This bill would amend Article 3 of Chapter 2 of Title 20 of the O.C.G.A. to add “any charter school in this state” to the definition of “public school.” It also defines “teacher enrichment” as professional development for certified teaching staff or salary enhancements or bonuses. It also defines “teacher enrichment contribution” as a cash contribution by a taxpayer to a public school for the purposes of teacher enrichment for which the taxpayer receives a tax credit.

            It would allow the school to keep one percent of any contribution for teacher enrichment for administrative costs, but all remaining funds would have to be expended for the defined purposes. A separate account would have to be kept for those funds, and funds could be transferred from one public school to another. Annual reports to the DOR must include:

1.      The total number and dollars contributed by individuals with tax credits approved;

2.      The total number and dollars contributed by corporations with tax credits approved; and

3.      A list of contributions, including dollar value of each contribution and the dollar value of each approved tax credit.

The DOR would be required to post all that data on its web site, and they would be prohibited from requiring any other information from public schools regarding such contributions. The department would also be required to submit a list of all public schools receiving contributions from businesses and individuals granted a tax credit to the General Assembly by January 30 of each year.

            The bill then jumps to address student scholarship organizations. It would eliminate the current 25% carryover from one year to the next and replace it with a paragraph that describes how the student scholarship organization would, at the end of the calendar year following the year in which donations were received, obligate and designate the funds to specific students. Distribution of the funds could then be made according to DOR rules to private schools that have submitted projected enrollments for the year or years that the students attend or will attend.

            Until the revenues are designated for specific students, they would have to be held in a bank or investment account owned and controlled by the scholarship organization. It would add to the required annual audit that the above procedures for obligating and distributed revenues were followed.

            The bill goes on to define “corporation” and “eligible student” to match other definitions in the code. It eliminates the caps for tax credits in the current law and allows tax credits for the actual amount expended or 75% of the taxpayer’s state income tax liability, whichever is less. Corporations would be allowed to use tax credits for contributions to offset other tax liabilities such as the sale of alcoholic beverages and other items. It would raise the cap on total tax credits allowed from $50 million a year to $80million and would allow unused tax credits to be carried forward to the next tax year. It extends the annual total maximum amount annual adjustment from 2018 to 2023 and changes the basis of the adjustment from the Consumer Price Index to the most recent annual percentage change in the gross output of state and local governments. It would prohibit the annual adjustment from moving downward. 

            Corporations’ aggregate amount of tax credits would not exceed 25% of the total aggregate amount of tax credits allowed in the bill.

            The bill would add a new Code section to address tax credits for contributions for teacher enrichment for public schools [a return to the initial topic of the bill]. At this point the bill restates the definitions at the beginning of the bill and elaborates on allowed tax credits for the contributions:

1.      The credit could be equal to the amount contributed or 75% of the taxpayer’s state income tax liability;

2.      A corporation could substitute the tax credit for other tax liabilities, such as alcohol sales taxes;

3.      No tax credit would be allowed if the contribution were designated for the benefit of a taxpayer’s dependent;

4.      The tax credit could not exceed tax liability for the current year, could not apply to previous years’ liability, but could carry forward for five years for future tax liability.

5.      The cap on tax credits would be $100 million per tax year, but could be carried forward. An annual adjustment would be made until January 1, 2023 and would be based on the same factors as student scholarship organization criteria. It would not be allowed to move downward;

6.      The tax credits would be granted on a first come, first served basis, and corporations’ credits could not exceed 25% of the cap ($100 million the first year).

An extremely complicated procedure is outlined regarding notification of intent to contribute to the public school, pre-approval by the state tax commissioner, and payment of the contribution in a 60 day window. Other requirements abound and are not present to allow tax credits for donations to student scholarship organizations for tax credits.