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AB 441

Revises provisions governing the Nevada Educational Choice Scholarship Program. (BDR 32-6)

2025 Regular Session Introduced by Daniele Monroe-Moreno

AB 441 tightens and centralizes how Nevada Educational Choice tax credits are approved and spent, prioritizing returning and sibling students but risking clawbacks if SGOs don’t fu

Vetoed by the Governor.
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Bill Summary · AB 441

AB 441 — Nevada Educational Choice Scholarship Program (2025) — Summary

Status: Enrolled and delivered to Governor; vetoed by the Governor (June 10, 2025)
Introduced: February 6, 2025
Sponsor: Assemblymember Daniele Monroe‑Moreno
Fiscal effect: Effect on State — Yes; Effect on Local Government — No

Purpose / Intent

AB 441 revises administrative rules for the Nevada Educational Choice Scholarship Program, which awards payroll tax credits to taxpayers who donate to Scholarship Granting Organizations (SGOs). The bill seeks to (1) change how and when SGOs apply for and receive approval of credits, (2) prioritize distribution of available credits to support returning and sibling students, (3) impose timing and corporate‑form requirements on SGOs, and (4) require repayment of credits tied to donations that are not spent within a specified window.

Key provisions

  • Fixed annual application window: SGOs must submit applications to the Department of Taxation for approval of payroll tax credits between May 1 and June 1 each year; the Department must review and notify SGOs on or before July 1.
  • Application content: SGOs must report the number of pupils applying for grants for the upcoming school year, broken out as (a) pupils who received grants in the immediately preceding year, (b) siblings of those pupils, and (c) other new applicants; and the total funds needed by category.
  • Prioritization of credits: If available credits are insufficient, the Department must approve credits in this order:
    1. Pupils who applied and received a grant in the immediately preceding year;
    2. Siblings of those pupils who newly applied;
    3. Other new applicants. If a category cannot be fully funded, credits are allocated pro rata across SGOs based on the number of pupils in that category.
  • Spending deadline and repayment: SGOs must expend the full amount of any donation for which a payroll tax credit was approved within a set period after approval. The enrolled version set this period at 24 months (earlier drafts used 18 months). Any unexpended amount triggers repayment to the Department equal to the unspent portion (effectively subjecting the tax credit to clawback).
  • Corporate form requirement: SGOs must be domestic nonprofit corporations organized under Nevada law.
  • Interaction with existing caps and carryforwards: The bill operates within existing statutory caps on total credits (existing NRS provisions referenced), including multi‑year carryforward/legacy credit pools.

Who is affected

  • Scholarship Granting Organizations (SGOs): new incorporation and spending/timing requirements, added reporting and administrative tasks, and potential repayment obligations.
  • Taxpayers/donors claiming payroll tax credits: timing and availability of credits may change; approvals centralized within an annual window.
  • Scholarship recipients (students and families): intended benefit is priority for returning students and siblings; possible risk to continuity if an SGO must repay or cannot meet mid‑year payments.
  • Department of Taxation: new annual review workload and priority allocation responsibilities.
  • State budget/administration: potential fiscal and administrative impacts (bill flagged as having a state effect).

Procedural / timeline notes

  • Original concept (as introduced) included an 18‑month spending deadline; subsequent amendments and reprints moved the deadline to 24 months in the enrolled version.
  • The bill replaced the prior rolling application process with a single annual application window (May 1–June 1; decisions by July 1).
  • AB 441 passed both chambers (with amendments and reprints). It was enrolled and transmitted to the Governor (May 29, 2025) and vetoed (June 10, 2025).

Stakeholder response / concerns

Multiple scholarship organizations and education‑choice advocacy groups submitted opposition letters and testimony, raising concerns that:
- The required spending window (18 → 24 months) and clawback risk would force SGOs to hasten expenditures, threaten multi‑year scholarship continuity, and destabilize planning;
- The corporate‑form and reporting requirements would add administrative burdens and could deter SGO participation;
- Donor uncertainty about tax credit eligibility and potential retroactive repayment could reduce donations and therefore scholarship availability for low‑income students.

(No Governor veto message was included in the materials provided; the summary does not speculate about veto rationale.)

Compiled from official sources — confirm details with the bill’s official record.

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