HB 2256 Summary

• Increases the minimum allocation requirement for School Tuition Organizations (STOs) from 90% to 95% of annual revenues from contributions for educational scholarships or tuition grants.

• Applies the 95% allocation requirement to all STO programs: income tax credits (sections 43-1183, 43-1184), insurance premium tax credits (sections 20-224.06, 20-224.07), and corporate tax credits (sections 43-1089, 43-1089.03).

• Prohibits awarding scholarships solely based on donor recommendations and requires STOs to consider financial need when evaluating applications and awarding scholarships.

• Requires STOs to include specific notice language in fundraising materials and applications stating that scholarships cannot be awarded solely on donor recommendation and that taxpayers cannot swap donations to benefit their own dependents.

• Prevents students from receiving scholarships while simultaneously enrolled in both district/charter schools and qualified schools, and prohibits multi-year scholarship awards that exceed school tuition costs.