2023 Code of Alabama › Title 16 - Education. › Chapter 6D - Alabama Accountability Act of 2013. › Section 16-6D-8 - Tax Credits; Failing Schools Income Tax Credit Account.

Section 16-6D-8
Tax credits; Failing Schools Income Tax Credit Account.
(a) To provide educational flexibility and state accountability for students in failing schools:
(1) For tax years beginning on and after January 1, 2013, an Alabama income tax credit is made available to the parent of a student enrolled in or assigned to attend a failing school to help offset the cost of transferring the student to a nonfailing public school or nonpublic school of the parent's choice. The income tax credit shall be an amount equal to 80 percent of the average annual state cost of attendance for a public K-12 student during the applicable tax year or the actual cost of attending a nonfailing public school or nonpublic school, whichever is less. The actual cost of attending a nonfailing public school or nonpublic school shall be calculated by adding together any tuition amounts or mandatory fees charged by the school to the student as a condition of enrolling or of maintaining enrollment in the school. The average annual state cost of attendance for a public K-12 student shall be calculated by dividing the state funds appropriated to the Foundation Program pursuant to Section 16-13-231(b)(2) by the total statewide number of pupils in average daily membership during the first 20 scholastic days following Labor Day of the preceding school year. For each student who was enrolled in and attended a failing school the previous semester whose parent receives an income tax credit under this section, an amount equal to 20 percent of the average annual state cost of attendance for a public K-12 student during the applicable tax year shall be allocated, for as long as the parent receives the tax credit, to the failing school from which the student transferred if the student transfers to and remains enrolled in a nonpublic school. No such allocation shall be made in the event the student transfers to or enrolls in a nonfailing public school. The Department of Education shall determine the best method of ensuring that the foregoing allocation provisions are properly implemented. A parent is allowed a credit against income tax for each taxable year under the terms established in this section. If income taxes owed by such a parent are less than the total credit allowed under this subsection, the taxpayer shall be entitled to a refund or rebate, as the case may be, equal to the balance of the unused credit with respect to that taxable year.
(2) Any income tax credit due a parent under this section shall be granted or issued to the parent only upon his or her making application therefor, at such time and in such manner as may be prescribed from time to time by the Department of Revenue. The application process shall include, but not be limited to, certification by the parent that the student was enrolled in or was assigned to attend a failing school, certification by the parent that the student was subsequently transferred to, and was enrolled and attended, a nonfailing public school or nonpublic school of the parent's choice, and proof, satisfactory to the Department of Revenue, of the actual cost of attendance for the student at the nonfailing public school or nonpublic school. For purposes of the tax credit authorized by this section, costs of attendance does not include any such costs incurred for an academic year prior to the 2013-2014 academic year. The Department of Revenue shall also prescribe the various methods by which income tax credits are to be issued to taxpayers. Income tax credits authorized by this section shall be paid out of sales tax collections made to the Education Trust Fund, and set aside by the Comptroller in the Failing Schools Income Tax Credit Account created in subsection (c), in the same manner as refunds of income tax otherwise provided by law, and there is hereby appropriated therefrom, for such purpose, so much as may be necessary to annually pay the income tax credits provided by this section.
(3) An application for an income tax credit authorized by this section shall be filed with the Department of Revenue within the time prescribed for filing petitions for refund under Section 40-2A-7.
(4) The Department of Revenue shall promulgate reasonable rules to effectuate the intent of this subsection.
(b)(1) The parent of a public school student may request and receive an income tax credit pursuant to this section to reimburse the parent for costs associated with transferring the student from a failing school to a nonfailing public school or nonpublic school of the parent's choice, in any of the following circumstances:
a. By assigned school attendance area, if the student spent the prior school year in attendance at a failing school and the attendance of the student occurred during a school year in which the designation was in effect.
b. The student was in attendance elsewhere in the Alabama public school system and was assigned to a failing school for the next school year.
c. The student was notified that he or she was assigned to a failing school for the next school year.
(2) This section does not apply to a student who is enrolled in the Department of Youth Services School District.
(3) For the purposes of continuity of educational choice, the tax credit shall be available to parents for those grade levels of the failing school from which the student transferred. The parent of a student who transfers from a failing school may receive income tax credits for those grade levels enrolled in and attended in the nonfailing public school or nonpublic school of the parent's choice transferred to that were included in the failing school from which the student transferred, whether or not the failing school becomes a nonfailing school during those years. The parent of such a student shall no longer be eligible for the income tax credit after the student completes the highest grade level in which he or she would otherwise have been enrolled at the failing school. Notwithstanding the foregoing, as long as the student remains enrolled in or assigned to attend a failing school, the parent may again transfer the student to a nonfailing public school or nonpublic school of the parent's choice and request and receive an income tax credit as provided in this section.
(4) A local school system, for each student enrolled in or assigned to a failing school, shall do all of the following:
a. Timely notify the parent of the student of all options available under this section as soon as the school of attendance is designated as a failing school.
b. Offer the parent of the student an opportunity to enroll the student in another public school within the local school system that is not a failing school or a failing school to which the student has been assigned.
(5) The parent of a student enrolled in or assigned to a school that has been designated as a failing school, who decides to transfer the student to a nonfailing public school, shall first attempt to enroll the student in a nonfailing public school within the same local system in which the student is already enrolled or assigned to attend before attempting to enroll the student in a nonfailing public school that has available space in any other local school system in the state . A local school system may accept the student on whatever terms and conditions the system establishes and report the student for purposes of the local school system's funding pursuant to the Foundation Program.
(6) For students in the local school system who are participating in the tax credit program, the local school system shall provide locations and times to take all statewide assessments required by law.
(7) Students with disabilities who are eligible to receive services from the local school system under federal or state law, and who participate in the tax credit program, remain eligible to receive services from the local school system as provided by federal or state law.
(8) If a parent enrolls a student in a nonfailing public school within the same local school system, and that system provides transportation services for other enrolled students, transportation costs to the nonfailing public school shall be the responsibility of the local school system. Local school systems may negotiate transportation options with a parent to minimize system costs. If a parent enrolls a student in a nonpublic school or in a nonfailing public school within another local school system, regardless of whether that system provides transportation services for other enrolled students, transportation of the student shall be the responsibility of the parent.
(9) The State Department of Education shall promulgate reasonable rules to effectuate the intent of this subsection. Rules shall include penalties for noncompliance.
(c) There is created within the Education Trust Fund a separate account named the Failing Schools Income Tax Credit Account. The Commissioner of Revenue shall certify to the Comptroller the amount of income tax credits due to parents under this section and the Comptroller shall transfer into the Failing Schools Income Tax Credit Account only the amount from sales tax revenues within the Education Trust Fund that is sufficient for the Department of Revenue to use to cover the income tax credits for the applicable tax year. The Commissioner of Revenue shall distribute the funds in the Failing Schools Income Tax Credit Account to parents pursuant to this section.
(d)(1) Nothing in this section or chapter shall be construed to force any public school, school system, or school district or any nonpublic school, school system, or school district to enroll any student.
(2) A public school, school system, or school district or any nonpublic school, school system, or school district may develop the terms and conditions under which it will allow a student whose parent receives an income tax credit pursuant to this section to be enrolled, but such terms and conditions may not discriminate on the basis of the race, gender, religion, color, disability status, or ethnicity of the student or of the student's parent.
(3) Nothing in this section shall be construed to authorize the violation of or supersede the authority of any court ruling that applies to the public school, school system, or school district, specifically any federal court order related to the desegregation of the local school system's student population.
(Act 2013-64, p. 112, §8; Act 2013-265, p. 894, §1.)