Kentucky's House Bill 1 has now been signed into law. So, what does that mean?

House Bill 1 permits Kentuckians to receive a federal tax credit of up to $1,700, or $3,400 for a family, if they donate to a scholarship-granting organization.

That SGO will use the funds to provide private school scholarships for students whose household income is up to 300% of the area's median income.

The federal tax credit is nonrefundable and would be a dollar-for-dollar credit.

What is a Scholarship-granting organization?

It's not run by a private school but instead is a separate nonprofit entity whose primary mission is to provide scholarships for students to a select group of private schools. For example, the Catholic Education Foundation acts similarly to an SGO for Louisville's Catholic school system. Donors give money to that foundation with the intention for it to go to a student who wants to attend a Louisville Catholic school.

For independent schools, like the Louisville Classical Academy, there is not yet an SGO to oversee the funding. Greg Markowitz, head of the academy, said they, along with similar schools, will not benefit from this bill until there is an SGO created.

"So, we're an independent school. That's a huge part of what we want to do. So, if [joining an SGO] means that we would have to compromise on essential values of school, we wouldn't want to do that," said Markowitz. "But we would imagine that, based on how HB 1 was written, there would be a really general one for most private schools."

Didn't voters vote against Amendment 2 back in 2024?

Correct, it was 65% no to 35% yes, to be exact. However, this bill is different because it involves federal tax credits instead of using state taxpayer money, which is what Amendment 2 would have done.

How did this become law?

After Gov. Andy Beshear vetoed the bill, Republicans in both the House and Senate voted to override his veto. The House voted 77-14, and the Senate voted 31-5.

Rep. Jason Nemes of Louisville voted "yes" to overriding the veto.

"Fundamentally, this will bring an unbelievable amount of money to Kentucky. For example, let's say that you live in Russell County, or pick your county. Every person that lives in Russell County who pays more than $1,700 in taxes, the federal government can now put that money in their public school district. That's a beautiful thing. It's a wonderful thing. This is a game changer for so many areas. And so, House Bill 1 is one of the best things we've done in the 10 years that I've been here," said Nemes.

Rep. Rachel Roarx of Louisville voted "no" to the override.

"I voted to not overturn the governor's veto because I do believe that constituents made a very vocal choice, saying that they do not want their tax dollars to go to private schools," said Roarx. "It is important to note that these are federal dollars, not our state tax dollars. So, it can go to both private and public schools in the form of a scholarship tax credit. So, folks can donate to one of these approved organizations, and then there's these scholarship-granting organizations can help out children no matter what type of schooling that they're going to."

"Now, that could be a benefit to a lot of folks. But the question that still remains is what type of scholarship-granting organizations exist, and are they predominantly for private schools? And when you create that imbalance in our state of who could be getting this money, there's just a lot of unknowns still left on the table now," Roarx added.

The bill was signed into law Tuesday night by Secretary of State Michael Adams. It will take effect July 1.