Nevada committee hears bill to tighten administration of education choice scholarships

At a committee hearing in Carson City, the Nevada Senate Committee on Revenue and Economic Development heard Assembly Bill 441, which would revise administration of the Nevada Educational Choice Scholarship Program by requiring scholarship organizations to be Nevada-based nonprofit corporations, submit applicant counts to the Department of Taxation, and spend donated funds within a set time frame or return unused amounts.

Assemblywoman Danielle Monroe Moreno, the bill sponsor, told the committee the measure responds to an interim finance committee hearing where a single out-of-state organization received most available tax credits and left Nevada-based scholarship groups without funds. “I made a commitment to those other vendors that were at that meeting that I would make sure that there was a bill to try to correct some of the problems that we have with the current system,” Monroe Moreno said.

Amanda Morgan, executive director of Educate Nevada, summarized the bill’s main provisions. Under the draft: scholarship organizations would submit applications for tax-credit approval between May 1 and June 1; applications must list three categories of applicants (current recipients, siblings of current recipients and other applicants) and the total money needed to fund each category; the Department of Taxation would notify organizations by July 1 whether their applications are approved; credits would be allocated first to continuing recipients, then to siblings, then to others, and prorated within a category if funds are insufficient; and scholarship organizations must expend donated funds within a specified period (originally 18 months, amended in committee to 24 months) or repay the unused portion to the Department of Taxation. Section 2.5 would require scholarship organizations to be domestic nonprofit corporations organized under chapter 82 of the Nevada Revised Statutes.

Supporters said the bill would protect Nevada families and ensure donated funds are used in a timely way. Wesley Harper, director of government affairs for the City of North Las Vegas, said the city supports the bill because it benefits city residents.

Opponents — including scholarship organizations, parent advocates and some students who testified — said the bill would create new burdens and unintended consequences. Maurice Washington, testifying for Americans for Prosperity, argued that time limits and other restrictions could reduce flexibility for families and discourage donors. “It removes that flexibility by ... putting a timeline on it for 18 months,” Washington said, adding the change could “put an onus on those organizations and those donors.”

Representatives of scholarship organizations and parent-advocacy groups said many SGOs (scholarship-granting organizations) operate with small staffs and maintain reserves to guarantee multi-year commitments to students. Kim Dyson, representing AAA Scholarship Foundation, said the bill would limit SGOs’ ability to maintain restricted emergency scholarship reserves and could require SGOs to repay amounts they cannot verify were claimed as tax credits by donors. Erin Phillips of Power to Parent said the proposal “undermines the ability of SGOs to responsibly budget for a student full K-12 education” and warned it could “break trust with families who made a life changing decision based on the promises of multiyear support.”

Several witnesses described equity concerns and administrative burdens. Anahit Baghshatsyan of Nevada Policy recommended a longer timeline tied to Nevada’s biennial budgeting cycle, saying 30 months would better align with state budgets. Gabriela Escudero and other parents and students said the program has provided tangible academic benefits and warned that additional reporting and timing rules could make scholarships harder to sustain for low-income families.

The committee did not take a formal vote on AB 441 during the hearing. The sponsor said she would consider legal questions and stakeholder feedback raised in testimony and urged lawmakers to focus on keeping program promises for Nevada students.