Regular Session 2017-2018 Senate Bill 0002 P.N. 1776

PRIOR PRINTER'S NO. 1271

PRINTER'S NO. 1776

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

Session of

2017

INTRODUCED BY DiSANTO, SCARNATI, EICHELBERGER, ARGALL, ALLOWAY,

AUMENT, BAKER, BARTOLOTTA, FOLMER, MARTIN, RAFFERTY, REGAN,

RESCHENTHALER, STEFANO, WAGNER, WHITE AND KILLION,

OCTOBER 18, 2017

SENATOR EICHELBERGER, EDUCATION, AS AMENDED, MAY 22, 2018

AN ACT

Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An

act relating to the public school system, including certain

provisions applicable as well to private and parochial

schools; amending, revising, consolidating and changing the

laws relating thereto," providing for education savings

account; and conferring powers and imposing duties on the

Department of Education and the State Treasury.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of March 10, 1949 (P.L.30, No.14), known

as the Public School Code of 1949, is amended by adding an

article to read:

ARTICLE XX-H

EDUCATION SAVINGS ACCOUNT

Section 2001-H. Short title.

This article shall be known and may be cited as the Education

Savings Account Act.

Section 2002-H. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Department." The Department of Education of the

Commonwealth.

"Education savings account." A spending account established

and administered by the State Treasury for a school-age child

and controlled by a parent, with money that may be spent on a

qualified education expense as provided for under section 2005-

"Institution of higher education." As defined under section

118(c).

"Low-achieving public school." A public school that ranked

in the lowest 15% of the school's designation as an elementary

school or a secondary school based on combined mathematics and

reading scores from the annual assessment STATE ACHIEVEMENT TEST

administered in the previous school year and for which the

department has posted results on its publicly accessible

Internet website. The term does not include a charter school,

cyber charter school or area vocational-technical school.

"Nonpublic school." A school, other than a public school,

located within this Commonwealth where a Commonwealth resident

may legally fulfill the compulsory attendance requirements of

this act, that meets the applicable requirements of Title VI of

the Civil Rights Act of 1964 (Public Law 88-352, 78 Stat. 241)

and that complies with section 1521.

"Parent." Either of the following:

(1) A resident of this Commonwealth who is the parent,

custodial parent or legal guardian of a school-age child.

(2) An individual in this Commonwealth who has control

or charge of a school-age child and the legal right to direct

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the education of the school-age child.

"Participating entity." Any of the following that has an

application under section 2007-H approved by the department:

(1) A nonpublic school for kindergarten through grade

12, or a combination of grades.

(2) An institution of higher education.

(3) A distance learning program that is not offered by a

public school or the department.

(4) A tutor who is a teacher licensed in any state, has

taught at an eligible postsecondary institution and is a

subject matter expert or a tutor or tutoring agency otherwise

approved by the department.

The term does not include a parent of a school-age child to the

extent the parent provides educational services directly to the

school-age child, as well as after the school-age child

graduates from high school.

"Program." The education savings account program provided

for under this article.

"Public school." A school district, charter school, cyber

charter school, regional charter school, intermediate unit or

area vocational-technical school.

"Resident school district." The school district in which a

school-age child resides.

"School-age child." A child enrolled in kindergarten through

grade 12 and who resides in this Commonwealth.

"STATE ACHIEVEMENT TEST." THE PENNSYLVANIA SYSTEM OF SCHOOL

ASSESSMENT TEST, THE KEYSTONE EXAM, AN EQUIVALENT LOCAL

ASSESSMENT OR ANOTHER TEST ESTABLISHED OR APPROVED BY THE STATE

BOARD OF EDUCATION OR THE GENERAL ASSEMBLY TO MEET THE

REQUIREMENTS OF SECTION 2603-B(D)(10)(I), OR REQUIRED UNDER THE

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EVERY STUDENT SUCCEEDS ACT (PUBLIC LAW 114-95, 129 STAT. 1802)

OR ITS SUCCESSOR STATUTE OR ANOTHER TEST REQUIRED TO ACHIEVE

OTHER STANDARDS ESTABLISHED BY THE DEPARTMENT FOR THE PUBLIC

SCHOOL OR SCHOOL DISTRICT UNDER 22 PA. CODE § 403.3 (RELATING TO

SINGLE ACCOUNTABILITY SYSTEM).

"Student with a disability." A school-age child who has been

identified, in accordance with 22 Pa. Code Ch. 14 (relating to

special education services and programs), as a "child with a

disability," as defined in 34 CFR 300.8 (relating to child with

a disability).

Section 2003-H. Application and agreement.

(a) Parents who may apply.--A parent may apply for an

education savings account for a school-age child who:

(1) resides within the attendance area of a low-

achieving public school and has been enrolled in a public

school in this Commonwealth for not less than one full

semester;

(2) is entering kindergarten or the first grade; or

(1) RESIDES WITHIN THE ATTENDANCE AREA OF A LOW-

ACHIEVING PUBLIC SCHOOL AND:

(I) HAS BEEN ENROLLED IN A PUBLIC SCHOOL IN THIS

COMMONWEALTH FOR NOT LESS THAN ONE FULL SEMESTER

IMMEDIATELY PRECEDING THE ESTABLISHMENT OF AN EDUCATION

SAVINGS ACCOUNT; OR

(II) IS ENTERING KINDERGARTEN OR THE FIRST GRADE; OR

(3) (2) participated in the program in the prior year

and is renewing an agreement under subsection (h) by filing

an application with the department, in a manner and on a form

provided by the department.

(b) Application form.--The form may not exceed one page that

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measures 8.5 inches by 11 inches and may be filled out and

submitted through the department's publicly accessible Internet

website.

application to determine if the applicant meets the requirements

of subsection (a). If the requirements have been met, the

department shall approve the application and enter into an

agreement with the applicant. The agreement shall provide that:

(1) The child will withdraw from public school and

receive instruction in this Commonwealth from a participating

entity for the school year for which the agreement applies.

(2) The child will not accept a scholarship in the

educational improvement tax credit program under Article XX-B

or the opportunity scholarship tax credit program under

Article XX-B.

(3) The parent will receive a grant on behalf of the

parent's child, in the form of money deposited under section

2004-H in the education savings account.

(4) The money in the education savings account will be

expended only as authorized under this article.

(d) Establishment.--

(1) If an agreement is entered into under subsection

(c), an education savings account shall be established. The

account shall be administered by the State Treasury under

this article.

(2) Failure of a parent to enter into an agreement under

subsection (c) for a school year shall not preclude the

parent from entering into an agreement for a subsequent

school year if the school-age child is eligible under

subsection (a).

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(e) Term of agreement.--Except as otherwise provided under

this article, an agreement entered into under subsection (c)

shall be valid for one school year.

(f) Termination.--

(1) Notwithstanding subsection (g), an agreement entered

into under subsection (c) may be terminated early.

(2) If an agreement is terminated early by either the

parent or the department, all available funds in the

education savings account shall revert to the State Treasury

and be used in the resident school district.

(g) Automatic termination.--

(1) An agreement entered into under subsection (c) shall

terminate automatically if the school-age child no longer

resides in this Commonwealth.

(2) The school-age child's parent shall notify the

department if the child no longer resides in this

Commonwealth within 15 days. In such a case, money remaining

in the education savings account shall revert to the State

Treasury and be used in the resident school district.

(h) Renewal.--

(1) An agreement entered into under subsection (c) may

be renewed for each school year for the school-age child.

(2) Failure of a parent to renew an agreement for a

school year shall not preclude a parent from renewing the

agreement for a subsequent school year if the school-age

child is eligible under subsection (a).

(i) Number.--A parent may enter into separate agreements

under subsection (c) for each school-age child of the parent.

Not more than one education savings account may be established

for a school-age child.

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(j) Explanation.--Upon entering into or renewing an

agreement under subsection (c), the department shall provide the

parent with a written explanation of the authorized uses of the

money in the education savings account and the responsibilities

of the parent, the department and the State Treasury under the

agreement and this article.

(K) APPLICATION AND RENEWAL PERIOD.--

(1) A PARENT MAY APPLY OR SEEK RENEWAL BETWEEN JANUARY 1

AND APRIL 1 FOR THE FOLLOWING SCHOOL YEAR.

(2) THE DEPARTMENT SHALL NOTIFY PARENTS AND SCHOOL

DISTRICTS OF APPROVED APPLICATIONS BY APRIL 30.

Section 2004-H. Amount.

(a) General rule.--If a parent enters into or renews an

agreement under section 2003-H with the department for a school

year, the Secretary of Education shall deposit a grant for that

school year in the education savings account of the student. The

amount of the grant shall be as follows:

(1) For a nonspecial education student, the grant amount

shall be equal to the State revenues received by school

districts minus State revenues received for transportation

divided by the State total average daily membership.

(2) For a special education student, the grant amount

shall be based on the category of disability by which the

resident school district is required to categorize the

student for the purpose of the report required under section

1372(8) as follows:

(i) For a student in Category 1, multiply the grant

amount in paragraph (1) by 1.51.

(ii) For a student in Category 2, multiply the grant

amount in paragraph (1) by 3.77.

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(iii) For a student in Category 3A and 3B, multiply

the grant amount in paragraph (1) by 7.46.

(3) For a student receiving a grant, the amount of basic

education funding and other subsidies paid by the department

to the resident school district shall be reduced by the grant

amount calculated for the student.

(4) Where a school district's basic education funding

and other subsidies are reduced under this section, the

resident school district shall include the grant recipient in

the resident school district's average daily membership for

the purpose of calculating school subsidies.

(b) Installments.--The State Treasury shall deposit the

money for each grant in quarterly installments under a schedule

determined by the State Treasury.

remaining in an education savings account:

(1) For money remaining in an education savings account

at the end of a school year, the money may be carried forward

to any other school year of the student if the agreement

entered into under section 2003-H is renewed for the other

school year.

(2) Subject to paragraph (3), money remaining in an

education savings account when an agreement entered into

under section 2003-H is not renewed or is terminated shall

revert to the resident school district.

(3) Money remaining in an education savings account

after the school-age child graduates from high school may be

used for qualified education expenses under section 2005-H

for up to two years after the date of high school graduation.

After that time period, money remaining in the education

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savings account shall revert to the General Fund.

Section 2005-H. Qualified education expenses.

(a) General rule.--Money deposited in an education savings

account may be used to pay for any of the following expenses

incurred by or associated with the school-age child:

(1) Tuition and fees charged by a participating entity.

(2) Textbooks or uniforms required by a participating

entity.

(3) Fees for tutoring or other teaching services

provided by a participating entity.

(4) Fees for a nationally norm-referenced test, advanced

placement or similar examination or standardized examination

required for admission to an institution of higher education,

and career and technical education examination fees.

(5) Fees for purchasing a curriculum or instructional

materials required to administer the curriculum.

(6) If the child is a student with a disability, fees

for special instruction or special services provided to the

child, including, but not limited to, occupational, physical,

speech and behavioral therapies.

(7) Other valid educational expenses approved by the

department.

(b) Prohibitions.--A participating entity that receives a

payment for qualified education expenses authorized under

subsection (a) may not:

(1) refund a portion of the payment directly to the

parent who made the payment.

(2) rebate or otherwise directly share a portion of the

payment with the parent who made the payment.

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for an item that is being returned or an item or service that

has not been provided directly to the education savings account

of the school-age child from which payment for the item or

service was made.

(d) Payment system.--

(1) The State Treasury shall develop a system that

enables parents to pay for services provided by participating

entities by electronic funds transfer, including electronic

payment systems or other means of electronic payment that the

State Treasury determines to be commercially viable and cost

effective.

(2) The State Treasury may not adopt a system that

requires parents to be reimbursed for out-of-pocket expenses.

(3) The State Treasury may contract with qualified

private firms to manage some or all parts of this subsection.

(e) Source of payment.--

(1) Persons may not deposit personal funds into or

otherwise make gifts or contributions of private funds to an

education savings account.

(2) Nothing in this section shall be construed to

prohibit a parent or school-age child from paying for

qualified education expenses from a source other than the

education savings account.

Section 2006-H. Audits and penalties.

(a) Audit.--The State Treasury may provide for audits of an

education savings account as the State Treasury determines

necessary.

(b) Penalties.--If the State Treasury determines that the

money in an education savings account has been expended for an

expense other than a qualified education expense under section

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2005-H(a), the State Treasury may do any of the following:

(1) Freeze or dissolve the education savings account,

subject to regulations adopted by the State Treasury

providing for notice of the action and opportunity to respond

to the notice.

(2) Refer the matter to the Attorney General or district

attorney of the county in which the parent resides for

investigation and criminal prosecution, if appropriate.

(3) Impose a civil penalty equal to 300% of the amount

of the education savings account prior to the fraudulent use.

(4) Disqualify the parent from future participation in

the program.

Section 2007-H. Participating entity application and

requirements.

(a) General rule.--A participating entity shall submit an

application to and enter into a contract with the department.

(b) Determination.--The department shall approve an

application submitted under subsection (a) if the applicant

meets the criteria to serve as a participating entity. If the

department accepts the application, the department, in

consultation with the State Treasury, shall enter into a

contract with the applicant specifying the rights and duties of

the parties relating to the program.

application and contract for participation in the program

required under this section available to be filled out and

submitted on the department's publicly accessible Internet

website.

(d) Receipt.--Each participating entity that accepts payment

from an education savings account shall provide a receipt to the

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parent for the payment.

(e) Refusal.--The department may refuse to allow a

participating entity continued participation in the program for

up to three years if the department determines that the

participating entity:

(1) has routinely failed to comply with the provisions

of this article; or

(2) has received payment for a school-age child of an

education savings account and fails to provide the education

services required by law to the school-age child.

(f) Notice.--

(1) If the department takes an action described under

subsection (e) against a participating entity, the department

shall provide immediate notice of the action to each parent

of a school-age child who is receiving education services

from the participating entity who has entered into or renewed

an agreement under section 2003-H.

(2) All payments made to a participating entity prior to

notice being given shall be deemed qualified education

expenses for education savings accounts.

(3) If a school-age child is enrolled in a participating

entity that is refused continued participation in the program

during the school year, the parent may use the education

savings account to pay for the remainder of that school

year's qualified education expenses, but may not use

education savings account money to pay the participating

entity until the participating entity is permitted to resume

continued participation in the program.

(g) Limitation on tuition charges.--The tuition charged by a

participating entity to a student with an education savings

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account may not exceed the regular tuition charged to those

similarly situated students for whom an education savings

account does not exist.

(h) Withdrawal from enrollment.--In the event that an

eligible student withdraws from enrollment in a participating

entity prior to the completion of the school year, the

participating entity shall, within 15 days of withdrawal,

provide the department with written notice of the withdrawal.

Section 2008-H. Academic requirements.

(a) General rule.--Nonpublic schools that accept payments

from education savings accounts for tuition and fees shall:

(1) Ensure that each school-age child on whose behalf a

grant of money has been deposited and who is receiving

education services from the participating entity is

administered either the State achievement tests or nationally

norm-referenced tests that measure learning gains in math and

language arts for grades 3, 5, 7 and 11.

(2) Release a school-age child's individual results on

the State achievement tests or nationally norm-referenced

tests to the parent of the school-age child.

(3) Collect and aggregate the test results and

associated learning gains under paragraph (1) and graduation

rates for the school-age children participating in the

program according to the grade level of each school-age child

and shall post the information on the publicly accessible

Internet website of the nonpublic school . , IF THE NUMBER OF

CHILDREN MEETS THE MINIMUM NUMBER REQUIRED BY THE DEPARTMENT

FOR REPORTING OF PUBLIC SCHOOL SCORES.

(b) Exception.--

(1) If a school-age child for whom an education savings

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account exists is not enrolled in a full-time education

program at a nonpublic school, the parent shall ensure the

participating student is administered a State achievement

test or nationally norm-referenced test.

(2) The department shall provide a list of entities

administering State achievement tests or nationally norm-

referenced tests to the parent.

(3) The entity that administers the test shall release

the result to each school-age child's parent and provide test

results to the department.

(1) Aggregate the examination results and associated

learning gains provided under subsection (b) according to the

grade level of each school-age child.

(2) After three school years for which examination data

has been collected under this section, post on the

department's publicly accessible Internet website the

aggregated test results, associated learning gains and

graduation rates of school-age children participating in the

program.

Section 2009-H. Listing of participating entities.

The department shall annually post on the department's

publicly accessible Internet website a listing of all

participating entities.

Section 2010-H. Education records.

The department shall annually require the resident school

district of each school-age child participating in the program

to provide the child's education records to the participating

entity.

(A) GENERAL RULE.--A RESIDENT SCHOOL DISTRICT SHALL PROVIDE

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A PARTICIPATING ENTITY THAT HAS ADMITTED AN ELIGIBLE STUDENT

PARTICIPATING IN THE PROGRAM WITH A COMPLETE COPY OF THE

STUDENT'S DISCIPLINARY RECORD AT THE REQUEST OF THE

PARTICIPATING ENTITY.

(B) TIME PERIOD.--THE RESIDENT SCHOOL DISTRICT SHALL SUPPLY

A CERTIFIED COPY OF THE STUDENT'S DISCIPLINARY RECORD, NOT LATER

THAN 10 DAYS AFTER RECEIPT OF THE REQUEST, SUBJECT TO THE FAMILY

EDUCATIONAL RIGHTS AND PRIVACY ACT OF 1974 (PUBLIC LAW 90-247,

20 U.S.C. § 1232G).

Section 2011-H. Transportation.

The school district of residence of a school-age child

participating in the program shall provide transportation to the

school-age child in accordance with section 1361.

Section 2012-H. Participating entity autonomy.

(a) General rule.--A participating entity shall be

autonomous and not an agent of the Commonwealth, the State

Treasury or the department.

(b) Prohibition.--

(1) No Commonwealth agency may regulate the education

program of a participating entity that accepts a payment from

an education savings account, except as otherwise provided

for under Federal or State law.

(2) The establishment of the program does not expand the

regulatory authority of the State, State officers or a school

district to impose additional regulation of nonpublic schools

or education providers beyond that necessary to enforce the

requirements of this article.

(3) No participating entity shall be required to alter

the participating entity's creed, practices, admissions

policy or curriculum to accept school-age children whose

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parents make payments from education savings accounts.

considered taxable income for purposes of any local taxing

ordinance or home rule charter or for purposes of Article III of

the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform

Code of 1971, nor shall payments made from any education savings

account constitute financial assistance or appropriations to any

participating entity.

Section 2013-H. Regulations.

The State Treasury and the department shall jointly

promulgate regulations as necessary for the administration of

this article within 60 days of the effective date of this

section.

Section 2. This act shall take effect in 60 days.

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