Illinois General Assembly - Full Text of HB5391
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Full Text of HB5391  102nd General Assembly




State of Illinois
2021 and 2022


Introduced 1/31/2022, by Rep. Michael J. Zalewski


35 ILCS 40/5
35 ILCS 40/10
35 ILCS 40/40

    Amends the Invest in Kids Act. Provides that non-public pre-kindergarten schools are considered qualified schools. Provides that contributions made by individuals may be directed to a particular subset of schools or a particular school. Allows qualified schools to set a maximum scholarship amount, which may not exceed the necessary costs and fees for attendance at the qualified school. Effective immediately.

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HB5391LRB102 26056 HLH 35509 b

1    AN ACT concerning revenue.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Invest in Kids Act is amended by changing
5Sections 5, 10, 40, and 65 as follows:
6    (35 ILCS 40/5)
7    (Section scheduled to be repealed on January 1, 2025)
8    Sec. 5. Definitions. As used in this Act:
9    "Authorized contribution" means the contribution amount
10that is listed on the contribution authorization certificate
11issued to the taxpayer.
12    "Board" means the State Board of Education.
13    "Contribution" means a donation made by the taxpayer
14during the taxable year for providing scholarships as provided
15in this Act.
16    "Custodian" means, with respect to eligible students, an
17Illinois resident who is a parent or legal guardian of the
18eligible student or students.
19    "Department" means the Department of Revenue.
20    "Eligible student" means a child who:
21        (1) is a member of a household whose federal adjusted
22    gross income the year before he or she initially receives
23    a scholarship under this program, as determined by the



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1    Department, does not exceed 300% of the federal poverty
2    level and, once the child receives a scholarship, does not
3    exceed 400% of the federal poverty level;
4        (2) is eligible to attend a pre-kindergarten school,
5    public elementary school, or high school in Illinois in
6    the semester immediately preceding the semester for which
7    he or she first receives a scholarship or is starting
8    school in Illinois for the first time when he or she first
9    receives a scholarship; and
10        (3) resides in Illinois while receiving a scholarship.
11    "Family member" means a parent, child, or sibling, whether
12by whole blood, half blood, or adoption; spouse; or stepchild.
13    "Focus district" means a school district which has a
14school that is either (i) a school that has one or more
15subgroups in which the average student performance is at or
16below the State average for the lowest 10% of student
17performance in that subgroup or (ii) a school with an average
18graduation rate of less than 60% and not identified for
20    "Jointly administered CTE program" means a program or set
21of programs within a non-public school located in Illinois, as
22determined by the State Board of Education pursuant to Section
237.5 of this Act.
24    "Necessary costs and fees" includes the customary charge
25for instruction and use of facilities in general and the
26additional fixed fees charged for specified purposes that are



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1required generally of non-scholarship recipients for each
2academic period for which the scholarship applicant actually
3enrolls, including costs associated with student assessments,
4but does not include fees payable only once and other
5contingent deposits that are refundable in whole or in part.
6The Board may prescribe, by rules consistent with this Act,
7detailed provisions concerning the computation of necessary
8costs and fees.
9    "Scholarship granting organization" means an entity that:
10        (1) is exempt from taxation under Section 501(c)(3) of
11    the Internal Revenue Code;
12        (2) uses at least 95% of the qualified contributions
13    received during a taxable year for scholarships;
14        (3) provides scholarships to students according to the
15    guidelines of this Act;
16        (4) deposits and holds qualified contributions and any
17    income derived from qualified contributions in an account
18    that is separate from the organization's operating fund or
19    other funds until such qualified contributions or income
20    are withdrawn for use; and
21        (5) is approved to issue certificates of receipt.
22    "Technical academy" means a non-public school located in
23Illinois that: (1) registers with the Board pursuant to
24Section 2-3.25 of the School Code; and (2) operates or will
25operate a jointly administered CTE program as the primary
26focus of the school. To maintain its status as a technical



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1academy, the non-public school must obtain recognition from
2the Board pursuant to Section 2-3.25o of the School Code
3within 2 calendar years of its registration with the Board.
4    "Qualified contribution" means the authorized contribution
5made by a taxpayer to a scholarship granting organization for
6which the taxpayer has received a certificate of receipt from
7such organization.
8    "Qualified school" means a non-public school, including a
9non-public pre-kindergarten school, located in Illinois and
10recognized by the Board pursuant to Section 2-3.25o of the
11School Code.
12    "Scholarship" means an educational scholarship awarded to
13an eligible student to attend a qualified school of their
14custodians' choice in an amount not exceeding the necessary
15costs and fees to attend that school.
16    "Taxpayer" means any individual, corporation, partnership,
17trust, or other entity subject to the Illinois income tax. For
18the purposes of this Act, 2 individuals filing a joint return
19shall be considered one taxpayer.
20(Source: P.A. 102-16, eff. 6-17-21.)
21    (35 ILCS 40/10)
22    (Section scheduled to be repealed on January 1, 2025)
23    Sec. 10. Credit awards.
24    (a) The Department shall award credits against the tax
25imposed under subsections (a) and (b) of Section 201 of the



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1Illinois Income Tax Act to taxpayers who make qualified
2contributions. For contributions made under this Act, the
3credit shall be equal to 75% of the total amount of qualified
4contributions made by the taxpayer during a taxable year, not
5to exceed a credit of $1,000,000 per taxpayer.
6    (b) The aggregate amount of all credits the Department may
7award under this Act in any calendar year may not exceed
9    (c) Contributions made by individuals, corporations
10(including Subchapter S corporations), partnerships, and
11trusts under this Act may not be directed to a particular
12subset of schools, a particular school, a particular group of
13students, or a particular student. Contributions made by
14individuals under this Act may be directed to a particular
15subset of schools or a particular school but may not be
16directed to a particular group of students or a particular
18    (d) No credit shall be taken under this Act for any
19qualified contribution for which the taxpayer claims a federal
20income tax deduction.
21    (e) Credits shall be awarded in a manner, as determined by
22the Department, that is geographically proportionate to
23enrollment in recognized non-public schools in Illinois. If
24the cap on the aggregate credits that may be awarded by the
25Department is not reached by June 1 of a given year, the
26Department shall award remaining credits on a first-come,



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1first-served basis, without regard to the limitation of this
3    (f) Credits awarded for donations made to a technical
4academy shall be awarded without regard to subsection (e), but
5shall not exceed 15% of the annual statewide program cap. For
6the purposes of this subsection, "technical academy" means a
7technical academy that is registered with the Board within 30
8days after the effective date of this amendatory Act of the
9102nd General Assembly.
10(Source: P.A. 102-16, eff. 6-17-21.)
11    (35 ILCS 40/40)
12    (Section scheduled to be repealed on January 1, 2025)
13    Sec. 40. Scholarship granting organization
15    (a) Before granting a scholarship for an academic year,
16all scholarship granting organizations shall assess and
17document each student's eligibility for the academic year.
18    (b) A scholarship granting organization shall grant
19scholarships only to eligible students.
20    (c) A scholarship granting organization shall allow an
21eligible student to attend any qualified school of the
22student's choosing, subject to the availability of funds.
23    (d) In granting scholarships, a scholarship granting
24organization shall give priority to the following priority



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1        (1) eligible students who received a scholarship from
2    a scholarship granting organization during the previous
3    school year;
4        (2) eligible students who are members of a household
5    whose previous year's total annual income does not exceed
6    185% of the federal poverty level;
7        (3) eligible students who reside within a focus
8    district; and
9        (4) eligible students who are siblings of students
10    currently receiving a scholarship.
11    (d-5) A scholarship granting organization shall begin
12granting scholarships no later than February 1 preceding the
13school year for which the scholarship is sought. The priority
14groups identified in subsection (d) of this Section shall be
15eligible to receive scholarships on a first-come, first-served
16basis until the April 1 immediately preceding the school year
17for which the scholarship is sought. Applications for
18scholarships for eligible students meeting the qualifications
19of one or more priority groups that are received before April 1
20must be either approved or denied within 10 business days
21after receipt. Beginning April 1, all eligible students shall
22be eligible to receive scholarships without regard to the
23priority groups identified in subsection (d) of this Section.
24    (e) Except as provided in subsection (e-5) of this
25Section, scholarships shall not exceed the lesser of: (i) the
26statewide average operational expense per student among public



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1schools; or (ii) the necessary costs and fees for attendance
2at the qualified school; or (iii) the maximum scholarship
3amount set by the qualified school, if the qualified school
4chooses to set such an amount, which may not exceed the
5necessary costs and fees for attendance at the qualified
6school. The qualified school shall notify the scholarship
7granting organization of its necessary costs and fees as well
8as any maximum scholarship amount set by the school.
9Scholarships shall be prorated as follows:
10        (1) for eligible students whose household income is
11    less than 185% of the federal poverty level, the
12    scholarship shall be 100% of the amount determined
13    pursuant to this subsection (e) and subsection (e-5) of
14    this Section;
15        (2) for eligible students whose household income is
16    185% or more of the federal poverty level but less than
17    250% of the federal poverty level, the average of
18    scholarships shall be 75% of the amount determined
19    pursuant to this subsection (e) and subsection (e-5) of
20    this Section or in an amount set by the qualified school
21    pursuant to item (iii) of subsection (e) of this Section;
22    and
23        (3) for eligible students whose household income is
24    250% or more of the federal poverty level, the average of
25    scholarships shall be 50% of the amount determined
26    pursuant to this subsection (e) and subsection (e-5) of



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1    this Section.
2    (e-5) The statewide average operational expense per
3student among public schools shall be multiplied by the
4following factors:
5        (1) for students determined eligible to receive
6    services under the federal Individuals with Disabilities
7    Education Act, 2;
8        (2) for students who are English learners, as defined
9    in subsection (d) of Section 14C-2 of the School Code,
10    1.2; and
11        (3) for students who are gifted and talented children,
12    as defined in Section 14A-20 of the School Code, 1.1.
13    (f) A scholarship granting organization shall distribute
14scholarship payments to the participating school where the
15student is enrolled.
16    (g) For the 2018-2019 school year through the 2021-2022
17school year, each scholarship granting organization shall
18expend no less than 75% of the qualified contributions
19received during the calendar year in which the qualified
20contributions were received. No more than 25% of the qualified
21contributions may be carried forward to the following calendar
23    (h) For the 2022-2023 school year, each scholarship
24granting organization shall expend all qualified contributions
25received during the calendar year in which the qualified
26contributions were received. No qualified contributions may be



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1carried forward to the following calendar year.
2    (i) A scholarship granting organization shall allow an
3eligible student to transfer a scholarship during a school
4year to any other participating school of the custodian's
5choice. Such scholarships shall be prorated.
6    (j) With the prior approval of the Department, a
7scholarship granting organization may transfer funds to
8another scholarship granting organization if additional funds
9are required to meet scholarship demands at the receiving
10scholarship granting organization. All transferred funds must
11be deposited by the receiving scholarship granting
12organization into its scholarship accounts. All transferred
13amounts received by any scholarship granting organization must
14be separately disclosed to the Department.
15    (k) If the approval of a scholarship granting organization
16is revoked as provided in Section 20 of this Act or the
17scholarship granting organization is dissolved, all remaining
18qualified contributions of the scholarship granting
19organization shall be transferred to another scholarship
20granting organization. All transferred funds must be deposited
21by the receiving scholarship granting organization into its
22scholarship accounts.
23    (l) Scholarship granting organizations shall make
24reasonable efforts to advertise the availability of
25scholarships to eligible students.
26(Source: P.A. 100-465, eff. 8-31-17.)



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1    Section 99. Effective date. This Act takes effect upon
2becoming law.