How states opt in to ECCA: the governor certification process

TL;DR

• A state participates in ECCA when its governor submits a list of qualifying Scholarship Granting Organizations to the U.S. Treasury by January 1 each participating year.
• States can opt in via an executive action by the governor, a legislative bill, or a combination. The mechanism varies by state but the federal trigger is always the governor’s annual Treasury submission.
• Participation is annual: a state can opt in (or out) each year. A veto in one year doesn’t permanently foreclose future participation.
• If a state doesn’t opt in, families there cannot access ECCA scholarships — even though donors in that state can still claim the federal credit by giving to an SGO in a participating state.
• Citizen advocacy meaningfully influences the decision. Governors face political pressure from both directions; constituent voice counts.

The opt-in mechanism

The Federal Scholarship Tax Credit (FSTC) — also known as the Educational Choice for Children Act (ECCA) and codified at IRC §25F — is a federal program that requires state action to deliver benefits to families in any given state. The federal trigger is narrow but specific: each year, by January 1, a participating state’s governor (or another state-designated authority) must submit to the U.S. Treasury a list of Scholarship Granting Organizations (SGOs) operating in that state that meet ECCA’s federal requirements.

Without that submission, no SGOs in the state are designated, no donations from federal taxpayers (whether residents or not) flow into scholarships for the state’s students, and ECCA effectively does not operate in that state for the year.

Two paths: executive vs. legislative

The executive path

In some states, the governor acts unilaterally (or with support from existing state agencies) to opt in. They certify a process for designating SGOs, identify qualifying organizations, and submit the list to Treasury. No new state law is required — ECCA is a federal program, and the governor’s role is to act as the state’s federal counterparty.

The legislative path

In other states, the legislature passes a bill that establishes a state-level framework for ECCA participation: how SGOs apply for designation, what additional state oversight applies, how the state will report on outcomes. The governor then signs or vetoes the bill.

Both paths can lead to participation. They can also collide: in several states, legislatures have passed opt-in bills that governors have vetoed, leaving the state in a pending or contested status.

What the governor certifies

When a governor submits the state’s annual SGO list, they are certifying that the listed organizations meet ECCA’s federal requirements:

• Tax-exempt nonprofit status
• Compliance with the 10% administrative cap (90% of donations to scholarships)
• Eligibility-verification processes
• Anti-earmarking rules (donors can’t designate specific recipients)
• Any state-specific oversight or reporting requirements

States have meaningful discretion in how they certify SGOs. Some states do a light-touch federal pass-through; others add nondiscrimination provisions, academic-outcome reporting, and other oversight.

The annual cycle

1. Throughout the year: SGOs operate, raise funds, and award scholarships. State authorities monitor compliance.
2. Fall: The governor’s office (or designated state agency) reviews the SGOs that intend to participate the following year, conducting whatever certification process the state has established.
3. By January 1: The governor submits the next year’s list to the U.S. Treasury. States that miss the deadline are not participating that year.
4. January through December: Donations to listed SGOs qualify for the federal tax credit.

Vetoes and overrides

Several governors have vetoed legislative opt-in bills. The consequences depend on what happens next:

• Veto stands: The bill dies. The state does not participate unless the governor changes their mind or the legislature acts again.
• Veto overridden: Most states require a supermajority to override (typically two-thirds in each chamber). When that happens, the state participates regardless of the governor’s objection.
• Reversal in a future year: A governor who vetoed one year may submit an SGO list the next, particularly if political conditions or federal regulations change.

What happens if a state doesn’t opt in

Several practical consequences follow:

• Families in the state can’t access ECCA scholarships. No designated SGOs means no federal scholarship funding for K–12 students in the state.
• Donors in the state can still claim the federal credit by giving to SGOs in opted-in states. Their donations fund students elsewhere.
• The state forfeits federal funding that would otherwise have flowed to its families — without affecting state-budget priorities, since ECCA is purely federal.
• The state can revisit the decision in any subsequent year.

How citizens can advocate

The decision is political. Citizens can influence it:

• Contact the governor’s office directly. Phone calls and emails are tracked; they signal constituent priority.
• Engage state legislators. They can introduce or advance opt-in legislation, override vetoes, and apply political pressure.
• Public testimony at hearings. Personal stories from parents, teachers, and students carry weight in legislative decisions.
• Op-eds and letters to the editor. Local media shapes how governors perceive constituent sentiment.
• Coordinated advocacy. Education-choice organizations, parent groups, religious institutions, and community groups can amplify individual voices.

Want to see your state’s status and your governor’s position? Visit the state-by-state status map.

Frequently asked questions