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PRINTER'S NO. 2523
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2169
Session of
2021
INTRODUCED BY OWLETT, WHITE, ROTHMAN, PICKETT, HAMM, TOPPER,
ROWE, MERCURI, RYAN, GLEIM, ROAE, KAIL, KAUFFMAN, BERNSTINE,
M. MACKENZIE, SCHEMEL, SILVIS, ECKER AND GROVE,
DECEMBER 14, 2021
REFERRED TO COMMITTEE ON EDUCATION, DECEMBER 14, 2021
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," establishing the Lifeline Scholarship
Program.
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-L
LIFELINE SCHOLARSHIP PROGRAM
Section 2001-L. Scope.
This article relates to the Lifeline Scholarship Program.
Section 2002-L. 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:
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"Applicant." A parent who applies for a lifeline scholarship
account under section 2003-L(b) on behalf of an eligible
student.
"Average daily membership." As defined in section 2501.
"Department." The Treasury Department of the Commonwealth.
"Department of Education." The Department of Education of
the Commonwealth.
"Distance education." Instruction offered by any means where
a student and faculty member are in separate physical locations
so that in-person communication is absent and communication is
accomplished instead by one or more technological media. The
term includes real-time or delayed interaction using voice,
video, data or text, including instruction provided online, via
correspondence or via interactive video. The term does not
include independent study or instruction that is not instructor
led.
"Eligible postsecondary institution." The term includes all
of the following:
(1) A community college operating under Article XIX-A.
(2) A college established under Article XIX-G.
(3) A university within the State System of Higher
Education established under Article XX-A.
(4) A State-related institution.
(5) Thaddeus Stevens College of Technology.
"Eligible student." A school-age child who:
(1) Has not yet received a high school diploma.
(2) Currently resides within the attendance area of a
low-achieving school.
(3) Satisfies one of the following:
(i) Attended a public school in this Commonwealth in
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the preceding school year.
(ii) Received funds from the program in the
preceding school year.
(iii) Will attend first grade for the first time in
the next school year.
(iv) Is currently a child in foster care as defined
in section 2 of the act of November 23, 2010 (P.L.1264,
No.119), known as the Children in Foster Care Act.
(v) Is a child whose adoption decree was entered not
more than one year prior to submission of the application
under section 2003-L(b).
(vi) Is a child whose parent is on full-time active-
duty status in the armed forces of the United States,
including a member of the National Guard and reserve on
active duty orders under 10 U.S.C. §§ 12301 et seq.
(relating to reserve components generally) and 12401 et
seq. (relating to Army and Air National Guard of the
United States: status).
"Institution of higher education." The term includes the
following:
(1) An eligible postsecondary institution.
(2) An institution of higher education located in and
incorporated or chartered by the Commonwealth and entitled to
confer degrees as specified in 24 Pa.C.S. § 6505 (relating to
power to confer degrees) and as provided for by the standards
and qualifications prescribed by the State Board of Education
under 24 Pa.C.S. Ch. 65 (relating to private colleges,
universities and seminaries).
(3) A private school licensed under the act of December
15, 1986 (P.L.1585, No.174), known as the Private Licensed
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Schools Act.
(4) A foreign corporation approved to operate an
educational enterprise under 22 Pa. Code Ch. 36 (relating to
foreign corporation standards).
"Lifeline scholarship account." A spending account
established and administered by the department and controlled by
a parent for an eligible student with money that may only be
spent on a qualified education expense as provided for under
section 2005-L.
"Low-achieving school." As defined under section 2002-B.
"Nonpublic school." A nonprofit school, other than a public
school, located in this Commonwealth where a resident of this
Commonwealth may legally fulfill the compulsory attendance
requirements of this act that complies with section 1521 and
meets the applicable requirements of Title VI of the Civil
Rights Act of 1964 (Public Law 88-352, 78 Stat. 241).
"Parent." An individual who:
(1) is a current resident of this Commonwealth; and
(2) either:
(i) has legal custody or guardianship of an eligible
student; or
(ii) keeps in the individual's home an eligible
student and supports the student gratis as if the student
were a lineal descendant of the individual.
"Participating entity."
(1) Any of the following where an eligible student
receives instruction or support:
(i) A nonpublic school for grade one through grade
twelve, or a combination of grades.
(ii) An institution of higher education.
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(iii) A distance learning program.
(iv) A tutor who is a teacher certified in a state,
has tutored or taught at an eligible postsecondary
institution or an eligible nonpublic school or is a
subject matter expert or a tutor or tutoring agency
otherwise approved by the Department of Education.
(v) A school counselor who is certified by the
Commonwealth to work with school-aged children.
(vi) A provider of curriculum that adheres to
education laws of the Commonwealth.
(2) The term does not include a parent to the extent
that the parent provides educational services directly to the
parent's child.
"Program." The Lifeline Scholarship Program established
under section 2003-L(a).
"Public school." A school district, charter school, cyber
charter school, regional charter school, intermediate unit or
area career and technical school.
"Resident school district." The school district in which an
eligible student currently resides.
"School-age child." An individual six to 21 years of age who
currently resides in this Commonwealth.
"State-related institution." The Pennsylvania State
University, including the Pennsylvania College of Technology,
the University of Pittsburgh, Temple University and Lincoln
University, and any other institution designated as State-
related by the Commonwealth.
"Student with special needs." A child who:
(1) is subject to an individualized education program
under the Individuals with Disabilities Education Act (Public
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Law 91-230, 20 U.S.C. § 1400 et seq.) and 22 Pa. Code Ch. 14
(relating to special education services and programs);
(2) is subject to a section 504 service agreement under
section 504 of the Rehabilitation Act of 1973 (Public Law 93-
112, 29 U.S.C. § 701 et seq.) and 22 Pa. Code Ch. 15
(relating to protected handicapped students);
(3) is subject to a gifted individualized education plan
under 22 Pa. Code Ch. 16 (relating to special education for
gifted students); or
(4) meets the definition of "child with a disability"
under the Individuals with Disabilities Education Act or
meets the definition of a "handicapped person" under section
504 of the Rehabilitation Act of 1973 and its implementing
regulations at 34 CFR § 104.3(j) (relating to definitions).
This paragraph includes a student for whom an evaluation is
pending under either the Individuals with Disabilities
Education Act or the Rehabilitation Act of 1973.
Section 2003-L. Establishment, application and agreement.
(a) Establishment.--Beginning with the 2022-2023 school
year, the Lifeline Scholarship Program is established as a
program of the department.
(b) Application form.--By May 1, 2022, the department shall
develop an application form that can be accessed from and
submitted electronically on the department's publicly accessible
Internet website. The form may not exceed one page that measures
8.5 inches by 11 inches.
(c) Review, approval and appeal.--
(1) An application must be submitted by the applicant to
the department for review. An eligible student shall be
accepted into the program if the student meets the
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requirements of this article.
(2) Within 30 days of receipt of an application, the
department shall notify the resident school district and the
parent of a student's acceptance or nonacceptance into the
program.
(3) A parent may appeal the department's decision to
deny acceptance into the program within 30 days of issuance
of the decision. The appeal shall be governed by 2 Pa.C.S.
Chs. 1 (relating to general provisions), 5 (relating to
practice and procedure) and 7 (relating to judicial review).
(d) Agreement.--
(1) If the department approves an application, the
department shall enter into an agreement with the applicant.
The agreement shall provide the following:
(i) The eligible student shall withdraw from public
school and receive instruction in this Commonwealth from
a participating entity for the school year for which the
agreement applies.
(ii) The eligible student may 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.
(iii) The parent will receive a grant on behalf of
the eligible student, in the form of money deposited
under section 2004-L in the lifeline scholarship account.
(iv) The money in the lifeline scholarship account
may be expended only as authorized under this article.
(2) Failure of a parent to enter into an agreement on
behalf of the eligible student for a school year shall not
preclude the parent from entering into an agreement with the
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department for a subsequent school year if the student is an
eligible student.
(e) Term of agreement.--Except as otherwise provided under
this article, an agreement entered into under subsection (d)
shall be valid for one school year.
(f) Termination.--
(1) Notwithstanding subsection (g), an agreement entered
into under subsection (d) may be terminated early by either
the parent or the department.
(2) If an agreement is terminated early, all available
money in the lifeline scholarship account shall be repaid to
the resident school district within 15 business days after
termination.
(g) Automatic termination.--
(1) An agreement entered into under subsection (d) shall
terminate automatically if the student no longer resides in
this Commonwealth.
(2) The parent shall notify the department if the
student no longer resides in this Commonwealth within 15 days
of the change of residence.
(3) After the student's parent notifies the department
under paragraph (2), money remaining in the lifeline
scholarship account shall be repaid to the resident school
district within 15 business days after notification.
(h) Renewal.--
(1) Subject to subsection (k), an agreement entered into
under subsection (d) may be renewed for each school year for
the eligible student.
(2) Failure of a parent to renew an agreement for a
school year shall not preclude a parent from renewing the
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agreement for a subsequent school year if the student remains
an eligible student.
(i) Multiple agreements.--A parent may enter into separate
agreements under subsection (d) for each eligible student of the
parent. Not more than one lifeline scholarship account may be
established for an eligible student.
(j) Explanation.--Upon entering into an agreement under
subsection (d) or renewing an agreement under subsection (h),
the department shall provide the parent with a written
explanation of the authorized uses of the money in the lifeline
scholarship account and the responsibilities of the parent and
the department under the agreement and this article.
(k) Application and renewal period.--
(1) For the 2022-2023 school year, a parent may apply
between May 1, 2022, and June 1, 2022, for acceptance to the
program.
(2) For each school year thereafter, a parent may apply
or seek renewal between January 1 and April 1 for the
following school year.
(3) The department shall notify parents and school
districts of approved applications within 30 days of receipt
of an application.
Section 2004-L. Lifeline scholarship account.--
(a) Establishment.--If an agreement is entered into under
section 2003-L(d), the department shall establish a lifeline
scholarship account for the eligible student. The account shall
be administered by the department in accordance with this
article.
(b) Deposit of grant.--
(1) Upon establishment of a lifeline scholarship
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account, the State Treasurer shall deposit a grant for that
school year in the scholarship account for the eligible
student in accordance with subsection (c). The amount of the
grant shall be as follows:
(i) For a student who is not a student with special
needs, the grant amount shall be equal to the total State
revenue received by all school districts minus total
State transportation subsidies received by all school
districts divided by the average daily membership of all
school districts based on the most recent annual
financial report published by the Department of
Education.
(ii) For an eligible student who is a student with
special needs for which expenditures have been reported
under section 1372(8), the grant amount shall be
calculated by multiplying the amount in subparagraph (i)
by the category weight multiplier assigned to the student
to determine the weighted special education student
headcount under section 2509.5(bbb).
(iii) For a student with special needs for which
expenditures are not reported under section 1372(8), the
grant amount shall be calculated using the Category 1
multiplier under section 2509.5(bbb).
(2) For an eligible student receiving a grant, the
amount of State subsidies paid by the Department of Education
to the resident school district shall be reduced by the grant
amount calculated for the eligible student.
(3) A student receiving a grant under this section shall
be included in the average daily membership of the student's
resident school district for the purpose of providing State
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subsidies under Article XXV.
(4) Nothing in this section shall be construed to reduce
a school district's revenue originating from Federal or local
sources or sources other than State revenue.
(c) Installments.--The department shall deposit the money
for each grant on a schedule determined by the department in
consultation with the Department of Education.
(d) Disposition.--The following shall apply to money
remaining in a lifeline scholarship account:
(1) For money remaining in a lifeline scholarship
account at the end of a school year, the money may be carried
forward to an ensuing school year for the eligible student if
the agreement entered into under section 2003-L(d) is
renewed.
(2) Subject to paragraph (3), money remaining in a
lifeline scholarship account when an agreement entered into
under section 2003-L(d) is not renewed or is terminated shall
be repaid to the resident school district within 15 business
days of nonrenewal or termination.
(3) Money remaining in a lifeline scholarship account
after the eligible student graduates from high school may
only be used for qualified education expenses at an eligible
post-secondary institution for a two-year period after
graduation subject to the following:
(i) The parent or eligible student shall notify the
department of the student's intent to utilize money
remaining in the account for qualified education expenses
at an eligible post-secondary institution within 30 days
of graduation from high school.
(ii) If notification is not received within the 30-
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day time period, the lifeline scholarship account shall
be terminated and the money remaining in the scholarship
account shall be repaid to the resident school district
within 15 days from the end of the notification period.
(iii) Upon the expiration of the two-year time
period under this paragraph, the lifeline scholarship
account shall be terminated and the money remaining in
the scholarship account shall be repaid to the resident
school district within 15 days from the expiration date.
Section 2005-L. Qualified education expenses.--
(a) General rule.--Money deposited in a lifeline scholarship
account may be used to pay for any of the following qualified
expenses incurred by or associated with the eligible student:
(1) Tuition, fees and uniforms required 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) Curriculum, textbooks or other instructional
materials.
(6) Hardware, software and Internet connectivity
associated with instruction or a qualifying expense described
in this subsection.
(7) If the eligible student is a student with a
disability, fees for special instruction or special services
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provided to the eligible student, including occupational,
physical, speech and behavioral therapies.
(8) Costs associated with evaluation and identification
of special needs.
(9) 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 refund, rebate or otherwise directly
share any portion of the payment with the parent who made the
payment.
(c) Refund.--A participating entity shall deposit into the
lifeline scholarship account a refund for an item that is being
returned or an item or service that has not been provided
directly to the lifeline scholarship account of the eligible
student from which payment for the item or service was made.
(d) Payment system.--The department shall develop a system
that enables a parent to pay for services provided by
participating entities under the program by electronic money
transfer.
(e) Source of payment.--
(1) An individual may not deposit personal money into or
otherwise make gifts or contributions of private money to a
lifeline scholarship account.
(2) Nothing in this section shall be construed to
prohibit a parent or eligible student from paying for
qualified education expenses from a source other than the
lifeline scholarship account.
(f) Tax consequences and status of awards.--
(1) The money in a lifeline scholarship account is not
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taxable income to the parent or eligible student.
(2) An award made to or funds expended from a lifeline
scholarship account may not be construed to be an
appropriation or financial assistance to the eligible
student's chosen school.
Section 2006-L. Duties of the department.
The department shall:
(1) Develop guidelines, in consultation with the
Department of Education, as necessary for the administration
of this article within 60 days of the effective date of this
section.
(2) Determine whether to solicit requests for proposals
from private financial management firms to manage some or all
parts of the program.
(3) In the department's discretion, deduct an amount
from the grants to lifeline scholarship accounts necessary to
pay the costs of overseeing the accounts and administering
the program up to a limit of 3% of the grants.
(4) Establish reasonable fees for private financial
management firms that manage the accounts based upon market
rates.
(5) Make payments to the accounts on a schedule to be
determined by the department, in consultation with the
Department of Education, each year of participation in the
program.
(6) Develop a system to allow parents to pay for
services by electronic funds transfer, including debit cards,
electronic payment systems or other means of electronic
payment that the department determines to be commercially
viable, cost effective and easily understandable and usable
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by parents. The department shall not adopt a system that
exclusively requires parents to be reimbursed for out-of-
pocket expenses.
(7) Develop a process by which participating schools may
inform the department of their interest in participating in
the program and demonstrate their compliance with the
requirements of this article.
(8) Ensure that eligible students and their parents are
informed annually of the participating schools in the program
by posting a list of participating schools on the
department's publicly accessible Internet website by May 1,
2022, and by March 1 of each year thereafter.
Section 2007-L. Duties of the Auditor General.
The Auditor General shall:
(1) Conduct random audits of lifeline scholarship
accounts on an annual basis.
(2) Refer cases of suspected fraudulent misuse of
lifeline scholarship accounts to law enforcement agencies for
investigation.
(3) Notify the department of cases of suspected
fraudulent misuse that are referred to law enforcement.
(4) If a parent is found to have engaged in fraudulent
misuse of a lifeline scholarship account, the account shall
be terminated and the eligible student shall be ineligible
for future participation in the program.
(5) Upon a finding that a parent engaged in fraudulent
misuse of a lifeline scholarship account, the remaining money
in the lifeline scholarship account shall be repaid to the
resident school district within 15 business days.
(6) A parent may appeal the department's decision
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regarding termination and student eligibility within 30 days
of issuance of the decision. The appeal shall be governed by
2 Pa.C.S. Chs. 1 (relating to general provisions), 5
(relating to practice and procedure) and 7 (relating to
judicial review).
Section 2008-L. Accountability standards for a participating
entity.
(a) Duties of participating entities.--A participating
entity shall:
(1) Hold a valid occupancy permit if required by the
municipality in which the participating entity is located.
(2) Comply with the nondiscrimination policies specified
in 42 U.S.C. § 1981 (relating to equal rights under the law)
and with section 1521.
(3) Comply with the provisions of sections 111 and
111.1.
(b) Financial accountability standards.--
(1) A participating entity shall provide parents with a
receipt for all qualifying expenses incurred by the
participating entity.
(2) The department may require a participating entity
that expects to receive at least $10,000 in payments from
lifeline scholarship accounts during the school year to file
financial viability documentation. The financial viability
documentation may include:
(i) a surety bond payable to the Commonwealth in an
amount equal to the aggregate amount of money from the
lifeline scholarship accounts expected to be paid during
the school year on behalf of eligible students admitted
at the participating entity; or
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(ii) financial information that demonstrates that
the participating entity has the ability to pay an
aggregate amount equal to the amount of money from the
lifeline scholarship accounts expected to be paid during
the school year on behalf of eligible students admitted
to the participating entity.
(c) Academic accountability standards.--
(1) A parent of an eligible student shall ensure that
the department is informed of the eligible student's
graduation from high school.
(2) The department shall:
(i) Ensure compliance with all student privacy laws,
including the Family Educational Rights and Privacy Act
of 1974 (Public Law 90-247, 20 U.S.C. § 1232g).
(ii) Administer an annual parental satisfaction
survey that shall ask parents of eligible students
participating in the program to express:
(A) The parent's satisfaction with the program.
(B) The number of years the eligible student has
participated in the program.
(C) The parent's opinions on other topics, items
or issues that the department determines would elicit
information about the effectiveness of the program.
(d) Participating entity autonomy.--
(1) For purposes of this article, a participating entity
shall be autonomous and is not an agent of the department or
the Commonwealth.
(2) Neither the department nor other State agency may
regulate the educational program of a participating entity
that accepts money from a lifeline scholarship account.
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(3) The establishment of the program may not be
construed to expand the regulatory authority of the State,
the officers of the State or a school district to impose
additional regulations of a participating entity beyond those
necessary to enforce the requirements of the program.
Section 2009-L. Bar of certain participating entities.
(a) General rule.--The department may bar a participating
entity from participation in the program if the department
establishes that the participating entity has:
(1) routinely failed to comply with the accountability
standards established in section 2008-L; or
(2) failed to provide an eligible student with the
educational services funded by the eligible student's
lifeline scholarship account.
(b) Notice.--If the department bars a participating entity
from participation in the program, the department shall post the
decision on the department's publicly accessible Internet
website.
(c) Appeal.--A participating entity may appeal the
department's decision to bar its participation in the program
within 30 days of issuance of the decision. The appeal shall be
governed by 2 Pa.C.S. Chs. 1 (relating to general provisions), 5
(relating to practice and procedure) and 7 (relating to judicial
review).
Section 2010-L. Duties of resident school districts.
(a) School records.--A resident school district shall
provide a participating entity that has admitted an eligible
student participating in the program with a complete copy of the
student's school records immediately upon the student's
enrollment or when services in the participating entity begin,
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subject to the Family Educational Rights and Privacy Act of 1974
(Public Law 90-247, 20 U.S.C. § 1232g).
(b) Transportation.--A resident school district shall
provide transportation for an eligible student to and from the
participating entity under the same conditions as the resident
school district provides transportation of other resident
students to nonpublic schools under section 1361. The resident
school district shall qualify for State transportation
reimbursement for each eligible student transported.
Section 2011-L. Legal proceedings.
(a) Liability.--No liability shall arise on the part of the
agency, the Commonwealth or a public school or school district
based on the award or use of a lifeline scholarship account
under this article.
(b) Challenges.--If any part of this article is challenged
in a State court as violating either the Constitution of the
United States or the Constitution of Pennsylvania, parents of
eligible students and students who previously had a lifeline
scholarship account shall be permitted to intervene as of right
in the lawsuit for the purposes of defending the program's
constitutionality. For the purposes of judicial administration,
a court may require that all parents file a joint brief but may
not require all parents to join a brief filed on behalf of a
named State defendant.
(c) Severability.--If any provision of this article or the
application thereof to any person or circumstance is held
invalid, the invalidity shall not affect other provisions or
applications of this article which can be given effect without
the invalid provision or application and to this end the
provisions of this article are declared to be severable.
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Section 2. This act shall take effect immediately.
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