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

3 is required for each pupil receiving private instruction. The bill requires that by March preceding the school year for which the education scholarship 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 scholarship and the amount of the scholarship for the pupil. Education scholarships must be approved for each school year and applications must be submitted each year. The amount of the education scholarship is equal to the regular program state cost per pupil for the same school budget year. The bill creates an education scholarship 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 scholarships. For the fiscal year commencing July 1, 2022, 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 scholarships approved for that fiscal year. For each pupil approved for an education scholarship, the department of management must establish an account for that pupil in the education scholarship account fund. The amount of the pupil’s education scholarship 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 scholarship shall be deposited into the pupil’s account and be made available as soon as practicable after the notice of receipt of the scholarship 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 scholarship account fund, in collaboration with the treasurer of state, including providing for the disbursement of education scholarships 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 scholarship fund for the payment of qualified educational expenses in future fiscal years during which the pupil participates in the program or for payment to the pupil as authorized in the bill. Under the bill, for each pupil with a positive balance in the pupil’s account upon graduation from high school or completion of an equivalent level of private instruction, the department of management is required to pay such amount to the pupil based on timelines established in the bill. For each pupil who graduates from high school or completes an equivalent level of private instruction while participating in the education scholarship account program prior to the pupil’s seventeenth birthday, the department of management shall deposit in the pupil’s account in the education scholarship fund an amount equal to the regular program state cost per pupil for the applicable school budget year for each full school budget year between the pupil’s date of graduation from high school or completion of an equivalent level of private instruction and the pupil’s eighteenth birthday. If, however, the pupil becomes ineligible for the program prior to graduation or completion of private instruction or fails to graduate or complete private instruction by the pupil’s twentieth birthday, the department of management shall close the pupil’s account and transfer any such remaining amount to the general fund of the state. The bill provides that a person who makes a false claim for the purpose of obtaining an education scholarship or who knowingly receives the scholarship or makes a payment from an account within the 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 scholarships and amounts improperly awarded or paid from accounts. The bill provides that an education scholarship received by a taxpayer or amounts paid to the pupil are 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, 2022. The section of the bill enacting the education savings account program applies to school budget years and fiscal years beginning on or after July 1, 2022.