HB393 Alabama 2022 Session

Summary

Primary Sponsor

Charlotte Meadows

Republican

Session

Regular Session 2022

Title

Schools, failing, scholarships for students assigned to in order to attend another public or nonpublic school, income tax credits for contributions to scholarship granting organizations increased, Sec. 16-6D-9 am'd.

Summary

HB393 would expand Alabama's tax-credit scholarship program by increasing donor credits and extending the funding-use deadline.

What This Bill Does

HB393 would raise the maximum tax credit for donations to scholarship granting organizations to 100% of the donor's tax liability, up to $100,000 per taxpayer, while keeping the annual cap at $30 million. It would allow pass-through credits for S corporations and Subchapter K entities to their owners. It would extend the required time to spend funds on educational scholarships from the end of the next academic year to within three calendar years, and add broader reporting and accountability requirements for scholarship organizations and participating schools. The credit would apply retroactively to tax years beginning after December 31, 2021.

Who It Affects

• Taxpayers and donors who contribute to scholarship granting organizations (potentially larger credits and enhanced use of pass-through credits).
• Scholarship granting organizations, qualifying nonpublic schools, and related state agencies (more stringent spending timelines, reporting, finances, and eligibility rules).

Key Provisions

• Tax credits: donor credit up to 100% of contributions, up to 100,000 per taxpayer; annual cumulative cap remains $30,000,000.
• Credit passthrough: credits for individuals and married couples, corporate tax credits for C corporations, pass-through to shareholders/partners/members of S corporations or Subchapter K entities.
• Spending deadline: funds on hand at the start of a calendar year must be expended within three calendar years (instead of by the end of the next academic year).
• Carry-forward: tax credits can be carried forward for up to three taxable years.
• Donor restrictions: contributions cannot be restricted to a particular school or student to receive the credit.
• Accountability and reporting: scholarship organizations must meet financial, academic, and operational standards, submit annual and quarterly reports, and verify schools' compliance; nonpublic schools must meet health, safety, nondiscrimination, and background-check requirements; administer tests and report results; unspent funds may be redirected to At-Risk program.
• Unspent funds and reallocation: funds not accounted for by July 31 may be used to help eligible students attend qualifying schools; funds unspent after three years may be turned over to the State Department of Education for At-Risk program use.
• Retroactive effective date: applies to tax years beginning after December 31, 2021.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Education