Indiana HB 1003 Overview

Overview

HB 1003 establishes a new school voucher program, expands Indiana’s preexisting tax credit scholarship program and institutes a tax deduction for families with children homeschooled or already enrolled in private school.

Establishment of Indiana’s New School Scholarship Program

Description

Any child who attended a public school for the preceding two semesters and who does not come from a family whose income exceeds 150% of the federal free-and-reduced-price lunch program is eligible to receive a scholarship to attend any approved and/or accredited private school.

Student Eligibility

Children in 1st- 12th grade who attended a public school for the preceding two semesters and who are from families earning 150% of the federal free-and-reduced price lunch program, which is $61,190 for a family of four.
By the end of the third year, approximately 60% of the state’s entire student enrollment, or 600,000, will be eligible to receive a voucher. In the first year, however, the program is capped at 7,500 children. In the second year, it is capped at 15,000.

Scholarship value

Children who qualify for the federal free-and-reduced price lunch program will be eligible to receive a voucher worth up to 90% of the state tuition amount for the sending school district. Children from families earning up to 150% of the federal free-and-reduced price lunch program will be eligible for a voucher worth up to 50%.
The maximum scholarship for a child enrolled in 1-8 is $4,500.
A family is allowed to supplement the voucher.
There is no overall financial cap on the program.

Regulations on the program

Non-public schools that voluntarily agree to participate must be accredited by either the state board or a national or regional accrediting agency that is recognized by the state board.
Non-public schools must administer the state test, ISTEP, and submit testing data to the Department of Education so that they, like all public schools in the state, can be assigned a letter grade, A-F.
Non-public schools are allowed to utilize their own admissions standards for students but can’t discriminate on the basis of race, color or national origin.
Non-public schools must hold a lottery if oversubscribed.
Accredited Non-public schools already have a number of regulations that they adhere to regarding the keeping of documents and various instructional requirements; these requirements would now extend to non-state accredited Non-public schools that participate in the program.

Expansion of Indiana’s Tax Credit Scholarship Program

Description

In 2009 Indiana passed a school scholarship tax credit program that allowed individuals and corporations to claim a 50% tax credit for contributions to approved scholarship granting organizations that distribute scholarships to children from families who earn up to 200% of the Federal free-and-reduced-price lunch program. The program serves entering kindergartners and children in grades 1-12 HB 1003 expands the total amount of the tax credits available from $2.5 million to $5 million and makes changes that allow scholarship granting organizations to serve two or more private schools.

Establishment of Indiana’s New Tax Deduction Program

Description

Any taxpayer who has a child already enrolled in a private school or who is homeschooled will be eligible to claim a $1,000 tax deduction per child for approved educational expenses including private school tuition, textbooks, fees, software, tutoring and supplies.