AB214 - Revises provisions governing Nevada Educational Choice Scholarship Program. (BDR 34-130)

A.B. 214 - *AB214* ASSEMBLY BILL NO. 214–ASSEMBLYMEMBER HAFEN PREFILED FEBRUARY 3, 2025 ____________ Referred to Committee on Education SUMMARY—Revises provisions governing Nevada Educational Choice Scholarship Program. (BDR 34-130) FISCAL NOTE: Effect on Local Government: No. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to education; revising the criteria for pupils to be eligible for a grant from a scholarship organization under the Nevada Educational Choice Scholarship Program; establishing the order of priority in which a scholarship organization must award such grants; establishing the minimum amount of a grant provided on behalf of a pupil; revising the amount of credits the Department of Taxation is authorized to approve against the modified business tax for taxpayers who donate to a scholarship organization; providing a tax credit for insurers who donate money to a scholarship organization to be applied against the general tax on insurance premiums; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law requires financial institutions, mining businesses and other 1 employers to pay an excise tax (the modified business tax) on wages paid by them. 2 (NRS 363A.130, 363B.110) Existing law also requires certain insurers to pay a tax 3 of 3.5 percent upon net direct premiums and net direct considerations written by 4 those insurers (the insurance premium tax). (NRS 680B.027) Existing law 5 establishes a credit against the modified business tax for a taxpayer who makes a 6 donation to a scholarship organization that provides grants on behalf of pupils who 7 are members of a household with a household income of not more than 300 percent 8 of the federally designated level signifying poverty to allow those pupils to attend 9 schools in this State, including private schools, chosen by the parents or legal 10 guardians of those pupils (the Nevada Educational Choice Scholarship Program). 11 (NRS 363A.139, 363B.119, 388D.270) Existing law authorizes the Department of 12 Taxation to approve applications for such tax credits until the total amount of 13 credits authorized for each fiscal year is $6,655,000. (NRS 363A.139, 363B.119) 14 – 2 – - *AB214* Sections 3 and 4 of this bill increase the amount of tax credits that the 15 Department of Taxation is authorized to approve for donations made to a 16 scholarship organization through the Nevada Educational Choice Scholarship 17 Program from $6,655,000 for each fiscal year to: (1) for Fiscal Year 2025-2026, 18 $30,000,000; and (2) for each succeeding fiscal year, 110 percent of the amount 19 authorized for the immediately preceding fiscal year. Sections 7 and 8 of this bill 20 establish a credit against the insurance premium tax for an insurer who makes a 21 donation to a scholarship organization through the Nevada Educational Choice 22 Scholarship Program to be administered in the same manner as the credit against 23 the modified business tax. Section 1 of this bill makes a conforming change to 24 indicate that this credit is part of the Nevada Educational Choice Scholarship 25 Program. Section 9 of this bill makes a conforming change to make certain 26 provisions governing the insurance premium tax applicable to this credit. Sections 27 5, 10 and 11 of this bill make conforming changes to make this credit applicable to 28 certain entities who are subject to the insurance premium tax. 29 Section 2 of this bill expands the existing criteria of pupils on whose behalf 30 scholarship organizations must provide grants to include pupils: (1) on whose 31 behalf a grant was awarded for the immediately preceding school year; (2) who are 32 the sibling of a pupil on whose behalf a grant was awarded for the current or 33 immediately preceding school year; (3) who have an individualized education 34 program; (4) who have a parent or legal guardian who is on active duty in the 35 Armed Forces of the United States; and (5) who have a parent or legal guardian 36 who is a peace officer or firefighter. Section 2 also modifies the existing 37 requirement that scholarship organizations provide grants on behalf of pupils who 38 are members of a household that has a household income within a certain 39 percentage of the federally designated level signifying poverty by increasing that 40 percentage from 300 percent of the federally designated level to 400 percent. 41 Section 2 further establishes the order of priority in which a scholarship 42 organization is required to award grants and requires that each grant made by a 43 scholarship organization be not less than $1,000. 44 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 388D.250 is hereby amended to read as 1 follows: 2 388D.250 NRS 363A.139, 363B.119 and 388D.250 to 3 388D.280, inclusive, and sections 7 and 8 of this act may be cited 4 as the Nevada Educational Choice Scholarship Program. 5 Sec. 2. NRS 388D.270 is hereby amended to read as follows: 6 388D.270 1. A scholarship organization must: 7 (a) Be exempt from taxation pursuant to section 501(c)(3) of the 8 Internal Revenue Code, 26 U.S.C. § 501(c)(3). 9 (b) Not own or operate any school in this State, including, 10 without limitation, a private school, which receives any grant money 11 pursuant to the Nevada Educational Choice Scholarship Program. 12 (c) Accept donations from taxpayers and other persons and may 13 also solicit and accept gifts and grants. 14 – 3 – - *AB214* (d) Not expend more than 5 percent of the total amount of 1 money accepted pursuant to paragraph (c) to pay its administrative 2 expenses. 3 (e) Provide grants , which must not be less than $1,000 per 4 pupil, on behalf of pupils [who are members of a household that has 5 a household income which is not more than 300 percent of the 6 federally designated level signifying poverty] in the order of 7 priority set forth in subsection 7 to allow those pupils to attend 8 schools in this State chosen by the parents or legal guardians of 9 those pupils, including, without limitation, private schools. The total 10 amount of a grant provided by the scholarship organization on 11 behalf of a pupil pursuant to this paragraph must not exceed $7,755 12 for Fiscal Year 2015-2016. 13 (f) Not limit to a single school the schools for which it provides 14 grants. 15 (g) Except as otherwise provided in paragraph (e), not limit to 16 specific pupils the grants provided pursuant to that paragraph. 17 2. The maximum amount of a grant provided by the 18 scholarship organization pursuant to paragraph (e) of subsection 1 19 must be adjusted on July 1 of each year for the fiscal year beginning 20 that day and ending June 30 in a rounded dollar amount 21 corresponding to the percentage of increase in the Consumer Price 22 Index (All Items) published by the United States Department of 23 Labor for the preceding calendar year. On May 1 of each year, the 24 Department of Education shall determine the amount of increase 25 required by this subsection, establish the adjusted amounts to take 26 effect on July 1 of that year and notify each scholarship organization 27 of the adjusted amounts. The Department of Education shall also 28 post the adjusted amounts on its Internet website. 29 3. A grant provided on behalf of a pupil pursuant to subsection 30 1 must be paid directly to the school chosen by the parent or legal 31 guardian of the pupil. 32 4. A scholarship organization shall provide each taxpayer and 33 other person who makes a donation, gift or grant of money to the 34 scholarship organization pursuant to paragraph (c) of subsection 1 35 with an affidavit, signed under penalty of perjury, which includes, 36 without limitation: 37 (a) A statement that the scholarship organization satisfies the 38 requirements set forth in subsection 1; and 39 (b) The total amount of the donation, gift or grant made to the 40 scholarship organization. 41 5. Each school in which a pupil is enrolled for whom a grant is 42 provided by a scholarship organization shall maintain a record of the 43 academic progress of the pupil. The record must be maintained in 44 such a manner that the information may be aggregated and reported 45 – 4 – - *AB214* for all such pupils if reporting is required by the regulations of the 1 Department of Education. 2 6. The Department of Education: 3 (a) Shall adopt regulations prescribing the contents of and 4 procedures for applications for grants provided pursuant to 5 subsection 1. 6 (b) May adopt such other regulations as the Department 7 determines necessary to carry out the provisions of this section. 8 7. A scholarship organization shall award grants on behalf of 9 pupils in the following order of priority: 10 (a) Pupils on whose behalf a grant was awarded for the 11 immediately preceding school year. 12 (b) Pupils who are the sibling of a pupil on whose behalf a 13 grant was awarded for the current school year or the immediately 14 preceding school year. 15 (c) Pupils who are members of a household that has a 16 household income which is not more than 400 percent of the 17 federally designated level signifying poverty. 18 (d) Pupils who meet one of the following criteria, in the order 19 in which a completed application for a grant was received on 20 behalf of any such pupil: 21 (1) A pupil who has an individualized education program; 22 (2) A pupil who has a parent or legal guardian who is on 23 active duty in the Armed Forces of the United States; 24 (3) A pupil who has a parent or legal guardian who is a 25 peace officer; or 26 (4) A pupil who has a parent or legal guardian who is a 27 firefighter. 28 8. Notwithstanding the provisions of subsection 7, a 29 scholarship organization shall prioritize the award of a grant to a 30 pupil described in subsection 7 and on whose behalf a completed 31 application for a grant was received on or before the deadline for 32 such applications over any pupil on whose behalf a completed 33 application was not received until after the deadline for such 34 applications. 35 9. As used in this section [, “private] : 36 (a) “Active duty” means full-time duty status in the active 37 uniformed armed service of the United States, including, without 38 limitation, members of the National Guard and Reserve on active 39 duty orders pursuant to 10 U.S.C. §§ 12301-12304b and 10 U.S.C. 40 § 12402. 41 (b) “Firefighter” means a person who is a salaried employee 42 of a fire-fighting agency and whose principal duties are to control, 43 extinguish, prevent and suppress fires. As used in this paragraph, 44 “fire-fighting agency” means a public fire department, fire 45 – 5 – - *AB214* protection district or other agency of this State or political 1 subdivision of this State, the primary functions of which are to 2 control, extinguish, prevent and suppress fires. 3 (c) “Individualized education program” has the meaning 4 ascribed to it in 20 U.S.C. § 1414(d)(1)(A). 5 (d) “Peace officer” has the meaning ascribed to it in 6 NRS 289.010. 7 (e) “Private school” has the meaning ascribed to it in 8 NRS 394.103. 9 Sec. 3. NRS 363A.139 is hereby amended to read as follows: 10 363A.139 1. Any taxpayer who is required to pay a tax 11 pursuant to NRS 363A.130 may receive a credit against the tax 12 otherwise due for any donation of money made by the taxpayer to a 13 scholarship organization in the manner provided by this section. 14 2. To receive the credit authorized by subsection 1, a taxpayer 15 who intends to make a donation of money to a scholarship 16 organization must, before making such a donation, notify the 17 scholarship organization of the taxpayer’s intent to make the 18 donation and to seek the credit authorized by subsection 1. A 19 scholarship organization shall, before accepting any such donation, 20 apply to the Department of Taxation for approval of the credit 21 authorized by subsection 1 for the donation. The Department of 22 Taxation shall, within 20 days after receiving the application, 23 approve or deny the application and provide to the scholarship 24 organization notice of the decision and, if the application is 25 approved, the amount of the credit authorized. Upon receipt of 26 notice that the application has been approved, the scholarship 27 organization shall provide notice of the approval to the taxpayer 28 who must, not later than 30 days after receiving the notice, make the 29 donation of money to the scholarship organization. If the taxpayer 30 does not make the donation of money to the scholarship 31 organization within 30 days after receiving the notice, the 32 scholarship organization shall provide notice of the failure to the 33 Department of Taxation and the taxpayer forfeits any claim to 34 the credit authorized by subsection 1. 35 3. The Department of Taxation shall approve or deny 36 applications for the credit authorized by subsection 1 in the order in 37 which the applications are received. 38 4. Except as otherwise provided in subsection 5, the 39 Department of Taxation may, for each fiscal year, approve 40 applications for the credit authorized by subsection 1 until the total 41 amount of the credits authorized by subsection 1 and approved by 42 the Department of Taxation pursuant to this subsection , [and] 43 subsection 4 of NRS 363B.119 and subsection 4 of section 7 of this 44 act is [$6,655,000.] : 45 – 6 – - *AB214* (a) For Fiscal Year 2025-2026, $30,000,000; and 1 (b) For each succeeding fiscal year, an amount equal to 110 2 percent of the amount authorized for the immediately preceding 3 fiscal year. 4  The amount of any credit which is forfeited pursuant to 5 subsection 2 must not be considered in calculating the amount of 6 credits authorized for any fiscal year. 7 5. Except as otherwise provided in this subsection, in addition 8 to the amount of credits authorized by subsection 4 for Fiscal Years 9 2019-2020, 2020-2021 and 2021-2022, the Department of Taxation 10 may approve applications for the credit authorized by subsection 1 11 for each of those fiscal years until the total amount of the credits 12 authorized by subsection 1 and approved by the Department of 13 Taxation pursuant to this subsection and subsect [Text truncated for display. Full text available on LegiScan.]