SB539 - Arkansas Tax Credit Scholarship Act

• Creates a tax credit scholarship program allowing eligible students to attend nonpublic schools using scholarship funds financed through charitable student support organizations that receive tax-creditable contributions from taxpayers and businesses.

• Establishes eligibility requirements for students based on income (no more than 1.5 times free/reduced lunch threshold), disability status, military family status, foster care status, or participation in the Succeed Scholarship Program; scholarships capped at the state foundation funding amount per student annually.

• Authorizes a 100% state income tax credit for contributions to certified student support organizations, with a $3,000,000 annual cap statewide beginning in tax year 2019; unused credits may be carried forward five years.

• Requires student support organizations to expend or reserve at least 75% of contributions for scholarships and no more than 10% for administrative expenses; mandates annual audits, quarterly reports, and separation of scholarship and operating funds.

• Allows scholarship funds to pay for tuition, textbooks, tutoring, curriculum, assessments, contracted services from public schools (at 1/6 of foundation funding per course), and specialized educational services; permits partial enrollment in public school courses.