SB 1401 Summary: Oklahoma Education Empowerment Scholarship Act

• Creates the Oklahoma Education Empowerment Scholarship Savings Program administered by the Office of the State Treasurer, providing scholarship savings cards for qualified students to use for approved educational expenses including online curriculum, private school tuition, tutoring, college entrance exams, and co-curricular activities.

• Qualified students include pre-kindergarten through grade 12 eligible residents who have attended 100+ days in public school the prior year or are children of active military; parents must sign agreements committing to use funds only for qualified expenses and not enroll in resident districts without reimbursing the state.

• Distributes 80% of state funding (excluding local property tax and federal funds) that would have gone to the resident district to the scholarship program; remaining 20% goes to the district for local use; unused funds roll over annually or transfer to Oklahoma College Savings Plan accounts upon graduation.

• Requires annual card renewal; removes participants who fail compliance; allows up to 3% administrative fee retention by the State Treasurer; monies received are exempt from state income taxation as of tax year 2016.

• Amends Oklahoma income tax code to exclude scholarship program funds from taxable income and modifies various tax provisions regarding adjusted gross income calculations and deductions.