Relating to education savings grants for certain pupils attending an accredited nonpublic school or specified public schools, establishing an education savings grant fund, providing an income tax exemption, making appropriations, providing penalties, and including applicability provisions

By January 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 education. The bill requires that by March preceding the school year for which the education savings grant is requested, the department of education must notify the department of management of the number of pupils in each school district designated for the following school year to receive an education savings grant and the amount of the education savings grant for each pupil. 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.5 percent of the regular program state cost per pupil and the statewide average regular program state foundation property tax per pupil in the same school 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, 2020, and each succeeding fiscal year, the bill appropriates 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 incurred by the parent or guardian for the pupil during that fiscal 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 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, the department of management is required to maintain the account in the fund until the pupil reaches an age specified in the bill.1. 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, 2020. The bill applies to school budget years and fiscal years beginning on or after July 1, 2020.