By Lee Hedgepeth
Alabama Political Reporter
Alabama House Representative Chad Fincher has introduced a bill that would remove the individual cap on tax credits available through the Alabama Accountability Act and allow some corporate entities to donate as “individual taxpayers.”
The tax credit cap, which is currently set at $7,500 per individual taxpayer, would be removed under the bill’s revisions to the AAA, but it would not effect the total cap of twenty five million dollars set aside for use in matching creditable donations to so-called Scholarship Granting Organizations, whose purported aim is providing scholarships to students to attend non-“failing” institutions.
The Alabama Department of Education determines the list of “failing” schools annually. APR reported on this year’s list here.
The Alabama Accountability Act was passed after serious contention in the Alabama legislature last session, with Democrats – and a few Republicans – saying that too much of the legislation was drafted behind closed doors and that it was a huge change from the original bill, which – ironically – was introduced by Chad Fincher, as the School Flexibility Act.
The twenty five million dollar overall cap for tax credits under the AAA has practically already been reached for this year, despite there are only being eight Scholarship Granting Organizations registered with the state.
Alabama Political Reporter has reported extensively on the financial aspects of the law – particularly the SGO provisions. With big time Alabama politicos involved with SGOs, such as Former Governor Bob Riley, who is the Chairman of the Scholarship Opportunities Foundation, questions about the ethics of such actions arise when considering that the law provides for a five percent off-the-top profit for the scholarship granting middle men – creating a race for $250,000.
Our reports on legislative leadership lounging with SGO lobbyist can be seen here.
In addition to removing the individual cap on tax credits, Fincher’s proposed legislation, HB558, would expand the definition of the eligible “individual taxpayer” to include S-corporations and LLCs, in effect allowing these entities an unlimited shot at the $25 million in tax credits in a manner reminiscent of Citizens United.
Representative Fincher, a Republican from Semmes, ran unsuccessfully in the GOP primary for the First Congressional District seat eventually taken by Rep. Bradley Byrne. Fincher is not running for reelection to his Alabama House seat this election cycle.
Representative Mary Sue McClurkin, Republican from Indian Springs, is also cosponsoring the legislation; she is also not running in the 2014 election cycle.
The proposed bill has been assigned to the House Ways and Means Education Committee.