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

This bill establishes an education savings grant program for certain pupils attending a nonpublic school or receiving competent private instruction. For the school budget year beginning July 1, 2022, and each succeeding school budget year, resident pupils eligible to enroll in kindergarten through grade and who are either attending a nonpublic school or are receiving competent private instruction under Code chapter 299A, and who are not otherwise ineligible under the bill, are eligible to receive an education savings grant. 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 indicating that the parent or guardian intends to enroll the pupil in a nonpublic school or provide competent private instruction for the school year. 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 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 education consisting of moneys appropriated to the department of education for the purpose of providing education savings grants and for administration of the program as specified in the bill. For the fiscal year commencing July 1, 2022, and each succeeding fiscal year, the bill appropriates from the general fund of the state to the department of education for deposit in the fund the amount necessary to pay all education savings grants approved for that fiscal year, including amounts used by the department to administer the program. For each pupil approved for an education savings grant, the department of education 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, as defined in the bill, incurred by the parent or guardian for the pupil during that fiscal year. The bill authorizes the department of education 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 parent or guardian of each pupil participating in the program must agree in writing to use the funds deposited in the pupil’s account in the education savings grant fund for only qualified educational expenses. The written agreement between the parent or guardian and the department of education must include provisions promising that the parent or guardian will provide an education for the pupil in at least the subjects of reading, language, mathematics, science, and social studies during the school year; will not enroll the pupil as a full-time student in a public school during the school year; and will comply with the rules and requirements of the education savings grant program. The bill requires the department of education to establish a parent review committee to assist the department in examining whether certain types of educational services and goods meet the definition of qualified educational expenses and to provide recommendations to the department about how to implement, administer, and improve the education savings grant program. 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 during which the pupil participates in the program or for higher education costs 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 or completion of an equivalent level of competent private instruction, the department of education is required to maintain the account in the fund until the pupil reaches the age of 26.1. Moneys in a pupil’s account when the pupil reaches the age limitation are transferred by the department of education for deposit in the general fund of the state. The bill establishes procedures for parent or guardian appeals to the state board of education and 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 education 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 education when a pupil receiving an education savings grant withdraws or is expelled from the nonpublic school or withdraws from competent private instruction 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.