Disabled/Displaced Tax Credit Law
A.R.S. 43-1184-Lexie's Law
Corporate Tax Credit Law Language
Below is information put out by the Department of Revenue on the Disabled/Displaced Student Corporate Credit
DISABLED/DISPLACED STUDENT CORPORATE CREDIT
HB2001, 49th LEGISLATURE, 2ND SPECIAL SESSION, 2009
THE EFFECTIVE DATE OF THIS LEGISLATION IS AUGUST 26, 2009. NO SCHOLARSHIPS CAN BE PROVIDED NOR CAN ANY CORPORATE DONATIONS FOR THIS CREDIT BE RECEIVED UNTIL AUGUST 26, 2009.
A.R.S. § 43-1184 is a corporate income tax credit for contributions to school tuition organizations (STOs). (A.R.S. § 20-224.06 creates the same credit against the insurance premium tax so that insurance companies can also contribute to school tuition organizations.) These contributions, limited to $5 million annually, are to be used to fund scholarships to private schools for disabled or displaced students. The purpose of these credits is “to encourage businesses to make charitable contributions to school tuition organizations that use the contributions to provide tuition scholarships to enable families to choose the best available education for their children with disabilities or displaced children.” These scholarships were funded by the State of Arizona through the Arizona Department of Education until such funding was struck down by the Arizona Supreme Court.
PLEASE NOTE: The addition of this program brings the total number of private-school-scholarship-type credits to three. This can create confusion. Therefore, this new credit will be referred to here as the disabled/displaced student credit. The corporate income tax credit for donations to school tuition organizations that already existed will be referred to as the corporate STO credit. The individual income tax credit for donations to private school tuition organizations will be referred to as the individual STO credit.
PROCEDURE FOR DONATION APPROVAL: The procedure for donation approval is identical to the procedure for donation approval under the corporate STO credit, governed by A.R.S. § 43-1183. The pre-approval form is on the Arizona Department of Revenue’s website at the following link: Link to the Department Revenue site
The STO solicits donations from corporations. When a corporation decides it would like to contribute, the STO fills out the pre-approval form. That form is then mailed by the STO to Georganna Meyer (address on form) via EXPRESS MAIL for approval. Approval involves determining if there is money available under the annual allocation cap of $5 million. If there is room available under the $5 million allocation, Georganna will fax the approval to the STO and the corporation has 10 days to make the donation. If all the $5 million allocation has been used, the request will be denied. The corporation must then wait until the following fiscal year when a new $5 million allocation is available.
INFORMATION FOR STOs ABOUT SCHOLARSHIPS: For purposes of this scholarship program, only students on the list maintained by the Arizona Department of Revenue are eligible for scholarships. When a parent applies to the STO for a scholarship, the STO must contact Karen Jacobs to determine if the child is on the approved list. When contacting Karen, the STO must have sent a form to Karen allowing release of information to the STO about the child. Karen will not discuss the approval status of a child without an Information Release Form for Education Scholarships and Tuition Grants for Disabled/Displaced Students.
When Karen is contacted regarding a disabled/displaced student, she will also want to know what private school the child will be attending and the cost of tuition. Please have this information available when you contact her.
No scholarships can be paid under this program prior to August 26, 2009. Likewise, no donations can be received for the disabled/displaced student credit program prior to August 26, 2009. This would mean that even though a scholarship could be paid, there would be no funds immediately available for the 2009/2010 academic year. The legislation takes this into consideration and allows STOs to fund scholarships from donations received through the corporate STO credit for the 2009/2010 academic year for disabled/displaced students who received scholarships in the 2008/2009 academic year. In doing so, all scholarship restrictions under the corporate STO credit are not applicable to this specific pool of qualified students. To restate:
IF the STO participates in the corporate STO credit and has revenue on hand,
And, IF the qualified student received a scholarship from the Arizona Department of Education for the 2008/2009 academic year,
THEN the STO may provide scholarships from donations received under the corporate STO credit to these specific qualified students, without regard to the income restrictions and scholarship amount restrictions set out in A.R.S. § 43-1183.
This exception exists only for the 2009/2010 academic year. Scholarships paid out of the corporate STO credit receipts for this academic year cannot exceed the amount of scholarship the student received for the 2008/2009 academic year.
However, there is nothing prohibiting an STO from funding the disabled/displaced students generally and in the future out of the corporate STO credit if the income and scholarship amount restrictions under the corporate STO credit are met. There is also nothing prohibiting an STO from funding the disabled/displaced students from the individual STO credit receipts. If the disabled/displaced student receives scholarship money from the disabled/displaced student credit program and the STO chooses to supplement the scholarship money (because the amount of scholarship money allowed or available does not match tuition) from the corporate STO credit and/or from the individual STO credit, that one student must be counted under each program as receiving a scholarship for reporting purposes. The student would be counted as 1 scholarship for $X under the disabled/displaced student credit program, 1 scholarship for $X under the corporate STO credit and 1 scholarship for $X under the individual STO credit.
INFORMATION FOR PARENTS ABOUT GETTING THEIR CHILD ON THE LISTS AND SCHOLARSHIPS: The scholarships paid under this statute may only go to students on an approved list maintained by Karen Jacobs at the Arizona Department of Revenue. These students have been verified through assistance from the Arizona Department of Education or the Arizona Department of Economic Security. STOs may only pay scholarships to children on this approved list.
Is there an existing list of children eligible for this program?
Every child who received a scholarship from the Arizona Department of Education for the 2008/2009 academic year for this program is on this list. To verify that a child’s name is on the list, the parent may call Karen Jacobs.
What is a qualified student that might be added to this list?
A qualified student is identified as having a disability under Section 504 of the Rehabilitation Act or identified by a school district as a child with a disability as defined in §15-761 or a child with a disability who is eligible to receive services from a school district under §15-763.
A qualified student identified as being displaced must fall into one of the following categories: (1) a child in a CPS case in which dependency as to the child was adjudicated as to both of the child’s parents, and the child has been adopted or placed with a legal guardian. The adoptive parent(s) or legal guardian(s) make(s) the decision to apply for the scholarship; (2) a child in a closed CPS case in which the child was voluntarily placed in foster care; or, (3) a child in a closed CPS case in which the court found the child dependent as to at least one parent and the child is now with a biological or adoptive parent or legal guardian.
Are there other requirements to be added to this list?
If a child did not receive a scholarship from the Arizona Department of Education for the 2008/2009 academic year, the child must have been a public school full-time student for at least the first 100 days of the 2008/2009 academic year. If a child was a full-time student at a private school for ALL of the 2008/2009 academic year, then there is no possibility for a scholarship under this program.
How does a child’s name get on the list if the child did attend a public school full-time for at least the first 100 days of the 2008/2009 academic year and switched to a private school or now wishes to attend a private school during the 2009/2010 academic year?
If a child meets all the requirements, the parent can submit an application to Karen Jacobs to request that the child be placed on the list. The applications for disabled students and for displaced students, along with instructions, are on the Arizona Department of Revenue website.
Link to the Department of Revenue site
These applications are to be filled out and submitted by the parent. The parent may also need to provide certain paperwork to facilitate the application process.
What amount is a student eligible to receive?
In the first year of the program, the 2009/2010 academic year, those children that received scholarships from the Arizona Department of Education for the 2008/2009 academic year are eligible to receive the same amount of scholarship. In other words, if a child is already on the list, that child is eligible to receive the same scholarship for 2009/2010 that was received for 2008/2009.
Any children that are placed on the list but did not receive scholarships from the Arizona Department of Education for 2008/2009 are eligible to receive the lesser of 100% of tuition or 90% of state aid. However, students that received scholarships for the 2008/2009 academic year are to receive priority consideration for any scholarships that may be available.
IMPORTANT NOTE: All children previously in the program are not eligible for as much scholarship money in 2010/2011 and thereafter as they received in 2008/2009.
ANOTHER IMPORTANT NOTE: There is no guarantee that any child will receive scholarship money for the 2009/2010 academic year or any year thereafter. A child may be eligible but if no funds are available from the STOs, no scholarship will be provided.
Are parents required to re-apply each year to be on the eligibility list?
No. Once a student is placed on the eligible student list and receives a scholarship or grant, he or she will continue to be on the list each year unless the student leaves the private school.
Once a parent determines that his/her child is on the list, what should be done?
As soon as the parent determines that his or her child is on the list, the parent should begin contacting STOs. There is a list of STOs on the Arizona Department of Revenue website. However, not all STOs will participate in this program. An alternative would be for the parent to contact the school his or her child attends, or is planning to attend, to see from which STOs that school has been receiving scholarships.
If an STO agrees to provide a scholarship for a child but that scholarship amount is less than what that child is eligible for under the guidelines of this program, a parent may wish to contact another STO to see if additional scholarship money can be obtained. The STOs will be contacting the Arizona Department of Revenue to see if that child has already received a scholarship, in full or in part.
Are parents required to re-apply each year to receive a scholarship or grant from an STO?
The STO with which the parent is working may or may not require parents to re-apply annually for a scholarship or grant.
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