Department of Finance and Administration
Legislative Impact Statement
Bill: HB1516 Amendment Number: S1
Bill Subtitle: TO ALLOW A PUBLIC SCHOOL DISTRICT TO PARTNER WITH A BUSINESS TO
ALLOW FOR THE PROVISION OF A SUBJECT-MATTER EXPERT; AND TO CREATE AN INCOME
TAX CREDIT FOR BUSINESSES THAT LOAN SUBJECT-MATTER EXPERTS TO PUBLIC
SCHOOL DISTRICTS.
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Basic Change :
Sponsors: Reps. Lundstrum, Bentley, J. Richardson, Long, and Vaught; Sen. English
Senate Amendment No. 1 --- HB1516-S1 places an annual cap of $250,000 on the amount of income
tax credits that may be issued. The amendment also provides that the instruction provided by the
subject-matter expert would be provided in public high schools.
House Amendment No. 1 --- HB1516-H1 (engrossed H3/15/23) limits the amount of tax credits that
may be issued to $2,000,000 per calendar year. HB1516-H1 provides that the Tax Credits and Special
Refunds Section of the Department of Finance and Administration (DFA) shall award the tax credits on
a first-come, first-served basis. HB1516-H1 also provides that DFA may file a written request with
Legislative Council or the Joint Budget Committee for an increase in the total amount of state income
tax credits to be awarded.
Original Bill --- HB1516 creates a new income tax credit for a business that contracts with an
individual school district to provide a "subject-matter expert" (SME) to supplement the public-school
curricula with targeted training or instruction. A "subject-matter expert" is defined as an individual who
has demonstrated expertise and professional experience in the designated industry in which the
individual intends to provide targeted classroom supplemental training or instruction.
HB1516 requires each business in the program to enter into a memorandum of understanding with the
school district that will identify:
How the school district can verify the credentials of a subject-matter expert including resumes,
relevant industry experience, and industry certifications;
The time in which the subject-matter expert will provide the supplemental training and instruction;
and
The method of tracking the amount of time that the subject-matter expert spends providing the
supplemental training and instruction.
A public school district entering into a memorandum of understanding under HB1516 will obtain the
results of:
A child maltreatment registry check from the Department of Human Services for each
subject-matter expert; and
If the subject-matter expert is left unsupervised with public school students, a statewide and
nationwide criminal background check.
HB1516 provides an income tax credit to the employer of the subject-matter expert that is based on the
number of hours that the subject-matter expert provides the supplemental training and instruction to
the public-school students multiplied by the subject matter expert's hourly "value" or $50 per hour,
whichever is less. The credit is non-refundable.
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Department of Finance and Administration
Legislative Impact Statement
Bill: HB1516 Amendment Number: S1
Bill Subtitle: TO ALLOW A PUBLIC SCHOOL DISTRICT TO PARTNER WITH A BUSINESS TO
ALLOW FOR THE PROVISION OF A SUBJECT-MATTER EXPERT; AND TO CREATE AN INCOME
TAX CREDIT FOR BUSINESSES THAT LOAN SUBJECT-MATTER EXPERTS TO PUBLIC
SCHOOL DISTRICTS.
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This tax credit is limited to:
No more than $10,000 per subject-matter expert; and
No more than $20,000 per employer.
HB1516 is effective for tax years beginning on or after January 1, 2024.
Revenue Impact :
FY2025 – Up to $250,000 General Revenue Reduction
Taxpayer Impact :
A participating business that enters into a memorandum of understanding to loan a SME to a public
school district to provide targeted classroom supplemental training or instruction will be eligible to
receive a nonrefundable tax credit not to exceed $10,000 per SME and $20,000 per business in a tax
year. Records must be maintained for six years to support the tax credit claim.
Resources Required :
Computer programs, tax forms, and instructions would need to be created. Arkansas Integrated
Revenue System (AIRS) programming costs estimates to program a new income tax credit is
estimated at $16,000.
Time Required :
Adequate time is provided for implementation.
Procedural Changes :
Income Tax Rules will be updated and instructions published. Department employees and the tax
community will need to be educated.
Other Comments :
HB1516 would benefit from procedures for how a taxpayer would be issued the tax credit. The bill does
not state which department is responsible for developing forms and instructions or who the taxpayer
should communicate with to get the credit established. Each school is responsible for recording and
verifying the number of hours a subject-matter expert spends in the classroom.
Legal Analysis :
None.
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4/5/2023 8:40 AM 2
Department of Finance and Administration
Legislative Impact Statement
Bill: HB1516 Amendment Number: S1
Bill Subtitle: TO ALLOW A PUBLIC SCHOOL DISTRICT TO PARTNER WITH A BUSINESS TO
ALLOW FOR THE PROVISION OF A SUBJECT-MATTER EXPERT; AND TO CREATE AN INCOME
TAX CREDIT FOR BUSINESSES THAT LOAN SUBJECT-MATTER EXPERTS TO PUBLIC
SCHOOL DISTRICTS.
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