An Act to Promote Educational Opportunity Through the Educational Choice Tax Credit Program, Eliminating Certain Restrictions on Charter Schools and Virtual Public Charter Schools, Allowing More Entities to Authorize Charter Schools and Clarifying Educational Policy on Immunization Requirements
Maine Legislature, Session 131, LD 1741
Committee: Education and Cultural Affairs
Sponsors: BAGSHAW, KEIM, ARATA, FREDERICKS, GRIFFIN, JAVNER, PAUL, PERKINS, SMITH, STEWART
Amends: 20-A MRSA §2, 20-A MRSA §2404, 20-A MRSA §2405, 20-A MRSA §2408, 20-A MRSA §6355, 36 MRSA §5217-G

Legislative Document
No. 1741
H.P. 1120
House of Representatives, April 20, 2023
An Act to Promote Educational Opportunity Through the 
Educational Choice Tax Credit Program, Eliminating Certain 
Restrictions on Charter Schools and Virtual Public Charter Schools, 
Allowing More Entities to Authorize Charter Schools and Clarifying 
Educational Policy on Immunization Requirements
Reference to the Committee on Education and Cultural Affairs suggested and ordered 
printed.
ROBERT B. HUNT
Clerk
Presented by Representative BAGSHAW of Windham.
Cosponsored by Senator KEIM of Oxford and
Representatives: ARATA of New Gloucester, FREDERICKS of Sanford, GRIFFIN of Levant, 
JAVNER of Chester, PAUL of Winterport, PERKINS of Dover-Foxcroft, SMITH of Palermo, 
Senator: STEWART of Aroostook.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  20-A MRSA §2, sub-§1, as enacted by PL 1981, c. 693, §§5 and 8, is 
amended to read:
1.  State responsibility for public education.  In accordance with the Constitution of 
Maine, Article VIII, the Legislature shall enact the laws that are necessary to assure that all 
school administrative units make suitable provisions for the support and maintenance of 
the public schools and the education of every individual within the age limitations 
prescribed by state statutes who resides in the school administrative unit. It is the intent of 
the Legislature that every person within the age limitations prescribed by state statutes shall 
be provided an opportunity to receive the benefits of a free public education.
Sec. 2.  20-A MRSA §2404, sub-§4, as enacted by PL 2019, c. 253, §1, is repealed.
Sec. 3.  20-A MRSA §2405, sub-§1, as amended by PL 2011, c. 570, §4, is further 
amended to read:
1.  Eligible authorizers.  The following groups may become authorizers of public 
charter schools:
A.  A local school board with regard to creating a public charter school within the 
boundaries of the school administrative unit governed by that local school board;
B.  The commission under subsection 8; and
C.  A collaborative among local school boards that forms to set up a regional public 
charter school to be located within the area managed and controlled by those local 
school boards.;
D.  The University of Maine System; and
E.  Educational or research-based nonprofit organizations.
Sec. 4.  20-A MRSA §2405, sub-§10, as enacted by PL 2019, c. 307, §2, is 
repealed.
Sec. 5.  20-A MRSA §2408, sub-§2, as amended by PL 2019, c. 253, §2, is further 
amended by repealing the 3rd blocked paragraph.
Sec. 6.  20-A MRSA c. 220 is enacted to read:
CHAPTER 220
EDUCATIONAL TAX CREDIT
§5901.  Educational tax credit program
1. Definition. As used in this chapter, unless the context otherwise indicates, 
"program" means the educational choice tax credit program created under this section and 
Title 36, section 5217-G.
2. Program created. The department shall create a program as provided by this section 
to determine eligibility for tax credits under Title 36, section 5217-G for donations made 
to scholarship organizations.
3. Requirements for scholarship organizations.  In order to qualify for a tax credit 
under the program, a taxpayer must make a donation to a scholarship organization that 
provides scholarships to qualifying students attending qualifying schools and has notified 
the department of its intention to participate in the program and comply with the program's 
requirements.  In order to qualify for participation in the program, a scholarship 
organization must:
A. Demonstrate to the department that the scholarship organization has been granted 
exemption from the federal income tax as an organization described in Section 
501(c)(3) of the federal Internal Revenue Code of 1986; 
B. Distribute periodic scholarship payments as checks made out to a student's parent;
C. Require a parent to submit receipts for all qualifying instruction-related expenses 
paid for by the scholarship to the scholarship organization within 90 days of payment; 
D. Provide a department-approved receipt to taxpayers for contributions made to the 
scholarship organization;
E. Ensure that at least 90% of the scholarship organization's revenue from donations is 
spent on educational scholarships and that all revenue from interest or investments is 
spent on educational scholarships; 
F. Each year, spend a portion of the scholarship organization's expenditures on 
scholarships for low-income eligible students that is at minimum equal to the 
percentage of low-income eligible students in the county where the scholarship 
organization expends the majority of its scholarships; 
G. Grant only single-year scholarships; 
H. Carry forward no more than 25% of their revenue from donations from the state 
fiscal year in which the donations were received to the following state fiscal year; 
I. Cooperate with the department to conduct criminal background checks on all of the 
scholarship organization's employees and board members and exclude from 
employment or governance any individual that might reasonably pose a risk to the 
appropriate use of donated funds; 
J. Ensure that scholarships are portable during the school year and can be used at any 
qualifying school to which the scholarship organization grants scholarships and that 
accepts the qualified student according to a parent's wishes. If a student moves to a new 
qualifying school during a school year, the scholarship organization may allow the 
amount of the scholarship to be prorated;
K. Report to the department by June 1st of each year the following information 
prepared by a certified public accountant regarding the scholarship organization's 
grants in the previous calendar year:
(1) The name and address of the scholarship organization;
(2) The total number and total dollar amount of donations received;
(3) The total number and total dollar amount of scholarships awarded;
(4) The total number and total dollar amount of scholarships awarded to students 
qualifying for free and reduced-price meals under the National School Lunch 
Program under 7 Code of Federal Regulations, Part 210; and 
(5) The percentage of first-time recipients of scholarships who were enrolled in a 
public school;
L. Ensure scholarships are not provided for students to attend a school with paid staff 
or board members or relatives of paid staff or board members in common with the 
scholarship organization; 
M. Annually submit to the department a financial information report for the scholarship 
organization that complies with uniform financial accounting standards established by 
the department, that is conducted by a certified public accountant and that an auditor 
has certified is free of material misstatements; 
N. Provide scholarships that cover all or part of the cost to educate a student, including, 
but not limited to: 
(1) Tuition and fees at a qualifying school;
(2) Instruction-related transportation expenses; and 
(3) Instruction-related expenses other than transportation subject to the approval of 
the department, including but not limited to online learning services, tutoring 
services and instruction-related materials and equipment. Instruction-related 
expenses may not include the cost of a parent's time expended in the 
homeschooling of the parent's child; and
O. Provide that, once a qualifying student receives a scholarship under the program, 
the student remains eligible regardless of household income until the student graduates 
high school or reaches 21 years of age, whichever occurs first.
In order to be a qualifying student, a student must be a member of a household whose 
total annual income the year before the student receives a scholarship from the 
scholarship organization does not exceed an amount equal to 2 times the income 
standard used to qualify for free or reduced-price meals under the National School 
Lunch Program under 7 Code of Federal Regulations, Part 210 and reside in this State 
while receiving the scholarship.
A qualifying school for purposes of this section means a public school other than the 
public school in which a student seeking a scholarship resides or a private school that 
has notified the department of an intention to participate in the program.
4. Department duties and powers. The department:
A. Shall:
(1) Provide a standardized format for a receipt to be issued by a scholarship 
organization to a taxpayer to indicate the value of a donation received;
(2) Provide a standardized format for a scholarship organization to report the 
information required in this section; and
(3) Notify affected scholarship students and the students' parents of this decision 
as quickly as possible if the department decides to bar a scholarship organization 
from the program; and
B. May:
(1) Conduct either a financial review or an audit of a scholarship organization if 
the department has evidence of fraud; and
(2) Bar a scholarship organization from participating in the program if the 
department establishes that the scholarship organization has intentionally and 
substantially failed to comply with the requirements in this section. 
5. Rules. The department may adopt rules to implement this section. Rules adopted 
pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A.
Sec. 7.  20-A MRSA §6355, sub-§5 is enacted to read:
5.  Virtual public charter schools and private schools.  The student is enrolled in or 
attends a virtual public charter school or a private school.
Sec. 8.  36 MRSA §5217-G is enacted to read:
§5217-G.  Educational tax credit and diversion of income tax withheld
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A. "Qualified taxpayer" means a taxpayer who files a state income tax return and is not 
a dependent of another taxpayer.
B. "Scholarship organization" means an organization that meets the requirements of 
Title 20-A, section 5901, subsection 3.
2.  Credit allowed.  For tax years beginning on or after January 1, 2023, a qualified 
taxpayer is allowed a credit against the tax imposed by this Part in accordance with the 
provisions of this section. The credit is created to implement the educational choice tax 
credit program established under this section and Title 20-A, chapter 220.
A. A qualified taxpayer entitled to the credit for any taxable year may carry over and 
apply to the tax liability for any one or more of the next succeeding 3 years the portion, 
as reduced from year to year, of any unused credits.
B. In the first 5 years of the program, a qualified taxpayer may claim a credit based on 
donations actually made to a scholarship organization under the program for 
educational scholarships during the taxable year for which the credit is claimed. 
Beginning in the 6th year of the program, the amount of the qualified taxpayer's 
liability for taxes under this Part that is eligible for a credit decreases by 10 percentage 
points each year until the 10th year of the program and beyond, when the tax credit 
may be claimed for up to 50 percent of the qualified taxpayer's tax liability.
C. Except as provided in subsection 4, the credit under this section may not reduce the 
tax otherwise due under this Part to less than zero.
3. Receipt required. A taxpayer shall provide a department-approved receipt for a 
scholarship donation in order to qualify for the credit described in this section.
4. State income tax withholding. For tax years beginning on or after January 1, 2023, 
a taxpayer may divert a prorated amount of state income tax withheld to a scholarship 
organization up to the maximum credit allowed by law, including carry-over credits. 
5. Rules. The assessor may adopt rules necessary to implement this section. Rules 
adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 
375, subchapter 2-A.
SUMMARY
This bill clarifies that a school administrative unit must make suitable provisions for 
the education of every person within the age limits prescribed by law who reside in the 
school administrative unit. The bill repeals provisions setting a limit on the total enrollment 
of virtual public charter schools, a limit on the number of public charter schools and a limit 
on the expansion of virtual public charter schools.  The bill adds 2 categories of authorizers 
of public charter schools. The bill creates the educational choice tax credit program to allow 
for tax credits for donations made to certain scholarship organizations.  The bill also 
provides an exception to school immunization requirements for students of virtual public 
charter schools or private schools.