Establishing the Iowa hope scholarship program and making appropriations

This bill establishes the Iowa hope scholarship program for the school years commencing on or after July 1, 2023. The program provides hope scholarships to eligible students for qualifying educational expenses. The bill phases in eligibility for the program based on grade eligibility and whether the child was enrolled in an accredited nonpublic school in the base year, as defined in the bill. The Iowa hope scholarship program shall be administered by the department of management. The bill establishes powers and duties of the department relating to the administration and oversight of the program, including the adoption of administrative rules. The bill requires that applications for the program for the school year beginning July 1, 2023, be available for submission no later than October 15, 2022. The department shall approve an application for a scholarship if a parent submits an application for a scholarship in accordance with the rules adopted by the department that includes an agreement with the department, promising to provide an education for the eligible recipient through enrollment in an accredited nonpublic school or instruction that meets the requirements of Code chapter 299A. The bill establishes a hope scholarship program fund under the control of the department of management. For each fiscal year beginning on or after July 1, 2023, there is appropriated from the general fund of the state to the hope scholarship fund an amount necessary to pay all hope scholarships approved for that fiscal year and the costs to administer the program as provided in the bill.4 percent of the regular program state cost per pupil and the statewide average foundation property tax per pupil; (2) the total teacher salary supplement district cost per pupil for the student’s district of residence; (3) the total professional development supplement district cost per pupil for the student’s district of residence; (4) the total early intervention supplement district cost per pupil for the student’s district of residence; (5) the total area education agency teacher salary supplement district cost per pupil for the student’s district of residence; (6) the total area education agency professional development supplement district cost per pupil for the student’s district of residence; and (7) the total teacher leadership supplement district cost per pupil for the student’s district of residence. The bill specifies the allowable uses for hope scholarship funds. A hope scholarship program expense fund is created under the control of the department of management. An amount not to exceed percent of the annual appropriation to the hope scholarship program fund shall be transferred to the hope scholarship program expense fund to cover the annual administrative costs of the hope scholarship program and the cost of surety bonds for education service providers receiving more than $100,000 annually in hope scholarship funds. Under the bill, funds deposited in a participating student’s hope scholarship account do not constitute taxable income to the parent or the participating student. The department shall continue to make deposits into a participating student’s hope scholarship account unless specified eligibility conditions have occurred or the student’s parent fails to renew the scholarship. A parent must renew a participating student’s hope scholarship on an annual basis. The bill requires the department to maintain an updated list of participating education service providers and shall ensure that the list is publicly available, and provide parents with a written explanation of the allowable uses of hope scholarship funds. The department may contract with private organizations to administer the hope scholarship program, including but not limited to private financial management firms to manage scholarship accounts. The department shall implement or contract with a private organization to implement a commercially viable, cost-effective, and parent-friendly system for payment for services from hope scholarship accounts and a system for publicly rating, reviewing, and sharing information about participating education service providers. The bill also requires the department to establish rules for the auditing of the program and requirements for participating education service providers.