Enacts Article 39A in GS Chapter 115C, establishing the North Carolina Personal Savings Account Program for the purpose of providing the option for a parent to better meet the individual educational needs of the parent's eligible child.
Directs the State Treasurer to make available, no later than February 1 of each year, applications to eligible students for the award of scholarship funds for a personal education savings account (PESA) to be used for qualifying education expenses to attend a nonpublic school. Provides that an eligible student is a student residing in North Carolina, who has not yet received a high school diploma and meets the specified requirements. The requirements include (1) the student meets one of seven qualifications; (2) the student has not been enrolled in a postsecondary institution in a matriculated status eligible for enrollment for 12 hours of academic credit; and (3) the student is a child with a disability, as defined by GS 115C-106.3. Defines PESA to mean a bank account provided to a parent for the purpose of holding scholarship funds awarded by the State Treasurer for an eligible student to be used for qualifying education expenses under GS 115C-537.9. Additionally, defines nonpublic school and parent.
Requires information about scholarship funds and the application process be made available on the State Treasurer's website. Requires applications to be submitted electronically. Directs the State Treasurer to begin selecting recipients for scholarships and details selection priority. Directs that the scholarships are to be awarded each year to eligible students in an amount equal to the statewide average per pupil allocation for average daily membership for charter schools plus the State allocation per funded child with disabilities for the fiscal year in which the application is received. Provides that recipients must receive scholarship funds deposited in equal amounts to a PESA in each quarter of the fiscal year. Sets forth provisions concerning PESA deposits and debit cards, required expense reports by parents, and remaining funds at the end of the fiscal year.
Sets forth eligibility provisions concerning receiving other specified scholarship programs in addition to a PESA.
Establishes that applications for scholarship funds and personally identifiable information related to eligible students receiving funds are not public records.
Directs the State Treasurer to establish rules for verifying information on applications, and requires the Treasurer to select and verify 6% of applications annually. Provides for the access of information from household members, and authorizes the State Treasurer to revoke the award of funds if a household fails to cooperate with verification efforts.
Requires the annual electronic submission of a parental agreement, provided by the State Treasurer, prior to receiving the scholarship funds. Details the conditions a parent must agree to in order to receive scholarship funds under Article 39A. Establishes that a parent or eligible student's failure to comply with this provision forfeits the funds, and states that those funds can be awarded to another eligible student. Prohibits a nonpublic school or a provider of services purchases from refunding or abating any scholarship funds to a parent or eligible student in any manner, and requires the parent to notify the State Treasurer if a refund is required.
Establishes that funds received pursuant to Article 39A are not taxable income to the parent, legal guardian, or legal custodian of an eligible student or to the eligible student.
Directs the Division of Nonpublic Education of the Department of Administration (Division) to provide annually by February 1 to the State Treasurer a list of all nonpublic schools operating in the State that meet the requirements of Part 1, 2, or 3 of Article 39 of GS Chapter 115C. Directs the State Treasurer to provide information about PESAs to the Division. Directs the Division to provide information about PESAs to all qualified nonpublic schools on an annual basis.
Sets forth provisions for the administration of the PESA program. Directs the State Treasurer to establish rules and regulations for administration, and details four parameters that must be included. Permits the State Treasurer to contract with a private financial management firm or institution to manage PESAs in accordance with Article 39A. Requires the State Treasurer to conduct annual audits of PESAs, and permits the auditing of a random sampling of PESAs as needed to ensure compliance with the Article's requirements. Allows the State Treasurer to contract with an independent entity to conduct these audits. Authorizes the State Treasurer to remove a parent or eligible student from the program for failure to comply with the terms of the parental agreement, for failure to comply with applicable laws, or because the student is no longer an eligible student.
Directs the State Treasurer to annually report by September 1 to the Joint Legislative Education Oversight Committee. Details information required to be included in the reports, including the number of substantiated cases of fraud by recipients and the number of parents and students removed from the program for noncompliance with the Article's provisions.
Amends GS 105-153.5(b) to provide for the amount deposited during the taxable year to a PESA under Article 39A of GS Chapter 115C to be deducted from the taxpayer's gross adjusted income in calculating NC taxable income.
Provides that the above provisions are applicable beginning with the 2018-19 school year.
Makes conforming change to GS 115C-555, concerning qualifications of nonpublic schools.
Appropriates $20 million in nonrecurring funds to the State Treasurer for the 2017-18 fiscal year to establish the PESA program. Appropriates $20 million in recurring funds to the State Treasurer for the 2018-19 fiscal year for the award of scholarships to eligible students.
Effective July 1, 2017.
Bill S 603 (2017-2018)Summary date: Apr 4 2017 - View summary