THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY SCHRODER, TURZAI, BLOOM, CHRISTIANA, COX, DENLINGER, EVERETT, GINGRICH, HENNESSEY, KILLION, METCALFE, RAPP AND SWANGER, JUNE 23, 2011

REFERRED TO COMMITTEE ON EDUCATION, JUNE 23, 2011  

AN ACT

Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An

act relating to the public school system, including certain

provisions applicable as well to private and parochial

schools; amending, revising, consolidating and changing the

laws relating thereto," providing for opportunity

scholarships and for educational improvement tax credit; and

repealing provisions of the Tax Reform Code of 1971 relating

to educational improvement tax credit.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of March 10, 1949 (P.L.30, No.14), known

as the Public School Code of 1949, is amended by adding an

article to read:

ARTICLE XXV-B

FAILING SCHOOLS STUDENT RESCUE

(a)  Preliminary Provisions

Section 2501-B.  Short title.

This article shall be known and may be cited as the Failing

Schools Student Rescue Act.

(b)  Opportunity Scholarships

Section 2501.1-B.  Legislative findings.

The General Assembly finds that:

(1)  Pursuant to section 14 of Article III of the

Constitution of Pennsylvania, the General Assembly has the

responsibility to provide for the maintenance and support of

a thorough and efficient system of public education to serve

the needs of this Commonwealth.

(2)  Parents are best suited to choose the most

appropriate means of education for their school-age children,

and the extraordinary challenges facing students in

persistently failing schools dictates that parents have

educational choice.

(3)  Providing diverse educational opportunities for the

children of this Commonwealth is a civic and civil rights

imperative and a matter of serious concern.

(4)  The importance of providing educational choices that

will meet the needs of parents, and the need to maintain and

support an effective system of education, make it imperative

to provide for the increased availability of diverse

opportunities, including both public and nonpublic programs

of education, to benefit all citizens of this Commonwealth.

(5)  Public schools are the foundation of the system of

education in this Commonwealth. Further, Pennsylvania's

longstanding tradition of local control of public education

allows communities to adapt their public school programs to

meet local needs. For these reasons, a robust program of

interdistrict school choice is a critical means of providing

families with increased educational options within the

traditional public school system.

(6)  The accessibility to families of nonpublic

educational alternatives decreases the burden on the

Commonwealth and local school districts and increases the

range of educational choices available to Pennsylvania

families, thus providing a benefit to all citizens of this

Commonwealth.

(7)  It is the goal of the General Assembly to offer

assistance to all families in this Commonwealth, so as to

provide every child in this Commonwealth with diverse

educational opportunities and options.

(8)  The programs of educational choice provided in this

subarticle are elements of an overall program of providing

funds to increase the availability of educational

opportunities for school-age children in this Commonwealth.

(9)  A comparatively far greater proportion of public

funds are and, upon implementation of an educational choice

program, will continue to be devoted to the benefit of

children enrolled in the public schools of this Commonwealth.

Therefore, an opportunity scholarship program that offers

assistance to parents who choose to enroll their children in

participating nonpublic schools should be viewed as an

integral part of the Commonwealth's overall program of

educational funding and not as an isolated individual

program.

(10)  A program of financial assistance to enhance

educational choice in this Commonwealth, as one element of

the Commonwealth's plan for the funding of diverse

educational opportunities for the citizens of this

Commonwealth, will better prepare Commonwealth citizens to

compete for employment opportunities, will foster development

of a more capable and better-educated work force and will

better enable the Commonwealth to fulfill its obligation of

providing children with the opportunity to receive a quality

education.

Section 2502-B.  Definitions.

The following words and phrases when used in this subarticle

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Assessment."  The Pennsylvania System of School Assessment

test, the Keystone Exam, an equivalent local assessment or

another test established by the State Board of Education to meet

the requirements of section 2603-B(d)(10)(i) and required under

the No Child Left Behind Act of 2001 (Public Law 107-110, 115

Stat. 1425) or its successor Federal statute or required to

achieve other standards established by the department for the

public school or school district under 22 Pa. Code § 403.3

(relating to single accountability system).

"Average daily membership."  A school district's average

daily membership as defined in section 2501(3).

"Board."  The Education Opportunity Board established under

this subarticle.

"Department."  The Department of Education of the

Commonwealth.

"Kindergarten."  A one-year formal kindergarten program that

occurs during the school year immediately prior to first grade.

"Nonpublic school."  A school, other than a public school,

located within this Commonwealth where a Commonwealth resident

may legally fulfill the compulsory school attendance

requirements of this act and that meets the applicable

requirements of Title VI of the Civil Rights Act of 1964 (Public

law 88-352, 78 Stat. 241). The term also includes a full-time or

part-time kindergarten program operated by a nonpublic school.

"Nonresident public school."  A public school outside a

child's resident school district.

"Nonresident school district."  A school district other than

the school district in which a school-age child resides.

"Nonresident student."  A school-age child attending a public

school outside the child's resident school district.

"Opportunity scholarship."  An opportunity scholarship

awarded to a child under this subarticle to pay tuition for the

child to attend a nonresident public school or a participating

nonpublic school.

"Opportunity scholarship program" or "program."  The

opportunity scholarship program established under this

subarticle.

"Opportunity scholarship recipient."  A child who is awarded

an opportunity scholarship under this subarticle.

"Parent."  A Commonwealth resident and legalized resident of

the United States who is a parent or guardian of a school-age

child.

"Participating nonpublic school."  A nonpublic school located

in this Commonwealth and offering a program of instruction for

kindergarten through 12th grade, or a combination of grades,

that certifies to the board under section 2505-B that it meets

the following criteria:

(1)  the nonpublic school is a nonprofit entity that is

exempt from Federal taxation under section 501(c)(3) of the

Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §

1 et seq.);

(2)  the nonpublic school does not discriminate in its

admission policies or practices for opportunity scholarship

applicants on the basis of measures of achievement or

aptitude or status as a handicapped person, provided,

however, that an applicant may be required to meet

established eligibility criteria for participation in magnet

schools or in schools with specialized academic missions; and

(3)  the nonpublic school is in full compliance with all

Federal and State laws applicable to nonpublic schools on the

date prior to the effective date of this section.

"Persistently lowest achieving school."  A public elementary

or secondary school within this Commonwealth that is among the

lowest performing 5% of schools. To determine the lowest

performing 5% of schools, the department shall:

(1)  consider all public schools in this Commonwealth,

with the exception of charter schools, cyber charter schools,

area vocational-technical schools, schools that do not draw

their student body from a particular attendance boundary and

schools with specialized academic programs with specific

admissions criteria;

(2)  exclude schools that have made adequate yearly

progress or were determined to be making progress for at

least one of the two most recent school years or that have

not been measured for adequate yearly progress in one of the

two most recent school years;

(3)  rank all remaining schools based upon their

performance on the most recent assessment for which data is

posted on the department's publicly accessible Internet

website; and

(4)  include the lowest-performing 5% of schools ranked

under paragraph (3) on a list of persistently lowest-

achieving schools.

"Resident school district."  The school district in which a

school-age child resides.

"School-age child."  A child enrolling in kindergarten or in

grades 1 through 12.

"Student with a disability."  A school-age child who has been

identified, in accordance with 22 Pa. Code Ch. 14 (relating to

special education services and programs), as a "child with a

disability," as defined in 34 CFR § 300.8 (relating to a child

with a disability).

"Total revenue per average daily membership."  A school

district's total revenue per average daily membership minus the

amount of reimbursement to the school district for pupil

transportation under sections 2509.3 and 2541.

Section 2503-B.  Opportunity scholarship program.

(a)  Establishment.--Beginning with the 2011-2012 school

year, the opportunity scholarship program shall be established

to provide scholarships to help children pay tuition to attend a

nonresident public school selected by the parents of the

students or a participating nonpublic school.

(b)  Eligibility.--During the 2011-2012 school year, the

opportunity scholarship program shall be available to children

who satisfy either of the following:

(1)  attended a persistently lowest achieving school

during the 2010-2011 school year or will be a kindergarten

student during the 2011-2012 school year in a persistently

lowest achieving school; or

(2)  will reside within the attendance boundary of a

persistently lowest achieving school as of the first day of

classes of the 2011-2012 school year.

(c)  List of persistently lowest achieving schools to be

published.--By April 1, 2011, or within 30 days of the effective

date of this section and by February 1 of each year thereafter,

the department shall publish on the department's publicly

accessible Internet website and in the Pennsylvania Bulletin a

list of persistently lowest achieving schools that will be in

effect for purposes of this subarticle for the following school

year. The department shall publish the list based upon the most

recent school year for which data is available.

(d)  Annual certification.--For each school year and by the

date established by the department, the selected school shall

certify to the department that:

(1)  the public school selected has no additional

attendance slots available and the district so notifies the

department and the student within time limitations

established by the department for this purpose;

(2)  the student's attendance would place either the

receiving school district or the student's district of

residence in violation of a valid and binding desegregation

order;

(3)  the public school requested does not offer

appropriate programs or is not structured or equipped with

the necessary facilities to meet the special needs of the

student or does not offer a particular program requested;

(4)  the student has been expelled or is in the process

of being expelled pursuant to section 1318 and applicable

regulations of the State Board of Education; or

(5)  the student does not meet the established

eligibility criteria for participation in magnet schools or

in schools with specialized academic missions.

(e)  Notice.--

(1)  For each school year, by a date established by the

department, each school district in this Commonwealth shall 

post on its publicly accessible Internet website notice of

the following:

(i)  A description of the opportunity scholarship

program.

(ii)  Instructions for applying for an opportunity

scholarship.

(iii)  A statement as to whether any schools in the

school district have been designated by the department as

persistently lowest achieving schools.

(iv)  Notice that a parent must contact directly the

nonresident public school or participating nonpublic

school in which the parent's child seeks to enroll for

application instructions.

(2)  The notice shall be in a form provided by the

department.

Section 2504-B.  Opportunity scholarship to attend a nonresident

public school.

(a)  Eligibility.--A child who is eligible to participate in

the opportunity scholarship program may receive an opportunity

scholarship to pay tuition to attend a nonresident public school

that accepts a child's enrollment application under subsection

(c).

(b)  Application for opportunity scholarships.--

(1)  By a date established by the department and pursuant

to guidelines developed by the department under section

2509.1-B, the parent of a child may apply to the department

for an opportunity scholarship for the following school year.

(2)  By a date established by the department, the board

shall notify parents whether the scholarships for which the

student applied will be awarded for the following school

year.

(c)  Application for enrollment in a nonresident public

school.--

(1)  By a date established by the department, the parent

of a child who has been awarded a scholarship under

subsection (b) may apply to one or more nonresident public

schools for enrollment of the child for the following school

year. The application shall be on a form provided by the

nonresident school district.

(2)  (i)  By a date established by the department, the 

nonresident school district shall provide written notice

to the parent and the department as to whether the child

will be offered enrollment in the requested nonresident

public school for the following school year.

(ii)  By a date established by the department, the

parent must provide written notice to the department, the

resident school district and the nonresident school

district whether the offer of enrollment will be

accepted.

(iii)  By a date established by the department, the

department shall provide the resident school district and

the nonresident school district with written confirmation

of the opportunity scholarship recipient's enrollment in

the nonresident school district.

(iv)  If the child is not enrolled in a nonresident

public school, the child's resident school district shall

determine the public school within the resident school

district to which the child will be assigned.

(3)  (i)  Each school district shall develop guidelines

setting forth the terms and conditions under which it

will enroll or deny nonresident students receiving

opportunity scholarships and shall develop an enrollment

application form and process.

(ii)  The guidelines will provide for the acceptance

or denial of student enrollments based on specific,

reasonable operational limitations that have been

reviewed and preapproved by the department.

(4)  A school district that enrolls nonresident students

receiving opportunity scholarships must enroll such

nonresident students on a lottery basis from a pool of

applicants who meet the application deadline established by

the department, provided that:

(i)  the nonresident student's enrollment in the

nonresident school district would not place either the

nonresident school district or the resident school

district in violation of a valid and binding

desegregation order;

(ii)  the nonresident student has not been expelled

nor is the nonresident student in the process of being

expelled under section 1317.2 or 1318 and applicable

regulations of the State Board of Education;

(iii)  the nonresident student has not been recruited

by the school district or its representatives for

athletic purposes;

(iv)  the nonresident student meets the established

eligibility criteria for participation in a magnet school

or in a public school with a specialized academic

mission; or

(v)  the guidelines developed by the school district

are satisfied.

(d)  Commonwealth payments.--The Commonwealth shall make

payment pursuant to the schedule contained in section 2517 to

each school district or area vocational-technical school that

accepts a nonresident student under the provisions of this

subarticle subject to the following terms and conditions:

(1)  (i)  The Commonwealth shall pay to each school

district or area vocational-technical school that accepts

a nonresident student, on a tuition basis, the amount

determined under section 2561.

(ii)  For the first year of enrollment in the

nonresident public school, if the tuition rate between

the nonresident public school and the resident public

school is greater than 10%, the Commonwealth shall

include the difference above the 10% in the scheduled

payment under section 2517 to the nonresident school from

funds appropriated for this program under section

2506-B(d).

(iii)  By July 31 of the year preceding the second

school year of enrollment, the resident and nonresident

public schools shall negotiate a tuition rate. If an

agreed upon tuition rate cannot be negotiated, the board

shall establish a tuition rate.

(2)  (i)  For a nonresident student who is an opportunity

scholarship recipient and defined as a "student with a

disability," services provided to the opportunity

scholarship recipient shall be charged against the

special education subsidy to the resident school district

under section 2509.5, provided that the resident school

district shall not be charged more for services provided

to the opportunity scholarship recipient by the

nonresident school district than the difference between

the current year cost of the services had the opportunity

scholarship recipient remained in the resident school

district and the sum of the opportunity scholarship and

the per pupil special education funding following the

opportunity scholarship recipient.

(ii)  The resident school district shall provide the

department with documentation of the prior year's cost of

services provided to the opportunity scholarship

recipient and an estimate of the cost of providing those

services in the current year had the opportunity

scholarship recipient remained in the resident school

district. For the first year of enrollment in the

nonresident school district, any cost not covered by this

funding shall be deemed eligible for funding under

section 2509.8(e).

(3)  An opportunity scholarship recipient shall be

included in the average daily membership of the opportunity

scholarship recipient's resident school district.

(4)  In the event an opportunity scholarship recipient

withdraws from a nonresident school district prior to the

completion of the school year, the following shall apply:

(i)  The nonresident school district shall, within 15

days of the opportunity scholarship recipient's

withdrawal from the nonresident school district, provide

the department with written notice of the opportunity

scholarship recipient's withdrawal from the nonresident

school district.

(ii)  The resident school district, nonresident

school district or participating nonpublic school in

which the opportunity scholarship recipient subsequently

enrolls shall notify the department within five days of

the opportunity scholarship recipient's enrollment.

(iii)  Within 30 days after receiving the notice

required under subparagraph (ii), the department shall do

the following:

(A)  If the opportunity scholarship recipient

enrolls in the resident school district or a

nonresident school district, pay the resident school

district or nonresident school district the full

amount of the opportunity scholarship payment reduced

on a pro rata basis for the portion of the school

year in which the opportunity scholarship recipient

was enrolled in another school.

(B)  If the opportunity scholarship recipient

enrolls in a participating nonpublic school, pay the

opportunity scholarship recipient's parent the full

amount of the opportunity scholarship payment reduced

on a pro rata basis for the portion of the school

year in which the opportunity scholarship recipient

was enrolled in another school. Such payment shall be

made to the parents of the opportunity scholarship

recipient pursuant to the provisions of section

2505-B(b).

(e)  Limitation.--The tuition charged by a nonresident school

district to an opportunity scholarship recipient under this

subarticle shall not exceed the opportunity scholarship awarded

to the opportunity scholarship recipient.

(f)  Transportation.--

(1)  Notwithstanding any provisions of section 1361 to

the contrary, a school district that provides its resident

public school pupils with transportation to and from the

resident public schools or to and from any points within or

without this Commonwealth in order to provide field trips

under section 1361 shall provide a student who resides within

the school district but regularly attends a nonresident

public school, including a charter school, that is located

not more than ten miles from the student's resident school

district by the nearest public highway, with transportation

to and from such nonresident public school or to and from any

points within or without this Commonwealth in order to

provide field trips under section 1361.

(2)  Transportation of a student under this subsection

shall be subject to reimbursement under section 2541.

Section 2505-B.  Opportunity scholarship to attend a

participating nonpublic school.

(a)  Eligibility.--The parent of a child who is eligible to

receive an opportunity scholarship under section 2503-B and

desires to apply for an opportunity scholarship to attend a

participating nonpublic school must:

(1)  By a date established by the department, apply to

the department for an opportunity scholarship for the

following school year pursuant to guidelines developed by the

department under section 2509-B. By a date established by the

department, the department shall notify parents whether the

opportunity scholarship will be awarded for the following

school year.

(2)  Apply for enrollment directly to the participating

nonpublic school pursuant to application procedures developed

by the participating nonpublic school. By a date established

by the department, a participating nonpublic school shall

provide written confirmation to the department of each

opportunity scholarship recipient whose application for

enrollment has been accepted for the following school year. 

By a date established by the department, the department shall

provide the opportunity scholarship recipient's resident

school district with written confirmation of the opportunity

scholarship recipient's enrollment in the participating

nonpublic school.

(b)  Payment of opportunity scholarship awards.--The

Commonwealth shall provide payment of an opportunity scholarship

to the parents of each opportunity scholarship recipient who is

enrolled in a participating nonpublic school under the

provisions of this subarticle subject to the following terms and

conditions:

(1)  Opportunity scholarships shall be awarded only for

the payment of costs of tuition at a participating nonpublic

school within this Commonwealth. Opportunity scholarships

shall not be awarded for enrollment in a home education

program provided under section 1327.1.

(2)  Opportunity scholarships shall be paid to the

parents of an opportunity scholarship recipient upon the

department's receipt of written confirmation of enrollment

from the participating nonpublic school selected by the

recipient. The opportunity scholarship award shall be paid by

check which may be endorsed by the parents only for payment

of tuition at the participating nonpublic school at which the

opportunity scholarship recipient's enrollment has been

confirmed.

(3)  In the event an opportunity scholarship recipient 

withdraws from a participating nonpublic school prior to the

completion of the school year, the following shall apply:

(i)  The participating nonpublic school shall, within

15 days of the opportunity scholarship recipient's

withdrawal from the participating nonpublic school:

(A)  Provide the department with written notice

of the opportunity scholarship recipient's withdrawal

from the participating nonpublic school.

(B)  Return to the department the full amount of

the opportunity scholarship payment reduced on a pro

rata basis by the tuition for the portion of the

school year in which the opportunity scholarship

recipient was enrolled.

(ii)  If the participating nonpublic school fails to

submit to the department the amount required to be paid

under subparagraph (i), the nonpublic school shall not be

permitted to enroll any future students for a period of

five years.

(iii)  If the opportunity scholarship recipient

enrolls in another participating nonpublic school within

the school year for which the opportunity scholarship was

awarded, the department shall pay the parent of the

opportunity scholarship recipient the opportunity

scholarship award prorated for the remaining portion of

the school year.

(4)  In the event an opportunity scholarship recipient is

expelled from a participating nonpublic school prior to the

completion of the school year and the opportunity scholarship

recipient subsequently enrolls in his resident school

district, the department shall pay the resident school

district the opportunity scholarship award prorated for the

remaining portion of the school year. The resident school

district shall apply this amount toward providing educational

services for the opportunity scholarship recipient, which may

include, but shall not be limited to, an alternative

assignment or alternative education services.

(b.1)  Penalties.--

(1)  Each opportunity scholarship check issued under this

section shall contain the following statement:

"Failure to endorse this check as directed by the

Department of Education may subject the endorser to

civil penalties and criminal prosecution."

(2)  A parent's endorsement or use of an opportunity

scholarship check in a manner other than as directed by the

department may subject the parent to the following penalties:

(i)  A civil penalty equal to 300% of the full amount

of the annual opportunity scholarship award made to the

parent.

(ii)  Disqualification from future eligibility for an

opportunity scholarship.

(iii)  Criminal prosecution.

(c)  Enrollment requirements.--The following shall apply to a

participating nonpublic school which admits an opportunity

scholarship recipient:

(1)  The participating nonpublic school shall not

discriminate on any basis that is illegal under Federal or

State laws applicable to nonpublic schools on the date prior

to the effective date of this section.

(2)  The participating nonpublic school shall comply with

section 1521, which prohibits discrimination in enrollment on

the basis of race or color.

(3)  The participating nonpublic school may not recruit

any public school student to enroll for athletic purposes.

(4)  For each school year, by a date established by the

department, a nonpublic school that desires to enroll

opportunity scholarship recipients under this subarticle

shall certify to the department that it satisfies the

definition of "participating nonpublic school" in section

2502-B. Such certification shall be on a form developed by

the department.

(d)  Policies.--Upon request, a participating nonpublic

school shall make available for review by the parents of any

opportunity scholarship recipient seeking enrollment, its

written school policies and procedures related to tuition

charges, admissions, academic offerings and requirements,

discipline, religious instruction, parent involvement,

standardized testing, the release of results of standardized

tests administered by the participating nonpublic school and

extracurricular activities and suspension and expulsion of

students, including educational accommodations and counseling

offered to students and parents.

(e)  Assessments.--

(1)  (i)  Each participating nonpublic school shall

administer annually an assessment or a nationally normed

standardized achievement test in reading/language arts

and mathematics to each opportunity scholarship recipient

attending the participating nonpublic school in grades 3,

5, 8 and 11.

(ii)  To comply with this paragraph, a participating

nonpublic school may either administer an assessment or

administer a nationally normed standardized achievement

test chosen by the participating nonpublic school from a

list established under paragraph (2).

(2)  The department shall establish a list of at least

eight nationally normed standardized achievement tests from

which the participating nonpublic school shall select a test

to be administered if the participating nonpublic school does

not choose to administer an assessment.

(3)  Each participating nonpublic school shall:

(i)  Release each opportunity scholarship recipient's

individual results on the assessment or nationally normed

standardized achievement test administered to opportunity

scholarship recipients under paragraph (1) to the parent

of the opportunity scholarship recipient.

(ii)  If the participating nonpublic school has a

publicly accessible Internet website, post on the website

the participating nonpublic school's aggregate results on

the assessment or nationally normed standardized

achievement test administered to opportunity scholarship

recipients under paragraph (1), provided that the

participating nonpublic school shall not post results

that reveal the identity of any individual student.

(4)  The participating nonpublic school shall bear the

cost of the testing administered under this subsection and

shall not impose an assessment or testing fee on an

opportunity scholarship recipient.

(f)  Construction.--Nothing in this subarticle shall be

construed to:

(1)  Prohibit a participating nonpublic school from

limiting admission to a particular grade level, a single

gender or to areas of concentration of the participating

nonpublic school, including, but not limited to, mathematics,

science and the arts.

(2)  Empower the Commonwealth or any of its agencies or

officers or political subdivisions to impose any additional

requirements on any participating nonpublic school which are

not otherwise authorized under the laws of this Commonwealth

or to require any participating nonpublic school to enroll

any opportunity scholarship recipient if the participating

nonpublic school does not offer appropriate programs or is

not structured or equipped with the necessary facilities to

meet the special needs of the opportunity scholarship

recipient or does not offer a particular program requested.

Section 2506-B.  Amount of opportunity scholarship.

(a)  Calculation.--

(1)  The amount of the opportunity scholarship shall be

up to $5,000 per eligible student.

(2)  In no case shall the combined amount of the 

opportunity scholarship award and any additional financial

assistance provided by a participating nonpublic school

exceed the tuition rate for the participating nonpublic

school.

(b)  Limitation.--No nonresident public school or

participating nonpublic school may charge an opportunity

scholarship recipient a higher tuition rate than the rate the

nonresident public school or participating nonpublic school

would have charged to a student who had not received an

opportunity scholarship.

(c)  (Reserved).

(d)  Annual appropriations.--

(1)  Opportunity scholarships authorized under this

subarticle shall be made from annual appropriations made by

the General Assembly to the department and moneys available

in the fund for that purpose.

(2)  In the event that insufficient moneys are

appropriated in any fiscal year to provide opportunity

scholarships to all eligible opportunity scholarship

recipients in the amount authorized, the board shall reduce

the number of scholarships available ensuring there is equity

among the persistently low-performing school districts.

(3)  The total amount of opportunity scholarships

provided in any fiscal year shall be limited to the amount of

money appropriated for that fiscal year.

(e)  Nontaxable.--Opportunity scholarship funds received by a

parent pursuant to this subarticle shall not be considered

taxable income for purposes of any local taxing ordinance or for

purposes of Article III of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971, nor shall such

opportunity scholarships constitute financial assistance or

appropriations to the participating nonpublic school attended by

the opportunity scholarship recipient.

(f)  Continued eligibility.--Subject to subsection (d), a

child enrolled in a nonresident public school or a participating

nonpublic school who received an opportunity scholarship under

this subarticle in the prior school year shall receive an

opportunity scholarship in each school year of enrollment under

the opportunity scholarship program, provided that the child

remains eligible.

(g)  Penalties.--Any person who fraudulently submits an

opportunity scholarship application or who knowingly falsifies

material information on an opportunity application shall be

subject to the following penalties:

(1)  Imposition by the board of a civil penalty of up to

$1,000.

(2)  Prosecution for violation of 18 Pa.C.S. § 4904

(relating to unsworn falsification to authorities).

(3)  Disqualification from future participation in the

opportunity scholarship program.

(h)  Residence in more than one school district within a

school year.--Where an opportunity scholarship recipient resides

within more than one school district during a school year, the

amount of the opportunity scholarship shall be charged against

each resident school district on a pro rata basis.

Section 2507-B.  (Reserved).

Section 2508-B.  Reduction in amount of school aid.

Notwithstanding any other provision of law to the contrary,

beginning in the second consecutive school year of enrollment in

a nonresident public school or a participating nonpublic school

by an opportunity scholarship recipient who was enrolled in the

recipient's resident school district or in a charter school or

cyber charter school when the recipient first received an

opportunity scholarship under this subarticle, the amount of

Commonwealth funding paid by the department to the resident

school district shall be reduced by an amount determined in

section 2504-B(d)(i), (ii) or (iii) for each resident student

attending a nonresident public school and section 2506-B(a) for

each resident student attending a participating nonpublic

school.

Section 2509-B.  Education Opportunity Board.

(a)  Establishment.--The Education Opportunity Board is

established within the department and shall consist of five

members appointed by the Governor, four of whom shall be

selected from lists provided by the Majority Leader and the

Minority Leader of the Senate and the Majority Leader and

Minority Leader of the House of Representatives, one from each

list. The Governor shall appoint no more than three members to

the board who are members of the same political party as the

Governor.

(b)  Terms of members.--

(1)  Members of the board appointed under this section

shall serve terms as follows:

(i)  Two of the members appointed by the Governor

shall serve initial terms of seven years.

(ii)  One of the members appointed by the Governor

shall serve an initial term of five years.

(iii)  One of the members appointed by the Governor

shall serve an initial term of three years.

(iv)  One member appointed by the Governor shall

serve at the pleasure of the Governor and shall serve an

initial term of three years.

(v)  After the expiration of each initial term:

(A)  members appointed by the Governor under

subparagraphs (i) and (ii) shall be appointed for a

term of 5 years.

(B)  Members appointed by the Governor under

subparagraphs (iii) and (iv) shall be appointed for a

term of four years.

(C)  each successive appointment shall be

consistent with the originating list created in

subsection (a).

(2)  (i)  Except as authorized in this subsection, no

board member may be removed from office during a term.

The Governor may, upon proof by clear and convincing

evidence of malfeasance or misfeasance in office, remove

a board member prior to the expiration of the term.

(ii)  Before a board member is removed, that member

must be provided with a written statement of the reasons

for removal and an opportunity for a hearing in

accordance with 2 Pa.C.S. Chs. 5 Subch. A (relating to

practice and procedure of Commonwealth agencies) and 7

Subch. A (relating to judicial review of Commonwealth

agency action).

(3)  A board member shall hold office until a successor

has been appointed and qualified.

(4)  A board member may serve successive terms.

(5)  No board member may, while in the service of the

board, seek or hold a position as any other public official

within this Commonwealth or as an officer of a political

party.

(c)  Chairperson.--The Governor shall annually select a

chairperson from among the membership of the board.

(d)  Meetings.--Meetings shall be held at the call of the

chairperson or upon request in writing of a majority of the

board. A majority shall constitute a quorum and a majority of

such quorum shall have the authority to act upon any matter

properly before the board unless otherwise specified in this

subarticle.

(e)  Compensation prohibited.--Members of the board shall

receive no compensation for their services but shall be

reimbursed for their actual and necessary expenses incurred in

the performance of their official board duties.

(f)  Executive director and staff.--

(1)  There shall be an executive director of the board

who shall serve as the executive officer and secretary of the

board. The board shall employ and fix the reasonable

compensation of the executive director.

(2)  The department shall provide, from existing

personnel of the department, adequate staffing to facilitate

the responsibilities of the board.

(3)  The department shall provide adequate funding, space

and equipment to facilitate the activities of the board.

(g)  Legal advice and assistance.--The Governor, through his

General Counsel, shall provide such legal advice and assistance

as the board may require.

(h)  Powers and duties.--The board shall have the following

powers and duties:

(1)  Advise the department concerning the implementation

and administration of the opportunity scholarship public

school choice demonstration grant and middle-income

scholarship programs.

(2)  Approve, by a majority vote, the guidelines

established by the department under section 2507-B.

(3)  Prepare a report to be submitted by December 1,

2012, and by December 1 of each year thereafter, to the

chairman and minority chairman of the Education Committee of

the Senate and the chairman and minority chairman of the

Education Committee of the House of Representatives

describing the manner in which the board carries out its

powers and duties under this subsection.

Section 2509.1-B.  Powers and duties of department.

The department shall have the following powers and duties:

(1)  Establish guidelines for the administration of the

opportunity and local scholarship program, subject to the

approval of the board, as required under section 2507-B.

(2)  Administer the opportunity scholarship application

and approval processes.

(3)  Develop the opportunity scholarship application form

and any other forms necessary to administer the opportunity

scholarship programs, including the notice required to be

provided by school districts under section 2503-B(e).

(4)  Certify the process to be used by public school

districts to verify the resident school district of program

participants.

(5)  Announce the award of opportunity scholarships for

the following school year under sections 2504-B(b) and 2505-

B(a).

(6)  Allocate opportunity scholarship funds to

opportunity scholarship recipients.

(7)  Make payment of opportunity scholarship awards as

provided in sections 2504-B and 2505-B.

(8)  Beginning after the first school year of

implementation of the opportunity scholarship program,

prepare a report to be submitted to the Governor and the

General Assembly by December 1 of each year, made available

to the parents of opportunity scholarship recipients and

placed on the department's publicly accessible Internet

website that includes at least the following information for

the prior school year:

(i)  The total number of opportunity scholarships

requested.

(ii)  The total number and total dollar amount of

opportunity scholarships awarded, in total and

disaggregated by:

(A)  Whether the opportunity scholarship

recipient attends a nonresident public school or a

participating nonpublic school.

(B)  Grade level of the opportunity scholarship

recipient.

(C)  Whether the opportunity scholarship

recipient resides in a school district with at least

one persistently lowest achieving school.

(iii)  The administrative costs of the opportunity

scholarship program.

(iv)  A listing of nonresident public schools to

which opportunity scholarship funds were disbursed on

behalf of opportunity scholarship recipients and the

amount disbursed to each nonresident public school.

(v)  A listing of participating nonpublic schools in

which opportunity scholarship recipients enrolled and the

number of opportunity scholarship recipients who enrolled

in each participating nonpublic school.

(9)  For the 2014-2015 school year and each school year

thereafter, administer and announce the award of public

school choice demonstration grants to eligible school

districts as provided under section 2513-B.

Section 2510-B.  Study.

Following the 2014-2015 school year, the department shall

conduct a study of the effectiveness of the opportunity

scholarship program and shall deliver a written report of its

findings, including any recommendations for changes to the

program, to the Governor, the chairman and minority chairman of

the Education Committee of the Senate and the chairman and

minority chairman of the Education Committee of the House of

Representatives by December 31, 2015.

(c)  Educational Improvement Tax Credit

Section 2521-B.  Definitions.

The following words and phrases when used in this subarticle

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Business firm."  An entity authorized to do business in this

Commonwealth and subject to taxes imposed under Article III, IV,

VI, VII, VIII, IX or XV of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971. The term includes a

pass-through entity.

"Contribution."  A donation of cash, personal property or

services, the value of which is the net cost of the donation to

the donor or the pro rata hourly wage, including benefits, of

the individual performing the services.

"Department."  The Department of Community and Economic

Development of the Commonwealth.

"Educational improvement organization."  A nonprofit entity

which:

(1)  is exempt from Federal taxation under section 501(c)

(3) of the Internal Revenue Code of 1986 (Public Law 99-514,

26 U.S.C. § 1 et seq.); and

(2)  contributes at least 80% of its annual receipts as

grants to a public school, a chartered school as defined in

section 1376.1 or a private school approved under section

1376 for innovative educational programs.

For purposes of this definition, a nonprofit entity

"contributes" its annual cash receipts when it expends or

otherwise irrevocably encumbers those funds for expenditure

during the then current fiscal year of the nonprofit entity or

during the next succeeding fiscal year of the nonprofit entity.

A "nonprofit entity" includes a school district foundation,

public school foundation, charter school foundation or cyber

charter school foundation.

"Eligible prekindergarten student."  A student, including an

eligible student with a disability, who is enrolled in a

prekindergarten program and is a member of a household with a

maximum annual household income as increased by the applicable

income allowance.

"Eligible student."  A school-age student, including an

eligible student with a disability, who:

(1)  is enrolled in a school or a home education program

provided under section 1327.1; and

(2)  is a member of a household with a maximum annual

household income as increased by the applicable income

allowance.

"Eligible student with a disability."  A prekindergarten

student or a school-age student who meets all of the following:

(1)  Is either enrolled in a special education school or

has otherwise been identified, in accordance with 22 Pa. Code

Ch. 14 (relating to special education services and programs),

as a "child with a disability," as defined in 34 CFR § 300.8

(relating to child with a disability).

(2)  Needs special education and related services.

(3)  Is enrolled in a prekindergarten program or in a

school.

(4)  Is a member of a household with a household income

of not more than the maximum annual household income.

"Household."  An individual living alone or with the

following: a spouse, parent and their unemancipated minor

children, other unemancipated minor children who are related by

blood or marriage or other adults or unemancipated minor

children living in the household who are dependent upon the

individual.

"Household income."  All moneys or property received of

whatever nature and from whatever source derived. The term does

not include the following:

(1)  Periodic payments for sickness and disability other

than regular wages received during a period of sickness or

disability.

(2)  Disability, retirement or other payments arising

under workers' compensation acts, occupational disease acts

and similar legislation by any government.

(3)  Payments commonly recognized as old-age or

retirement benefits paid to persons retired from service

after reaching a specific age or after a stated period of