Scholarship Granting Organizations

Second Regular Session Seventy-fifth General Assembly STATE OF COLORADO INTRODUCED HOUSE BILL 26-1292 LLS NO. 26-0798.02 Jacob Baus x2173 HOUSE SPONSORSHIP Goldstein, SENATE SPONSORSHIP Kipp and Marchman, House Committees Senate Committees Education A BILL FOR AN ACT CONCERNING REQUIREMENTS RELATED TO A FEDERAL TAX PROGRAM INVOLVING SCHOLARSHIP GRANTING ORGANIZATIONS, AND, IN CONNECTION THEREWITH, ESTABLISHING REQUIREMENTS FOR A SCHOOL THAT RECEIVES FUNDS FROM A SCHOLARSHIP GRANTING ORGANIZATION.

Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.) If the state voluntarily elects to participate in a federal program that provides a tax credit for a qualified contribution to a scholarship Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law.

granting organization, the bill requires the state to include all eligible scholarship granting organizations on its list identifying scholarship granting organizations to the federal government. If a school enrolls a student whose education-related expenses are paid, in whole or in part, by a scholarship granting organization, the bill requires the school to comply with nondiscrimination requirements and laws concerning students with disabilities. If the school that is subject to these requirements violates a requirement, the school is subject to an injunction and may have its eligibility to receive money for a student whose education-related expenses are paid by a scholarship granting organization suspended.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1. In Colorado Revised Statutes, add article 2.5 to title 22 as follows:

ARTICLE 2.5 Schools Receiving Funds from Scholarship Granting Organizations 22-2.5-101. Definitions.

AS USED IN THIS ARTICLE 2.5, UNLESS THE CONTEXT OTHERWISE REQUIRES:

(1) "PARENT" MEANS A BIOLOGICAL OR ADOPTIVE PARENT, LEGAL GUARDIAN, OR ANY PERSON HAVING LEGAL OR PHYSICAL CUSTODY OF A CHILD.

(2) "PARTICIPATING SCHOOL" MEANS A SCHOOL THAT ENROLLS A STUDENT WHOSE EDUCATION-RELATED EXPENSES ARE PAID, IN WHOLE OR IN PART, BY A SCHOLARSHIP GRANTING ORGANIZATION.

"SCHOLARSHIP GRANTING ORGANIZATION" MEANS AN ORGANIZATION THAT USES PUBLIC FUNDING OR TAX-FAVORED FUNDING TO DISTRIBUTE SCHOLARSHIPS FOR A STUDENT'S EDUCATION-RELATED EXPENSES.

(4) "SCHOOL" MEANS A PUBLIC OR NONPUBLIC SCHOOL.

(5) "STATE BOARD" MEANS THE STATE BOARD OF EDUCATION CREATED AND EXISTING PURSUANT TO SECTION 1 OF ARTICLE IX OF THE STATE CONSTITUTION.

(6) "TAX-FAVORED FUNDING" MEANS ANY MECHANISM, INCLUDING A PROGRAM, ACCOUNT, CREDIT, DEDUCTION, DEFERRAL, OR OTHER ARRANGEMENT CONTRIBUTION, DISTRIBUTION, OR EXPENDITURE WAS USED TO PAY FOR OR REIMBURSE EDUCATION-RELATED EXPENSES, THAT RESULTS IN A TAX BENEFIT FOR THE DONOR, CONTRIBUTOR, STUDENT, STUDENT'S PARENT, OR OTHER TAXPAYER.

UNDER FEDERAL TAX LAW, UNDER WHICH A 22-2.5-102. State opt-in requirements for federal program.

IF THE STATE VOLUNTARILY ELECTS TO PARTICIPATE IN THE FEDERAL PROGRAM THAT ALLOWS TAX-FAVORED FUNDING FOR A CONTRIBUTION TO A SCHOLARSHIP GRANTING ORGANIZATION PURSUANT TO THE FEDERAL "H.R. 1 OF THE 119TH CONGRESS (2025-2026), PUB.L.

119-21", AND ITS IMPLEMENTING REGULATIONS AND GUIDANCE, THEN THE STATE SHALL INCLUDE ALL SCHOLARSHIP GRANTING ORGANIZATIONS THAT SATISFY THE REQUIREMENTS OF THE FEDERAL "H.R. 1 OF THE 119TH CONGRESS (2025-2026), PUB.L. 119-21", AND ITS IMPLEMENTING REGULATIONS AND GUIDANCE, IN THE LIST OF SCHOLARSHIP GRANTING ORGANIZATIONS THAT IT PROVIDES TO THE SECRETARY OF THE TREASURY.

22-2.5-103. Nondiscrimination.

(1) (a) A PARTICIPATING SCHOOL SHALL NOT DISCRIMINATE ON THE BASIS OF ANY STUDENT'S, STUDENT'S PARENT'S, OR STUDENT'S FAMILY MEMBER'S DISABILITY, SPECIAL EDUCATION STATUS, RACE, ETHNICITY, RELIGION, CREED, COLOR, SEX, SEXUAL ORIENTATION, GENDER IDENTITY, GENDER EXPRESSION, FAMILY COMPOSITION, AGE, NATIONAL ORIGIN, ANCESTRY, LANGUAGE PROFICIENCY, OR SOCIOECONOMIC STATUS.

(b) THE PROHIBITION DESCRIBED IN THIS SUBSECTION (1) APPLIES TO ALL CONDUCT BY A PARTICIPATING SCHOOL, INCLUDING ADMISSIONS, ENROLLMENT, ACADEMIC PERFORMANCE, ACCESS TO OR PARTICIPATION IN EDUCATIONAL SERVICES, AND RETENTION.

(2) A PARTICIPATING SCHOOL SHALL PUBLISH THE PROHIBITION DESCRIBED IN SUBSECTION (1) OF THIS SECTION ON ITS PUBLIC-FACING WEBSITE, ON ITS APPLICATION FOR ENROLLMENT, AND IN ANY ENROLLMENT MATERIALS.

(3) (a) FOR ANY STUDENT, A PARTICIPATING SCHOOL SHALL COMPLY WITH STATE AND FEDERAL LAWS CONCERNING STUDENTS WITH DISABILITIES, INCLUDING:

(I) SECTION 504 OF THE FEDERAL "REHABILITATION ACT OF 1973", 29 U.S.C. SEC. 701 ET SEQ., AS AMENDED, AND ITS IMPLEMENTING REGULATIONS;

(II) TITLE II OF THE FEDERAL "AMERICANS WITH DISABILITIES ACT OF 1990", AS AMENDED, AND ITS IMPLEMENTING REGULATIONS;

(III) THE FEDERAL "INDIVIDUALS WITH DISABILITIES EDUCATION ACT", 20 U.S.C. SEC. 1400 ET SEQ., AS AMENDED, AND ITS IMPLEMENTING REGULATIONS; AND (IV) THE "EXCEPTIONAL CHILDREN'S EDUCATIONAL ACT", ARTICLE 20 OF THIS TITLE 22.

(b) A PARTICIPATING SCHOOL SHALL NOT CHARGE ADDITIONAL TUITION OR FEES TO A STUDENT WHO REQUIRES ACCOMMODATIONS OR SERVICES PURSUANT TO SUBSECTION (3)(a) OF THIS SECTION.

(4) NOTWITHSTANDING A REQUIREMENT IN SUBSECTION (1) OR (3) OF THIS SECTION, THIS SECTION DOES NOT PROHIBIT A PARTICIPATING SCHOOL THAT IS A NONPUBLIC SCHOOL FROM:

(a) MAINTAINING ITS RELIGIOUS MISSION, CHARACTER, GOVERNANCE, OR INSTRUCTIONAL PHILOSOPHY, OR FROM MAKING EMPLOYMENT PROTECTIONS; OR DECISIONS CONSISTENT WITH CONSTITUTIONAL

(b) OFFERING RELIGIOUS INSTRUCTION OR WORSHIP.

22-2.5-104. Oversight.

(1) IF A PARTICIPATING SCHOOL VIOLATES A REQUIREMENT OF THIS ARTICLE 2.5:

(a) AN INJURED PARTY, OR A SCHOLARSHIP GRANTING ORGANIZATION THAT DISTRIBUTED MONEY TO THE SCHOOL, MAY FILE AN ACTION IN A COURT OF COMPETENT JURISDICTION SEEKING INJUNCTIVE RELIEF THAT COMPELS THE SCHOOL TO COMPLY WITH THIS ARTICLE 2.5;

AND

(b) THE STATE BOARD, UPON FINDING THAT THE PARTICIPATING SCHOOL VIOLATED A REQUIREMENT OF THIS ARTICLE 2.5, MAY SUSPEND THE SCHOOL'S ELIGIBILITY TO RECEIVE MONEY FOR A STUDENT WHOSE EDUCATION-RELATED EXPENSES ARE PAID, IN WHOLE OR IN PART, BY A SCHOLARSHIP GRANTING ORGANIZATION, FOR A PERIOD NOT TO EXCEED FIVE YEARS.

SECTION 2. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 12, 2026, if adjournment sine die is on May 13, 2026); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.