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Introduced Version Senate Bill 525 History

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Key: Green = existing Code. Red = new code to be enacted

FISCAL NOTEWEST virginia legislature

2017 regular session

Introduced

Senate Bill 525

By Senators Maynard, Cline and Blair

[Introduced March 6, 2017; referred
to the Committee on Education; and then to the Committee on Finance]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §18-2E-1, §18-2E-2, §18-2E-3, §18-2E-4, §18-2E-5, §18-2E-6, §18-2E-7, §18-2E-8, §18-2E-9 and §18-2E-10, all relating generally to establishing education savings accounts for West Virginia students; defining terms; authorizing establishment of education savings accounts; granting of funds; providing restrictions on use of funds; financial management of education savings funds; establishing terms of eligibility for participation in program; imposing testing and data collection requirements; and reaffirming independence of nonpublic schools.

Be it enacted by the Legislature of West Virginia:


That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §18-2E-1, §18-2E-2, §18-2E-3, §18-2E-4, §18-2E-5, §18-2E-6, §18-2E-7, §18-2E-8, §18-2E-9 and §18-2E-10, all to read as follows:

ARTICLE 2E. Education Savings Accounts.


§18-2E-1. Definitions.

(a) The following words used in this article have the meanings ascribed to them unless the context clearly indicates a different meaning:

(1) “Education savings account” means an account established for a child pursuant to section two of this article.

(2) “Eligible institution” means:

(A) A university, state college or community college within the West Virginia higher education system;

(B) Any other college or university that:

(i) Was originally established in, and is organized under the laws of this state;

(ii) Is exempt from taxation pursuant to 26 U.S.C. §501(c)(3); and

(iii) Is accredited by a regional accrediting agency recognized by the United States Department of Education.

(3) “Parent” means the parent, custodial parent, legal guardian or other person in this state who has control or charge of a child and the legal right to direct the education of the child.

 (4) “Participating entity” means a private, parochial or church school as defined in article twenty-eight of this chapter, an eligible institution, a program of distance education that is not offered by a public school or the department, a tutor or tutoring agency or a parent that has provided to the State Treasurer the application described in subsection (a), section six of this article.

(5) “Resident school district” means the school district in which a child would be enrolled based on his or her residence.

§18-2E-2. Establishment of education savings accounts.


(a) Except as otherwise provided in subdivision (5), the parent of any child required by section one, article eight of this chapter to attend a public school who has been enrolled in a public school in this state during the period immediately preceding the establishment of an education savings account pursuant to this section for not less than one hundred school days without interruption may establish an education savings account for the child by entering into a written agreement with the State Treasurer, in a manner and form provided by the State Treasurer. The agreement must provide that:

(1) The child will receive instruction in this state from a participating entity for the school year for which the agreement applies;

(2) The child will receive a grant, in the form of money deposited pursuant to section three of this article in the education savings account established for the child pursuant to subsection (b) of this section;

(3) The money in the education savings account established for the child must be expended only as authorized by section four of this article; and

(4) The State Treasurer will freeze money in the education savings account during any break in the school year, including any break between school years.

(b) If an agreement is entered into pursuant to subsection (a) of this section, an education savings account must be established by the parent on behalf of the child. The account must be maintained with a financial management firm qualified by the State Treasurer pursuant to section five of this article.

(c) The failure to enter into an agreement pursuant to subsection (a) of this section for any school year for which a child is required by section one, article eight of this chapter to attend a public school does not preclude the parent of the child from entering into an agreement for a subsequent school year.

(d) An agreement entered into pursuant to subsection (a) is valid for one school year but may be terminated early. If the agreement is terminated early, the child may not receive instruction from a public school in this state until the end of the period for which the last deposit was made into the education savings account pursuant to section three of this article, except to the extent the student was allowed to receive instruction from a public school under the agreement.

(e) An agreement terminates automatically if the child no longer resides in this state. In such a case, any money remaining in the education savings account of the child reverts to the State General Fund.

(f) An agreement may be renewed for any school year for which the child is required by section one, article eight of this chapter to attend a public school. The failure to renew an agreement for any school year does not preclude the parent of the child from renewing the agreement for any subsequent school year.

(g) A parent may enter into a separate agreement pursuant to subsection (a) of this section for each child of the parent. Not more than one education savings account may be established for a child.

(h) Except as otherwise provided in subsection (j) of this section, the State Treasurer shall enter into or renew an agreement pursuant to this section with any parent of a child required by section one, article eight of this chapter to attend a public school who applies to the State Treasurer in the manner provided by the State Treasurer. The State Treasurer shall make the application available on the Internet website of the State Treasurer.

(i) Upon entering into or renewing an agreement pursuant to this section, the State Treasurer shall provide to the parent who enters into or renews the agreement a written explanation of the authorized uses, pursuant to section four of this article, of the money in an education savings account and the responsibilities of the parent and the State Treasurer pursuant to the agreement and sections one through ten, inclusive, of this article.

(j) A parent may not establish an education savings account for a child who will be homeschooled, who will receive instruction outside this state or will remain enrolled full-time in a public school, regardless of whether such a child receives instruction from a participating entity. A parent may establish an education savings account for a child who receives a portion of his or her instruction from a public school and a portion of his or her instruction from a participating entity.

§18-2E-3. Education savings grants.


(a) If a parent enters into or renews an agreement pursuant to section two of this article, a grant of money on behalf of the child must be deposited in the education savings account of the child.

(b) Except as otherwise provided in subsections (c) and (d) of this section, the grant required by subsection (a) of this section must, for the school year for which the grant is made, be in an amount equal to:

(1) For a child who is a student with a disability, as defined in section one, article twenty of this chapter, or a child with a household income that is less than one hundred and eighty-five percent of the federally designated level signifying poverty; one hundred percent of the statewide average basic support per student; and

(2) For all other children, ninety percent of the statewide average basic support per student.

(c) If a child receives a portion of his or her instruction from a participating entity and a portion of his or her instruction from a public school, for the school year for which the grant is made, the grant required by subsection (a) must be in a pro rata based on the amount  percentage of the total instruction provided to the child by the participating entity in proportion to the total instruction provided to the child.

(d) The State Treasurer may deduct not more than three percent of each grant for the administrative costs of implementing the provisions of this article.

(e) The State Treasurer shall deposit the money for each grant in quarterly installments pursuant to a schedule determined by the State Treasurer.

(f) Any money remaining in an education savings account:

(1) At the end of a school year may be carried forward to the next school year if the agreement entered into pursuant to section two of this article is renewed.

(2) When an agreement entered into pursuant to section two of this article is not renewed or is terminated, because the child for whom the account was established graduates from high school or for any other reason, reverts to the State General Fund at the end of the last day of the agreement.

§18-2E-4. Restrictions on use of education savings funds.


(a) Money deposited in an education savings account must be used only to pay for:

(1) Tuition and fees at a school that is a participating entity in which the child is enrolled;

(2) Textbooks required for a child who enrolls in a school that is a participating entity;

(3) Tutoring or other teaching services provided by a tutor or tutoring facility that is a participating entity;

(4) Tuition and fees for a program of distance education that is a participating entity;

(5) Fees for any national norm-referenced achievement examination, advanced placement or similar examination or standardized examination required for admission to a college or university;

(6) If the child is a student with a disability, as that term is defined in section one, article twenty of this chapter, fees for any special instruction or special services provided to the child;

(7) Tuition and fees at an eligible institution that is a participating entity;

(8) Textbooks required for the child at an eligible institution that is a participating entity or to receive instruction from any other participating entity;

(9) Fees for the management of the education savings account, as described in section five of this article;

(10) Transportation required for the child to travel to and from a participating entity or any combination of participating entities up to but not to exceed $750 per school year; or

(11) Purchasing a curriculum or any supplemental materials required to administer the curriculum.

(b) A participating entity that receives a payment authorized by subsection (a) shall not:

(1) Refund any portion of the payment to the parent who made the payment, unless the refund is for an item that is being returned or an item or service that has not been provided; or

(2) Rebate or otherwise share any portion of the payment with the parent who made the payment.

(c) A parent who receives a refund pursuant to subdivision (2) shall deposit the refund in the education savings account from which the money refunded was paid.

(d) Nothing in this section shall be deemed to prohibit a parent or child from making a payment for any tuition, fee, service or product described in subsection (a) of this section from a source other than the education savings account of the child.

§18-2E-5. Financial management of education savings accounts; required auditing; misuse of funds.


(a) The State Treasurer shall qualify one or more private financial management firms to manage education savings accounts and shall establish reasonable fees, based on market rates, for the management of education savings accounts.

(b) An education savings account must be audited randomly each year by a certified or licensed public accountant. The State Treasurer may provide for additional audits of an education savings account as it determines necessary.

(c) If the State Treasurer determines that there has been substantial misuse of the money in an education savings account, the State Treasurer may:

(1) Freeze or dissolve the account, subject to any regulations adopted by the State Treasurer providing for notice of such action and opportunity to respond to the notice; and

(2) Give notice of his or her determination to the Attorney General or the district attorney of the county in which the parent resides.

§18-2E-6. Eligibility for participation; application process; required posting of surety bonds; disqualification from participation.


(a) The following persons may become a participating entity by submitting an application demonstrating that the person is:

(1) A private, public or parochial school in compliance with the provisions of article twenty- eight of this chapter;

(2) An eligible institution;

(3) A program of distance education that is not operated by a public school or the department;

(4) A tutor or tutoring facility that is accredited by a state, regional or national accrediting organization; or

(5) The parent of a child.

(b) The State Treasurer shall approve an application submitted pursuant to subsection (a) or request additional information to demonstrate that the person meets the criteria to serve as a participating entity. If the applicant is unable to provide such additional information, the State Treasurer may deny the application.

(c) If it is reasonably expected that a participating entity will receive, from payments made from education savings accounts, more than $50,000 during any school year, the participating entity shall annually, on or before the date prescribed by the State Treasurer by regulation:

(1) Post a surety bond in an amount equal to the amount reasonably expected to be paid to the participating entity from education savings accounts during the school year; or

(2) Provide evidence satisfactory to the State Treasurer that the participating entity otherwise has unencumbered assets sufficient to pay to the State Treasurer an amount equal to the amount described in subdivision (1) of this subsection.

(d) Each participating entity that accepts payments made from education savings accounts shall provide a receipt for each such payment to the parent who makes the payment.

(e) The State Treasurer may refuse to allow an entity described in subsection (a) to continue to participate in the grant program provided in this article if the State Treasurer determines that the entity:

(1) Has routinely failed to comply with the provisions of this article; or

(2) Has failed to provide any educational services required by law to a child receiving instruction from the entity if the entity is accepting payments made from the education savings account of the child.

(f) If the State Treasurer takes an action described in subsection (e) against an entity described in subsection (a), the State Treasurer shall provide immediate notice of the action to each parent of a child receiving instruction from the entity who has entered into or renewed an agreement pursuant to section two of this article and on behalf of whose child a grant of money has been deposited pursuant to section three of this article.

§18-2E-7. Testing requirements; data collection.


(a) Each participating entity that accepts payments for tuition and fees made from education savings account shall:

(1) Ensure that each child on whose behalf a grant of money has been deposited pursuant to section three of this article and who is receiving instruction from the participating entity takes:

(A) Any examinations in mathematics and English language arts required for students of the same grade; or

(B) Norm-referenced achievement examinations in mathematics and English language arts each school year;

(2) Provide for value-added assessments of the results of the examinations described in subdivision (1) of this section; and

(3) Subject to the Family Educational Rights and Privacy Act of 1974, 20 U.S.C. § 1232g, and any regulations adopted pursuant thereto, provide the results of the examinations described in paragraph (A) to the department or an organization designated by the department pursuant to subsection (d) of this section.

(b) The department shall:

(1) Aggregate the examination results provided pursuant to subsection (a) according to the grade level, gender, race and family income level of each child whose examination results are provided; and

(2) Subject to the Family Educational Rights and Privacy Act of 1974, 20 U.S.C. § 1232g, and any regulations adopted pursuant thereto, make available on the Internet website of the department:

(A) The aggregated results and any associated learning gains; and

(B) After three school years for which examination data has been collected, the graduation rates, as applicable, of children whose examination results are provided.

(c) The State Treasurer shall administer an annual survey of parents who enter into or renew an agreement pursuant to section two of this article. The survey must ask each parent to indicate the number of years the parent has entered into or renewed such an agreement and to express:

(1) The relative satisfaction of the parent with the grant program established pursuant to this article; and

(2) The opinions of the parent regarding any topics, items or issues that the State Treasurer determines may aid the State Treasurer in evaluating and improving the effectiveness of the grant program established pursuant to this article.

(d) The department may arrange for a third-party organization to perform the duties of the department prescribed by this section.

§18-2E-8. Data collection and retention.


(a) The State Treasurer shall annually make available a list of participating entities, other than any parent of a child.

(b) Subject to the Family Educational Rights and Privacy Act of 1974, 20 U.S.C. § 1232g, and any regulations adopted pursuant thereto, the department shall annually require the resident school district of each child on whose behalf a grant of money is made pursuant to section eight of this article to provide to the participating entity any educational records of the child.

§18-2E-9. Independence of participating entities.


Except as otherwise provided in this article, nothing in the provisions of this article, shall be deemed to limit the independence or autonomy of a participating entity or to make the actions of a participating entity the actions of the State Government.

§18-2E-10. Rulemaking authority.


The State Treasurer shall adopt any rules necessary or convenient to carry out the provisions of this article.

 

NOTE: The purpose of this bill is to establish an education savings account program for West Virginia students.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.

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