Establishing an education savings grant program for pupils attending a nonpublic school or receiving competent private instruction, establishing an education savings grant fund, providing an income tax exemption, making appropriations, providing penalties, and including applicability provisions

The parent or guardian of the pupil requesting to receive an education savings grant must submit an application to the department of management indicating that the parent or guardian intends to enroll the pupil in a nonpublic school or provide competent private instruction. The bill requires that by March preceding the school year for which the education savings grant is requested, the department of management must notify the parent or guardian of each pupil approved for the following school year to receive an education savings grant and the amount of the education savings grant for the pupil. Education savings grants must be approved for each school year and applications must be submitted each year. The bill creates an education savings grant fund in the state treasury under the control of the department of management consisting of moneys appropriated to the department of management for the purpose of providing education savings grants. For the fiscal year commencing July 1, 2021, and each succeeding fiscal year, there is appropriated from the general fund of the state to the department of management for deposit in the fund the amount necessary to pay all education savings grants approved for that fiscal year. For each pupil approved for an education savings grant, the department of management must establish an account for that pupil in the education savings grant fund. The amount of the pupil’s education savings grant is deposited into the pupil’s account on July and such amount is available for use by parents and guardians for the payment of qualified educational expenses, as defined in the bill, incurred by the parent or guardian for the pupil during that fiscal year. Upon written request of the parent or guardian, the amount of the pupil’s education savings grant shall be deposited into the pupil’s account and be made available as soon as practicable after the notice of receipt of the grant is given to the parent or guardian if qualified educational expenses for the pupil for the applicable school year are due prior to July of the school year. The bill authorizes the department of management to contract with a private financial management firm to manage the education savings grant fund, in collaboration with the treasurer of state, including providing for the disbursement of education savings grants in the form of an electronic debit card or checks that are payable directly from the pupil’s account within the fund. The bill provides that moneys remaining in a pupil’s account upon the conclusion of the fiscal year shall remain in the pupil’s account in the education savings grant fund for the payment of qualified educational expenses in future fiscal years during which the pupil participates in the program or for qualified higher education expenses as authorized in the bill. Under the bill, for each pupil with a positive balance in the pupil’s account in the education savings grant fund upon graduation from high school or completion of an equivalent level of competent private instruction under Code chapter 299A, the department of management is required to maintain the account in the fund until the pupil reaches an age specified in the bill. Until the pupil reaches the age limitation, moneys in the pupil’s account may be used by the pupil for qualified higher education expenses. Moneys in a pupil’s account when the pupil reaches the age limitation are transferred by the department of management for deposit in the general fund of the state. The bill provides that a person who makes a false claim for the purpose of obtaining an education savings grant or who knowingly receives the grant or makes a payment from an account within the education savings grant fund without being legally entitled to do so is guilty of a fraudulent practice and is subject to a criminal penalty. The bill allows the department of management to initiate legal proceedings to recover grants and amounts improperly awarded or paid from accounts under the bill. The bill provides that an education savings grant received by a taxpayer is not taxable income for purposes of state individual income taxation. This provision of the bill applies to tax years beginning on or after January 1, 2021. The section of the bill enacting the education savings grant program applies to school budget years and fiscal years beginning on or after July 1, 2021.