Ala. Admin. Code r. 810-3-61-.04 - Receipt, Maintenance And Disbursement Of Scholarship Funds By Scholarship Granting Organizations (SGOs)
(1) Scope. The Alabama Accountability Act of
2013 provides for the granting of scholarships by SGOs under certain
circumstances. This rule prescribes accountability requirements for making
scholarship grants.
(2) The SGO
must maintain separate accounts for all scholarship donations, including any
interest or other income on the scholarship funds. The scholarship fund must
not be comingled with any other funds, and may only be used for making actual
scholarship grants and for paying allowable non-scholarship expenditures, as
described in paragraph 3, below.
(3) An SGO may accept and separately account
for donations which do not entitle the donor to tax credits under the
scholarship program, if such donations are not a violation of its by-laws and
other applicable laws and regulations. The SGO may use any interest or other
investment income derived from non-scholarship funds for non-scholarship
purposes.
(4) At least 95% of
revenue from scholarship donations and all interest and investment income
attributable to scholarship funds must be used for educational scholarships.
Therefore, the SGO may use no more than 5% of the amount of its scholarship
donations for purposes other than making scholarship grants. The 5% maximum
will be calculated for each calendar year, using the amount of scholarship
donations received during the year. If an SGO does not expend the full 5% of
funds available for non-scholarship expenditures in the year of donation, the
remaining balance may be carried forward for use in subsequent years on
non-scholarship expenditures.
(5)
The SGO must make sure any scholarship funds on hand at the beginning of a
calendar year are expended on educational scholarships by the end of the
academic year ending during the next succeeding calendar year. Any scholarship
funds which are not so expended shall be turned over and deposited with the
State Department of Education for the benefit of its At-Risk Student
Program.
(6) Effective for tax
years beginning after December 31, 2021, any scholarship funds on hand at the
beginning of a calendar year must be expended on educational scholarships
within three calendar years or turned over and deposited with the Department of
Education for the benefit of its At-Risk Student Program.
(7) For all scholarship donations received,
the SGO must notify donors to enter the donation into the Department of
Revenue's system for tracking scholarship donations and credits, which must be
done pursuant to Rule
810-3-61-.02.
(8) The Department of Revenue will make
available an electronic receipt system for qualified SGO to enter and verify
actual scholarship donations received. No tax credits will be allowed to
donors, if the SGO receiving the donation fails to enter the donation amounts
into the system, and to provide all required donor identifying information by
the required date.
(9) The SGO must
enter all donations received and all required donor identifying information
into the Department of Revenue's system within 30 days of receipt of the
donations, in order to validate the donor's donation and to create the
electronic receipt. The donor will receive the electronic receipt form through
the Department of Revenue's system, enabling the donor to use the allowable
credit on his/her tax return.
(10)
The portion of the $30 million in available tax credits which has been reserved
for a particular donation may be released and made available to other donors if
the SGO fails to provide validating information by the required date.
Notes
Authors: Curtis Stewart, Neal Hearn
Statutory Authority: Code of Ala. 1975, ยงยง 40-2A-7(a)(5), 16-16D-1.
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