HB442INTRODUCED
Page 0
SK3V75-1
By Representatives Garrett, Collins
RFD: Ways and Means Education
First Read: 09-May-23
2023 Regular Session
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6 SK3V75-1 05/08/2023 KMS (L)cr 2023-1992
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SYNOPSIS:
This bill would create the Alabama Fits All
Scholarship Program.
This bill would require the State Board of
Education to contract with a program manager to
administer the program and would authorize the program
manager to establish scholarship accounts on behalf of
eligible students to pay for approved education goods
and services.
This bill would prohibit a program manager from
accepting scholarship funds in certain circumstances
and would require other fiscal safeguards, auditing,
and accountability measures.
This bill would require eligible schools and
service providers to meet certain standards to be
eligible to receive scholarship funds and would
establish an annual and private portfolio submission to
the program manager as an eligibility qualification.
This bill would authorize the program manager to
administer the program and distribute scholarship funds
and would require the State Board of Education to
provide limited oversight of the program manager,
including an appeal process for the program manager's
administrative decisions.
This bill would require criminal history
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background information checks for employees and
officers of a program manager, would provide for
program funding, and would also require the program
manager and the State Board of Education to submit
reports on the program to the Legislature.
A BILL
TO BE ENTITLED
AN ACT
To create the Alabama Fits All Scholarship Program;
require the State Board of Education to contract with a
program manager to administer the program; to authorize the
program manager to establish scholarship accounts on behalf of
eligible students; to prohibit a program manager from
accepting scholarship funds in certain circumstances; to
require fiscal safeguards and accountability measures; to
require eligible schools and service providers to meet certain
standards to be eligible to receive scholarship funds; to
authorize the program manager to distribute scholarship funds;
to require the State Board of Education to provide limited
oversight of the program manager, including an appeal process
for the program manager's administrative decisions; to
prohibit certain regulations of eligible schools and eligible
service providers; to require criminal history background
information checks for employees and officers of a program
manager; to provide for program funding; and to require the
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program manager and the board to submit reports on the program
to the Legislature.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. This act shall be known and may be cited as
the Alabama Fits All Scholarship Program.
Section 2. For the purposes of this act, the following
terms shall have the following meanings:
(1) ELIGIBLE STUDENT. A student who satisfies all of
the following:
a. Who is eligible to participate in public school in
grades K-12.
b. Who is a resident of this state.
c. Who, during the school year for which the student is
applying for a scholarship account, does not receive a
scholarship under the Alabama Accountability Act of 2013,
Chapter 6D of Title 16, Code of Alabama 1975, or under any
other similar educational scholarship program available for
students in grades K-12.
d. Who, during the school year for which the student is
applying for a scholarship account, is not enrolled in a
public school upon receiving the scholarship.
e. Whose eligibility is not suspended or disqualified
under Section 6.
f. Who completes, to maintain eligibility, the
portfolio requirement described in subdivision (c)(4) of
Section 3.
(2) FEDERAL POVERTY LEVEL. The United States poverty
level as defined by the most recently revised poverty income
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guidelines published by the United States Department of Health
and Human Services in the Federal Register.
(3) HOME-BASED SCHOLARSHIP STUDENT. A student who is
homeschooled and receives a scholarship under the program.
(4) NONPUBLIC SCHOOL. A nongovernment K-12 school
offering educational instruction. The term includes private
(religious and nonreligious), parochial, and church schools,
including home-based education programs.
(5) PROGRAM. The Alabama Fits All Scholarship Program
established by this act.
(6) PROGRAM MANAGER. An organization that satisfies all
of the following:
a. Is qualified as tax exempt under Section 501(c)(3),
Internal Revenue Code.
b. Is not affiliated with any international
organization.
c. Does not harvest data for the purpose of reproducing
or distributing the data to other entities.
d. Has no involvement in guiding or directing any
curriculum or curriculum standards.
e. Does not manage or otherwise administer a
scholarship under the Alabama Accountability Act of 2013,
Chapter 6D of Title 16, Code of Alabama 1975.
f. Has an agreement with the State Board of Education
that recognizes the organization as a program manager, in
accordance with this act.
(7) PROGRAM MANAGER EMPLOYEE. An individual working for
the program manager in a position in which the individual's
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salary, wages, pay, or compensation, including as a
contractor, is paid from scholarship funds. The term does not
include any of the following:
a. An individual who volunteers for the program manager
or for a qualifying provider.
b. An individual who works for a qualifying provider.
c. A qualifying provider.
(8) PROGRAM MANAGER OFFICER. A member of the board of a
program manager or the chief administrative officer of a
program manager.
(9) QUALIFYING PROVIDER. One of the following entities
that is not a public school and is autonomous and not an agent
of the state, in accordance with Section 7:
a. An eligible school that the program manager approves
in accordance with Section 9.
b. An eligible service provider that the program
manager approves in accordance with Section 10.
(10) RELATIVE. A father, mother, husband, wife, son,
daughter, sister, brother, uncle, aunt, nephew, niece, first
cousin, mother-in-law, father-in-law, brother-in-law,
sister-in-law, son-in-law, or daughter-in-law.
(11) SCHOLARSHIP ACCOUNT. The account to which a
program manager allocates funds for the payment of approved
scholarship expenses in accordance with this act.
(12) SCHOLARSHIP EXPENSE. An expense described in
Section 3 that a parent or scholarship student incurs in the
education of the scholarship student for a service or goods
that a qualifying provider provides, including all of the
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following:
a. Tuition and fees of a qualifying provider.
b. Fees and instructional materials at a college under
the jurisdiction of the Alabama Community College System.
c. Tutoring services.
d. Fees for after-school or summer education programs.
e. Textbooks, curricula, or other instructional
materials, including any supplemental materials or associated
online instruction that a curriculum or a qualifying provider
recommends.
f. Educational software and applications.
g. Supplies or other equipment related to a scholarship
student's educational needs.
h. Computer hardware or other technological devices
that are intended primarily for a scholarship student's
educational needs.
i. Fees for the following examinations, or for a
preparation course for the following examinations, that the
program manager approves:
1. A national norm-referenced or standardized
assessment described in Section 11, an advanced placement
examination, or another similar assessment.
2. A state-recognized industry certification
examination.
3. An examination related to college or university
admission.
j. Educational services for students with disabilities
from a licensed or accredited practitioner or provider,
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including occupational, behavioral, physical, audiology, or
speech-language therapies.
k. Contracted services that the program manager
approves and that a local school system provides, including
individual classes, after-school tutoring services,
transportation, or fees or costs associated with participation
in extracurricular activities.
l. Ride fees or fares for a fee-for-service
transportation provider to transport the scholarship student
to and from a qualifying provider, not to exceed seven hundred
fifty dollars ($750) in a given school year.
m. Expenses related to extracurricular activities,
field trips, educational supplements, and other educational
experiences.
n. Any other expense for a good or service that
satisfies both of the following:
1. A parent or scholarship student incurs in the
education of the scholarship student.
2. The program manager approves.
(13) SCHOLARSHIP FUNDS. Both of the following:
a. Funds that the Legislature appropriates for the
program.
b. Interest that scholarship funds accrue.
(14) SCHOLARSHIP STUDENT. An eligible student,
including a home-based scholarship student, for whom the
program manager establishes and maintains a scholarship
account in accordance with this act. The term does not include
a homeschooled student who does not receive a scholarship
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award under the program.
Section 3. (a) There is established the Alabama Fits
All Scholarship Program under which, beginning March 1, 2024,
a parent may apply to a program manager on behalf of the
parent's student to establish and maintain a scholarship
account to cover the cost of a scholarship expense. The amount
of scholarship funds available is subject to appropriations by
the Legislature and may not exceed forty-five million dollars
($45,000,000) in the initial year.
(b)(1) The program manager shall establish and
maintain, in accordance with this act, scholarship accounts
for eligible students.
(2) The program manager shall do both of the following:
a. Determine that a student meets the requirements to
be an eligible student.
b. Subject to subdivision (3), each year the student is
an eligible student, maintain a scholarship account for the
scholarship student to pay for the cost of one or more
scholarship expenses that the student or student's parent
incurs in the student's education.
(3) Each year, subject to this act and legislative
appropriations, a scholarship student is eligible for no more
than:
a. For the 2024-2025 school year, six thousand nine
hundred dollars ($6,900).
b. For each school year following the 2024-2025 school
year, the maximum allowed amount under this subdivision in the
previous year plus a percentage increase that is equal to the
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five-year rolling average inflationary factor described in
Section 6.
(c)(1) A program manager shall establish a scholarship
account on behalf of an eligible student who submits a timely
application, unless the number of applications exceeds
available scholarship funds for the school year.
(2) If the number of applications exceeds the available
scholarship funds for a school year, the program manager shall
select students on a random basis, except as provided in
subsection (f).
(3) An eligible student or a public education student
shall submit an application for an initial scholarship or
renewal for each school year that the student intends to
receive scholarship funds.
(4)a. To maintain eligibility, the scholarship student
or the parent of the scholarship student shall annually
complete and deliver to the program manager a portfolio
describing the scholarship student's educational opportunities
and achievements under the program for the given year.
b. The program manager may not disclose the content of
a given scholarship student's portfolio except to the
scholarship student's parent.
(5) An eligible student who has applied for an
educational scholarship under the Alabama Accountability Act
of 2013, Chapter 6D of Title 16, Code of Alabama 1975, or any
other similar educational scholarship program available for
students in grades K-12, and who is wait listed or otherwise
not approved for participation in those programs, may apply
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for a scholarship account under this program.
(d)(1) An application for a scholarship account shall
contain an acknowledgment by the student's parent that the
qualifying provider selected by the parent for the student's
enrollment or engagement is capable of providing education
services for the student.
(2) A scholarship account application form shall
contain the following statement: "I acknowledge all of the
following:
"a. A qualifying provider may not provide the same
level of disability services that are provided in a public
school.
"b. I will assume full financial responsibility for the
education of my scholarship recipient if I agree to this
scholarship account.
"c. Agreeing to establish this scholarship account has
the same effect as a parental refusal to consent to services
as described in 34 C.F.R. §300.300, issued under the
Individuals with Disabilities Education Act, 20 U.S.C. §1400,
et seq.
"d. My child may return to a public school at any
time."
(3) Upon agreeing to establish a scholarship account,
the parent assumes full financial responsibility for the
education of the scholarship student, including the balance of
any expense incurred at a qualifying provider or for goods
that are not paid for by the scholarship student's scholarship
account.
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(4) Agreeing to establish a scholarship account has the
same effect as a parental refusal to consent to services as
described in 34 C.F.R. §300.300, issued under the Individuals
with Disabilities Education Act, 20 U.S.C. §1400, et seq.
(5) The creation of the program or establishment of a
scholarship account on behalf of a student does not do either
of the following:
a. Imply that a public school did not provide a free
and appropriate public education for a student.
b. Constitute a waiver or admission by the state.
(e) A program manager may not charge a scholarship
account application fee.
(f) A program manager shall give an enrollment
preference based on the following order of preference:
(1) To an eligible student who used a scholarship
account in the previous school year.
(2) To an eligible student who did not use a
scholarship account in the previous school year and with a
family income at or below 200 percent of the federal poverty
level.
(3) To an eligible student who is a sibling of an
eligible student who uses a scholarship account at the time
the sibling applies for a scholarship account or used a
scholarship account in the school year immediately preceding
the school year for which the sibling is applying for a
scholarship account.
(4) To an eligible student who did not use a
scholarship account in the previous school year and with a
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family income between 200 percent and 555 percent of the
federal poverty level.
(g)(1) Subject to subdivisions (2) through (5), a
parent may use a scholarship account to pay for a scholarship
expense that a parent or scholarship student incurs in the
education of the scholarship student.
(2) A scholarship student or the scholarship student's
parent may not use a scholarship account for an expense that
the student or parent does not incur in the education of the
scholarship student, including either of the following:
a. A rehabilitation program that is not primarily
designed for an educational purpose.
b. A travel expense other than a transportation
scholarship expense described paragraph (12)l. of Section 2.
(3) The program manager may not do either of the
following:
a. Approve a scholarship expense for a service that a
qualifying provider provides unless the program manager
determines that the scholarship student or the scholarship
student's parent incurred the expense in the education of the
scholarship student.
b. Reimburse a scholarship expense for a service or
good that a provider, that is not a qualifying provider,
provides unless both of the following are satisfied:
1. The parent or scholarship student submits a receipt
that shows the cost and type of service or good and the name
of the provider.
2. The program manager determines that the parent or
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scholarship student incurred the expense in the education of
the scholarship student.
(4) The parent of a scholarship student may not receive
scholarship funds as payment for the parent's time spent
educating the parent's child.
(5) Except for cases in which a scholarship student or
the scholarship student's parent is convicted of fraud in
relation to scholarship funds, if a qualifying provider,
scholarship student, or scholarship student's parent repays an
expenditure from a scholarship account for an expense that is
not approved under this subsection, the program manager shall
credit the repaid amount back to the scholarship account
balance within 30 days after the day on which the program
manager receives the repayment.
(h) Notwithstanding any other provision of law, funds
that the program manager disburses under this act to a
scholarship account on behalf of a scholarship student do not
constitute state taxable income to the parent of the
scholarship student.
(i) The program manager shall prepare and disseminate
information on the program to a parent applying for a
scholarship account on behalf of a student, including the
information that the program manager provides in accordance
with Section 6.
(j) On or before September 1, 2023, and as frequently
as necessary to maintain the information, the State Board of
Education shall provide information on the website of the
State Board of Education, including all of the following:
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(1) Scholarship account information.
(2) Information on the program manager, including the
program manager's contact information.
(3) An overview of the program.
Section 4. (a) Before the beginning of the school year
immediately following a school year in which a qualifying
provider receives scholarship funds equal to or more than five
hundred thousand dollars ($500,000), the qualifying provider
shall file with the program manager a surety bond payable to
the program manager in an amount equal to the aggregate amount
of scholarship funds expected to be received during the school
year.
(b) If a program manager determines that a qualifying
provider has violated this act, the program manager may
interrupt disbursement of or withhold scholarship funds from
the qualifying provider.
(c)(1) If the program manager determines that a
qualifying provider no longer meets the eligibility
requirements described in this act, the program manager may
withdraw the organization's approval of the qualifying
provider.
(2) A provider or individual that does not have the
approval of the program manager in accordance with either of
the following may not accept scholarship funds for services
under this act:
a. Section 9, regarding eligible schools.
b. Section 10, regarding eligible service providers.
(d) If a qualifying provider requires partial payment
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of tuition or fees before the beginning of the academic year
to reserve space for a scholarship student who has been
admitted to the qualifying provider, the program manager may
do both of the following:
(1) Pay the partial payment before the beginning of the
school year in which the scholarship funds are awarded.
(2) Deduct the amount of the partial payment from
subsequent scholarship fund deposits in an equitable manner
that provides the best availability of scholarship funds to
the student throughout the remainder of the school year.
(e) If a scholarship student described in subdivision
(d)(1) chooses to withdraw from or otherwise not engage with
the qualifying provider before the beginning of the school
year:
(1) The qualifying provider shall remit the partial
payment described in subdivision (d)(1) to the program
manager; and
(2) The program manager shall credit the remitted
partial payment to the scholarship student's scholarship
account.
Section 5. (a)(1) In accordance with Article 5,
commencing with Section 41-4-110, of Chapter 4 of Title 41,
the State Board of Education shall issue a request for
proposals, on or before June 15, 2023, and enter an agreement
with no more than one organization that qualifies as tax
exempt under Section 501(c)(3), Internal Revenue Code, for the
State Board of Education to recognize as the program manager,
on or before September 1, 2023.
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(2) An organization that responds to a request for
proposals described in subdivision (1) shall submit all of the
following information in the organization's response:
a. A copy of the organization's incorporation
documents.
b. A copy of the organization's Internal Revenue
Service determination letter qualifying the organization as
being tax exempt under Section 501(c)(3), Internal Revenue
Code.
c. A description of the methodology the organization
shall use to verify a student's eligibility under this act.
d. A description of the organization's proposed
scholarship account application process.
e. An affidavit or other evidence that the organization
satisfies all of the following:
1. Is not affiliated with any international
organization.
2. Does not harvest data for the purpose of reproducing
or distributing the data to another entity.
3. Has no involvement in guiding or directing any
curriculum standards.
(3) The State Board of Education shall ensure that the
agreement described in subdivision (1) satisfies all of the
following:
a. Ensures the efficiency and success of the program.
b. Does not impose any requirements on the program
manager that satisfy either of the following:
1. Are not essential to the basic administration of the
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program.
2. Create restrictions, directions, or mandates
regarding instructional content or curriculum.
(b) The State Board of Education may regulate and take
enforcement action as necessary against a program manager in
accordance with the State Board of Education's agreement with
the program manager.
(c)(1) If the State Board of Education determines that
a program manager has violated this act or the State Board of
Education's agreement with the program manager, the State
Board of Education shall send written notice to the program
manager explaining the violation and the remedial action
required to correct the violation.
(2) A program manager that receives a notice described
in subdivision (1), no later than 60 days after the day on
which the program manager receives the notice, shall correct
the violation and report the correction to the State Board of
Education.
(3)a. If a program manager that receives a notice
described in subdivision (1) fails to correct a violation in
the time period described in subdivision (2), the State Board
of Education may bar the program manager from further
participation in the program.
b. A program manager may appeal a decision of the State
Board of Education under paragraph a. in accordance with the
Alabama Administrative Procedures Act.
(4) A program manager may not accept state funds while
the program manager satisfies either of the following:
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a. Is barred from participating in the program under
paragraph (3)a.
b. Has an appeal pending under paragraph (3)b.
(5) A program manager that has an appeal pending under
paragraph (3)b. may continue to administer scholarship
accounts during the pending appeal.
(d) The State Board of Education shall establish a
process for a program manager to report the information the
program manager is required to report to the State Board of
Education under Section 6.
(e) The State Board of Education shall adopt rules
pursuant to the Alabama Administrative Procedures Act, and
include provisions in the State Board of Education's agreement
with the scholarship organization for either of the following:
(1) Subject to subsection (f), the administration of
scholarship accounts and disbursement of scholarship funds if
a program manager is barred from participating in the program
under paragraph (c)(3)a.
(2) Audit and report requirements as described in
Section 6.
(f)(1) The State Board of Education shall include in
the rules described in subdivision (e)(1) measures to ensure
that the establishment and maintenance of scholarship accounts
and enrollment in the program are not disrupted if the program
manager is barred from participating in the program.
(2) The State Board of Education, if the program
manager is barred from participating in the program, may issue
a new request for proposals and enter into a new agreement
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with an alternative program manager in accordance with this
section.
(g)(1) On or before January 1, 2024, the State Board of
Education shall do all of the following:
a. Adopt rules, in accordance with the Alabama
Administrative Procedures Act, to establish a process for a
scholarship student or a scholarship student's parent to
appeal any administrative decision of the program manager for
State Board of Education resolution within 30 days after the
day of the appeal, including both of the following:
1. Scholarship expense denials.
2. Determinations regarding enrollment eligibility or
suspension or disqualification under Section 6.
b. Make information available regarding the appeals
process on the State Board of Education's website and on the
scholarship application.
(2) If the State Board of Education stays or reverses
an administrative decision of the program manager on appeal,
the program manager may not withhold scholarship funds or
application approval for the scholarship student on account of
the appealed administrative decision unless as the State Board
of Education expressly allows.
(h) The State Board of Education may not include a
provision in any rule that creates or implies a restriction,
direction, or mandate regarding instructional content or
curriculum.
Section 6. (a) The program manager shall administer the
program, including all of the following administrative duties:
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(1) Maintaining an application website that includes
information on enrollment, relevant application dates, and
dates for notification of acceptance.
(2) Reviewing applications from and determining if an
applicant is either of the following:
a. An eligible school under Section 9.
b. An eligible service provider under Section 10.
(3) Establishing an application process, including
application dates opening before March 1, 2024, in accordance
with Section 3.
(4) Reviewing and granting or denying applications for
a scholarship account.
(5) Providing an online portal for the parent of a
scholarship student to access the scholarship student's
account.
(6) Ensuring that scholarship funds in a scholarship
account are readily available to a scholarship student.
(7) Requiring a parent to notify the program manager if
the parent's scholarship student is no longer enrolled in or
engaging in a service for which the scholarship student
receives scholarship funds and that is provided to the
scholarship student for an entire school year.
(8) Obtaining reimbursement of scholarship funds from a
qualifying provider that provides the services in which a
scholarship student is no longer enrolled or with which the
scholarship student is no longer engaged.
(9) Expending all revenue from interest on scholarship
funds or investments on scholarship expenses.
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(10) Each time the program manager makes an
administrative decision that is adverse to a scholarship
student or the scholarship student's parent, informing the
scholarship student and the scholarship student's parent of
the opportunity and process to appeal an administrative
decision of the program manager to the State Board of
Education in accordance with the process described in Section
5.
(11) Maintaining a protected internal wait list of all
eligible students who have applied to the program and are not
yet scholarship students, including any student who removed
his or her application from the wait list.
(12) Providing aggregate data regarding the number of
scholarship students and the number of eligible students on
the wait list described in subdivision (11).
(b) The program manager shall do all of the following:
(1) Contract with one or more private entities to
develop and implement a commercially viable, cost-effective,
and parent-friendly system to do all of the following:
a. Establish scholarship accounts.
b. Maximize payment flexibility by allowing all of the
following:
1. For payment of services to qualifying providers
using scholarship funds by electronic or online funds
transfer.
2. Preapproval of a reimbursement to a parent for a
good that is a scholarship expense.
c. Allow scholarship students and scholarship student's
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parents to publicly rate, review, and share information about
qualifying providers.
(2) Ensure that the system complies with industry
standards for data privacy and cybersecurity, including
ensuring compliance with the Family Educational Rights and
Privacy Act, 34 C.F.R. Part 99.
(c) In advance of the program manager accepting
applications in accordance with Section 3 and as regularly as
information develops, the program manager shall provide
information regarding the program by publishing a program
handbook online for scholarship applicants, scholarship
students, parents, service providers seeking to become
qualifying providers, and qualifying providers that includes
information regarding all of the following:
(1) The policies and processes of the program.
(2) Approved scholarship expenses and qualifying
providers.
(3) The responsibilities of parents regarding the
program and scholarship funds.
(4) The duties of the program manager.
(5) The opportunity and process to appeal an
administrative decision of the program manager to the State
Board of Education in accordance with the process described in
Section 5.
(6) The role of any private financial management firms
or other private organizations with which the program manager
may contract to administer any aspect of the program.
(d) To ensure the fiscal security and compliance of the
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program, the program manager shall do all of the following:
(1) Prohibit a program manager employee or program
manager officer from handling, managing, or processing
scholarship funds, if, based on a criminal history background
information check conducted in accordance with Section 8, the
State Board of Education identifies the program manager
employee or program manager officer as posing a risk to the
appropriate use of scholarship funds.
(2) Establish procedures to ensure a fair process to do
any of the following:
a. Suspend a scholarship student's eligibility for the
program in the event of the scholarship student's or
scholarship student's parent's:
1. Intentional or substantial misuse of scholarship
funds; or
2. Violation of this act or the terms of the program.
b. If the program manager obtains evidence of
fraudulent use of scholarship funds, refer the case to the
Attorney General for collection or criminal investigation.
c. Ensure that a scholarship student whose eligibility
is suspended or disqualified under this subdivision or
subdivision (3) based on the actions of the student's parent
regains eligibility if the student is placed with a different
parent or otherwise no longer resides with the parent related
to the suspension or disqualification.
(3) Notify the State Board of Education, scholarship
student, and scholarship student's parent in writing of all of
the following:
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a. Of the suspension described in paragraph (2)a.
b. That no further transactions, disbursements, or
reimbursements are allowed.
c. That the scholarship student or scholarship
student's parent may take corrective action within 10 business
days of the day on which the program manager provides the
notification.
d. That without taking the corrective action within the
time period described in paragraph (3)c., the program manager
may disqualify the student's eligibility.
(e)(1) A program manager may not do either of the
following:
a. Disburse scholarship funds to a qualifying provider
or allow a qualifying provider to use scholarship funds if any
of the following occur:
1. The program manager determines that the qualifying
provider intentionally or substantially misrepresented
information on overpayment.
2. The qualifying provider fails to refund an
overpayment in a timely manner.
3. The qualifying provider routinely fails to provide
scholarship students with promised educational services.
b. Reimburse with scholarship funds an individual for
the purchase of a good or service if the program manager
determines that either of the following have occurred:
1. The scholarship student or the scholarship student's
parent requesting reimbursement intentionally or substantially
misrepresented the cost or educational purpose of the good or
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service.
2. The relevant scholarship student was not the
exclusive user of the good or service.
(2) A program manager shall notify a scholarship
student if the program manager does either of the following:
a. Stops disbursement of the scholarship student's
scholarship funds to a qualifying provider under paragraph
(1)a.
b. Refuses reimbursement under paragraph (1)b.
(f)(1) At any time, a scholarship student may change
the qualifying provider to which the scholarship student's
scholarship account makes distributions.
(2) If, during the school year, a scholarship student
changes the student's enrollment in or engagement with a
qualifying provider to another qualifying provider, the
program manager may prorate scholarship funds between the
qualifying providers based on the time the scholarship student
received the goods or services or was enrolled.
(g) A program manager may not subvert the enrollment
preferences required under Section 3 or other provisions of
this act to establish a scholarship account on behalf of a
relative of a program manager officer.
(h) The program manager shall do all of the following:
(1) Contract for annual and random audits on
scholarship accounts conducted as follows:
a. By a certified public accountant who is independent
from all of the following:
1. The program manager.
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2. The State Board of Education.
3. The program manager's accounts and records
pertaining to scholarship funds.
b. In accordance with generally accepted auditing
standards.
(2) Demonstrate the program manager's financial
accountability by annually submitting to the State Board of
Education all of the following:
a. A financial information report that a certified
public accountant prepares and that includes the total number
and total dollar amount of scholarship funds disbursed during
the previous calendar year.
b. No later than 180 days after the last day of the
program manager's fiscal year, the results of the audits
described in subdivision (1), including the program manager's
financial statements in a format that meets generally accepted
accounting principles.
(i)(1) The State Board of Education shall review a
report described in this section and may request that the
program manager revise or supplement the report if the report
does not fully comply with this section.
(2) The program manager shall provide to the State
Board of Education a revised report or a supplement to the
report no later than 45 days after the day on which the State
Board of Education makes a request described in subdivision
(1).
Section 7. (a) Nothing in this act shall be interpreted
as doing any of the following:
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(1) Except as expressly described in this act, granting
additional authority to any state agency or local school
system to regulate or control any of the following:
a. A nonpublic school, qualifying provider, or
homeschool.
b. Students receiving education from a nonpublic
school, qualifying provider, or homeschool.
(2) Applying to or otherwise affecting the freedom of
choice of a homeschooled student, including the curriculum,
resources, developmental planning, or any other aspect of the
homeschooled student's education.
(3) Expanding the regulatory authority of the state, a
state office holder, or a local school system to impose any
additional regulation of a qualifying provider beyond any
regulation necessary to administer this act.
(b)(1) A qualifying provider is entitled to maximum
freedom from unlawful governmental control in providing for
the educational needs of a scholarship student who attends or
engages with the qualifying provider.
(2) A qualifying provider is not an agent of the state
by virtue of the provider's acceptance of payment from a
scholarship account in accordance with this act.
(c) Except as provided in Section 4 regarding
qualifying providers, Section 9 regarding eligible schools, or
Section 10 regarding eligible service providers, a program
manager may not require a qualifying provider to alter the
qualifying provider's creed, practices, admissions policies,
hiring practices, or curricula in order to accept scholarship
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funds.
(d) A local school system or a public school within a
local school system in which a scholarship student was
previously enrolled shall provide to the scholarship student's
parent a copy of all school records relating to the student
that the local school system possesses within 30 days after
the day on which the local school system or public school
receives the parent's request for the student's records,
subject to the Family Educational Rights and Privacy Act, 20
U.S.C. §1232g.
(e) By virtue of a scholarship student's involvement in
the program and unless otherwise expressly provided in
statute, a scholarship student is not either of the following:
(1) Enrolled in the public education system.
(2) Otherwise subject to statute, administrative rules,
or other state regulations as if the student was enrolled in
the public education system.
Section 8. The program manager and each employee and
officer of the program manager shall complete a criminal
history background information check. The criminal history
background check shall be administered in a manner prescribed
by the State Board of Education that is consistent with the
Alabama Child Protection Act of 1999, Chapter 22A of Title 16,
and rules adopted by the State Board of Education.
Section 9. (a) To be eligible to receive scholarship
funds on behalf of a scholarship student as an eligible
school, a nonpublic school with 150 or more enrolled students
shall do all of the following:
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(1)a. Contract with an independent licensed certified
public accountant to conduct an agreed upon procedures
engagement as the State Board of Education adopts or obtain an
audit and report that satisfies all of the following:
1. Is conducted by a licensed independent certified
public accountant in accordance with generally accepted
auditing standards.
2. Presents the financial statements in accordance with
generally accepted accounting principles.
3. Audits financial statements from within the 12
months immediately preceding the audit.
b. Submit the audit report or report of the agreed upon
procedure to the program manager when the nonpublic school
applies to receive scholarship funds.
(2) Comply with the antidiscrimination provisions of 42
U.S.C. §2000d.
(3) Provide a written disclosure to the parent of each
prospective scholarship student, before the student is
enrolled, of all of the following:
a. The education services that the school shall provide
to the scholarship student, including the cost of the provided
services.
b. Tuition costs.
c. Additional fees the school shall require a parent to
pay during the school year.
d. The skill or grade level of the curriculum in which
the prospective scholarship student shall participate.
(4) Require the following individuals to submit to a
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criminal history background information check in accordance
with Section 8, as a condition for employment or appointment,
as authorized by the Adam Walsh Child Protection and Safety
Act of 2006, Pub. L. No. 109-248:
a. An employee who does not hold one of the following:
1. A current Alabama educator license issued by the
State Board of Education.
2. If the nonpublic school is not physically located in
this state, a current educator license in the state where the
nonpublic school is physically located.
b. A contract employee.
(b) A nonpublic school described in subsection (a) is
not eligible to receive scholarship funds if any of the
following occur:
(1) The nonpublic school requires a scholarship student
to sign a contract waiving the scholarship student's right to
transfer to another qualifying provider during the school
year.
(2) The audit report described in subdivision (a)(1)
contains a going concern explanatory paragraph.
(3) The report of the agreed upon procedures described
in subdivision (a)(1) shows that the nonpublic school does not
have adequate working capital to maintain operations for the
first full year.
(c) To be eligible to receive scholarship funds on
behalf of a scholarship student as an eligible school, a
nonpublic school with fewer than 150 enrolled students shall
do all of the following:
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(1) Provide to the program manager all of the
following:
a. A federal employer identification number.
b. The provider's address and contact information.
c. A description of each program or service the
provider proposes to offer a scholarship student.
d. Any other information as required by the program
manager.
(2) Comply with the antidiscrimination provisions of 42
U.S.C. §2000d.
(d) A nonpublic school described in subsection (c) is
not eligible to receive scholarship funds if the nonpublic
school requires a scholarship student to sign a contract
waiving the student's rights to transfer to another qualifying
provider during the school year.
(e) To be eligible to receive scholarship funds on
behalf of a scholarship student as an eligible school, a local
school system shall do all of the following:
(1) Provide to the program manager all of the
following:
a. A federal employer identification number.
b. The local school system's address and contact
information.
c. A description of each program or service the local
school system proposes to offer to scholarship students.
d. Any other information as required by the program
manager.
(2) Comply with the antidiscrimination provisions of 42
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U.S.C. §2000d.
(3) Enter into an agreement with the program manager
regarding the provision of services to a scholarship student
through which:
a. The scholarship student does not enroll in the local
school system.
b. The local school system and program manager ensure
that a scholarship student does not participate in a course or
program at the local school system except in accordance with
the agreement described in this subsection under the program.
(f) A local school system described in subsection (e)
is not eligible to receive scholarship funds in either of the
following situations:
(1) The local school system requires a public education
system scholarship student to sign a contract waiving the
student's rights to transfer to another qualifying provider
during the school year.
(2) The local school system refuses to offer services
that do not require local school system enrollment to
scholarship students under the program.
(g) Residential treatment facilities licensed by the
state are not eligible to receive scholarship funds.
(h) A nonpublic school or local school system intending
to receive scholarship funds shall do both of the following:
(1) Submit an application to the program manager.
(2) Agree to not refund, rebate, or share scholarship
funds with scholarship students or scholarship student's
parents in any manner except remittances or refunds to a
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scholarship account in accordance with this act and procedures
that the program manager establishes.
(i) The program manager shall do all of the following:
(1) If the nonpublic school or local school system
meets the eligibility requirements of this section, recognize
the nonpublic school or local school system as an eligible
school and approve the application.
(2) Make available to the public a list of eligible
schools approved under this section.
(j) A nonpublic school approved under this section that
changes ownership shall do all of the following:
(1) Cease operation as an eligible school until both of
the following occur:
a. The school submits a new application to the program
manager.
b. The program manager approves the new application.
(2) Demonstrate that the nonpublic school continues to
meet the eligibility requirements of this section.
Section 10. (a) To be an eligible service provider, a
private program or service shall do all of the following:
(1) Provide to the program manager all of the
following:
a. A federal employer identification number.
b. The provider's address and contact information.
c. A description of each program or service the
provider proposes to offer directly to a scholarship student.
d. Subject to subsection (b), any other information as
required by the program manager.
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(2) Comply with the antidiscrimination provisions of 42
U.S.C. §2000d.
(3) Not act as a consultant, clearing house, or
intermediary that connects a scholarship student with or
otherwise facilitates the student's engagement with a program
or service that another entity provides.
(b) The program manager shall adopt policies that
maximize the number of eligible service providers, including
accepting new providers throughout the school year, while
ensuring education programs or services provided through the
program meet student needs and otherwise comply with this act.
(c) A private program or service intending to receive
scholarship funds shall do both of the following:
(1) Submit an application to the program manager.
(2) Agree to not refund, rebate, or share scholarship
funds with scholarship students or scholarship students'
parents in any manner except remittances or refunds to a
scholarship account in accordance with this act and procedures
that the program manager establishes.
(d) The program manager shall do all of the following:
(1) If the private program or service meets the
eligibility requirements of this section, recognize the
private program or service as an eligible service provider and
approve a private program or service's application to receive
scholarship funds on behalf of a scholarship student.
(2) Make available to the public a list of eligible
service providers approved under this section.
(e) A private program or service approved under this
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section that changes ownership shall do all of the following:
(1) Cease operation as an eligible service provider
until all of the following occur:
a. The program or service submits a new application to
the program manager.
b. The program manager approves the new application.
(2) Demonstrate that the private program or service
continues to meet the eligibility requirements of this
section.
Section 11. (a) Regarding a parent's right to academic
accommodations, nothing in this act restricts or affects a
parent's interests and role in the care, custody, and control
of the parent's child, including the duty and right to nurture
and direct the child's upbringing and education.
(b)(1) A parent may request that the program manager
facilitate any of the assessments provided to public school
students to the parent's scholarship student including, but
not limited to, college readiness assessments, reading grade
level assessments, and nationally norm-referenced assessments.
(2)a. Notwithstanding any other provision of law, the
entity administering an assessment described in subdivision
(1) to a scholarship student in accordance with this section
may not report the result of or any other data pertaining to
the assessment or scholarship student to an individual or
entity other than the program manager, the scholarship
student, or the scholarship student's parent.
b. The program manager may not report or communicate
the result or data described in paragraph a. to an individual
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or entity other than the relevant scholarship student and the
scholarship student's parent unless the result or data is
included in a deidentified compilation of data related to all
scholarship students.
(3) In any communication from the program manager
regarding an assessment described in this subsection, the
program manager shall include a disclaimer that no assessment
is required.
(4) The completion of an optional assessment under this
section satisfies the portfolio eligibility qualification
described in subdivision (c)(4) of Section 3.
Section 12. (a) If a scholarship student enters or
reenters the public education system during a given school
year:
(1) No later than five business days after the day on
which the student enters or reenters the public education
system, the program manager shall immediately remove the
balance in the scholarship student's scholarship account for
other use within the program.
(2) The State Board of Education may not distribute any
remaining state funds to the program manager for the student.
(3) The program manager may use the balance described
in subdivision (1) for another scholarship student.
(b) At the end of a school year, a program manager
shall withdraw any remaining scholarship funds in a
scholarship account and retain the scholarship funds for
disbursement in the following year.
(c)(1) To administer the program, the program manager
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may use up to the lesser of five percent or two million five
hundred thousand dollars ($2,500,000) of the funds the
Legislature appropriates for the program.
(2) Subject to subdivision (1), the funds for program
administration described in subdivision (1) are nonlapsing.
(3) The program manager may not retain administrative
cost balances in excess of 25 percent of total administrative
costs in any fiscal year.
Section 13. Beginning in 2025 and in accordance with
the Family Educational Rights and Privacy Act, 20 U.S.C.
§1232g:
(1) The program manager shall submit a report on the
program to the Chairs of the Senate Finance and Taxation
Education Committee and the House Ways and Means Education
Committee no later than September 1 of each year that includes
all of the following:
a. The total amount of tuition and fees qualifying
providers charged for the current year and previous two years.
b. The total amount of goods paid for with scholarship
funds in the previous year and a general characterization of
the types of goods.
c. Administrative costs of the program.
d. The number of scholarship students from each county
and the aggregate number of eligible students on the wait list
described in Section 6.
e. The percentage of first-time scholarship students
who were enrolled in a public school during the previous
school year or who entered kindergarten or a higher grade for
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the first time in Alabama.
f. The program manager's strategy and outreach efforts
to reach eligible students whose family income is at or below
200 percent of the federal poverty level and related obstacles
to enrollments.
g. In the report that the program manager submits in
2025, information on steps the program manager has taken and
processes the program manager has adopted to implement the
program.
h. Any other information regarding the program and the
program's implementation that the Chair of the Senate Finance
and Taxation Education Committee or the Chair of the House
Ways and Means Education Committee requests.
(2) The State Board of Education shall also submit a
report on the cost-effectiveness of the program to the Chairs
of the Senate Finance and Taxation Education Committee and the
House Ways and Means Education Committee no later than
September 1 of each year.
Section 14. (a) In any legal proceeding against the
state in which a qualifying provider challenges the
application of this act to the qualifying provider, the state
shall bear the burden of establishing that the law is
necessary and does not impose an undue burden on the
qualifying provider.
(b) The following bear no liability based on the award
or use of scholarship funds under this act:
(1) This state.
(2) The State Board of Education.
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(3) The program manager.
(4) A local school system.
(c) If any provision of this act is the subject of a
state or federal constitutional challenge in a state court,
scholarship students and scholarship students' parents may
intervene as a matter of right to defend the program's
constitutionality, subject to any court order that all
defending parents and scholarship students intervene jointly.
Section 15. If any provision of this act or the
application of any provision of this act to any individual,
entity, or circumstance is held invalid by a final decision of
a court of competent jurisdiction, the remaining provisions of
this act remain effective without the invalidated provision or
application.
Section 16. This act shall become effective on the
first day of the third month following its passage and
approval by the Governor, or its otherwise becoming law.
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