HB3411 102ND GENERAL ASSEMBLY

LRB102 14219 HLH 19571 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3411

Introduced 2/22/2021, by Rep. Blaine Wilhour

SYNOPSIS AS INTRODUCED:

35 ILCS 40/5
35 ILCS 40/7.5 new
35 ILCS 40/10
35 ILCS 40/40
35 ILCS 40/45
35 ILCS 40/65 rep.
35 ILCS 40/995 rep.

Amends the Invest in Kids Act. Provides that the amount of the credit shall be 100% (currently, 75%) of the total amount of qualified contributions made by the taxpayer during the taxable year. Provides that the annual aggregate credit cap shall be $100,000,000 per calendar year (currently, $75,000,000). Provides that the individual credit cap shall be $1,333,333 per taxpayer (currently, $1,000,000). Removes a limitation that prevent contributions from being directed to a particular subset of schools or a particular school. Provides that, in granting scholarships, first priority shall be given to eligible students who received a scholarship from a scholarship granting organization during the previous school year. Contains provisions concerning technical academies.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 105-10. The Invest in Kids Act is amended by changing Sections 5, 10, 40, and 45 and by adding Section 7.5 as follows:

(35 ILCS 40/5)

(Section scheduled to be repealed on January 1, 2024)

Sec. 5. Definitions. As used in this Act:

"Authorized contribution" means the contribution amount that is listed on the contribution authorization certificate issued to the taxpayer.

"Board" means the State Board of Education.

"Contribution" means a donation made by the taxpayer during the taxable year for providing scholarships as provided in this Act.

"Custodian" means, with respect to eligible students, an Illinois resident who is a parent or legal guardian of the eligible student or students.

"Department" means the Department of Revenue.

"Eligible student" means a child who:

(1) is a member of a household whose federal adjusted gross income the year before he or she initially receives a scholarship under this program, as determined by the Department, does not exceed 300% of the federal poverty level and, once the child receives a scholarship, does not exceed 400% of the federal poverty level;

(2) is eligible to attend a public elementary school or high school in Illinois in the semester immediately preceding the semester for which he or she first receives a scholarship or is starting school in Illinois for the first time when he or she first receives a scholarship; and

(3) resides in Illinois while receiving a scholarship.

"Family member" means a parent, child, or sibling, whether by whole blood, half blood, or adoption; spouse; or stepchild.

"Focus district" means a school district which has a school that is either (i) a school that has one or more subgroups in which the average student performance is at or below the State average for the lowest 10% of student performance in that subgroup or (ii) a school with an average graduation rate of less than 60% and not identified for priority.

"Jointly-administered CTE program" means a program or set of programs within a non-public school located in Illinois, as determined by the Department of Labor pursuant to Section 7.5 of this Act.

"Necessary costs and fees" includes the customary charge for instruction and use of facilities in general and the additional fixed fees charged for specified purposes that are required generally of non-scholarship recipients for each academic period for which the scholarship applicant actually enrolls, including costs associated with student assessments, but does not include fees payable only once and other contingent deposits that are refundable in whole or in part. The Board may prescribe, by rules consistent with this Act, detailed provisions concerning the computation of necessary costs and fees.

"Scholarship granting organization" means an entity that:

(1) is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code;

(2) uses at least 95% of the qualified contributions received during a taxable year for scholarships;

(3) provides scholarships to students according to the guidelines of this Act;

(4) deposits and holds qualified contributions and any income derived from qualified contributions in an account that is separate from the organization's operating fund or other funds until such qualified contributions or income are withdrawn for use; and

(5) is approved to issue certificates of receipt.

"Qualified contribution" means the authorized contribution made by a taxpayer to a scholarship granting organization for which the taxpayer has received a certificate of receipt from such organization.

"Qualified school" means a non-public school located in Illinois and recognized by the Board pursuant to Section 2-3.25o of the School Code.

"Scholarship" means an educational scholarship awarded to an eligible student to attend a qualified school of their custodians' choice in an amount not exceeding the necessary costs and fees to attend that school.

"Taxpayer" means any individual, corporation, partnership, trust, or other entity subject to the Illinois income tax. For the purposes of this Act, 2 individuals filing a joint return shall be considered one taxpayer.

"Technical academy" means a non-public school located in Illinois that (i) registers with the Board pursuant to Section 2-3.25o of the School Code and (ii) operates or will operate a jointly-administered CTE program as the primary focus of the school. To maintain its status as a technical academy, the non-public school must obtain recognition from the Board pursuant to Section 2-3.25o of the School Code within 2 calendar years of its registration with the Board.

(Source: P.A. 100-465, eff. 8-31-17.)

(35 ILCS 40/7.5 new)

Sec. 7.5. Determination of jointly-administered CTE programs.

(a) Upon its own motion, or petition from a qualified school or technical academy, the Department of Labor shall determine whether a program or set of programs offered or proposed by a qualified school or technical academy provides coursework and training in career and technical education pathways aligned to industry-recognized certifications and credentials. The Department of Labor shall make that determination based upon whether the industry-recognized certifications or credentials that are the focus of a qualified school or technical academy's coursework and training program or set of programs (i) are associated with an occupation determined to fall under the LEADING or EMERGING priority sectors as determined through Illinois' Workforce Innovation and Opportunity Act Unified State Plan, and (ii) provide wages that are at least 70% of the average annual wage in the State as determined by the United States Bureau of Labor Statistics.

The Department of Labor shall publish a list of approved jointly-administered programs on its website and otherwise make such list available to the public.

(b) A qualified school or technical academy may petition the Department of Labor to obtain a determination that a proposed program or set of programs that it seeks to offer qualifies as a jointly-administered CTE program under subsection (a) of this Section. A petitioner shall file one original petition in the format provided by the Department of Labor and in the manner specified by the Department of Labor. The petitioner may withdraw his or her petition by submitting a written statement to the Department indicating withdrawal. The Department shall approve or deny a petition within 180 days of its submission, and, upon approval, shall proceed to add the program or set of programs to the list of approved jointly-administered CTE programs. The approval or denial of any petition is a final decision of the Department, subject to judicial review under the Administrative Review Law. Jurisdiction and venue are vested in the circuit court.

(c) The Department of Labor shall evaluate the approved jointly-administered CTE programs under this Section once every 5 years. At this time, the Department shall determine whether these programs continue to meet the requirements set forth in subsection (a) of this Section.

(35 ILCS 40/10)

(Section scheduled to be repealed on January 1, 2024)

Sec. 10. Credit awards.

(a) The Department shall award credits against the tax imposed under subsections (a) and (b) of Section 201 of the Illinois Income Tax Act to taxpayers who make qualified contributions. For contributions made under this Act, the credit shall be equal to 100% 75% of the total amount of qualified contributions made by the taxpayer during a taxable year, not to exceed a credit of $1,333,333 $1,000,000 per taxpayer.

(b) The aggregate amount of all credits the Department may award under this Act in any calendar year may not exceed $100,000,000 $75,000,000. The aggregate credit cap under this subsection (b) shall be increased by 20% beginning on the first day of a calendar year if, in at least 2 of the previous 3 calendar years, the applicable aggregate credit cap was reached.

(c) Contributions made by corporations (including Subchapter S corporations), partnerships, and trusts under this Act may not be directed to a particular subset of schools or , a particular school, but may not be directed to a particular group of students, or a particular student. Contributions made by individuals under this Act may be directed to a particular subset of schools or a particular school but may not be directed to a particular group of students or a particular student.

(d) No credit shall be taken under this Act for any qualified contribution for which the taxpayer claims a federal income tax deduction.

(e) Credits shall be awarded in a manner, as determined by the Department, that is geographically proportionate to enrollment in recognized non-public schools in Illinois. If the cap on the aggregate credits that may be awarded by the Department is not reached by April 1 June 1 of a given year, the Department shall award remaining credits on a first-come, first-served basis, without regard to the limitation of this subsection.

(f) Credits awarded for donations made to a technical academy shall be awarded without regard to subsection (e), but shall not exceed 15% of the annual statewide program cap. For the purposes of this subsection, "technical academy" means a technical academy that is registered with the Board within 30 days after the effective date of this amendatory Act of the 102nd General Assembly.

(Source: P.A. 100-465, eff. 8-31-17.)

(35 ILCS 40/40)

(Section scheduled to be repealed on January 1, 2024)

Sec. 40. Scholarship granting organization responsibilities.

(a) Before granting a scholarship for an academic year, all scholarship granting organizations shall assess and document each student's eligibility for the academic year.

(b) A scholarship granting organization shall grant scholarships only to eligible students.

(c) A scholarship granting organization shall allow an eligible student to attend any qualified school of the student's choosing, subject to the availability of funds.

(d) In granting scholarships, beginning in the 2022-2023 school year and each school year thereafter, a scholarship granting organization shall give first priority to eligible students who received a scholarship from a scholarship granting organization during the previous school year. Second priority shall be given to the following priority groups:

(1) (blank); eligible students who received a scholarship from a scholarship granting organization during the previous school year;

(2) eligible students who are members of a household whose previous year's total annual income does not exceed 185% of the federal poverty level;

(3) eligible students who reside within a focus district; and

(4) eligible students who are siblings of students currently receiving a scholarship.

(d-5) A scholarship granting organization shall begin granting scholarships no later than February 1 preceding the school year for which the scholarship is sought. Each The priority group groups identified in subsection (d) of this Section shall be eligible to receive scholarships on a first-come, first-served basis until the April 1 immediately preceding the school year for which the scholarship is sought starting with the first priority group identified in subsection (d) of this Section. Applications for scholarships for eligible students meeting the qualifications of one or more priority groups that are received before April 1 must be either approved or denied within 10 business days after receipt. Beginning April 1, all eligible students shall be eligible to receive scholarships without regard to the priority groups identified in subsection (d) of this Section.

(e) Except as provided in subsection (e-5) of this Section, scholarships shall not exceed the lesser of (i) the statewide average operational expense per student among public schools or (ii) the necessary costs and fees for attendance at the qualified school. Scholarships shall be prorated as follows:

(1) for eligible students whose household income is less than 185% of the federal poverty level, the scholarship shall be 100% of the amount determined pursuant to this subsection (e) and subsection (e-5) of this Section;

(2) for eligible students whose household income is 185% or more of the federal poverty level but less than 250% of the federal poverty level, the average of scholarships shall be 75% of the amount determined pursuant to this subsection (e) and subsection (e-5) of this Section; and

(3) for eligible students whose household income is 250% or more of the federal poverty level, the average of scholarships shall be 50% of the amount determined pursuant to this subsection (e) and subsection (e-5) of this Section.

(e-5) The statewide average operational expense per student among public schools shall be multiplied by the following factors:

(1) for students determined eligible to receive services under the federal Individuals with Disabilities Education Act, 2;

(2) for students who are English learners, as defined in subsection (d) of Section 14C-2 of the School Code, 1.2; and

(3) for students who are gifted and talented children, as defined in Section 14A-20 of the School Code, 1.1; and .

(4) for students enrolled in a jointly-administered CTE program, 1.5.

(f) A scholarship granting organization shall distribute scholarship payments to the participating school where the student is enrolled.

(g) Beginning in For the 2018-2019 school year through the 2021-2022 school year, each scholarship granting organization shall expend no less than 75% of the qualified contributions received during the calendar year in which the qualified contributions were received. No more than 25% of the qualified contributions may be carried forward to the following calendar year.

(h) In determining compliance with subsection (g), a scholarship granting organization may exempt a portion of donations directed to a technical academy operating in the first two calendar years in which the school is eligible to receive donations. For purposes of determining compliance with subsection (g) the sum of exempted donations per technical academy shall not exceed $3,000,000 over the 2-calendar year period. Not more than one scholarship granting organization shall exempt a portion of directed donations per technical academy. For the 2022-2023 school year, each scholarship granting organization shall expend all qualified contributions received during the calendar year in which the qualified contributions were received. No qualified contributions may be carried forward to the following calendar year.

(i) A scholarship granting organization shall allow an eligible student to transfer a scholarship during a school year to any other participating school of the custodian's choice. Such scholarships shall be prorated.

(j) With the prior approval of the Department, a scholarship granting organization may transfer funds to another scholarship granting organization if additional funds are required to meet scholarship demands at the receiving scholarship granting organization. All transferred funds must be deposited by the receiving scholarship granting organization into its scholarship accounts. All transferred amounts received by any scholarship granting organization must be separately disclosed to the Department.

(k) If the approval of a scholarship granting organization is revoked as provided in Section 20 of this Act or the scholarship granting organization is dissolved, all remaining qualified contributions of the scholarship granting organization shall be transferred to another scholarship granting organization. All transferred funds must be deposited by the receiving scholarship granting organization into its scholarship accounts.

(l) Scholarship granting organizations shall make reasonable efforts to advertise the availability of scholarships to eligible students.

(Source: P.A. 100-465, eff. 8-31-17.)

(35 ILCS 40/45)

(Section scheduled to be repealed on January 1, 2024)

Sec. 45. State Board responsibilities.

(a) Beginning in the 2019-2020 school year, students who have been granted a scholarship under this Act shall be annually assessed at the qualified school where the student attends school in the same manner in which students that attend public schools are annually assessed pursuant to Section 2-3.64a-5 of the School Code. Such qualified school shall pay costs associated with this requirement.

(b) The Board shall select an independent research organization, which may be a public or private entity or university, to which participating qualified schools must report the scores of students who are receiving scholarships and are assessed pursuant to subsection (a) of this Section. Costs associated with the independent research organization shall be paid by the scholarship granting organizations on a per-pupil basis or by gifts, grants, or donations received by the Board under subsection (d) of this Section, as determined by the Board. The independent research organization must annually report to the Board on the year-to-year learning gains of students receiving scholarships on a statewide basis. The report shall also include, to the extent possible, a comparison of these learning gains to the statewide learning gains of public school students with socioeconomic backgrounds similar to those of students receiving scholarships. The annual report shall be delivered to the Board and published on its website.

(c) Beginning within 120 days after the Board first receives the annual report by the independent research organization as provided in subsection (b) of this Section and on an annual basis thereafter, the Board shall submit a written report to the Governor, the President of the Senate, the Speaker of the House of Representatives, the Minority Leader of the Senate, and the Minority Leader of the House of Representatives regarding this Act. Such report shall include an evaluation of the academic performance of students receiving scholarships and recommendations for improving student performance.

(d) Subject to the State Officials and Employees Ethics Act, the Board may receive and expend gifts, grants, and donations of any kind from any public or private entity to carry out the purposes of this Section, subject to the terms and conditions under which the gifts are given, provided that all such terms and conditions are permissible under law.

(e) The sharing and reporting of student assessment learning gain data under this Section must be in accordance with requirements of the Family Educational Rights and Privacy Act and the Illinois School Student Records Act. All parties must preserve the confidentiality of such information as required by law. The annual report must not disaggregate data to a level that will disclose the academic level of individual students.

(Source: P.A. 100-465, eff. 8-31-17.)

(35 ILCS 40/65 rep.)

(35 ILCS 40/995 rep.)

Section 105-15. The Invest in Kids Act is amended by repealing Sections 65 and 995.