Trial Engrossment of Amendment A04368 to Senate Bill 0795 P.N. 0902, Regular Session 2023-2024

A04368

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

795

Session of

2023

INTRODUCED BY J. WARD, STEFANO, COLEMAN, LAUGHLIN, PHILLIPS-

HILL, PENNYCUICK, MARTIN, ARGALL, MASTRIANO, AUMENT, ROTHMAN,

BREWSTER, REGAN, DiSANTO, DUSH, GEBHARD, HUTCHINSON AND YAW,

JUNE 15, 2023

REFERRED TO EDUCATION, JUNE 15, 2023

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 and the Lifeline Scholarship Fund. establishing the

Pennsylvania Award for Student Success 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 articles to read:

ARTICLE XVII-E

LIFELINE SCHOLARSHIP PROGRAM

Section 1701-E. Scope of article.

This article relates to the Lifeline Scholarship Program.

Section 1702-E. 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

program under section 1704-E on behalf of an eligible student.

"Attendance boundary." As defined in section 2002-B.

"Department." The Department of Education of the

Commonwealth.

"Eligible student." A school-age child who:

(1) Has not received a high school diploma.

(2) Resides within the attendance boundary of a low-

achieving school as determined under section 1302 upon

initial application under section 1704-E(b)(1).

(3) 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.

(iii) Will attend kindergarten for the first time in

the next school year.

"Fund." The Lifeline Scholarship Fund established in section

1708-E.

"Kindergarten." A one-year formal educational program,

whether part time or full time, that occurs during the school

year immediately prior to first grade.

"Lifeline scholarship account." A spending account

established and administered by the State Treasury, and

controlled 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.

"Low-achieving school." As defined in section 2002-B.

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

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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

twelve, or a combination of grades, that notifies the State

Treasury of the nonpublic school's desire to participate in the

program and provides certification to the State Treasury that

the nonpublic school meets the criteria under section 1711-E.

"Program." The Lifeline Scholarship Program established

under section 1703-E(a).

"Public school." A school operated by a school district, an

intermediate unit, area career and technical school, a charter

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 or in

grade one through grade twelve.

"School-related fee." A fee charged by a participating

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nonpublic school to all students for books, instructional

materials, technology equipment and services, uniforms,

activities and concurrent enrollment programs under Article XVI-

"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.

"State Treasury." The Treasury Department of the

Commonwealth.

"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).

Section 1703-E. Lifeline Scholarship Program.

(a) Establishment.--Beginning with the 2023-2024 school

year, the Lifeline Scholarship Program is established as a

program in the State Treasury to provide scholarships to 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) No later than July 15, 2023, and within 15 days of

receipt of a notice under section 2010-B 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.

A04368 - 4 -

(2) The notice shall be in a form provided by the State

Treasury, 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.

to submit a notice to parents under subsection (b) shall provide

the State Treasurer with a list of students whose parents were

provided the notice.

Section 1704-E. Application.

(a) Application form.--By July 15, 2023, the State Treasury

shall develop an application form that can be accessed from and

submitted electronically on the State Treasury's publicly

accessible Internet website.

(b) Application and approval process.--

(1) By July 31, 2023, and by April 1 of each year

thereafter, the applicant may apply to the State Treasury for

a scholarship for the following school year according to

guidelines developed by the State Treasury under section

1709-E. An application shall be approved by the State

Treasury if the student meets the eligibility requirements of

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this article.

(2) By August 9, 2023, and by May 1 of each year

thereafter, the State Treasury shall notify the applicant

whether a scholarship will be awarded for the following

school year.

(3) For the 2023-2024 school year, scholarships shall be

awarded on a first-come, first-served basis considering money

available in the fund.

(4) For the 2024-2025 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

money available in the fund.

(5) Upon notification by the State Treasury 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.

(6) By August 16, 2023, and by June 1 each year

thereafter, a participating nonpublic school shall provide

written confirmation to the State Treasury of scholarship

recipients who have accepted an offer of enrollment for the

following school year and provide the State Treasury with the

amounts to be charged to the scholarship recipient for

tuition, school-related fees and special education services

fees.

Section 1705-E. Agreement.

(a) Authorization.--Upon approval of an application, the

State Treasury shall enter into an agreement with the applicant.

The agreement shall provide the following:

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(1) The scholarship recipient shall enroll in a

participating nonpublic school for the school year for which

the agreement applies.

(2) A certain sum of money shall be deposited into a

lifeline scholarship account under section 1706-E on behalf

of the scholarship recipient.

(3) The money in the lifeline scholarship account may be

expended only as authorized under this article.

(4) The parent shall notify the State Treasury 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.

(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 State Treasury for the following

reasons:

(i) The parent is found to have engaged in

fraudulent misuse of the lifeline scholarship account. In

such case, the scholarship recipient shall be ineligible

for future participation in the program. The parent may

appeal the State Treasury'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

A04368 - 7 -

(relating to practice and procedure) and 7 (relating to

judicial review).

(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 lifeline scholarship

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 State Treasury shall provide the parent with a written

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explanation of the authorized uses of the money in the lifeline

scholarship account.

Section 1706-E. Lifeline scholarship account.

(a) Establishment.--If an agreement is entered into under

section 1705-E(a), the State Treasury shall establish a lifeline

scholarship account for the scholarship recipient. The lifeline

scholarship account shall be administered by the State Treasury

in accordance with this article.

(b) Deposit.--

(1) Upon establishment of a lifeline scholarship

account, the State Treasurer shall deposit a sum of money for

the applicable school year in the scholarship account for the

scholarship recipient in accordance with this section.

(2) For the 2023-2024 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 grade nine through grade

twelve, $10,000; or

(iv) for a student with special needs regardless of

grade level, $15,000.

(3) Beginning with the 2024-2025 school year, and each

school year thereafter, the amounts in paragraph (2) shall be

increased by the greater of the average percentage increase

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 State Treasury

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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.

money for each scholarship into a lifeline scholarship account

on a schedule determined by the State Treasury in consultation

with the department.

(d) Payments to participating nonpublic schools.--A parent

may direct payments from the lifeline scholarship account to a

participating nonpublic school on behalf of the scholarship

recipient via an electronic money transfer system developed by

the State Treasury under section 1709-E.

Section 1707-E. Qualified education expenses.

(a) General rule.--Money deposited into a lifeline

scholarship 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

directly share any portion of the payment with the parent who

made the payment.

(1) The money in a lifeline scholarship account is not

taxable income to the parent or scholarship recipient under

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State law.

(2) An award made to, or payment from, a lifeline

scholarship account may not be construed to be an

appropriation or financial assistance to a participating

nonpublic school.

Section 1708-E. Lifeline Scholarship Fund.

(a) Establishment.--The Lifeline Scholarship 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 the purposes authorized

by this article. 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) Funding.--The fund shall consist of 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.

appropriated on a continuing basis to the State Treasury for the

purpose of administering this article.

Section 1709-E. Duties of State Treasury.

(a) General rule.--The State Treasury shall:

(1) Develop guidelines, in consultation with the

department, as necessary for the administration of this

article.

(2) Make payments to lifeline scholarship 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.

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(4) Develop a process by which a nonpublic school may

inform the State Treasury 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 State Treasury's publicly accessible Internet

website by July 31, 2023, and by April 1 of each year

thereafter.

(b) Third-party administration.--The State Treasury may

contract with a third party to administer the program.

Section 1710-E. Duties of Auditor General.

The Auditor General may:

(1) Conduct a random audit of lifeline scholarship

accounts.

(2) Refer cases of suspected fraudulent misuse of

lifeline scholarship 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 State Treasury of cases of suspected

fraudulent misuse that are referred to the Inspector General.

Section 1711-E. Duties of participating nonpublic schools.

(a) Notification requirement.--A nonpublic school that

desires to participate in the program shall notify the State

Treasury by a date and in a manner established by the State

Treasury. The notification shall include certification by the

nonpublic school that:

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(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.).

(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 a lifeline 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 student who had not received a lifeline

scholarship.

(1) For purposes of this article, a participating

nonpublic school shall be autonomous and is not an agent of

the State Treasury, the department or the Commonwealth.

(2) Neither the State Treasury, 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 1712-E. Bar of certain participating nonpublic schools.

(a) General rule.--The State Treasury may bar a nonpublic

school from participation in the program if State Treasury

establishes that the nonpublic school has:

(1) routinely failed to comply with the requirements

established in section 1711-E; or

(2) failed to provide a scholarship recipient with the

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educational services funded by the recipient's lifeline

scholarship account.

(b) Notice.--If the State Treasury bars a nonpublic school

from participation in the program, the State Treasury shall,

after any appeal is concluded and the State Treasury's decision

is upheld under subsection (c), post the decision on the State

Treasury's publicly accessible Internet website.

Treasury'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 1713-E. 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

within 10 days of the receipt of notice from the participating

nonpublic school of the scholarship recipient's enrollment.

Section 1714-E. Report.

(a) Duty to prepare and submit.--Beginning January 31, 2025,

and each January 31 thereafter, the State Treasury, 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

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program.

(4) The total number of applications approved for the

program, by resident school district.

(5) The total number of lifeline scholarship accounts

terminated early.

(6) The total number of lifeline scholarship accounts

investigated for fraud by the Inspector General.

(7) The total number of scholarships awarded to students

attending half-day kindergarten.

(8) The total number of scholarships awarded to students

attending full-day kindergarten through grade eight.

(9) The total number of scholarships awarded to students

attending grade nine through grade twelve.

(10) The total dollar amount of scholarships awarded.

(11) The total number of applications not approved due

to lack of funding.

(12) The cost of administration of the program.

(13) Other information the department and the State

Treasury deem helpful to the General Assembly.

ARTICLE XXVII-E

(Reserved)

ARTICLE XVII-F

PENNSYLVANIA AWARD FOR STUDENT

SUCCESS SCHOLARSHIP PROGRAM

Section 1701-F. Scope of article.

This article relates to the Pennsylvania Award for Student

Success Scholarship Program.

Section 1702-F. Definitions.

The following words and phrases when used in this article

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

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context clearly indicates otherwise:

"Applicant." A parent who applies for participation in the

program under section 1704-F on behalf of an eligible student.

"Attendance boundary." As defined in section 2002-B.

"Department." The Department of Education of the

Commonwealth.

"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 State

Treasury received written confirmation that the child

accepted an offer of enrollment under section 1704-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 State Treasury received

written confirmation that the child accepted an offer of

enrollment under section 1704-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.

(iii) Will attend kindergarten for the first time in

the next school year.

"Fund." The Pennsylvania Award for Student Success

Scholarship Fund established in section 1708-F.

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"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

twelve, or a combination of grades, that notifies the State

Treasury of the nonpublic school's desire to participate in the

program and provides certification to the State Treasury that

the nonpublic school meets the criteria under section 1711-F.

"PASS scholarship account." A spending account established

and administered by the State Treasury, 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.

"Program." The Pennsylvania Award for Student Success

Scholarship Program established under section 1703-F(a).

"Public school." A school operated by a school district, an

intermediate unit, area career and technical school, a charter

A04368 - 17 -

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 or in

grade one through grade twelve.

"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-

"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.

"State Treasury." The Treasury Department of the

Commonwealth.

"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).

Section 1703-F. Pennsylvania Award for Student Success

Scholarship Program.

(a) Establishment.--Beginning with the 2024-2025 school

year, the Pennsylvania Award for Student Success Scholarship

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Program is established as a program in the State Treasury to

provide scholarships to help eligible students pay tuition,

school-related fees and special education services fees for

attendance at a participating nonpublic school. The program may

be referred to as the PASS Scholarship Program.

(b) Notice to parents.--

(1) Within 15 days of receipt of a notice under section

2010-B, 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 State

Treasury, 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.

submit a notice to parents under subsection (b) shall provide

the State Treasury with a list of students whose parents were

provided the notice. The notification shall be made in a manner

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