The Hope Scholarship Act

Model Bill Info
Bill Title	The Hope Scholarship Act
Date Introduced	July 28, 2022
Type	Model Policy
Status	Final
Task Forces	Education and Workforce Development
Keywords	Education, Local Issues

The Hope Scholarship Act

Section I – Hope Scholarship Program – Short Title

This law shall be known as the “Hope Scholarship Act.” The program created by this act shall be known as the “Hope Scholarship Program.”

Section II. Public School Support – Funding for Hope Scholarship Program

1. Notwithstanding any other provision of this article to the contrary, for fiscal year 2024 and each fiscal year thereafter, in addition to all other amounts required by this law, the Department of Education shall include in its budget request, and the Governor shall include in each budget bill submitted to the Legislature, an appropriation to the Department of Education for the greater of an amount not less than two percent of net public school enrollment adjusted for state aid purposes or the total number of eligible Hope Scholarship applications received by the Hope Scholarship Board, if available, multiplied by the prior year’s statewide average net state aid allotted per pupil. The amount appropriated shall be transferred by the Department of Education to the Hope Scholarship Board to be used solely to meet the Hope Scholarship Program obligations established by this law except as otherwise provided in this section. The Governor shall also provide in each budget for the reappropriation for expenditure during the ensuing fiscal year the balance to the Department of Education that was not transferred to the Hope Scholarship Board due to an accumulated balance from prior years as provided under subsection B of this section.

2. Each fiscal year, the amount required to be requested and included in the budget bill for appropriation under subsection A of this section shall be reduced by the sum of:

(a) Any unused accumulated amounts transferred to the Hope Scholarship Board for these purposes from previous years; and

(b) Any unused appropriations made to the Department of Education for these purposes that were not transferred to the Hope Scholarship Board due to an accumulated balance from prior years.

Section III – Hope Scholarship Program – Definitions

The following words have the meanings ascribed to them unless the context clearly indicates a different meaning:

• “Account” or “scholarship” means a Hope Scholarship account, awarded pursuant to this article, to which funds are allocated by the board to the parent or parents of an eligible Hope Scholarship student in order to pay qualifying education expenses to educate the student pursuant to the requirements and conditions of this law;
• “Board” means the Hope Scholarship Board created pursuant to Section IV of this law;
• “Curriculum” means a completed course of study for a particular content area or grade level, including any supplemental materials required by the curriculum;
• “Education service provider” means a person or organization that receives payments from Hope Scholarship accounts to provide educational goods and services to Hope Scholarship students;
• “Eligible recipient” means a child who is a resident of this state and is otherwise eligible to enroll in a public school, subject to the provisions of Section VIII.G;
• “Hope scholarship funds” means the moneys deposited in a Hope Scholarship student’s account in accordance with the requirements of this law.
• “Hope scholarship student” means a student who receives a scholarship pursuant to this law;
• “Parent” means a biological parent, legal guardian, custodian, or other person with legal authority to act on behalf of an eligible recipient or Hope Scholarship student;
• “Participating school” means any private school that provides education to elementary and/or secondary students and has notified the board of its intention to participate in the program and comply with the program’s requirements;
• “Resident school district” means the county school district in which the student resides; and
• “Treasurer” means the [insert state] State Treasurer

SECTION IV – Hope Scholarship Program – Hope Scholarship Board; Members; Terms; Compensation; Proceedings Generally

(A) The [insert state] Hope Scholarship Program shall be administered by the Hope Scholarship Board.

(B) The board shall consist of nine members and include the following:

(1) The State Treasurer;

(2) The State Auditor, or his or her designee;

(3) The State Attorney General, or his or her designee;

(4) The [State Superintendent of Schools or other similar authority], or his or her designee;

(5) The [Chancellor of Higher Education or other similar authority], or his or her designee;

(6) The [insert head of state agency/office overseeing minority affairs/equal opportunity], or his or her designee; and

(7) Three members appointed by the Governor with the advice and consent of the Senate who are parents of Hope Scholarship students, or for the initial appointments of board members following the effective date of this law, parents who intend to apply for the Hope Scholarship on behalf of eligible recipients, to be appointed as follows:

(a) Only state residents are eligible for appointment to the board;

(b) The members shall reside in geographically diverse areas of the state;

(c) Members shall be initially appointed to staggered terms as follows:

1. One member appointed by the Governor to a one-year term;

2. One member appointed by the Governor to a two-year term; and

3. One member each appointed by the Governor to a three-year term.

After the initial staggering of terms, appointed board members shall serve for three-year terms and are eligible for reappointment at the expiration of their terms; and

(d) If there is a vacancy among appointed members, the vacancy shall be filled by appointment to the unexpired term of a person meeting the requirements of this section by the Governor with the advice and consent of the Senate. Members of the board shall serve until the later of the expiration of the term for which the member was appointed or the appointment of his or her successor.

(C) Members of the board shall serve without compensation. The board may reimburse members for all reasonable and necessary expenses, including travel expenses, actually incurred by board members in the conduct of their official duties. Any expense reimbursements shall be made from the Hope Scholarship Program Expense Fund at the same rate paid to state employees.

(D) The Treasurer is the chairman and presiding officer of the board. The Treasurer may provide office space and staff to the board upon request of the board.

(E) The [State Superintendent of Schools or other similar authority] may provide staff to the board, upon request of the board.

(F) A majority of the members of the board constitutes a quorum for the transaction of the business of the board.

(G) Members of the board are subject to the ethical standards and financial disclosure requirements of [insert cross-sectional reference].

Section V – Hope Scholarship Program – Powers of the Board

The board is authorized to take any action necessary to effectuate the provisions of this law and to successfully administer the Hope Scholarship Program, subject to applicable state and federal law, including, but not limited to the following:

1. Adopt and amend bylaws;

2. Execute contracts and other instruments for necessary goods and services, employ necessary personnel and engage the services of private consultants, actuaries, auditors, counsel, managers, trustees, and any other contractor or professional needed for rendering professional and technical assistance and advice;;

3. Implement the program through the use of financial organizations as account depositories and managers;

4. Develop and impose requirements, policies, procedures, and guidelines to implement and manage the program;

5. Determine whether an expenditure of Hope Scholarship funds is or was a qualifying expense to educate a Hope Scholarship student pursuant to Section X of this law. The board may approve or deny expenditures by a majority vote;

6. Review any appeals made pursuant to Section XIII.B and Section XIII.D of this law;

7. Establish the method by which moneys in the Hope Scholarship Expense Fund shall be allocated to pay for administrative costs and assess, collect and expend administrative fees, charges, and penalties;

8. Authorize the assessment, collection and retention of fees and charges against the amounts paid into and the earnings on the Hope Scholarship funds by a financial institution, investment manager, fund manager, [insert any applicable state authorities], or other professional managing or investing the Hope Scholarship funds and accounts;

9. Invest and reinvest any of the funds and accounts under the board’s control with a financial institution, an investment manager, a fund manager, [insert any applicable state authorities], or other professionals investing the funds and accounts: Provided, That investments made under this article shall be made in accordance with the provisions of [insert relevant cross-sectional reference regarding investment of state funds, if applicable]; and

10. Solicit and accept gifts, including bequests and other testamentary gifts made by will, trust, or other disposition; grants; loans; aid; and property, real or personal of any nature and from any source, or to participate in any other way in any federal, state, or local governmental programs in carrying out the purposes of this article: Provided, That the board shall use the property received to effectuate the desires of the donor, and shall convert the property received into cash within 180 days of receipt.

Section VI – The Hope Scholarship Program – Award of Hope Scholarships

(A) The Hope Scholarship Program is established to provide the option for a parent to better meet the individual education needs of his or her eligible child. The program shall be operational no later than July 1, 2023.

(B) The board shall create a standard application form that a parent can submit to establish his or her student’s eligibility for the award of Hope Scholarship funds, to be placed in a personal educations savings account to be used for qualifying education expenses on behalf of the eligible recipient as provided for in Section VIII of this law. Information about scholarship funds and the application process shall be made available on the board’s website.

(C) The board shall make such applications available no later than March 1, 2023 and shall begin accepting applications immediately thereafter. The board may update the application as needed. The board shall issue an award letter to eligible recipients within 45 days of receipt of a completed application and all required documentation.

(D) The board shall approve an application for a Hope Scholarship if all of the following circumstances are met:

1. A parent submits an application for a Hope Scholarship in accordance with the rules promulgated by the board;

2. A student on whose behalf the parent is applying is an eligible recipient, as provided for in Section III.(5) of this law;

3.The parent signs an agreement with the board, promising to do all of the following:

(a) To provide an education for the eligible recipient in at least the subjects of reading, language, mathematics, science, and social studies;

(b) To use the Hope Scholarship funds exclusively for qualifying expenses as provided for in Section VIII of this law;

(c) To comply with the rules and requirements of the Hope Scholarship program; and

(d) To afford the Hope Scholarship student opportunities for educational enrichment such as organized athletics, art, music, or literature; and

(e) The board confirms with the [insert state] Department of Education that the student satisfies Section III.(5) of this law: Provided, That if the department does not reply within 30 days, the criteria is considered satisfied.

(E) An application for a Hope Scholarship is confidential and not a public record subject to release pursuant to the [insert state] Freedom of Information Act, as codified in [insert cross-sectional reference].

(F) A child receiving home instruction pursuant to [insert relevant cross-sectional reference] is deemed to be an eligible recipient and may receive a Hope Scholarship if the requirements of subdivisions 1 and 2 of this subsection, relating to home instruction, are met.

1. The instruction shall be in the home of the child or children or at some other place approved by the county board and for a time equal to the instructional term set forth in [insert cross-sectional reference]. If the request for home jurisdiction is denied by the county board, good and reasonable justification for the denial shall be furnished in writing to the applicant by the county board. The instruction shall be conducted by a person or persons who, in the judgement of the county superintendent and county board, are qualified to give instruction in subjects required to be taught in public elementary schools in the state. The person or persons providing the instruction, upon request of the county superintendent, shall furnish to the county board information and records as may be required periodically with respect to attendance, instruction and progress of students receiving the instruction. The state board shall develop guidelines for the home schooling of special education students including alternative assessment measures to assure that satisfactory academic progress is achieved.

2. The child meets the requirements set forth in this subdivision. Provided, That the county superintendent may, after a showing of probable cause, seek from a court of competent jurisdiction an order denying home instruction of the child. The order may be granted upon a showing of clear and convincing evidence that the child will suffer neglect in his or her education or that there are other compelling reasons to deny home instruction.

3. Upon commencing home instruction under this section the parent of a child receiving home instruction shall present to the county superintendent or county board a notice of intent to provide home instruction that includes the name, address, and age of any child of compulsory school age to be instructed and assurance that the child shall receive instruction in reading, language, mathematics, science and social studies and that the child shall receive instruction in reading, language, mathematics, science and social studies and that the child shall be assessed annually in accordance with this subdivision. The person providing home instruction shall notify the county superintendent upon termination of home instruction for a child who is of compulsory attendance age. Upon establishing residence in a new county, the person providing home instruction shall notify the previous county superintendent and submit a new notice of intent to the superintendent of the new county of residence: Provided, That if a child is enrolled in a public school, notice of intent to provide home instruction shall be given on or before the date home instruction is to begin.

4. The person or persons providing home instruction shall submit satisfactory evidence of a high school diploma or equivalent, or a post-secondary degree or certificate from a regionally accredited institution or from an institution of higher education that has been authorized to confer a post-secondary degree or certificate in [insert state] by the [insert proper state authorities].

5. Annually, the person or persons providing home instruction shall obtain an academic assessment of the child for the previous school year in one of the following ways:

• The child receiving home instruction takes a nationally normed standardized achievement test published or normed not more than 10 years from the date of administration and administered under the conditions as set forth by the published instructions of the selected test and by a person qualified in accordance with the test’s published guidelines in the subjects of reading, language, mathematics, science and social studies. The child is considered to have made acceptable progress when the mean of the child’s test results in the required subject areas for any single year is within or above the fourth stanine or, if below the fourth stanine, shows improvement from the previous year’s results;
• The child participates in the testing program currently in use in the state’s public schools. The test shall be administered to the child at a public school in the county of residence. Determination of acceptable progress shall be based on current guidelines of the state testing program;
• A portfolio of samples of the child’s work is reviewed by a certified teacher who determines whether the child’s academic progress for the year is in accordance with the child’s abilities. The teacher shall provide a written narrative about the child’s progress in the areas of reading, language, mathematics, science and social studies and shall note any areas which, in the professional opinion of the reviewer, show need for improvement or remediation. If the narrative indicates that the child’s academic progress for the year is in accordance with the child’s abilities, the child is considered to have made acceptable progress; or
• The child completes an alternative academic assessment of proficiency that is mutually agreed upon by the parent or legal guardian and the county superintendent.
• A parent or legal guardian shall maintain copies of each student’s Academic Assessment for three years. When the annual assessment fails to show acceptable progress, the person or persons providing home instruction shall initiate a remedial program to foster acceptable progress. The county board upon request shall notify the parents or legal guardian of the child, in writing, of the services available to assist in the assessment of the child’s eligibility for special education services. Identification of a disability does not preclude the continuation of home schooling. In the event that the child does not achieve acceptable progress for a second consecutive year, the person or persons providing instruction shall submit to the county superintendent additional evidence that appropriate instruction is being provided.

6. The parent or legal guardian shall submit to the county superintendent the results of the academic assessment of the child at grade levels three, five, eight and 11, as applicable, by June 30 of the year in which the assessment was administered.

• The county superintendent or a designee shall offer such assistance, including textbooks, other teaching materials and available resources, all subject to availability, as may assist the person or persons providing home instruction. Any child receiving home instruction in this state may, upon approval of the county board, exercise the option to attend any class offered by the county board as the person or persons providing home instruction may consider appropriate subject to normal registration and attendance requirements.

Section VII – The Hope Scholarship Program – Funding of Hope Scholarships; Program and Expense Funds

1.There is hereby created in the State Treasury a special revenue fund designated and known as the Hope Scholarship Program Fund. The fund shall be administered by the Treasurer and shall consist of funds transferred by the Department of Education in accordance with Section II of this law. All interest and other returns derived from the deposit and investment of moneys in the Hope Scholarship Program Fund shall be credited to the fund. Any balance, including accrued interest and other returns, remaining in the fund at the end of each fiscal year shall not revert to the General Revenues Fund but shall remain in the fund and be expended as provided by this section.

2.The amount of Hope Scholarship funds made available to an eligible recipient on a yearly basis shall be equal to 100 percent of the prior year’s statewide average net state aid share allotted per pupil based on net enrollment adjusted for state aid purposes, subject to the provisions of subsection C of this section: Provided, That the amount of the funding to an eligible recipient who is awarded a Hope Scholarship account for less than a full fiscal year shall be prorated based on the portion of the fiscal year the eligible recipient is awarded the Hope Scholarship account. On or prior to the submission of the Department of Education’s budget request each year, the board shall notify the Department of Education of the total number of eligible Hope Scholarship applications received by the board, for purposes of facilitating the necessary transfer of moneys pursuant to Section II of this law.

3.Expenditures from the Hope Scholarship Fund shall be limited to the purposes set forth in this article: Provided, That an amount not to exceed five percent of the fund shall be transferred annually to the Hope Scholarship Program Expense Fund established in subsection H of this section to cover the annual administrative costs of the Hope Scholarship Program. If the number of Hope Scholarship accounts increases significantly after any fiscal year, the Treasurer may request an appropriation by the Legislature to the Hope Scholarship Program Expense Fund in an amount equal to the administrative costs associated with the increase in Hope Scholarship accounts.

4.The first deposit of Hope Scholarship funds into an eligible recipient account shall be subject to the execution of the parental agreement required by Section VI of this law. Upon execution of the required parental agreement, and subject to the provisions of Section X.E of this law, one half of the total annually required deposit shall be made no later than August 15 of every year into an eligible recipient’s Hope Scholarship account, and one half of the total annually required deposit shall be made no later than January 15 of every year. Any funds remaining in a Hope Scholarship account at the end of the fiscal year may be carried over to the next fiscal year upon successful renewal of the account.

5.Funds deposited in a student’s Hope Scholarship account, other than those funds expended on transportation pursuant to Section VIII.A.11 of this law, do not constitute taxable income to the parent or the Hope Scholarship student.

6.The board shall continue to make deposits into an eligible recipient’s Hope Scholarship account in accordance with the provisions of this section unless any of the following conditions have occurred:

(a) A parent of an eligible recipient fails to renew a Hope Scholarship account or withdraws from the Hope Scholarship Program;

(b) The board determines that a student is no longer eligible for a Hope Scholarship;

(c) The board suspends or revokes participation in the Hope Scholarship Program for failure to comply with the requirements of this law;

(d) The Hope Scholarship student successfully completes a secondary education program; or

(e) The Hope Scholarship student reached 21 years of age.

7. If any of the conditions in subsection F of this section occur, the board shall notify the parent that the eligible recipient’s account will be closed in 45 calendar days. If a parent fails to adequately address the condition or conditions upon which closure is based or does not respond within 30 calendar days of receipt of notice, the board shall close the account and any remaining moneys shall be returned to the state.

8. There is hereby created in the State Treasury a special revenue fund designated and known as the Hope Scholarship Program Expense Fund. The account shall consist of moneys received pursuant to this section; moneys, if any, transferred from special revenue funds administered by the Treasurer; or any governmental or private grants and any state general fund appropriations, if any, for the Hope Scholarship Program. All interest and other returns derived from the deposit and investment of moneys in the Hope Scholarship Program Expense Fund shall be credited to the fund. Any balance, including accrued interest and other returns, remaining in the fund at the end of each fiscal year shall not revert to the General Revenue Fund but shall remain in the fund and be expended as provided by this section.

9. All expenses incurred by the Treasurer or the board in developing and administering the Hope Scholarship Program shall be payable from the Hope Scholarship Expense Fund.

Section VIII – The Hope Scholarship Program – Qualifying Expenses for Hope Scholarship Accounts

1. Parents of a Hope Scholarship student shall agree to use the funds deposited in their student’s Hope Scholarship account only for the following qualifying expenses to educate the student:

(a) Ongoing services provided by a public school district pursuant to Section IX.F of this law, including without limitation, individual classes and extracurricular activities and programs;

(b) Tuition and fees at a participating school;

(c) Tutoring services provided by an individual or a tutoring facility: Provided, That such tutoring services are not provided by a member of the Hope Scholarship student’s immediate family;

(d) Fees for national standardized assessments, advanced placement examinations, any examinations related to college or university admission, and tuition and/or fees for preparatory courses for the aforementioned exams;

(e) Tuition and fees for programs of study or the curriculum of courses that lead to an industry-recognized credential that satisfies a workforce need;

(f) Tuition and fees for nonpublic online learning programs;

(g) Tuition and fees for alternative education programs;

(h) Fees for after-school or summer education programs;

(i) Educational services and therapies, including, but not limited to, occupational, behavioral, physical, speech-language, and audiology therapies;

(j) Curriculum as defined in Section III of this law;

(k) Fees for transportation paid to a fee-for-service transportation provider for the student to travel to and from an education service provider; and

(l) Any other qualified expenses as approved by the board established pursuant to Section IV of this law.

2.Hope Scholarship funds may only be used for educational purposes in accordance with subsection A of this section. Nothing in this section requires that a Hope Scholarship student be enrolled, full- or part-time, in either a private school or nonpublic online school.

3. Hope Scholarship funds may not be refunded, rebated, or shared with a parent or student in any manner. Any refund or rebate for goods or services purchased with Hope Scholarship funds shall be credited directly to a student’s Hope Scholarship account.

4. Nothing in this section prohibits the parents of a Hope Scholarship student from making payments for the costs of educational goods and services not covered by the funds in their student’s Hope Scholarship account. However, personal deposits into a Hope Scholarship account are not permitted.

Section IX – The Hope Scholarship Program – Renewal of Hope Scholarship Accounts; Participation in Public School System

(A) A parent must renew an eligible recipient’s Hope Scholarship on an annual basis. Notwithstanding any changes in eligibility, a Hope Scholarship student who has previously qualified for a Hope Scholarship account remains eligible to apply for renewal until one of the conditions set forth in Section VII.F occurs: Provided, That the board shall verify with the Department of Education the following information by July 1 of every year:

1. A list of all active Hope Scholarship Accounts;

2. The resident school district of each Hope Scholarship student;

3. For a Hope Scholarship student who chooses to attend a participating school, annual confirmation of his or her continued attendance at a nonpublic school that complies with all requirements that other nonpublic students must comply with; and

4. For a Hope Scholarship student who chooses an individualized instructional program:

(a) He or she has annually taken a nationally standardized achievement test of academic achievement;

(b) The mean of the child’s test results in the subject areas of reading, language, mathematics, science and social studies for any single year is within or above the fourth stanine or, if below the fourth stanine, show improvement from the previous year’s results; and

(c) The child’s test results are reported to the county superintendent; or

(d) A certified teacher conducts a review of the student’s academic work annually;

(e) The certified teacher determines that the student is making academic progress commensurate with his or her age and ability; and

(f) The certified teacher’s determination is reported to the county superintendent.

(B) Each county superintendent shall submit the test results and determinations reported to him or her pursuant to subsection A of this section to the Department of Education each year on or before June 15.

(C) If a parent fails to renew an eligible recipient’s Hope Scholarship, the board shall notify the parent that the eligible recipient’s account will be closed in 45 calendar days. If a parent chooses not to renew or does not respond within 30 calendar days of receipt of notice, the board shall close the account and any remaining moneys shall be returned to the state.

(D) If an eligible recipient decides to return to the Hope Scholarship Program after failing to renew, they must reapply.

(E) The board, in consultation with the Department of Education, may adopt rules and policies to provide the least disruptive process for Hope Scholarship students who desire to stop receiving Hope Scholarship payments and return full-time to a public school.

(F) The board, in consultation with the Department of Education, may adopt rules and policies for Hope Scholarship students who want to continue to receive services provided by a public school or district, including individual classes and extracurricular programs, in combination with an individualized instructional program. The board, in consultation with the Department of Education, shall ensure that any public school or school district providing such services receives the appropriate pro rata share of a student’s Hope Scholarship funds based on the percentage of total instruction provided to the student by the public school or school district. County boards shall charge tuition to Hope Scholarship students who enroll for services in a public school within the county. Hope Scholarship students who enroll for services part-time in a public school shall not be included in net enrollment for state aid funding purposes under [insert cross-sectional reference] . Nothing in this subsection prohibits a Hope Scholarship student from using the funds deposited in his or her account on both services provided by a public school or district and other qualifying expenses as provided for in Section VIII of this law.

Section X – The Hope Scholarship Program – Administration of Hope Scholarship Accounts

1. In addition to the duties, obligations, and authority stated in this section and in other parts of this law, the board has the following duties, obligations, and authority with respect to the administration of Hope Scholarship accounts:

(a) To maintain an updated list of participating schools and shall ensure that the list is publicly available through various sources, including the internet;

(b)To provide parents with a written explanation of the allowable uses of Hope Scholarship funds, the responsibilities of parents, the duties of the board and the role of any private financial management firms or other private organizations that the board may contract with to administer the Hope Scholarship Program or any aspect of the program; and

(c) To ensure that parents of students with a disability receive notice that participation in the Hope Scholarship Program is a parental placement under 20 U.S.C. §1412 of the Individuals with Disabilities Education Act (IDEA) along with an explanation of the rights that parentally placed students possess under (IDEA) and any applicable state laws and regulations.

2. The board may contract with private organizations to administer the Hope Scholarship Program. This includes, but is not limited to, private financial management firms to manage Hope Scholarship accounts.

3. The board shall implement, or contract with a private organization to implement, a commercially viable, cost effective, and parent-friendly system for payment for services from Hope Scholarship accounts to participating schools or education service providers, including, but not limited to, the use of debit cards or other electronic or online fund transfers; Provided, That a Hope Scholarship account may not be reduced for debit card or electronic payment fees.

4.The board shall also seek to implement a commercially viable, cost-effective, and parent-friendly system for publicly rating, reviewing, and sharing information about participating schools and education service providers, ideally as part of the same system that facilitates the electronic or online funds transfers so as to create a one-stop-shop for parents and Hope Scholarship students.

5. If an education service provider requires partial payment of tuition or fees prior to the start of the academic year to reserve space for a Hope Scholarship student admitted to the education service provider, such partial payment may be paid prior to the start of the school year in which the Hope Scholarship is awarded, and deducted in an equitable manner from subsequent Hope Scholarship deposits to ensure adequate funds remain available throughout the school year; but if a Hope Scholarship student decides not to use the education service provider, the partial reservation payment must be returned to the board by such education service provider and credited to the student’s Hope Scholarship account.

6. The board may accept gifts and grants from any source to cover administrative costs, to inform the public about the Hope Scholarship Program, or to provide additional funding for Hope Scholarship Accounts.

7. The board may propose rules for legislative approval pursuant to [insert cross-sectional reference] , including emergency rules, if necessary, to meet timelines set forth in this law, that are not inconsistent with this law and that are necessary for the administration of this law, including:

(a)Establishing or contracting for the establishment of a fraud reporting system;

(b) Policies that require a surety bond for education service providers receiving more than $100,000 in Hope Scholarship funds;

(c) Procedures for refunding payments from education service providers back to Hope Scholarship accounts; and

(d) Procedures for entering into reciprocal agreements with other state education savings account agencies or entities, whether public or private, to recognize and allow education service providers approved in other states to receive payments from Hope Scholarship accounts under this article.

8. The rules or policies adopted by the board should avoid excessive bureaucracy and overly prescriptive mandates and instead shall focus on encouraging participation in the program and encouraging education service providers to provide parents and Hope Scholarship students with a broad array of educational options.

Section XI – The Hope Scholarship Program – Auditing of Hope Scholarship Program; Suspension of Accounts and Providers

1. The board may propose rules for legislative approval pursuant to [insert cross-sectional reference] for the auditing of individual Hope Scholarship accounts and shall conduct or contract for the random auditing of individual Hope Scholarship accounts as needed to ensure compliance with the requirements of this article and rules promulgated pursuant to this law.

2. As part of the auditing process, the board may remove a parent or eligible recipient from the Hope Scholarship program and close a Hope Scholarship account for failure to comply with the terms of the parental agreement required by Section VIII of this law, failure to comply with the applicable laws, failure of the student to remain eligible, or intentional and fraudulent misuse of Hope Scholarship funds: Provided, That the board shall create procedures to ensure that a fair process exists to determine the removal of a parent or eligible recipient from the Hope Scholarship program and a parent or Hope Scholarship student may appeal the decision to make the student ineligible for funds to the board.

3. The board may conduct or contract for the audit of education service providers accepting payments from Hope Scholarship accounts if it determines that the education service provider has:

(a) Intentionally and substantially misrepresented information or failed to refund any overpayments in a timely manner; or

(b) Routinely failed to provide students with promised educational goods or services.

4. If the board determines that an education service provider has intentionally and substantially misused Hope Scholarship funds, the board may bar the education service provider from continuing to receive payments. The board shall create procedures to ensure that a fair process exists to determine whether an education service provider may be barred from receiving payment from Hope Scholarship accounts and an education service provider may appeal a decision to bar it from receiving payments to the board. If the board bars an education service provider from receiving payments from Hope Scholarship accounts, it shall notify parents and students of its decision as quickly as possible.

5. If the board obtains evidence of potential fraudulent use of Hope Scholarship funds, it may refer suspected cases to the State Auditor for purposes of investigation, collection and potential criminal investigation.

Section XII – The Hope Scholarship Program – Requirements for and Rights of Education Service Providers

1. To be eligible to accept payments from a Hope Scholarship account, an education service provider shall:

(a) Submit notice to the board that they wish to participate in the Hope Scholarship Program;

(b) Provide participating parents with a receipt for all qualifying educational expenses for the Hope Scholarship student;

(c) Agree not to refund, rebate, or share Hope Scholarship funds with parents or students in any manner, except that funds may be remitted or refunded to a Hope Scholarship account in accordance with Section VIII.C of this law;

(d) Certify that it will not discriminate on any basis prohibited by 42 U.S.C. 19831;

(e) Agree to submit any employee who will have contact with Hope Scholarship students to a criminal background check; and

(f) In the case of a participating school, provide notice of enrollment annually to the county superintendent of any student for which a student’s tuition is being paid through the Hope Scholarship Program.

2.This article does not limit the independence or autonomy of an education service provider or make the actions of an education service provider the actions of the state government.

3.Education service providers shall be given maximum freedom to provide for the educational needs of Hope Scholarship students without governmental control.

4.A participating school or education service provider is not required to alter its creed, practices, admission policy, hiring policy or curriculum in order to accept eligible recipients whose parents pay tuition or fees from a Hope Scholarship account pursuant to this article.

5. This article does not expand the regulatory authority of the state, its officers, or any school district to impose any additional regulation of education service providers beyond those necessary to enforce the requirements of the program.

Section XIII – The Hope Scholarship Program – Responsibilities of Resident School Districts

1. The resident school district or school district in which a Hope Scholarship student was last enrolled, as applicable, shall provide an education service provider that has enrolled the student with a complete copy of the student’s school records, while complying with the Family Educational Rights and Privacy Act of 1974 (20 U.S.C. §1232 g).

Section XIV – The Hope Scholarship Program – Legal Proceedings; Severability

1.No liability arises on the part of the board or the state or of any county school district based on the award or use of a Hope Scholarship awarded pursuant to this article.

2.It is the intention of the Legislature in the enactment of this article that if any part of this article is challenged in court as violating either the state or federal constitution, the parents of eligible Hope Scholarship students should be deemed to have standing to be parties to such litigation, and should be permitted by the court to intervene if they are not already parties to such litigation.

3. If any provision of this article or the application of any such provision of this article to any person or circumstance is held invalid by a court of competent jurisdiction, the remainder of this article or the application of its provisions to persons or circumstances other than those to which it is held invalid is not affected thereby.