PRINTER'S NO. 1367
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1057
Session of
2024
INTRODUCED BY A. WILLIAMS AND PENNYCUICK, FEBRUARY 12, 2024
REFERRED TO EDUCATION, FEBRUARY 12, 2024
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 the Educational Freedom
Act Program; and establishing the Educational Freedom Act
Fund and educational freedom accounts.
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 XIII-F
EDUCATIONAL FREEDOM ACT PROGRAM
Section 1301-F. Scope of article.
This article relates to the Educational Freedom Act Program.
Section 1302-F. 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:
"Applicant." A parent who applies for participation in the
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program under section 1304-F on behalf of an eligible student.
"Attendance boundary." The term shall mean the same as
defined under section 2002-B.
"Department." The Department of Education of the
Commonwealth.
"Educational freedom account." A spending account
established and administered by the Treasury Department and
directed by a parent for a scholarship recipient that may be
used for tuition, school-related fees and special education
services fees to attend a participating nonpublic school.
"Eligible student." A school-age child who:
(1) Is a resident of this Commonwealth.
(2) Has not received a high school diploma.
(3) Resides, as determined under section 1302, within
the attendance boundary of a low-achieving school or resided,
as determined under section 1302, within the attendance
boundary of a low-achieving school at the time the Treasury
Department received written confirmation that the child
accepted an offer of enrollment under section 1304-F.
(4) Lives in a household with a household income below
250% of the Federal poverty guidelines or lived in a
household with a household income below 250% of the Federal
poverty guidelines at the time the Treasury Department
received written confirmation that the child accepted an
offer of enrollment under section 1304-F.
(5) Satisfies one of the following:
(i) Attended a public school in this Commonwealth in
the preceding school year.
(ii) Received a scholarship from the program in the
preceding school year.
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(iii) Will attend kindergarten for the first time in
the next school year.
"Fund." The Educational Freedom Act Fund established under
section 1308-F.
"Kindergarten." A one-year formal educational program,
whether part time or full time, that occurs during the school
year immediately prior to first grade.
"Low-achieving school." As defined in 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.
"Parent." An individual who is a resident of this
Commonwealth and:
(1) has legal custody or guardianship of an eligible
student; or
(2) 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 nonpublic school." A nonpublic school
offering a program of instruction for kindergarten through grade
12, or a combination of grades, that notifies the Treasury
Department of the nonpublic school's desire to participate in
the program and provides certification to the Treasury
Department that the nonpublic school meets the criteria under
section 1311-F.
"Program." The Educational Freedom Act Program established
under section 1303-F.
"Public school." A school operated by a school district,
intermediate unit, area career and technical school, charter
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school, regional charter school or cyber charter school.
"Resident school district." The school district in which an
eligible student resides.
"Scholarship." A scholarship that is awarded to an eligible
student under the program.
"Scholarship recipient." An eligible student that is awarded
a scholarship under the program.
"School-age child." A child enrolling in kindergarten
through grade 12.
"School-related fee." A fee charged by a participating
nonpublic school to all students for books, instructional
materials, technology equipment and services, uniforms,
activities and concurrent enrollment programs under Article XVI-
B.
"School year." A school term as defined in section 102.
"Special education services fee." A fee charged by a
participating nonpublic school for special education services
for a student with special needs as agreed to by the parent and
the participating nonpublic school.
"Student with special needs." A child who is subject to an
individualized education program under 20 U.S.C. Ch. 33
(relating to education of individuals with disabilities) and 22
Pa. Code Ch. 14 (relating to special education services and
programs).
"Treasury Department." The Treasury Department of the
Commonwealth.
Section 1303-F. Educational Freedom Act Program.
(a) Establishment.--Beginning with the 2024-2025 school
year, the Educational Freedom Act Program is established as a
program in the Treasury Department to provide scholarships to
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help eligible students pay tuition, school-related fees and
special education services fees for attendance at a
participating nonpublic school.
(b) Notice to parents.--
(1) Within 15 days of receipt of a notice under section
2010-B and each year thereafter, a school district with at
least one school designated as a low-achieving school shall
notify the parent of a student who is attending or residing
within the attendance boundary of a low-achieving school
during the school year of the school's designation.
(2) The notice shall be in a form provided by the
Treasury Department, in consultation with the department, and
shall provide the following information regarding the
program:
(i) A description of the program.
(ii) Instructions for obtaining information about
applying for a scholarship under the program.
(iii) A list of schools in the school district that
have been designated as low-achieving schools.
(iv) Notice of the parent's responsibilities
regarding application to a participating nonpublic school
if the parent seeks to enroll an eligible student in a
participating nonpublic school.
(3) The notice shall be posted on the school district's
publicly accessible Internet website.
(c) Notice to Treasury Department.--A school district
required to submit a notice to parents under subsection (b)
shall provide the Treasury Department with a list of students
whose parents were provided the notice. The notification shall
be made in a manner and form established by the Treasury
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Department.
Section 1304-F. Application.
(a) Application form.--By March 1, 2024, the Treasury
Department shall develop an application form that can be
accessed from and submitted electronically on the Treasury
Department's publicly accessible Internet website.
(b) Application and approval process.--
(1) By April 1, 2024, and by April 1 of each year
thereafter, the applicant may apply to the Treasury
Department for a scholarship for the following school year
according to guidelines developed by the Treasury Department
under section 1309-F. An application shall be approved by the
Treasury Department if the student meets the eligibility
requirements of this article.
(2) A renewal application shall be approved by the
Treasury Department if the student meets the eligibility
requirements of this article, notwithstanding the residence
and income criteria specified in paragraphs (3) and (4) of
the definition of "eligible student" in section 1302-F.
(3) By May 1, 2024, and by May 1 of each year
thereafter, the Treasury Department shall notify the
applicant whether a scholarship will be awarded for the
following school year.
(4) For the 2024-2025 school year, scholarships shall be
awarded on a first-come, first-served basis considering money
available in the fund.
(5) For the 2025-2026 school year and each school year
thereafter, priority for scholarships shall be given to prior
year scholarship recipients. New applicants shall be awarded
a scholarship on a first-come, first-served basis considering
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money available in the fund.
(6) Upon notification by the Treasury Department that a
scholarship has been awarded, the applicant shall apply for
enrollment of the scholarship recipient directly to the
participating nonpublic school under an application procedure
developed by the participating nonpublic school.
(7) By June 1, 2024, and by June 1 each year thereafter,
a participating nonpublic school shall provide written
confirmation to the Treasury Department of scholarship
recipients who have accepted an offer of enrollment for the
following school year and provide the Treasury Department
with the amounts to be charged to the scholarship recipient
for tuition, school-related fees and special education
services fees. The notification shall be made in a manner and
form established by the Treasury Department.
(8) The Treasury Department may establish a waiting list
for eligible students with approved applications and who did
not receive awards due to availability of money in the fund
and if, after July 1, 2024, and by July 1 each year
thereafter, additional money is available in the fund for
scholarships, may award scholarships to the eligible students
on a first-come, first-served basis.
Section 1305-F. Agreement.
(a) Authorization.--Upon receipt of written confirmation
that the scholarship recipient has accepted an offer of
enrollment under section 1304-F, the Treasury Department shall
enter into or renew an agreement with the applicant. The
agreement shall provide the following:
(1) The scholarship recipient shall enroll in a
participating nonpublic school for the school year for which
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the agreement applies.
(2) A certain sum of money shall be deposited into an
educational freedom account on behalf of the scholarship
recipient.
(3) The money in the educational freedom account may be
expended only as authorized under this article.
(4) The parent shall notify the Treasury Department if
the scholarship recipient no longer resides in this
Commonwealth or withdraws or is forced to withdraw from the
participating nonpublic school within 15 days of the change
of residency or withdrawal.
(b) Term of agreement.--Except as otherwise provided under
this article, an agreement entered into under subsection (a)
shall be valid for one school year.
(c) Termination.--
(1) An agreement entered into under subsection (a) may
be terminated early by the parent for any reason.
(2) An agreement entered into under subsection (a) shall
be terminated by the Treasury Department for the following
reasons:
(i) The parent is found to have engaged in
fraudulent misuse of the educational freedom account. In
such case, the scholarship recipient shall be ineligible
for future participation in the program. The parent may
appeal the Treasury Department's decision 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).
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(ii) The scholarship recipient no longer resides in
this Commonwealth.
(iii) The scholarship recipient withdraws or is
forced to withdraw from a participating nonpublic school
prior to the completion of the school year.
(3) If an agreement is terminated early under this
subsection, the following shall apply:
(i) All available money in the educational freedom
account shall revert to the fund.
(ii) The participating nonpublic school shall repay
to the State Treasury for deposit into the fund the full
amount of the scholarship payment, reduced on a pro rata
basis by the tuition, school related fees and special
education services fees owed for the portion of the
school year in which the scholarship recipient was
enrolled.
(iii) The participating nonpublic school may not
require a parent to reimburse the participating nonpublic
school for the amount of the scholarship returned to the
State Treasury.
(d) Renewal.--An agreement entered into under subsection (a)
may be renewed for each school year for the same student.
(e) Multiple agreements.--A parent may enter into separate
agreements under subsection (a) for each child of the parent who
is a scholarship recipient.
(f) Explanation.--Upon entering into an agreement under
subsection (a) or renewing an agreement under subsection (d),
the Treasury Department shall provide the parent with a written
explanation of the authorized uses of the money in the
educational freedom account and, a notice that students with
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disabilities who participate in the program are "parentally
placed private school children with disabilities" under 20
U.S.C. § 1412 (relating to state eligibility) and an explanation
of the rights of parentally placed private school children under
20 U.S.C. Ch. 33 (relating to education of individuals with
disabilities) and any applicable State law and regulation.
Section 1306-F. Educational freedom accounts.
(a) Establishment.--If an agreement is entered into under
section 1305-F, the Treasury Department shall establish an
educational freedom account for the scholarship recipient. The
educational freedom account shall be administered by the
Treasury Department in accordance with this article.
(b) Deposit.--
(1) Upon establishment of an educational freedom
account, the Treasury Department shall deposit a sum of money
for the applicable school year in the educational freedom
account for the scholarship recipient in accordance with this
section.
(2) For the 2024-2025 school year, the sum shall be as
follows:
(i) for a student in half-day kindergarten, $2,500;
(ii) for a student in full-day kindergarten through
grade eight, $5,000;
(iii) for a student in grades 9 through 12, $10,000;
or
(iv) for a student with special needs regardless of
grade level, $15,000.
(3) Beginning with the 2025-2026 school year, and each
school year thereafter, the amounts in paragraph (2) shall be
increased by the greater of the average percentage increase
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in the index as defined in section 302 of the act of June 27,
2006 (1st Sp.Sess., P.L.1873, No.1), known as the Taxpayer
Relief Act, for all school districts for the prior school
year and the percentage increase in the appropriation for
basic education for the prior fiscal year. The Treasury
Department shall calculate the increases on an annual basis
and shall submit a notice of the increases to the Legislative
Reference Bureau for publication in the next available issue
of the Pennsylvania Bulletin.
(c) Installments.--The Treasury Department shall deposit the
money for each scholarship into an educational freedom account
on a schedule determined by the Treasury Department in
consultation with the department.
(d) Payments to participating nonpublic schools.--A parent
may direct payments from the educational freedom account to a
participating nonpublic school on behalf of the scholarship
recipient via an electronic money transfer system or other
method approved by the Treasury Department under section 1309-F.
Section 1307-F. Qualified education expenses.
(a) General rule.--Money deposited into an educational
freedom account may be used only to pay for the following
qualified expenses incurred by or associated with the
scholarship recipient:
(1) Tuition required by a participating nonpublic
school.
(2) School-related fees.
(3) Special education services fees.
(b) Prohibition.--A participating nonpublic school that
receives a payment for qualified education expenses authorized
under subsection (a) may not refund, rebate or otherwise
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directly share any portion of the payment with the parent who
made the payment.
(c) Tax consequences and status of awards.--
(1) The money in a educational freedom account is not
taxable income to the parent or scholarship recipient under
State law.
(2) An award made to, or payment from, a educational
freedom account may not be construed to be an appropriation
or financial assistance to a participating nonpublic school.
Section 1308-F. Educational Freedom Act Fund.
(a) Establishment.--The Educational Freedom Act Fund is
established in the State Treasury. All interest and earnings
received from investment or deposit of the money in the fund
shall be paid into the fund and used for scholarships. Any
unexpended money and interest or earnings on the money in the
fund may not be transferred or revert to the General Fund but
shall remain in the fund.
(b) Deposits.--Deposits in the fund shall consist of the
following:
(1) Money that is appropriated, given, granted or
donated by the Commonwealth or any other government or
private agency or person for the purpose established under
this article.
(2) $300,000,000 transferred from funds received under
the authority of Article III of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971. This
transfer shall occur no later than 15 days after the
effective date of this paragraph and each August 1
thereafter.
(c) Continuing appropriation.--The money in the fund is
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appropriated on a continuing basis to the Treasury Department
for scholarships.
Section 1309-F. Duties of Treasury Department.
(a) General rule.--The Treasury Department shall:
(1) Develop guidelines, in consultation with the
department, as necessary for the administration of this
article.
(2) Make payments to educational freedom accounts as
provided in this article.
(3) Develop a system that enables a parent to direct
payment to a participating nonpublic school in accordance
with this article.
(4) Develop a process by which a nonpublic school may
inform the Treasury Department of the nonpublic school's
interest to participate in the program and demonstrate
compliance with the requirements of this article.
(5) Ensure that eligible students and their parents are
informed annually of the participating nonpublic schools in
the program by posting a list of participating nonpublic
schools on the Treasury Department's publicly accessible
Internet website by April 1, 2024, and by April 1 of each
year thereafter.
(6) At such time and in such form and manner as may be
directed by the Treasury Department, request and receive
information and data from a public school, resident school
district, participating nonpublic school or applicant
determined to be necessary by the Treasury Department to
administer this article.
(b) Third-party administration.--The Treasury Department may
contract with a third party to administer the program.
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(c) Contracting.--
(1) Notwithstanding any provision of 62 Pa.C.S. Pt. I
(relating to Commonwealth Procurement Code), to the contrary
and in order to facilitate the prompt implementation of this
article, a contract may be awarded for a supply or service
without competition if the Treasury Department determines in
writing that the contract is necessary for the implementation
of any provision of this article and is in the best interest
of the Commonwealth. T he Treasury Department shall provide
and make publicly available a written justification of any
procurement under this section.
(2) Paragraph (1) shall expire no later than two years
following the issuance of the procurement under paragraph
(1). Procurements issued after this period shall be issued as
provided by law.
(d) Regulations.--
(1) In order to facilitate the prompt implementation of
this chapter, regulations determined to be necessary and
promulgated by the Treasury Department shall be deemed
temporary regulations and shall expire no later than two
years following the publication of temporary regulations. The
Treasury Department may promulgate temporary regulations not
subject to:
(i) Section 612 of the act of April 9, 1929
(P.L.177, No.175), known as The Administrative Code of
1929.
(ii) Sections 201, 202, 203, 204 and 205 of the act
of July 31, 1968 (P.L.769, No.240), referred to as the
Commonwealth Documents Law.
(iii) Section 204(b) of the act of October 15, 1980
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(P.L.950, No.164), known as the Commonwealth Attorneys
Act.
(iv) The act of June 25, 1982 (P.L.633, No.181),
known as the Regulatory Review Act.
(2) The authority provided to the Treasury Department to
adopt temporary regulations in this subsection shall expire
no later than two years following the publication of the
temporary regulations. Regulations adopted after this period
shall be promulgated as provided by law.
Section 1310-F. Duties of Auditor General.
The Auditor General may:
(1) Conduct a random audit of educational freedom
accounts.
(2) Refer cases of suspected fraudulent misuse of
educational freedom accounts to the Inspector General for
investigation. If the investigation results in a finding that
rises to the level of criminal activity, the Inspector
General shall refer the matter to the appropriate law
enforcement agency for prosecution.
(3) Notify the Treasury Department of cases of suspected
fraudulent misuse that are referred to the Inspector General.
Section 1311-F. Duties of participating nonpublic schools.
(a) Notification requirement.--A nonpublic school that
desires to participate in the program shall notify the Treasury
Department by a date and in a manner and form established by the
Treasury Department. The notification shall include
certification by the nonpublic school that:
(1) The nonpublic school is a nonprofit entity exempt
from Federal taxation under 26 U.S.C. § 501(c)(3) (relating
to exemption from tax on corporations, certain trusts, etc.).
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(2) The nonpublic school complies with the
nondiscrimination policies specified in 42 U.S.C. § 1981
(relating to equal rights under the law).
(3) The nonpublic school complies with the provisions of
sections 111 and 111.1.
(b) Prohibition.--A participating nonpublic school may not
charge an scholarship recipient a tuition rate, student-related
fees or special education services fees that are higher than the
rates the participating nonpublic school would have charged to a
non-scholarship-recipient student.
(c) Reporting requirements.--
(1) Each participating nonpublic school shall report in
a manner and form determined by the Treasury Department, in
consultation with the department, information regarding
scholarship recipients enrolled in the participating
nonpublic school as follows:
(i) Enrollment and disenrollment.
(ii) Regular attendance.
(iii) Chronic absenteeism.
(iv) Academic progress as measured by advancement to
the next grade level.
(v) Indication of graduation.
(vi) Concurrent or dual enrollment course credits.
(2) The Treasury Department shall report the information
regularly to the department on a schedule agreed to by the
Treasury Department and the department.
(d) Construction.--
(1) For purposes of this article, a participating
nonpublic school shall be autonomous and is not an agent of
the Treasury Department, the department or the Commonwealth.
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(2) Neither the Treasury Department, the department nor
other State agency may regulate the educational program of a
participating nonpublic school that accepts money from a
scholarship recipient beyond what is necessary to administer
the program.
Section 1312-F. Bar of certain participating nonpublic schools.
(a) General rule.--The Treasury Department may bar a
nonpublic school from participation in the program if Treasury
Department establishes that the nonpublic school has:
(1) routinely failed to comply with the requirements
established in section 1311-F; or
(2) failed to provide a scholarship recipient with the
educational services funded by the recipient's educational
freedom account.
(b) Notice.--If the Treasury Department bars a nonpublic
school from participation in the program, the Treasury
Department shall, after any appeal is concluded and the Treasury
Department's decision is upheld under subsection (c), post the
decision on the Treasury Department's publicly accessible
Internet website.
(c) Appeal.--A nonpublic school may appeal the Treasury
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 1313-F. Duties of resident school districts.
A resident school district shall provide a participating
nonpublic school that has admitted a scholarship recipient with
a complete copy of the scholarship recipient's school record
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within 10 days of the receipt of notice from the participating
nonpublic school of the scholarship recipient's enrollment.
Section 1314-F. Report.
(a) Duty to prepare and submit.--Beginning January 31, 2025,
and each January 31 thereafter, the Treasury Department, in
consultation with the department, shall prepare and submit to
the General Assembly an annual report on the program.
(b) Contents.--The report shall include the following:
(1) The total number of applications received for the
program.
(2) The total number of applications received for the
program, by resident school district.
(3) The total number of applications approved for the
program.
(4) The total number of applications approved for the
program, by resident school district.
(5) The total number of educational freedom accounts
terminated early.
(6) The total number of educational freedom accounts
investigated for fraud by the Inspector General.
(7) The total number of educational freedom scholarships
awarded to students attending half-day kindergarten.
(8) The total number of educational freedom scholarships
awarded to students attending full-day kindergarten through
grade eight.
(9) The total number of scholarships awarded to students
attending grades 9 through 12.
(10) The total dollar amount of educational freedom
scholarships awarded.
(11) The total number of applications not approved due
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to lack of funding.
(12) The cost of administration of the program.
(13) Other information the Treasury Department deems
helpful to the General Assembly.
Section 2. This act shall take effect in 60 days.
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