(1) ADMINISTRATIVE ACCOUNTABILITY STANDARDS. All scholarship granting organizations shall do all of the following:
a. Notify the Department of Revenue of their intent to provide educational scholarships to eligible students.
b. Demonstrate to the Department of Revenue that they have been granted exemption from the federal income tax as an organization described in Section 501(c)(3) of the Internal Revenue Code, as in effect from time to time.
c. Distribute periodic educational scholarship payments as checks made out and mailed to or directly deposited with the school where the student is enrolled.
d. Provide a Department of Revenue approved receipt to taxpayers for contributions made to the scholarship granting organization.
e. Ensure that all determinations with respect to the eligibility of a student to receive an educational scholarship shall be made by the scholarship granting organization. A scholarship granting organization shall not delegate any responsibility for determining the eligibility of a student for an educational scholarship or any other requirements it is subject to under this chapter to any qualifying school or an entity affiliated therewith.
f. Verify that a student who is receiving an educational scholarship as an eligible student with unique needs satisfies the qualifications provided in subdivision (6) of Section 16-6D-4, before the first day of every other instructional year for which the student receives the educational scholarship.
g. Ensure that at least 95 percent of their revenue from donations is expended on educational scholarships, and that all revenue from interest or investments is expended on educational scholarships. A scholarship granting organization may expend up to five percent of its revenue from donations on administrative and operating expenses in the calendar year of the donation or in any subsequent calendar year.
h. Ensure that scholarship funds on hand at the beginning of a calendar year are expended on educational scholarships within three calendar years. Any scholarship funds on hand at the beginning of a calendar year that are not expended on educational scholarships within three calendar years shall be turned over to and deposited with the State Department of Education for the benefit of its At-Risk Student Program to be distributed to local boards of education on the basis determined by the State Department of Education in furtherance of support to underperforming schools.
i. Ensure that at least 75 percent of first-time recipients of educational scholarships were not continuously enrolled in a private school during the previous academic year. To ensure compliance with this paragraph, the local board of education of the local school system in which an eligible student applying for an educational scholarship resides, upon written request by a parent, shall provide written verification that a particular address is in the attendance zone of a specified public school. The State Department of Education shall provide written verification of enrollment in a priority school under this chapter. With respect to first time educational scholarship recipients, scholarship granting organizations shall give priority to eligible students who are zoned to attend a priority school over eligible students who are not zoned to attend a priority school.
j. Ensure that 25 percent of first-time recipients of educational scholarships are not zoned for a priority school and were not continuously enrolled in a private school during the previous academic year.
k. Cooperate with the Department of Revenue to conduct criminal background checks on all of their employees and board members and exclude from employment or governance any individual who may reasonably pose a risk to the appropriate use of contributed funds.
l. Ensure that educational scholarships are portable during the academic year and can be used at any qualifying school that accepts the eligible student according to the wishes of the parent. If an eligible student transfers to another qualifying school during an academic year, the educational scholarship amount may be prorated.
m. Publicly report to the Department of Revenue by September 1 of each year all of the following information prepared by a certified public accountant regarding their educational scholarships funded in the previous academic year:
1. The name and address of the scholarship granting organization.
2. The total number and total dollar amount of contributions received during the previous academic year.
3. The total number and total dollar amount of educational scholarships awarded and funded during the previous academic year, the total number and total dollar amount of educational scholarships awarded and funded during the previous academic year for students qualifying for the federal free and reduced-price lunch program, and the percentage of first-time recipients of educational scholarships who were enrolled in a public school during the previous academic year.
n. Publicly report to the Department of Revenue, by the 15th day after the close of each calendar quarter, all of the following information about educational scholarships granted during the quarter:
1. The total number of scholarships awarded and funded.
2. The names of the qualifying schools that received funding for educational scholarships, the total amount of funds paid to each qualifying school, and the total number of scholarship recipients enrolled in each qualifying school.
3. The total number of eligible students zoned to attend a priority school who received educational scholarships from the scholarship granting organization.
4. The total number of first time scholarship recipients who were continuously enrolled in a nonpublic school prior to receiving an educational scholarship from that scholarship granting organization.
o. Ensure that educational scholarships are not provided for eligible students to attend a school with paid staff or board members, or relatives thereof, in common with the scholarship granting organization.
p. Ensure that educational scholarships are provided in a manner that does not discriminate based on the gender, race, or disability status of the scholarship applicant or his or her parent.
q. Any scholarship funds unaccounted for on June 30 of each calendar year may be made available to eligible students to defray the costs of attending a qualifying school, whether or not the student is zoned to attend a priority school. Any provision of this section to the contrary notwithstanding, once an eligible student receives an educational scholarship under this program, scholarship funds may be made available to the student for educational scholarships until the student graduates from high school or reaches 19 years of age, regardless of whether the student is zoned to attend a priority school, subject to the income eligibility requirements of paragraph (5)b. of Section 16-6D-4.
r. An eligible student who enrolls in a public school or public school program is considered to have terminated his or her participation in the program. Any remaining scholarship funds shall be paid to the public school system in which the eligible student enrolls.
s. Ensure that no donations are directly made to benefit specifically designated scholarship recipients or to particular qualifying schools.
t. Submit to the Department of Revenue annual verification of the scholarship granting organization’s policies and procedures used to determine scholarship eligibility. The verification shall confirm that the scholarship granting organization, and not one or more qualifying schools accepting educational scholarship recipients or scholarship funds, is determining whether scholarship applicants are eligible to receive educational scholarships. The verification shall also confirm that the scholarship granting organization is giving priority to receive an educational scholarship to eligible students zoned to attend priority schools.
u. Submit to the Department of Revenue annual verification that none of its actions or policies restricts a parent’s educational choice by limiting or prohibiting the enrollment of eligible students in a qualifying school if those eligible students received educational scholarships from other scholarship granting organizations.