Trial Engrossment of Amendment A03842 to House Bill 2169 P.N. 2887, Regular Session 2021-2022

A03842

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, GROVE, RAPP, HERSHEY,

KNOWLES, BURGOS, ZIMMERMAN, TWARDZIK, STAATS, A. BROWN AND

LEWIS DELROSSO, DECEMBER 14, 2021

AS REPORTED FROM COMMITTEE ON EDUCATION, HOUSE OF

REPRESENTATIVES, AS AMENDED, MARCH 29, 2022

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 OF AR TICLE .

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:

"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:

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(i) Attended a public school in this Commonwealth in

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

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15, 1986 (P.L.1585, No.174), known as the Private Licensed

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.

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(ii) An institution of higher education.

(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

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under the Individuals with Disabilities Education Act (Public

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 JULY 15 , 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.

(1) An application must be submitted by the applicant to

the department for review. An eligible student shall be

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accepted into the program if the student meets the

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.

(iii) A grant, in the form of money, will be

deposited into the lifeline scholarship account under

section 2004-L on behalf of the eligible student.

(iv) The money in the lifeline scholarship account

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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

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

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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

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 JULY 15 , 2022, and June 1 AUGUST 15 , 2022, for

acceptance to the program.

(2) For each school year thereafter, a parent may apply

or seek renewal between January MARCH 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

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be administered by the department in accordance with this

article.

(b) Deposit of grant.--

(1) Upon establishment of a lifeline scholarship

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

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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

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.

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

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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-

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

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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

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 qualified 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.

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

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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

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

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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

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

JULY 15 , 2022, and by March 1 of each year thereafter.

(9) If a parent is found to have engaged in fraudulent

misuse of a lifeline scholarship account, terminate the

account. In such case, the eligible student shall be

ineligible for future participation in the program and the

remaining money in the lifeline scholarship account shall be

repaid to the resident school district within 15 business

days. A parent may appeal the 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).

Section 2007-L. Duties of the Auditor General.

The Auditor General shall:

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(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

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.

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(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

(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.

(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).

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(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.

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.

(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.

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(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.

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,

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.

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(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.

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.

Section 2. This act shall take effect immediately.

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