Bill Text: IA SF252 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act providing education savings grants 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) 2015-02-18 - Subcommittee, Dvorsky, Quirmbach, and Sinclair. S.J. 325. [SF252 Detail]
Download: Iowa-2015-SF252-Introduced.html
Senate File 252 - Introduced SENATE FILE BY BERTRAND A BILL FOR 1 An Act providing education savings grants for pupils attending 2 a nonpublic school or receiving competent private 3 instruction, establishing an education savings grant fund, 4 providing an income tax exemption, making appropriations, 5 providing penalties, and including applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 1729XS (2) 86 md/sc 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. Pupils eligible to enroll in grades kindergarten through 1 10 twelve and attending a nonpublic school or receiving competent 1 11 private instruction under chapter 299A shall be eligible to 1 12 receive an education savings grant in the manner provided in 1 13 this section for school years beginning on or after July 1, 1 14 2016. Education savings grants shall be made available to 1 15 parents and guardians in the manner authorized under subsection 1 16 4, paragraph "c", for the payment of qualified educational 1 17 expenses as provided in this section. 1 18 2. a. (1) By January 31 preceding the school year for 1 19 which the education savings grant is requested, the parent 1 20 or guardian of the pupil requesting to receive an education 1 21 savings grant shall submit an application to the department of 1 22 education, on application forms developed by the department, 1 23 indicating that the parent or guardian intends to enroll the 1 24 pupil in a nonpublic school or provide competent private 1 25 instruction for the pupil under chapter 299A. 1 26 (2) In addition to such information deemed appropriate by 1 27 the department of education, the application shall require 1 28 certification from the nonpublic school of the pupil's 1 29 enrollment for the following school year or a statement 1 30 indicating the parent or guardian's intent to provide or 1 31 arrange for competent private instruction for the pupil for the 1 32 following school year. 1 33 b. By March 1 preceding the school year for which the 1 34 education savings grant is requested, the department of 1 35 education shall notify the department of management of the 2 1 number of pupils in each school district designated for the 2 2 following school year to receive an education savings grant 2 3 and the amount of the education savings grant for each pupil. 2 4 The department of education shall also notify the parent 2 5 or guardian of such pupils who are approved to receive an 2 6 education savings grant. 2 7 c. Education savings grants shall only be approved for one 2 8 school year and applications must be submitted under paragraph 2 9 "a" for education savings grants in subsequent school years. 2 10 3. a. The department of management shall assign each pupil 2 11 an education savings grant in an amount equal to the statewide 2 12 average regular program state foundation aid per pupil in the 2 13 same school year. 2 14 b. The department of management shall on July 1 following 2 15 the determination of the amount of the education savings grant 2 16 for each approved pupil transfer such amounts to the pupil's 2 17 account in the education savings grant fund established under 2 18 subsection 4. Such amount shall be available to the pupil's 2 19 parent or guardian in the manner authorized under subsection 2 20 4, paragraph "c", for the payment of qualified educational 2 21 expenses incurred by such persons for the pupil during that 2 22 school year. 2 23 4. An education savings grant fund is created in the state 2 24 treasury under the control of the department of management 2 25 consisting of moneys appropriated to the department for the 2 26 purpose of providing education savings grants under this 2 27 section. For the fiscal year commencing July 1, 2016, and 2 28 each succeeding fiscal year, there is appropriated from the 2 29 general fund of the state to the department of management to be 2 30 credited to the fund the amount necessary to pay all education 2 31 savings grants approved for that fiscal year. The director of 2 32 the department of management has all powers necessary to carry 2 33 out and effectuate the purposes, objectives, and provisions of 2 34 this section pertaining to the fund, including the power to do 2 35 all of the following: 3 1 a. Make and enter into contracts necessary for the 3 2 administration of the fund. 3 3 b. Procure insurance against any loss in connection with the 3 4 assets of the fund or require a surety bond. 3 5 c. Contract with a private financial management firm to 3 6 manage the fund, in collaboration with the treasurer of state, 3 7 including providing for the disbursement of education savings 3 8 grants in the form of an electronic debit card or checks that 3 9 are payable directly from the pupil's account within the fund. 3 10 d. Conduct audits or other review necessary to properly 3 11 administer the program. 3 12 e. Adopt rules for the administration of the fund and 3 13 accounts within the fund. 3 14 5. a. For each pupil approved for an education savings 3 15 grant, the department shall establish an account for that pupil 3 16 in the education savings grant fund. The amount of the pupil's 3 17 education savings grant determined under subsection 3 shall be 3 18 deposited into the pupil's account on July 1, and such amount 3 19 shall be immediately available for the payment of qualified 3 20 educational expenses incurred by the parent or guardian for 3 21 the pupil during that fiscal year using the payment method 3 22 authorized under subsection 4, paragraph "c". 3 23 b. A nonpublic school or other entity that accepts payment 3 24 from a parent or guardian using funds from a pupil's account in 3 25 the education savings grant fund shall not refund, rebate, or 3 26 share any portion of such payment with the parent, guardian, or 3 27 pupil. 3 28 c. Moneys remaining in a pupil's account upon conclusion 3 29 of the fiscal year shall remain in the pupil's account in the 3 30 education savings grant fund for the payment of qualified 3 31 educational expenses in future fiscal years or for the payment 3 32 of higher education costs as provided under subsection 8. 3 33 6. a. For purposes of this section, "qualified educational 3 34 expenses" includes tuition and fees at a nonpublic school, 3 35 textbooks, fees or payments for educational therapies, 4 1 including tutoring or cognitive skills training, curriculum 4 2 fees and materials for a course of study for a specific subject 4 3 matter or grade level, tuition or fees for nonpublic online 4 4 education programs, education materials and services for pupils 4 5 with disabilities, including the cost of paraprofessionals 4 6 and assistants who are trained in accordance with state law, 4 7 standardized test fees, fees required by the department not to 4 8 exceed for each grant recipient five percent of the total grant 4 9 amount in any fiscal year, higher education costs, as defined 4 10 in section 12D.1, excluding room and board expenses, and other 4 11 expenses incurred by the parent or guardian that are directly 4 12 related to the education of the pupil at a nonpublic school, 4 13 including a nonpublic school accredited by an independent 4 14 accrediting agency approved by the department of education, or 4 15 directly related to providing competent private instruction 4 16 for the pupil under chapter 299A. The cost of one computer or 4 17 other portable computing device shall be allowed as a qualified 4 18 educational expense for a pupil if such a purchase has not been 4 19 made using funds from that pupil's account in either of the two 4 20 immediately preceding fiscal years. 4 21 b. "Qualified educational expenses" does not include 4 22 transportation costs for the pupil, the cost of food or 4 23 refreshments consumed by the pupil, the cost of clothing for 4 24 the pupil, or the cost of disposable materials, including 4 25 but not limited to paper, notebooks, pencils, pens, and art 4 26 supplies. 4 27 c. "Qualified educational expenses" does not include 4 28 tuition, as defined in section 422.12, at a nonpublic 4 29 school where the tuition charged per student, prior to any 4 30 scholarships or other reductions, exceeds the regular program 4 31 state cost per pupil for the same school year. 4 32 7. A person who makes a false claim for the purpose of 4 33 obtaining an education savings grant provided for in this 4 34 section or who knowingly receives the grant or makes a payment 4 35 from an account within 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 commits a fraudulent practice under this subsection is 5 9 prohibited from participating in the education savings grant 5 10 program in the future. 5 11 8. a. For each pupil with a positive balance in the 5 12 pupil's account in the education savings grant fund upon 5 13 graduation from high school or completion of an equivalent 5 14 level of competent private instruction under chapter 299A, the 5 15 department of management shall maintain the account in the 5 16 fund until the pupil is twenty=three years of age. Following 5 17 graduation from high school until the pupil is twenty=three 5 18 years of age, moneys in the pupil's account may be used for 5 19 higher education costs, as defined in section 12D.1, subsection 5 20 2, incurred by the pupil while attending an institution of 5 21 higher education under the control of the state board of 5 22 regents, a community college located in this state, or a 5 23 private college or university located in this state. Payments 5 24 from a pupil's account for higher education costs shall be 5 25 made in the same manner as payments for qualified educational 5 26 expenses under subsection 5. Moneys in a pupil's account when 5 27 the pupil turns twenty=three years of age shall be transferred 5 28 by the department for deposit in the general fund of the state. 5 29 b. Notwithstanding the age limitation in paragraph "a", 5 30 if the pupil with a positive balance in the pupil's account 5 31 in the education savings grant fund upon graduation from high 5 32 school or completion of an equivalent level of competent 5 33 private instruction under chapter 299A serves on federal active 5 34 duty, other than training, and is discharged under honorable 5 35 conditions, the limitation date otherwise applicable under 6 1 paragraph "a" shall be extended by one year for each year of 6 2 federal active duty service by the pupil, but not to a date 6 3 after the pupil's twenty=seventh birthday. 6 4 9. This section shall not be construed to authorize the 6 5 state or any political subdivision of the state to exercise 6 6 authority over any nonpublic school or pupil receiving 6 7 competent private instruction under chapter 299A or construed 6 8 to require a nonpublic school to modify its admissions or 6 9 educational program in order to receive payment from a parent 6 10 or guardian using funds from a pupil's account in the education 6 11 savings grant fund. A nonpublic school or entity providing 6 12 competent private instruction under chapter 299A that accepts 6 13 payment from a parent or guardian using funds from a pupil's 6 14 account in the education savings grant fund is not an agent of 6 15 this state or of a political subdivision of this state. Rules 6 16 adopted by the department to implement this section that impose 6 17 an undue burden on a nonpublic school or entity providing 6 18 competent private instruction under chapter 299A are invalid. 6 19 Sec. 3. Section 422.7, Code 2015, is amended by adding the 6 20 following new subsection: 6 21 NEW SUBSECTION. 51. Subtract, to the extent included, the 6 22 amount of an education savings grant under section 257.11B 6 23 received by the taxpayer for payment of qualified educational 6 24 expenses. 6 25 Sec. 4. APPLICABILITY. This Act applies to school budget 6 26 years and fiscal years beginning on or after July 1, 2016. 6 27 Sec. 5. APPLICABILITY. The section of this Act enacting 6 28 section 422.7, subsection 51, applies to tax years beginning on 6 29 or after January 1, 2016. 6 30 EXPLANATION 6 31 The inclusion of this explanation does not constitute agreement with 6 32 the explanation's substance by the members of the general assembly. 6 33 This bill provides education savings grants for pupils 6 34 attending a nonpublic school or receiving competent private 6 35 instruction and establishes an education savings grant fund. 7 1 Under the bill, pupils eligible to enroll in grades 7 2 kindergarten through 12 and attending a nonpublic school or 7 3 receiving competent private instruction under Code chapter 7 4 299A are eligible to receive an education savings grant for 7 5 school years beginning on or after July 1, 2016. By January 31 7 6 preceding the school year for which the education savings grant 7 7 is requested, the parent or guardian of the pupil requesting to 7 8 receive an education savings grant must submit an application 7 9 to the department of education indicating that the parent or 7 10 guardian intends to enroll the pupil in a nonpublic school or 7 11 provide competent private instruction for the pupil. 7 12 The bill requires that by March 1 preceding the school 7 13 year for which the education savings grant is requested, 7 14 the department of education must notify the department of 7 15 management of the number of pupils in each school district 7 16 designated for the following school year to receive an 7 17 education savings grant and the amount of the education 7 18 savings grant for each pupil. Education savings grants must 7 19 be approved for each school year and applications must be 7 20 submitted each year. 7 21 The amount of each education savings grant is equal to the 7 22 statewide average regular program state foundation aid per 7 23 pupil in the same school year. 7 24 The bill creates an education savings grant fund in the state 7 25 treasury under the control of the department of management 7 26 consisting of moneys appropriated to the department for the 7 27 purpose of providing education savings grants. For the fiscal 7 28 year commencing July 1, 2016, and each succeeding fiscal year, 7 29 there is appropriated from the general fund of the state to the 7 30 department of management for deposit in the fund the amount 7 31 necessary to pay all education savings grants approved for 7 32 that fiscal year. For each pupil approved for an education 7 33 savings grant, the department of management must establish an 7 34 account for that pupil in the education savings grant fund. 7 35 The amount of the pupil's education savings grant is deposited 8 1 into the pupil's account on July 1 and such amount is available 8 2 for use by parents and guardians for the payment of qualified 8 3 educational expenses, as defined in the bill, incurred by the 8 4 parent or guardian for the pupil during that fiscal year. The 8 5 bill specifies that "qualified educational expenses" does not 8 6 include tuition at a nonpublic school where the tuition charged 8 7 per student, prior to any scholarships or other reductions, 8 8 exceeds the regular program state cost per pupil for the same 8 9 school year. 8 10 The bill authorizes the department of education to 8 11 contract with a private financial management firm to manage 8 12 the education savings grant fund, in collaboration with the 8 13 treasurer of state, including providing for the disbursement 8 14 of education savings grants in the form of an electronic debit 8 15 card or checks that are payable directly from the pupil's 8 16 account within the fund. 8 17 The bill provides that moneys remaining in a pupil's account 8 18 upon the conclusion of the fiscal year shall remain in the 8 19 pupil's account in the education savings grant fund for the 8 20 payment of qualified educational expenses in future fiscal 8 21 years or for higher education costs as authorized in the bill. 8 22 Under the bill, for each pupil with a positive balance in 8 23 the pupil's account in the education savings grant fund upon 8 24 graduation from high school or completion of an equivalent 8 25 level of competent private instruction under Code chapter 8 26 299A, the department of management is required to maintain the 8 27 account in the fund until the pupil reaches an age specified in 8 28 the bill. Until the pupil reaches the age limitation, moneys 8 29 in the pupil's account may be used by the pupil for higher 8 30 education costs, as defined in Code section 12D.1. Moneys in a 8 31 pupil's account when the pupil reaches the age limitation are 8 32 transferred by the department of management for deposit in the 8 33 general fund of the state. 8 34 The bill provides that a person who makes a false claim for 8 35 the purpose of obtaining an education savings grant or who 9 1 knowingly receives the grant or makes a payment from an account 9 2 in the education savings grant fund without being legally 9 3 entitled to it is guilty of a fraudulent practice and is 9 4 subject to a criminal penalty. The bill allows the department 9 5 of management to initiate legal proceedings to recover grants 9 6 and amounts improperly awarded or paid. 9 7 The bill provides that an education savings grant received 9 8 by a taxpayer is not taxable income under Code section 422.7, 9 9 subsection 51. This provision of the bill applies to tax years 9 10 beginning on or after January 1, 2016. 9 11 The bill applies to school budget years and fiscal years 9 12 beginning on or after July 1, 2016. LSB 1729XS (2) 86 md/sc
