Relating to education by modifying the duties and authority of certain state and local governmental entities, establishing an education savings grant program and fund, making appropriations, providing penalties, and including effective date and applicability provisions

Division I of the bill also amends and repeals other chapters of the Code relating to education to transition the duties and authority of the department of education, the director of the department of education, and the state board of education to other specified local and state governmental entities beginning July 1, 2020. Division I of the bill takes effect July 1, 2020. Division II of the bill provides that additional legislation is required to fully implement Division I of the bill and requires the director of the department of education to prepare draft legislation for submission to the legislative services agency, as necessary, to implement the transition and elimination of authority and duties under Division I of the bill and to implement the transition and elimination of authority and duties under other provisions of law including but not limited to the duties and authority of the department of education, the state board of education, the director of the department of education, and any division, commission, or subunit of such entities or offices under specified Code chapters. Division III of the bill provides that beginning July 1, 2020, the authority and duties of the department of education, the state board of education, and the director of the department of education under Code chapter 257 are transferred to the department of management and the director of the department of management. The bill also provides that moneys remaining in any account or fund under the control of the department of education at the conclusion of the fiscal year beginning July 1, 2019, relative to the provisions of Code chapter 257 are transferred to the control of the department of management for such purposes. The bill provides that any contract entered into by the department of education relating to the provisions of Code chapter 257 in effect at the conclusion of the fiscal year beginning July 1, 2019, shall continue in full force and effect pending transfer of such contracts to the department of management. The bill also provides for the continuation of any rule, regulation, form, order, or directive promulgated by the department of education until amended, repealed, or supplemented by affirmative action of the department of management. Division III of the bill provides education savings grants for pupils attending a nonpublic school, receiving competent private instruction, or receiving private preschool instruction and establishes an education savings grant fund. Under Division III of the bill, pupils eligible to enroll in grades kindergarten through 12 or eligible to participate in a preschool program under Code chapter 256C and attending a nonpublic school, receiving competent private instruction under Code chapter 299A, or receiving private preschool instruction are eligible to receive an education savings grant for school years beginning on or after July 1, 2020. By January 31 preceding the school year for which the education savings grant is requested, the parent or guardian of the pupil requesting to receive an education savings grant must submit an application to the department of management. Division III of the bill requires that by March 1 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 designated to receive an education savings grant and the amount of the education savings grant. Education savings grants may only be approved for one school year and annual applications must be submitted for education savings grants in subsequent school years. The amount of each education savings grant is equal to the statewide average regular program state foundation aid per pupil in the same school year or in the case of a preschool eligible pupil an amount equal to 50 percent of the regular program state cost per pupil. Division III of 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 for the purpose of providing education savings grants. For the fiscal year commencing July 1, 2020, 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 1 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. Division III of 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. Division III of 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 within the education savings grant fund for the payment of qualified educational expenses in future fiscal years or for higher education costs as authorized in the bill. Under the division, 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 is 25 years old.1. Moneys in a pupil’s account when the pupil turns 25 years old are transferred by the department of management for deposit in the general fund of the state. Division III of 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. Division III of 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, 2020.1A takes effect July 1, 2020. Division III of the bill applies to school budget years and fiscal years beginning on or after July 1, 2020.1A and to implement the transition and elimination of authority and duties under other provisions of law.