HP0794, LD 1131, item 1, An Act To Create Education Savings Accounts for Maine Students

An Act To Create Education Savings Accounts for Maine Students

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 20-A MRSA §7303 is enacted to read:

§ 7303. Education savings accounts

The Treasurer of State, in consultation with the department, shall, in accordance with this section, establish education savings accounts, referred to in this section as "savings accounts." A savings account may be used by the parent or legal guardian of a child for educational purposes in accordance with subsection 3 for one school year and may be renewed for such use for subsequent years in accordance with subsection 2.

1. Establish savings accounts. The Treasurer of State shall establish savings accounts as follows.

A. The Treasurer of State by rule shall establish an application process for a parent or legal guardian of a child to request the establishment of a savings account. The Treasurer of State:

(1) May establish a savings account for a child only if the child will be receiving education provided by one or more educational entities certified under subsection 4;

(2) May establish a savings account for a child who will receive some education through a public school as long as the majority of the child's education is being provided by one or more educational entities certified under subsection 4; and

(3) May not establish a savings account for a child who will be home-schooled or who will be enrolled full-time in a public school.

B. The Treasurer of State may authorize private financial management entities to manage savings accounts established under this section and may establish reasonable fees for services that a private financial management entity may charge to a savings account.

2. Renewal, rollover and closure. The Treasurer of State may annually renew a savings account and deposit funds into the savings account in accordance with subsection 3 if the parent or legal guardian at whose request a savings account was established applies for a renewal and the Treasurer of State finds that the requirements of this section and rules adopted under this section have been met.

A. Unspent funds in a savings account that is renewed remain in the savings account and may be used in accordance with subsection 3.

B. If a parent or legal guardian at whose request a savings account was established does not apply for a renewal or the Treasurer of State finds that the requirements of this section or rules adopted under this section have not been met, the Treasurer of State shall close the savings account and provide all funds in the savings account to the State Controller who shall transfer them to the unappropriated surplus of the General Fund.

3. Funding and oversight. The Treasurer of State shall oversee savings accounts as follows.

A. Each year the Treasurer of State shall direct the department to deposit into each active savings account 90% of the state subsidy attributable to the child for whom the savings account is established that would otherwise have been provided to the child's school administrative unit under chapter 606-B. The department shall also direct that school administrative unit to deposit into the savings account 90% of the school administrative unit's required contribution to the unit's total cost of education attributable to that child. The department shall calculate these amounts and shall allocate the state funds to the extent possible in a manner consistent with the schedules applicable to state subsidy payments pursuant to section 15689-B. New funds may not be deposited in a savings account after the child graduates from high school.

B. The Treasurer of State may receive for and use to pay the costs of administering this section up to 3% of the state subsidy attributable to the child for whom a savings account is established.

C. The Treasurer of State shall establish and administer a savings account in a manner that allows the parent or legal guardian of the child for whom the savings account was established to expend funds in the account only for the following educational expenses, and the parent or legal guardian may use funds in the savings account only to pay for these educational expenses:

(1) The following costs of education provided by one or more educational entities certified under subsection 4:

(a) Tuition and fees charged by the educational entity, including charges for tutoring services; and

(b) The costs of textbooks required as part of the instruction by the educational entity;

(2) Transportation costs, for which receipts must be provided to the Treasurer of State, for travel to and from any educational entities certified under subsection 4, up to $750 in any school year;

(3) Test fees for a national achievement examination, advanced placement or similar examination required for admission to a college or university; and

(4) Costs of higher education, if the child graduates from high school with an active savings account and there are funds remaining in the savings account.

D. The Treasurer of State shall review all expenditures from savings accounts to ensure that they are in accordance with the requirements of this subsection and rules adopted under this section. If at any time the Treasurer of State finds that expenditures from a savings account are not in accordance with the requirements of this subsection or rules adopted under this section, the Treasurer of State shall notify the parent or legal guardian of the child for whom the savings account was established and if, after an opportunity for hearing, the department determines that there was in fact a misuse of the funds, the Treasurer of State shall close the savings account and provide all funds in the savings account to the State Controller, who shall transfer them to the unappropriated surplus of the General Fund.

4. Certification of educational entities. The department shall adopt rules providing for the certification of private educational entities that may receive funds from a savings account pursuant to subsection 3, paragraph C. The rules must provide for the certification of any of the following that the department determines provides adequate educational services to children:

A. A private school;

B. An entity, other than a school administrative unit or the State, providing a program of distance learning; and

C. A person or entity providing educational tutoring who is accredited by a recognized accrediting organization.

Rules adopted by the department under this subsection must provide for appropriate periodic review of educational entities certified under this subsection to ensure the adequacy of educational services provided by the entities. The rules must provide for the decertification of any entity the department finds not to be providing adequate educational services. The rules must also require the school administrative unit in which a child resides to provide any appropriate and necessary academic records to a certified educational entity at the request of the child's parent or legal guardian.

Rules adopted by the department pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.

5. Rules. The Treasurer of State shall adopt rules necessary to implement this section. Rules adopted by the Treasurer of State pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.

Sec. 2. 20-A MRSA §15689, sub-§14 is enacted to read:

14. Adjustment for savings accounts. The commissioner shall reduce the state share of the total allocation to a school administrative unit in any year in which one or more savings accounts under section 7303 are established for children within that school administrative unit. The amount of the reduction must equal the total state subsidy that is attributable to all children in that school administrative unit for whom savings accounts have been established, as determined by the department pursuant to section 7303, subsection 3, paragraph A.

SUMMARY

This bill directs the Treasurer of State to establish education savings accounts that may be used by the parents or legal guardians of children to pay for the education of their children outside of the public school system. The funding for these savings accounts would come from shifting 90% of the essential programs and services funding that would otherwise be provided by the State and the school administrative unit for each child into a savings account. The bill specifies what educational expenditures are permitted and provides for review of spending from the accounts.

HP0794 LD 1131	Session - 128th Maine Legislature		LR 1201 Item 1
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