Citations Affected: IC 6-3.1; IC 20-51.
Synopsis: School scholarships. Increases the school scholarship tax
credits that may be awarded for donations to a scholarship granting
organization and allows up to 25% of the credits to be awarded for
donations to public school foundations. Allows scholarship granting
organizations to grant scholarships to families with income that is not
more than 250% of the amount required for the individual to qualify for
the federal free or reduced price lunch program. Prohibits a scholarship
granting organization from limiting the availability of scholarships to
students of only one participating school. Provides choice scholarships
to students in families with income that is not more than 150% percent
of the amount required for the individual to qualify for the federal free
or reduced lunch program to pay the costs of tuition and fees at a public
or private elementary school or high school that charges tuition.
Provides for a supplemental distribution to public schools equal to the
difference between the amount distributed as choice scholarships and
the amount that would have been distributed to public schools to
educate the children receiving choice scholarships. Requires fair
admissions policies for schools eligible for choice scholarships. Limits
the number of choice scholarships awarded per school year before June
30, 2013. Limits the choice scholarship granted to a student in grade 1
through 8 to $4,500 per school year. Provides consequences for
nonpublic schools who receive: (1) consecutive low category
designations for school performance and improvement; and (2) a
distribution of choice scholarships. Provides for any savings from the
choice scholarships to be used for tuition support for schools. Makes
Effective: July 1, 2011.
January 20, 2011, read first time and referred to Committee on Education.
February 17, 2011, amended, reported _ Do Pass.
March 29, 2011, read second time, amended, ordered engrossed.
A BILL FOR AN ACT to amend the Indiana Code concerning
(1) a scholarship granting organization for use by the scholarship granting organization in a school scholarship program; or
(2) a public school foundation in a taxable year beginning after December 31, 2011;
is entitled to a credit against the taxpayer's state tax liability in the taxable year in which the taxpayer makes the contribution.
of tax credits that may be awarded under this chapter in a state
fiscal year beginning after June 30, 2012:
(1) increases by an additional ten million dollars ($10,000,000) in each state fiscal year that the total amount of tax credits awarded in the immediately preceding state fiscal year equaled at least ninety percent (90%) of the maximum amount permitted to be awarded under this section in the immediately preceding state fiscal year; and
(2) is equal to the maximum permissible amount of tax credits that were permitted to be awarded under this section in the immediately preceding state fiscal year, if subdivision (1) does not apply.
Not more than twenty-five percent (25%) of the credits awarded in a state fiscal year may be awarded for contributions to public school foundations.
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2011]: Sec. 4.7. "Eligible school" refers to a public or nonpublic
elementary school or high school that:
(1) is located in Indiana;
(2) requires an eligible individual to pay tuition or transfer tuition to attend;
(3) voluntarily agrees to enroll an eligible individual;
(4) is accredited by either the state board or a national or regional accreditation agency that is recognized by the state board;
(5) administers the Indiana statewide testing for educational progress (ISTEP) program under IC 20-32-5;
(6) is not a charter school or the school corporation in which an eligible individual has legal settlement under IC 20-26-11;
(7) submits to the department verification of compliance with all:
(A) requirements of the Americans with Disabilities Act (42 U.S.C. 12101 et seq.) and any amendments and regulations related to the Act;
(B) fire safety requirements; and
(C) health standards under federal and state law;
(8) adheres to the state teacher evaluation requirements as specified by state law and administrative rule; and
(9) submits to the department data required for a category designation under IC 20-31-8-3.
preceding term of the current school year and qualified under
clause (A) in the first year that the individual received a
this article; IC 20-51-3; and
(5) meets at least one (1) of the following conditions:
(A) The individual is enrolling in kindergarten.
(B) The individual was enrolled in a public school during the school year preceding the first school year for which a scholarship granting organization provides a scholarship to the individual.
(C) The individual received a scholarship (that did not qualify as a school scholarship under IC 20-51-3) in the previous year from a nonprofit scholarship granting organization that qualifies for certification as a school scholarship program.
(D) The individual received a school scholarship under IC 20-51-3 for the previous school year.
participating school. An agreement entered into under section 1 of
this chapter before July 1, 2011, must be amended to include the
requirement specified in this subsection.
amount determined under section 4 of this chapter if the
eligible individual is a member of a household with an
annual income of not more than the amount required for
the individual to qualify for the federal free or reduced
price lunch program; and
(B) fifty percent (50%) of the state tuition support amount determined under section 4 of this chapter if the eligible individual is a member of a household with an annual income of not more than one hundred fifty percent (150%) of the amount required for the individual to qualify for the federal free or reduced price lunch program.
(3) If the eligible individual is enrolled in grade 1 through 8, the maximum choice scholarship that the eligible individual may receive for a school year is four thousand five hundred dollars ($4,500).
Sec. 4. The state tuition support amount to be used in section 3(2) of this chapter for an eligible individual is the amount determined under the last STEP of the following formula:
STEP ONE: Determine the school corporation in which the eligible individual has legal settlement.
STEP TWO: Determine the amount of state tuition support that the school corporation identified under STEP ONE is eligible to receive under IC 20-43 for the calendar year in which the current school year begins, excluding amounts provided for special education grants under IC 20-43-7 and career and technical education grants under IC 20-43-8.
STEP THREE: Determine the result of:
(A) the STEP TWO amount; divided by
(B) the current ADM (as defined in IC 20-43-1-10) for the school corporation identified under STEP ONE for the calendar year used in STEP TWO.
Sec. 5. (a) If an eligible individual enrolls in an eligible school for less than an entire school year, the choice scholarship provided under this chapter for that school year shall be reduced on a prorated basis to reflect the shorter school term.
(b) The amount by which a choice scholarship is reduced under subsection (a) shall be distributed to public schools using the same formula applicable to the distribution of basic tuition support (as defined in IC 20-43-1-8).
(c) An eligible individual is entitled to only one (1) choice scholarship for each school year. If the eligible individual leaves the eligible school for which the eligible individual was awarded a
choice scholarship and enrolls in another eligible school, the
eligible individual is responsible for the payment of any tuition
required for the remainder of that school year.
Sec. 6. (a) The department shall administer this chapter.
(b) The department shall adopt rules under IC 4-22-2 to implement this chapter.
(c) The department may adopt emergency rules under IC 4-22-2-37.1 to implement this chapter.
Sec. 7. The department may prescribe forms and methods for demonstrating eligibility for a choice scholarship under this chapter.
Sec. 8. (a) The department shall enforce the following consequences for an eligible school that is nonpublic:
(1) If the school is placed in either of the lowest two (2) categories or designations under IC 20-31-8-3 for two (2) consecutive years, the department shall suspend choice scholarship payments for one (1) year for new students who would otherwise use a choice scholarship to attend the school.
(2) If the school is placed in either of the lowest two (2) categories or designations under IC 20-31-8-3 for three (3) consecutive years, the department shall suspend choice scholarship payments for new students who would otherwise use a choice scholarship to attend the school until the school is placed in the middle category or higher category or designation, for two (2) consecutive years.
(3) If the school is placed in the lowest category or designation under IC 20-31-8-3 for three (3) consecutive years, the department shall suspend choice scholarship payments for new students who would otherwise use a choice scholarship to attend the school until the school is placed in the middle category or higher category or designation, for three (3) consecutive years.
(4) Students who:
(A) are currently enrolled at a school described in subdivision (1), (2), or (3); and
(B) qualify for a choice scholarship for the upcoming school year;
may continue to receive a choice scholarship at the school.
(b) This section may not be construed to prevent a student enrolled in a school subject to this section from applying for a choice scholarship in the future at another participating school.
Sec. 9. The department may distribute any part of a choice
scholarship to the eligible individual (or the parent of the eligible
individual) for the purpose of paying the educational costs
described in section 3(1) of this chapter. For the distribution to be
valid, the distribution must be endorsed by both the eligible
individual (or the parent of the eligible individual) and the eligible
school providing educational services to the eligible individual.
Sec. 10. The amount of a choice scholarship provided to an eligible individual shall not be treated as income or a resource for the purposes of qualifying for any other federal or state grant or program administered by the state or a political subdivision.
Sec. 11. (a) Each school year, the department shall make a supplemental distribution to school corporations and charter schools (other than virtual charter schools) in the amount determined under this section.
(b) The amount of the distribution is equal to the result determined under STEP TWO of the following formula:
STEP ONE: Determine the result of:
(A) the state tuition support amount that applies to the school year under section 4 of this chapter; multiplied by
(B) the total number of eligible individuals receiving a choice scholarship in the school year, including eligible individuals that received a prorated choice scholarship under section 5 of this chapter.
STEP TWO: Determine the result of:
(A) the STEP ONE amount; minus
(B) the amount distributed as choice scholarships for the school year.
(c) The department shall distribute the amount determined under subsection (b) to school corporations and charter schools (other than virtual charter schools) under the same formula used in that year to distribute basic tuition support (as defined in IC 20-43-1-8).