HB 2775 Summary

• Amends Arizona's income tax credit for contributions to school tuition organizations (STOs) by adding a financial need requirement for scholarship recipients.

• Requires STOs receiving contributions under this section to use at least 90 percent of those contributions to provide educational scholarships or tuition grants only to children whose family income does not exceed 185 percent of the income limit for reduced price lunches under federal school lunch programs.

• Removes the prior requirement that STOs allocate at least 90 percent of annual revenue to scholarships, replacing it with a requirement specific to contributions received under the tax credit provision.

• Maintains existing tax credit limits: $500 per year for single individuals/heads of household, and $1,000 per year for married couples filing jointly (as of 2006).

• Requires STOs to report electronically to the Department of Revenue by February 28 each year on contributions received, number and dollar amount of scholarships awarded, and details for each school where grants were distributed.