HB658 Alabama 2013 Session

Summary

Primary Sponsor

Jim CarnsRepresentative

Republican

Co-Sponsor

Paul DeMarco

Session

Regular Session 2013

Title

Schools, Accountability Act of 2013 amended, definition of failing school, school flexibility contracts, and calculation of tax credits for parents of children assigned to or enrolled in failing school, further provided for, revises tax credit for corporate donors to scholarship program, retoactive, Act 2013-64, 2013 Reg. Sess., am'd.

Summary

HB658 expands school choice in Alabama by creating tax credits for parents of students in failing schools to transfer to nonfailing public or nonpublic schools, with accompanying scholarship accountability and funding rules.

What This Bill Does

It defines key terms such as failing schools, eligible students, and qualifying/nonpublic schools. It creates an income tax credit for parents to offset transfer costs to a nonfailing school, set at 80% of the public-school cost or the actual cost of a nonfailing school, whichever is less, with funds allocated to the failing school of origin if the student moves to a nonfailing nonpublic school; credits can be refundable if they exceed tax liability. It establishes the Failing Schools Income Tax Credit Account to pay these credits from Education Trust Fund sales tax revenues and requires annual distribution of credits to eligible parents. It also strengthens corporate donor scholarships with caps and detailed accountability, while imposing extensive operational, reporting, and nondiscrimination requirements on scholarship granting organizations and participating schools, all with retroactive effect to March 14, 2013.

Who It Affects

• Parents and eligible students in households at or below 150% of the state median income who are in or designated to attend a failing school and may use the credit to transfer to a nonfailing public or nonpublic school.
• Public and nonpublic schools, local school systems, scholarship granting organizations, and state agencies (Department of Revenue and Department of Education) who will implement, oversee, and comply with the new funding, transfer, testing, and reporting requirements.

Key Provisions

• Defines Educational Scholarships, Eligible Student, Failing School, Flexibility Contract, Innovation Plan, Local School System, Local Board of Education, Qualifying School, Scholarship Granting Organization, and Parent.
• Failing School criteria include persistently low-performing status, designation by the State Superintendent, or low ranking/ratings on state assessments or related grading systems, with conditions for time-based thresholds.
• Establishes an 80% tax credit for parents to offset transfer costs to nonfailing public or nonpublic schools, with the lesser of 80% of public school cost or actual nonfailing school cost; credits are refundable if they exceed tax liability; credits funded from the Education Trust Fund’s Education Trust Fund sales tax revenues.
• Creates the Failing Schools Income Tax Credit Account to hold and distribute credits; the Department of Revenue certifies credits and the Comptroller transfers funds as needed.
• Allows credits for transfers under specified circumstances, including assigned attendance area or graduation from failing school districts, and requires timely notification and enrollment options by the local school system.
• Requires local systems to offer enrollment in a nonfailing school within the same system or approved external nonfailing options, with transportation duties defined (system-provided if within the same system; parent generally responsible when outside).
• Imposes penalties and oversight on scholarship granting organizations, including financial reporting, 95% of revenue spent on scholarships, portability of scholarships, nondiscrimination, and background checks for staff and board members.
• Mandates academic accountability, including annual testing (state or recognized tests) for participating students, reporting of test results to parents and the state, and public posting of aggregated results on the Department of Revenue website after testing begins.
• Nonpublic schools receiving scholarships must meet health, safety, and nondiscrimination standards, demonstrate financial viability if receiving large contributions, and undergo background checks.
• Provides for transportation cost responsibilities, including who pays when transferring within or outside the local system, and allows local systems to negotiate transportation options to minimize costs.
• Prohibits forcing enrollment in any school and requires terms of enrollment to be non-discriminatory; cannot override federal desegregation orders.
• Authorizes retroactive application to March 14, 2013; the act is effective immediately upon passage; does not alter athletic eligibility rules.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Education