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First Substitute H.B. 271

This document includes House Committee Amendments incorporated into the bill on Thu, Feb 26, 2004 at 3:39 PM by kholt. --> This document includes House Committee Amendments (CORRECTED) incorporated into the bill on Fri, Feb 27, 2004 at 3:09 PM by kholt. -->

Representative James A. Ferrin proposes the following substitute bill:


             1     
TUITION TAX CREDITS

             2     
2004 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: James A. Ferrin

             5     
             6      LONG TITLE
             7      General Description:
             8          This bill modifies the Individual Income Tax Act to provide for a tax credit for amounts
             9      paid to a private school for tuition.
             10      Highlighted Provisions:
             11          This bill:
             12          .    provides a refundable tax credit against individual income tax for amounts paid to a
             13      private school for tuition on behalf of a qualifying student;
             14          .    limits the tax credit to 50% of tuition expenses, up to maximum of $1,500 for a
             15      kindergarten student or $2,000 for a student in grades one through 12;
             16          .    defines a qualifying student as an individual who:
             17              .    was not in a private school on January 1, 2004; and
             18              .    is not enrolled in kindergarten in a private school in the 2004-05 school year;
             19      and
             20          .    defines a private school as an elementary or secondary school that:
             21              .    has a physical location in Utah where, for at least 90% of the days within the
             22      school year, the students attend classes and have direct contact with the school's
             23      teachers;
             24              .    does not operate in a residence;
             25              .    enrolls at least H [ 75 ] 40 h students;

             26              .    annually assesses the achievement of each qualifying student; and
             27              .    provides information to parents on teachers' credentials and school
             28      accreditation.
             29      Monies Appropriated in this Bill:
             30          H [ None ] THIS BILL APPROPRIATES $2,000,000 FROM THE GENERAL FUND AND $3,486,100
             30a      FROM THE                   UNIFORM SCHOOL FUND FOR FISCAL YEAR 2004-05 ONLY TO THE STATE BOARD OF
             30b      EDUCATION. h
             31      Other Special Clauses:
             32          This bill provides for retrospective operation.
             33      Utah Code Sections Affected:
             34      ENACTS:
             34a           H 53A-17a-150, Utah Code Annotated 1953 h
             35          59-10-136, Utah Code Annotated 1953
             36     
             37      Be it enacted by the Legislature of the state of Utah:
             38          Section 1. Section 59-10-136 is enacted to read:
             39          59-10-136. Refundable tuition tax credit -- Definitions.
             40          (1) As used in this section:
             41          (a) (i) "Private school" means an elementary or secondary school that:
             42          (A) is not owned and controlled by a governmental entity:
             43          (B) has a physical location in Utah where, for at least 90% of the days within the
             44      school year, the students attend classes and have direct contact with the school's teachers;
             45          (C) provides instruction for one or more grades kindergarten through 12;
             46          (D) at which the compulsory attendance requirements of Section 53A-11-101 may be
             47      met;
             48          (E) (I) annually assesses the achievement of each student by administering a
             49      standardized achievement test scored by an independent party that provides a comparison of
             50      the student's performance to other students on a national basis;
             51          (II) reports the test results to the student's parents; and
             52          (III) upon request, makes test results available to other persons, in a manner that does
             53      not reveal the identity of any student;
             54          (F) provides to parents the relevant credentials of teachers who will be teaching their
             55      children; and
             56          (G) provides to parents a statement indicating which, if any, organizations have

             57      accredited the private school.
             58          (ii) "Private school" does not include a school that:
             59          (A) operates in a residence; or
             60          (B) has an enrollment of less than H [ 75 ] 40 h students.
             61          (b) (i) "Qualifying student" means, except as provided in Subsection (1)(b)(ii), an
             62      individual:
             63          (A) who is enrolled at a private school as a full-time student as determined by the
             64      private school and is not participating in a dual enrollment program pursuant to Section
             65      53A-11-102.5 ;
             66          (B) who will be under 19 years of age on the last day of the school year as determined
             67      by the private school, or, if the individual is disabled and has not graduated from high school
             68      with a regular diploma, will be under 22 years of age on the last day of the school year as
             69      determined by the private school; and
             70          (C) who was not enrolled at a private school on January 1, 2004.
             71          (ii) "Qualifying student" does not include a private school student while enrolled in
             72      kindergarten during the 2004-05 school year.
             73          (2) (a) For taxable years beginning on or after January 1, 2004, a taxpayer may claim a
             74      refundable tax credit against the taxes imposed by this chapter as provided in this section for
             75      amounts paid to a private school for tuition:
             76          (i) on behalf of a qualifying student; and
             77          (ii) during the taxable year.
             78          (b) The refundable tax credit under Subsection (2)(a) may not exceed 50% of amounts
             79      paid to a private school for tuition, up to a maximum of:
             80          (i) $1,500 for tuition payments for a kindergarten student; or
             81          (ii) $2,000 for tuition payments for a student in grades one through 12.
             82          (3) The tax credit provided for in this section may not be carried forward or carried
             83      back.
             83a           H (4)(a) ONLY ONE TAXPAYER MAY CLAIM A REFUNDABLE TAX CREDIT FOR EACH
             83b      QUALIFYING STUDENT EACH TAXABLE YEAR.
             83c          (b) THE TAXPAYER WHO CLAIMS A PERSONAL EXEMPTION FOR THE QUALIFYING STUDENT
             83d      SHALL HAVE THE RIGHT TO CLAIM THE REFUNDABLE TAX CREDIT, UNLESS THAT TAXPAYER
             83e      AUTHORIZES ANOTHER PERSON TO CLAIM THE REFUNDABLE TAX CREDIT.
             83f          (c) IN ACCORDANCE WITH TITLE 63, CHAPTER 46a, UTAH ADMINISTRATIVE RULEMAKING
             83g      ACT, THE COMMISSION SHALL MAKE RULES TO ADMINISTER SUBSECTIONS (4)(a) AND (4)(b).

             83h          (5) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 2005, A REFUNDABLE h

             83i      H TAX CREDIT MAY NOT BE CLAIMED ,IF THE QUALIFYING STUDENT WAS ENROLLED IN A
             83j      PRIVATE SCHOOL FOR PART OF THE TAXABLE YEAR AND IN A UTAH PUBLIC SCHOOL FOR PART
             83k      OF THE SAME TAXABLE YEAR.
             83l           Section 2. Section 53A-17a-150 is enacted to read:
             83m           53A-17a-150. Appropriation for school districts affected by tuition tax credits.
             83n          (1)THERE IS APPROPRIATED $2,000,000 FROM THE GENERAL FUND AND $3,486,100 FROM
             83o      THE UNIFORM SCHOOL FUND FOR FISCAL YEAR 2004-05 ONLY TO THE STATE BOARD OF
             83p      EDUCATION TO BE DISTRIBUTED TO SCHOOL DISTRICTS THAT SUFFER ANY ACTUAL LOSSES
             83q      THAT CAN BE ATTRIBUTED TO THE ENACTMENT OF THE TUITION TAX CREDIT UNDER SECTION
             83r      59-10-136.
             83s          (2) THE APPROPRIATION UNDER SUBSECTION (1) SHALL BE NONLAPSING.
             83t          (3) IN ACCORDANCE WITH TITLE 63, CHAPTER 46a, UTAH ADMINISTRATIVE RULEMAKING
             83u      ACT, THE BOARD SHALL MAKE RULES ESTABLISHING CRITERIA AND PROCEDURES FOR THE
             83v      DISTRIBUTION OF FUNDS APPROPRIATED UNDER SUBSECTION (1). h
             84          Section H [ 2 ] 3 h . Retrospective operation.    
             85          This bill has retrospective operation for taxable years beginning on or after January 1,
             86      2004.

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