Senate Bill No. 123, introduced by Senator Jackson-Andrews, proposes the enactment of R.S. 47:6302, which establishes an income tax credit for donations made by taxpayers to public schools that receive a letter grade of "D" or "F" under the Louisiana School and District Accountability System. The bill specifies that the credit will amount to 95% of the donation made during a taxable year, and it outlines that the donations must be utilized for specific purposes, including purchasing instructional materials, establishing tutorial programs, and maintaining school-based health clinics. To qualify for the credit, the taxpayer must be required to file a Louisiana income tax return.

Additionally, the bill mandates that public schools provide a standardized receipt for donations, which must include the donation amount and the school's letter grade, along with a certification that the funds will be used for the authorized purposes. The governing authority of the school must also submit an annual report to the Department of Revenue and the Department of Education detailing the donations received. The total amount of credits granted under this program is capped at $10 million per calendar year, and the Department of Revenue will issue credits on a first-come, first-served basis. The provisions of this act will take effect on January 1, 2026, and will apply to donations made for the 2025-2026 school year and thereafter, with no credits available for taxable periods beginning on or after January 1, 2028.