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Senate File 252 - IntroducedA Bill ForAn Act 1providing education savings grants for pupils attending
2a nonpublic school or receiving competent private
3instruction, establishing an education savings grant fund,
4providing an income tax exemption, making appropriations,
5providing penalties, and including applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 256.7, Code 2015, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 33. Adopt rules relating to applications
4for an education savings grant pursuant to section 257.11B,
5including application processing timelines and information
6required to be submitted by a parent or guardian.
7 Sec. 2. NEW SECTION. 257.11B Education savings grant
8program.
91. Pupils eligible to enroll in grades kindergarten through
10twelve and attending a nonpublic school or receiving competent
11private instruction under chapter 299A shall be eligible to
12receive an education savings grant in the manner provided in
13this section for school years beginning on or after July 1,
142016. Education savings grants shall be made available to
15parents and guardians in the manner authorized under subsection
164, paragraph “c”, for the payment of qualified educational
17expenses as provided in this section.
182. a. (1) By January 31 preceding the school year for
19which the education savings grant is requested, the parent
20or guardian of the pupil requesting to receive an education
21savings grant shall submit an application to the department of
22education, on application forms developed by the department,
23indicating that the parent or guardian intends to enroll the
24pupil in a nonpublic school or provide competent private
25instruction for the pupil under chapter 299A.
26(2) In addition to such information deemed appropriate by
27the department of education, the application shall require
28certification from the nonpublic school of the pupil’s
29enrollment for the following school year or a statement
30indicating the parent or guardian’s intent to provide or
31arrange for competent private instruction for the pupil for the
32following school year.
33b. By March 1 preceding the school year for which the
34education savings grant is requested, the department of
35education shall notify the department of management of the
-1-1number of pupils in each school district designated for the
2following school year to receive an education savings grant
3and the amount of the education savings grant for each pupil.
4The department of education shall also notify the parent
5or guardian of such pupils who are approved to receive an
6education savings grant.
7c. Education savings grants shall only be approved for one
8school year and applications must be submitted under paragraph
9“a” for education savings grants in subsequent school years.
103. a. The department of management shall assign each pupil
11an education savings grant in an amount equal to the statewide
12average regular program state foundation aid per pupil in the
13same school year.
14b. The department of management shall on July 1 following
15the determination of the amount of the education savings grant
16for each approved pupil transfer such amounts to the pupil’s
17account in the education savings grant fund established under
18subsection 4. Such amount shall be available to the pupil’s
19parent or guardian in the manner authorized under subsection
204, paragraph “c”, for the payment of qualified educational
21expenses incurred by such persons for the pupil during that
22school year.
234. An education savings grant fund is created in the state
24treasury under the control of the department of management
25consisting of moneys appropriated to the department for the
26purpose of providing education savings grants under this
27section. For the fiscal year commencing July 1, 2016, and
28each succeeding fiscal year, there is appropriated from the
29general fund of the state to the department of management to be
30credited to the fund the amount necessary to pay all education
31savings grants approved for that fiscal year. The director of
32the department of management has all powers necessary to carry
33out and effectuate the purposes, objectives, and provisions of
34this section pertaining to the fund, including the power to do
35all of the following:
-2- 1a. Make and enter into contracts necessary for the
2administration of the fund.
3b. Procure insurance against any loss in connection with the
4assets of the fund or require a surety bond.
5c. Contract with a private financial management firm to
6manage the fund, in collaboration with the treasurer of state,
7including providing for the disbursement of education savings
8grants in the form of an electronic debit card or checks that
9are payable directly from the pupil’s account within the fund.
10d. Conduct audits or other review necessary to properly
11administer the program.
12e. Adopt rules for the administration of the fund and
13accounts within the fund.
145. a. For each pupil approved for an education savings
15grant, the department shall establish an account for that pupil
16in the education savings grant fund. The amount of the pupil’s
17education savings grant determined under subsection 3 shall be
18deposited into the pupil’s account on July 1, and such amount
19shall be immediately available for the payment of qualified
20educational expenses incurred by the parent or guardian for
21the pupil during that fiscal year using the payment method
22authorized under subsection 4, paragraph “c”.
23b. A nonpublic school or other entity that accepts payment
24from a parent or guardian using funds from a pupil’s account in
25the education savings grant fund shall not refund, rebate, or
26share any portion of such payment with the parent, guardian, or
27pupil.
28c. Moneys remaining in a pupil’s account upon conclusion
29of the fiscal year shall remain in the pupil’s account in the
30education savings grant fund for the payment of qualified
31educational expenses in future fiscal years or for the payment
32of higher education costs as provided under subsection 8.
336. a. For purposes of this section, “qualified educational
34expenses” includes tuition and fees at a nonpublic school,
35textbooks, fees or payments for educational therapies,
-3-1including tutoring or cognitive skills training, curriculum
2fees and materials for a course of study for a specific subject
3matter or grade level, tuition or fees for nonpublic online
4education programs, education materials and services for pupils
5with disabilities, including the cost of paraprofessionals
6and assistants who are trained in accordance with state law,
7standardized test fees, fees required by the department not to
8exceed for each grant recipient five percent of the total grant
9amount in any fiscal year, higher education costs, as defined
10in section 12D.1, excluding room and board expenses, and other
11expenses incurred by the parent or guardian that are directly
12related to the education of the pupil at a nonpublic school,
13including a nonpublic school accredited by an independent
14accrediting agency approved by the department of education, or
15directly related to providing competent private instruction
16for the pupil under chapter 299A. The cost of one computer or
17other portable computing device shall be allowed as a qualified
18educational expense for a pupil if such a purchase has not been
19made using funds from that pupil’s account in either of the two
20immediately preceding fiscal years.
21b. “Qualified educational expenses” does not include
22transportation costs for the pupil, the cost of food or
23refreshments consumed by the pupil, the cost of clothing for
24the pupil, or the cost of disposable materials, including
25but not limited to paper, notebooks, pencils, pens, and art
26supplies.
27c. “Qualified educational expenses” does not include
28tuition, as defined in section 422.12, at a nonpublic
29school where the tuition charged per student, prior to any
30scholarships or other reductions, exceeds the regular program
31state cost per pupil for the same school year.
327. A person who makes a false claim for the purpose of
33obtaining an education savings grant provided for in this
34section or who knowingly receives the grant or makes a payment
35from an account within the education savings grant fund
-4-1without being legally entitled to it is guilty of a fraudulent
2practice. The false claim for an education savings grant or a
3payment from an account shall be disallowed and if amounts from
4the grant have been disbursed from the applicable account in
5the education savings grant fund, the department of management
6shall initiate legal proceedings to recover such amounts. A
7parent or guardian, or a pupil for purposes of subsection 8,
8who commits a fraudulent practice under this subsection is
9prohibited from participating in the education savings grant
10program in the future.
118. a. For each pupil with a positive balance in the
12pupil’s account in the education savings grant fund upon
13graduation from high school or completion of an equivalent
14level of competent private instruction under chapter 299A, the
15department of management shall maintain the account in the
16fund until the pupil is twenty-three years of age. Following
17graduation from high school until the pupil is twenty-three
18years of age, moneys in the pupil’s account may be used for
19higher education costs, as defined in section 12D.1, subsection
202, incurred by the pupil while attending an institution of
21higher education under the control of the state board of
22regents, a community college located in this state, or a
23private college or university located in this state. Payments
24from a pupil’s account for higher education costs shall be
25made in the same manner as payments for qualified educational
26expenses under subsection 5. Moneys in a pupil’s account when
27the pupil turns twenty-three years of age shall be transferred
28by the department for deposit in the general fund of the state.
29b. Notwithstanding the age limitation in paragraph “a”,
30if the pupil with a positive balance in the pupil’s account
31in the education savings grant fund upon graduation from high
32school or completion of an equivalent level of competent
33private instruction under chapter 299A serves on federal active
34duty, other than training, and is discharged under honorable
35conditions, the limitation date otherwise applicable under
-5-1paragraph “a” shall be extended by one year for each year of
2federal active duty service by the pupil, but not to a date
3after the pupil’s twenty-seventh birthday.
49. This section shall not be construed to authorize the
5state or any political subdivision of the state to exercise
6authority over any nonpublic school or pupil receiving
7competent private instruction under chapter 299A or construed
8to require a nonpublic school to modify its admissions or
9educational program in order to receive payment from a parent
10or guardian using funds from a pupil’s account in the education
11savings grant fund. A nonpublic school or entity providing
12competent private instruction under chapter 299A that accepts
13payment from a parent or guardian using funds from a pupil’s
14account in the education savings grant fund is not an agent of
15this state or of a political subdivision of this state. Rules
16adopted by the department to implement this section that impose
17an undue burden on a nonpublic school or entity providing
18competent private instruction under chapter 299A are invalid.
19 Sec. 3. Section 422.7, Code 2015, is amended by adding the
20following new subsection:
21 NEW SUBSECTION. 51. Subtract, to the extent included, the
22amount of an education savings grant under section 257.11B
23received by the taxpayer for payment of qualified educational
24expenses.
25 Sec. 4. APPLICABILITY. This Act applies to school budget
26years and fiscal years beginning on or after July 1, 2016.
27 Sec. 5. APPLICABILITY. The section of this Act enacting
28section 422.7, subsection 51, applies to tax years beginning on
29or after January 1, 2016.
30EXPLANATION
31The inclusion of this explanation does not constitute agreement with
32the explanation’s substance by the members of the general assembly.
33This bill provides education savings grants for pupils
34attending a nonpublic school or receiving competent private
35instruction and establishes an education savings grant fund.
-6- 1Under the bill, pupils eligible to enroll in grades
2kindergarten through 12 and attending a nonpublic school or
3receiving competent private instruction under Code chapter
4299A are eligible to receive an education savings grant for
5school years beginning on or after July 1, 2016. By January 31
6preceding the school year for which the education savings grant
7is requested, the parent or guardian of the pupil requesting to
8receive an education savings grant must submit an application
9to the department of education indicating that the parent or
10guardian intends to enroll the pupil in a nonpublic school or
11provide competent private instruction for the pupil.
12The bill requires that by March 1 preceding the school
13year for which the education savings grant is requested,
14the department of education must notify the department of
15management of the number of pupils in each school district
16designated for the following school year to receive an
17education savings grant and the amount of the education
18savings grant for each pupil. Education savings grants must
19be approved for each school year and applications must be
20submitted each year.
21The amount of each education savings grant is equal to the
22statewide average regular program state foundation aid per
23pupil in the same school year.
24The bill creates an education savings grant fund in the state
25treasury under the control of the department of management
26consisting of moneys appropriated to the department for the
27purpose of providing education savings grants. For the fiscal
28year commencing July 1, 2016, and each succeeding fiscal year,
29there is appropriated from the general fund of the state to the
30department of management for deposit in the fund the amount
31necessary to pay all education savings grants approved for
32that fiscal year. For each pupil approved for an education
33savings grant, the department of management must establish an
34account for that pupil in the education savings grant fund.
35The amount of the pupil’s education savings grant is deposited
-7-1into the pupil’s account on July 1 and such amount is available
2for use by parents and guardians for the payment of qualified
3educational expenses, as defined in the bill, incurred by the
4parent or guardian for the pupil during that fiscal year. The
5bill specifies that “qualified educational expenses” does not
6include tuition at a nonpublic school where the tuition charged
7per student, prior to any scholarships or other reductions,
8exceeds the regular program state cost per pupil for the same
9school year.
10The bill authorizes the department of education to
11contract with a private financial management firm to manage
12the education savings grant fund, in collaboration with the
13treasurer of state, including providing for the disbursement
14of education savings grants in the form of an electronic debit
15card or checks that are payable directly from the pupil’s
16account within the fund.
17The bill provides that moneys remaining in a pupil’s account
18upon the conclusion of the fiscal year shall remain in the
19pupil’s account in the education savings grant fund for the
20payment of qualified educational expenses in future fiscal
21years or for higher education costs as authorized in the bill.
22Under the bill, for each pupil with a positive balance in
23the pupil’s account in the education savings grant fund upon
24graduation from high school or completion of an equivalent
25level of competent private instruction under Code chapter
26299A, the department of management is required to maintain the
27account in the fund until the pupil reaches an age specified in
28the bill. Until the pupil reaches the age limitation, moneys
29in the pupil’s account may be used by the pupil for higher
30education costs, as defined in Code section 12D.1. Moneys in a
31pupil’s account when the pupil reaches the age limitation are
32transferred by the department of management for deposit in the
33general fund of the state.
34The bill provides that a person who makes a false claim for
35the purpose of obtaining an education savings grant or who
-8-1knowingly receives the grant or makes a payment from an account
2in the education savings grant fund without being legally
3entitled to it is guilty of a fraudulent practice and is
4subject to a criminal penalty. The bill allows the department
5of management to initiate legal proceedings to recover grants
6and amounts improperly awarded or paid.
7The bill provides that an education savings grant received
8by a taxpayer is not taxable income under Code section 422.7,
9subsection 51. This provision of the bill applies to tax years
10beginning on or after January 1, 2016.
11The bill applies to school budget years and fiscal years
12beginning on or after July 1, 2016.
-9-
2a nonpublic school or receiving competent private
3instruction, establishing an education savings grant fund,
4providing an income tax exemption, making appropriations,
5providing penalties, and including applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 256.7, Code 2015, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 33. Adopt rules relating to applications
4for an education savings grant pursuant to section 257.11B,
5including application processing timelines and information
6required to be submitted by a parent or guardian.
7 Sec. 2. NEW SECTION. 257.11B Education savings grant
8program.
91. Pupils eligible to enroll in grades kindergarten through
10twelve and attending a nonpublic school or receiving competent
11private instruction under chapter 299A shall be eligible to
12receive an education savings grant in the manner provided in
13this section for school years beginning on or after July 1,
142016. Education savings grants shall be made available to
15parents and guardians in the manner authorized under subsection
164, paragraph “c”, for the payment of qualified educational
17expenses as provided in this section.
182. a. (1) By January 31 preceding the school year for
19which the education savings grant is requested, the parent
20or guardian of the pupil requesting to receive an education
21savings grant shall submit an application to the department of
22education, on application forms developed by the department,
23indicating that the parent or guardian intends to enroll the
24pupil in a nonpublic school or provide competent private
25instruction for the pupil under chapter 299A.
26(2) In addition to such information deemed appropriate by
27the department of education, the application shall require
28certification from the nonpublic school of the pupil’s
29enrollment for the following school year or a statement
30indicating the parent or guardian’s intent to provide or
31arrange for competent private instruction for the pupil for the
32following school year.
33b. By March 1 preceding the school year for which the
34education savings grant is requested, the department of
35education shall notify the department of management of the
-1-1number of pupils in each school district designated for the
2following school year to receive an education savings grant
3and the amount of the education savings grant for each pupil.
4The department of education shall also notify the parent
5or guardian of such pupils who are approved to receive an
6education savings grant.
7c. Education savings grants shall only be approved for one
8school year and applications must be submitted under paragraph
9“a” for education savings grants in subsequent school years.
103. a. The department of management shall assign each pupil
11an education savings grant in an amount equal to the statewide
12average regular program state foundation aid per pupil in the
13same school year.
14b. The department of management shall on July 1 following
15the determination of the amount of the education savings grant
16for each approved pupil transfer such amounts to the pupil’s
17account in the education savings grant fund established under
18subsection 4. Such amount shall be available to the pupil’s
19parent or guardian in the manner authorized under subsection
204, paragraph “c”, for the payment of qualified educational
21expenses incurred by such persons for the pupil during that
22school year.
234. An education savings grant fund is created in the state
24treasury under the control of the department of management
25consisting of moneys appropriated to the department for the
26purpose of providing education savings grants under this
27section. For the fiscal year commencing July 1, 2016, and
28each succeeding fiscal year, there is appropriated from the
29general fund of the state to the department of management to be
30credited to the fund the amount necessary to pay all education
31savings grants approved for that fiscal year. The director of
32the department of management has all powers necessary to carry
33out and effectuate the purposes, objectives, and provisions of
34this section pertaining to the fund, including the power to do
35all of the following:
-2- 1a. Make and enter into contracts necessary for the
2administration of the fund.
3b. Procure insurance against any loss in connection with the
4assets of the fund or require a surety bond.
5c. Contract with a private financial management firm to
6manage the fund, in collaboration with the treasurer of state,
7including providing for the disbursement of education savings
8grants in the form of an electronic debit card or checks that
9are payable directly from the pupil’s account within the fund.
10d. Conduct audits or other review necessary to properly
11administer the program.
12e. Adopt rules for the administration of the fund and
13accounts within the fund.
145. a. For each pupil approved for an education savings
15grant, the department shall establish an account for that pupil
16in the education savings grant fund. The amount of the pupil’s
17education savings grant determined under subsection 3 shall be
18deposited into the pupil’s account on July 1, and such amount
19shall be immediately available for the payment of qualified
20educational expenses incurred by the parent or guardian for
21the pupil during that fiscal year using the payment method
22authorized under subsection 4, paragraph “c”.
23b. A nonpublic school or other entity that accepts payment
24from a parent or guardian using funds from a pupil’s account in
25the education savings grant fund shall not refund, rebate, or
26share any portion of such payment with the parent, guardian, or
27pupil.
28c. Moneys remaining in a pupil’s account upon conclusion
29of the fiscal year shall remain in the pupil’s account in the
30education savings grant fund for the payment of qualified
31educational expenses in future fiscal years or for the payment
32of higher education costs as provided under subsection 8.
336. a. For purposes of this section, “qualified educational
34expenses” includes tuition and fees at a nonpublic school,
35textbooks, fees or payments for educational therapies,
-3-1including tutoring or cognitive skills training, curriculum
2fees and materials for a course of study for a specific subject
3matter or grade level, tuition or fees for nonpublic online
4education programs, education materials and services for pupils
5with disabilities, including the cost of paraprofessionals
6and assistants who are trained in accordance with state law,
7standardized test fees, fees required by the department not to
8exceed for each grant recipient five percent of the total grant
9amount in any fiscal year, higher education costs, as defined
10in section 12D.1, excluding room and board expenses, and other
11expenses incurred by the parent or guardian that are directly
12related to the education of the pupil at a nonpublic school,
13including a nonpublic school accredited by an independent
14accrediting agency approved by the department of education, or
15directly related to providing competent private instruction
16for the pupil under chapter 299A. The cost of one computer or
17other portable computing device shall be allowed as a qualified
18educational expense for a pupil if such a purchase has not been
19made using funds from that pupil’s account in either of the two
20immediately preceding fiscal years.
21b. “Qualified educational expenses” does not include
22transportation costs for the pupil, the cost of food or
23refreshments consumed by the pupil, the cost of clothing for
24the pupil, or the cost of disposable materials, including
25but not limited to paper, notebooks, pencils, pens, and art
26supplies.
27c. “Qualified educational expenses” does not include
28tuition, as defined in section 422.12, at a nonpublic
29school where the tuition charged per student, prior to any
30scholarships or other reductions, exceeds the regular program
31state cost per pupil for the same school year.
327. A person who makes a false claim for the purpose of
33obtaining an education savings grant provided for in this
34section or who knowingly receives the grant or makes a payment
35from an account within the education savings grant fund
-4-1without being legally entitled to it is guilty of a fraudulent
2practice. The false claim for an education savings grant or a
3payment from an account shall be disallowed and if amounts from
4the grant have been disbursed from the applicable account in
5the education savings grant fund, the department of management
6shall initiate legal proceedings to recover such amounts. A
7parent or guardian, or a pupil for purposes of subsection 8,
8who commits a fraudulent practice under this subsection is
9prohibited from participating in the education savings grant
10program in the future.
118. a. For each pupil with a positive balance in the
12pupil’s account in the education savings grant fund upon
13graduation from high school or completion of an equivalent
14level of competent private instruction under chapter 299A, the
15department of management shall maintain the account in the
16fund until the pupil is twenty-three years of age. Following
17graduation from high school until the pupil is twenty-three
18years of age, moneys in the pupil’s account may be used for
19higher education costs, as defined in section 12D.1, subsection
202, incurred by the pupil while attending an institution of
21higher education under the control of the state board of
22regents, a community college located in this state, or a
23private college or university located in this state. Payments
24from a pupil’s account for higher education costs shall be
25made in the same manner as payments for qualified educational
26expenses under subsection 5. Moneys in a pupil’s account when
27the pupil turns twenty-three years of age shall be transferred
28by the department for deposit in the general fund of the state.
29b. Notwithstanding the age limitation in paragraph “a”,
30if the pupil with a positive balance in the pupil’s account
31in the education savings grant fund upon graduation from high
32school or completion of an equivalent level of competent
33private instruction under chapter 299A serves on federal active
34duty, other than training, and is discharged under honorable
35conditions, the limitation date otherwise applicable under
-5-1paragraph “a” shall be extended by one year for each year of
2federal active duty service by the pupil, but not to a date
3after the pupil’s twenty-seventh birthday.
49. This section shall not be construed to authorize the
5state or any political subdivision of the state to exercise
6authority over any nonpublic school or pupil receiving
7competent private instruction under chapter 299A or construed
8to require a nonpublic school to modify its admissions or
9educational program in order to receive payment from a parent
10or guardian using funds from a pupil’s account in the education
11savings grant fund. A nonpublic school or entity providing
12competent private instruction under chapter 299A that accepts
13payment from a parent or guardian using funds from a pupil’s
14account in the education savings grant fund is not an agent of
15this state or of a political subdivision of this state. Rules
16adopted by the department to implement this section that impose
17an undue burden on a nonpublic school or entity providing
18competent private instruction under chapter 299A are invalid.
19 Sec. 3. Section 422.7, Code 2015, is amended by adding the
20following new subsection:
21 NEW SUBSECTION. 51. Subtract, to the extent included, the
22amount of an education savings grant under section 257.11B
23received by the taxpayer for payment of qualified educational
24expenses.
25 Sec. 4. APPLICABILITY. This Act applies to school budget
26years and fiscal years beginning on or after July 1, 2016.
27 Sec. 5. APPLICABILITY. The section of this Act enacting
28section 422.7, subsection 51, applies to tax years beginning on
29or after January 1, 2016.
30EXPLANATION
31The inclusion of this explanation does not constitute agreement with
32the explanation’s substance by the members of the general assembly.
33This bill provides education savings grants for pupils
34attending a nonpublic school or receiving competent private
35instruction and establishes an education savings grant fund.
-6- 1Under the bill, pupils eligible to enroll in grades
2kindergarten through 12 and attending a nonpublic school or
3receiving competent private instruction under Code chapter
4299A are eligible to receive an education savings grant for
5school years beginning on or after July 1, 2016. By January 31
6preceding the school year for which the education savings grant
7is requested, the parent or guardian of the pupil requesting to
8receive an education savings grant must submit an application
9to the department of education indicating that the parent or
10guardian intends to enroll the pupil in a nonpublic school or
11provide competent private instruction for the pupil.
12The bill requires that by March 1 preceding the school
13year for which the education savings grant is requested,
14the department of education must notify the department of
15management of the number of pupils in each school district
16designated for the following school year to receive an
17education savings grant and the amount of the education
18savings grant for each pupil. Education savings grants must
19be approved for each school year and applications must be
20submitted each year.
21The amount of each education savings grant is equal to the
22statewide average regular program state foundation aid per
23pupil in the same school year.
24The bill creates an education savings grant fund in the state
25treasury under the control of the department of management
26consisting of moneys appropriated to the department for the
27purpose of providing education savings grants. For the fiscal
28year commencing July 1, 2016, and each succeeding fiscal year,
29there is appropriated from the general fund of the state to the
30department of management for deposit in the fund the amount
31necessary to pay all education savings grants approved for
32that fiscal year. For each pupil approved for an education
33savings grant, the department of management must establish an
34account for that pupil in the education savings grant fund.
35The amount of the pupil’s education savings grant is deposited
-7-1into the pupil’s account on July 1 and such amount is available
2for use by parents and guardians for the payment of qualified
3educational expenses, as defined in the bill, incurred by the
4parent or guardian for the pupil during that fiscal year. The
5bill specifies that “qualified educational expenses” does not
6include tuition at a nonpublic school where the tuition charged
7per student, prior to any scholarships or other reductions,
8exceeds the regular program state cost per pupil for the same
9school year.
10The bill authorizes the department of education to
11contract with a private financial management firm to manage
12the education savings grant fund, in collaboration with the
13treasurer of state, including providing for the disbursement
14of education savings grants in the form of an electronic debit
15card or checks that are payable directly from the pupil’s
16account within the fund.
17The bill provides that moneys remaining in a pupil’s account
18upon the conclusion of the fiscal year shall remain in the
19pupil’s account in the education savings grant fund for the
20payment of qualified educational expenses in future fiscal
21years or for higher education costs as authorized in the bill.
22Under the bill, for each pupil with a positive balance in
23the pupil’s account in the education savings grant fund upon
24graduation from high school or completion of an equivalent
25level of competent private instruction under Code chapter
26299A, the department of management is required to maintain the
27account in the fund until the pupil reaches an age specified in
28the bill. Until the pupil reaches the age limitation, moneys
29in the pupil’s account may be used by the pupil for higher
30education costs, as defined in Code section 12D.1. Moneys in a
31pupil’s account when the pupil reaches the age limitation are
32transferred by the department of management for deposit in the
33general fund of the state.
34The bill provides that a person who makes a false claim for
35the purpose of obtaining an education savings grant or who
-8-1knowingly receives the grant or makes a payment from an account
2in the education savings grant fund without being legally
3entitled to it is guilty of a fraudulent practice and is
4subject to a criminal penalty. The bill allows the department
5of management to initiate legal proceedings to recover grants
6and amounts improperly awarded or paid.
7The bill provides that an education savings grant received
8by a taxpayer is not taxable income under Code section 422.7,
9subsection 51. This provision of the bill applies to tax years
10beginning on or after January 1, 2016.
11The bill applies to school budget years and fiscal years
12beginning on or after July 1, 2016.
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