House Study Bill 203 




                                 HOUSE FILE       
                                 BY  (PROPOSED COMMITTEE ON
                                     EDUCATION BILL BY
                                     CHAIRPERSON JORGENSEN)

                                      A BILL FOR

  1 An Act providing education savings grants for pupils attending
  2    a nonpublic school, establishing an education savings grant
  3    fund, making appropriations, providing penalties, and
  4    including applicability provisions.
  5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN



  1  1    Section 1.  Section 256.7, Code 2015, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  33.  Adopt rules relating to applications
  1  4 for an education savings grant pursuant to section 257.11B,
  1  5 including application processing timelines and information
  1  6 required to be submitted by a parent or guardian.
  1  7    Sec. 2.  NEW SECTION.  257.11B  Education savings grant
  1  8 program.
  1  9    1.  a.  The following pupils shall be eligible to receive an
  1 10 education savings grant in the manner provided in this section:
  1 11    (1)  For the school budget year beginning July 1, 2017,
  1 12 pupils eligible to enroll in kindergarten who are attending a
  1 13 nonpublic school for that budget year.
  1 14    (2)  For each school budget year beginning on or after July
  1 15 1, 2018, pupils eligible to enroll in the grade levels eligible
  1 16 for an education savings grant in the immediately preceding
  1 17 school budget year and pupils eligible to enroll in the grade
  1 18 level that is one grade level higher than the highest grade
  1 19 level that was eligible for an education savings grant in the
  1 20 immediately preceding budget year, but not higher than grade
  1 21 twelve, who are attending a nonpublic school for that budget
  1 22 year.
  1 23    b.  Education savings grants shall be made available to
  1 24 parents and guardians in the manner authorized under subsection
  1 25 4, paragraph "c", for the payment of qualified educational
  1 26 expenses as provided in this section.
  1 27    2.  a.  (1)  By January 31 preceding the school year for
  1 28 which the education savings grant is requested, the parent
  1 29 or guardian of the pupil requesting to receive an education
  1 30 savings grant shall submit an application to the department of
  1 31 education, on application forms developed by the department,
  1 32 indicating that the parent or guardian intends to enroll the
  1 33 pupil in a nonpublic school.
  1 34    (2)  In addition to such information deemed appropriate by
  1 35 the department of education, the application shall require
  2  1 certification from the nonpublic school of the pupil's
  2  2 enrollment for the following school year.
  2  3    b.  By March 1 preceding the school year for which the
  2  4 education savings grant is requested, the department of
  2  5 education shall notify the department of management of the
  2  6 number of pupils in each school district designated for the
  2  7 following school year to receive an education savings grant.
  2  8 The department of education shall also notify the parent
  2  9 or guardian of such pupils who are approved to receive an
  2 10 education savings grant.
  2 11    c.  Education savings grants shall only be approved for one
  2 12 school year per application, and applications must be submitted
  2 13 under paragraph "a" for education savings grants in subsequent
  2 14 school years.
  2 15    3.  a.  The department of management shall assign each pupil
  2 16 an education savings grant in an amount equal to the statewide
  2 17 average state foundation aid per pupil in the same school year.
  2 18    b.  The department of management shall on July 1 following
  2 19 the determination of the amount of the education savings grant
  2 20 for each approved pupil transfer such amounts to the pupil's
  2 21 account in the education savings grant fund established under
  2 22 subsection 4.  Such amount shall be available to the pupil's
  2 23 parent or guardian in the manner authorized under subsection
  2 24 4, paragraph "c", for the payment of qualified educational
  2 25 expenses incurred by such persons for the pupil during that
  2 26 school year.
  2 27    4.  An education savings grant fund is created in the state
  2 28 treasury under the control of the department of management
  2 29 consisting of moneys appropriated to the department for the
  2 30 purpose of providing education savings grants under this
  2 31 section.  For the fiscal year commencing July 1, 2017, and
  2 32 each succeeding fiscal year, there is appropriated from the
  2 33 general fund of the state to the department of management to be
  2 34 credited to the fund the amount necessary to pay all education
  2 35 savings grants approved for that fiscal year.  The director of
  3  1 the department of management has all powers necessary to carry
  3  2 out and effectuate the purposes, objectives, and provisions of
  3  3 this section pertaining to the fund, including the power to do
  3  4 all of the following:
  3  5    a.  Make and enter into contracts necessary for the
  3  6 administration of the fund.
  3  7    b.  Procure insurance against any loss in connection with the
  3  8 assets of the fund or require a surety bond.
  3  9    c.  Contract with a private financial management firm to
  3 10 manage the fund, in collaboration with the treasurer of state,
  3 11 including providing for the disbursement of education savings
  3 12 grants in the form of an electronic debit card or checks that
  3 13 are payable directly from the pupil's account in the fund.
  3 14    d.  Conduct audits or other review necessary to properly
  3 15 administer the program.
  3 16    e.  Adopt rules pursuant to chapter 17A for the
  3 17 administration of the fund and accounts in the fund.
  3 18    5.  a.  For each pupil approved for an education savings
  3 19 grant, the department shall establish an account for that pupil
  3 20 in the education savings grant fund.  The amount of the pupil's
  3 21 education savings grant determined under subsection 3 shall be
  3 22 deposited into the pupil's account on July 1 and such amount
  3 23 shall be immediately available for the payment of qualified
  3 24 educational expenses incurred by the parent or guardian for
  3 25 the pupil during that fiscal year using the payment method
  3 26 authorized under subsection 4, paragraph "c".
  3 27    b.  A nonpublic school or other entity that accepts payment
  3 28 from a parent or guardian using funds from a pupil's account in
  3 29 the education savings grant fund shall not refund, rebate, or
  3 30 share any portion of such payment with the parent, guardian, or
  3 31 pupil.
  3 32    c.  Moneys remaining in a pupil's account upon conclusion
  3 33 of the fiscal year shall remain in the pupil's account in the
  3 34 education savings grant fund for the payment of qualified
  3 35 educational expenses in future fiscal years, unless subject to
  4  1 the transfer required under subsection 8.
  4  2    6.  a.  For purposes of this section, "qualified educational
  4  3 expenses" includes tuition and fees at a nonpublic school,
  4  4 textbooks, fees or payments for educational therapies including
  4  5 tutoring or cognitive skills training, curriculum fees and
  4  6 materials for a course of study for a specific subject matter
  4  7 or grade level, tuition or fees for nonpublic online education
  4  8 programs, education materials and services for pupils with
  4  9 disabilities including the cost of paraprofessionals and
  4 10 assistants who are trained in accordance with state law,
  4 11 standardized test fees, fees required by the department not
  4 12 to exceed for each grant recipient five percent of the total
  4 13 grant amount in any fiscal year, higher education expenses,
  4 14 as defined in section 12D.1, resulting from the pupil's
  4 15 participation in a program under chapter 261E, excluding room
  4 16 and board expenses, and other expenses incurred by the parent
  4 17 or guardian that are directly related to the education of the
  4 18 pupil at a nonpublic school, including a nonpublic school
  4 19 accredited by an independent accrediting agency approved by the
  4 20 department of education. The cost of one computer or other
  4 21 portable computing device shall be allowed as a qualified
  4 22 educational expense for a pupil if such a purchase has not been
  4 23 made using funds from that pupil's account in either of the
  4 24 two immediately preceding fiscal years.  "Qualified educational
  4 25 expenses" do not include transportation costs for the pupil, the
  4 26 cost of food or refreshments consumed by the pupil, the cost of
  4 27 clothing for the pupil, or the cost of disposable materials,
  4 28 including but not limited to paper, notebooks, pencils, pens,
  4 29 and art supplies.
  4 30    b.  For purposes of this section, "nonpublic school" means
  4 31 the same as defined in section 285.16.
  4 32    7.  A person who makes a false claim for the purpose
  4 33 of obtaining an education savings grant provided for in
  4 34 this section or who knowingly receives the grant or makes a
  4 35 payment from an account in the education savings grant fund
  5  1 without being legally entitled to it is guilty of a fraudulent
  5  2 practice.  The false claim for an education savings grant or a
  5  3 payment from an account shall be disallowed and if amounts from
  5  4 the grant have been disbursed from the applicable account in
  5  5 the education savings grant fund, the department of management
  5  6 shall initiate legal proceedings to recover such amounts. A
  5  7 parent or guardian, or a pupil for purposes of subsection 8,
  5  8 who violates this subsection is prohibited from participating
  5  9 in the education savings grant program in the future.
  5 10    8.  For each pupil with a positive balance in the pupil's
  5 11 account in the education savings grant fund upon graduation
  5 12 from high school or upon termination of the pupil's enrollment
  5 13 in the nonpublic school, moneys in the pupil's account shall be
  5 14 transferred by the department for deposit in the general fund
  5 15 of the state.
  5 16    9.  A nonpublic school that accepts payment from a parent or
  5 17 guardian using funds from a pupil's account in the education
  5 18 savings grant fund is not an agent of this state or other
  5 19 political subdivision of this state.
  5 20    Sec. 3.  Section 422.7, Code 2015, is amended by adding the
  5 21 following new subsection:
  5 22    NEW SUBSECTION.  51.  Subtract, to the extent included, the
  5 23 amount of any education savings grant under section 257.11B
  5 24 received during the tax year by a taxpayer authorized to spend
  5 25 such grant amounts for qualified educational expenses.
  5 26    Sec. 4.  APPLICABILITY.  This Act applies to school budget
  5 27 years and fiscal years beginning on or after July 1, 2017.
  5 28    Sec. 5.  APPLICABILITY.  The provision of this Act amending
  5 29 section 422.7 applies to tax years beginning on or after
  5 30 January 1, 2017.
  5 31                           EXPLANATION
  5 32 The inclusion of this explanation does not constitute agreement with
  5 33 the explanation's substance by the members of the general assembly.
  5 34    This bill provides education savings grants for pupils
  5 35 attending a nonpublic school and establishes an education
  6  1 savings grant fund.
  6  2    Under the bill, for the school budget year beginning July
  6  3 1, 2017, pupils eligible to enroll in kindergarten who are
  6  4 attending a nonpublic school for that budget year are eligible
  6  5 to receive an education savings grant.  For each succeeding
  6  6 budget year, an additional grade level is added until all grade
  6  7 levels from kindergarten through 12 are eligible in the budget
  6  8 year beginning July 1, 2029. By January 31 preceding the
  6  9 school year for which the education savings grant is requested,
  6 10 the parent or guardian of the pupil requesting to receive an
  6 11 education savings grant must submit an application to the
  6 12 department of education indicating that the parent or guardian
  6 13 intends to enroll the pupil in a nonpublic school.
  6 14    The bill requires that by March 1 preceding the school
  6 15 year for which the education savings grant is requested,
  6 16 the department of education must notify the department of
  6 17 management of the number of pupils in each school district
  6 18 designated for the following school year to receive an
  6 19 education savings grant and the amount of the education savings
  6 20 grant for each pupil.  Education savings grants may only be
  6 21 approved for one school year per application, and applications
  6 22 must be submitted for education savings grants in subsequent
  6 23 school years.
  6 24    The amount of each education savings grant is equal to the
  6 25 statewide average state foundation aid per pupil in the same
  6 26 school year.
  6 27    The bill creates an education savings grant fund in the state
  6 28 treasury under the control of the department of management
  6 29 consisting of moneys appropriated to the department for the
  6 30 purpose of providing education savings grants.  For the fiscal
  6 31 year commencing July 1, 2017, and each succeeding fiscal year,
  6 32 there is appropriated from the general fund of the state to the
  6 33 department of management for deposit in the fund the amount
  6 34 necessary to pay all education savings grants approved for
  6 35 that fiscal year.  For each pupil approved for an education
  7  1 savings grant, the department of management must establish an
  7  2 account for that pupil in the education savings grant fund.
  7  3 The amount of the pupil's education savings grant is deposited
  7  4 into the pupil's account on July 1 and such amount is available
  7  5 for use by parents and guardians for the payment of qualified
  7  6 educational expenses, as defined in the bill, incurred by the
  7  7 parent or guardian for the pupil during that fiscal year.
  7  8    The bill defines "nonpublic school" to mean those nonpublic
  7  9 schools accredited by the department of education and nonpublic
  7 10 institutions which comply with state board of education
  7 11 standards for providing special education programs.
  7 12    The bill authorizes the department of education to
  7 13 contract with a private financial management firm to manage
  7 14 the education savings grant fund, in collaboration with the
  7 15 treasurer of state, including providing for the disbursement
  7 16 of education savings grants in the form of an electronic debit
  7 17 card or checks that are payable directly from the pupil's
  7 18 account within the fund.
  7 19    The bill provides that moneys remaining in a pupil's account
  7 20 upon the conclusion of the fiscal year shall remain in the
  7 21 pupil's account within the education savings grant fund for
  7 22 the payment of qualified educational expenses in future fiscal
  7 23 years.
  7 24    Under the bill, for each pupil with a positive balance in
  7 25 the pupil's account in the education savings grant fund upon
  7 26 graduation from high school or upon termination of the pupil's
  7 27 enrollment in the nonpublic school, moneys in the pupil's
  7 28 account are transferred by the department of management for
  7 29 deposit in the general fund of the state.
  7 30    The bill provides that a person who makes a false claim for
  7 31 the purpose of obtaining an education savings grant or who
  7 32 knowingly receives the grant or makes a payment from an account
  7 33 within the education savings grant fund without being legally
  7 34 entitled to it is guilty of a fraudulent practice and is
  7 35 subject to a criminal penalty.  The bill allows the department
  8  1 of management to initiate legal proceedings to recover grants
  8  2 and amounts improperly awarded or paid from accounts under the
  8  3 bill.
  8  4    The bill provides that moneys from an education savings
  8  5 grant under the bill are not taxable income under Code chapter
  8  6 422.
  8  7    The bill applies to school budget years and fiscal years
  8  8 beginning on or after July 1, 2017.
  8  9    The provision of the bill amending Code section 422.7
  8 10 applies to tax years beginning on or after January 1, 2017.
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