The bill enacts a new section, R.S. 47:6302, which establishes an income tax credit for donations made by taxpayers to public schools that have received a letter grade of "D" or "F" under the Louisiana School and District Accountability System. The credit is set at 95% of the donation amount and is intended to support various educational initiatives, including the purchase of instructional materials, the establishment of tutorial programs, and the maintenance of school-based health clinics. To qualify for the credit, taxpayers must file a Louisiana income tax return and the donations must be used for specific authorized purposes. Public schools are required to issue standardized receipts for donations, which must include details about the donation and its intended use.

Additionally, the bill imposes a cap of one million dollars on the total amount of credits granted per calendar year, with a first-come, first-serve issuance process. Taxpayers must apply for the credit electronically, providing necessary documentation, including the receipt from the public school. The provisions of this act will apply to taxable periods beginning on or after January 1, 2026, and no credits will be earned for taxable periods starting on or after January 1, 2028. The act is set to become effective on January 1, 2026.