HCS HB 350 Christofanelli, Phil Committee
HCS HB 350 -- FUNDING FOR MISSOURI CHILDREN
SPONSOR: Christofanelli
COMMITTEE ACTION: Voted "Do Pass with HCS" by the Standing Committee on Elementary and Secondary Education by a vote of 11 to 5. Voted "Do Pass" by the Standing Committee on Rules- Regulatory Oversight by a vote of 5 to 4.
The following is a summary of the House Committee Substitute for HB 350.
MISSOURI EMPOWERMENT SCHOLARSHIPS (Sections 135.714, 135.715, 166.700, and 166.705 RSMo.)
Currently, the Missouri Empowerment Scholarship grants are capped at the state adequacy target (SAT) and calculated by the Department of Elementary and Secondary Education.
This bill increases the grant amount for pupils with limited English proficiency by 160% over the SAT, for pupils qualifying for free and reduced price lunches 125% over the SAT, and for special education pupils by 175% over the SAT.
The bill removes language that imposed a $25 million dollar cap in the first year of the program and a cumulative $50 million dollar cap on the tax credit allowance.
The bill expands the current definitions for a "qualified school" and a "qualified student" in the program to include public and private preschool programs and children that are 3 years of age but not eligible for kindergarten.
CHILD CARE CONTRIBUTION TAX CREDIT ACT (Section 135.1310)
This bill establishes the "Child Care Contribution Tax Credit Act". Beginning January 1, 2023, a taxpayer may claim a tax credit for verified contributions to a child care provider in an amount up to 75% of the contribution. The tax credit issued shall not be less than $100, and shall not exceed $200,000 per tax year.
To be eligible for the tax credit, a donation must be:
(1) Used directly by a child care provider to promote child care for children 12 years of age or younger;
(2) Made to a child care provider in which the taxpayer or a person related to the taxpayer does not have a direct financial interest; and
(3) Not made in exchange for care of a child or children in the case of an individual taxpayer that is not an employer making a contribution on behalf of its employees.
The tax credits authorized by this section shall not be refundable and shall not transferred, sold, or otherwise conveyed. The cumulative amount of tax credits authorized shall not exceed $20 million for each calendar year. If the maximum amount of tax credits allowed in any calendar year is authorized, the maximum amount of tax credits shall be increased by 15%, provided that all such increases of tax credits shall be reserved for contributions made to child care providers located in a child care desert.
The program sunsets on December 31, 2029 .
EMPLOYER PROVIDED CHILD CARE ASSISTANCE TAX CREDIT ACT (Section 135.1325)
This bill also establishes the "Employer Provided Child Care Assistance Tax Credit Act". Beginning January 1, 2023, a taxpayer may claim a tax credit in an amount equal to 30% of the qualified child care expenditures paid or incurred with respect to a child care facility. The maximum amount of any tax credit issued shall not exceed $200,000 per taxpayer per tax year.
A facility shall not be treated as a child care facility with respect to a taxpayer unless the following conditions have been met:
(1) Enrollment in the facility is open to employees of the taxpayer during the tax year; and
(2) If the facility is the principal business of the taxpayer, at least 30% of the enrollees of such facility are dependents of employees of the taxpayer.
The tax credits shall not be refundable, transferable, sold, assigned, or otherwise conveyed. The cumulative amount of tax credits shall not exceed $20 million for each calendar year. If the maximum amount of tax credits allowed in any calendar year is authorized, the maximum amount of tax credits shall be increased by 15%, provided that all such increases of tax credits shall be reserved for contributions made to child care providers located in a child care desert.
The program sunsets on December 31, 2029 .
CHILD CARE PROVIDERS TAX CREDIT ACT (Section 135.1350)
This bill also establishes the "Child Care Providers Tax Credit Act". Beginning January 1, 2024, a child care provider with three or more employees may claim a tax credit in an amount equal to the child care provider's eligible employer withholding tax, and may also claim a tax credit in an amount up to 30% of the child care provider's capital expenditures.
No tax credit for capital expenditures shall be allowed if the capital expenditures are less than $1,000. The amount of any tax credit issued shall not exceed $200,000 per child care provider per tax year.
To claim a tax credit for capital expenditures, a child care provider shall present proof acceptable to the Department of Elementary and Secondary Education that the expenditures fall within the definition of capital expenditure, as defined in the bill.
The tax credits shall not be refundable and shall not be transferred, sold, assigned, or otherwise conveyed. Any amount of credit that exceeds the child care provider's state tax liability for the tax year for which the tax credit is issued may be carried back to the child care provider's immediately prior tax year or carried forward to the child care provider's subsequent tax year for up to five succeeding tax years. The cumulative amount of tax credits authorized pursuant to this section shall not exceed $20 million for each calendar year.
If the maximum amount of tax credits allowed in any calendar year is authorized, the maximum amount of tax credits shall be increased by 15%, provided that all such increases of tax credits shall be reserved for contributions made to child care providers located in a child care desert.
The program sunsets on December 31, 2029.
SUPPORTING USE OF CHILD CARE FOR ECONOMIC STABILITY AND SECURITY TAX CREDIT (SUCCESS TAX CREDIT) (Section 135.2560)
This bill establishes the "Supporting Use of Child Care for Economic Stability and Security Tax Credit".
Beginning January 1, 2024, an eligible taxpayer shall be allowed a nonrefundable tax credit equal to the employment-related expenses for up to two qualifying children, not to exceed:
(1) Expenses of $1,800 for each child who was under two years of age at any time during the tax year for which the tax credit is being sought; and
(2) Expenses of $1,200 for each child who was two years of age or older during all of the tax year and under six years of age at any time during the tax year for which the tax credit is being sought.
A tax credit under this proposal shall not be claimed by more than one taxpayer for the same child. This tax credit shall be nontransferable and nonrefundable, and shall not be carried back or forward to any other tax year.
The program sunsets on December 31, 2029.
The following is a summary of the public testimony from the committee hearing. The testimony was based on the introduced version of the bill.
PROPONENTS: Supporters say that this program has seen enormous success and has truly helped many children across the state receive education that they would not otherwise have been able to access. The expansion makes sense as the areas of highest need and that need the most support are those of special needs and english as a second language.
Testifying in person for the bill were Representative Christofanelli; Missouri Catholic Conference; Becki Uccello; Izabella Uccello; and the American Federation For Children.
OPPONENTS: Those who oppose the bill say that this is an expansion of a program that uses public money for private schools. The expansion in the area of ESL may not work as that is not currently tracked by the program.
Testifying in person against the bill were the Missouri School Boards Association; and the American Federation of Teachers - Missouri.
OTHERS: Others testifying on the bill say the program is being utilized by a diverse group of students for a variety of educational opportunities.
Testifying in person on the bill were Chris Vas, Herzog Tomorrow Foundation and Families For Home Education, Inc.
Written testimony has been submitted for this bill. The full written testimony and witnesses testifying online can be found under Testimony on the bill page on the House website.