Summary of IA Senate Voucher Bill SF2091
By Randy Richardson
This bill establishes an education savings grant program for pupils attending a nonpublic school or receiving competent private instruction and establishes an education savings grant fund. For the school budget year beginning July1, 2019, and each succeeding school budget year, resident pupils who are attending a nonpublic school or who are receiving competent private instruction are eligible to receive an education savings grant if:
• the pupil is eligible to enroll in kindergarten, or
• is eligible to enroll in grade 1 through grade 12 and has attended a public school for the equivalent of the two immediately preceding semesters, or
• if the pupil received an education savings grant for the immediately preceding school budget year.
Parents or guardians would be required to submit an application for an education savings grant to the Department of Education by January 31 of the year prior to enrollment stating that they intend to enroll their child in a nonpublic school or place the child in competent private instruction.
By March 1 proceeding each school year, the department of education must notify the department of management of the number of pupils designated for the following school year to receive an education savings grant and the amount of the education savings grant for each pupil.
An application from the parent or guardian of an eligible pupil shall be approved for the duration of the education savings grant period and the department of education shall enter into a contract with the parent or guardian requiring provision and funding of the education savings grant for each school budget year of the education savings grant period for which the pupil remains eligible. The education savings grant period is five years or the number of years until completion of the school year during which the pupil graduates from high school or completes an equivalent level of competent private instruction, whichever is less, provided that the parent or guardian may terminate the contract at any time. The amount of each education savings grant is equal to the difference between 87.5 percent of the regular program state cost per pupil and the statewide average foundation property tax per pupil in the same school year. [Our estimate: give or take $4,000/pupil]
For the fiscal year commencing July 1, 2019, and each succeeding fiscal year, there is appropriated from the general fund of the state to the department of management for deposit in the fund the amount necessary to pay all education savings grants approved for that fiscal year. For each pupil approved for an education savings grant, the department of management must establish an account for that pupil in the education savings grant fund. The amount of the pupil’s education savings grant is deposited into the pupil’s account on July 1 and such amount is available for use by parents and guardians for the payment of qualified educational expenses, as defined in the bill, incurred by the parent or guardian for the pupil during that fiscal year or in a future fiscal year as provided in the bill.
The bill authorizes the department of education to contract with a private financial management firm to manage the education savings grant fund, in collaboration with the treasurer of state, including providing for the disbursement of education savings grants in the form of an electronic debit card or checks that are payable directly from the pupil’s account within the fund.
The bill provides that moneys remaining in a pupil’s account upon the conclusion of the fiscal year shall remain in the pupil’s account in the education savings grant fund for the payment of qualified educational expenses in future fiscal years during which the pupil participates in the program or for higher education costs as authorized in the bill. Under the bill, for each pupil with a positive balance in the pupil’s account in the education savings grant fund upon graduation from high school or completion of an equivalent level of competent private instruction under Code chapter 299A, the department of management is required to maintain the account in the fund until the pupil reaches an ages specified in the bill. Until the pupil reaches the age limitation, moneys in the pupil’s account may be used by the pupil for higher education costs, as defined in Code section 12D.1. The bill provides that an education savings grant received by a taxpayer is not taxable income for purposes of state individual income taxation. This provision of the bill applies to tax years beginning on or after January 1, 2019. The sections of the bill amending Code section 256.7 and enacting Code section 257.11B apply to school budget years and fiscal years beginning on or after July 1, 2019.
