Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-61 - ALABAMA ACCOUNTABILITY ACT - CREDITS FOR SCHOLARSHIP GRANTING ORGANIZATIONS › Section 810-3-61-.04 - Receipt, Maintenance And Disbursement Of Scholarship Funds By Scholarship Granting Organizations (SGOs)

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Scope. The Alabama Accountability Act of
			 2013 provides for the granting of scholarships by SGOs under certain
			 circumstances. This rule prescribes accountability requirements for making
			 scholarship grants.
(2) The SGO
			 must maintain separate accounts for all scholarship donations, including any
			 interest or other income on the scholarship funds. The scholarship fund must
			 not be comingled with any other funds, and may only be used for making actual
			 scholarship grants and for paying allowable non-scholarship expenditures, as
			 described in paragraph 3, below.
(3) An SGO may accept and separately account
			 for donations which do not entitle the donor to tax credits under the
			 scholarship program, if such donations are not a violation of its by-laws and
			 other applicable laws and regulations. The SGO may use any interest or other
			 investment income derived from non-scholarship funds for non-scholarship
			 purposes.
(4) At least 95% of
			 revenue from scholarship donations and all interest and investment income
			 attributable to scholarship funds must be used for educational scholarships.
			 Therefore, the SGO may use no more than 5% of the amount of its scholarship
			 donations for purposes other than making scholarship grants. The 5% maximum
			 will be calculated for each calendar year, using the amount of scholarship
			 donations received during the year. If an SGO does not expend the full 5% of
			 funds available for non-scholarship expenditures in the year of donation, the
			 remaining balance may be carried forward for use in subsequent years on
			 non-scholarship expenditures.
(5)
			 The SGO must make sure any scholarship funds on hand at the beginning of a
			 calendar year are expended on educational scholarships by the end of the
			 academic year ending during the next succeeding calendar year. Any scholarship
			 funds which are not so expended shall be turned over and deposited with the
			 State Department of Education for the benefit of its At-Risk Student
			 Program.
(6) Effective for tax
			 years beginning after December 31, 2021, any scholarship funds on hand at the
			 beginning of a calendar year must be expended on educational scholarships
			 within three calendar years or turned over and deposited with the Department of
			 Education for the benefit of its At-Risk Student Program.
(7) For all scholarship donations received,
			 the SGO must notify donors to enter the donation into the Department of
			 Revenue's system for tracking scholarship donations and credits, which must be
			 done pursuant to Rule
			 810-3-61-.02.
(8) The Department of Revenue will make
			 available an electronic receipt system for qualified SGO to enter and verify
			 actual scholarship donations received. No tax credits will be allowed to
			 donors, if the SGO receiving the donation fails to enter the donation amounts
			 into the system, and to provide all required donor identifying information by
			 the required date.
(9) The SGO must
			 enter all donations received and all required donor identifying information
			 into the Department of Revenue's system within 30 days of receipt of the
			 donations, in order to validate the donor's donation and to create the
			 electronic receipt. The donor will receive the electronic receipt form through
			 the Department of Revenue's system, enabling the donor to use the allowable
			 credit on his/her tax return.
(10)
			 The portion of the $30 million in available tax credits which has been reserved
			 for a particular donation may be released and made available to other donors if
			 the SGO fails to provide validating information by the required date.
Authors
: Curtis Stewart, Neal Hearn
Statutory Authority
:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  16-16D-1.