this act.
SECTION 5. The commission may conduct examinations and investigations whenever it believes that this act has been evaded or violated in any manner. All powers possessed by the commission to conduct examinations and investigations apply to examinations and investigations conducted under this section.
SECTION 6. If a student desires to transfer to a different school district, the school board of the school district to which the student desires to transfer must approve or disapprove the transfer. If the school board approves the transfer, the board may estimate the tuition to charge the transferring student.
SECTION 7. (1) A person is allowed a tax credit for tuition paid for qualifying students to attend a school. The credit may be applied against the person's liability for taxes imposed under Mississippi law. Limitations upon the total amount of liability for taxes or license fees that can be reduced by the use of another credit allowed for that tax or license fee must be computed after the credit allowed by this section is used to reduce a tax. The credit may be claimed only by the person who actually paid the tuition except that if the credit is earned by one (1) member of a controlled group of corporations, the credit may be used and applied by that member and by another member of the controlled group of corporations. More than one (1) person may claim a credit for the payment of a portion of the qualifying student's total tuition but only if the person actually paid the portion and the total credit taken by all persons does not exceed, in the aggregate, the limits set in this section. If the person's receipt indicates that the aggregate tuition paid by all persons, including scholarships from scholarship granting organizations if the source of funds for the scholarship is monies for which a credit may be claimed under Sections 8 and 9 of this act, for the qualifying student exceeds the credit that may be claimed under this act, then that person may claim the credit only to the extent that the person's tuition payment does not exceed the allowable credit. No credit may be claimed by a person without a receipt. The credit is nonrefundable. A credit claimed under this section but not used in a taxable year may be carried forward for five (5) years from the taxable year in which the credit is earned by the taxpayer. Credits which are carried forward must be used in the order earned.
(2) Except as otherwise provided in this section, the credit claimed for each qualifying student under this act may not exceed eighty percent (80%) of the projected average state per pupil expenditure as determined by the Department of Education for the grade group for the qualifying student which is determined based on the highest grade in which the qualifying student is enrolled during the calendar year.
(3) Notwithstanding subsection (2) of this section, for qualifying students who are eligible for free or reduced price meals or for free milk, as determined in accordance with 7 CFR Part 245, Determining Eligibility for Free and Reduced Price Meals and Free Milk in Schools, the credit claimed for each of those qualifying students may not exceed the lesser of:
(a) One hundred percent (100%) of the actual tuition paid during the taxable year; or
(b) One hundred percent of the dollar amount set annually in subsection (2) of this section.
(4) (a) The credit may be taken for the 2008 tax year only for qualifying students in kindergarten through Grade 4 as of the fall 2008 semester or term, except that the credit may not be taken for students who were enrolled in an independent school as of October 1, 2006.
(b) The credit may be taken for the 2009 tax year only for qualifying students in kindergarten through Grade 6 as of the fall 2009 semester or term, except that the credit may not be taken for students who were enrolled in an independent school as of October 1, 2006.
(c) The credit may be taken for the 2010 tax year only for qualifying students who were in kindergarten through Grade 8 as of the fall 2010 semester or term, except that the credit may not be taken for students who were enrolled in Grades 2 through 8 in an independent school as of October 1, 2006.
(d) The credit may be taken for the 2011 tax year only for qualifying students who were in kindergarten through Grade 10 as of the fall 2011 semester or term, except that the credit may not be taken for students who were enrolled in Grades 5 through 10 in an independent school as of October 1, 2006.
(e) Beginning with the 2012 tax year, the credit may be taken each year for a qualifying student as provided in this section.
SECTION 8. A person is allowed a tax credit for contributions to a scholarship granting organization which will be used in accordance with subsection (1) of Section 14 of this act. The credit may be applied against the person's liability for taxes imposed under Mississippi law. Limitations upon the total amount of liability for taxes that can be reduced by the use of another credit allowed for that tax license fee must be computed after the credit allowed by this section is used to reduce a tax liability. The credit may be claimed only by the person who actually made the contribution except that if the credit is earned by one (1) member of a controlled group of corporations, the credit may be used and applied by that member and by another member of the controlled group of corporations. The credit is nonrefundable. A credit claimed under this section but not used in a taxable year may be carried forward for five (5) years from the taxable year in which the credit is earned by the taxpayer. Credits which are carried forward must be used in the order earned.
SECTION 9. A scholarship granting organization receiving contributions for which the person claims a credit under this act must segregate the contributions from other funds of the scholarship granting organization.
SECTION 10. (1) Not later than thirty (30) days after its organization, a scholarship granting organization shall register with the commission as provided in this section. In all subsequent years, the scholarship granting organization shall renew its registration with the commission not later than January 31. Each scholarship granting organization registering with the commission, whether initial or renewal, shall pay a fee of One Hundred Dollars ($100.00).
(2) The registration must be in a form developed by the commission and available both electronically and in paper form and be limited to and include:
(a) The full name, address and telephone number of the scholarship granting organization;
(b) The name, address and telephone number of the chief administrative official of the scholarship granting organization;
(c) The names, addresses and telephone numbers of the individuals who serve on the scholarship granting organization's governing body;
(d) The scholarship granting organization's federal taxpayer identification number;
(e) A statement of the scholarship granting organization's status as a 501(c)(3) organization under the Internal Revenue Code;
(f) A statement that the scholarship granting organization does not discriminate in hiring on the basis of race, color, national origin or disability; and
(g) Certification by an authorized official of the scholarship granting organization that the information contained on the registration statement is true and correct.
(3) A scholarship granting organization must file a supplemental registration statement indicating a substantial change in the information contained in the prior registration statement within thirty (30) days after the date of the change.
(4) The commission may revoke or suspend the registration of a scholarship granting organization for a violation of this act.
(5) Contributions to a scholarship granting organization that is not registered with the commission or during the time that the registration of the scholarship granting organization is revoked or suspended do not qualify for the credit provided in Sections 8 and 9.
SECTION 11. (1) Each scholarship granting organization, not later than June 30 of each year, must file a report with the commission covering that scholarship granting organization's activities during the most recently completed calendar year.
(2) Each report must be in a form developed by the commission and available both electronically and in paper form and be limited to and include:
(a) The full name, address and telephone number of the reporting scholarship granting organization;
(b) The name, address and telephone number of the chief administrative official of the scholarship granting organization;
(c) The names, addresses and telephone numbers of the individuals who serve on the scholarship granting organization's governing body;
(d) The scholarship granting organization's federal taxpayer identification number;
(e) A statement of the scholarship granting organization's status as a 501(c)(3) organization under the Internal Revenue Code;
(f) A statement of the monies received for which a credit may be claimed under Sections 8 and 9 of this act during the covered period including:
(i) A listing of the amounts expended by number and amount of scholarships awarded by the school attended by the scholarship recipient and by the public school district in which the qualifying student would attend if the qualifying student were attending a public school;
(ii) The total number and total dollar amount of scholarships awarded, the total number and total dollar amount of scholarships awarded to students eligible for free or reduced price meals or for free milk, as determined under 7 CFR Part 245, Determining Eligibility for Free and Reduced Price Meals and Free Milk in Schools, and the percentage of first-time recipients of scholarships who were enrolled in a public school in the year prior to the award of the scholarship; and
(iii) The beginning balance for monies held for administrative expenses, a listing of the expenditures, by category, for administrative expenses including, but not limited to, marketing materials, office supplies, legal services, accounting services, rent, utilities, and compensation of personnel and the ending balance for monies held for administrative expenses;
(g) A copy of the scholarship granting organization's annual financial and compliance audit of its accounts and records conducted by an independent certified public accountant and in accordance with regulations adopted by the commission; and
(h) Certification by an authorized official of the scholarship granting organization that the information contained in the report is true and correct.
(3) Information provided to the commission under this section and Section 10 of this act is available for public inspection and copying under the Freedom of Information Act. The commission shall make information provided to the commission under this section or Section 10 of this act accessible to the public through the commission's Web site.
SECTION 12. A scholarship granting organization shall notify the commission whenever the scholarship granting organization receives more than Five Hundred Thousand Dollars ($500,000.00) of contributions in the aggregate in a calendar quarter. The notification must be filed with the commission not later than thirty (30) days after the close of the calendar quarter and must inform the commission of the total amount of contributions received by the scholarship granting organization for the reporting period.
SECTION 13. (1) Scholarship granting organizations that receive or expect to receive Fifty Thousand Dollars ($50,000.00) or more of contributions in the aggregate in a calendar year shall file and maintain with the commission a surety bond in favor of the state executed by a surety company authorized to transact business in this state. Instead of a surety bond, the scholarship granting organization may file with the commission letters of credit and certificates of deposit of financial institutions located within the state in which deposits are guaranteed by the federal government or any other financial instrument that the commission considers appropriate. The amount of the surety bond, letter of credit, certificate of deposit or any other instrument filed with the commission must be in an amount equal to the aggregate amount of contributions the scholarship granting organization expects to receive during the calendar year. The surety bond must be on a form approved by the commission. A surety bond or financial instrument filed with the commission must be conditioned to pay a person who sustains a loss as a result of:
(a) The scholarship granting organization's violation of or failure to comply with any requirement of this act;
(b) The scholarship granting organization's misapplication or misappropriation of funds received by it; or
(c) An act of fraud or dishonesty committed by the scholarship granting organization in the administration of a scholarship program.
(2) An aggrieved person may institute an action in the county of the person's residence against the scholarship granting organization or the surety, or both, to recover on the surety bond or to recover from the letters of credit, certificates of deposit or other financial instrument accepted by the commission.
SECTION 14. (1) Contributions to a scholarship granting organization which qualify for the credit provided in Sections 8 and 9 of this act must be used by the scholarship granting organization only for the purpose of providing scholarships to qualifying students, except that not more than five percent (5%) of the contributions may be used for administrative expenses of the scholarship granting organization including, but not limited to, marketing materials, office supplies, legal services, accounting services, rent, utilities and compensation of personnel. Students taught at home are eligible for scholarships provided for in this section.
(2) (a) Except as otherwise provided in this section, in a calendar year, a scholarship granting organization may not award a scholarship to a qualifying student, which exceeds eighty percent (80%) of the projected average state per pupil expenditure as determined by the State Department of Education for the grade group for the qualifying student, which is determined based on the grade for which the scholarship applies.
(b) Notwithstanding the provisions of paragraph (a) of this subsection, if the qualifying student is classified as educable mentally handicapped, learning disabilities handicapped or speech handicapped, then, regardless of the grade for the qualifying student, a scholarship granting organization may not award a scholarship to the qualifying student which exceeds the lesser of either eighty percent (80%) of the amount of the tuition at the qualifying student's school or eighty percent (80%) of Five Thousand Six Hundred Dollars (($5,600.00). If the qualifying student is classified as trainable mentally handicapped, emotionally handicapped, orthopedically handicapped or homebound, then, regardless of the grade for the qualifying student, a scholarship granting organization may not award a scholarship to the qualifying student which exceeds the lesser of either eighty percent (80%) of the amount of the tuition at the qualifying student's school or eighty percent (80%) of Seven Thousand Dollars ($7,000.00). If the qualifying student is classified as visually handicapped, hearing handicapped or autistic, then, regardless of the grade for the qualifying student, a scholarship granting organization may not award a scholarship to the qualifying student which exceeds the lesser of either eighty percent (80%)of the amount of the tuition at the qualifying student's school or eighty percent (80%) of Ten Thousand Dollars ($10,000.00). If a qualifying student may be classified in more than one (1) classification, the classification with the higher dollar amount must be used.
(3) Notwithstanding the provisions of subsection (2) of this section, for a qualifying student who is eligible for free or reduced price meals or for free milk, as determined under 7 CFR Part 245, Determining Eligibility for Free and Reduced Price Meals and Free Milk in Schools, the scholarship from the scholarship granting organization may not exceed the lesser of either one hundred percent (100%) of the amount of the tuition at the qualifying student's school or one hundred percent (100%) of the dollar amounts set annually in subsection (2).
(4) (a) For calendar year 2008, a scholarship granting organization may award a scholarship only to qualifying students who:
(i) Are in kindergarten through Grade 4 as of the fall 2008 semester or term; and
(ii) Were not enrolled in an independent school as of October 1, 2006.
(b) For calendar year 2009, a scholarship granting organization may award a scholarship only to qualifying students who:
(i) Are in kindergarten through Grade 6 as of the fall 2009 semester or term; and
(ii) Were not enrolled in an independent school as of October 1, 2006.
(c) For calendar year 2010, a scholarship granting organization may award a scholarship only to qualifying students who:
(i) Are in kindergarten through Grade 8 as of the fall 2010 semester or term; and
(ii) Were not enrolled in Grades 2 through 8 in an independent school as of October 1, 2006.
(d) For calendar year 2011, a scholarship granting organization may award a scholarship only to qualifying students who:
(i) Are in kindergarten through Grade 10 as of the fall 2011 semester or term; and
(ii) Were not enrolled in Grades 5 through 10 in an independent school as of October 1, 2006.
(e) Beginning with calendar year 2012, a scholarship granting organization may award a scholarship each year to qualifying students as provided in this section.
(5) A qualifying student may receive a scholarship from more than one (1) scholarship granting organization; however, the total amount of the scholarships received from all scholarship granting organizations may not exceed the calendar year limits as established in this section.
SECTION 15. (1) A scholarship granting organization, within thirty (30) days after the day on which a person makes a contribution to the scholarship granting organization, shall provide to the person a written statement containing the name and address of the scholarship granting organization, the name of the person making the contribution, the amount of the contribution, the date of the contribution and certifying that the contribution must be used in accordance with this act. The written statement must inform the person that the statement is provided under this section and that the scholarship granting organization is segregating the contribution from other funds of the scholarship granting organization as required by Sections 8 and 9 of this act relating to tax credits for contributions to scholarship granting organizations.
(2) When a scholarship granting organization makes a determination to award a scholarship to a qualifying student from monies for which a credit may be claimed under Sections 8 and 9 of this act, the scholarship granting organization immediately shall notify the school at which the scholarship will be applied of the award of the scholarship. The school immediately shall enter the information from the notice of scholarship award on the receipt applicable to the qualifying student. The school shall return to the scholarship granting organization monies from the scholarship which exceeds the credit applicable to the qualifying student under Section 7 of this act. In deciding whether monies must be returned to the scholarship granting organization, the school shall review the chronological record of tuition payments by or on behalf of the qualifying student including the date and amount contained on the notice of scholarship award. If the chronological record reflects that the date and amount of payment of tuition by scholarship, including the date and amount indicated on the notice of scholarship award, and tuition payments received before the scholarship activity causes the credit applicable to the qualifying student to be exceeded, then the school shall return the scholarship monies that exceed the credit to the scholarship granting organization.
(3) Scholarship granting organizations must make scholarship payments by check payable to the qualifying student's parents or legal guardian and to the school at which the scholarship is to be used. The check may be delivered or mailed by the scholarship granting organization to the school at which the scholarship is to be used. The check must be endorsed by all payees. The check may be endorsed by the school on behalf of the student's parents or legal guardian if the parents or legal guardian have placed on file with the school written authorization to endorse the check.
SECTION 16. Except for the portion of a contribution a scholarship granting organization retains to expend for administrative expenses under Section 14(1) of this act, a scholarship granting organization must expend a contribution by the end of the calendar quarter which is at least twelve (12) months from the date on which the scholarship granting organization receives the contribution. The scholarship granting organization must remit to the state, for deposit in the General Fund, monies not expended within the time period provided in this section. The remittance to the state must be made within thirty (30) days after the end of each calendar quarter.
SECTION 17. If a qualifying student's enrollment in an independent school is terminated before the end of the school year and the independent school charges tuition of One Thousand Dollars ($1,000.00) or more each school year, the independent school must refund to the scholarship granting organization and other tuition payers any tuition paid that is applicable to a semester or term beyond the semester or term during which the qualifying student's enrollment is terminated. At the time of making the refund, the independent school shall issue a receipt reflecting the date, amount and payee for each refund.
SECTION 18. (1) Annually, the Legislative Budget Office shall provide a report on the impact of the implementation of this act on school enrollment and state and local funding of public schools for the fiscal year most recently completed. The report must include, but is not limited to, an analysis of and statement on the:
(a) Change in public school enrollment, by school district, attributable to this act;
(b) Amount of credits claimed, by type, for state tax purposes; and
(c) Amount of funds the state would have had to expend for public schools under the adequate education program funding formula and the amount actually expended by the state.
(2) The report must be submitted by December 1 of each year to the Governor, the Chairman of the Senate Finance Committee, the Chairman of the Senate Education Committee, the Chairman of the House Ways and Means Committee and the Chairman of the House Education Committee.
SECTION 19. (1) (a) In addition to the annual report as required under Section 18 of this act, the Legislative Budget Office shall provide for a long-term evaluation of the impact of this act. The evaluation must be conducted by contract with one or more qualified persons or entities with previous experience evaluating school choice programs and must be conducted for a minimum of twelve (12) years. The evaluation must include an assessment of the:
(i) Level of parental satisfaction for parents of students participating in the tuition credit or scholarship programs provided for in this act;
(ii) Level of parental satisfaction for parents of students in public schools;
(iii) Academic performance of public school and independent school students;
(iv) Level of student satisfaction with the tuition credit or scholarship programs provided for in this act;
(v) Level of student satisfaction for students attending public schools;
(vi) Impact of this act on public school districts, public school students, independent schools, independent school students and the quality of life in a community; and
(vii) Impact of this act on school capacity, availability and quality.
(b) The evaluation must be conducted using appropriate analytical and behavioral science methodologies and must protect the identity of participating schools and students by, at a minimum, keeping anonymous all disaggregated data other than that for the categories of grade, gender, race and ethnicity. The evaluation of public and independent school students must compute the relative efficiency of public and independent schools, and must include a comparison of acceptance rates into college, while adjusting or controlling for student and family background.
(2) State and local government entities must cooperate with the persons or entities conducting the evaluation provided for in subsection (1) of this Section. Scholarship granting organizations must cooperate with the persons or entities conducting the evaluation. Cooperation includes providing available student assessment results and other information needed to complete the evaluation.
(3) The Legislative Budget Office shall pay the cost of the evaluation from funds available to it for that purpose, except that state funds may not be used to pay the cost of the evaluation.
(4) Before January 31 each year, the Legislative Budget Office shall provide to each member of the Legislature interim reports of the results of the evaluation. Upon completion of the evaluation, the Legislative Budget Office shall provide a final report to each member of the Legislature. At the same time as the final report is made public, the persons or entities who conducted the evaluation must make their data and methodology available for public review and inspection, but only if the release of the data and methodology is in compliance with 20 USCS 1232g, Family Educational Rights and Privacy Act of 1974.
SECTION 20. This act shall take effect and be in force from and after July 1, 2007.