HF 1529

as introduced - 89th Legislature (2015 - 2016) Posted on 03/23/2015 03:58pm

A bill for an act
relating to education; creating Education Savings Accounts for Students with
Special Needs Act; appropriating money.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. EDUCATION SAVINGS ACCOUNTS FOR STUDENTS WITH
SPECIAL NEEDS ACT.

Subdivision 1.

Title.

This act shall be known as the "Education Savings Accounts
for Students with Special Needs Act."

Subd. 2.

Definitions.

(a) For the purposes of this section, the following terms
have the meanings given them.

(b) "Commissioner" means the commissioner of education.

(c) "Department" means the Department of Education.

(d) "Educational service provider" means an eligible school, tutor, or other person or
organization that provides education-related services and products to participating students.
The eligible student's parent shall not be an educational service provider for that student.

(e) "Eligible school" means a nonpublic school where a student can fulfill compulsory
education requirements and that is recognized by the commissioner or accredited by an
accrediting agency recognized by the Minnesota Nonpublic Education Council under
Minnesota Statutes, section 123B.445, paragraph (a). An eligible school does not include
a home school under Minnesota Statutes, sections 120A.22, subdivision 4, and 120A.24.

(f) "Eligible student" means any student who has had an individualized education
program (IEP) or has been determined by the resident school district to qualify for special
education services.

(g) "Parent" means a resident of this state who is a parent, legal guardian, custodian,
or other person with the authority to act on behalf of the eligible student.

(h) "Postsecondary institution" means a college or university accredited by a state,
regional, or national accrediting organization.

(i) "Program" means a five-year pilot program to implement education savings
accounts (ESAs).

(j) "Tutor" means a person who (1) is certified or licensed by a state, regional, or
national certification or licensing organization to teach, (2) has earned a valid teacher's
license, or (3) has experience teaching at a postsecondary institution.

Subd. 3.

ESA program.

(a) An eligible student qualifies to participate in the
program if the student's parent signs an agreement:

(1) to arrange for the provision of organized, appropriate educational services with
measurable goals to the participating student in at least the subjects of reading, writing,
mathematics, social studies, and science; and

(2) to not enroll the participating student in a public school or a public charter
school and to acknowledge as part of the agreement that the participating student has no
individual entitlement to a free appropriate public education from the student's resident
school district, including special education and related services, for as long as the student
is participating in the program.

(b) A parent shall use the funds deposited in a participating student's ESA for any
of the following qualifying expenses to educate the student using any of the methods
or combination of methods in this paragraph that meet the requirement in paragraph
(a), clause (1):

(1) tuition and fees at an eligible school;

(2) payment to a tutor;

(3) payment for purchase of curriculum, including any textbooks and supplemental
materials required by the curriculum;

(4) fees for transportation to and from an educational service provider paid to a
fee-for-service transportation provider;

(5) tuition and fees for online learning programs or courses;

(6) fees for nationally standardized norm-referenced achievement tests, including
alternate assessments, and fees for advanced placement examinations or similar courses
and any examinations related to college or university admission;

(7) educational services or therapies from a licensed or certified practitioner or
provider, including licensed or certified paraprofessionals or educational aides;

(8) services provided by a public school, including individual classes and
extracurricular programs;

(9) tuition, fees, and textbooks at a postsecondary institution;

(10) no more than $300 in annual consumable school supplies necessary for the
student's education; or

(11) computer hardware and software and other technological devices if an eligible
school, tutor, educational service provider, or licensed medical professional verifies in
writing that these items are necessary for the student to meet annual, measurable goals.

(c) Neither a participating student nor anyone on the student's behalf may receive
cash or cash-equivalent items, such as gift cards or store credit, from refunds or rebates
from a provider of services or products in this program. Refunds or rebates shall be
credited directly to the participating student's ESA. The funds in an ESA may only be
used for education-related purposes. Eligible schools, postsecondary institutions, and
educational service providers that serve participating students shall provide parents with a
receipt for all qualifying expenses.

(d) Payment for educational services through an ESA shall not preclude parents
from paying for educational services using non-ESA funds.

(e) For purposes of continuity of educational attainment, students who enroll in the
program shall remain eligible to receive quarterly ESA payments until the participating
student returns to a public school, graduates from high school, or completes the school
year in which the student reaches the age of 21, whichever occurs first.

(f) Any funds remaining in a student's ESA upon graduation from high school
may be used to attend or take courses from a postsecondary institution, with qualifying
expenses subject to the applicable conditions in paragraph (b).

(g) Upon the participating student's graduation from a postsecondary institution or
after any period of four consecutive years after graduation from high school that the
student is not enrolled in a postsecondary institution, the participating student's ESA shall
be closed and any remaining funds shall be returned to the state general fund.

(h) A participating student shall be allowed to return to the resident school district at
any time after enrolling in the program, according to rules adopted by the commissioner
providing for the least disruptive process for doing so. Upon a participating student's
return to the resident school district, the student's ESA shall be closed and any remaining
funds shall be returned to the state general fund.

(i) The commissioner shall begin accepting applications for the program on July
1, 2016.

Subd. 4.

Funding.

(a) The commissioner shall determine the amount to be deposited
in each student's ESA on a first-come, first-served basis. The commissioner shall calculate
the sum of the following to determine the ESA amount:

(1) the statewide average general education revenue per adjusted pupil unit; and

(2) the sum of the amounts according to Minnesota Statutes, section 125A.76,
subdivision 2, clauses (1), (3), (4), (5), (6), and (7), attributable to the student and using
the student's most recent year of enrollment in a public school as the base year.

(b) The information in paragraph (a) must be provided by the school in the form
required by the commissioner.

Subd. 5.

Administration.

(a) The commissioner shall create a standard form
that parents of students submit to establish their student's eligibility for an ESA. The
commissioner shall ensure that the application is readily available to interested families
through various sources, including the department's Web site, and a copy of procedural
safeguards annually given to parents.

(b) The commissioner shall provide parents of participating students with a written
explanation of the allowable uses of ESAs, the responsibilities of parents, and the duties
of the commissioner. The information shall also be made available on the department's
Web site.

(c) The commissioner shall annually notify all students who are eligible to
participate of the existence of the program and shall ensure that lower-income families are
made aware of their potential eligibility.

(d) The commissioner may deduct up to six percent from appropriations made to
fund ESAs to cover the costs of overseeing and administering the program.

(e) The commissioner shall make payments to the ESAs of participating students on
a quarterly basis unless there is evidence of misuse of the ESA pursuant to subdivision 6.

(f) The commissioner shall make a determination of eligibility and shall approve the
application within 21 business days of receiving an application for participation in the
program.

Subd. 6.

ESA establishment.

(a) To ensure that funds are spent appropriately,
the commissioner shall adopt rules and policies necessary for the administration of the
program, including the auditing of ESAs, and shall conduct or contract for random audits
throughout the year.

(b) Beginning with the 2016-2017 school year, the commissioner shall issue ESA
cards to parents making expenditures under this section on behalf of a participating
student. ESA cards shall be issued to parents upon entry to the program and shall expire
when the participating student's ESA is closed, except for the periodic expiration and
replacement of cards in the normal course of business. All unexpended amounts shall
remain in the student's ESA and be combined with the following year's allocation of ESA
funds, subject to subdivision 3, paragraphs (f) and (g).

(c) The commissioner, taking into consideration requests from the parents of
participating students, shall use merchant category classification (MCC) codes, or a
similar system as practicable and consistent with current technology, to identify categories
of providers that provide services and products consistent with subdivision 3, paragraph
(b). The commissioner shall make a list of blocked and unblocked MCC codes publicly
available for purposes of the program.

(d) The commissioner shall adopt a process for removing educational service
providers that defraud parents and for referring cases of fraud to law enforcement.

(e) The commissioner shall establish or contract for the establishment of an online,
anonymous fraud-reporting service and an anonymous telephone hotline for fraud
reporting.

(f) The commissioner shall adopt rules implementing policies on misspending of
ESA funds.

(g) Any amount not spent in the allowable categories pursuant to the agreement
will cause the ESA card to be temporarily suspended and the parent contacted within
five business days by United States mail at the parent's home address explaining the
suspension, detailing the violation, and requesting the parent to:

(1) provide additional documentation within 15 business days justifying the
expenditure; or

(2) repay the misspent amount within 15 business days.

(h) If the parent does not provide sufficient documentation and refuses to repay the
amount, the commissioner shall begin the removal process and shall seek to recover the
misspent funds using administrative measures or other appropriate measures, including
referral to collections, seeking a civil judgment, or referral to law enforcement.

(i) If the parent repays the amount within the requested time frame, then the offense
will be recorded and held in the parent's file.

(j) Three offenses within a consecutive three-year period shall disqualify the parent's
student from participating in the program.

(k) If the commissioner determines that a parent has failed to comply with the
terms of the agreement as specified in subdivision 3, the commissioner shall suspend the
participating student's ESA. The commissioner shall notify the parent in writing within
five business days that the ESA has been suspended and that no further transactions will be
allowed or disbursements made. The notification shall specify the reason for the suspension
and state that the parent has 21 business days to respond and take corrective action.

(l) If the parent fails to respond to the commissioner, to furnish reasonable and
necessary information, or to make a report that may be required for reinstatement within the
21-day period, the commissioner may remove the participating student from the program.

(m) The decision of the commissioner under this section is subject to judicial review
under Minnesota Statutes, sections 14.63 to 14.69. The decision of the commissioner is
stayed pending an appeal.

(n) The commissioner shall refer cases of substantial misuse of funds to law
enforcement agencies for investigation if evidence of fraudulent intent and use of an
ESA is obtained.

Subd. 7.

Scope.

An eligible nonpublic school is autonomous and not an agent of the
state or federal government, and therefore:

(1) the commissioner, department, or any other government agency shall not in
any way regulate the educational program of a nonpublic school or educational service
provider that accepts funds from the parent of a participating student;

(2) the creation of the program does not expand the regulatory authority of the state,
its officers, or any school district to impose any additional regulation of nonpublic schools
or educational service providers beyond those necessary to enforce the requirements
of the program; and

(3) eligible schools and educational service providers shall be given the maximum
freedom to provide for the educational needs of their students without governmental
control. No eligible school or educational service provider shall be required to alter its
creed, practices, admission policies, or curriculum in order to accept participating students.

Subd. 8.

Severability.

If any provision of this law or its application is found to be
unconstitutional and void, the remaining provisions or applications of this law that can be
given effect without the invalid provision or application are valid.

EFFECTIVE DATE.

This section is effective the day following final enactment
and applies for the 2016-2017 through the 2020-2021 school years.

Sec. 2. APPROPRIATIONS.

Subdivision 1.

Department of Education.

The sums indicated in this section are
appropriated from the general fund in the fiscal year designated.

Subd. 2.

Education savings accounts.

For education savings accounts:

	$	.......	.....	2016
	$	.......	.....	2017

Any balance in the first year does not cancel but is available in the second year.