SB 190-FN - AS INTRODUCED

2015 SESSION

15-0392

10/09

SENATE BILL 190-FN

AN ACT relative to payment of costs for career and technical education center programs and administration by the department of education, and establishing a tax credit against business profits taxes for donations to such centers.

SPONSORS: Sen. Watters, Dist 4; Sen. Stiles, Dist 24; Sen. Little, Dist 8; Sen. Fuller Clark, Dist 21; Sen. Hosmer, Dist 7; Rep. Ladd, Graf 4; Rep. Gile, Merr 27; Rep. Sprague, Straf 18

COMMITTEE: Education

ANALYSIS

This bill modifies the determination of financial responsibility for tuition for career and technical education center programs and the administration of CTE programs by the department of education. The bill also establishes a tax credit against business profits taxes for charitable donations to career and technical education centers.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [~~in brackets and struckthrough.~~]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

15-0392

10/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Fifteen

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Purpose. The provision of an adequate education in New Hampshire includes career and technical education. New Hampshire career and technical education centers are established for the purpose of developing a competitive workforce to support local business, industry, and economic growth. The program provides high school students the opportunity to explore career options that apply academic concepts to real-world situations using the most current business and industry-based technologies. Through a commitment to developing the knowledge and skills required for successful performance in the current and future workplace, the program further provides advanced training leading to skill certification and postsecondary education with career pathways for lifelong learning and opportunity.

2 Chapter Title; Community and Technical Education. Amend the chapter title of RSA 188-E to read as follows:

CHAPTER 188-E

REGIONAL [~~VOCATIONAL~~] CAREER AND TECHNICAL EDUCATION (CTE)

3 Designation of Centers and Programs. Amend RSA 188-E:2 to read as follows:

188-E:1 Designation of Regional Centers and [~~Courses~~] Programs. The commissioner, department of education, is hereby authorized and directed to designate high schools, and public academies as defined in RSA 194:23, II, offering [~~vocational~~] career and technical education programs as [~~vocational~~] career and technical education centers. In instances where it is educationally and economically feasible to do so, the commissioner may designate individual [~~vocational courses~~] career and technical education programs in other than the [~~vocational~~] career and technical education centers as regional [~~courses~~] programs. An out-of-state school or [~~course~~] program may be designated, when it is in the best interest of the state, as a part of the New Hampshire regional [~~vocational~~] career and technical education plan.

4 Definitions. RSA 188-E:2 is repealed and reenacted to read as follows:

188-E:2 Definitions. In this chapter:

I. “Alternative education program” means a program providing at risk students with a variety of options with a goal of graduation or completion by focusing on the student’s individual social needs and the academic requirements for a high school diploma, including:

(a) A program offered at a regional career technical education center or other comprehensive high school.

(b) An adult high school diploma program administered pursuant to rules of the department.

II. “At risk student” means a high school student who has been evaluated by the local school district staff and deemed to be an individual in jeopardy of dropping out of school prior to graduation.

III. “Career and technical education” or “CTE” means organized educational activities that:

(a) Offer a sequence of courses that:

(1) Provides individuals with coherent and rigorous content aligned with challenging academic standards and relevant technical knowledge and skills needed to prepare for further education and careers in current or emerging professions;

(2) Provides technical skill proficiency, an industry-recognized credential, a certificate, or an associate degree; and

(3) Might include prerequisite courses, other than a remedial course; and

(b) Include competency-based applied learning that contributes to the academic knowledge, higher-order reasoning and problem-solving skills, work attitudes, general employability skills, technical skills, and occupation specific skills, and knowledge of all aspects of an industry, including entrepreneurship, of an individual;

IV. “Construction” means the actual construction of facilities and provision of initial equipment.

V. “Receiving district” means a school district operating a comprehensive high school or public academy pursuant to RSA 194:23 which is designated as a regional center or offers a designated regional program.

VI. “Regional career and technical education student” means a student attending a regional center or a regional program, for career and technical education purposes, which is in a high school other than one the student would normally attend for his or her regular education program.

VII. “Renovation” means an upgrade and/or addition of career and technical education space, facility, and/or equipment at designated regional career and technical education centers.

VIII. “Sending district” means:

(a) A school district where students reside who attend a regional center, regional program, or alternative education program other than within the district itself; or

(b) If a student attends a chartered public school the sending district shall be the school district in which the student resides.

5 Construction or Renovation. Amend RSA 188-E:3 to read as follows:

188-E:3 Construction or Renovation of Regional [~~Vocational~~] Career and Technical Education Centers.

I. The commissioner, department of education, shall make grants available to designated regional centers for construction of [~~vocational~~] career and technical education facilities or renovation of existing regional [~~vocational~~] career and technical education centers. The state board shall adopt rules, pursuant to RSA 541-A and RSA 21-N:9, II, which the commissioner shall carry out, relative to requirements for approval of regional [~~vocational~~] career and technical education centers to receive funds for construction or renovation of such facilities. The rules shall include criteria which guarantee potential sending districts an opportunity to enroll students in the regional [~~vocational~~] career and technical education program, and basic criteria for planning such facilities through cooperative development of plans by the [~~vocational~~] career and technical education staff of the state department of education and the local school district’s staff. When such plans appear to be both educationally and financially acceptable, the department’s [~~vocational~~] career and technical education staff shall recommend to the commissioner that they be approved for funding.

II. Upon completion, the constructed or renovated facility shall become the property of the school district or public academy, [~~as the case may be~~] for use by the career and technical education center exclusively. Provision of the site, parking, and other related areas shall be the responsibility of the local community. Site work, including but not limited to cut and fill work, compaction, demolition, relocation of utilities, relocation of roadways and sidewalks, and similar work within an area extending to one foot beyond the outside edge of the exterior walls of the building, shall be eligible for grants under paragraph I. Nothing shall prohibit the inclusion of the site and related facilities which are not funded as part of construction cost by the state under this chapter from being included in a regular building aid grant application of the district as provided in RSA 198:15-b. However, no school district which receives any funding under this chapter shall be eligible to receive school building aid grants under RSA 198:15-b for the same project. Maintenance, repair, and upkeep of the constructed or renovated facility, including all classroom and laboratory spaces, shall be the responsibility of the school district or public academy, as the case may be.

6 CTE Program. RSA 188-E:5 is repealed and reenacted to read as follows:

188-E:5 Program.

I. The program in the regional career and technical education centers shall be broad enough to serve the reasonable business and industry needs of the area, and provide for a substantial career and technical offering in the region.

II. Career and technical education of consistent quality shall be equally available to students and across the state. Each career and technical education program pathway shall include embedded rigorous academic skills and technical core competencies aligned with national business and industry standards delivered through a relevant sequence of courses.

III. Each center shall make maximum utilization of cooperative arrangements with special education and vocational rehabilitation in providing career and technical education for disadvantaged and disabled persons. Opportunities for out-of-school youths, including “drop outs” and others, and adult education will be provided whenever possible.

IV. The regional career and technical education centers, as an integral part of each career and technical offering, may provide opportunities in leadership development through participation by students in appropriate corresponding and nationally recognized career and technical student organizations.

V. Regional career and technical education centers shall, on a space available basis, enroll any student requesting enrollment who has attended 2 years of high school regardless of the number of academic credits earned, except that the Manchester school district shall, on a space available basis, enroll and bear the associated costs for any Manchester school district student in grades 9-12 who resides in the city of Manchester and who requests enrollment in a regional career and technical education center within the district, provided that in either case:

(a) The student has successfully completed any courses required as a prerequisite for the career and technical education program selected; or

(b) The prerequisites have been waived by the regional career and technical education center director. Such a waiver shall not be unreasonably withheld.

VI. Sending schools shall not limit the number of students desiring enrollment in the receiving school if space is available and the student is qualified for admission. The receiving district shall be responsible for determining the student’s qualifications for admission and space availability.

VII. There shall not be more than 5 instructional days of school calendar deviations between those of the school administrative units affiliated with a career and technical education center or one or more of the school calendars of the school administrative units within a career and technical education region which are not aligned with the regional career and technical education school district calendar.

(a) Regional school calendars that comply with this paragraph shall be approved for implementation in the upcoming full school year.

(b) When there are multiple career and technical education centers or when career and technical education center regions overlap, there must be one common calendar for all of the school districts in those overlapping areas.

VIII. All career and technical education students shall be given access to career and technical education programs for the entire instructional time required for those programs.

IX. Programs shall demonstrate alignment of curriculum to national technical core competencies to assessment and demonstrate achievement through evidence documented by course and learning experiences using multiple measures, such as, but not limited to, examinations, quizzes, portfolios, performances, exhibitions, industry certifications, projects, and community service.

X. An approved career and technical education program shall be designed to enable a student to meet industry standards applicable to the respective career field.

XI. To the greatest extent possible, a career and technical education program offered at a center or region shall provide students the opportunity to take advantage of any applicable career pathways, including career pathways set forth in an articulation agreement with a postsecondary institution or in a collaborative agreement with publicly supported secondary and postsecondary educational institutions that form a dual enrollment career and technical education program.

7 Costs of Attendance. Amend RSA 188-E:6 to read as follows:

188-E:6 [~~Reimbursement~~] Costs for Students Attending Career and Technical Education Programs.

I. The state shall [~~reimburse the state’s~~] pay a portion of the cost of tuition and reimburse transportation costs, as provided in this section, for a sending district student attending an approved career and technical education (CTE) program.

II. A student’s sending district shall be financially responsible for [~~an amount equal to~~] 25 percent of the career and technical education portion of the receiving district’s cost per pupil for the prior school year, as calculated by the department of education.

III. Any sending district student who attends an approved CTE program that provides instruction in subject areas approved by the state board of education shall be eligible for [~~reimbursement~~] payment of tuition and reimbursement of transportation costs. Students enrolled in introductory CTE [~~programs~~] courses, pre-CTE [~~programs~~] courses, or other CTE programs offering instruction in subject areas not approved by the state board of education shall not be eligible for payment of tuition and transportation reimbursement.

IV. In consultation with the house and senate committees responsible for education policy and financial matters, the state board of education shall, in rules adopted pursuant to RSA 541-A, develop a formula for determining the tuition and transportation costs for approved career technical education programs and procedures for disbursement of funds.

8 Tuition. Amend RSA 188-E:7 to read as follows:

188-E:7 Tuition.

I. The department of education is authorized to pay from its regular budget tuition for full or part-time sending district students, attending programs at designated [~~vocational~~] career and technical education centers or designated [~~vocational educational courses~~] career and technical education programs at other comprehensive high schools, whose residence is in a district where the high school of normal attendance does not offer a similar [~~vocational education course~~] career and technical education program.

II. The department of education shall pay up to 75 percent and no less than 60 percent of 40 percent of the average cost per pupil for the prior school year inclusive of only those districts designated at regional career and technical education centers for tuition for a student enrolled in a CTE program from eligible sending districts.

III. Receiving district CTE centers may charge sending districts on a per capita ratio of the proportion of total student count each sending district represents as compared to the total receiving district CTE enrollment. A sending district shall not deny tuition support for a student eligible for a placement in the receiving district CTE.

IV. The department is authorized to pay from its budget for at risk students who reside in a school district in which the high school does not offer an alternative education program, to attend an alternative education program at a [~~regional vocational education center or the associated~~] comprehensive high school within New Hampshire.

[~~II.~~] V. The liability of the state and local school districts for tuition shall be determined by the state board under rules adopted pursuant to RSA 541-A, provided that a receiving district may charge a student from a sending district a differential fee for career and technical education [~~fee~~] not to exceed 3 percent of the receiving district’s cost per pupil for the prior school year, as calculated by the department of education, and provided that the receiving district shall deposit the differential fee into its capital reserve account to be used for career and technical education program development, improvement, and equipment.

[~~III.~~] VI. The state’s tuition liability for a student enrolled in an alternative education program shall not exceed the per student cost of a student enrolled in a career and technical education program, as calculated by the department of education.

9 Transportation. Amend RSA 188-E:8 to read as follows:

188-E:8 Transportation. The department of education is authorized to [~~pay~~] reimburse from its regular budget the cost of transportation for (a) regional [~~vocational~~] career and technical education students who attend regional career and technical education centers and for (b) at risk students who attend alternative education programs located at a regional [~~vocational~~] career and technical education center or [~~the associated~~] other comprehensive high school. Transportation costs shall not exceed the rate adopted pursuant to RSA 541-A by the state board. The sending district shall be responsible for paying the transportation costs and shall be reimbursed from state funds.

10 New Section; Regional Career and Technical Education Centers; Donations. Amend RSA 188-E by inserting after section 9 the following new section:

188-E:9-a Donations to Regional Career and Technical Education Center Programs.

I. A school district may accept a charitable donation of:

(a) Tangible personal property for a related use by an educational program offered by the regional CTE center.

(b) Up to 50 percent of the cost of apprenticeship and training programs offered by the regional CTE center, including the compensation of employees in direct supervision and training of students in a CTE center program.

II. The school district shall report within 30 days the donor name and the value of each charitable donation under paragraph I to the department of education.

III. The department of education shall provide a donor with a written statement of the value of the property donated and/or the amount donated for apprenticeship and training, which may be used by a donor for purposes of the tax credit against business profits taxes provided in RSA 77-A:5, XVI, computed according to paragraph IV.

IV. A taxpayer who makes a qualifying charitable contribution under paragraph I shall be allowed a credit against the business enterprise tax imposed under RSA 77-E as computed by the department of education. The aggregate of tax credits issued by the department of education to all donors claiming the credit under this section shall not exceed $500,000 for any state fiscal year. Credits claimed which exceed the total allowed shall be granted in the taxpayer’s proportional share of the maximum aggregate credit amount. The department shall report all credits granted to the department of revenue administration.

V. The commissioner of education shall adopt rules pursuant to RSA 541-A, relative to:

(a) The application procedure for a tax credit for qualifying charitable donations under this section.

(b) The design and content of the reports, forms, and applications required to be filed with the department of education.

11 New Section; Advisory Council on Career and Technical Education. Amend RSA 188-E by inserting after section 10-a the following new section:

188-E:10-b Advisory Council on Career and Technical Education.

I. There is established an advisory council on career and technical education (CTE). The members of the council shall be as follows:

(a) One member of the senate, appointed by the president of the senate.

(b) Two members of the house of representatives, appointed by the speaker of the house of representatives.

(d) The commissioner of the department of resources and economic development, or designee.

(e) The chancellor of the community college system, or designee.

(f) Three CTE directors, one member of a school board, and one SAU administrator, appointed by the commissioner of education.

(g) A representative of the Business and Industry Association of New Hampshire, appointed by the association.

(h) Three representatives of skilled trades or businesses related to CTE programs, appointed by the commissioner of education.

II. Legislative members of the council shall receive mileage at the legislative rate when attending to the duties of the council.

III. Members of the advisory council appointed under subparagraphs I(f) –(h) shall serve for terms of 3 years and may be reappointed.

IV. The council shall study career and technical education, and make recommendations concerning:

(a) The delivery system of career and technical education in New Hampshire;

(b) Increasing access to career and technical education programs;

(d) The establishment and implementation of Individual Learning Plans beginning in grade 6; and

(e) Other barriers as may be identified that restrict the delivery of career and technical education to all interested students.

IV. The members of the advisory council shall elect a chairperson from among the members. Meetings of the advisory council shall be called by the chairperson as necessary. Seven members of the council shall constitute a quorum.

V. The advisory council shall file an annual report of its findings and any recommendations for proposed legislation to the speaker of the house of representatives, the president of the senate, the house clerk, the senate clerk, the governor, and the state library on or before November 1.

12 New Paragraph; Business Profits Tax; Credit for Donations to Regional Vocational Education Centers. Amend RSA 77-A:5 by inserting after paragraph XV the following new paragraph:

XVI. The tax credit computed under RSA 188-E:9-a for donations to regional vocational education center programs, provided that the credit allowed for a taxpayer under this paragraph shall not exceed 25 percent of the tax due under this chapter for such taxpayer before any credits under RSA 77-A:5 are taken into account.

13 Applicability. The tax credit under RSA 77-A:5, XVI shall apply to taxable periods beginning after June 30, 2015.

14 Reference Changed. Amend RSA 21-N:9, II(m) to read as follows:

(m) Standards for approval of regional [~~vocational~~] career and technical education centers, as authorized by RSA 188-E:3.

15 Reference Changed. Amend RSA 189:25-a to read as follows:

189:25-a Universal Service Fund; Definition of “School.” For the purpose of obtaining discounts pursuant to the universal service fund, otherwise known as “E-rate” discounts, as established by section 254 of the Telecommunications Act of 1996, “school” means any public or private elementary or secondary school, and any regional [~~vocational~~] career and technical educational [~~school~~] center designated under RSA 188-E, including educational programs offered at such [~~vocational~~] career and technical educational [~~schools~~] centers for pre-kindergarten, adult education programs, and juvenile justice programs.

16 Reference Changed. Amend RSA 194:23, II-a to read as follows:

II-a. In this section, the term “high school” shall include any regional [~~vocational~~] career and technical education center in the Manchester school district which complies with the provisions of RSA 188-E.

17 Effective Date. This act shall take effect July 1, 2015.

LBAO

15-0392

02/02/15

SB 190-FN - FISCAL NOTE

FISCAL IMPACT:

The Department of Revenue Administration and the Department Education state this bill, as introduced, will decrease state revenue by an indeterminable amount in FY 2016, and by $500,000 in FY 2017 and each fiscal year thereafter. This bill will increase state expenditures, and local revenue and expenditures by an indeterminable amount in FY 2016 and each fiscal year thereafter. There will be no impact on county revenue or expenditures.

METHODOLOGY:

The Department of Revenue Administration (DRA) and Department of Education (DOE) state this bill authorizes DOE to issue up to $500,000 of tax credits against the Business Enterprise Tax (BET) to businesses making charitable donations to regional career and technical education centers (CTEs). The proposed legislation also dictates school districts sending students to CTEs outside of their district (sending schools) shall not limit the number of students desiring enrollment in a regional CTE if space is available and students are qualified. Additionally, this bill specifies the state shall pay 60-75% of 40% of the average cost per CTE pupil from the prior school year.

DRA states the tax credit established in this bill would be applicable to tax periods beginning after June 30, 2015. Based on this effective date, the Department estimates approximately 92% of FY 2016 taxpayers would be ineligible for the credit. The Department assumes in FY 2017 and each fiscal year thereafter all taxpayers would be eligible to apply for the credit. Accordingly, the Department states the proposed legislation will reduce state general and education trust fund revenue by an indeterminable amount up to $500,000 in FY 2016, and by $500,000 in FY 2017 and each fiscal year thereafter.

DOE states under current law, sending schools can deny a student’s request to attend a CTE based on the availability of funds. The proposed legislation specifies sending schools shall not limit the number of students desiring enrollment in a regional CTE if space is available and students are qualified. DOE states this change would increase the participation of sending schools in CTE programs to the extent CTEs reach enrollment capacity, estimated to be 11,360 students. Based on 2013-2014 enrollments at CTEs of 10,585 students, the DOE estimates this bill will increase CTE sending district enrollments by approximately 775 students. Using the most recently available average cost per CTE pupil (ACP) of $14,314 from the 2013-2014 school year, and applying the funding formula range specified in this bill (40% of ACP or $5,725.60), DOE estimates the increase in enrollments would have the following fiscal impact –

Fiscal Impact at 60% of 40% of ACP

FY 2016

FY 2017

FY 2018

FY 2019

Increase to State Expenditures (Reimbursements to School Districts for Prior Year Costs)

$2,662,404

Increase to Local Revenue (State Reimbursements of Prior Year Local Expenditures)

$2,662,404

Increase to Local Expenditures for Additional Enrollments ($5,725.60 x 60% x 775 Additional Enrollments)

$2,662,404

Fiscal Impact at 75% of 40% of ACP

FY 2016

FY 2017

FY 2018

FY 2019

Increase to State Expenditures (Reimbursements to School Districts for Prior Year Costs)

$3,328,005

Increase to Local Revenue (State Reimbursements of Prior Year Expenditures)

$3,328,005

Increase to Local Expenditures for Additional Enrollments ($5,725.60 x 75% x 775 Additional Enrollments)

$3,328,005

DOE notes the funding formula proposed in this bill would also impact reimbursements to sending school districts for those students currently attending CTE programs. DOE states the most recent per student reimbursement rates for sending district CTE students is $2,887.20 per student, and 2,127 of the current 10,585 CTE students are from sending districts. The funding formula in the proposed legislation would therefore increase state expenditures and local revenues in FY 2016 and each fiscal year thereafter within the following range:

40% of ACP

$ 5,725.60

60% of 40% of ACP

$ 3,435.36

75% of 40% of ACP

$ 4,294.20

Current Reimbursement per student

$ 2,887.20

Additional Reimbursement Required per Student

$ 548.16

$ 1,407.00

Number of Students

2,127

Estimated Increase to State Expenditures and Local Revenues for Current Enrollments

$ 1,165,936

$ 2,992,689

DOE states this bill will further increase local expenditures by an indeterminable amount in FY 2016 and each fiscal year thereafter as a result of additional staffing levels that may be required at the CTEs to accommodate the increases in enrollments as well as increases to the sending district’s share of CTE tuition costs. Additionally, this bill will have an indeterminable impact on state expenditures for student transportation costs. Although the Department does not estimate any significant increase in the number of busses that would be required to accommodate the projected increase in enrollments, current billings for student transportation costs are based on a per student/per mile rate structure. Accordingly, DOE is unable to estimate to what extent, if any, the passage of this bill would have on student transportation expenditures.