Session of 1997
HOUSE BILL No. 2466
By Representatives Landwehr and Powell, Compton,
Farmer, Mayans, O'Connor, Presta and Wagle
9 AN ACT enacting the Kansas opportunity scholarship act; providing a
10 credit from income taxation for certain education expenses; amending
11 K.S.A. 1996 Supp. 79-32,117 and repealing the existing section.
13 Be it enacted by the Legislature of the State of Kansas:
14 New Section 1. This act shall be known and may be cited as the
15 Kansas opportunity scholarship act. It is the purpose of this act to establish
16 a pilot program under which eligible children are awarded scholarships
17 which provide the financial assistance necessary to avail such children and
18 their parents of an opportunity to exercise choice in the selection of
19 schools. The program shall be conducted in Sedgwick county and Wy-
20 andotte county in the 1997-98 through 2000-01 school years. The selec-
21 tion of schools by parents under the Kansas opportunity scholarship act
22 shall not be construed as or presumed to be an act of the state or any
23 political subdivision of the state.
24 New Sec. 2. As used in this act:
25 (a) ``Scholarship eligible child'' means any child who is: (1) A resident
26 of this state; (2) school age and enrolled in or eligible for enrollment in
27 an opportunity scholarship school and for attendance at kindergarten or
28 any of the grades one through 12; and (3) eligible for free or reduced
29 cost meals under the national school lunch act.
30 (b) ``Parent'' means and includes natural parents, adoptive parents,
31 stepparents, foster parents and persons acting as parents.
32 (c) ``Person acting as parent'' means: (1) A guardian or conservator;
33 or (2) a person, other than a parent, who is liable by law to maintain, care
34 for, or support the child, or who is liable by law to maintain, care for or
35 support the child, or who has actual care and control of the child and is
36 contributing the major portion of the cost of support of the child, or who
37 has actual care and control of the child with the written consent of a
38 person who has legal custody of the child, or who has been granted cus-
39 tody of the child by a court of competent jurisdiction.
40 (d) ``Opportunity scholarship school'' means any nonpublic school
41 which: (1) Is accredited by the state board of education; (2) is located in
42 Sedgwick county or in Wyandotte county; (3) is operated by a board of
1 education or other governing authority that has elected to participate in
2 the Kansas opportunity scholarship program; and (4) administers the met-
3 ropolitan achievement test as a part of its pupil assessment program.
4 (e) ``Opportunity scholarship'' means a voucher in the amount of
5 $2,000, which is awarded in the name of a scholarship eligible child for
6 redemption by a parent of the child at an opportunity scholarship school
7 for provision of educational services to the child.
8 (f) ``Satisfactory academic achievement'' means scoring at or above
9 the national average on the metropolitan achievement test.
10 (g) ``Scholarship impact aid'' means financial assistance in the form
11 of grants of state moneys provided to school districts, all or any part of
12 which are located in Sedgwick county or in Wyandotte county, in order
13 to lessen the impact on such districts of any decrease in enrollment ex-
14 perienced by the districts as a result of implementation and maintenance
15 of the opportunity scholarship pilot program.
16 (h) ``State board'' means the state board of education.
17 New Sec. 3. (a) In order to achieve the purpose of this act, the state
18 board shall establish and effectuate a pilot program under which the par-
19 ent of any scholarship eligible child, upon application, receives from the
20 state board in each school year in which the program is maintained an
21 opportunity scholarship that may be redeemed for payment of the costs
22 of enrollment of the child at an opportunity scholarship school selected
23 by the child's parent. Scholarship applications shall be on a form pre-
24 scribed and furnished by the state board. The application shall request
25 such information as necessary to determine program eligibility and to
26 efficiently administer the program.
27 (b) An application for an opportunity scholarship may be submitted
28 to the state board, to the the board of education of the school district in
29 which the child resides, or to the board of education of the school district
30 in which the opportunity scholarship school selected by the child's parent
31 for enrollment of the child is located. If an application for a scholarship
32 is submitted to the board of education of a school district, the board of
33 education shall transmit the application, immediately upon receipt, to the
34 state board.
35 (c) Opportunity scholarships received under this act shall be re-
36 deemed upon certification by an opportunity scholarship school that a
37 scholarship eligible child is enrolled and in attendance at the school. The
38 state board shall certify to the director of accounts and reports the amount
39 due the parent of each scholarship eligible child. The director of accounts
40 and reports shall issue a warrant to the parent of the scholarship eligible
41 child and shall cause the warrant to be delivered to the school in which
42 the child is enrolled. The parent of the scholarship eligible child shall use
43 the warrant for payment of the costs of enrollment of the child. If a
1 scholarship eligible child discontinues attendance at an opportunity schol-
2 arship school before the end of the school year, the entire amount which
3 the child would otherwise qualify to have refunded, if any, up to the
4 amount paid by the state pursuant to the scholarship redeemed by the
5 parent of the child, shall be paid by the school to the state board. The
6 state board shall remit any amounts so received to the state treasurer,
7 and the state treasurer shall deposit the same in the state treasury to the
8 credit of the state school district finance fund.
9 (d) The amount of an opportunity scholarship redeemed under this
10 act shall not be considered gross income and shall not be taxable for
11 Kansas income tax purposes.
12 New Sec. 4. (a) Subject to the provisions of subsection (b), an op-
13 portunity scholarship school shall admit scholarship eligible children who
14 have received scholarships and who apply for admission, up to the limit
15 of the school's capacity after reserving places for children required or
16 entitled to be admitted to the school.
17 (b) An opportunity scholarship school shall establish criteria for the
18 admission of scholarship eligible children. Such criteria shall be consistent
19 with the admissions criteria that the school regularly applies.
20 (c) An opportunity scholarship school shall provide assurance to the
21 state board that the amount of the costs of enrollment charged a schol-
22 arship eligible child will not be greater than the amount of the costs of
23 enrollment regularly charged by the school.
24 (d) An opportunity scholarship school shall publish or otherwise make
25 available information regarding the school's program of instruction,
26 achievement data regarding children attending the school (which data
27 shall be stated in the aggregate by grades maintained by the school),
28 incidence of alcohol and drug abuse, if any, and school discipline and
30 (e) Prior to the commencement of school in each school year in which
31 the opportunity scholarship pilot program is maintained, each opportunity
32 scholarship school shall certify to the state board the amount of the costs
33 of enrollment to be charged in such school year.
34 New Sec. 5. (a) Prior to the commencement of each school year in
35 which the opportunity scholarship pilot program is maintained, the state
36 board shall prepare and publish in Sedgwick county and in Wyandotte
37 county information regarding the opportunity scholarship program, the
38 procedure to the followed by parents in applying for opportunity schol-
39 arships for their children, and a list of all opportunity scholarship schools.
40 Such information and list shall be maintained on file at the state depart-
41 ment of education and shall be made available to members of the public
42 upon request.
43 (b) The state board shall monitor the academic performance of schol-
1 arship eligible children attending opportunity scholarship schools. If the
2 state board determines in any school year that a majority of the scholar-
3 ship eligible children attending any such school are not demonstrating
4 satisfactory academic achievement or that any such school is not meeting
5 the requirements of section 4, the school shall not be eligible to accept
6 scholarships from the parents of scholarship eligible children in the suc-
7 ceeding school year.
8 New Sec. 6. (a) (1) In each school year in which the pilot program
9 established under the Kansas opportunity scholarship act is maintained,
10 each school district which is eligible for scholarship impact aid may submit
11 an application to the state board for a grant of state moneys. The appli-
12 cation shall be prepared in such form and manner as the state board shall
13 require and shall be submitted at a time to be determined and specified
14 by the state board. Approval by the state board of applications for grants
15 of state moneys is prerequisite to the award of grants.
16 (2) The state board shall approve applications of school districts for
17 grants, determine the amount of grants and be responsible for payment
18 of grants to school districts. In determining the amount of a grant which
19 a school district is eligible to receive, the state board shall: (A) Determine
20 the number of scholarship eligible children who were enrolled as pupils
21 in the school district in the preceding school year, who received an op-
22 portunity scholarship, and who are enrolled in an opportunity scholarship
23 school in the current school year; and (B) multiply the amount of $1,000
24 by the number of children determined under subpart (A). The product
25 is the amount of scholarship impact aid the district is eligible to receive.
26 If the amount of appropriations for the payment of grants under this
27 subsection is insufficient to pay in full the amount each school district is
28 determined to be eligible to receive for the school year, the state board
29 shall prorate the amount appropriated among all school districts which
30 are eligible to receive grants of state moneys in proportion to the amount
31 each school district is determined to be eligible to receive.
32 (3) Each school district which is awarded a grant under this section
33 shall make such periodic and special reports of statistical and financial
34 information to the state board as it may request.
35 (4) All moneys received by a school district under authority of this
36 subsection shall be deposited in the general fund of the school district
37 and may be expended for operating expenses whether budgeted or not.
38 (b) Except as provided in K.S.A. 72-8306, and amendments thereto,
39 no school district shall be responsible for the furnishing or provision of
40 transportation for scholarship eligible children to or from any opportunity
41 scholarship school.
42 New Sec. 7. Upon completion of the 2000-01 school year, the state
43 board shall evaluate the pilot program established under the Kansas op-
1 portunity scholarship act, assess the impact the program has had on the
2 educational systems of the school districts affected by the program, collect
3 data on the academic achievement of scholarship eligible children, de-
4 termine the total amount of savings realized by the state due to mainte-
5 nance of the program, and make a recommendation to the governor and
6 the legislature with regard to effectuation of the program on a statewide
8 New Sec. 8. For all taxable years commencing after December 31,
9 1996, there shall be allowed as a credit against the tax liability imposed
10 under the Kansas income tax act of an individual who is a teacher certified
11 by the state board of education and employed by a school district organ-
12 ized and operating under the laws of this state or by a nonpublic school
13 accredited by the state board of education an amount, not to exceed $500,
14 equal to the amount such individual has expended of such individual's
15 personal moneys for the purchase of equipment, materials or supplies
16 used in the classroom for the benefit of the pupils of such individual.
17 New Sec. 9. For all taxable years commencing after December 31,
18 1996, there shall be allowed as a credit against the tax liability imposed
19 under the Kansas income tax act of an individual an amount equal to the
20 amount, not to exceed $500 for each dependent, the individual has paid
21 for textbooks and other instructional materials for the use of each such
22 dependent attending a nonpublic elementary or secondary school which
23 is located in Kansas and accredited by the state board of education. As
24 used in this section, the term ``textbook and other instructional materials''
25 means books and materials used in elementary and secondary schools for
26 teaching only those subjects legally and commonly taught in elementary
27 and secondary schools maintained by the public school districts organized
28 and operating under the laws of this state and does not include books or
29 materials used in the teaching of religious tenets, doctrines, or worship,
30 the purpose of which is to inculcate those tenets, doctrines, or worship,
31 and does not include books or materials used for extracurricular activities,
32 including sporting events, musical or dramatic events, speech and debate
33 activities, driver's education, or activities of a similar nature.
34 Section 10. K.S.A. 1996 Supp. 79-32,117 is hereby amended to read
35 as follows: 79-32,117. (a) The Kansas adjusted gross income of an indi-
36 vidual means such individual's federal adjusted gross income for the tax-
37 able year, with the modifications specified in this section.
38 (b) There shall be added to federal adjusted gross income:
39 (i) Interest income less any related expenses directly incurred in the
40 purchase of state or political subdivision obligations, to the extent that
41 the same is not included in federal adjusted gross income, on obligations
42 of any state or political subdivision thereof, but to the extent that interest
43 income on obligations of this state or a political subdivision thereof issued
1 prior to January 1, 1988, is specifically exempt from income tax under the
2 laws of this state authorizing the issuance of such obligations, it shall be
3 excluded from computation of Kansas adjusted gross income whether or
4 not included in federal adjusted gross income. Interest income on obli-
5 gations of this state or a political subdivision thereof issued after Decem-
6 ber 31, 1987, shall be excluded from computation of Kansas adjusted
7 gross income whether or not included in federal adjusted gross income.
8 (ii) Taxes on or measured by income or fees or payments in lieu of
9 income taxes imposed by this state or any other taxing jurisdiction to the
10 extent deductible in determining federal adjusted gross income and not
11 credited against federal income tax. This paragraph shall not apply to taxes
12 imposed under the provisions of K.S.A. 79-1107 or 79-1108, and amend-
13 ments thereto, for privilege tax year 1995, and all such years thereafter.
14 (iii) The federal net operating loss deduction.
15 (iv) Federal income tax refunds received by the taxpayer if the de-
16 duction of the taxes being refunded resulted in a tax benefit for Kansas
17 income tax purposes during a prior taxable year. Such refunds shall be
18 included in income in the year actually received regardless of the method
19 of accounting used by the taxpayer. For purposes hereof, a tax benefit
20 shall be deemed to have resulted if the amount of the tax had been de-
21 ducted in determining income subject to a Kansas income tax for a prior
22 year regardless of the rate of taxation applied in such prior year to the
23 Kansas taxable income, but only that portion of the refund shall be in-
24 cluded as bears the same proportion to the total refund received as the
25 federal taxes deducted in the year to which such refund is attributable
26 bears to the total federal income taxes paid for such year. For purposes
27 of the foregoing sentence, federal taxes shall be considered to have been
28 deducted only to the extent such deduction does not reduce Kansas tax-
29 able income below zero.
30 (v) The amount of any depreciation deduction or business expense
31 deduction claimed on the taxpayer's federal income tax return for any
32 capital expenditure in making any building or facility accessible to the
33 handicapped, for which expenditure the taxpayer claimed the credit al-
34 lowed by K.S.A. 79-32,177, and amendments thereto.
35 (vi) Any amount of designated employee contributions picked up by
36 an employer pursuant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965,
37 and amendments to such sections.
38 (vii) The amount of any charitable contribution made to the extent
39 the same is claimed as the basis for the credit allowed pursuant to K.S.A.
40 1996 Supp. 79-32,196, and amendments thereto.
41 (viii) The amount of any contribution made to a school district or an
42 accredited nonpublic school to the extent the same is claimed as the basis
43 for the credit allowed pursuant to section 8.
1 (c) There shall be subtracted from federal adjusted gross income:
2 (i) Interest or dividend income on obligations or securities of any
3 authority, commission or instrumentality of the United States and its pos-
4 sessions less any related expenses directly incurred in the purchase of
5 such obligations or securities, to the extent included in federal adjusted
6 gross income but exempt from state income taxes under the laws of the
7 United States.
8 (ii) Any amounts received which are included in federal adjusted
9 gross income but which are specifically exempt from Kansas income tax-
10 ation under the laws of the state of Kansas.
11 (iii) The portion of any gain or loss from the sale or other disposition
12 of property having a higher adjusted basis for Kansas income tax purposes
13 than for federal income tax purposes on the date such property was sold
14 or disposed of in a transaction in which gain or loss was recognized for
15 purposes of federal income tax that does not exceed such difference in
16 basis, but if a gain is considered a long-term capital gain for federal in-
17 come tax purposes, the modification shall be limited to that portion of
18 such gain which is included in federal adjusted gross income.
19 (iv) The amount necessary to prevent the taxation under this act of
20 any annuity or other amount of income or gain which was properly in-
21 cluded in income or gain and was taxed under the laws of this state for a
22 taxable year prior to the effective date of this act, as amended, to the
23 taxpayer, or to a decedent by reason of whose death the taxpayer acquired
24 the right to receive the income or gain, or to a trust or estate from which
25 the taxpayer received the income or gain.
26 (v) The amount of any refund or credit for overpayment of taxes on
27 or measured by income or fees or payments in lieu of income taxes im-
28 posed by this state, or any taxing jurisdiction, to the extent included in
29 gross income for federal income tax purposes.
30 (vi) Accumulation distributions received by a taxpayer as a beneficiary
31 of a trust to the extent that the same are included in federal adjusted
32 gross income.
33 (vii) Amounts received as annuities under the federal civil service
34 retirement system from the civil service retirement and disability fund
35 and other amounts received as retirement benefits in whatever form
36 which were earned for being employed by the federal government or for
37 service in the armed forces of the United States.
38 (viii) Amounts received by retired railroad employees as a supple-
39 mental annuity under the provisions of 45 U.S.C. 228b (a) and 228c (a)(1)
40 et seq.
41 (ix) Amounts received by retired employees of a city and by retired
42 employees of any board of such city as retirement allowances pursuant to
43 K.S.A. 13-14,106, and amendments thereto, or pursuant to any charter
1 ordinance exempting a city from the provisions of K.S.A. 13-14,106, and
2 amendments thereto.
3 (x) For taxable years beginning after December 31, 1976, the amount
4 of the federal tentative jobs tax credit disallowance under the provisions
5 of 26 U.S.C. 280 C. For taxable years ending after December 31, 1978,
6 the amount of the targeted jobs tax credit and work incentive credit dis-
7 allowances under 26 U.S.C. 280 C.
8 (xi) For taxable years beginning after December 31, 1986, dividend
9 income on stock issued by Kansas Venture Capital, Inc.
10 (xii) For taxable years beginning after December 31, 1989, amounts
11 received by retired employees of a board of public utilities as pension and
12 retirement benefits pursuant to K.S.A. 13-1246, 13-1246a and 13-1249
13 and amendments thereto.
14 (xiii) For taxable years beginning after December 31, 1993, the
15 amount of income earned on contributions deposited to an individual
16 development account under K.S.A. 1996 Supp. 79-32,117h, and amend-
17 ments thereto.
18 (d) There shall be added to or subtracted from federal adjusted gross
19 income the taxpayer's share, as beneficiary of an estate or trust, of the
20 Kansas fiduciary adjustment determined under K.S.A. 79-32,135, and
21 amendments thereto.
22 (e) The amount of modifications required to be made under this sec-
23 tion by a partner which relates to items of income, gain, loss, deduction
24 or credit of a partnership shall be determined under K.S.A. 79-32,131,
25 and amendments thereto, to the extent that such items affect federal
26 adjusted gross income of the partner.
27 Sec. 11. K.S.A. 1996 Supp. 79-32,117 is hereby repealed.
28 Sec. 12. This act shall take effect and be in force from and after its
29 publication in the statute book.