SF 2261 (LSB 5927XS (4) 84)

SENATE FILE 2261

BY  CHELGREN

A BILL FOR

An Act providing education savings grants for pupils attending a public school or an accredited nonpublic school or receiving competent private instruction, establishing an education savings grant fund, providing for the establishment of education achievement standards, making appropriations, providing penalties, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 256.7, Code Supplement 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  31.  Adopt rules relating to applications for an education savings grant, including application processing timelines and information required to be submitted by a parent or guardian, and rules to establish academic growth standards pursuant to section 257.11B.
    Sec. 2.  Section 257.3, subsection 1, Code 2011, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  The amount of tuition collected by each school district under section 257.3A shall be regarded as property tax for purposes of this chapter.
    Sec. 3.  NEW SECTION.  257.3A  Education savings grant —— tuition.
   A school district may collect as tuition from each pupil enrolled in the school district an amount not to exceed the education savings grant received by the pupil for that school year under section 257.11B.
    Sec. 4.  NEW SECTION.  257.11B  Education savings grant program.
   1.
  a.  Pupils residing in this state, eligible to enroll in grades kindergarten through twelve, and enrolled in a public school, attending an accredited nonpublic school, or receiving competent private instruction under chapter 299A shall be eligible to receive an education savings grant in the manner provided in this section for school years beginning on or after July 1, 2013. Except as provided in subsection 6, education savings grants shall be available for disbursement to parents and guardians for the payment of qualified education expenses as provided in this section.
   b.
  (1)  If a pupil fails to meet the academic growth standards established by the state board of education under subparagraph (2) for two consecutive school years for which the student has received an education savings grant under this section, the pupil shall not be eligible for an education savings grant for future school years unless the pupil is enrolled in an alternative options education program adopted by the school district where the pupil resides under section 280.19A. If the pupil meets the academic growth standards established by the state board of education for two consecutive school years while enrolled in the alternative options education program, the pupil shall again be eligible for the education savings grant while enrolled in any public school, attending an accredited nonpublic school, or receiving competent private instruction under chapter 299A.
   (2)  The state board of education shall adopt standards for determining academic growth of pupils in grades kindergarten through twelve. Such academic growth standards shall include minimum levels of proficiency in the areas of math, science, literacy, and social studies.
   2.
  a.  (1)  By January 31 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 shall submit an application to the department of education, on application forms developed by the department, indicating that the parent or guardian intends to enroll the pupil in either a public school, an accredited nonpublic school, or provide competent private instruction for the pupil under chapter 299A.
   (2)  In addition to such information deemed appropriate by the department of education, the application shall require certification from the public school or the accredited nonpublic school of the pupil’s enrollment for the following school year or a statement indicating the parent or guardian’s intent to provide or arrange for competent private instruction for the pupil for the following school year.
   b.  By March 1 preceding the school year for which the education savings grant is requested, the department of education shall notify the department of management of the number of pupils in each school district designated for the following school year to receive an education savings grant and the amount of the education savings grant for each pupil. The department of education shall also notify the parent or guardian of such pupils who are approved to receive an education savings grant.
   c.  Education savings grants shall only be approved for one school year and applications must be submitted under paragraph “a” for education savings grants in subsequent school years. 
   3.
  a.  The department of management shall assign each pupil an education savings grant of three thousand seven hundred dollars.
   b.  The department of management shall on July 1 transfer such amounts to the pupil’s account in the Iowa education savings grant fund established under subsection 4. Such amount shall be available for disbursement to the pupil’s parent or guardian for the payment of qualified educational expenses incurred by such persons for the pupil during that school year.
   4.  An Iowa education savings grant fund is created in the state treasury under the control of the department of management consisting of moneys appropriated to the department for the purpose of providing education savings grants under this section. For the fiscal year commencing July 1, 2013, and each succeeding fiscal year, there is appropriated from the general fund of the state to the department of management the amount necessary to pay all education savings grants approved for that fiscal year. The director of the department of management has all powers necessary to carry out and effectuate the purposes, objectives, and provisions of this section pertaining to the fund, including the power to do all of the following:
   a.  Make and enter into contracts necessary for the administration of the fund.
   b.  Procure insurance against any loss in connection with the assets of the fund.
   c.  Make disbursements from a pupil’s account within the fund to the pupil’s parents or guardians for the payment of qualified educational expenses.
   d.  Adopt rules pursuant to chapter 17A for the administration of the fund and accounts within the fund.
   5.
  a.  For each pupil approved for an education savings grant, the department shall establish an account for that pupil in the education savings grant fund. The amount of the pupil’s education savings grant determined under subsection 3 shall be deposited into the pupil’s account on July 1 and such amount shall be immediately available for disbursement to parents and guardians upon filing and approval of claims from the pupil’s account for qualified education expenses incurred by the parent or guardian for the pupil during that fiscal year.
   b.  A parent or guardian of a pupil may on forms prescribed by the department of management submit claims for disbursements of moneys within the account. The department may by rule designate the appropriate supporting documentation necessary for the disbursement of moneys in an account including but not limited to invoices of amounts due and receipts of amounts paid for qualified education expenses. If a pupil is enrolled in an alternative options education program as the result of failing to meet the academic growth standards under subsection 1, paragraph “b”, disbursements of moneys in a pupil’s account shall only be made by the department to the parent or guardian for tuition expenses of the alternative options education program.
   6.  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 shall maintain such account in the fund until the pupil is twenty-five years of age. Following graduation from high school until the pupil is twenty-five years of age, moneys in the pupil’s account may be used for higher education costs, as defined in section 12D.1, subsection 2. Disbursements from a pupil’s account for higher education costs shall be claimed by and disbursed to the pupil. Claims and disbursements for higher education costs under this subsection shall be made in the same manner as claims and disbursements for qualified educational expenses under subsection 5. Moneys in a pupil’s account when the pupil turns twenty-five years of age shall be transferred by the department for deposit in the general fund of the state. 
   7.  For purposes of this section, “qualified educational expense” includes tuition at a public school collected under section 257.3A, tuition and fees at an accredited nonpublic school, textbooks, payment to a licensed or accredited tutor, curriculum materials, tuition or fees for nonpublic online education programs, education materials and services for pupils with disabilities, standardized test fees, and other expenses incurred by the parent or guardian that are directly related to the education of the pupil at a public school or an accredited nonpublic school or directly related to providing competent private instruction for the pupil under chapter 299A.
   8.  A person who makes a false claim for the purpose of obtaining an education savings grant provided for in this section or who knowingly receives the grant without being legally entitled to it is guilty of a fraudulent practice. The false claim for an education savings grant shall be disallowed and if amounts from the grant have been disbursed from the applicable account in the education savings grant fund, the department of management shall initiate legal proceedings to recover such amounts.
    Sec. 5.  APPLICABILITY.  This Act applies to school budget years and fiscal years beginning on or after July 1, 2013.
    Sec. 6.  CORRESPONDING AMENDMENTS LEGISLATION.  Additional legislation is required to fully implement this Act. The director of the department of education shall, in compliance with section 2.16, prepare draft legislation for submission to the legislative services agency, as necessary, to implement the school finance modifications under this Act and to implement the education savings grant program created in this Act.
EXPLANATION
   This bill provides education savings grants for pupils enrolled in a public school, attending an accredited nonpublic school, or receiving competent private instruction.
   Under the bill, resident pupils eligible to enroll in grades kindergarten through 12 and enrolled in a public school, attending an accredited nonpublic school, or receiving competent private instruction under Code chapter 299A are eligible to receive an education savings grant for school years beginning on or after July 1, 2013. By January 31 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 public school or an accredited nonpublic school, or provide competent private instruction for the pupil.
   Under the bill, however, if a pupil fails to meet the academic growth standards established by the state board of education for two consecutive school years for which the student has received an education savings grant, the pupil is not eligible for an education savings grant for future school years unless the pupil is enrolled in an alternative options education program adopted by the school district where the pupil resides under Code section 280.19A. The bill provides that if the pupil meets the academic growth standards established by the state board of education for two consecutive school years while enrolled in the alternative options education program, the pupil shall again be eligible for the education savings grant while enrolled in any public school, attending an accredited nonpublic school, or receiving competent private instruction under Code chapter 299A. The bill requires the state board of education to adopt standards for determining academic growth of pupils in grades kindergarten through 12. Such academic growth standards must include minimum levels of proficiency in the areas of math, science, literacy, and social studies.
   The bill requires that by March 1 preceding the school year for which the education savings grant is requested, the department of education must notify the department of management of the number of pupils in each school district designated for the following school year to receive an education savings grant. Education savings grants may only be approved for one school year and applications must be submitted for education savings grants in subsequent school years. 
   The amount of each education savings grant is $3,700 per pupil.
   The bill creates an Iowa education savings grant fund in the state treasury under the control of the department of management consisting of moneys appropriated to the department for the purpose of providing education savings grants. For the fiscal year commencing July 1, 2013, and each succeeding fiscal year, there is appropriated from the general fund of the state to the department of management 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 1 and such amount is available for disbursement to parents and guardians upon filing and approval of claims from the pupil’s account for qualified education expenses, as defined in the bill, incurred by the parent or guardian for the pupil during that fiscal year. However, if a pupil is enrolled in an alternative options education program as the result of failing to meet the academic growth standards, disbursements of moneys in a pupil’s account shall only be made by the department of management for tuition expenses of the alternative options education program.
   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 is 25 years old. Following graduation from high school until the pupil is 25 years old, moneys in the pupil’s account may be used by the pupil for higher education costs, as defined in Code section 12D.1. Moneys in a pupil’s account when the pupil turns 25 years old 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 without being legally entitled to it is guilty of a fraudulent practice and is subject to a criminal penalty. The bill allows the department of management to initiate legal proceedings to recover grants improperly awarded under the bill.
   The bill authorizes school districts to collect as tuition from each pupil enrolled in the school district an amount not to exceed the education savings grant received by the pupil for that school year under new Code section 257.11B. Such tuition amounts collected by each school district under new Code section 257.3A shall be regarded as property tax for purposes of the school foundation formula.
   The bill applies to school budget years and fiscal years beginning on or after July 1, 2013.
   The bill provides that additional legislation is required to fully implement the bill and requires the director of the department of education to prepare draft legislation in compliance with Code section 2.16 for submission to the legislative services agency, as necessary, to implement the school finance modifications and the education savings grant program in the bill.