2005 Maine Code - §1100-Y — Educational attainment and recruitment tax credits

      1. Definitions. As used in this subchapter, unless the context otherwise indicates, the following terms have the following meanings.
   
A. "Eligible student" means a student who:     
(1) Is a resident of the State;   
(2) Is a graduate of an approved secondary school or the equivalent, including, but not limited to, a student who received equivalent instruction through home instruction, a student who matriculated at an accredited public or private institution of higher education in the State prior to high school graduation or a student who successfully completed a general educational development examination or its equivalent; and  
(3) Is or will be matriculated at an institution of higher education. [2003, c. 473, §1 (amd).]    
B. "Need-based scholarship" means a scholarship awarded by a qualified scholarship organization to an eligible student based on financial need as determined by eligibility requirements established by the qualified scholarship organization that awards the scholarship. [2001, c. 700, §1 (new).]    
C. "Qualified scholarship organization" means an organization certified by the authority under subsection 2. [2001, c. 700, §1 (new).]    
D. "Resident of the State" means a person who is either an independent student who has been domiciled in the State for at least one calendar year prior to the date of attendance at an accredited public or private educational institution or a dependent student whose parent or legal guardian has been domiciled in the State at least one calendar year prior to the date of attendance at an accredited public or private educational institution. A residence established in the State solely for the purpose of attending an accredited public or private institution of higher education in the State is not sufficient to establish domicile in the State. [2001, c. 700, §1 (new).] [2003, c. 473, §1 (amd).]
      2. Certification of qualified scholarship organizations. The authority shall provide initial and annual certification for qualified scholarship organizations in accordance with this subsection.
   
A. For initial certification, the organization must be a private, nonprofit organization that is qualified under Section 501(c)(3) of the Internal Revenue Code, that has as one of its purposes the provision of need-based scholarships to eligible students, that meets the standards adopted by the authority by rule under subsection 7, that files reports as required by this section and that:   
(1) Is affiliated with and designated by an accredited institution of higher education in this State; or  
(2) Has filed as a nonprofit corporation with the Secretary of State on or before April 1, 2006 and continues as a nonprofit corporation in good standing with the Secretary of State. [2005, c. 12, Pt. Q, §1 (amd).]    
B. Following initial certification pursuant to paragraph A, annual certification standards for a qualified scholarship organization must include the requirement that the qualified scholarship organization:   
(1) Has awarded in the form of need-based scholarships an amount equal to at least 95% of the contributions received during the preceding calendar year that are eligible for a tax credit under Title 36, section 2527 or 5219-U; or  
(2) Demonstrate that it is a need-based scholarship-granting organization possessing an endowment or endowments with a value of not less than $1,000,000 that makes a commitment to spend on need-based scholarships an amount equal to 100% of the contributions that are eligible for the tax credit received during the preceding calendar year and to spend no more than 2% of the value of the endowment or endowments of the organization on administrative expenses related to the distribution of scholarships, exclusive of investment management fees and awarded grants. [2003, c. 473, §2 (rpr).]    
C. A qualified scholarship organization must demonstrate that it encourages scholarship recipients to stay in this State or to return to this State upon completion of education. The organization may meet this requirement by demonstrating that it requires scholarship recipients to sign a statement of intent to reside in this State upon graduation from institutions of higher education or by providing organized community service opportunities, fellowships, job assistance, professional development or other activities designed to connect Maine students with businesses and communities in this State. [2003, c. 473, §3 (new).] [2005, c. 12, Pt. Q, §1 (amd).]
      3. Annual filing. A qualified scholarship organization shall file an annual report of its activities with the authority. The annual report must state the eligibility requirements established by the qualified scholarship organization for awarding need-based scholarships to eligible students, the total number of contributions to the organization and the total dollar amount contributed to the organization over the reporting period and must identify the total number of scholarships awarded and the amount of money paid by the organization for need-based scholarships identified by the county of residence of the eligible student and the institutions of higher education receiving scholarship funds.[2001, c. 700, §1 (new).]
      4. Information to contributors. A qualified scholarship organization shall, by January 31st annually, provide to each person who contributed $250 or more to that organization during the previous calendar year a statement:
   
A. Identifying the total amount contributed by the contributor during the year to that organization and notifying the contributor that the contribution may be eligible for credits provided under Title 36, sections 2527 and 5219-U; and [2001, c. 700, §1 (new).]    
B. Notifying the contributor that the total amount contributed during the year and the amount of the contribution eligible for the credits provided under Title 36, sections 2527 and 5219-U will be reported to the Department of Administrative and Financial Services, Bureau of Revenue Services. [2001, c. 700, §1 (new).] [2001, c. 700, §1 (new).]
      5. Information to Bureau of Revenue Services. A qualified scholarship organization shall, by January 31st annually, provide a statement to the Department of Administrative and Financial Services, Bureau of Revenue Services identifying the amount of the contribution made by each taxpayer that has made a contribution that is eligible for the credits provided under Title 36, sections 2527 and 5219-U, the total amount contributed by each taxpayer during the previous calendar year for need-based scholarships to the qualified scholarship organization and the amount of the total contribution by the taxpayer that is eligible for the credits provided under Title 36, sections 2527 and 5219-U.[2001, c. 700, §1 (new).]
      6. Report to committees. The authority, in conjunction with the Department of Administrative and Financial Services, Bureau of Revenue Services, shall file a report annually with the joint standing committee of the Legislature having jurisdiction over education and cultural affairs and the joint standing committee of the Legislature having jurisdiction over taxation matters. The report must provide a summary of the information collected under this section and analyze the costs and benefits of the tax credits provided under Title 36, sections 2527, 2528, 5219-U and 5219-V. The report may make recommendations for increasing the effectiveness of these tax credits.[2001, c. 700, §1 (new).]
      7. Rulemaking. The authority, after consultation with the Bureau of Revenue Services, shall establish rules for the application, eligibility and annual filing requirements necessary to implement the certification of qualified scholarship organizations pursuant to this section and may include any rules necessary to establish initial application fees and penalties, which may include monetary penalties and revocation of certification, to ensure that a qualified scholarship organization is fulfilling the requirements of this section. These rules may also include any necessary conflict-of-interest provisions pertaining to qualified scholarship organizations. The authority shall also establish any rules necessary to define postsecondary education loans that are eligible for the recruitment credits provided under Title 36, sections 2528 and 5219-V. Rules adopted pursuant to this subsection, including those setting initial application fees and penalties, are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. The authority shall submit a report to the joint standing committee of the Legislature having jurisdiction over education and cultural affairs and to the joint standing committee of the Legislature having jurisdiction over taxation matters by January 30, 2007 on the rules and rule-making process to implement the tax credit program established pursuant to this subchapter.[2005, c. 12, Pt. Q, §2 (amd).]

Section History:

PL 2001,  Ch. 700,   §1 (NEW).
RR 2001,  Ch. 2,   §A13 (COR).
PL 2003,  Ch. 20,   §DD1,2 (AMD).
PL 2003,  Ch. 20,   §DD7 (AFF).
PL 2003,  Ch. 451,   §JJ1,2 (AMD).
PL 2003,  Ch. 473,   §1-3 (AMD).
PL 2005,  Ch. 12,   §Q1,2 (AMD).