Bill Text: IA HF663 | 2019-2020 | 88th General Assembly | Introduced


Bill Title: A bill for an act establishing an education savings grant program for 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.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2020-02-13 - Subcommittee recommends amendment and passage. [HF663 Detail]

Download: Iowa-2019-HF663-Introduced.html
House File 663 - Introduced HOUSE FILE 663 BY GASSMAN A BILL FOR An Act establishing an education savings grant program 1 for pupils attending a nonpublic school or receiving 2 competent private instruction, establishing an education 3 savings grant fund, providing an income tax exemption, 4 making appropriations, providing penalties, and including 5 applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 2659YH (3) 88 md/jh
H.F. 663 Section 1. Section 8.6, Code 2019, is amended by adding the 1 following new subsection: 2 NEW SUBSECTION . 16. Education savings grant 3 applications. To adopt rules relating to applications for an 4 education savings grant pursuant to section 257.11B, including 5 application processing timelines and information required to be 6 submitted by a parent or guardian. 7 Sec. 2. NEW SECTION . 257.11B Education savings grant 8 program. 9 1. a. For the school budget year beginning July 1, 2021, 10 and each succeeding school budget year, the following resident 11 pupils who are attending a nonpublic school, as defined in 12 section 285.16, or receiving competent private instruction 13 under chapter 299A shall be eligible to receive an education 14 savings grant in the manner provided in this section: 15 (1) A pupil eligible to enroll in kindergarten. 16 (2) A pupil who received an education savings grant for 17 the immediately preceding school budget year, who is eligible 18 to enroll in grade one through grade twelve, who performed at 19 or above the statewide average on assessments and evaluations 20 identified in subsection 2, paragraph “a” , subparagraph (4), 21 and who is not otherwise ineligible under this section. 22 b. For purposes of this subsection, “resident” means the 23 same as defined in section 282.1, subsection 2. 24 2. a. (1) Except as provided in subparagraph (2), by 25 January 31 preceding the school year for which the education 26 savings grant is requested, the parent or guardian of the pupil 27 requesting to receive an education savings grant shall submit 28 an application to the department of management, on application 29 forms developed by the department of management, indicating 30 that the parent or guardian intends to enroll the pupil in a 31 nonpublic school or place the pupil under competent private 32 instruction under chapter 299A. 33 (2) For pupils under subsection 1, paragraph “a” , 34 subparagraph (1), by January 31 preceding the school year 35 -1- LSB 2659YH (3) 88 md/jh 1/ 10
H.F. 663 immediately preceding the school year for which the education 1 savings grant is requested, the parent or guardian of the pupil 2 requesting to receive an education savings grant shall submit 3 an application to the department of management, on application 4 forms developed by the department of management, indicating 5 that the parent or guardian intends to enroll the pupil in a 6 nonpublic school or place the pupil under competent private 7 instruction under chapter 299A. 8 (3) In addition to such information deemed appropriate by 9 the department of management, the application shall require 10 certification from the nonpublic school of the pupil’s 11 enrollment for the applicable school year or a statement from 12 the intended provider of competent private instruction for the 13 pupil for the applicable school year. 14 (4) Applications submitted for pupils other than those 15 identified in subsection 1, paragraph “a” , subparagraph 16 (1), shall include evidence of the pupil’s completion and 17 performance on each statewide assessment administered to the 18 pupil required by the pupil’s nonpublic school or, for pupils 19 receiving competent private instruction, each evaluation 20 conducted under section 299A.4. 21 b. (1) Except as provided in subparagraph (2), by March 22 1 preceding the school year for which the education savings 23 grant is requested, the department of management shall notify 24 the parent or guardian of each pupil approved for the following 25 school year to receive an education savings grant and the 26 amount of the education savings grant for the pupil. 27 (2) For pupils under subsection 1, paragraph “a” , 28 subparagraph (1), by March 1 preceding the school year 29 immediately preceding the school year for which the education 30 savings grant is requested, the department of management shall 31 notify the parent or guardian of each pupil approved for the 32 applicable school year to receive an education savings grant 33 and the amount of the education savings grant for the pupil. 34 c. Education savings grants shall only be approved for one 35 -2- LSB 2659YH (3) 88 md/jh 2/ 10
H.F. 663 school year and applications must be submitted annually for 1 education savings grants in subsequent school years. 2 3. The department of management shall assign each pupil 3 an education savings grant in an amount equal to two thousand 4 dollars. 5 4. An education savings grant fund is created in the state 6 treasury under the control of the department of management 7 consisting of moneys appropriated to the department of 8 management for the purpose of providing education savings 9 grants under this section. For the fiscal year commencing July 10 1, 2021, and each succeeding fiscal year, there is appropriated 11 from the general fund of the state to the department of 12 management to be credited to the fund the amount necessary 13 to pay all education savings grants approved for that fiscal 14 year. The director of the department of management has all 15 powers necessary to carry out and effectuate the purposes, 16 objectives, and provisions of this section pertaining to the 17 fund, including the power to do all of the following: 18 a. Make and enter into contracts necessary for the 19 administration of the fund. 20 b. Procure insurance against any loss in connection with the 21 assets of the fund or require a surety bond. 22 c. Contract with a private financial management firm to 23 manage the fund, in collaboration with the treasurer of state, 24 including providing for the disbursement of education savings 25 grants in the form of an electronic debit card or checks that 26 are payable directly from the pupil’s account within the fund. 27 d. Conduct audits or other reviews necessary to properly 28 administer the program. 29 e. Adopt rules under chapter 17A for the administration of 30 the fund and accounts within the fund. 31 5. a. For each pupil approved for an education savings 32 grant, the department of management shall establish an 33 account for that pupil in the education savings grant fund. 34 Unless already made available to the parent or guardian under 35 -3- LSB 2659YH (3) 88 md/jh 3/ 10
H.F. 663 paragraph “b” , the amount of the pupil’s education savings grant 1 shall be deposited into the pupil’s account on July 1, and such 2 amount shall be immediately available to the parent or guardian 3 for the payment of qualified educational expenses incurred 4 by the parent or guardian for the pupil during that fiscal 5 year using the payment method authorized under subsection 4, 6 paragraph “c” . 7 b. Upon written request of the parent or guardian, the 8 amount of the pupil’s education savings grant shall be 9 deposited into the pupil’s account and be made available 10 as soon as practicable after the department of management 11 provides notice under subsection 2, paragraph “b” , if qualified 12 educational expenses for the pupil for the applicable school 13 year are due prior to July 1 of the school year. 14 c. A nonpublic school or a provider of competent private 15 instruction that accepts payment from a parent or guardian 16 using funds from a pupil’s account in the education savings 17 grant fund shall not refund, rebate, or share any portion of 18 such payment with the parent, guardian, or pupil. 19 d. Moneys remaining in a pupil’s account upon conclusion 20 of the fiscal year shall remain in the pupil’s account in the 21 education savings grant fund for the payment of qualified 22 educational expenses in future fiscal years during which 23 the pupil participates in the program or for the payment 24 of qualified higher education expenses as provided under 25 subsection 8. 26 6. a. For purposes of this section, “qualified educational 27 expenses” includes tuition and fees at a nonpublic school, 28 textbooks, fees or payments for educational therapies, 29 including tutoring or cognitive skills training, curriculum 30 fees and materials for a course of study for a specific subject 31 matter or grade level, tuition or fees for nonpublic online 32 education programs, education materials and services for pupils 33 with disabilities, including the cost of paraprofessionals 34 and assistants who are trained in accordance with state law, 35 -4- LSB 2659YH (3) 88 md/jh 4/ 10
H.F. 663 standardized test fees, qualified higher education expenses, 1 as defined in section 12D.1, subsection 2, paragraph “k” , 2 excluding room and board expenses, and other expenses incurred 3 by the parent or guardian that are directly related to the 4 education of the pupil under competent private instruction or 5 at a nonpublic school, including a nonpublic school accredited 6 by an independent accrediting agency approved by the department 7 of education. 8 b. “Qualified educational expenses” does not include 9 transportation costs for the pupil, the cost of food or 10 refreshments consumed by the pupil, the cost of clothing for 11 the pupil, or the cost of disposable materials, including 12 but not limited to paper, notebooks, pencils, pens, and art 13 supplies. 14 7. A person who makes a false claim for the purpose 15 of obtaining an education savings grant provided for in 16 this section or who knowingly receives the grant or makes a 17 payment from an account within the education savings grant 18 fund without being legally entitled to do so is guilty of a 19 fraudulent practice under chapter 714. The false claim for an 20 education savings grant or a payment from an account shall be 21 disallowed. If amounts from the grant have been disbursed from 22 the applicable account in the education savings grant fund, the 23 department of management shall initiate legal proceedings to 24 recover such amounts. A parent or guardian, or a pupil for 25 purposes of subsection 8, who commits a fraudulent practice 26 under this subsection is prohibited from participating in the 27 education savings grant program in the future. 28 8. a. For each pupil with a positive balance in the 29 pupil’s account in the education savings grant fund upon 30 graduation from high school or completion of an equivalent 31 level of competent private instruction under chapter 299A, the 32 department of management shall maintain the account in the 33 fund until the pupil is twenty-three years of age. Following 34 graduation from high school until the pupil is twenty-three 35 -5- LSB 2659YH (3) 88 md/jh 5/ 10
H.F. 663 years of age, moneys in the pupil’s account may be used for 1 qualified higher education expenses, as defined in section 2 12D.1, subsection 2, paragraph “k” , incurred by the pupil while 3 attending an institution of higher education under the control 4 of the state board of regents, a community college located in 5 this state, or a private college or university located in this 6 state. Payments from a pupil’s account for qualified higher 7 education expenses shall be made in the same manner as payments 8 for qualified educational expenses under subsection 5. Moneys 9 in a pupil’s account when the pupil turns twenty-three years of 10 age shall be transferred by the department of management for 11 deposit in the general fund of the state. 12 b. Notwithstanding the age limitation in paragraph “a” , 13 if the pupil with a positive balance in the pupil’s account 14 in the education savings grant fund upon graduation from high 15 school or completion of an equivalent level of competent 16 private instruction under chapter 299A serves on federal active 17 duty, other than training, and is discharged under honorable 18 conditions, the limitation date otherwise applicable under 19 paragraph “a” shall be extended by one year for each year of 20 federal active duty service by the pupil, but not to a date 21 after the pupil’s twenty-seventh birthday. 22 9. This section shall not be construed to authorize the 23 state or any political subdivision of the state to exercise 24 authority over any nonpublic school or provider of competent 25 private instruction under chapter 299A or construed to require 26 a nonpublic school to modify its standards for admission 27 or educational program in order to receive payment from a 28 parent or guardian using funds from a pupil’s account in the 29 education savings grant fund. A nonpublic school or provider 30 of competent private instruction that accepts payment from a 31 parent or guardian using funds from a pupil’s account in the 32 education savings grant fund is not an agent of this state or 33 of a political subdivision of this state. Rules adopted by the 34 department of management to implement this section that impose 35 -6- LSB 2659YH (3) 88 md/jh 6/ 10
H.F. 663 an undue burden on a nonpublic school or provider of competent 1 private instruction are invalid. 2 Sec. 3. Section 422.7, Code 2019, is amended by adding the 3 following new subsection: 4 NEW SUBSECTION . 48. Subtract, to the extent included, the 5 amount of an education savings grant under section 257.11B 6 received by the taxpayer for payment of qualified educational 7 expenses. 8 Sec. 4. APPLICABILITY. The following applies to school 9 budget years and fiscal years beginning on or after July 1, 10 2021: 11 The section of this Act enacting section 257.11B. 12 Sec. 5. APPLICABILITY. The following applies to tax years 13 beginning on or after January 1, 2021: 14 The section of this Act enacting section 422.7, subsection 15 48. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill provides education savings grants for pupils 20 attending a nonpublic school or receiving competent private 21 instruction and establishes an education savings grant fund. 22 Under the bill, the following pupils who meet certain 23 assessment and evaluation standards and who attend a nonpublic 24 school or are placed under competent private instruction under 25 Code chapter 299A are eligible to receive an education savings 26 grant: (1) a pupil eligible to enroll in kindergarten; and 27 (2) a pupil who received an education savings grant for the 28 immediately preceding school budget year and who is eligible 29 to enroll in grade 1 through grade 12. The parent or guardian 30 of the pupil requesting to receive an education savings grant 31 must submit an application to the department of management 32 indicating that the parent or guardian intends to enroll the 33 pupil in a nonpublic school or provide competent private 34 instruction. 35 -7- LSB 2659YH (3) 88 md/jh 7/ 10
H.F. 663 The bill requires that by March 1 preceding the school 1 year for which the education savings grant is requested, the 2 department of management must notify the parent or guardian of 3 each pupil approved for the following school year to receive an 4 education savings grant and the amount of the education savings 5 grant for the pupil. Education savings grants must be approved 6 for each school year and applications must be submitted each 7 year. 8 The bill creates an education savings grant fund in 9 the state treasury under the control of the department of 10 management consisting of moneys appropriated to the department 11 of management for the purpose of providing education savings 12 grants. For the fiscal year commencing July 1, 2021, and each 13 succeeding fiscal year, there is appropriated from the general 14 fund of the state to the department of management for deposit 15 in the fund the amount necessary to pay all education savings 16 grants approved for that fiscal year. For each pupil approved 17 for an education savings grant, the department of management 18 must establish an account for that pupil in the education 19 savings grant fund. The amount of the pupil’s education 20 savings grant is deposited into the pupil’s account on July 1 21 and such amount is available for use by parents and guardians 22 for the payment of qualified educational expenses, as defined 23 in the bill, incurred by the parent or guardian for the pupil 24 during that fiscal year. 25 Upon written request of the parent or guardian, the amount of 26 the pupil’s education savings grant shall be deposited into the 27 pupil’s account and be made available as soon as practicable 28 after the notice of receipt of the grant is given to the parent 29 or guardian if qualified educational expenses for the pupil 30 for the applicable school year are due prior to July 1 of the 31 school year. 32 The bill authorizes the department of management to 33 contract with a private financial management firm to manage 34 the education savings grant fund, in collaboration with the 35 -8- LSB 2659YH (3) 88 md/jh 8/ 10
H.F. 663 treasurer of state, including providing for the disbursement 1 of education savings grants in the form of an electronic debit 2 card or checks that are payable directly from the pupil’s 3 account within the fund. 4 The bill provides that moneys remaining in a pupil’s account 5 upon the conclusion of the fiscal year shall remain in the 6 pupil’s account in the education savings grant fund for the 7 payment of qualified educational expenses in future fiscal 8 years during which the pupil participates in the program or for 9 qualified higher education expenses as authorized in the bill. 10 Under the bill, for each pupil with a positive balance in 11 the pupil’s account in the education savings grant fund upon 12 graduation from high school or completion of an equivalent 13 level of competent private instruction under Code chapter 14 299A, the department of management is required to maintain the 15 account in the fund until the pupil reaches an age specified in 16 the bill. Until the pupil reaches the age limitation, moneys 17 in the pupil’s account may be used by the pupil for qualified 18 higher education expenses. Moneys in a pupil’s account when 19 the pupil reaches the age limitation are transferred by the 20 department of management for deposit in the general fund of the 21 state. 22 The bill provides that a person who makes a false claim for 23 the purpose of obtaining an education savings grant or who 24 knowingly receives the grant or makes a payment from an account 25 within the education savings grant fund without being legally 26 entitled to do so is guilty of a fraudulent practice and is 27 subject to a criminal penalty. The bill allows the department 28 of management to initiate legal proceedings to recover grants 29 and amounts improperly awarded or paid from accounts under the 30 bill. 31 The bill provides that an education savings grant received 32 by a taxpayer is not taxable income for purposes of state 33 individual income taxation. This provision of the bill applies 34 to tax years beginning on or after January 1, 2021. 35 -9- LSB 2659YH (3) 88 md/jh 9/ 10
H.F. 663 The section of the bill enacting the education savings 1 grant program applies to school budget years and fiscal years 2 beginning on or after July 1, 2021. 3 -10- LSB 2659YH (3) 88 md/jh 10/ 10
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