H.F. 2223 DIVISION I 1 SHORT TITLE 2 Section 1. SHORT TITLE. This Act shall be known and may be 3 cited as the “Iowa Hope Scholarship Program to Empower Parents 4 and Expand Choice in Children’s Education by Funding Students 5 and Not Systems Act”. 6 DIVISION II 7 IOWA HOPE SCHOLARSHIP PROGRAM 8 Sec. 2. NEW SECTION . 257A.1 Program title. 9 An Iowa hope scholarship program is established for the 10 school years commencing on or after July 1, 2023. 11 Sec. 3. NEW SECTION . 257A.2 Definitions. 12 As used in this chapter, unless the context otherwise 13 requires: 14 1. “Base year” means the school year prior to the school 15 year for which the scholarship is received. 16 2. “Curriculum” means a complete course of study for 17 a particular content area or grade level, including any 18 supplemental materials required by the curriculum. 19 3. “Department” means the department of management. 20 4. “District of residence” means the public school district 21 in which the participating student resides. 22 5. “Education service provider” means a person, school, or 23 organization that receives payments to provide educational 24 goods and services to students. 25 6. “Eligible student” means a resident of this state who is 26 any of the following: 27 a. A child who is eligible to enroll in preschool through 28 grade twelve and who is not enrolled in an accredited nonpublic 29 school in the base year. 30 b. (1) For the school year beginning July 1, 2023, a child 31 who is eligible to enroll in grades eleven and twelve and who 32 is enrolled in an accredited nonpublic school for the base 33 year. 34 (2) For the school year beginning July 1, 2024, a child who 35 -1- LSB 5479HH (18) 89 md/jh 1/ 18

H.F. 2223 is eligible to enroll in grades nine through twelve and who is 1 enrolled in an accredited nonpublic school for the base year. 2 (3) For the school year beginning July 1, 2025, a child who 3 is eligible to enroll in grades seven through twelve and who is 4 enrolled in an accredited nonpublic school for the base year. 5 (4) For the school year beginning July 1, 2026, a child who 6 is eligible to enroll in grades five through twelve and who is 7 enrolled in an accredited nonpublic school for the base year. 8 (5) For the school year beginning July 1, 2027, a child who 9 is eligible to enroll in grades three through twelve and who is 10 enrolled in an accredited nonpublic school for the base year. 11 (6) For the school year beginning July 1, 2028, a child who 12 is eligible to enroll in grades one through twelve and who is 13 enrolled in an accredited nonpublic school for the base year. 14 (7) For school years beginning on or after July 1, 2029, 15 a child who is eligible to enroll in preschool through grade 16 twelve and who is enrolled in an accredited nonpublic school or 17 private preschool for the base year. 18 7. “Parent” means a biological parent, legal guardian, 19 custodian, or other person with legal authority to act on 20 behalf of an eligible student or participating student. 21 8. “Participating education service provider” means an 22 education service provider that satisfies the requirements of 23 section 257A.10. 24 9. “Participating student” means a student who receives a 25 scholarship pursuant to this chapter. 26 10. “Resident” means the same as defined in section 282.1, 27 subsection 2. 28 11. “Scholarship” means the amount of funds awarded and 29 allocated to the parents or guardian of a participating student 30 in order to pay for qualifying education expenses to educate 31 the student pursuant to the requirements of this chapter. 32 Sec. 4. NEW SECTION . 257A.3 Iowa hope scholarship 33 administration. 34 The Iowa hope scholarship program shall be administered by 35 -2- LSB 5479HH (18) 89 md/jh 2/ 18

H.F. 2223 the department. 1 Sec. 5. NEW SECTION . 257A.4 Powers of the department. 2 1. The department is authorized to take any action 3 necessary to effectuate the provisions of this chapter and to 4 successfully administer the hope scholarship program, including 5 but not limited to the following: 6 a. Adopting rules under chapter 17A for the requirements, 7 policies, procedures, and guidelines to implement and manage 8 the program. 9 b. Executing contracts and other instruments for necessary 10 goods and services. 11 c. Employing necessary personnel and engaging the services 12 of private consultants, actuaries, auditors, legal counsel, 13 managers, trustees, and any other contractors or professionals 14 needed for rendering professional and technical assistance and 15 advice. 16 d. Implementing the program through the use of financial 17 organizations as account depositories and managers. 18 e. Determining whether an expenditure of scholarship funds 19 is or was a qualifying expense to educate a participating 20 student. 21 f. Establishing the method by which moneys in the 22 hope scholarship expense fund shall be allocated to pay 23 for administrative costs and assess, collect, and expend 24 administrative fees, charges, and penalties. 25 g. Authorizing the assessment, collection, and retention of 26 fees and charges against the amounts paid into and the earnings 27 on the hope scholarship funds by a financial institution, 28 investment manager, or fund manager. 29 h. Investing and reinvesting any of the funds and accounts 30 under the department’s control with a financial institution, an 31 investment manager, or a fund manager. 32 i. Soliciting and accepting gifts, including bequests 33 and other testamentary gifts made by will, trust, or other 34 disposition; grants; loans; aid; and property, real or personal 35 -3- LSB 5479HH (18) 89 md/jh 3/ 18

H.F. 2223 of any nature and from any source, or to participate in any 1 other way in any federal, state, or local governmental programs 2 in carrying out the purposes of this chapter. The department 3 shall use the property received to effectuate the desires of 4 the donor, and shall convert the property received into cash 5 for deposit in the hope scholarship fund within one hundred 6 eighty days of receipt. 7 Sec. 6. NEW SECTION . 257A.5 Award of hope scholarships. 8 1. The hope scholarship program is established to provide 9 the option for parents to better meet the individual education 10 needs of their eligible student. 11 2. The program shall be available to receive applications 12 for the school year beginning July 1, 2023, no later than 13 October 15, 2022. 14 3. The department shall create a standard application form 15 that a parent may submit to establish the student’s eligibility 16 for the award of a scholarship, to be placed in the student’s 17 education savings account to be used for qualifying expenses 18 on behalf of the participating student. Information about 19 scholarship funds and the application process shall be made 20 available on the department’s internet site. 21 4. a. The department shall issue a decision letter to 22 eligible students within forty-five days of receipt of a 23 completed application and all required documentation. 24 b. The department shall approve an application for a 25 scholarship if the parent submits an application for a 26 scholarship in accordance with the rules adopted by the 27 department that includes an agreement with the department, 28 promising to provide an education for the eligible recipient 29 through enrollment in an accredited nonpublic school or 30 instruction that meets the requirements of chapter 299A. 31 Sec. 7. NEW SECTION . 257A.6 Funding of hope scholarships 32 —— program and expense funds. 33 1. A hope scholarship program fund is created as a separate 34 and distinct fund in the state treasury under the control of 35 -4- LSB 5479HH (18) 89 md/jh 4/ 18

H.F. 2223 the department. Moneys in the fund include revenues credited 1 to the fund, appropriations made to the fund, and other moneys 2 deposited into the fund. Notwithstanding section 12C.7, 3 subsection 2, all interest and earnings and other returns 4 derived from the deposit and investment of moneys in the hope 5 scholarship fund shall be credited to the fund. 6 2. For each fiscal year beginning on or after July 1, 2023, 7 there is appropriated from the general fund of the state to 8 the hope scholarship fund an amount necessary to pay all hope 9 scholarships approved for that fiscal year and the amount 10 necessary to administer the program and subject to transfer 11 under subsection 6. There is appropriated annually all moneys 12 in the hope scholarship fund to the department for purposes of 13 providing scholarships under this chapter. 14 3. Notwithstanding section 8.33, any moneys remaining in 15 the hope scholarship fund at the end of a fiscal year shall not 16 revert to any other fund but shall remain in the fund for use as 17 provided in this chapter for the following fiscal year. 18 4. Following approval of the application, the department 19 shall make available to each participating student a 20 scholarship in an amount equal to the sum of all the following 21 for the same school budget year: 22 a. The product of the student’s weighted enrollment that 23 would otherwise be assigned to the student under chapter 257 24 if the student was enrolled in the student’s district of 25 residence multiplied by the difference between eighty-eight and 26 four-tenths percent of the regular program state cost per pupil 27 and the statewide average foundation property tax per pupil. 28 b. The total teacher salary supplement district cost per 29 pupil for the student’s district of residence. 30 c. The total professional development supplement district 31 cost per pupil for the student’s district of residence. 32 d. The total early intervention supplement district cost per 33 pupil for the student’s district of residence. 34 e. The total area education agency teacher salary supplement 35 -5- LSB 5479HH (18) 89 md/jh 5/ 18

H.F. 2223 district cost per pupil for the student’s district of 1 residence. 2 f. The total area education agency professional development 3 supplement district cost per pupil for the student’s district 4 of residence. 5 g. The total teacher leadership supplement district cost per 6 pupil for the student’s district of residence. 7 5. The amount of the scholarship to a participating student 8 who is awarded a hope scholarship for less than a full school 9 year shall be prorated based on the portion of the school year 10 the eligible recipient is awarded the scholarship. 11 6. A hope scholarship program expense fund is created 12 as a separate and distinct fund in the state treasury under 13 the control of the department. Moneys in the fund include 14 transfers made pursuant to this subsection or other moneys 15 received by the department for the hope scholarship program 16 expense fund. Notwithstanding sections 12C.7, subsection 2, 17 all interest or earnings derived from the deposit of moneys in 18 the hope scholarship program expense fund shall be credited to 19 the fund. An amount not to exceed five percent of the annual 20 appropriation to the hope scholarship program fund shall be 21 transferred to the hope scholarship program expense fund to 22 cover the annual administrative costs of the hope scholarship 23 program and the cost of surety bonds for education service 24 providers receiving more than one hundred thousand dollars 25 annually in hope scholarship funds. 26 7. The deposit of hope scholarship funds into a 27 participating student’s account shall be subject to the 28 execution of the parental agreement. Any funds remaining in a 29 hope scholarship account at the end of the fiscal year may be 30 carried over to the next fiscal year upon successful renewal 31 of the account. 32 8. Funds deposited in a participating student’s hope 33 scholarship account do not constitute taxable income to the 34 parent or the participating student. 35 -6- LSB 5479HH (18) 89 md/jh 6/ 18

H.F. 2223 9. The department shall continue to make deposits into a 1 participating student’s hope scholarship account unless any of 2 the following conditions have occurred: 3 a. A parent of a participating student fails to renew a 4 hope scholarship account or withdraws from the hope scholarship 5 program. 6 b. The department determines that the student is no longer 7 eligible for a hope scholarship. 8 c. The department suspends or revokes participation in 9 the hope scholarship program for failure to comply with the 10 requirements of this chapter. 11 d. The participating student successfully completes a 12 secondary education program. 13 e. The participating student reaches twenty-one years of 14 age. 15 10. If any of the conditions in subsection 9 occur, the 16 department shall notify the parent that the participating 17 student’s account will be closed in forty-five calendar days. 18 If a parent fails to adequately address the condition or 19 conditions upon which closure is based or does not respond 20 within thirty calendar days of receipt of notice, the 21 department shall close the account and any remaining moneys 22 shall be returned to the general fund of the state. 23 11. Hope scholarship funds may only be used for educational 24 purposes in accordance with this subsection. Parents of a 25 participating student shall agree to use the funds deposited in 26 their student’s hope scholarship account only for the following 27 qualifying expenses to educate the student: 28 a. Services provided by a public school district, including 29 tuition and individual classes and extracurricular activities 30 and programs. 31 b. Tuition and fees at a participating education service 32 provider. 33 c. Tutoring services provided by an individual or a tutoring 34 facility, if such tutoring services are not provided by a 35 -7- LSB 5479HH (18) 89 md/jh 7/ 18

H.F. 2223 member of the participating student’s immediate family. 1 d. Fees for nationally standardized assessments, advanced 2 placement examinations, any examinations related to college 3 or university admission, and tuition or fees for preparatory 4 courses for such exams. 5 e. Tuition and fees for programs of study or the curriculum 6 of courses that lead to an industry-recognized credential that 7 satisfies a workforce need. 8 f. Tuition and fees for accredited nonpublic online learning 9 programs. 10 g. Tuition and fees for alternative education programs 11 that meet standards similar to alternative options education 12 programs under section 280.19A. 13 h. Fees for education programs and services otherwise 14 allowed under this subsection that meet outside of the normal 15 school day or outside the academic school year. 16 i. Educational services and therapies, including but not 17 limited to occupational, behavioral, physical, speech-language, 18 and audiology therapies. 19 j. Any other qualified expenses as approved by the 20 department. 21 12. This chapter does not prohibit a student from receiving 22 a tuition grant from an accredited nonpublic school or school 23 tuition organization or from receiving any other form of 24 financial aid. 25 13. Hope scholarship funds shall not be refunded, rebated, 26 or shared with a parent or participating student in any manner 27 by an education service provider. Any refund or rebate for 28 goods or services purchased with hope scholarship funds shall 29 be credited directly to the participating student’s hope 30 scholarship account. 31 14. This chapter does not prohibit the parents of a 32 participating student from making payments for the costs of 33 educational goods and services not covered by the funds in 34 the qualifying student’s hope scholarship account. However, 35 -8- LSB 5479HH (18) 89 md/jh 8/ 18

H.F. 2223 personal deposits into an account are not permitted. 1 Sec. 8. NEW SECTION . 257A.7 Renewal of hope scholarship 2 accounts. 3 1. A parent must renew a participating student’s hope 4 scholarship on an annual basis. 5 2. Notwithstanding any changes in eligibility, a student 6 who has previously qualified for a hope scholarship remains 7 eligible to apply for renewal until one of the disqualifying 8 conditions set forth in section 257A.6, subsection 9, occurs 9 and provided that the department verifies the following 10 information by July 1 of every year: 11 a. A list of all active hope scholarship accounts. 12 b. The district of residence of each participating student. 13 c. For each participating student who attends an accredited 14 nonpublic school that is a participating education service 15 provider, annual confirmation of the participating student’s 16 continued attendance at the nonpublic school. 17 d. For each participating student who is receiving 18 private instruction, that the student has complied with all 19 requirements of chapter 299A. 20 3. If a parent fails to renew a student’s hope scholarship, 21 the department shall notify the parent that the student’s 22 account will be closed in forty-five calendar days. If a 23 parent chooses not to renew or does not respond within thirty 24 calendar days of receipt of notice, the department shall close 25 the account and any remaining moneys shall be deposited in the 26 general fund of the state. 27 4. If an eligible student decides to return to the hope 28 scholarship program after failing to renew, the eligible 29 student must reapply. The department shall adopt rules to 30 provide the least disruptive process for students who desire to 31 stop receiving hope scholarship payments and return full-time 32 to a public school. 33 5. The department shall adopt rules for participating 34 students who want to continue to receive services provided by 35 -9- LSB 5479HH (18) 89 md/jh 9/ 18

H.F. 2223 a public school or district, including individual classes and 1 extracurricular programs. The department shall ensure that 2 any public school or school district providing such services 3 receives the appropriate pro rata share of a participating 4 student’s hope scholarship funds based on the percentage of 5 total instruction provided to the student by the public school 6 or school district. Public school districts may charge tuition 7 to hope scholarship students who enroll for services in a 8 public school. Participating students who enroll for services 9 part-time in public schools shall not be included in the 10 enrollment of the school district for funding purposes under 11 chapter 257. This chapter shall not be construed to prohibit 12 a participating student from using the funds deposited in the 13 student’s account on both services provided by a public school 14 or district and other qualifying expenses. 15 Sec. 9. NEW SECTION . 257A.8 Administration of hope 16 scholarship program and accounts. 17 1. In addition to the duties under this chapter, the 18 department shall do all of the following: 19 a. Maintain an updated list of participating education 20 service providers and ensure that the list is publicly 21 available. 22 b. Provide parents with a written explanation of the 23 allowable uses of hope scholarship funds, the responsibilities 24 of parents, the duties of the department, and the role of 25 any private financial management firms or other private 26 organizations that the department may contract with to 27 administer the hope scholarship program. 28 c. Ensure that parents of students with a disability 29 receive notice that participation in the hope scholarship 30 program is a parental placement under 20 U.S.C. §1412 of the 31 federal Individuals with Disabilities Education Act, including 32 an explanation of the rights that parentally placed students 33 possess under the federal law and any applicable state laws and 34 regulations. 35 -10- LSB 5479HH (18) 89 md/jh 10/ 18

H.F. 2223 2. The department may contract with private organizations 1 to administer the hope scholarship program, including but 2 not limited to private financial management firms to manage 3 scholarship accounts. 4 3. The department shall implement or contract with a 5 private organization to implement a commercially viable, 6 cost-effective, and parent-friendly system for payment for 7 services from hope scholarship accounts to participating 8 education service providers, including but not limited to 9 the use of debit cards or other electronic fund transfers. 10 However, a hope scholarship account shall not be used for debit 11 card or electronic payment fees. 12 4. The department shall also implement a commercially 13 viable, cost-effective, and parent-friendly system for publicly 14 rating, reviewing, and sharing information about participating 15 education service providers. If feasible, such a system shall 16 be integrated with the system under subsection 3. 17 5. If a participating education service provider requires 18 an application fee or a partial payment of tuition or fees 19 prior to the start of the academic year to reserve space for a 20 participating student, such fee or partial payment may be paid 21 prior to the start of the school year in which the scholarship 22 is awarded, and deducted in an equitable manner from subsequent 23 scholarship deposits to ensure adequate funds remain available 24 throughout the school year; but if the student decides not to 25 use the education service provider, the application fee or 26 partial reservation payment must be returned to the department 27 by such education service provider and credited to the 28 student’s account. 29 6. a. The department may accept gifts and grants from any 30 source to cover administrative costs to be deposited in the 31 hope scholarship program expense fund and for costs to inform 32 the public about the program. 33 b. The department may accept gifts and grants from any 34 source to cover scholarship costs to be deposited in the hope 35 -11- LSB 5479HH (18) 89 md/jh 11/ 18

H.F. 2223 scholarship program fund. 1 7. The department shall adopt all necessary rules to meet 2 timelines set forth in this chapter, including rules for all 3 of the following: 4 a. Establishing or contracting for the establishment of a 5 fraud reporting system. 6 b. Procedures for refunding payments from education service 7 providers back to scholarship accounts. 8 c. Procedures for entering into reciprocal agreements with 9 other state education savings account agencies or entities, 10 whether public or private, to recognize and allow education 11 service providers approved in other states to receive payments 12 from hope scholarship accounts under this chapter. 13 8. The rules and policies adopted by the department should 14 avoid excessive bureaucracy and overly prescriptive mandates 15 and instead shall focus on encouraging participation in the 16 program and encouraging education service providers to provide 17 parents and hope scholarship students with a broad array of 18 educational options. 19 Sec. 10. NEW SECTION . 257A.9 Auditing of program —— 20 suspension of accounts and providers. 21 1. The department shall adopt rules for the auditing of 22 individual hope scholarship accounts and shall conduct or 23 contract for the random auditing of individual hope scholarship 24 accounts as needed to ensure compliance with the requirements 25 of this chapter and rules of the program. 26 2. As part of the auditing process, the department may 27 remove a parent or eligible recipient from the program and 28 close an account for failure to comply with the terms of the 29 parental agreement, failure to comply with the applicable laws, 30 failure of the student to remain eligible, or intentional 31 and fraudulent misuse of scholarship funds. The department 32 rules shall create procedures to ensure that a fair process 33 exists to determine the removal of a parent or student from the 34 program and a parent may appeal a decision of the department 35 -12- LSB 5479HH (18) 89 md/jh 12/ 18

H.F. 2223 as provided under chapter 17A. 1 3. a. The department may conduct or contract for the audit 2 of education service providers accepting payments from hope 3 scholarship accounts if the department determines that the 4 education service provider has done any of the following: 5 (1) Intentionally and substantially misrepresented 6 information or failed to refund any overpayments in a timely 7 manner. 8 (2) Routinely failed to provide students with promised 9 educational goods or services. 10 b. If the department determines that an education service 11 provider has intentionally and substantially misused hope 12 scholarship funds, the department may bar the education service 13 provider from continuing to receive payments. The department 14 shall create procedures to ensure that a fair process exists 15 to determine whether an education service provider may be 16 barred from receiving payment from scholarship accounts and 17 an education service provider may appeal a decision to bar 18 the education service provider from receiving payments to the 19 department. 20 c. If the department bars an education service provider 21 from receiving payments from hope scholarship accounts, the 22 department shall notify parents and students of the decision as 23 quickly as practicable. 24 d. If the department obtains evidence of potential 25 fraudulent use of hope scholarship funds, the department 26 may refer suspected cases to the attorney general for 27 purposes of investigation, collection, and potential criminal 28 investigation. 29 Sec. 11. NEW SECTION . 257A.10 Requirements for and rights 30 of participating education service providers. 31 1. To be a participating education service provider and be 32 eligible to accept payments from a hope scholarship account, an 33 education service provider must do all of the following: 34 a. Submit notice to the department that the provider wishes 35 -13- LSB 5479HH (18) 89 md/jh 13/ 18

H.F. 2223 to participate in the hope scholarship program. 1 b. Provide parents with a receipt for all qualifying 2 expenses for the participating student. 3 c. Agree not to refund, rebate, or share scholarship funds 4 with parents or students in any manner, except that funds may 5 be remitted or refunded to a scholarship account in accordance 6 with section 257A.6, subsection 13. 7 d. Agree to submit any employee who will have contact with 8 participating students to a criminal background check. 9 e. In the case of a participating education service provider 10 that is an accredited nonpublic school, provide notice of 11 enrollment annually to the district of residence of any student 12 for which a student’s tuition to such school is being paid 13 through the hope scholarship program. 14 2. This chapter shall not be construed to limit the 15 independence or autonomy of an education service provider or 16 make the actions of an education service provider the actions 17 of any governmental entity. 18 3. Education service providers shall be given maximum 19 freedom to provide for the educational needs of participating 20 students without governmental control. 21 4. A participating education service provider is not 22 required to alter its creed, practices, admission policy, 23 hiring policy, or curriculum in order to accept participating 24 students. 25 5. This chapter does not expand the regulatory authority 26 of the state, its officers, or any school district to impose 27 any additional regulation of education service providers beyond 28 those necessary to enforce the requirements of the program. 29 Sec. 12. NEW SECTION . 257A.11 Responsibilities of districts 30 of residence. 31 The district of residence in which a participating student 32 was last enrolled, if applicable, shall provide an education 33 service provider that has enrolled the student with a complete 34 copy of the student’s school records, while complying with the 35 -14- LSB 5479HH (18) 89 md/jh 14/ 18

H.F. 2223 federal Family Educational Rights and Privacy Act of 1974, 20 1 U.S.C. §1232g. 2 Sec. 13. NEW SECTION . 257A.12 Legal proceedings —— 3 severability. 4 1. No liability arises on the part of the department or 5 any governmental entity based on the award or use of a hope 6 scholarship awarded pursuant to this chapter. 7 2. It is the intent of the general assembly that if any 8 portion of this chapter is challenged in court as violating 9 either the state or federal constitution, the parents of 10 eligible students shall have standing to be parties to such 11 litigation, and should be permitted by the court to intervene 12 if the parents are not already parties to such litigation. 13 3. If any provision of this chapter or the application 14 of any such provision of this chapter to any person or 15 circumstance is held invalid by a court of competent 16 jurisdiction, the remainder of this chapter or the application 17 of the provisions of this chapter to persons or circumstances 18 other than those to which the chapter is held invalid shall not 19 be affected. 20 EXPLANATION 21 The inclusion of this explanation does not constitute agreement with 22 the explanation’s substance by the members of the general assembly. 23 This bill establishes the Iowa hope scholarship program 24 for the school years commencing on or after July 1, 2023. 25 The program provides hope scholarships to eligible students 26 for qualifying educational expenses. The bill phases in 27 eligibility for the program based on grade eligibility and 28 whether the child was enrolled in an accredited nonpublic 29 school in the base year, as defined in the bill. 30 The Iowa hope scholarship program shall be administered by 31 the department of management. 32 The bill establishes powers and duties of the department 33 relating to the administration and oversight of the program, 34 including the adoption of administrative rules. The bill 35 -15- LSB 5479HH (18) 89 md/jh 15/ 18

H.F. 2223 requires that applications for the program for the school 1 year beginning July 1, 2023, be available for submission no 2 later than October 15, 2022. The department shall approve 3 an application for a scholarship if a parent submits an 4 application for a scholarship in accordance with the rules 5 adopted by the department that includes an agreement with the 6 department, promising to provide an education for the eligible 7 recipient through enrollment in an accredited nonpublic school 8 or instruction that meets the requirements of Code chapter 9 299A. 10 The bill establishes a hope scholarship program fund under 11 the control of the department of management. For each fiscal 12 year beginning on or after July 1, 2023, there is appropriated 13 from the general fund of the state to the hope scholarship fund 14 an amount necessary to pay all hope scholarships approved for 15 that fiscal year and the costs to administer the program as 16 provided in the bill. 17 Following approval of the scholarship application, the 18 department shall make available to each participating student 19 a scholarship in an amount equal to the sum of all the 20 following for the same school budget year: (1) the product 21 of the student’s weighted enrollment that would otherwise 22 be assigned to the pupil if the pupil was enrolled in the 23 student’s district of residence multiplied by the difference 24 between 88.4 percent of the regular program state cost per 25 pupil and the statewide average foundation property tax per 26 pupil; (2) the total teacher salary supplement district cost 27 per pupil for the student’s district of residence; (3) the 28 total professional development supplement district cost per 29 pupil for the student’s district of residence; (4) the total 30 early intervention supplement district cost per pupil for the 31 student’s district of residence; (5) the total area education 32 agency teacher salary supplement district cost per pupil 33 for the student’s district of residence; (6) the total area 34 education agency professional development supplement district 35 -16- LSB 5479HH (18) 89 md/jh 16/ 18

H.F. 2223 cost per pupil for the student’s district of residence; and (7) 1 the total teacher leadership supplement district cost per pupil 2 for the student’s district of residence. 3 The bill specifies the allowable uses for hope scholarship 4 funds. 5 A hope scholarship program expense fund is created under 6 the control of the department of management. An amount 7 not to exceed 5 percent of the annual appropriation to the 8 hope scholarship program fund shall be transferred to the 9 hope scholarship program expense fund to cover the annual 10 administrative costs of the hope scholarship program and the 11 cost of surety bonds for education service providers receiving 12 more than $100,000 annually in hope scholarship funds. 13 Under the bill, funds deposited in a participating student’s 14 hope scholarship account do not constitute taxable income to 15 the parent or the participating student. 16 The department shall continue to make deposits into a 17 participating student’s hope scholarship account unless 18 specified eligibility conditions have occurred or the student’s 19 parent fails to renew the scholarship. A parent must renew a 20 participating student’s hope scholarship on an annual basis. 21 The bill requires the department to maintain an updated list 22 of participating education service providers and shall ensure 23 that the list is publicly available, and provide parents with a 24 written explanation of the allowable uses of hope scholarship 25 funds. The department may contract with private organizations 26 to administer the hope scholarship program, including but 27 not limited to private financial management firms to manage 28 scholarship accounts. 29 The department shall implement or contract with a 30 private organization to implement a commercially viable, 31 cost-effective, and parent-friendly system for payment for 32 services from hope scholarship accounts and a system for 33 publicly rating, reviewing, and sharing information about 34 participating education service providers. The bill also 35 -17- LSB 5479HH (18) 89 md/jh 17/ 18