Bill Text: IA SF372 | 2019-2020 | 88th General Assembly | Introduced


Bill Title: A bill for an act relating to 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. (See SF 547.)

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2019-03-07 - Reported out of committee as SF 547. S.J. 506. [SF372 Detail]

Download: Iowa-2019-SF372-Introduced.html
Senate File 372 - Introduced SENATE FILE 372 BY BEHN A BILL FOR An Act relating to education savings grants for pupils 1 attending a nonpublic school or receiving competent private 2 instruction, establishing an education savings grant fund, 3 providing an income tax exemption, making appropriations, 4 providing penalties, and including applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 2481XS (4) 88 md/jh
S.F. 372 Section 1. Section 256.7, Code 2019, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 34. Adopt rules relating to applications 3 for an education savings grant pursuant to section 257.11B, 4 including application processing timelines and information 5 required to be submitted by a parent or guardian. 6 Sec. 2. NEW SECTION . 257.11B Education savings grant 7 program. 8 1. Pupils eligible to enroll in grades kindergarten through 9 twelve and attending a nonpublic school or receiving competent 10 private instruction under chapter 299A shall be eligible to 11 receive an education savings grant in the manner provided in 12 this section for school years beginning on or after July 1, 13 2020. Education savings grants shall be made available to 14 parents and guardians in the manner authorized under subsection 15 4, paragraph “c” , for the payment of qualified educational 16 expenses as provided in this section. 17 2. a. (1) By January 31 preceding the school year for 18 which the education savings grant is requested, the parent 19 or guardian of the pupil requesting to receive an education 20 savings grant shall submit an application to the department of 21 education, on application forms developed by the department of 22 education, indicating that the parent or guardian intends to 23 enroll the pupil in a nonpublic school or place the pupil under 24 competent private instruction under chapter 299A. 25 (2) In addition to information deemed appropriate by 26 the department of education, the application shall require 27 certification from the nonpublic school of the pupil’s 28 enrollment for the following school year or a statement 29 indicating the parent or guardian’s intent to provide or 30 arrange for competent private instruction for the pupil for the 31 following school year. 32 b. By March 1 preceding the school year for which the 33 education savings grant is requested, the department of 34 education shall notify the department of management of the 35 -1- LSB 2481XS (4) 88 md/jh 1/ 9
S.F. 372 number of pupils in each school district designated for the 1 following school year to receive an education savings grant 2 and the amount of the education savings grant for each pupil. 3 The department of education shall also notify the parent or 4 guardian of each pupil who is approved to receive an education 5 savings grant and the amount of the grant. 6 c. Education savings grants shall only be approved for one 7 school year and applications must be submitted annually for 8 education savings grants in subsequent school years. 9 3. a. The department of management shall assign each pupil 10 an education savings grant in an amount equal to the difference 11 between eighty-seven and five-tenths percent of the regular 12 program state cost per pupil and the statewide average regular 13 program state foundation property tax per pupil in the same 14 school year. 15 b. The department of management shall on July 1 following 16 the determination of the amount of the education savings grant 17 for each approved pupil transfer such amounts to the pupil’s 18 account in the education savings grant fund established under 19 subsection 4. Such amount shall be available to the pupil’s 20 parent or guardian in the manner authorized under subsection 21 4, paragraph “c” , for the payment of qualified educational 22 expenses incurred by such persons for the pupil during that 23 school year. 24 4. An education savings grant fund is created in the state 25 treasury under the control of the department of management 26 consisting of moneys appropriated to the department of 27 management for the purpose of providing education savings 28 grants under this section. For the fiscal year commencing July 29 1, 2020, and each succeeding fiscal year, there is appropriated 30 from the general fund of the state to the department of 31 management to be credited to the fund the amount necessary 32 to pay all education savings grants approved for that fiscal 33 year. The director of the department of management has all 34 powers necessary to carry out and effectuate the purposes, 35 -2- LSB 2481XS (4) 88 md/jh 2/ 9
S.F. 372 objectives, and provisions of this section pertaining to the 1 fund, including the power to do all of the following: 2 a. Make and enter into contracts necessary for the 3 administration of the fund. 4 b. Procure insurance against any loss in connection with the 5 assets of the fund or require a surety bond. 6 c. Contract with a private financial management firm to 7 manage the fund, in collaboration with the treasurer of state, 8 including providing for the disbursement of education savings 9 grants in the form of an electronic debit card or checks that 10 are payable directly from the pupil’s account within the fund. 11 d. Conduct audits or other review necessary to properly 12 administer the program. 13 e. Adopt rules pursuant to chapter 17A for the 14 administration of the fund and accounts within the fund. 15 5. a. For each pupil approved for an education savings 16 grant, the department of management shall establish an account 17 for that pupil in the education savings grant fund. The 18 amount of the pupil’s education savings grant determined under 19 subsection 3 shall be deposited into the pupil’s account on 20 July 1, and such amount shall be immediately available for 21 the payment of qualified educational expenses incurred by the 22 parent or guardian for the pupil during that fiscal year using 23 the payment method authorized under subsection 4, paragraph 24 “c” . 25 b. A nonpublic school or a provider of competent private 26 instruction that accepts payment from a parent or guardian 27 using funds from a pupil’s account in the education savings 28 grant fund shall not refund, rebate, or share any portion of 29 such payment with the parent, guardian, or pupil. 30 c. Moneys remaining in a pupil’s account upon conclusion 31 of the fiscal year shall remain in the pupil’s account in the 32 education savings grant fund for the payment of qualified 33 educational expenses in future fiscal years or for the payment 34 of qualified higher education expenses under subsection 8. 35 -3- LSB 2481XS (4) 88 md/jh 3/ 9
S.F. 372 6. For purposes of this section, “qualified educational 1 expenses” includes tuition and fees at a nonpublic school, 2 textbooks, fees or payments for educational therapies, 3 including tutoring or cognitive skills training, curriculum 4 fees and materials for a course of study for a specific subject 5 matter or grade level, tuition or fees for nonpublic online 6 education programs, education materials and services for pupils 7 with disabilities, including the cost of paraprofessionals 8 and assistants who are trained in accordance with state law, 9 standardized test fees, fees required by the department of 10 education not to exceed for each grant recipient five percent 11 of the total grant amount in any fiscal year, qualified higher 12 education expenses, as defined in section 12D.1, subsection 2, 13 paragraph “k” , excluding room and board expenses, and other 14 expenses incurred by the parent or guardian that are directly 15 related to the education of the pupil at a nonpublic school, 16 including a nonpublic school accredited by an independent 17 accrediting agency approved by the department of education, or 18 directly related to providing competent private instruction 19 for the pupil under chapter 299A. The cost of one computer or 20 other portable computing device shall be allowed as a qualified 21 educational expense for a pupil if such a purchase has not been 22 made using funds from that pupil’s account in either of the 23 two immediately preceding fiscal years. “Qualified educational 24 expenses” do not include transportation costs for the pupil, the 25 cost of food or refreshments consumed by the pupil, the cost of 26 clothing for the pupil, or the cost of disposable materials, 27 including but not limited to paper, notebooks, pencils, pens, 28 and art supplies. 29 7. A person who makes a false claim for the purpose 30 of obtaining an education savings grant provided for in 31 this section or who knowingly receives the grant or makes a 32 payment from an account within the education savings grant 33 fund without being legally entitled to do so is guilty of a 34 fraudulent practice under chapter 714. The false claim for an 35 -4- LSB 2481XS (4) 88 md/jh 4/ 9
S.F. 372 education savings grant or a payment from an account shall be 1 disallowed. If amounts from the grant have been disbursed from 2 the applicable account in the education savings grant fund, the 3 department of management shall initiate legal proceedings to 4 recover such amounts. A parent or guardian, or a pupil for 5 purposes of subsection 8, who commits a fraudulent practice 6 under this subsection is prohibited from participating in the 7 education savings grant program in the future. 8 8. a. For each pupil with a positive balance in the 9 pupil’s account in the education savings grant fund upon 10 graduation from high school or completion of an equivalent 11 level of competent private instruction under chapter 299A, the 12 department of management shall maintain such account in the 13 fund until the pupil is twenty-three years of age. Following 14 graduation from high school until the pupil is twenty-three 15 years of age, moneys in the pupil’s account may be used for 16 qualified higher education expenses, as defined in section 17 12D.1, subsection 2, paragraph “k” , incurred by the pupil while 18 attending an institution of higher education under the control 19 of the state board of regents, a community college located in 20 this state, or a private college or university located in this 21 state. Payments from a pupil’s account for qualified higher 22 education expenses shall be made in the same manner as payments 23 for qualified educational expenses under subsection 5. Moneys 24 in a pupil’s account when the pupil turns twenty-three years of 25 age shall be transferred by the department of management for 26 deposit in the general fund of the state. 27 b. Notwithstanding the age limitation in paragraph “a” , 28 if the pupil with a positive balance in the pupil’s account 29 in the education savings grant fund upon graduation from high 30 school or completion of an equivalent level of competent 31 private instruction under chapter 299A serves on federal active 32 duty, other than training, and is discharged under honorable 33 conditions, the limitation date otherwise applicable under 34 paragraph “a” shall be extended by one year for each year of 35 -5- LSB 2481XS (4) 88 md/jh 5/ 9
S.F. 372 federal active duty service by the pupil, but not to a date 1 after the pupil’s twenty-seventh birthday. 2 9. This section shall not be construed to authorize the 3 state or any political subdivision of the state to exercise 4 authority over any nonpublic school or provider of competent 5 private instruction under chapter 299A or construed to require 6 a nonpublic school to modify its standards for admission or 7 educational program in order to receive payment from a parent 8 or guardian using funds from a pupil’s account in the education 9 savings grant fund. A nonpublic school or provider of 10 competent private instruction under chapter 299A that accepts 11 payment from a parent or guardian using funds from a pupil’s 12 account in the education savings grant fund is not an agent 13 of this state or of a political subdivision of this state. 14 Rules adopted by the department of management or the department 15 of education to implement this section that impose an undue 16 burden on a nonpublic school or provider of competent private 17 instruction under chapter 299A are invalid. 18 Sec. 3. Section 422.7, Code 2019, is amended by adding the 19 following new subsection: 20 NEW SUBSECTION . 48. Subtract, to the extent included, the 21 amount of an education savings grant under section 257.11B 22 received by the taxpayer for payment of qualified educational 23 expenses. 24 Sec. 4. APPLICABILITY. This Act applies to school budget 25 years and fiscal years beginning on or after July 1, 2020. 26 Sec. 5. APPLICABILITY. The section of this Act enacting 27 section 422.7, subsection 48, applies to tax years beginning on 28 or after January 1, 2020. 29 EXPLANATION 30 The inclusion of this explanation does not constitute agreement with 31 the explanation’s substance by the members of the general assembly. 32 This bill provides education savings grants for pupils 33 attending a nonpublic school or receiving competent private 34 instruction and establishes an education savings grant fund. 35 -6- LSB 2481XS (4) 88 md/jh 6/ 9
S.F. 372 Under the bill, pupils eligible to enroll in grades 1 kindergarten through 12 and attending a nonpublic school or 2 receiving competent private instruction under Code chapter 3 299A are eligible to receive an education savings grant for 4 school years beginning on or after July 1, 2020. By January 31 5 preceding the school year for which the education savings grant 6 is requested, the parent or guardian of the pupil requesting to 7 receive an education savings grant must submit an application 8 to the department of education indicating that the parent or 9 guardian intends to enroll the pupil in a nonpublic school or 10 provide competent private instruction for the pupil. 11 The bill requires that by March 1 preceding the school 12 year for which the education savings grant is requested, 13 the department of education must notify the department of 14 management of the number of pupils in each school district 15 designated for the following school year to receive an 16 education savings grant and the amount of the education savings 17 grant for each pupil. Education savings grants may only be 18 approved for one school year and annual applications must be 19 submitted for education savings grants in subsequent school 20 years. 21 The amount of each education savings grant is equal to the 22 statewide average regular program state foundation aid per 23 pupil in the same school year. 24 The bill creates an education savings grant fund in 25 the state treasury under the control of the department of 26 management consisting of moneys appropriated to the department 27 of management for the purpose of providing education savings 28 grants. For the fiscal year commencing July 1, 2020, and each 29 succeeding fiscal year, there is appropriated from the general 30 fund of the state to the department of management for deposit 31 in the fund the amount necessary to pay all education savings 32 grants approved for that fiscal year. For each pupil approved 33 for an education savings grant, the department of management 34 must establish an account for that pupil in the education 35 -7- LSB 2481XS (4) 88 md/jh 7/ 9
S.F. 372 savings grant fund. The amount of the pupil’s education 1 savings grant is deposited into the pupil’s account on July 1 2 and such amount is available for use by parents and guardians 3 for the payment of qualified educational expenses, as defined 4 in the bill, incurred by the parent or guardian for the pupil 5 during that fiscal year. 6 The bill authorizes the department of management to 7 contract with a private financial management firm to manage 8 the education savings grant fund, in collaboration with the 9 treasurer of state, including providing for the disbursement 10 of education savings grants in the form of an electronic debit 11 card or checks that are payable directly from the pupil’s 12 account within the fund. 13 The bill provides that moneys remaining in a pupil’s account 14 upon the conclusion of the fiscal year shall remain in the 15 pupil’s account in the education savings grant fund for the 16 payment of qualified educational expenses in future fiscal 17 years or for qualified higher education expenses as authorized 18 in the bill. 19 Under the bill, for each pupil with a positive balance in 20 the pupil’s account in the education savings grant fund upon 21 graduation from high school or completion of an equivalent 22 level of competent private instruction under Code chapter 23 299A, the department of management is required to maintain the 24 account in the fund until the pupil reaches an age specified in 25 the bill. Until the pupil reaches the age limitation, moneys 26 in the pupil’s account may be used by the pupil for qualified 27 higher education expenses, as defined in Code section 12D.1. 28 Moneys in a pupil’s account when the pupil reaches the age 29 limitation are transferred by the department of management for 30 deposit in the general fund of the state. 31 The bill provides that a person who makes a false claim for 32 the purpose of obtaining an education savings grant or who 33 knowingly receives the grant or makes a payment from an account 34 within the education savings grant fund without being legally 35 -8- LSB 2481XS (4) 88 md/jh 8/ 9
S.F. 372 entitled to do so is guilty of a fraudulent practice and is 1 subject to a criminal penalty. The bill allows the department 2 of management to initiate legal proceedings to recover grants 3 and amounts improperly awarded or paid from accounts under the 4 bill. 5 The bill provides that an education savings grant received 6 by a taxpayer is not taxable income for purposes of state 7 individual income taxation. This provision of the bill applies 8 to tax years beginning on or after January 1, 2020. 9 The bill applies to school budget years and fiscal years 10 beginning on or after July 1, 2020. 11 -9- LSB 2481XS (4) 88 md/jh 9/ 9
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