Establishing an education savings grant program for certain pupils attending a nonpublic school, 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 management indicating that the parent or guardian intends to enroll the pupil in a nonpublic school for the entirety of the school year. 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, as specified in the bill. 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, 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 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 grant expenses, as defined in the bill, 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 an eligible pupil’s account upon the conclusion of the fiscal year shall remain in the eligible pupil’s account in the education savings grant fund for the payment of qualified grant expenses in future fiscal years during which the pupil participates in the program or for higher education costs that are qualified 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 in 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 directs the department of management to recover grants and amounts improperly awarded or paid and requires the closure of the pupil’s account and transfer of all remaining moneys to the general fund of the state. The bill also establishes requirements and procedures for parents or guardians and for the department of management when a pupil receiving an education savings grant withdraws or is expelled from the nonpublic school prior to the end of the required attendance period of the school year, including requirements for disposition of the pupil’s account within the education savings grant fund and recovery of grant funds. 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, 2022. 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, 2022.