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PRIOR PRINTER'S NO. 1271
PRINTER'S NO. 1776
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
2
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
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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-
H.
"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.
(c) Review and approval.--The department shall review the
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.
(c) Disposition.--The following shall apply to money
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.
(c) Refund.-A participating entity shall deposit a refund
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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.
(c) Posting and submission.--The department shall make the
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.
(c) Department duties.--The department shall:
(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.
(c) Nontaxable.--Education savings accounts shall not be
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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