HB 2652 Summary

• Establishes the Hawaii Tax Credit Scholarship Program allowing taxpayers to receive a 100% tax credit for contributions to eligible nonprofit scholarship-funding organizations that provide scholarships to students with disabilities.

• Eligible students must have a current individual education plan (IEP) or 504 accommodation plan and can use scholarships for transportation and fees to attend public schools outside their service area or accredited nonpublic special education schools.

• Sets initial tax credit cap at an unspecified amount for fiscal year 2016-2017, with automatic 25% increases in subsequent years if annual usage reaches 90% or more of the cap.

• Eligible nonprofit organizations must comply with antidiscrimination laws, conduct criminal background checks on owners and operators, maintain surety bonds, undergo annual audits, and expend at least 75% of contributions on scholarships annually.

• Applies to taxable years beginning after December 31, 2016, and requires the Department of Education and Department of Taxation to develop cooperative agreements for program administration.