Report on legislative activity re: education

The members of the NH House representing Strafford County District 7 have asked that we post the following:

NH House of Representatives

Strafford County      District 7      Durham, Lee, Madbury

Representative Phil Ginsburg       Representative Tim Horrigan    Representative Naida Kaen       

Representative Jenna Roberts      Representative Judith Spang      Representative Janet Wall

To: Oyster River Cooperative School Board

CC: ORCSD Administration 

ORCSD Advisory Budget Committee

From: Strafford-7 Delegation

Date: July 16, 2012

Re: 2012 Legislation

Below you will find legislation from 2012 that you should review as these laws may directly impact the delivery of public education.  The first section simply lists the title and you will find the complete text following that section.  Please note that these bills were not necessarily supported by your Representatives.  To get more information you can go to the NH General Court website: http://www.gencourt.state.nh.us/

To get more information you can go to the NH General Court website: 

http://www.gencourt.state.nh.us/

For a link to these laws, go to:  

http://www.gencourt.state.nh.us/bill_status/misc/chaptered_final_version.aspx

NH House of Representatives—Durham, Lee, Madbury

Philip.Ginsburg@leg.state.nh.us Timothy.Horrigan@leg.state.nh.us Naida.Kaen@leg.state.nh.us   

Jenna.Roberts@ leg.state.nh.us                   Judith.Spang@leg.state.nh.us                           Janet.Wall@leg.state.nh.us

CHAPTER 70

HB 1270 – FINAL VERSION 

7Mar2012… 0840h

2012 SESSION

12-2222

06/01

HOUSE BILL 1270

AN ACT requiring an employer to disclose non-compete and non-piracy agreements prior to making an offer of employment or an offer of change in job classification.

SPONSORS: Rep. K. Murphy, Hills 18; Rep. Infantine, Hills 13; Rep. Abrami, Rock 13; Sen. White, Dist 9

COMMITTEE: Labor, Industrial and Rehabilitative Services

AMENDED ANALYSIS

This bill requires an employer to disclose non-compete and non-piracy agreements to an employee or potential employee prior to making an offer of employment or an offer of change in job classification.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

7Mar2012… 0840h

12-2222

06/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT requiring an employer to disclose non-compete and non-piracy agreements prior to making an offer of employment or an offer of change in job classification.

Be it Enacted by the Senate and House of Representatives in General Court convened:

70:1 New Subdivision; Non-Compete and Non-Piracy Agreements. Amend RSA 275 by inserting after section 69 the following new subdivision:

Non-Compete and Non-Piracy Agreements

275:70 Notice of Non-Compete and Non-Piracy Agreements Required. Prior to or concurrent with making an offer of change in job classification or an offer of employment, every employer shall provide a copy of any non-compete or non-piracy agreement that is part of the employment agreement to the employee or potential employee. Any contract that is not in compliance with this section shall be void and unenforceable.

70:2 Effective Date. This act shall take effect 60 days after its passage.

Approved: May 15, 2012

Effective Date: July 14, 2012

CHAPTER 198

SB 401 – FINAL VERSION

03/28/12 1362s

16May2012… 2120h

2012 SESSION

12-3061

04/09

SENATE BILL 401

AN ACT relative to reporting the average daily membership of pupils in the public schools and relative to adjustments to adequate education grants.

SPONSORS: Sen. Forsythe, Dist 4; Sen. Stiles, Dist 24; Sen. Bragdon, Dist 11; Sen. Bradley, Dist 3; Rep. Hill, Merr 6; Rep. Fleck, Carr 5; Rep. Boehm, Hills 27

COMMITTEE: Education

AMENDED ANALYSIS

This bill amends the definition of “determination year” for the purpose of calculating adequate education grants and authorizes the commissioner of the department of education to make adjustments in adequate education grants based on variations in the average daily membership in attendance data. 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/28/12 1362s

16May2012… 2120h 

12-3061

04/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT relative to reporting the average daily membership of pupils in the public schools and relative to adjustments to adequate education grants.

Be it Enacted by the Senate and House of Representatives in General Court convened:

198:1 Adequate Education; Definitions. Amend RSA 198:38, I to read as follows:

I. “Average daily membership in attendance” or “ADMA” means the average daily membership in attendance of pupils in kindergarten through grade 12, as defined in RSA 189:1-d, III of the [second school year preceding the] school year in which the calculation is made, provided that no kindergarten pupil shall count as more than 1/2 day attendance per calendar year. 

198:2 Adequate Education; Definitions. Amend RSA 198:38, IV to read as follows:

IV. “Determination year” means the [fiscal year that was 3 years prior to the fiscal year for which aid is to be determined] school year immediately preceding the school year for which aid is determined. Unless otherwise indicated, determination year data shall be used to calculate aid.

198:3 Distribution Schedule for Adequate Education Grants. Amend RSA 198:42, I to read as follows:

I. The adequate education grant determined in RSA 198:41 shall be distributed to each municipality's school district or districts legally responsible for the education of the pupils who attend approved public schools within the district or in other districts or who attend approved programs for children with disabilities, as the case may be, from the education trust fund in 4 payments of 20 percent on September 1, 20 percent on November 1, 30 percent on January 1, and 30 percent on April 1 of each school year; provided that for a dependent school district, the grant determined in RSA 198:41 shall be distributed to the municipality, which shall appropriate and transfer the grant funds to its dependent school department. During the course of the school year, the commissioner may make adjustments in grant payments necessitated by variations in the ADMA data for a school district for any fiscal year in which the ADMA calculation is made.

198:4 School Money; Cost of an Opportunity for an Adequate Education. Amend RSA 198:40-a, IV(a) to read as follows:

(a) The sum total calculated under paragraphs I-III of this section shall be used to determine the cost of an adequate education [which shall be used in each year of the biennium].

198:5 School Money; Cost of an Opportunity for an Adequate Education. Amend RSA 198:40-a, V to read as follows:

V. The department shall notify school districts of the estimated amounts of grants by the November 15 preceding the [fiscal] school year for which aid is determined. The commissioner shall provide to the general court all data or reports requested by the general court in a form which the general court determines will facilitate the calculations required in this section.

198:6 New Paragraph; School Money; Cost of an Opportunity for an Adequate Education. Amend RSA 198:40-a by inserting after paragraph V the following new paragraph:

VI. The commissioner of the department of education shall adjust the April adequate education grant disbursement as provided in RSA 198:42 to the extent necessary to ensure that the total education grant for each school district is within 5 percent of the school district’s estimated total education grant amount, as provided in the report prepared by the department of education pursuant to RSA 198:40-a, V, for the school year for which the calculation is made.

198:7 District Taxes; Reports Required. Amend RSA 198:4-d, II to read as follows:

II. A report filed by the governing body of each city and school district shall revise all the estimated revenues for the year. This report shall be filed by September 1 of each year. The revised estimates by school districts for the adequate education grants calculated under RSA 198:41 shall be considered the most accurate within 5 percent of the amount estimated pursuant to RSA 198:40-a, V. 

198:8 New Paragraph; Cooperative School Districts; District Taxes. Amend RSA 195:14 by inserting after paragraph II the following new paragraph:

III.(a) The adequate education grant used in subparagraph I(d) shall be based on the revised estimated revenues contained in the report required in RSA 198:4-d, II.

(b) If the commissioner finds that the actual adequacy grant used in the prior year was inaccurate or inappropriate, the commissioner shall perform a town-specific reconciliation adjustment for each town’s estimates in question against the apportionment. The difference between the recomputed apportionment and the apportionment determined under subparagraph (a), and the difference between the actual adequate education grant provided under RSA 198:42 for the prior year and the grant amount estimated in the prior year under subparagraph (a), shall be the basis for the town-specific reconciliation adjustment.

198:9 Applicability. The provisions of this act shall apply beginning with the 2013-2014 school year.

198:10 Effective Date. This act shall take effect July 1, 2012.

Approved: Enacted in accordance with Article 44, Part II, of N.H. Constitution, without signature of the governor, June 13, 2012.

Effective Date: July 1, 2012

CHAPTER 206

HB 1223-FN – FINAL VERSION 

7Mar2012… 0866h

05/02/12 1860s

05/02/12 1925s

2012 SESSION

12-2145

01/10

HOUSE BILL 1223-FN

AN ACT relative to remedies under the right-to-know law.

SPONSORS: Rep. Giuda, Merr 7; Rep. Watrous, Merr 12; Rep. J. Garrity, Rock 6; Rep. Pitre, Straf 3; Rep. Notter, Hills 19; Rep. LeBrun, Hills 26; Rep. Hansen, Hills 6

COMMITTEE: Judiciary

ANALYSIS

This bill clarifies the remedies for violations of the right-to-know law.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

7Mar2012… 0866h

05/02/12 1860s

05/02/12 1925s

12-2145 01/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT relative to remedies under the right-to-know law.

Be it Enacted by the Senate and House of Representatives in General Court convened:

206:1 Right-to-Know Law; Remedies. RSA 91-A:8 is repealed and reenacted to read as follows:

91-A:8 Remedies. 

I. If any public body or public agency or officer, employee, or other official thereof, violates any provisions of this chapter, such public body or public agency shall be liable for reasonable attorney’s fees and costs incurred in a lawsuit under this chapter, provided that the court finds that such lawsuit was necessary in order to enforce compliance with the provisions of this chapter or to address a purposeful violation of this chapter. Fees shall not be awarded unless the court finds that the public body, public agency, or person knew or should have known that the conduct engaged in was in violation of this chapter or if the parties, by agreement, provide that no such fees shall be paid. 

II. The court may award attorney’s fees to a public body or public agency or employee or member thereof, for having to defend against a lawsuit under the provisions of this chapter, when the court finds that the lawsuit is in bad faith, frivolous, unjust, vexatious, wanton, or oppressive.

III. The court may invalidate an action of a public body or public agency taken at a meeting held in violation of the provisions of this chapter, if the circumstances justify such invalidation.

IV. If the court finds that an officer, employee, or other official of a public body or public agency has violated any provision of this chapter in bad faith, the court shall impose against such person a civil penalty of not less than $250 and not more than $2,000. Upon such finding, such person or persons may also be required to reimburse the public body or public agency for any attorney’s fees or costs it paid pursuant to paragraph I. If the person is an officer, employee, or official of the state or of an agency or body of the state, the penalty shall be deposited in the general fund. If the person is an officer, employee, or official of a political subdivision of the state or of an agency or body of a political subdivision of the state, the penalty shall be payable to the political subdivision.

V. The court may also enjoin future violations of this chapter, and may require any officer, employee, or other official of a public body or public agency found to have violated the provisions of this chapter to undergo appropriate remedial training, at such person or person’s expense. 

206:2 Effective Date. This act shall take effect January 1, 2013.

Approved: June 13, 2012

Effective Date: January 1, 2013

CHAPTER 210

HB 1360 – FINAL VERSION

1Feb2012… 0389h

28Mar2012… 1321h

05/16/12 2148s

2012 SESSION

12-2187 04/03

HOUSE BILL 1360

AN ACT relative to the state board of education rules concerning special education.

SPONSORS: Rep. Balboni, Hills 21; Rep. L. Ober, Hills 27

COMMITTEE: Education

AMENDED ANALYSIS

This bill requires the state board of education and the commissioner of the department of education to submit reports detailing any proposed or adopted special education rules which exceed the minimum requirements of state or federal law. 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

1Feb2012… 0389h

28Mar2012… 1321h

05/16/12 2148s

12-2187

04/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT relative to the state board of education rules concerning special education.

Be it Enacted by the Senate and House of Representatives in General Court convened:

210:1 New Section; Special Education; Rules Exceeding State or Federal Minimum Requirements. Amend RSA 186-C by inserting after section 16-b the following new section:

186-C:16-c Rules Exceeding State or Federal Minimum Requirements. 

I. Whenever the state board of education proposes to adopt or amend any special education rule which exceeds the minimum requirements of state or federal law, the state board shall, in addition to the provisions of RSA 541-A, issue a report of all such proposed rules which meets the following requirements:

(a) For each rule or proposed rule contained in the report, the state board shall include the rule number, the nature of the rule, any state minimum requirement exceeded, any federal minimum requirement exceeded, and the reasons for exceeding those minimum requirements.

(b) The report shall be issued to the chairpersons of the house and senate education committees.

(c) A copy of the report shall be distributed to the superintendent of each school district in the state.

II. By December 1 of each year, the commissioner of the department of education shall issue a report of all special education rules, proposed or adopted, which exceed the minimum requirements of state or federal law. This report shall meet the requirements of paragraph I. 

210:2 Effective Date. This act shall take effect upon its passage.

Approved: June 13, 2012

Effective Date: June 13, 2012

CHAPTER 217

HB 1633 – FINAL VERSION

05/09/12 2157s

2012 SESSION

12-2659

06/03

HOUSE BILL 1633

AN ACT relative to a tally requirement on school district and village district warrant articles.

SPONSORS: Rep. Maltz, Hills 27; Rep. C. McGuire, Merr 8; Rep. Renzullo, Hills 27; Rep. Ulery, Hills 27

COMMITTEE: Election Law

AMENDED ANALYSIS

This bill permits school districts and village districts to require tallies on school district warrant articles.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

05/09/12 2157s

12-2659

06/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT relative to a tally requirement on school district and village district warrant articles.

Be it Enacted by the Senate and House of Representatives in General Court convened:

217:1 Budget Preparation; Tally Requirement. Amend RSA 32:5, V-a to read as follows:

V-a. The legislative body of any town, school district, or village district may vote to require that all votes by an advisory budget committee, a town, school district, or village district budget committee, and the governing body or, in towns, school districts, or village districts without a budget committee, all votes of the governing body relative to budget items or any warrant articles shall be recorded votes and the numerical tally of any such vote shall be printed in the town, school district, or village district warrant next to the affected warrant article. Unless the legislative body has voted otherwise, if a town or school district has not voted to require such tallies to be printed in the town or school district warrant next to the affected warrant article, the governing body may do so on its own initiative.

217:2 Use of Official Ballot; Tally Requirement. Amend RSA 40:13, V-a to read as follows:

V-a. The legislative body of any town, school district, or village district may vote to require that all votes by an advisory budget committee, a town, school district, or village district budget committee, and the governing body or, in towns, school districts, or village districts without a budget committee, all votes of the governing body relative to budget items or any warrant articles or ballot questions shall be recorded votes and the numerical tally of any such vote shall be printed in the town, school district, or village district warrant next to the affected warrant article or on the ballot next to the affected ballot question. Unless the legislative body has voted otherwise, if a town or school district has not voted to require such tallies to be printed in the town or school district warrant next to the affected warrant article or on the ballot next to the affected ballot question, the governing body may do so on its own initiative.

217:3 Effective Date. This act shall take effect July 1, 2013.

Approved: June 13, 2012

Effective Date: July 1, 2013

CHAPTER 219

SB 83-FN – FINAL VERSION 

01/18/12 0219s

11Apr2012… 1513h

17May2012… 2049h

06/06/12 2469EBA

2012 SESSION

11-0994

05/03

SENATE BILL 83-FN

AN ACT enabling municipalities and school districts to create other post-employment benefits (OPEB) trusts.

SPONSORS: Sen. Merrill, Dist 21; Rep. Watters, Straf 4; Rep. P. Schmidt, Straf 4; Rep. Pelletier, Straf 5; Rep. Andolina, Straf 6; Rep. D. Hooper, Straf 5

COMMITTEE: Public and Municipal Affairs

AMENDED ANALYSIS

This bill enables municipalities and school districts to create other post-employment benefits (OPEB) trusts provided that the actuarial liability for the benefit was created on or before January 1, 2012.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

01/18/12 0219s

11Apr2012… 1513h

17May2012… 2049h

06/06/12 2469EBA

11-0994

05/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT enabling municipalities and school districts to create other post-employment benefits (OPEB) trusts.

Be it Enacted by the Senate and House of Representatives in General Court convened:

219:1 New Section; Other Post-Employment Benefits Trusts. Amend RSA 31 by inserting after section 19-b the following new section:

31:19-c Authorization for Municipalities to Establish OPEB Trusts.

I. The legislative body of a municipality that created, on or before January 1, 2012, an actuarial liability to pay other post-employment benefits (OPEB) to employees or officers after their termination of service may establish an irrevocable trust to pay those benefits. In this section, the term “other post-employment benefits” means employee benefits other than pensions that are received after employment ends, and may include such medical, disability, or other health benefits, as are covered by Statement No. 45 of the Governmental Accounting Standards Board (GASB). The term “trust” means a trust qualified under GASB Statement No. 43.

II. Deposits to any fund under such a trust and any earnings on those deposits shall be irrevocable and shall be held in trust for the exclusive benefit of retirees and their beneficiaries in accordance with the terms of the plans or programs providing other post-employment benefits, except that funds governed by the trust may be withdrawn for other purposes only when an employer’s liability owed to former officers or employees for other post-employment benefits has been satisfied or otherwise eliminated pursuant to subparagraph V(b). The assets of any trust created pursuant to this section or in which a municipality participates pursuant to this section shall be exempt from taxation and execution, attachment, garnishment, or any other process. No public officer, employee, or agency shall divert, use, or authorize the use of such funds for any purpose other than as provided in law for other post-employment benefits covered by the trust and administrative expenses.

III. The trustees of any trust created pursuant to this section shall have the full power to invest, reinvest, and manage the assets of the trust. The trustees shall invest the assets of the trust with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. The trustees shall also diversify such investments so as to minimize the risk of large losses unless under the circumstances it is clearly prudent not to do so. The board of trustees may engage a trust administrator, investment consultants, or other qualified professionals to assist with management and investment of the funds of the trust and may pay for these services out of the funds of the trust.

IV. Trusts created by a municipality pursuant to this section shall by administered by the board of trustees established by the municipality pursuant to RSA 31:22. The accounts of the trustees shall be subject to the auditing and reporting requirements of RSA 31:33. Other provisions of RSA 31:19 through 31:38-a governing trusts shall also apply unless they are contrary to this section.

V. The municipality may withdraw money from the funds of a trust created pursuant to this section only:

(a) As needed to pay other post-employment benefits owed to former officers and employees; or

(b) When all other post-employment benefits liability owed to former officers or employees of the employing entity has been satisfied or otherwise defeased.

219:2 Trust Funds Created for the Purpose of Maintaining Health Insurance Funds; Reference Added. Amend RSA 198:20-c, III to read as follows:

III. A trust fund created under the provisions of this section that is established for the purpose of maintaining health insurance funds for the benefit of employees and retired employees of any school district, including an OPEB trust established pursuant to paragraph VII, shall be exempt from the provisions of paragraph II, and when so established, the school district may name its own trustees who may expend any funds in the trust for the payment of health claims or health insurance premiums for the benefit of any employees or retired employees of the school district. An annual accounting and report of the activities of the trust shall be presented to the school board of the district and published in the annual report.

219:3 New Paragraph; School Money; Trust Funds Created for Specific Purposes; OPEB Trusts. Amend RSA 198:20-c by inserting after paragraph VI the following new paragraph:

VII.(a) A school district that created, on or before January 1, 2012, an actuarial liability to pay other post-employment benefits (OPEB) to employees or officers after their termination of service may establish an irrevocable trust to pay those benefits. In this paragraph, the term “other post-employment benefits” means employee benefits other than pensions that are received after employment ends, and may include such medical, disability, or other health benefits, as are covered by Statement No. 45 of the Governmental Accounting Standards Board (GASB). The term “trust” means a trust qualified under GASB Statement No. 43.

(b) Deposits to any fund under such a trust and any earnings on those deposits shall be irrevocable and shall be held in trust for the exclusive benefit of retirees and their beneficiaries in accordance with the terms of the plans or programs providing other post-employment benefits, except that funds governed by the trust may be withdrawn for other purposes only when an employer’s liability owed to former officers or employees for other post-employment benefits has been satisfied or otherwise eliminated pursuant to subparagraph (d)(2). The assets of any trust created pursuant to this paragraph or in which a school district participates pursuant to this paragraph shall be exempt from taxation and execution, attachment, garnishment, or any other process. No public officer, employee, or agency shall divert, use, or authorize the use of such funds for any purpose other than as provided in law for other post-employment benefits covered by the trust and administrative expenses.

(c) The trustees of any trust created pursuant to this paragraph shall have the full power to invest, reinvest, and manage the assets of the trust. The trustees shall invest the assets of the trust with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. The trustees shall also diversify such investments so as to minimize the risk of large losses unless under the circumstances it is clearly prudent not to do so. The trustees may engage a trust administrator, investment consultants, or other qualified professionals to assist with management and investment of the funds of the trust and may pay for these services out of the funds of the trust.

(d) The school district may withdraw money from the funds of a trust created pursuant to this paragraph only:

(1) As needed to pay other post-employment benefits owed to former officers and employees; or

(2) When all other post-employment benefits liability owed to former officers or employees of the employing entity has been satisfied or otherwise defeased.

219:4 Effective Date. This act shall take effect July 1, 2012.

Approved: June 13, 2012

Effective Date: July 1, 2012

CHAPTER 221

SB 373-LOCAL – FINAL VERSION 

03/07/12 0819s

15May2012… 2193h

15May2012… 2260h

2012 SESSION

12-2996

04/10

SENATE BILL 373-LOCAL

AN ACT authorizing the retention of funds by a school district and relative to regional vocational education centers in the Manchester school district.

SPONSORS: Sen. Forsythe, Dist 4; Sen. Carson, Dist 14; Sen. Gallus, Dist 1; Sen. Lambert, Dist 13; Sen. Luther, Dist 12; Sen. Odell, Dist 8; Sen. Stiles, Dist 24; Rep. L. Ober, Hills 27; Rep. Malone, Belk 5

COMMITTEE: Education

AMENDED ANALYSIS

This bill authorizes a school district to retain funds for emergency expenditures or to reduce the tax rate. The bill also makes changes to the definition and enrollment requirements for regional vocational education centers in the Manchester school district and provides that the Manchester school district shall bear the costs associated with such changes. 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/07/12 0819s

15May2012… 2193h

15May2012… 2260h

12-2996

04/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT authorizing the retention of funds by a school district and relative to regional vocational education centers in the Manchester school district.

Be it Enacted by the Senate and House of Representatives in General Court convened:

221:1 School Money; Contingency Fund. Amend RSA 198:4-b to read as follows:

198:4-b Contingency Fund. 

I. [Every] A school district annually by an article in the warrant, [and] or the governing body of a city upon recommendation of the school board, when the operation of the schools is by a department of the city, may establish a contingency fund to meet the cost of unanticipated expenses that may arise during the year. A detailed report of all expenditures from the contingency fund shall be made annually by the school board and published with their report.

II. Notwithstanding any other provision of law, a school district by a vote of the legislative body may authorize, indefinitely until specific rescission, the school district to retain year-end unassigned general funds in an amount not to exceed, in any fiscal year, 2.5 percent of the current fiscal year’s net assessment pursuant to RSA 198:5, for the purpose of having funds on hand to use as a revenue source for emergency expenditures and overexpenditures under RSA 32:11, or to be used as a revenue source to reduce the tax rate.

III. The legislative body of the city of Manchester, upon recommendation of the school committee, may authorize, indefinitely until specific rescission, the school district to retain year-end unassigned general funds.

221:2 New Paragraph; Definition of High School. Amend RSA 194:23 by inserting after paragraph II, the following new paragraph:

II-a. In this section, the term “high school” shall include any regional vocational education center in the Manchester school district which complies with the provisions of RSA 188-E. 

221:3 Regional Vocational Education; Program. Amend RSA 188-E:5, II to read as follows:

II. Regional vocational centers shall, on a space available basis, enroll any student requesting enrollment who has attended 2 years of high school regardless of the number of academic credits earned, except that the Manchester school district shall, on a space available basis, enroll and bear the associated costs for any Manchester school district student in grades 9-12 who resides in the city of Manchester and who requests enrollment in a regional vocational center within the district, provided that in either case: 

(a) The student has successfully completed any courses required as a prerequisite for the career and technical education program elected; or 

(b) The prerequisites have been waived by the regional vocational center. Such a waiver shall not be unreasonably withheld.

221:4 Effective Date.

I. Section 1 of this act shall take effect 60 days after its passage.

II. The remainder of this act shall take effect upon its passage.

Approved; June 13, 2012

Effective Date: I. Section 1 shall take effect August 12, 2012.

II. Remainder shall take effect June 13, 2012.

CHAPTER 224

HB 1139 – FINAL VERSION 

7Mar2012… 0600h

05/16/12 2033s

2012 SESSION

12-2545

04/03

HOUSE BILL 1139

AN ACT making changes to the unique pupil identification system.

SPONSORS: Rep. Hill, Merr 6; Rep. Boehm, Hills 27; Rep. Ingbretson, Graf 5

COMMITTEE: Education

AMENDED ANALYSIS

This bill allows a parent, legal guardian, or person who is 18 years of age or older to have access to the unique pupil identifier and related information in the data warehouse.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

7Mar2012… 0600h

05/16/12 2033s

12-2545

04/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT making changes to the unique pupil identification system.

Be it Enacted by the Senate and House of Representatives in General Court convened:

224:1 Unique Pupil Identification; Availability. Amend RSA 193-E:5, I(b) to read as follows:

(b) The random number generator shall make available to each early childhood program, district, or postsecondary institution a unique pupil identifier for each pupil pursuing an education in a New Hampshire early childhood program, district, or postsecondary institution. The unique pupil identifier itself shall not permit pupil identification within a [sub-category] subcategory including, but not limited to, early childhood program, district, postsecondary institution, sex, age, grade, or county of residence.

224:2 Unique Pupil Identification; Access. Amend RSA 193-E:5, I(d) to read as follows:

(d)(1) Access to the random number generator shall be limited to an early childhood program director or designee, a district superintendent or designee, or a postsecondary institution registrar or designee, and only for pupils pursuing an education in that early childhood program, district, or postsecondary institution. 

(2) A parent or legal guardian shall, upon request made in person to the early child program director, school district superintendent for the district which the child last attended, or postsecondary institution registrar, have access to their child’s unique pupil identifier and their child’s data maintained in the data warehouse. A person who is 18 years of age or older shall, upon request made in person to the early child program director, school district superintendent for the district which the person last attended, or postsecondary institution registrar, have access to their unique pupil identifier and their data maintained in the data warehouse.

(3) Any person who knowingly violates [this provision] the provisions of this subparagraph is guilty of a class B felony and may be subject to involuntary termination of employment.

224:3 Effective Date. This act shall take effect 60 days after its passage.

Approved: June 15, 2012

Effective Date: August 14, 2012

CHAPTER 227

HB 1571 – FINAL VERSION

15Feb2012… 0554h

05/16/12 2036s

2012 SESSION

12-2778

04/10

HOUSE BILL 1571

AN ACT relative to educational evaluation of home schooled children.

SPONSORS: Rep. Hoell, Merr 13

COMMITTEE: Education

AMENDED ANALYSIS

This bill amends the educational evaluation procedures for home educated children and repeals the notice, hearing, and appeals procedures afforded to parents relative to the termination of a home education program. The bill also clarifies the school district's limited liability for home educated children.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

15Feb2012… 0554h

05/16/12 2036s

12-2778

04/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT relative to educational evaluation of home schooled children.

Be it Enacted by the Senate and House of Representatives in General Court convened:

227:1 Home Education; Notification. Amend RSA 193-A:5, IV to read as follows:

IV. [Subject to the provisions of RSA 193-A:7,] The commissioner of education, resident district superintendent, or nonpublic school principal shall acknowledge receipt of notification within 14 days of such receipt.

227:2 Home Education; Records; Evaluation. Amend RSA 193-A:6 to read as follows:

193-A:6 Records; Evaluation. 

I. The parent shall maintain a portfolio of records and materials relative to the home education program. The portfolio shall consist of a log which designates by title the reading materials used, and also samples of writings, worksheets, workbooks, or creative materials used or developed by the child. Such portfolio shall be preserved by the parent for 2 years from the date of the ending of the instruction.

II. The parent shall provide for an annual educational evaluation in which is documented the child’s demonstration of educational progress at a level commensurate with the child’s age and ability. The child shall be deemed to have successfully completed his annual evaluation upon meeting the requirements of any one of the following:

(a) A certified teacher or a teacher currently teaching in a nonpublic school who is selected by the parent shall evaluate the child’s educational progress upon review of the portfolio and discussion with the parent or child[. The teacher shall submit a written evaluation to the commissioner of education, resident district superintendent, or nonpublic school principal];

(b) The child shall take any national student achievement test, administered by a person who meets the qualifications established by the provider or publisher of the test. Composite results at or above the fortieth percentile on such tests shall be deemed reasonable academic proficiency[. Such test results shall be reported to the commissioner of education, resident district superintendent, or nonpublic school principal];

(c) The child shall take a state student assessment test used by the resident district. Composite results at or above the fortieth percentile on such state test shall be deemed reasonable academic proficiency[. Such test results shall be reported to the commissioner of education, the resident district superintendent, or nonpublic school principal]; or

(d) The child shall be evaluated using any other valid measurement tool mutually agreed upon by the parent and the commissioner of education, resident district superintendent, or nonpublic school principal. [The results shall be reported by the parent or the testing agency to such appropriate official.]

III. [The commissioner of education, resident district superintendent, or nonpublic school principal shall review the results of the annual educational evaluation of the child in a home education program as provided in paragraph II. If the child does not demonstrate educational progress for age and ability at a level commensurate with his ability, the commissioner, superintendent, or principal shall notify the parent, in writing, that such progress has not been achieved. The parent shall have one year from the date of receipt of the written notification to provide remedial instruction to the child. At the end of the one-year probationary period, the child shall be reevaluated in a manner as provided in this section. Continuation in a home education program shall be contingent upon the child demonstrating at the end of the probationary period educational progress commensurate with his age and ability. The parent of a child who fails to demonstrate such progress at the end of the probationary period shall be notified by the commissioner that the parent is entitled to a hearing as provided in RSA 193-A:7, I and II and that the program will be terminated absent a finding for continuation pursuant to such hearing. Upon a finding that the program should be terminated, the child shall be reported by the commissioner or nonpublic school principal to the appropriate resident district superintendent, who shall, if necessary, take appropriate action to ensure that compulsory attendance requirements are met] The parent shall maintain a copy of the evaluation. The results of the evaluation:

(a) May be used to demonstrate the child’s academic proficiency in order to participate in public school programs, and co-curricular activities which are defined as school district-sponsored and directed athletics, fine arts, and academic activities. Home educated students shall be subject to the same participation policy and eligibility conditions as apply to public school students.

(b) Shall not be used as a basis for termination of a home education program.

(c) Provides a basis for a constructive relationship between the parent and the evaluator, both working together in the best interest of the child.

227:3 Limited Liability. Amend RSA 193-A:9 to read as follows:

193-A:9 Liability Limited. The resident school district, the board of such district, and any employees of the resident school district associated with a child who is or has been receiving home education [in accordance with this chapter,] are not liable in damages in a civil action for any injury, death or loss to person or property allegedly sustained by that child, [his] the child’s parent, or any other person as a result of the child's receipt of home education, including but not limited to, any liability allegedly based on the failure of the child to receive a free appropriate or adequate public education.

227:4 Repeal. The following are repealed:

I. RSA 193-A:7, relative to notice and hearing afforded to a parent conducting a home education program.

II. RSA 193-A:8, relative to issuance of order after a hearing and appeals of such orders.

227:5 Effective Date. This act shall take effect upon its passage.

Approved: Enacted in accordance with Article 44, Part II, N.H. Constitution, without signature of governor, June 16, 2012.

Effective Date: June 16, 2012

CHAPTER 234

SB 402 – FINAL VERSION

03/28/12 1408s

15May2012… 2124h

06/06/12 2483EBA

2012 SESSION

12-3062

04/03

SENATE BILL 402

AN ACT relative to the adoption of policies for the management of concussion and head injury in student sports.

SPONSORS: Sen. Houde, Dist 5; Sen. Lambert, Dist 13; Sen. Boutin, Dist 16; Sen. D'Allesandro, Dist 20; Sen. Kelly, Dist 10; Sen. Merrill, Dist 21; Sen. Larsen, Dist 15; Rep. White, Graf 11; Rep. Harding, Graf 11; Rep. Gile, Merr 10; Rep. Millham, Belk 5; Rep. Reagan, Rock 1

COMMITTEE: Health and Human Services

AMENDED ANALYSIS

This bill requires school districts to develop policies for the management of concussion and head injury in student sports and limits a school district’s liability for injuries occurring on school district property.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/28/12 1408s

15May2012… 2124h

06/06/12 2483EBA

12-3062

04/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT relative to the adoption of policies for the management of concussion and head injury in student sports.

Be it Enacted by the Senate and House of Representatives in General Court convened:

234:1 Legislative Findings. The general court finds that: 

I. A concussion is caused by a blow or motion to the head or body that causes the brain to move rapidly inside the skull. The risk of catastrophic injuries or death are significant when a concussion or head injury is not properly evaluated and managed.

II. Concussions are a type of mild brain injury that can disrupt the way the brain normally works. Concussions can result from a fall or from players colliding with each other, the ground, or obstacles. Concussions occur with or without loss of consciousness, but the vast majority occur without loss of consciousness. When managed properly, the majority of concussions resolve without direct medical intervention in 10-14 days.

III. Continuing to play with a concussion or symptoms of head injury leaves the student-athlete especially vulnerable to greater injury and even death.

234:2 New Subdivision; Health and Sanitation; Head Injury Policies for Student Sports. Amend RSA 200 by inserting after section 48 the following new subdivision:

Head Injury Policies for Student Sports

200:49 Head Injury Policies for Student Sports. Education is the key to identification and appropriate management of all concussions. The school board of each school district is encouraged to develop guidelines and other pertinent information and forms for student sports to inform and educate coaches, student-athletes, and student-athletes’ parents or guardians of the nature and risk of concussion and head injury including continuing to play after concussion or head injury. On an annual basis, a school district or school is encouraged to distribute a concussion and head injury information sheet to all student-athletes. 

200:50 Removal of Student-Athlete.

I. A school employee coach, official, licensed athletic trainer, or health care provider who suspects that a student-athlete has sustained a concussion or head injury in a practice or game shall remove the student-athlete from play immediately.

II. A student-athlete who has been removed from play shall not return to play on the same day or until he or she is evaluated by a health care provider and receives medical clearance and written authorization from that health care provider to return to play. The student-athlete shall also present written permission from a parent or guardian to return to play.

III. No person who authorizes a student-athlete to return to play shall be liable for civil damages resulting from any act or omission in the rendering of such care, other than acts or omissions constituting gross negligence or willful or wanton misconduct.

200:51 School Districts; Limitation of Liability. An employee of a school administrative unit, school, or chartered public school, or a school volunteer, pupil, parent, legal guardian, or employee of a company under contract to a school, school district, school administrative unit, or chartered public school, shall be immune from civil liability for good faith conduct arising from or pertaining to the injury or death of a student-athlete provided the action or inaction was in compliance with this subdivision and local school board policies relative to the management of concussions and head injuries. This limitation of liability shall extend to school-sponsored athletic activities. A school district or school may provide concussion guidelines to other organizations sponsoring athletic activities on school property, however the school district or school shall not be required to enforce compliance with such guidelines.

200:52 Definitions. As used in this subdivision:

I. “Health care provider” means a person who is licensed, certified, or otherwise statutorily authorized by the state to provide medical treatment and is trained in the evaluation and management of concussions.

II. “School property” means school property as defined in RSA 193-D:1, V.

III. “Student-athlete” means a student in grades 9-12 involved in student sports.

IV. “Student sports” means athletic programs for students in grades 9-12.

234:3 Effective Date. This act shall take effect 60 days after its passage.

Approved: June 18, 2012

Effective Date: August 17, 2012

CHAPTER 239

SB 328 – FINAL VERSION 

06/06/12 2384CofC

2012 SESSION

12-3026

03/04

SENATE BILL 328

AN ACT relative to the procedure for filling a vacancy on a cooperative school board.

SPONSORS: Sen. Bragdon, Dist 11

COMMITTEE: Education

ANALYSIS

This bill modifies the procedure for filling a vacancy on a cooperative school board.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

06/06/12 2384CofC

12-3026

03/04

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT relative to the procedure for filling a vacancy on a cooperative school board.

Be it Enacted by the Senate and House of Representatives in General Court convened:

239:1 School Districts; Vacancies. Amend RSA 671:33 to read as follows:

671:33 Vacancies.

I. Vacancies among members of cooperative or area school planning committees shall be filled by the moderator for the unexpired term.

II.(a) The school board shall fill vacancies occurring on the school board, except as provided in subparagraph (b), and in all other district offices for which no other method of filling a vacancy is provided. Appointees of the school board shall serve until the next district election when the voters of the district shall elect a replacement for the unexpired term. In the case of a vacancy of the entire membership of the school board, or if the remaining members are unable, by majority vote, to agree upon an appointment, the selectmen of the town or towns involved shall appoint members by majority vote in convention.

(b) In a cooperative school district, the remaining school board members representing the same town or towns as the departed member shall fill a vacancy on the school board, provided that there are at least 2 such members. If there are less than 2 remaining members on the cooperative school board representing the same town or towns as the departed member, or if the remaining members are unable, by majority vote, to agree upon an appointment, the selectmen of the town or towns involved shall fill the vacancy by majority vote in convention. If the selectmen are unable to fill the vacancy then the cooperative school district moderator shall make the appointment. A member appointed to fill a vacancy under this subparagraph shall serve until the next district election when the voters of the district shall elect a replacement for the unexpired term.

III. Vacancies in the office of moderator shall be filled by vote at a school meeting or election, provided that, until a replacement is chosen, the school district clerk shall serve as moderator.

IV. Vacancies occurring on the budget committee of a cooperative school district shall be filled by appointment made within 5 days by the budget committee, or by the chairperson of the cooperative school board if the vacancy is that of a member appointed from the school board.

239:2 Effective Date. This act shall take effect 60 days after its passage.

Approved: June 18, 2012 Effective Date: August 17, 2012

CHAPTER 257

HB 1325 – FINAL VERSION

1Feb2012… 0307h

28Mar2012… 1334h

05/16/12 2145s

6June2012… 2449CofC

2012 SESSION

12-2012

04/05

HOUSE BILL 1325

AN ACT relative to legal residency requirements for purposes of school attendance for children of divorced parents.

SPONSORS: Rep. Proulx, Hills 15

COMMITTEE: Education

AMENDED ANALYSIS

This bill revises the legal residency requirements for purposes of school attendance for children of divorced parents.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

1Feb2012… 0307h

28Mar2012… 1334h

05/16/12 2145s

6June2012… 2449CofC

12-2012

04/05

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT relative to legal residency requirements for purposes of school attendance for children of divorced parents.

Be it Enacted by the Senate and House of Representatives in General Court convened:

257:1 School Attendance; Legal Residence Required. Amend RSA 193:12, II(a)(2) to read as follows:

(2)(A) In a divorce decree where parents are awarded joint decision making responsibility or joint legal custody, the legal residence of a minor child is the residence of the parent with whom the child resides. In a divorce decree, or parenting plan developed pursuant to RSA 461-A, a child’s legal residence for school attendance purposes may be the school district in which either parent resides, provided the parents agree in writing to the district the child will attend and each parent furnishes a copy of the agreement to the school district in which the parent resides. The parents shall update their parenting plan to reflect this agreement. If a parent is awarded sole or primary residential responsibility or physical custody by a court of competent jurisdiction in this or any other state, legal residence of a minor child is the residence of the parent who has sole or primary residential responsibility or physical custody. If the parent with sole or primary physical custody lives outside the state of New Hampshire, the pupil does not have residence in New Hampshire. If the court order is for equal or approximately equal periods of residential responsibility, the child’s legal residence for school attendance purposes shall be as stated in the order. If a child is in a court-ordered residential placement, foster home, or group home pursuant to RSA 169-B, RSA 169-C, RSA 169-D, RSA 170-C, or RSA 463, residence shall be determined in accordance with RSA 193:28.

(B) Nothing in this subparagraph shall require a school district to provide transportation for a child to another school in the school district in which the child resides or beyond the geographical limits of the school district in which the child resides.

257:2 Effective Date. This act shall take effect upon its passage.

Approved: June 18, 2012

Effective Date: June 18, 2012

CHAPTER 275

HB 533-FN-LOCAL – FINAL VERSION 

4Jan2012… 2801h

28Mar2012… 1064h

6June2012… 2448CofC

6June2012… 2504EBA

2012 SESSION

11-0680

04/09

HOUSE BILL 533-FN-LOCAL

AN ACT establishing a cap on the amount of school building aid grants distributed in each fiscal year.

SPONSORS: Rep. Ladd, Graf 5; Rep. Boehm, Hills 27; Rep. Jasper, Hills 27; Rep. Fleck, Carr 5

COMMITTEE: Special Committee on Education Funding Reform

AMENDED ANALYSIS

This bill revises the calculation and distribution of school building aid grants.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

4Jan2012… 2801h

28Mar2012… 1064h

6June2012… 2448CofC

6June2012… 2504EBA

11-0680

04/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT establishing a cap on the amount of school building aid grants distributed in each fiscal year.

Be it Enacted by the Senate and House of Representatives in General Court convened:

275:1 School Building Aid; Annual Grant. Amend RSA 198:15-a to read as follows:

198:15-a [Annual] Grant for [the Payment of Debt Service for] School Construction. 

I. To aid local school districts in meeting the costs of [the payment of debt for] school buildings [and educational administration buildings, including office facilities for school administrative units, and to meet the costs of leasing permanent space in a building which is used for the operation of a high school vocational technical education program], the department of education shall, from funds appropriated by the general court to carry out the provisions of this subdivision, pay [annually] to the school districts of the state, sums in accordance with the provisions of this subdivision or the alternative school building aid provisions under RSA 198:15-u through RSA 198:15-w[, depending on which option a school district elects. The annual grant to school districts shall be made in 2 approximately equal payments, one in October and one in April of each fiscal year. No payment shall be made to a school district prior to the district’s first payment on the amount of principal borrowed].

II. [To provide funds for appropriations made to the department of education relative to paragraph I for the fiscal years ending June 30, 2009, June 30, 2010, and June 30, 2011, the state treasurer is hereby authorized to borrow upon the credit of the state the sums necessary for payment of such grants and for said purpose may issue bonds and notes in the name of and on behalf of the state of New Hampshire in accordance with RSA 6-A. Payments of principal and interest on the bonds and notes shall be made when due by the state treasurer from funds designated under RSA 78-A:26, I(a)] Beginning with construction authorized by a local school district on or after July 1, 2013, office facilities for school administrative units and the purchase or lease-purchase of temporary space for any purpose, including but not limited to modulars, trailers, or other similar structures to be used as classroom, office, or storage space shall not be eligible for school building aid grants. 

III. Facilities constructed using school building aid grants shall be used as instructional facilities for kindergarten through grade 12 for at least 20 years. A school district that discontinues the use of the facilities within 20 years shall be required to repay the state 100 percent of the state grant received. Upon a showing of good cause by the school district, the commissioner of the department of education may waive this penalty in whole or part on a case by case basis.

IV. Beginning July 1, 2013, and every fiscal year thereafter, school building aid grants for construction or renovation projects approved by the department of education shall not exceed $50,000,000 per fiscal year less any debt service payments owed in the fiscal year, unless otherwise provided by an act of the general court. School building aid grants shall be funded from appropriations in the state operating budget and no state bonds shall be authorized or issued for the purpose of funding such school building aid grants.

275:2 School Building Aid; Amount of Grant. Amend RSA 198:15-b to read as follows:

198:15-b Amount of [Annual] Grant. 

I.(a)(1) For construction authorized by a school district on or before July 1, 2013, the amount of the annual grant to any school district duly organized, any city maintaining a school department within its corporate organization, any cooperative school district as defined in RSA 195:1, any receiving district operating an area school as defined in RSA 195-A:1, or any receiving district providing an education to pupils from one or more sending districts under a contract entered into pursuant to RSA 194:21-a or RSA 194:22, shall be a sum equal to 30 percent of the amount of the annual payment of principal on all outstanding borrowings of the school district, city, cooperative school district, joint maintenance agreement, or receiving district, heretofore or hereafter incurred, for the cost of construction or purchase of school buildings and school administrative unit facilities, or for the cost of acquiring, developing, or renovating any municipally-owned land, buildings, or facilities to be used for school district purposes, to the extent approved by the department of education, provided that any school district may receive an annual grant in the amount of 40 percent for the construction of an educational administration building for a school administrative unit, and provided that the amount of the annual grant in the case of a cooperative school district, a joint maintenance agreement, a receiving district operating an area school, or any receiving district providing an education to pupils from one or more sending districts under a contract entered into pursuant to RSA 194:21-a or RSA 194:22, shall be 40 percent plus 5 percent for each pre-existing district in excess of 2 and each sending district in excess of one, and provided further that no cooperative school district, joint maintenance agreement, or receiving district operating an area school, shall receive an annual grant in excess of 55 percent.

(2)(A) For construction authorized by a school district after July 1, 2013, school building aid grants for new construction shall not exceed the state appropriation for school building aid for the fiscal year, less any debt service payments due and owing in the fiscal year for construction or renovation projects approved in a prior fiscal year, less the amount owed for construction or renovation projects approved prior to July 1, 2013 in accordance with subparagraph (a)(1), unless otherwise provided by an act of the general court. School building aid grants approved pursuant to RSA 198:15-u through RSA 198:15-w, shall be disbursed to school districts pursuant to this subparagraph and no state bonds shall be authorized or issued for the purpose of funding school building aid grants. The amount of the grant to any school district duly organized, any city maintaining a school department within its corporate organization, any cooperative school district as defined in RSA 195:1, any receiving district operating an area school as defined in RSA 195-A:1, or any receiving district providing an education to pupils from one or more sending districts under a contract entered into pursuant to RSA 194:21-a or RSA 194:22, shall be calculated based on the criteria set forth in RSA 198:15-v.

(B) The state board of education shall approve the disbursement of 80 percent of the eligible grant amount upon approval of the application for school building aid grants by the state board of education, and shall disburse the balance of the grant amount upon completion of the construction and verification of the final cost of construction by the department of education. 

(C) The amount of the grant to any chartered public school established in accordance with RSA 194-B:3-a shall be 30 percent of the eligible cost of construction.

(D) Any state aid for leased space pursuant to RSA 198:15-hh shall require a separate appropriation, and shall not be included in the state appropriation for school building aid. 

(b) For any municipally-owned land, buildings, or facilities for which a school building aid grant is granted under this subdivision, the following shall apply:

(1) A school district, a city maintaining a school department within its corporate organization, a cooperative school district as defined in RSA 195:1, a receiving district operating an area school as defined in RSA 195-A:1, or a receiving district providing an education to pupils from one or more sending districts under a contract entered into pursuant to RSA 194:21-a or RSA 194:22, shall have first priority in the use of such land, buildings, or facilities for 10 years or the life of any bond or note issued to provide funds for such land, buildings, or facilities, whichever is greater.

(2) [The cost of any proposed renovation project shall be less than the cost of a new acquisition for the same purpose] A school district, a city maintaining a school department within its corporate organization, a cooperative school district as defined in RSA 195:1, a receiving district operating an area school as defined in RSA 195-A:1, or a receiving district providing an education to pupils from one or more sending districts under a contract entered into pursuant to RSA 194:21-a or RSA 194:22, shall submit, when applying for aid under this chapter, the least costly building plan based on a 20-year life cycle cost analysis that meets minimum state building standards in this chapter along with any alternative plans that may be proposed.

(3) In the absence of a bond or note or upon the expiration of any bond or note issued to provide funds for land, buildings, or facilities, the principal parties shall enter into an agreement on how such land, buildings, or facilities are to be used.

[I-a.(a) A receiving district situated in this state which is providing education to students from another school district situated in this state under a contract entered into pursuant to RSA 194:21-a or RSA 194:22, shall be eligible to receive the higher annual grant amount provided in RSA 198:15-b, I or RSA 198:15-v under the following conditions:

(1) The contract requires the receiving district to educate at least 70 percent of the public school students at particular grade levels from a sending district as provided in the contract.

(2) The contract contains a provision for the payment of capital costs for specific capital projects.

(3) The contract provides the manner in which school building aid is to be credited to school districts.

(4) The contract or sending district’s obligation to pay capital costs is for a period of 10 years or longer.

(b) The provisions of this paragraph shall only apply for those years in which the contract is in effect. In all other years, the receiving district shall receive aid in the amount for which it would otherwise be eligible under RSA 198:15-b, I or RSA 198:15-v.

(c) No receiving district shall receive a school building aid grant which is less than what a single school district would receive under RSA 198:15-b, I or RSA 198:15-v.

I-b.(a) A school district, or other entity listed in paragraph I of this section, which is in compliance with the requirements of this section, shall be entitled to receive an additional grant equal to 3 percent of the total construction costs. To be eligible for additional grant moneys, construction projects, as built, shall meet the criteria for designation as a high performance school under the most recent edition of the New England version of standards from the Collaborative for High Performance Schools. Application for the grant of additional moneys shall be submitted on forms developed by the department of education.

(b) Not more than $100,000 in any fiscal year in new additional grant moneys shall be awarded. In the event that the total additional grant entitlement in any fiscal year exceeds $100,000, the full entitlement of grant moneys shall be awarded to the districts having projects which exceed the minimum criteria for designation as a high performance school to the greatest extent.

(c) The department of education shall review other high performance standards as they are developed and shall recommend adoption of new standards when in the judgment of the department, the new standards better reflect the intent of this section.]

I-c.] I-a.(a) In addition to the requirements of paragraph I, each school district, prior to receipt of any grant moneys, shall submit for review and approval a written maintenance plan describing in detail how the school district intends to maintain the new facilities to be constructed with state aid grant moneys. The required maintenance plan shall include, but not be limited to, the following information:

(b) A description of the procedures to be used, and the method of staffing in which, the following building services are or will be provided. For work performed by in-house staff, an indication of the staffing level shall be provided, expressed as full-time equivalent positions:

(1) Daily facility cleaning.

(2) Grounds maintenance.

(3) Refuse removal.

(4) Snow removal.

(5) Minor maintenance and repair.

(6) Pest management.

(7) Periodic equipment servicing and preventive maintenance.

(8) Plan for 12 month operations, if applicable.

(c) The average amount of space, in square feet, assigned to each custodian for daily cleaning.

(d) The process for reporting, recording, verifying, and prioritizing building problems and fire safety issues.

(e) The process for assigning corrective work.

(f) The process for determining that corrective work has solved the problem.

(g) The process for tracking and analyzing recurring problems.

(h) The process for scheduling and completing preventive maintenance services and inspections on installed equipment and major building systems including, but not limited to heating, ventilation, air conditioning, life safety, elevators, plumbing, roofs, windows, doors, and kitchen appliances.

(i) Custodial or maintenance staff increases or reductions that result from the project.

(j) The training program for employees on new equipment to be installed by the project.

(k) A statement of assurance, signed by the chair of the school board, which indicates that the district intends to maintain and service all installed equipment according to the manufacturer’s instructions.

(l) A 20-year maintenance plan that identifies and defines the program and activities necessary to achieve the design life expectancy of the building. Such program shall include activities having to do with scheduled repairs, upkeep, minor alterations, and enhancements of the building. The maintenance plan shall also consider preventive maintenance supporting building systems and components.

[II. for the purposes of computing grants hereunder, the amount of the annual payment of principal shall be increased by an amount equal to the amount of capital reserve or the amount raised by taxation which was actually expended for the project at any time, divided by the number of years for which bonds or notes were issued to provide funds for such school building or school administrative unit facilities; provided, however that funds received from trusts, bequests, gifts or insurance policies shall not be eligible for computing grants hereunder. When bonds and notes are issued for a period of less than 5 years, the amount of aid for which the district is eligible shall be paid in no fewer than 5 equal installments.

III. If the project was entirely financed by the use of amounts raised by taxation or by the use of capital reserve other than funds from trusts, bequests, gifts or received from insurance policies the aid provided herein shall be paid in 5 equal installments.

IV.] II. For the purposes of this subdivision, “construction” shall include any one or more of the following for the construction of instructional facilities only:

(a) The acquisition and development of a site.

(b) Planning, construction, or both, of a new building.

(c) Planning, construction, or both, of additions to existing buildings.

(d) Architectural and engineering fees.

(e) Purchase of equipment and any other costs necessary for the completion of a building as approved by the department of education.

(f) Substantial renovations approved by the commissioner of education.

(g) Purchase or lease-purchase of mechanical, structural, or electrical equipment, including the cost of installation of such equipment, which is designed to improve energy efficiency or indoor air quality in school buildings. All grant amounts awarded under this subparagraph shall be returned to the state if such equipment is removed from the school building by the vendor due to the school district’s failure to comply with the terms of the lease-purchase agreement. Lease-purchase agreements shall be subject to the requirements of RSA 33:7-e.

[V.] III. Purchase of school buildings shall include the acquisition and improvement of land in connection therewith and the remodeling, altering, repairing, equipping and furnishing of such buildings as approved by the department of education.

[VI. [Repealed].

VII.] IV. In this paragraph, “new construction” means additional square footage but shall not mean the renovation of school buildings [or school administrative unit facilities]. The provisions of this paragraph shall apply to any school building aid grants made pursuant to RSA 198:15-a through RSA 198:15-w.

(a) The department of education shall issue annually maximum eligible cost standards for the construction of new school buildings [or school administrative unit facilities], less site acquisition costs, qualifying for a school building aid grant. These standards shall take into account the type, size, and location of the school [or school administrative unit facility] and shall be based on an appropriate construction cost index developed or adopted by the department which shall reflect cost differences in the several regions of the state. Maximum cost standards shall be computed and published annually and expressed as a maximum cost per square foot.

(b) Maximum size standards for new construction shall be as follows:

(1) Maximum gross square footage per pupil:

Student Population

under 250 250 and over

Elementary school 144 120

Middle or junior high school 168 140

Senior high school 

(excluding vocational-technical 

centers) 192 160

(2) Maximum usable site size for new schools:

Elementary School 20 acres plus 1 acre for each 100 pupils

Middle or junior high school 25 acres plus 1 acre for each 100 pupils

Senior high school 30 acres plus 1 acre for each 100 pupils

(3) In addition to the provisions of subparagraphs (1) and (2), the department of education shall require architectural designs for new space in order to make efficient use of space. Space determined by the department to be excessive or unnecessary to fulfill educational needs shall not be eligible for state building aid grants. 

(c) For the purpose of calculating the total school building aid grants made under RSA 198:15-a through RSA 198:15-w, the final approved cost for school construction or school project shall not exceed the cost that would result if the project conformed to the maximum cost and size standards. The provisions of this section shall not preclude an eligible applicant from exceeding the maximum standards provided, however, the cost of the portion of the facilities which exceed the maximum standards shall not be eligible for school building aid grants. The maximum cost and size standards in effect at the time general contract work begins shall be used for the purposes of determining school building aid grants.

(d) The commissioner of the department of education shall have the authority to waive eligible cost and size standards for new construction for good reason shown.

[VIII.] V. For the purpose of receiving grants under this section, acquisition of additional land as part of any school renovation project shall not be required unless such additional land is necessary to ensure the safe flow of traffic for school buses or other vehicles entering or exiting school grounds, or the safe boarding or discharge of children using school buses or other vehicles.

275:3 School Building Aid; Approval of Plans. Amend RSA 198:15-c to read as follows:

198:15-c Approval of Plans, Specifications, and Costs of Construction or Purchase. 

I. A school district maintaining approved schools, desiring to avail itself of the grants herein provided shall have the plans, specifications, and cost estimates for school plant construction or proposals for the purchase of school buildings, or both, and the costs for them approved by the [state board] department of education prior to the start of construction. For this purpose the district shall submit its plans, specifications, cost, and purchase estimates in writing to the department of education on such forms as the department prescribes. A school district shall also submit a copy of any application for energy efficiency reimbursement under RSA 374-F. The department of education shall coordinate with the public utilities commission to ensure that eligible school districts have submitted applications for funding reimbursement and technical assistance as available from energy utility companies to promote indoor air quality and energy efficiency in public schools. [Application] Applications for school building aid grants shall be submitted before [January 1] September 1 of each year in order to be eligible for school building aid grants in the fiscal year following the year of submittal. 

II.(a) The commissioner shall accept school building aid grant applications based upon completeness and submit a preliminary school building aid grant list to the school building authority established pursuant to RSA 195-C. By January 15 of the fiscal year prior to the biennium in which school building aid grants are to be disbursed, the school building authority shall develop a rank ordered list of all school building construction and renovation proposals submitted by school districts and shall categorize each proposal based on school building and site criteria in descending order. The school building authority shall recommend prioritized proposals to be funded in descending rank order to the state board of education for approval. School districts which have projects approved for funding shall be notified by the department of education of the projected amount to be funded within 10 days of approval. The project rating system and criteria used to rate project applications which shall include an administrative review process for appeal of a school district’s project point rating, shall be developed by the department of education and approved by the state board of education. The department of education, after review by the house finance committee, the house special committee on education funding reform, and any senate committee designated by the senate president, shall propose interim rules pursuant to RSA 541-A no later than November 1, 2012, and final rules pursuant to RSA 541-A no later than April 30, 2013, relative to the criteria set forth in this paragraph and the procedures necessary to implement this paragraph.

(b) The commissioner of the department of education shall accept school building construction proposals based upon completeness. The department of education shall consider and score each proposal based on the following criteria:

(1) Unsafe conditions.

(2) Facilities not in compliance with the Americans With Disabilities Act, or obsolete, inefficient, or unsuitable facilities or mechanical and building systems.

(3) Overcrowding and associated influences to instructional areas and programming.

(4) Enrollment projections and population shifts.

(5) Whether a school district has made a reasonable attempt to accommodate maintenance activities including scheduled and unscheduled repairs, upkeep, minor alterations, enhancements to buildings, and preventive maintenance necessary to achieve the design life expectancy of building systems and components.

(6) A school district’s fiscal capacity based on measurable criteria such as the percentage of pupils eligible for free and reduced price meals.

(7) Any other criteria that the state board of education may determine are necessary.

(c) The school building authority shall recommend those proposals to be funded in descending rank order to the state board of education for approval. The state board of education shall publish the list by January 15 of each year. Those proposals not approved shall be considered for approval in the next biennial budget. Project proposals shall be funded to the extent of available appropriations in the fiscal year. 

(d) A school district, a city maintaining a school department within its corporate organization, a cooperative school district as defined in RSA 195:1, a receiving district operating an area school as defined in RSA 195-A:1, or a receiving district providing an education to pupils from one or more sending districts under a contract entered into pursuant to RSA 194:21-a or RSA 194:22, with projects for which there is insufficient state grant funding may resubmit those projects to the department pursuant to the provisions of this section.

III. [The department of education shall not approve the plans, specifications, cost, or purchase estimates, if in the department’s judgment the facilities planned will not adequately meet the educational requirements, or if its cost estimates are excessive or unreasonable. The department of education shall not approve the plans, specifications, cost, or purchase estimates if in the department’s judgment the proposed construction or purchase is in conflict with effective statewide planning pursuant to RSA 9-A or the principles of smart growth pursuant to RSA 9-B.] Necessary costs of the purchase of school buildings may be determined by any recognized method of real estate appraisal with appropriate adjustments for remodeling or other expenditures. Upon approval of the construction or purchase, or both, by the department of education, the school district shall be entitled to receive [an annual] a grant as provided herein.

275:4 School Building Aid; Proration and Unexpended Funds. Amend RSA 198:15-e to read as follows:

198:15-e Proration and Unexpended Funds. [If] In any fiscal year, the amount appropriated for distribution as school building grants in accordance with the version of RSA 198:15-b in effect prior to July 1, 2012 shall first be awarded to a school district for an eligible project funded before July 1, 2012. If the amount appropriated is insufficient [therefor, grants for eligible construction work approved by the legislative body of the school district since the approval of the most recent state biennial budget shall be deferred and included in a request for a future appropriation, or partial grants may be made to the extent of the available appropriation. Any partial grant made shall be prorated proportionally among all districts with eligible construction work approved since the approval of the most recent biennial budget. The department of education shall include any unpaid grant amounts in the next biennial budget or request a supplemental appropriation. If the amount appropriated is insufficient after deducting all grants approved since the approval of the most recent biennial budget,] the appropriation shall be prorated proportionally among the districts entitled to a grant. If the amount appropriated exceeds the amount necessary to fully fund grants to a school district for eligible construction projects funded before July 1, 2012, the remaining amount of the appropriation shall be awarded to a school district for an eligible new proposal in the ranked order developed pursuant to RSA 198:15-c, II(a) and II(b). Such a district shall receive a grant equal to 100 percent of the eligible amount of the request until the amount appropriated has been exhausted. A partial grant may be awarded to the extent that funds are available. If a school district declines a full or partial grant, a grant shall be made to the next ranked school district until the amount appropriated has been exhausted. Any amounts not distributed in the first year of any biennium may be distributed in the second year if required to distribute the maximum amount permissible under RSA 198:15-a.

275:5 Kindergarten Construction Program; Eligibility. Amend RSA 198:15-s, III(b)(4) to read as follows:

(4) Costs shall be limited to the annual maximum eligible cost standards in accordance with RSA 198:15-b, [VII,] unless waived by the commissioner of the department of education for good cause.

275:6 Alternative School Building Aid. Amend RSA 198:15-v, II to read as follows:

II.(a) The amount of the annual grant in this subdivision shall be a sum equal to a percentage of the amount of the annual payment of principal on all outstanding borrowings of the school district, city, cooperative school district, joint maintenance agreement, or receiving district, for all approved costs of construction or purchase of school buildings and school administrative unit facilities, for [which loans are approved after July 1, 2005] grants approved on or before July 1, 2013 according to the following table:

Building Aid Factor Single District Preexisting District in a

Cooperative School 

District, Area School, or

Joint Maintenance 

Agreement 

0-59 60 percent 60 percent 

60-69 55 percent 60 percent 

70-89 45 percent 55 percent 

90-114 40 percent 50 percent 

115 or greater 30 percent 40 percent 

(b) For projects approved after July 1, 2013, the amount of the grant to any school district, city, cooperative school district, joint maintenance agreement, or receiving district shall be a sum equal to the percentage of all approved costs for construction or purchase of school buildings according to the following table:

Building Aid Factor Building Aid Grant 

0-59 60 percent 

60-69 55 percent 

70-89 45 percent 

90-114 40 percent 

115 or greater 30 percent 

[The percentage once determined for a particular borrowing shall not thereafter be subject to change.]

275:7 School Building Authority. Amend RSA 195-C:1, I to read as follows:

I. There shall be a school building authority, referred to in this chapter as the authority, [of 5 members] consisting of the state treasurer, the commissioner of education, the state fire marshal or designee, and 3 other members appointed by the governor, one of whom shall have expertise in education, one of whom shall have expertise in finance, and one of whom shall have expertise in building construction or engineering, with the advice and consent of the council, for terms of 3 years and until their successors are appointed and qualify. The governor shall designate one of said members as chairman. In case of vacancy among the appointive members of the authority, the governor, with the advice and consent of the council, shall fill the same for the unexpired term. The appointive members of the authority shall receive as compensation for their services, while actually engaged in the business of the authority, the sum of $8 per day plus their necessary subsistence expenses. The appointive members of the authority shall be paid mileage at the state employees rate, plus necessary travel expenses, only when performing activities at the request of the state board of education.

275:8 Construction or Renovation of Regional Vocational Education Centers. Amend RSA 188-E:3, II to read as follows:

II. Upon completion, the constructed or renovated facility shall become the property of the school district or public academy, as the case may be. Provision of the site, parking, and other related areas shall be the responsibility of the local community. Site work, including but not limited to cut and fill work, compaction, demolition, relocation of utilities, relocation of roadways and sidewalks, and similar work within an area extending to one foot beyond the outside edge of the exterior walls of the building, shall be eligible for grants under paragraph I. Nothing shall prohibit the inclusion of the site and related facilities which are not funded as part of construction cost by the state under this chapter from being included in a regular building aid grant application of the district as provided in RSA 198:15-b. However, no school district which receives any funding under this chapter shall be eligible to receive school building aid grants under RSA 198:15-b for the same project.

275:9 School Building Aid; Annual Grants for Leased Space. Amend the introductory paragraph in RSA 198:15-hh, I to read as follows:

I. The amount of the annual grant for a lease to any school district duly organized, any city maintaining a school department within its corporate organization, any cooperative school district as defined in RSA 195:1, or any receiving district operating an area school as defined in RSA 195-A:1, shall be a sum equal to 30 percent of the amount of the annual payment of the lease incurred, for the cost of leasing permanent space in a building or buildings not owned by the school district or school administrative unit which is used for the operation of a high school vocational technical education program, to the extent approved by the state board of education[, provided that the amount of the annual grant in the case of a cooperative school district, joint maintenance agreement, or a receiving district operating an area school, shall be 40 percent plus 5 percent for each pre-existing district in excess of 2 and each sending district, in excess of one, and provided further that no cooperative school district, joint maintenance agreement, or receiving district operating an area school, shall receive an annual grant in excess of 55 percent]. For the purposes of this section, the amount of the annual grant for a lease to a vocational technical education center shall be calculated in the same manner as a cooperative school district. The amount of the annual grant for a chartered public school authorized under RSA 194-B:3-a shall be a sum equal to 30 percent of the annual lease payment incurred for the cost of leasing space. The total amount of grants to schools pursuant to this section shall not exceed the state appropriation for leased space. If the amount appropriated is insufficient therefor, the appropriation shall be prorated proportionally among the schools eligible for a grant. Such lease agreements shall be eligible for grants under this section, provided all of the following conditions apply:

275:10 Effective Date. This act shall take effect 60 days after its passage.

Approved: June 19, 2012

Effective Date: August 18, 2012

VETO OVERRIDES ON 6/27/12

HB 1607-FN-LOCAL – VERSION ADOPTED BY BOTH BODIES

29Mar2012… 1364h

05/02/12 1832s

05/16/12 2218s

05/16/12 2309s

6June2012… 2476EBA

2012 SESSION

12-2607

04/10

HOUSE BILL 1607-FN-LOCAL

AN ACT establishing an education tax credit.

SPONSORS: Rep. Bettencourt, Rock 4; Rep. Hill, Merr 6; Rep. W. Smith, Rock 18; Rep. D. McGuire, Merr 8; Rep. O'Brien, Hills 4; Rep. Tucker, Rock 17; Rep. Bates, Rock 4; Rep. Silva, Hills 26; Rep. Chandler, Carr 1; Sen. Forsythe, Dist 4; Sen. De Blois, Dist 18

COMMITTEE: Ways and Means

AMENDED ANALYSIS

This bill establishes an education tax credit against the business profits tax and/or the business enterprise tax for business organizations and business enterprises that contribute to scholarship organizations which award scholarships to be used by students to defray educational expenses.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

29Mar2012… 1364h

05/02/12 1832s

05/16/12 2218s

05/16/12 2309s

6June2012… 2476EBA

12-2607

04/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT establishing an education tax credit.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Purpose. 

I. The general court finds that:

(a) It has the inherent power to determine subjects of taxation for general or particular public purposes.

(b) Expanding educational opportunities and improving the quality of educational services within the state are valid public purposes that the general court may cherish using its sovereign power to determine subjects of taxation and exemptions from taxation.

(c) Ensuring that all parents may exercise and enjoy their basic right to educate their children as they see fit is a valid public purpose that the general court may promote using its sovereign power to determine subjects of taxation and exemptions from taxation.

(d) Expanding educational opportunities and thereby promoting healthy competition is critical to improving the quality of education in the state and ensuring that all children have the opportunity to receive a high quality education.

II. The purpose of this act is to:

(a) Allow maximum freedom to parents and nonpublic schools to respond to and, without governmental control, provide for the educational needs of children, and this act shall be liberally construed to achieve that purpose.

(b) Promote the general welfare by expanding educational opportunities for children.

(c) Enable children in this state to achieve a higher level of excellence in their education.

(d) Improve the quality of education in this state, both by expanding educational opportunities for children and by creating incentives for schools to achieve excellence.

2 New Paragraph; Business Profits Tax; Education Tax Credit. Amend RSA 77-A:5 by inserting after paragraph XIV the following new paragraph:

XV. The education tax credit as computed in RSA 77-G:4. 

3 New Section; Business Enterprise Tax; Education Tax Credit. Amend RSA 77-E by inserting after section 3-c the following new section:

77-E:3-d Education Tax Credit. The education tax credit as computed in RSA 77-G:4 shall be allowed against the tax due under this chapter.

4 New Chapter; Education Tax Credit. Amend RSA by inserting after chapter 77-F the following new chapter:

CHAPTER 77-G

EDUCATION TAX CREDIT

77-G:1 Definitions. The following definitions shall apply in this chapter:

I. “Adequacy cost” means the total cost of the opportunity for an adequate education as defined in RSA 198:40-a, I-III.

II. “Adequacy grant” means the grant calculated under RSA 198:41, or for a chartered public school, the amount calculated under RSA 194-B:11.

III. “Business organization” shall be as defined in RSA 77-A:1, I.

IV. “Business enterprise” shall be as defined in RSA 77-E:1, III. 

V. “Donation receipt” means a document submitted by a scholarship organization that contains at a minimum:

(a) The business organization’s or business enterprise’s name, address, and federal taxpayer identification number.

(b) The scholarship organization’s name and address.

(c) The donation amount and date received.

VI. “Educational expenses” means the tuition cost of an eligible student to attend a public or nonpublic school, excluding students who were placed into a nonpublic school by their school district, and in the case of a home educated student, the academic expenses not to exceed 25 percent of the average scholarship as defined in RSA 77-G:2, I(b), incurred in a child’s home schooling. Educational expenses shall not include fees or expenses related to participation in athletic programs, transportation expenses, or the cost of a parent’s time expended in the home schooling of his or her child. 

VII. “Education tax credit application” means a document developed by the department of revenue administration and submitted by a business organization or business enterprise that contains at a minimum:

(a) The business organization’s or business enterprise’s name, address, and federal taxpayer identification number.

(b) A contact person’s name, title, and phone number.

(c) The requested donation amount.

(d) A signed statement certifying that the business organization or business enterprise agrees to make donations in accordance with the requirements established in this chapter.

VIII. “Eligible student” means a New Hampshire resident who is at least 5 years of age and no more than 20 years of age, who has not graduated from high school, and 

(a)(1) Who is currently attending a New Hampshire public school, including a chartered public school, and for whom the adequacy grant in the next school year would be reduced if the student were removed from the average daily membership calculation; or 

(2) Who received a scholarship under subparagraph (1) or this subparagraph in the prior program year; or

(3) Who does not qualify under subparagraph (1) or (2); and

(b) Whose annual household income is less than or equal to 300 percent of the federal poverty guidelines as updated annually in the Federal Register by the United States Department of Health and Human Services under the authority of 42 U.S.C. section 9902(2). The scholarship organization shall verify eligibility under this subparagraph.

IX. “Nonpublic school” shall be as defined in RSA 193-A:1.

X. “Owner or operator” means an owner, president, officer, or director of an eligible nonprofit scholarship organization or a person with equivalent decision making authority over an eligible nonprofit scholarship organization.

XI. “Parent” means the natural or adoptive parent or legal guardian of a child. 

XII. “Program year” means the year beginning January 1 and ending December 31. 

XIII. “Receipt” means a document developed by the department of revenue administration that is issued by the receiving school, or parent in the case of a home educated student, to the scholarship organization which makes payment for educational expenses on behalf of an eligible student and that contains, at a minimum and where applicable:

(a) The name and address of the school if a school is attended or, in the case of a home educated student, the name and address of a parent.

(b) The name and address of the eligible student for whom the expense has been paid. 

(c) The name of the payer and the date and amount of the expense paid.

(d) Receipts for all specific, reimbursed educational expenses.

XIV. “Receiving school” means a public or nonpublic school which the eligible student seeks to attend. 

XV. “Release of information form” means a document developed by a receiving school, signed by the parent or guardian of an eligible student, and which acknowledges the consent of the parent or guardian to release of information contained in the receipt.

XVI. “Scholarship impact survey” means a document developed by the department of education and given to the parents of students who have exited a public school under the provisions of RSA 77-G:8. The survey shall solicit the reasons for seeking the scholarship, and any suggested improvements desired in the public school they are leaving.

XVII. “Scholarship organization” means a charitable organization incorporated or qualified to do business in this state that:

(a) Is exempt from federal income taxation pursuant to section 501(c)(3) of the Internal Revenue Code;

(b) Complies with applicable state and federal antidiscrimination and privacy laws;

(c) Is registered with the director of charitable trusts; and

(d) Has been approved by the department of revenue administration for the purpose of issuing scholarships as provided in this chapter.

XVIII. “Scholarship organization application” means a document developed by the department of revenue administration and submitted by a scholarship organization that contains at a minimum:

(a) The scholarship organization’s name, address, and federal taxpayer identification number.

(b) A contact person’s name, title, and phone number.

(c) A signed statement that the scholarship organization has met the eligibility requirements of paragraph XVII, and will comply with the provisions of this chapter.

XIX. “Scholarship organization report” means a document developed by the department of revenue administration and submitted by a scholarship organization to the department of revenue administration that shall be a public record, notwithstanding RSA 21-J:14, and contains at a minimum:

(a) The number of scholarships granted under subparagraph VIII(a)(1), and the percentage of these students who were eligible for the federal free and reduced-price meal program in the final year they were in public school.

(b) The number of scholarships granted under subparagraph VIII(a)(2), and the percentage of these students who were eligible for the federal free and reduced-price meal program in the final year they were in public school.

(c) The number of scholarships granted under subparagraph VIII(a)(3), and the percentage of these students who were eligible for the federal free and reduced-price meal program in the prior year.

(d) The total dollar amount of all scholarships granted.

(e) The total dollar amount of donations spent on administrative expenses pursuant to RSA 77-G:5, I(f).

(f) The total dollar amount to be carried forward pursuant to RSA 77-G:5, I(g).

(g) The total dollar amount of donations used and not used for scholarships.

(h) The number of scholarships granted.

(i) The number of scholarships distributed by the organization, per school, and the dollar range of those scholarships. All home educated students shall be totaled together as a single school. 

(j) An analysis, broken down by zip code, of the place of residence for each student receiving a scholarship under this program.

(k)(1) The aggregated results from a survey, designed by the department of revenue administration, and administered by the scholarship organization, which shall solicit and receive information from at least 90 percent of the parents or legal guardians of participating students, broken down by the number of years in the program. In each case, the respondent shall be asked to gauge their level of agreement with the statement as follows: “strongly agree,” “agree,” “no change,” “disagree,” “strongly disagree.” The following statements shall be included in the survey:

(A) I am satisfied with the school my child is attending as compared to the school my child attended prior to the availability of the education tax credit program.

(B) My child has seen a measurable improvement in academic achievement.

(C) My child would have been unable to attend the school of his or her choice without the education tax credit program.

(2) The survey shall include the following question to the parent or legal guardian of a participating student: “Excluding the education tax credit scholarship, how much did you pay out of pocket for your child to attend school this year?”

(l) The aggregated results from a survey, designed by the department of education, and administered by the scholarship organization, which shall solicit and receive information from the parents or legal guardians of participating students who graduated or stopped attending 2 years prior. A parent’s or legal guardian’s response to the survey shall be optional. Results shall be aggregated by the scholarship organization and published by the department of education. The survey shall solicit the following information:

(1) Whether the student is attending a private, public, community, or vocational college, or otherwise employed or unemployed.

(2) Whether the student graduated or not.

(m) The number of participating students who graduated from high school in the previous year, and the number that dropped out of school.

(n) A signed statement that the scholarship organization acknowledges compliance with the provisions of this chapter.

(o) An explanation of information omitted from the report because it would reveal private data about an individual student.

(p) The name of any other scholarship organizations who have agreed to combine their data with the scholarship organization for the purposes set forth in RSA 77-G:2, II. The agreement shall only be considered valid if each scholarship organization lists the other scholarship organizations in the agreement.

XX. “Scholarship receipt” means a document developed by the department of revenue administration and submitted by a scholarship organization to the business organization or business enterprise and that contains at a minimum:

(a) The business organization’s or business enterprise’s name, address, and federal taxpayer identification number.

(b) The amount of the donations used or carried forward and the amount not used.

77-G:2 Scholarships.

I.(a) An eligible student may receive a scholarship to attend (1) a nonpublic school, except when the student has been placed by the local school district through the special education process; or (2) a public school located outside of the school district in which the student resides and for which the public school is not eligible to receive an adequate education grant payment for the student in the current fiscal year, in an amount not to exceed the tuition cost of the public or nonpublic school. A home education student may also receive a scholarship to cover educational expenses. A student shall not receive a scholarship from more than one scholarship organization. 

(b) The average value of all scholarships awarded by a scholarship organization, excluding eligible students who received scholarships for educational expenses related to home education only, shall not exceed $2,500. Beginning in the second year of the program, the commissioner of the department of revenue administration shall annually adjust this amount based on the average change in the Consumer Price Index for All Urban Consumers, Northeast Region, using the “services less medical care services’’ special aggregate index, as published by the Bureau of Labor Statistics, United States Department of Labor. The average change shall be calculated using the calendar year ending 12 months prior to the beginning of program year. In each of the first and second program years, a scholarship organization shall award a minimum of 70 percent of all scholarships issued to eligible students as defined in RSA 77-G:1, VIII(a)(1) and (2) and, notwithstanding RSA 193-E:5, shall notify the department of education of the unique pupil identifier and date of birth for each of these students granted a scholarship by July 15. The required minimum percentage of all scholarships issued by a scholarship organization to eligible students as defined in RSA 77-G:1, VIII(a)(1) and (2) shall be reduced by 5 percent each program year for years 3 through 15 of the program, and, at the beginning of the sixteenth program year and every program year thereafter, there shall be no required minimum percentage of scholarships.

(c) The minimum value of a scholarship granted to a student receiving special education programs or services pursuant to RSA 186-C shall be 175 percent of the maximum average scholarship size as defined in subparagraph (b).

(d) At least 40 percent of the scholarships awarded by the scholarship organization to eligible students as defined in RSA 77-G:1, VIII(a)(1) and (2) shall be awarded to students who qualified for the federal free and reduced-price meal program in the final year they were in public school.

(e) A student shall reapply each year for a scholarship.

II. Scholarship organizations may meet the percentage requirements of subparagraphs I(b) and (d) if, pursuant to a mutual agreement, the organizations aggregate their scholarship data and the aggregated data shows compliance with the percentage requirements.

77-G:3 Contributions to Scholarship Organizations. For each contribution made to a scholarship organization, a business organization or business enterprise may claim a credit equal to 85 percent of the contribution against the business profits tax due pursuant to RSA 77-A, or against the business enterprise tax due pursuant to RSA 77-E, or apportioned against both provided the total credit granted against both shall not exceed the maximum education tax credit allowed. Credits provided under this chapter shall not be deemed taxes paid for the purposes of RSA 77-A:5, X. The department of revenue administration shall not grant the credit without a scholarship receipt. No business organization or business enterprise shall direct, assign, or restrict any contribution to a scholarship organization for the use of a particular student or nonpublic school. No business organization or business enterprise shall receive more than 10 percent of the aggregate amount of tax credits permitted in RSA 77-G:4.

77-G:4 Tax Credits.

I. The aggregate of tax credits issued by the commissioner of the department of revenue administration to all taxpayers claiming the credit shall not exceed $3,400,000 for the first program year and $5,100,000 for the second program year, subject to the provisions of paragraph III. In subsequent years, the aggregate of tax credits shall not exceed the amount allowed for the prior year, unless adjusted pursuant to paragraph II.

II. Beginning with the second program year, if the amount of the total donations used for scholarships exceeds 80 percent of the current program year’s tax credits allowed, the aggregate of tax credits allowed for the next program year shall increase by 25 percent, subject to the provisions of paragraph III.

III. In each program year, the increase in the aggregate of tax credits allowed pursuant to paragraphs I and II shall be contingent upon the board of directors of the community development finance authority certifying in writing to the commissioner of the department of revenue administration by the December 1 preceding the program year that the community development finance authority has received $5,000,000 or more in contributions for the state fiscal year or that the authority has received contribution offers sufficient to meet its state fiscal year limit but did not meet its limit for other reasons. 

77-G:5 Scholarship Organizations. 

I. A scholarship organization shall:

(a) Provide scholarships from eligible contributions to eligible students to defray educational expenses.

(b) Not restrict or reserve scholarships for use at a single nonpublic school and not restrict or reserve a scholarship for a specific student or a specific person.

(c) Verify a student’s eligibility to apply for and receive a scholarship through transcripts and attendance records.

(d) Not have an owner or operator who also owns or operates a nonpublic school that participates in the education tax credit program.

(e) Not have an owner or operator who in the last 7 years has filed for personal bankruptcy or corporate bankruptcy in a business organization or business enterprise of which he or she owned more than 20 percent.

(f) Not use more than 10 percent of eligible contributions used during the program year in which the contributions are collected, and for which scholarship receipts were issued for tax credit purposes, for administrative expenses. Administrative expenses shall be reasonable and necessary for the organization’s management and distribution of eligible contributions pursuant to this chapter. 

(g) In the first program year, there shall be no carry forward of unused eligible contributions. In each program year thereafter, not more than 10 percent of eligible contributions may be carried forward to the following program year. Any amount carried forward shall be expended for annual or partial year scholarships in the program year into which the amount is carried forward. 

(h) Maintain separate accounts for scholarship funds, non-tax credit donations, and operating funds.

(i)(1) Not award a scholarship to any lineal descendent or equivalent step-person of any officer, director, or employee of any scholarship organization; and

(2) Not award a scholarship to any lineal descendant or equivalent step-person of any proprietor, partner, or member of any business organization or business enterprise making a contribution to a scholarship organization and claiming a credit against the business profits tax or business enterprise tax, nor any lineal descendant or equivalent step-person of any officer, director, or owner of more than a 5 percent interest in any business organization or business enterprise making a contribution to a scholarship organization and claiming a credit against the business profits tax or business enterprise tax, nor any employee who is among the highest-paid 20 percent of paid employees in any business organization or business enterprise making a contribution to a scholarship organization and claiming a credit against the business profits tax or business enterprise tax.

(j) Provide to each school district which receives a stabilization grant pursuant to RSA 77-G:8 a copy of the aggregated results of the scholarship impact survey, including total number of students who received scholarships from that school district under RSA 77-G:1, VIII(a)(1).

II.(a) An organization seeking approval as a scholarship organization under this chapter shall submit an application to the department of revenue administration each program year no later than June 15. The department of revenue administration shall approve or deny the application within 30 days of receipt. The department shall deny any application that fails to meet the statutory requirements and shall notify the scholarship organization of the reasons for denial.

(b) A business organization or business enterprise shall submit an education tax credit application to the department of revenue administration no earlier than January 1 and no later than June 15. The department shall approve these applications within 30 days on a first come-first served basis, up to the aggregate tax credit amount allowed under RSA 77-G:4. If multiple education tax credit applications are received on the same day, they shall be processed at random. No business organization or business enterprise shall be granted an education tax credit for more than 10 percent of the aggregate tax credit amount permitted in RSA 77-G:4. The department of revenue administration may approve only a portion of a request if required to prevent exceeding the aggregate tax credit amount allowed under RSA 77-G:4. The approval shall include the amount allowed and the date of approval.

(c) Once an education tax credit application is approved, the business organization or business enterprise shall donate within 60 days of the date of approval or the request shall expire. Donations may be made to multiple scholarship organizations provided the total amount donated by the business organization or business enterprise does not exceed the amount approved. Donations shall be made no later than July 15 of the program year.

(d) Upon receiving a donation, the scholarship organization shall send a donation receipt to the department of revenue administration and to the business organization or business enterprise within 15 days. The department of revenue administration shall notify the scholarship organization and the business organization or business enterprise within 15 days if the donations made by a business organization or business enterprise exceed the amount approved. If a business organization or business enterprise fails to donate the total amount approved within the time permitted, the department of revenue administration may grant credit requests in the order specified in subparagraph (b). 

(e) Notwithstanding RSA 193-E:5, on or before July 15, a scholarship organization shall furnish the unique pupil identifier and date of birth for each student eligible pursuant to RSA 77-G:1, VIII(a)(1) and (2) who is receiving a scholarship, and the subparagraph under which he or she was eligible, to the department of education. The department of education shall notify the scholarship organization within 30 days of any students who are ineligible under RSA 77-G:1, VIII(a)(1). The scholarship organization shall notify the department of education within 30 days if any student eligible under RSA 77-G:1, VIII(a)(1) or (2) is not awarded a scholarship or is awarded a scholarship yet subsequently returns to public school. The department of education shall return such student to the calculation of the average daily membership in residence, as defined in RSA 189:1-d, IV, for the student’s school district of residence, and add the amount calculated under RSA 198:40-a, I-III to the adequate education grant amount to the student’s school district of residence, and include such amount in the next adequate education grant payment made under RSA 198:42.

(f) On or before December 1, the scholarship organization shall send a scholarship receipt to the business organization or business enterprise and to the department of revenue administration. The scholarship receipt shall include the amount of the donation that was used under this chapter which is eligible for the tax credit, and the amount that was not used. The scholarship organization shall return any unused funds to the business organization or business enterprise.

(g) On or prior to December 1, the scholarship organization shall submit a scholarship organization report to the department of revenue administration. The scholarship organization shall also include a scholarship organization application if it intends to issue scholarships under this chapter in the next program year. The department of revenue administration shall review the scholarship organization report and the scholarship receipts to ensure that the administrative expenses requirement set forth in subparagraph I(f) is not exceeded, that the number of scholarships issued under RSA 77-G:1, VIII(a)(1)and (2) meets the requirements of this chapter, and the average scholarship size does not exceed the amount allowed. If any of these requirements are not met, the department of revenue administration may deny a scholarship organization application for subsequent program years and shall notify the scholarship organization of the reasons for denial.

(h) A business organization or business enterprise may file for the tax credit after receiving the scholarship receipt, and may file a tax credit request for the subsequent program year up to the amount donated in the current program year.

(i) The provisions of this chapter regarding nonpublic schools and their relation to scholarship organizations shall apply only to nonpublic schools that choose to accept scholarship students.

77-G:6 Department of Revenue Administration; Requirements.

I. The department of revenue administration shall:

(a) Develop, and annually verify and update, by February 1, a list of eligible nonprofit scholarship funding organizations that meet the requirements of this chapter. The department shall post this list on the department’s Internet website and update the list monthly until July 15. The department shall forward the list and any updates to the commissioner of the department of education who shall post the list on the department of education’s Internet website. 

(b) Conduct or require audits in response to any reasonable complaints made. The cost of an independent audit shall be paid by the scholarship organization, but this cost shall be excluded from the administrative expenses requirement set forth in RSA 77-G:5, I(f). 

(c) Establish a process by which individuals may notify the department of revenue administration of any violation by a parent, business organization, business enterprise, scholarship organization, or nonpublic school of state laws relating to program participation. The department of revenue administration shall conduct an inquiry of any written complaint of a violation of this chapter, or make a referral to the appropriate agency for an investigation, if the complaint is signed by the complainant and is legally sufficient. A complaint is legally sufficient if it contains facts demonstrating a violation of this chapter or any rule adopted pursuant to this chapter. In order to determine legal sufficiency, the department of revenue administration may require supporting information or documentation from the complainant.

(d) Create, maintain, and post online the relevant forms and reports, and submit scholarship organization reports to the members of the house and senate education committees and to the department of education.

(e) Post to the department’s website an up-to-date total of the amount of credits available. 

(f) No later than January 1, 2013, adopt rules pursuant to RSA 541-A, relative to: 

(1) The application procedure for a scholarship organization applying to accept scholarship donations under this chapter.

(2) The application procedure for a business organization or business enterprise applying for a tax credit under this chapter. 

(3) Complaint procedures, including the filing of a complaint and investigations of complaints. 

(4) The design and content of the forms and applications required to be filed with, or issued by, the department of revenue administration under this chapter. 

77-G:7 Department of Education; Requirements. 

I. The department of education shall determine the number of students receiving a scholarship under RSA 77-G:1, VIII(a)(1) and (2) who were counted in the calculation of the average daily membership in attendance, as defined in RSA 198:38, I, for schools, other than chartered public schools, for the student’s school district of residence and for each such student, shall deduct the amount calculated under RSA 198:40-a, I-III from the total education grant amount disbursed to the student’s school district of residence calculated pursuant to RSA 198:40-a, IV(b)-(c). This adjustment shall be completed prior to September 1 of the program year in which the scholarships are granted.

II. The department of education shall verify a student’s eligibility under RSA 77-G:1, VIII(a)(1) upon request of a scholarship organization. The department of education shall assist the department of revenue administration, upon request, in the investigation of student eligibility complaints.

III. The state board of education shall adopt rules, pursuant to RSA 541-A, relative to forms necessary for any surveys required and the procedures for determining and disbursing stabilization grants.

77-G:8 Scholarship Stabilization Grant. 

I. For each school district, the department of education shall calculate the combined amount of reductions in adequacy cost pursuant to RSA 77-G:7 from students receiving scholarships under RSA 77-G:1, VIII(a)(1) and who were in attendance in that district in the year prior to receiving the scholarships. If this combined amount is greater than 1/4 of one percent of a school district’s total voted appropriations for the year prior to the scholarship year, the commissioner of the department of education shall disburse a scholarship stabilization grant for the current and next 3 fiscal years to each such school district equal to the amount of the reductions in excess of 1/4 of one percent. This scholarship stabilization grant shall be included in the September 1 disbursement required pursuant to RSA 198:42. 

II. The department of education shall order any scholarship organizations that provided scholarships to students from districts that were awarded stabilization grants pursuant to paragraph I to conduct a scholarship impact survey. The organization shall forward the results of this survey to the department of education and the school board of each district. The department of education shall post the results of this survey online.

77-G:9 Exceptions.

I. A receiving nonpublic school or home education program that accepts students benefiting from scholarships, grants, or tax credits shall not be considered an agent of the state or federal government as a result of participating in the program established in this chapter.

II. Except as provided in this chapter, or otherwise provided in law, no state department, agency, or board shall regulate the educational program of a receiving nonpublic school or home education program that accepts students pursuant to this chapter. 

III. Donations made by a business organization or business enterprise to a scholarship organization that are not for the purpose of obtaining a tax credit under this chapter shall not be subject to the requirements in this chapter.

77-G:10 Severability. If any provision of this chapter or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.

5 Applicability. The first program year of the education tax credit pursuant to RSA 77-G as inserted by section 4 of this act shall begin on January 1, 2013.

6 Effective Date. This act shall take effect upon its passage.

LBAO

12-2607

Amended 05/15/12

SB 372-FN-LOCAL – VERSION ADOPTED BY BOTH BODIES

03/21/12 1128s

03/28/12 1486s

16May2012… 2190h

06/06/12 2487EBA

2012 SESSION

12-2995

04/10

SENATE BILL 372-FN-LOCAL 

AN ACT establishing an education tax credit.

SPONSORS: Sen. Forsythe, Dist 4; Sen. Bradley, Dist 3; Sen. Bragdon, Dist 11; Sen. Carson, Dist 14; Sen. De Blois, Dist 18; Sen. Gallus, Dist 1; Sen. Groen, Dist 6; Sen. Lambert, Dist 13; Sen. Luther, Dist 12; Sen. Sanborn, Dist 7; Sen. White, Dist 9; Rep. Hill, Merr 6; Rep. Bettencourt, Rock 4; Rep. B. Murphy, Rock 18; Rep. Groen, Straf 1 

COMMITTEE: Education 

AMENDED ANALYSIS

This bill establishes an education tax credit against the business profits tax and/or the business enterprise tax for business organizations and business enterprises that contribute to scholarship organizations which award scholarships to be used by students to defray educational expenses.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/21/12 1128s

03/28/12 1486s

16May2012… 2190h

06/06/12 2487EBA

12-2995

04/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT establishing an education tax credit.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Purpose. 

I. The general court finds that:

(a) It has the inherent power to determine subjects of taxation for general or particular public purposes.

(b) Expanding educational opportunities and improving the quality of educational services within the state are valid public purposes that the general court may cherish using its sovereign power to determine subjects of taxation and exemptions from taxation.

(c) Ensuring that all parents may exercise and enjoy their basic right to educate their children as they see fit is a valid public purpose that the general court may promote using its sovereign power to determine subjects of taxation and exemptions from taxation.

(d) Expanding educational opportunities and thereby promoting healthy competition is critical to improving the quality of education in the state and ensuring that all children have the opportunity to receive a high quality education.

II. The purpose of this act is to:

(a) Allow maximum freedom to parents and nonpublic schools to respond to and, without governmental control, provide for the educational needs of children, and this act shall be liberally construed to achieve that purpose.

(b) Promote the general welfare by expanding educational opportunities for children.

(c) Enable children in this state to achieve a higher level of excellence in their education.

(d) Improve the quality of education in this state, both by expanding educational opportunities for children and by creating incentives for schools to achieve excellence.

2 New Paragraph; Business Profits Tax; Education Tax Credit. Amend RSA 77-A:5 by inserting after paragraph XIV the following new paragraph:

XV. The education tax credit as computed in RSA 77-G:4. 

3 New Section; Business Enterprise Tax; Education Tax Credit. Amend RSA 77-E by inserting after section 3-c the following new section:

77-E:3-d Education Tax Credit. The education tax credit as computed in RSA 77-G:4 shall be allowed against the tax due under this chapter.

4 New Chapter; Education Tax Credit. Amend RSA by inserting after chapter 77-F the following new chapter:

CHAPTER 77-G

EDUCATION TAX CREDIT

77-G:1 Definitions. The following definitions shall apply in this chapter:

I. “Adequacy cost” means the total cost of the opportunity for an adequate education as defined in RSA 198:40-a, I-III.

II. “Adequacy grant” means the grant calculated under RSA 198:41, or for a chartered public school, the amount calculated under RSA 194-B:11.

III. “Business organization” shall be as defined in RSA 77-A:1, I.

IV. “Business enterprise” shall be as defined in RSA 77-E:1, III. 

V. “Donation receipt” means a document submitted by a scholarship organization that contains at a minimum:

(a) The business organization’s or business enterprise’s name, address, and federal taxpayer identification number.

(b) The scholarship organization’s name and address.

(c) The donation amount and date received.

VI. “Educational expenses” means the tuition cost of an eligible student to attend a public or nonpublic school, excluding students who were placed into a nonpublic school by their school district, and in the case of a home educated student, the academic expenses not to exceed 25 percent of the average scholarship as defined in RSA 77-G:2, I(b), incurred in a child’s home schooling. Educational expenses shall not include fees or expenses related to participation in athletic programs, transportation expenses, or the cost of a parent’s time expended in the home schooling of his or her child. 

VII. “Education tax credit application” means a document developed by the department of revenue administration and submitted by a business organization or business enterprise that contains at a minimum:

(a) The business organization’s or business enterprise’s name, address, and federal taxpayer identification number.

(b) A contact person’s name, title, and phone number.

(c) The requested donation amount.

(d) A signed statement certifying that the business organization or business enterprise agrees to make donations in accordance with the requirements established in this chapter.

VIII. “Eligible student” means a New Hampshire resident who is at least 5 years of age and no more than 20 years of age, who has not graduated from high school, and 

(a)(1) Who is currently attending a New Hampshire public school, including a chartered public school, and for whom the adequacy grant in the next school year would be reduced if the student were removed from the average daily membership calculation; or 

(2) Who received a scholarship under subparagraph (1) or this subparagraph in the prior program year; or

(3) Who does not qualify under subparagraph (1) or (2); and

(b) Whose annual household income is less than or equal to 300 percent of the federal poverty guidelines as updated annually in the Federal Register by the United States Department of Health and Human Services under the authority of 42 U.S.C. section 9902(2). The scholarship organization shall verify eligibility under this subparagraph.

IX. “Nonpublic school” shall be as defined in RSA 193-A:1.

X. “Owner or operator” means an owner, president, officer, or director of an eligible nonprofit scholarship organization or a person with equivalent decision making authority over an eligible nonprofit scholarship organization.

XI. “Parent” means the natural or adoptive parent or legal guardian of a child. 

XII. “Program year” means the year beginning January 1 and ending December 31. 

XIII. “Receipt” means a document developed by the department of revenue administration that is issued by the receiving school, or parent in the case of a home educated student, to the scholarship organization which makes payment for educational expenses on behalf of an eligible student and that contains, at a minimum and where applicable:

(a) The name and address of the school if a school is attended or, in the case of a home educated student, the name and address of a parent.

(b) The name and address of the eligible student for whom the expense has been paid. 

(c) The name of the payer and the date and amount of the expense paid.

(d) Receipts for all specific, reimbursed educational expenses.

XIV. “Receiving school” means a public or nonpublic school which the eligible student seeks to attend. 

XV. “Release of information form” means a document developed by a receiving school, signed by the parent or guardian of an eligible student, and which acknowledges the consent of the parent or guardian to release of information contained in the receipt.

XVI. “Scholarship impact survey” means a document developed by the department of education and given to the parents of students who have exited a public school under the provisions of RSA 77-G:8. The survey shall solicit the reasons for seeking the scholarship, and any suggested improvements desired in the public school they are leaving.

XVII. “Scholarship organization” means a charitable organization incorporated or qualified to do business in this state that:

(a) Is exempt from federal income taxation pursuant to section 501(c)(3) of the Internal Revenue Code;

(b) Complies with applicable state and federal antidiscrimination and privacy laws;

(c) Is registered with the director of charitable trusts; and

(d) Has been approved by the department of revenue administration for the purpose of issuing scholarships as provided in this chapter.

XVIII. “Scholarship organization application” means a document developed by the department of revenue administration and submitted by a scholarship organization that contains at a minimum:

(a) The scholarship organization’s name, address, and federal taxpayer identification number.

(b) A contact person’s name, title, and phone number.

(c) A signed statement that the scholarship organization has met the eligibility requirements of paragraph XVII, and will comply with the provisions of this chapter.

XIX. “Scholarship organization report” means a document developed by the department of revenue administration and submitted by a scholarship organization to the department of revenue administration that shall be a public record, notwithstanding RSA 21-J:14, and contains at a minimum:

(a) The number of scholarships granted under subparagraph VIII(a)(1), and the percentage of these students who were eligible for the federal free and reduced-price meal program in the final year they were in public school.

(b) The number of scholarships granted under subparagraph VIII(a)(2), and the percentage of these students who were eligible for the federal free and reduced-price meal program in the final year they were in public school.

(c) The number of scholarships granted under subparagraph VIII(a)(3), and the percentage of these students who were eligible for the federal free and reduced-price meal program in the prior year.

(d) The total dollar amount of all scholarships granted.

(e) The total dollar amount of donations spent on administrative expenses pursuant to RSA 77-G:5, I(f).

(f) The total dollar amount to be carried forward pursuant to RSA 77-G:5, I(g).

(g) The total dollar amount of donations used and not used for scholarships.

(h) The number of scholarships granted.

(i) The number of scholarships distributed by the organization, per school, and the dollar range of those scholarships. All home educated students shall be totaled together as a single school. 

(j) An analysis, broken down by zip code, of the place of residence for each student receiving a scholarship under this program.

(k)(1) The aggregated results from a survey, designed by the department of revenue administration, and administered by the scholarship organization, which shall solicit and receive information from at least 90 percent of the parents or legal guardians of participating students, broken down by the number of years in the program. In each case, the respondent shall be asked to gauge their level of agreement with the statement as follows: “strongly agree,” “agree,” “no change,” “disagree,” “strongly disagree.” The following statements shall be included in the survey:

(A) I am satisfied with the school my child is attending as compared to the school my child attended prior to the availability of the education tax credit program.

(B) My child has seen a measurable improvement in academic achievement.

(C) My child would have been unable to attend the school of his or her choice without the education tax credit program.

(2) The survey shall include the following question to the parent or legal guardian of a participating student: “Excluding the education tax credit scholarship, how much did you pay out of pocket for your child to attend school this year?”

(l) The aggregated results from a survey, designed by the department of education, and administered by the scholarship organization, which shall solicit and receive information from the parents or legal guardians of participating students who graduated or stopped attending 2 years prior. A parent’s or legal guardian’s response to the survey shall be optional. Results shall be aggregated by the scholarship organization and published by the department of education. The survey shall solicit the following information:

(1) Whether the student is attending a private, public, community, or vocational college, or otherwise employed or unemployed.

(2) Whether the student graduated or not.

(m) The number of participating students who graduated from high school in the previous year, and the number that dropped out of school.

(n) A signed statement that the scholarship organization acknowledges compliance with the provisions of this chapter.

(o) An explanation of information omitted from the report because it would reveal private data about an individual student.

(p) The name of any other scholarship organizations who have agreed to combine their data with the scholarship organization for the purposes set forth in RSA 77-G:2, II. The agreement shall only be considered valid if each scholarship organization lists the other scholarship organizations in the agreement.

XX. “Scholarship receipt” means a document developed by the department of revenue administration and submitted by a scholarship organization to the business organization or business enterprise and that contains at a minimum:

(a) The business organization’s or business enterprise’s name, address, and federal taxpayer identification number.

(b) The amount of the donations used or carried forward and the amount not used.

77-G:2 Scholarships.

I.(a) An eligible student may receive a scholarship to attend (1) a nonpublic school, except when the student has been placed by the local school district through the special education process; or (2) a public school located outside of the school district in which the student resides and for which the public school is not eligible to receive an adequate education grant payment for the student in the current fiscal year, in an amount not to exceed the tuition cost of the public or nonpublic school. A home education student may also receive a scholarship to cover educational expenses. A student shall not receive a scholarship from more than one scholarship organization. 

(b) The average value of all scholarships awarded by a scholarship organization, excluding eligible students who received scholarships for educational expenses related to home education only, shall not exceed $2,500. Beginning in the second year of the program, the commissioner of the department of revenue administration shall annually adjust this amount based on the average change in the Consumer Price Index for All Urban Consumers, Northeast Region, using the “services less medical care services’’ special aggregate index, as published by the Bureau of Labor Statistics, United States Department of Labor. The average change shall be calculated using the calendar year ending 12 months prior to the beginning of program year. In each of the first and second program years, a scholarship organization shall award a minimum of 70 percent of all scholarships issued to eligible students as defined in RSA 77-G:1, VIII(a)(1) and (2) and, notwithstanding RSA 193-E:5, shall notify the department of education of the unique pupil identifier and date of birth for each of these students granted a scholarship by July 15. The required minimum percentage of all scholarships issued by a scholarship organization to eligible students as defined in RSA 77-G:1, VIII(a)(1) and (2) shall be reduced by 5 percent each program year for years 3 through 15 of the program, and, at the beginning of the sixteenth program year and every program year thereafter, there shall be no required minimum percentage of scholarships.

(c) The minimum value of a scholarship granted to a student receiving special education programs or services pursuant to RSA 186-C shall be 175 percent of the maximum average scholarship size as defined in subparagraph (b).

(d) At least 40 percent of the scholarships awarded by the scholarship organization to eligible students as defined in RSA 77-G:1, VIII(a)(1) and (2) shall be awarded to students who qualified for the federal free and reduced-price meal program in the final year they were in public school.

(e) A student shall reapply each year for a scholarship.

II. Scholarship organizations may meet the percentage requirements of subparagraphs I(b) and (d) if, pursuant to a mutual agreement, the organizations aggregate their scholarship data and the aggregated data shows compliance with the percentage requirements.

77-G:3 Contributions to Scholarship Organizations. For each contribution made to a scholarship organization, a business organization or business enterprise may claim a credit equal to 85 percent of the contribution against the business profits tax due pursuant to RSA 77-A, or against the business enterprise tax due pursuant to RSA 77-E, or apportioned against both provided the total credit granted against both shall not exceed the maximum education tax credit allowed. Credits provided under this chapter shall not be deemed taxes paid for the purposes of RSA 77-A:5, X. The department of revenue administration shall not grant the credit without a scholarship receipt. No business organization or business enterprise shall direct, assign, or restrict any contribution to a scholarship organization for the use of a particular student or nonpublic school. No business organization or business enterprise shall receive more than 10 percent of the aggregate amount of tax credits permitted in RSA 77-G:4.

77-G:4 Tax Credits.

I. The aggregate of tax credits issued by the commissioner of the department of revenue administration to all taxpayers claiming the credit shall not exceed $3,400,000 for the first program year and $5,100,000 for the second program year, subject to the provisions of paragraph III. In subsequent years, the aggregate of tax credits shall not exceed the amount allowed for the prior year, unless adjusted pursuant to paragraph II.

II. Beginning with the second program year, if the amount of the total donations used for scholarships exceeds 80 percent of the current program year’s tax credits allowed, the aggregate of tax credits allowed for the next program year shall increase by 25 percent, subject to the provisions of paragraph III.

III. In each program year, the increase in the aggregate of tax credits allowed pursuant to paragraphs I and II shall be contingent upon the board of directors of the community development finance authority certifying in writing to the commissioner of the department of revenue administration by the December 1 preceding the program year that the community development finance authority has received $5,000,000 or more in contributions for the state fiscal year or that the authority has received contribution offers sufficient to meet its state fiscal year limit but did not meet its limit for other reasons. 

77-G:5 Scholarship Organizations. 

I. A scholarship organization shall:

(a) Provide scholarships from eligible contributions to eligible students to defray educational expenses.

(b) Not restrict or reserve scholarships for use at a single nonpublic school and not restrict or reserve a scholarship for a specific student or a specific person.

(c) Verify a student’s eligibility to apply for and receive a scholarship through transcripts and attendance records.

(d) Not have an owner or operator who also owns or operates a nonpublic school that participates in the education tax credit program.

(e) Not have an owner or operator who in the last 7 years has filed for personal bankruptcy or corporate bankruptcy in a business organization or business enterprise of which he or she owned more than 20 percent.

(f) Not use more than 10 percent of eligible contributions used during the program year in which the contributions are collected, and for which scholarship receipts were issued for tax credit purposes, for administrative expenses. Administrative expenses shall be reasonable and necessary for the organization’s management and distribution of eligible contributions pursuant to this chapter. 

(g) In the first program year, there shall be no carry forward of unused eligible contributions. In each program year thereafter, not more than 10 percent of eligible contributions may be carried forward to the following program year. Any amount carried forward shall be expended for annual or partial year scholarships in the program year into which the amount is carried forward. 

(h) Maintain separate accounts for scholarship funds, non-tax credit donations, and operating funds.

(i)(1) Not award a scholarship to any lineal descendent or equivalent step-person of any officer, director, or employee of any scholarship organization; and

(2) Not award a scholarship to any lineal descendant or equivalent step-person of any proprietor, partner, or member of any business organization or business enterprise making a contribution to a scholarship organization and claiming a credit against the business profits tax or business enterprise tax, nor any lineal descendant or equivalent step-person of any officer, director, or owner of more than a 5 percent interest in any business organization or business enterprise making a contribution to a scholarship organization and claiming a credit against the business profits tax or business enterprise tax, nor any employee who is among the highest-paid 20 percent of paid employees in any business organization or business enterprise making a contribution to a scholarship organization and claiming a credit against the business profits tax or business enterprise tax.

(j) Provide to each school district which receives a stabilization grant pursuant to RSA 77-G:8 a copy of the aggregated results of the scholarship impact survey, including total number of students who received scholarships from that school district under RSA 77-G:1, VIII(a)(1).

II.(a) An organization seeking approval as a scholarship organization under this chapter shall submit an application to the department of revenue administration each program year no later than June 15. The department of revenue administration shall approve or deny the application within 30 days of receipt. The department shall deny any application that fails to meet the statutory requirements and shall notify the scholarship organization of the reasons for denial.

(b) A business organization or business enterprise shall submit an education tax credit application to the department of revenue administration no earlier than January 1 and no later than June 15. The department shall approve these applications within 30 days on a first come-first served basis, up to the aggregate tax credit amount allowed under RSA 77-G:4. If multiple education tax credit applications are received on the same day, they shall be processed at random. No business organization or business enterprise shall be granted an education tax credit for more than 10 percent of the aggregate tax credit amount permitted in RSA 77-G:4. The department of revenue administration may approve only a portion of a request if required to prevent exceeding the aggregate tax credit amount allowed under RSA 77-G:4. The approval shall include the amount allowed and the date of approval.

(c) Once an education tax credit application is approved, the business organization or business enterprise shall donate within 60 days of the date of approval or the request shall expire. Donations may be made to multiple scholarship organizations provided the total amount donated by the business organization or business enterprise does not exceed the amount approved. Donations shall be made no later than July 15 of the program year.

(d) Upon receiving a donation, the scholarship organization shall send a donation receipt to the department of revenue administration and to the business organization or business enterprise within 15 days. The department of revenue administration shall notify the scholarship organization and the business organization or business enterprise within 15 days if the donations made by a business organization or business enterprise exceed the amount approved. If a business organization or business enterprise fails to donate the total amount approved within the time permitted, the department of revenue administration may grant credit requests in the order specified in subparagraph (b). 

(e) Notwithstanding RSA 193-E:5, on or before July 15, a scholarship organization shall furnish the unique pupil identifier and date of birth for each student eligible pursuant to RSA 77-G:1, VIII(a)(1) and (2) who is receiving a scholarship, and the subparagraph under which he or she was eligible, to the department of education. The department of education shall notify the scholarship organization within 30 days of any students who are ineligible under RSA 77-G:1, VIII(a)(1). The scholarship organization shall notify the department of education within 30 days if any student eligible under RSA 77-G:1, VIII(a)(1) or (2) is not awarded a scholarship or is awarded a scholarship yet subsequently returns to public school. The department of education shall return such student to the calculation of the average daily membership in residence, as defined in RSA 189:1-d, IV, for the student’s school district of residence, and add the amount calculated under RSA 198:40-a, I-III to the adequate education grant amount to the student’s school district of residence, and include such amount in the next adequate education grant payment made under RSA 198:42.

(f) On or before December 1, the scholarship organization shall send a scholarship receipt to the business organization or business enterprise and to the department of revenue administration. The scholarship receipt shall include the amount of the donation that was used under this chapter which is eligible for the tax credit, and the amount that was not used. The scholarship organization shall return any unused funds to the business organization or business enterprise.

(g) On or prior to December 1, the scholarship organization shall submit a scholarship organization report to the department of revenue administration. The scholarship organization shall also include a scholarship organization application if it intends to issue scholarships under this chapter in the next program year. The department of revenue administration shall review the scholarship organization report and the scholarship receipts to ensure that the administrative expenses requirement set forth in subparagraph I(f) is not exceeded, that the number of scholarships issued under RSA 77-G:1, VIII(a)(1)and (2) meets the requirements of this chapter, and the average scholarship size does not exceed the amount allowed. If any of these requirements are not met, the department of revenue administration may deny a scholarship organization application for subsequent program years and shall notify the scholarship organization of the reasons for denial.

(h) A business organization or business enterprise may file for the tax credit after receiving the scholarship receipt, and may file a tax credit request for the subsequent program year up to the amount donated in the current program year.

(i) The provisions of this chapter regarding nonpublic schools and their relation to scholarship organizations shall apply only to nonpublic schools that choose to accept scholarship students.

77-G:6 Department of Revenue Administration; Requirements.

I. The department of revenue administration shall:

(a) Develop, and annually verify and update, by February 1, a list of eligible nonprofit scholarship funding organizations that meet the requirements of this chapter. The department shall post this list on the department’s Internet website and update the list monthly until July 15. The department shall forward the list and any updates to the commissioner of the department of education who shall post the list on the department of education’s Internet website. 

(b) Conduct or require audits in response to any reasonable complaints made. The cost of an independent audit shall be paid by the scholarship organization, but this cost shall be excluded from the administrative expenses requirement set forth in RSA 77-G:5, I(f). 

(c) Establish a process by which individuals may notify the department of revenue administration of any violation by a parent, business organization, business enterprise, scholarship organization, or nonpublic school of state laws relating to program participation. The department of revenue administration shall conduct an inquiry of any written complaint of a violation of this chapter, or make a referral to the appropriate agency for an investigation, if the complaint is signed by the complainant and is legally sufficient. A complaint is legally sufficient if it contains facts demonstrating a violation of this chapter or any rule adopted pursuant to this chapter. In order to determine legal sufficiency, the department of revenue administration may require supporting information or documentation from the complainant.

(d) Create, maintain, and post online the relevant forms and reports, and submit scholarship organization reports to the members of the house and senate education committees and to the department of education.

(e) Post to the department’s website an up-to-date total of the amount of credits available. 

(f) No later than January 1, 2013, adopt rules pursuant to RSA 541-A, relative to: 

(1) The application procedure for a scholarship organization applying to accept scholarship donations under this chapter.

(2) The application procedure for a business organization or business enterprise applying for a tax credit under this chapter. 

(3) Complaint procedures, including the filing of a complaint and investigations of complaints. 

(4) The design and content of the forms and applications required to be filed with, or issued by, the department of revenue administration under this chapter. 

77-G:7 Department of Education; Requirements. 

I. The department of education shall determine the number of students receiving a scholarship under RSA 77-G:1, VIII(a)(1) and (2) who were counted in the calculation of the average daily membership in attendance, as defined in RSA 198:38, I, for schools, other than chartered public schools, for the student’s school district of residence and for each such student, shall deduct the amount calculated under RSA 198:40-a, I-III from the total education grant amount disbursed to the student’s school district of residence calculated pursuant to RSA 198:40-a, IV(b)-(c). This adjustment shall be completed prior to September 1 of the program year in which the scholarships are granted.

II. The department of education shall verify a student’s eligibility under RSA 77-G:1, VIII(a)(1) upon request of a scholarship organization. The department of education shall assist the department of revenue administration, upon request, in the investigation of student eligibility complaints.

III. The state board of education shall adopt rules, pursuant to RSA 541-A, relative to forms necessary for any surveys required and the procedures for determining and disbursing stabilization grants.

77-G:8 Scholarship Stabilization Grant. 

I. For each school district, the department of education shall calculate the combined amount of reductions in adequacy cost pursuant to RSA 77-G:7 from students receiving scholarships under RSA 77-G:1, VIII(a)(1) and who were in attendance in that district in the year prior to receiving the scholarships. If this combined amount is greater than 1/4 of one percent of a school district’s total voted appropriations for the year prior to the scholarship year, the commissioner of the department of education shall disburse a scholarship stabilization grant for the current and next 3 fiscal years to each such school district equal to the amount of the reductions in excess of 1/4 of one percent. This scholarship stabilization grant shall be included in the September 1 disbursement required pursuant to RSA 198:42. 

II. The department of education shall order any scholarship organizations that provided scholarships to students from districts that were awarded stabilization grants pursuant to paragraph I to conduct a scholarship impact survey. The organization shall forward the results of this survey to the department of education and the school board of each district. The department of education shall post the results of this survey online.

77-G:9 Exceptions.

I. A receiving nonpublic school or home education program that accepts students benefiting from scholarships, grants, or tax credits shall not be considered an agent of the state or federal government as a result of participating in the program established in this chapter.

II. Except as provided in this chapter, or otherwise provided in law, no state department, agency, or board shall regulate the educational program of a receiving nonpublic school or home education program that accepts students pursuant to this chapter. 

III. Donations made by a business organization or business enterprise to a scholarship organization that are not for the purpose of obtaining a tax credit under this chapter shall not be subject to the requirements in this chapter.

77-G:10 Severability. If any provision of this chapter or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.

5 Applicability. The first program year of the education tax credit pursuant to RSA 77-G as inserted by section 4 of this act shall begin on January 1, 2013.

6 Effective Date. This act shall take effect upon its passage.

LBAO

12-2995

Amended 04/27/12

SB 372-FN - FISCAL NOTE

AN ACT establishing an education tax credit.

FISCAL IMPACT:

The Departments of Education and Revenue Administration state this bill, as amended by the Senate (Amendment # 2012-1486s), will decrease state revenue by $3,740,000 in FY 2014, $5,610,000 in FY 2015, $7,012,500 in FY 2016, decrease state expenditures by $4,127,665 in FY 2014, $6,153,942 in FY 2015, $7,247,685 in FY 2016, decrease local revenue by $4,227,665 in FY 2014, $6,253,942 in FY 2015, $7,347,685 in FY 2016, and decrease local expenditures by $270,241 in FY 2014, $399,765 in FY 2015, and $463,195 in FY 2016. This bill will have no fiscal impact on county revenue and expenditures.

METHODOLOGY:

The Department of Revenue Administration (DRA) states this bill establishes an education credit against the business profits tax (BPT) and/or the business enterprise tax (BET) for business organizations that contribute to scholarship organizations which awards scholarships to be used by students to defray education expenses of attending an independent school. Since the Education Tax Credit would be a new tax credit, the Department does not have any information in order to project the estimated cost of such credits. A tax credit reduces a taxpayer’s liability dollar for dollar. While DRA does not provide federal tax advance, they note that it is possible that as a result of federal deductions for charitable contributions, there could be a further loss based on the total allowable deductions in each year, due to a diminished starting point for calculating New Hampshire taxable business income under the BPT. The Department states the BPT tax credit amounts are established at $3,400,000 in FY 2014, $5,100,000 in FY 2015, and can increase by 25% in each fiscal year thereafter if the amount of total donations used for scholarships exceed 80% of the current year’s tax program allowed. This would amount to BPT tax credits totaling $6,375,000 in FY 2016. The total amount of allowable scholarship contributions are $4,000,000 in FY 2014, $6,000,000 in FY 2015, and $7,500,000 in FY 2016. Of these amounts, 85% can be claimed as a tax credit against the BPT and/or BET, and 8.5% of the amounts would be an additional impact against BPT amounts paid. The estimated combined state general fund/education trust fund revenue impact would be as follows – 

FY 2014 FY 2015 FY 2016 

State Revenues

BPT/BET Tax Credit (85% of Contributions) $(3,400,000) $(5,100,000) $(6,375,000) BPT Impact (8.5% of Contributions) $(340,000) $(510,000) $(637,500)

Total State Revenue Impact $(3,740,000) $(5,610,000) $(7,012,500)

The Department assumes additional students will chose to leave public school if they receive a scholarship as proposed in this bill. Scholarship organizations are allowed to use no more than 10% of eligible contributions for administrative expenses. As a result, DOE estimates scholarships will total 85% of the total allowable contributions in each year resulting in actual scholarships granted of $3,600,000 in FY 2014, $5,400,000 in FY 2015, and $6,750,000 in FY 2016. 

The Department assumes all households will apply for the scholarship. The bill mandates scholarships to have an average value of $2,500 for private school students and 25% or $625 for home school students. These values will increase by the consumer price index (CPI) in each year thereafter, which is assumed by the Department at approximately 1.4% annually. The Department states this bill requires that 70% of scholarships must come from students who will reduce adequacy payments, and the other 30% will be split between home school students (30%) and students who will not reduce adequacy payments (70%). It is assumed the number of scholarships will total 1,544 in FY 2014, 2,285 in FY 2015, and 2,850 in FY 2016. Of these totals, a scholarship organization shall award a minimum of 70% or 1,081 of all scholarships to public school students in FY 2014, 70% or 1,599 in FY 2015, and 65% or 1,853 in FY 2016. The Department states the number of students receiving scholarships would be deducted from the adequate education grant amount disbursed to the pupil’s school district of residence. The Department estimates 6.2% of public school students who will receive scholarships will come from towns who do not receive adequate education grants. As a result, DOE calculates the decrease in adequate education payments assuming 1,013.8 public school students in FY 2014, 1,499.7 in FY 2015, and 1,737.9 in FY 2016. Assuming an average adequate education grant amount of approximately $4,170 in FY 2014 and 2015, and $4,228 in FY 2016 (based on a 1.4% CPI increase biennially), DOE estimates adequate education grant payments will decrease by approximately $4,227,665 in FY 2014, $6,253,942 in FY 2015, and $7,347,685 in FY 2016. 

Although this bill does not contain an appropriation or establish positions, DOE estimates they would need to hire a full time employee at a cost of approximately $100,000 annually to implement the provisions of this bill. 

Based on discussions with three school districts, DOE estimates local school districts will experience a reduction in expenditures for each public school student who receives a scholarship and leaves the school district. The Department assumes for every 2 students who leave public schools as a result of this bill, the school district will save $500. As a result, the Department estimates local expenditures would decrease by $270,241 in FY 2014, $399,765 in FY 2015, and $463,195 in FY 2016. 

In summary, the estimated state and local impact is as follows – 

FY 2014 FY 2015 FY 2016 

State Revenues

BPT Tax Credits $(3,400,000) $(5,100,000) $(6,375,000) Additional BPT Impact $(340,000) $(510,000) $(637,500)

Total State Revenue Impact $(3,740,000) $(5,610,000) $(7,012,500)

State Expenditures 

DOE (1 FTE) $100,000 $100,000 $100,000 Decrease in adequacy 

payments to locals $(4,227,665) $(6,253,942) $(7,347,685) 

Total State Expenditure Impact $(4,127,665) $(6,153,942) $(7,247,685) 

Local Revenues

Decrease in adequacy 

payments from State $(4,227,665) $(6,253,942) $(7,347,685) 

Total Local Revenue Impact $(4,227,665) $(6,253,942) $(7,347,685) 

Local Expenditures

Decrease in local costs 

due to less students $(270,241) $(399,765) $(463,195) 

Total Local Expenditure Impact $(270,241) $(399,765) $(463,195)