AB599 - Revises provisions governing the Nevada Educational Choice Scholarship Program. (BDR 34-1157)

EXEMPT A.B. 599 - *AB599* ASSEMBLY BILL NO. 599–COMMITTEE ON WAYS AND MEANS (ON BEHALF OF THE OFFICE OF FINANCE IN THE OFFICE OF THE GOVERNOR) MAY 27, 2025 ____________ Referred to Committee on Ways and Means SUMMARY—Revises provisions governing the Nevada Educational Choice Scholarship Program. (BDR 34-1157) 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; requiring a scholarship organization to register in order to participate in the Nevada Educational Choice Scholarship Program; limiting the period that a donation to a scholarship organization may be carried forward; requiring the Department of Education and scholarship organizations to report certain information; providing the procedure for applying for a grant; requiring a scholarship organization to establish certain procedures; establishing the order of priority in which grants must be awarded; requiring a school that receives a grant on behalf of a pupil under the Program to report certain information regarding the academic progress of such pupils; increasing the total amount of credits the Department of Taxation is authorized to approve each fiscal year under the Program; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law establishes the Nevada Educational Choice Scholarship Program. 1 (NRS 388D.250-388D.280) Under existing law, financial institutions, certain 2 mining businesses and other employers are required to pay an excise tax (the 3 modified business tax) on the wages paid by them. (NRS 363A.130, 363B.110) The 4 Program establishes a credit against the modified business tax paid by certain 5 businesses equal to an amount which is approved by the Department of Taxation 6 – 2 – - *AB599* and which must not exceed the amount of any donation of money which is made by 7 a taxpayer to a scholarship organization that provides grants on behalf of pupils 8 who are members of a household with a household income which is not more than 9 300 percent of the federally designated level signifying poverty to attend schools in 10 this State, including private schools, chosen by the parents or legal guardians of 11 those pupils. (NRS 363A.130, 363A.139, 363B.110, 363B.119, 388D.270) Existing 12 law authorizes the Department, each fiscal year, to approve applications for the 13 credit under the Program until the total amount of credits authorized and approved 14 by the Department is $6,655,000. (NRS 363A.139, 363B.119) Sections 11 and 12 15 of this bill increase the total amount of credits that the Department is authorized to 16 approve to $8,725,000 for Fiscal Year 2025-2026 and $10,725,000 for Fiscal Year 17 2026-2027 and each subsequent fiscal year. 18 Existing law requires each school in which a pupil is enrolled for whom a grant 19 is provided by a scholarship organization to maintain a record of the academic 20 progress of the pupil in such a manner that the information may be aggregated and 21 reported for all such pupils if reporting is required by the Department of Education. 22 (NRS 388D.270) Section 10 of this bill requires each school in which a pupil is 23 enrolled for whom a grant is provided by a scholarship organization to submit to 24 the Department of Education, on or before August 1 of each year, a report on the 25 academic progress of all such pupils during the immediately preceding school year. 26 Section 10 requires the report to include certain information regarding such pupils 27 and be accompanied by a statement from the owner, executive head or chair of the 28 governing body of the school certifying that the information included in the report 29 is complete and accurate. Section 10 requires the Department of Education to 30 compile and analyze the data included in such reports to evaluate the impact of the 31 Program and submit an anonymized summary of the data to the Governor, the State 32 Board of Education and, in alternating years, the Legislature and the Joint Interim 33 Standing Committee on Education. Section 10 authorizes the Department of 34 Education to suspend or disqualify a school from receiving grants on behalf of 35 pupils if the school fails to comply with the reporting requirement. Section 10 36 prohibits a scholarship organization from making a grant to a school that has been 37 suspended or disqualified from receiving grants. 38 Existing regulations include provisions governing the operation of the Nevada 39 Educational Choice Scholarship Program. (NAC 388D.030-388D.130) Sections 2- 40 7 of this bill codify certain provisions of these regulations into the Nevada Revised 41 Statutes. Section 2 requires a scholarship organization to register with the 42 Department of Education by submitting certain information. Section 3 requires: (1) 43 a registered scholarship organization to provide to the Department of Education 44 certain information concerning each pupil on behalf of whom it awards a grant; and 45 (2) the Department of Education to compile certain information submitted by each 46 scholarship organization and review the information to determine whether to 47 recommend a change to the Legislature in the priority for awarding grants. Section 48 4 requires a registered scholarship organization to: (1) provide to the Department of 49 Education certain financial statements; (2) notify the Department of Education if 50 the scholarship organization ceases to qualify as a scholarship organization or 51 ceases to exist; and (3) allow the Superintendent of Public Instruction or his or her 52 designee to inspect the records of the scholarship organization. Section 5 requires a 53 registered scholarship organization to notify the Department of Taxation of each 54 donation received and prohibits a scholarship organization from carrying forward a 55 donation for more than 5 years. Section 6 requires the Department of Education to: 56 (1) maintain a directory of each scholarship organization registered with the 57 Department; (2) submit a list of scholarship organizations registered with the 58 Department to the Department of Taxation quarterly; and (3) submit a summary of 59 certain reports made to the Department of Education to certain entities annually. 60 Section 7 authorizes the parent or guardian of a pupil to apply directly to a 61 – 3 – - *AB599* scholarship organization for a grant and establishes the order of priority in which 62 a scholarship organization is required to award grants. Section 7 also requires a 63 scholarship organization to establish written procedures for determining whether a 64 pupil is qualified to receive a grant and awarding grants on behalf of pupils. 65 Section 8 of this bill adds sections 2-7 to the provisions that may be cited as the 66 Nevada Educational Choice Scholarship Program and section 9 of this bill applies 67 the existing definition of “scholarship organization” to those sections. 68 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 388D of NRS is hereby amended by 1 adding thereto the provisions set forth as sections 2 to 7, inclusive, 2 of this act. 3 Sec. 2. To participate in the Nevada Educational Choice 4 Scholarship Program, a scholarship organization must register 5 with the Department of Education by providing: 6 1. On a form provided by the Superintendent of Public 7 Instruction: 8 (a) The name, address and contact information of the 9 scholarship organization; and 10 (b) If the scholarship organization uses a fiscal year other 11 than July 1 to June 30, the period of the fiscal year used by the 12 scholarship organization; 13 2. Evidence of an official declaration by the Internal Revenue 14 Service that the scholarship organization qualifies as a tax-exempt 15 organization pursuant to 26 U.S.C. § 501(c); 16 3. Confirmation that the scholarship organization is 17 incorporated pursuant to chapter 82 of NRS; 18 4. A copy of the written procedures established pursuant to 19 subsection 2 of section 7 of this act; and 20 5. An affidavit signed by the chief executive officer or 21 president or chair of the board of directors of the scholarship 22 organization under penalty of perjury stating that: 23 (a) No member of the board of directors or employee of the 24 scholarship organization: 25 (1) Has declared bankruptcy within the 7 years immediately 26 preceding the date on which the affidavit is submitted; or 27 (2) Has ever been convicted of a felony; and 28 (b) Neither the scholarship organization nor any member of 29 the board of directors or employee thereof owns or operates a 30 school in this State that receives grant money from the Nevada 31 Educational Choice Scholarship Program. 32 – 4 – - *AB599* Sec. 3. 1. Each scholarship organization that is registered 1 with the Department of Education pursuant to section 2 of this act 2 shall: 3 (a) Not later than October 15, January 15, March 15 and 4 June 15 of each year, provide to the Department in a format 5 prescribed by the Department an electronic list of each pupil on 6 behalf of whom the scholarship organization awarded a grant 7 pursuant to NRS 388D.270 for the previous quarter. The 8 electronic list must include: 9 (1) Demographic information for each pupil, including, 10 without limitation, the name, date of birth, grade level, gender and 11 race or ethnicity of the pupil, whether the pupil has a disability, 12 the household income of the pupil calculated pursuant to section 7 13 of this act and the name and address of the parent or guardian of 14 the pupil; 15 (2) The amount of each grant provided on behalf of a 16 pupil; 17 (3) Whether the pupil received any other scholarships in 18 addition to the grant; 19 (4) The manner in which money from each grant has been 20 used, including, without limitation: 21 (I) The name of each school that has received money 22 from a grant; 23 (II) The tuition and fees charged by each school; and 24 (III) Any portion of such money that has been used to 25 pay for transportation to and from the school; and 26 (5) The number of applications for a grant received by the 27 scholarship organization for which a grant was not awarded and 28 the reason that a grant was not awarded in each case. 29 (b) Annually submit to the Department the name of: 30 (1) The school attended by each pupil on whose behalf a 31 grant is provided during the school year immediately preceding 32 the school year for which the grant is awarded or, if such a pupil 33 was not enrolled in a school, whether the pupil was a 34 homeschooled child, an opt-in child or was not required to attend 35 school pursuant to NRS 392.040 for that school year; and 36 (2) The last public school, if any, attended by each pupil on 37 whose behalf a grant is provided. 38 2. The Department of Education shall annually: 39 (a) Compile the information submitted by each scholarship 40 organization pursuant to subsection 1; and 41 (b) Review the information to determine whether to 42 recommend legislation to revise the priority for awarding grants to 43 the Legislature. 44 – 5 – - *AB599* Sec. 4. Each scholarship organization that is registered with 1 the Department of Education pursuant to section 2 of this act 2 shall: 3 1. Not more than 180 days after the conclusion of the fiscal 4 year of the scholarship organization, submit to the Department of 5 Education a copy of an audited or compiled financial statement of 6 the scholarship organization prepared by an independent certified 7 public accountant. 8 2. If the scholarship organization no longer meets the 9 qualifications prescribed by law to participate in the Nevada 10 Educational Choice Scholarship Program as a scholarship 11 organization or ceases to exist, notify the Department within 30 12 days. Upon receiving such notification, the Department of 13 Education shall update the directory maintained pursuant to 14 section 6 of this act and notify the Department of Taxation. 15 3. Within 72 hours after receiving notice from the 16 Superintendent of Public Instruction or his or her designee, make 17 any financial records of the scholarship organization or records 18 concerning a pupil maintained by the scholarship organization 19 available to the Superintendent or his or her designee for 20 inspection during regular business hours. 21 Sec. 5. 1. A scholarship organization that is registered with 22 the Department of Education pursuant to section 2 of this act shall 23 notify the Department of Taxation in writing not more than 10 24 days after receiving a donation from a taxpayer pursuant to NRS 25 363A.139 or 363B.119, as applicable, of the amount of the 26 donation. 27 2. Any donation received by a scholarship organization must 28 not be carried forward for more than 5 years after the last day on 29 the calendar year in which the donation is made. 30 Sec. 6. The Department of Education shall: 31 1. Maintain on its Internet website a directory of each 32 scholarship organization that is registered with the Department 33 pursuant to section 2 of this act and, not later than September 30, 34 December 30, March 30 and June 30 of each year, submit to the 35 Department of Taxation a list of each such scholarship 36 organization. 37 2. Not later than March 30 of each year, submit to the 38 Governor, the State Board of Education and the Director of the 39 Legislative Counsel Bureau a summary of the information 40 reported to the Department by each scholarship organization 41 pursuant to NRS 388D.280. 42 Sec. 7. 1. The parent or guardian of a pupil who meets the 43 requirements to receive a grant pursuant to NRS 388D.270 may 44 apply to a scholarship organization registered with the Department 45 – 6 – - *AB599* of Education pursuant to section 2 of this act for such a grant. A 1 scholarship organization may charge each family that applies for 2 a grant on behalf of one or more children of the family an 3 administrative fee of not more than $25. 4 2. A scholarship organization shall: 5 (a) Establish written procedures that the scholarship 6 organization will use to determine whether a pupil meets the 7 requirements to receive a grant pursuant to NRS 388D.270 [Text truncated for display. Full text available on LegiScan.]