SB 618 - This act creates the "Milton Friedman 'Put Parents in Charge' Education Program." Beginning with the 2007 tax year, taxpayers who donate to a scholarship-granting organization shall receive a tax credit in an amount equal to 65% of the contribution if the donations are not claimed on the taxpayer's federal income tax return. The credit is nonrefundable but may be carried forward for three years or transferred. .The cumulative amount of tax credits cannot exceed $40 million annually, and scholarships must average $5,000. Both amounts shall be increased or decreased based on the consumer price index for the Midwest. In order to eligible for the scholarship, the student must reside in a provisionally accredited, unaccredited, or interim accredited school district; attend a public school for the semester before a scholarship is granted or be starting school in the state for the first time; and have a family income of 185% of the level which qualifies the student for the reduced lunch program. Scholarships may be given to a disabled child three years of age or older if the child's parents have nonreimbursed medical expenses in excess of 7.5% of their federal adjusted gross income; or a child identified by the principal and approved by the superintendent on the basis of disciplinary or academic criteria delineated in the act.
The act requires that in order to qualify as an educational assistance organization, at least 80% of the qualifying contributions are allocated to scholarships to qualified students to attend qualified schools and the organization gives priority to those students who demonstrate the greatest need for such scholarships. The act provides that the organizations must meet other requirements regarding fiscal soundness and public reporting. Public schools are given the right of first acceptance of scholarship recipients, and scholarships may be used at public schools for certain purposes which include tutoring, general educational development, and transportation. Public school districts may opt into the scholarship program.
Private schools qualify to accept scholarship students by meeting certain requirements including employee background checks and student assessments. The act specifies how scholarship checks will be distributed.
The weighted average daily attendance count for purposes of calculating state aid under the school funding formula shall be adjusted such that a school district shall not receive state aid for a student who is no longer enrolled in the school district as a result of receiving an educational scholarship under the provisions of this act.
The provisions of this act shall expire in six years, but a child who is receiving a scholarship may continue in the program until completion of the twelfth grade.
The act contains an emergency clause.
This act is substantially similar to HB 498 (2007).
JIM ERTLE