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Arkansas House Bill HB1020

Arkansas 2025 Regular Session

Arkansas House Bill HB1020 Compare Versions

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11 Stricken language would be deleted from and underlined language would be added to present law.
22 *TNL014* 11/20/2024 9:17:32 AM TNL014
33 State of Arkansas 1
44 95th General Assembly A Bill 2
55 Regular Session, 2025 HOUSE BILL 1020 3
66 4
77 By: Representative A. Collins 5
88 6
99 7
1010 For An Act To Be Entitled 8
1111 AN ACT TO REPEAL THE ARKANSAS CHILDREN'S EDUCATIONAL 9
1212 FREEDOM ACCOUNT PROGRAM; TO CREATE AN ADDITIONAL 10
1313 EDUCATION FUNDING CATEGORY FOR STUDENTS WHO RECEIVE 11
1414 SPECIAL EDUCATION AND RELATED SERVICES; TO CREATE THE 12
1515 COMMUNITY SCHOOLS ACT FUND; AND FOR OTHER PURPOSES. 13
1616 14
1717 15
1818 Subtitle 16
1919 TO REPEAL THE ARKANSAS CHILDREN'S 17
2020 EDUCATIONAL FREEDOM ACCOUNT PROGRAM; TO 18
2121 CREATE A NEW EDUCATION FUNDING CATEGORY 19
2222 FOR STUDENTS WHO RECEIVE SPECIAL 20
2323 EDUCATION AND RELATED SERVICES; AND TO 21
2424 CREATE THE COMMUNITY SCHOOLS ACT FUND. 22
2525 23
2626 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24
2727 25
2828 SECTION 1. Arkansas Code Title 6, Chapter 18, Subchapter 25, is 26
2929 repealed. 27
3030 6-18-2501. Title. 28
3131 This subchapter shall be known and may be cited as the “Arkansas 29
3232 Children's Educational Freedom Account Program”. 30
3333 31
3434 6-18-2502. Creation. 32
3535 There is created the “Arkansas Children's Educational Freedom Account 33
3636 Program”. 34
3737 35
3838 6-18-2503. Definitions. 36 HB1020
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4141 As used in this subchapter: 1
4242 (1) “Account” means an account that is comprised of funds 2
4343 deposited on behalf of a participating student to pay for qualifying 3
4444 educational expenses; 4
4545 (2) “Account funds” means the funds deposited into an account on 5
4646 behalf of a participating student; 6
4747 (3) “Curriculum” means a complete course of study for a 7
4848 particular content area or grade level; 8
4949 (4) “Eligible student” means a resident of the State of Arkansas 9
5050 who is eligible to enroll in a public elementary or secondary school, subject 10
5151 to the timeline and parameters established under §§ 6 -18-2506 and 6-18-2507; 11
5252 (5) “Full academic curriculum” means all required core courses, 12
5353 or the equivalent, as are offered in traditional public schools; 13
5454 (6) “Full academic year” means at least one hundred seventy -14
5555 eight (178) days of instruction or the equivalent number of hours to what is 15
5656 offered in traditional public schools; 16
5757 (7) “Parent” means: 17
5858 (A) A biological or adoptive parent; 18
5959 (B) Legal guardian or custodian; 19
6060 (C) Persons standing in loco parentis to a student; or 20
6161 (D) Another person with legal authority to act on behalf 21
6262 of an eligible student; 22
6363 (8) “Participating school” means a private elementary school or 23
6464 private secondary school that: 24
6565 (A) Offers enrolled students a full academic curriculum 25
6666 and full academic year experience; and 26
6767 (B) Receives payments from Arkansas Children's Educational 27
6868 Freedom Account Program accounts to provide goods and services that are 28
6969 covered as qualifying expenses under this subchapter; 29
7070 (9) “Participating service provider” means a person or an 30
7171 entity, including a participating public or private school, that receives 31
7272 payments from program accounts to provide goods and services that are covered 32
7373 as qualifying expenses under this subchapter; 33
7474 (10) “Participating student” means a student: 34
7575 (A) Eligible to participate in the program; and 35
7676 (B) For whom an account has been established under this 36 HB1020
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7979 subchapter; and 1
8080 (11) “Qualifying expenses” means: 2
8181 (A)(i) For the 2023 -2024 school year, “qualifying 3
8282 expenses” shall include: 4
8383 (a) Tuition; 5
8484 (b) Fees; 6
8585 (c) The cost of testing under this subchapter; 7
8686 (d) The cost of required school uniforms, if 8
8787 any, at a participating school; and 9
8888 (e) Expenses determined by a participating 10
8989 school to be necessary for the education of a participating student and 11
9090 required to be paid by a participating student who is enrolled in the 12
9191 participating school, including without limitation expenses related to: 13
9292 (1) Supplies; 14
9393 (2) Equipment; 15
9494 (3) Access to technology; and 16
9595 (4) Services provided by or at the 17
9696 participating school. 18
9797 (ii) “Qualifying expenses” shall not mean optional 19
9898 expenses payable to a third party; and 20
9999 (B) Beginning with the 2024 -2025 school year and 21
100100 each year thereafter, “qualifying expenses” shall include those listed under 22
101101 subdivision (11)(A) of this section and include the following: 23
102102 (i) Instructional materials required for either in -24
103103 person or virtual instruction provided by a participating service provider or 25
104104 participating school; 26
105105 (ii) Instructional or tutoring services; 27
106106 (iii) Curriculum; 28
107107 (iv) Supplemental materials or supplies required by 29
108108 a course of study for a particular content area; 30
109109 (v) Fees for: 31
110110 (a) Courses and associated examinations for 32
111111 college credit; and 33
112112 (b) Any examination related to postsecondary 34
113113 educational institution admission; 35
114114 (vi) Fees for: 36 HB1020
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117117 (a) Courses and associated examinations for 1
118118 career training; and 2
119119 (b) Any examination required in order to 3
120120 obtain an industry-based credential; 4
121121 (vii) Educational services provided by a licensed or 5
122122 accredited practitioner or participating service provider to a participating 6
123123 student who is a student with a disability; 7
124124 (viii) Fees for account management by participating 8
125125 service providers; 9
126126 (ix)(a) Technological devices used to meet a 10
127127 participating student's educational needs, which shall not include: 11
128128 (1) A television; 12
129129 (2) A video game console or accessory; 13
130130 or 14
131131 (3) Home theater or audio equipment. 15
132132 (b) Technological devices under subdivision 16
133133 (11)(B)(ix)(a) of this section are subject to approval by the Department of 17
134134 Education or a licensed physician; 18
135135 (x) Costs associated with transportation to and from 19
136136 a participating service provider or participating school; and 20
137137 (xi) Any other educational expense approved by the 21
138138 Division of Elementary and Secondary Education. 22
139139 23
140140 6-18-2504. State Board of Education — Rules. 24
141141 (a) The Division of Elementary and Secondary Education shall 25
142142 administer the Arkansas Children's Educational Freedom Account Program under 26
143143 this subchapter, which shall be subject to the rules adopted by the State 27
144144 Board of Education. 28
145145 (b) The rules adopted by the state board under this subchapter shall 29
146146 include without limitation the: 30
147147 (1) Process for determining the eligibility of students and 31
148148 service providers, including the awarding of accounts to eligible students 32
149149 and removal of unnecessary barriers or disincentives to participation by 33
150150 potential participating service providers; 34
151151 (2)(A) Process for conducting account and program audits, 35
152152 including establishing the authority for the division to conduct or contract 36 HB1020
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155155 for the auditing of accounts. 1
156156 (B) The division shall establish a process for conducting 2
157157 an audit of an entity receiving funds under this subchapter, including: 3
158158 (i) An individual account; 4
159159 (ii) A participating service provider; and 5
160160 (iii) A participating school. 6
161161 (C) At least one (1) time each year, the division shall 7
162162 conduct random audits of the following according to the auditing process 8
163163 established under subdivision (b)(2)(B) of this section: 9
164164 (i) An individual account; 10
165165 (ii) A participating service provider; and 11
166166 (iii) A participating school; 12
167167 (3) Authority of the division to: 13
168168 (A) Deem any participating student ineligible for the 14
169169 program; and 15
170170 (B) Refer a case involving the misuse of account funds for 16
171171 investigation to: 17
172172 (i) The Attorney General; or 18
173173 (ii) The Secretary of the Department of Inspector 19
174174 General; 20
175175 (4) Authority of the division to contract with a vendor or other 21
176176 supplier for the administration of the program or parts of the program; 22
177177 (5) Requirement that the program shall: 23
178178 (A) Begin enrolling participating students no later than 24
179179 the beginning of the 2023 -2024 school year; and 25
180180 (B) Be fully implemented to serve all Arkansas children 26
181181 eligible to enroll in a public school by the beginning of the 2025 -2026 27
182182 school year; 28
183183 (6) Establishment or creation of a contract for the establishment of 29
184184 an online anonymous fraud reporting service, including without limitation a 30
185185 telephone hotline; 31
186186 (7) Requirement for a surety bond for a participating service provider 32
187187 that receives more than one hundred thousand dollars ($100,000) in account 33
188188 funds; 34
189189 (8) Mechanism for the refunding of payments from service providers 35
190190 back to the account from which they were paid; 36 HB1020
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193193 (9) Required compliance with all state procurement laws and 1
194194 procedures; and 2
195195 (10) Means for preventing unreasonable inflation or fraud in 3
196196 participating school tuition and fees. 4
197197 (c) The following shall be forwarded to Arkansas Legislative Audit: 5
198198 (1) An audit conducted under subdivision (b)(2) of this section 6
199199 that identifies a potential misuse of account funds; and 7
200200 (2) The referral of a case involving the misuse of account funds 8
201201 for investigation to the Attorney General or the Secretary of the Department 9
202202 of Inspector General under subdivision (b)(3)(B) of this section. 10
203203 (d) To ensure that account funds under this subchapter provide for the 11
204204 expansion of access to education options by reducing family financial burdens 12
205205 and are not abused by service providers for financial gain, the state board 13
206206 shall take all necessary action in establishing rules under this subchapter, 14
207207 including without limitation the disqualification of a participating school 15
208208 or a participating service provider. 16
209209 17
210210 6-18-2505. Account funds. 18
211211 (a)(1) The Division of Elementary and Secondary Education shall 19
212212 allocate annually to each participating student's account, from funds 20
213213 appropriated to the Arkansas Children's Educational Freedom Account Fund or 21
214214 otherwise made available for the Arkansas Children's Educational Freedom 22
215215 Account Program, an amount equal to ninety percent (90%) of the prior year's 23
216216 statewide foundation funding allotted per student under § 6 -20-2305. 24
217217 (2) For the 2023-2024 school year and each school year 25
218218 thereafter, a student who participated in the Succeed Scholarship Program 26
219219 during the 2022-2023 school year shall receive one hundred percent (100%) of 27
220220 the prior year's statewide foundation funding amount allotted per student 28
221221 under § 6-20-2305 until: 29
222222 (A) The participating student graduates from high school; 30
223223 (B) The participating student receives a certificate of 31
224224 completion; or 32
225225 (C) An event that requires an account to be closed under 33
226226 subdivision (f)(1) or (f)(2) of this section occurs. 34
227227 (b)(1) For the 2023 -2024 school year, on behalf of participating 35
228228 students enrolled in participating schools or with participating service 36 HB1020
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231231 providers and at the direction of a participating student’s parent, the 1
232232 Department of Education shall make four (4) equal payments in quarterly 2
233233 installments from the participating student’s account to the participating 3
234234 school or participating service provider in which the participating student 4
235235 is enrolled for tuition, fees, and costs associated with testing and 5
236236 uniforms. 6
237237 (2) The department may: 7
238238 (A) Contract with a vendor or provider to manage the 8
239239 payment system used for purposes of implementing this subsection; and 9
240240 (B) Withhold up to five percent (5%) of funds allocated 10
241241 for each account annually for the administration of the Arkansas Children’s 11
242242 Educational Freedom Account Program. 12
243243 (c) For the 2023-2024 school year, if a participating student is 13
244244 enrolled full-time in a participating school or with a participating service 14
245245 provider and the total amount of tuition, fees, testing, and uniform costs is 15
246246 less than the amount determined under subsection (a) of this section, the 16
247247 amount allocated to the student shall be the lesser amount. 17
248248 (d) Account funds shall: 18
249249 (1)(A) Not be refunded, rebated, or shared with a parent or 19
250250 participating student in any manner. 20
251251 (B) Any refund or rebate for goods or services purchased 21
252252 with account funds shall be credited directly to the participating student’s 22
253253 account; and 23
254254 (2) Be used only for qualifying education expenses for a 24
255255 participating student. 25
256256 (e)(1) Beginning with the 2024 -2025 school year and each year 26
257257 thereafter, the department shall develop a system for parents to direct 27
258258 account funds to participating schools and participating service providers by 28
259259 electronic funds transfer, automated clearinghouse transfer, debit card, or 29
260260 another system. 30
261261 (2) The department may: 31
262262 (A) Contract with a vendor or provider, including without 32
263263 limitation a private institution, to manage the payment system used for 33
264264 purposes of implementing this subsection; and 34
265265 (B) Withhold up to five percent (5%) of funds allocated 35
266266 for each account annually for the administration of the Arkansas Children’s 36 HB1020
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269269 Educational Freedom Account Program. 1
270270 (3) The department shall: 2
271271 (A) Not adopt a payment system under this subsection that 3
272272 relies exclusively on requiring parents to be reimbursed for out -of-pocket 4
273273 expenses; and 5
274274 (B) Ensure a payment system developed under this 6
275275 subsection provides maximum flexibility to parents by facilitating direct 7
276276 payments to participating service providers and requests for preapproval of 8
277277 and reimbursements for qualifying expenses. 9
278278 (f)(1) An account shall remain in force, and any unused funds shall 10
279279 roll over from quarter -to-quarter and from year -to-year, until: 11
280280 (A) A parent withdraws his or her participating student 12
281281 from the program; 13
282282 (B) A participating student graduates from high school; or 14
283283 (C) The end of the school year if a participating student 15
284284 turns twenty-one (21) years of age, whichever occurs first. 16
285285 (2) An account shall be closed before an event occurs under 17
286286 subdivision (f)(1) of this section if the State Board of Education finds: 18
287287 (A) A substantial misuse of funds; or 19
288288 (B) That a parent has failed to comply with this 20
289289 subchapter or state board rules governing the Arkansas Children’s Educational 21
290290 Freedom Account Program. 22
291291 (3)(A) Any unused funds shall revert to the division and be 23
292292 allocated to fund other accounts. 24
293293 (B)(i) There shall be a maximum amount of funds allowed to 25
294294 remain in each participating student's account. 26
295295 (ii) The state board may establish rules to determine 27
296296 the: 28
297297 (a) Maximum amount of funds allowed under 29
298298 subdivision (f)(3)(B)(i) of this section; and 30
299299 (b) Process by which account funds will be 31
300300 returned to the appropriate fund within the department. 32
301301 (g) Account funds shall not: 33
302302 (1) Constitute taxable income of the parent or the participating 34
303303 student; and 35
304304 (2) Be claimed as a credit, deduction, exemption, or rebate. 36 HB1020
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307307 (h) The division shall create procedures to ensure that a fair process 1
308308 exists to determine whether a participating student is no longer eligible for 2
309309 participation in the Arkansas Children’s Educational Freedom Account Program, 3
310310 including without limitation a participating student who is no longer 4
311311 eligible for participation in the Arkansas Children’s Educational Freedom 5
312312 Account Program due to his or her failure to demonstrate academic achievement 6
313313 or academic growth. 7
314314 (i)(1) If the division bars a student from participating in the 8
315315 Arkansas Children’s Educational Freedom Account Program, it shall notify the 9
316316 participating student and his or her parent of its decision within three (3) 10
317317 days of its decision. 11
318318 (2) A parent may appeal the division’s decision to bar him or 12
319319 her from receiving payments from accounts to the state board according to 13
320320 rules established by the state board. 14
321321 (j) The state board may promulgate rules to implement this subchapter. 15
322322 16
323323 6-18-2506. Student eligibility — Initial and continuing. 17
324324 (a) A student is initially eligible for an account if the student: 18
325325 (1) Has a parent who is a resident of the State of Arkansas as 19
326326 defined by § 6-18-202; 20
327327 (2) Is eligible to enroll in a public elementary or secondary 21
328328 school in this state; and 22
329329 (3) Meets the following criteria: 23
330330 (A)(i) For the 2023 -2024 school year, a student shall be 24
331331 eligible if the student is at least one (1) of the following: 25
332332 (a) A student with a disability identified 26
333333 under the Individuals with Disabilities Education Act, 20 U.S.C. § 1400 et 27
334334 seq., as it existed on January 1, 2023; 28
335335 (b) A student who is considered homeless under 29
336336 the McKinney-Vento Homeless Assistance Act, 42 U.S.C. § 11431 et seq., as it 30
337337 existed on January 1, 2023; 31
338338 (c) A foster child or a former foster child; 32
339339 (d)(1) A student who is currently 33
340340 participating in the Succeed Scholarship Program, § 6 -41-901 et seq. 34
341341 [repealed]. 35
342342 (2) A student who participated in the 36 HB1020
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345345 Succeed Scholarship Program during the 2022 -2023 school year and elects to 1
346346 enroll in the Arkansas Children's Educational Freedom Account Program under 2
347347 this subchapter shall receive one hundred percent (100%) of the prior year's 3
348348 statewide foundation funding amount allotted per student under § 6 -20-2305 4
349349 until: 5
350350 (A) The participating student 6
351351 graduates from high school; 7
352352 (B) The participating student 8
353353 receives a certificate of completion; or 9
354354 (C) An event that requires an 10
355355 account to be closed under § 6 -18-2505(f)(1) or § 6-18-2505(f)(2) occurs; 11
356356 (e) A child of active -duty uniformed service 12
357357 personnel, as identified under Title 10, Title 32, Title 33, or Title 42 of 13
358358 the United States Code; 14
359359 (f) A student who was enrolled in the previous 15
360360 school year in a: 16
361361 (1) Public school that has a rating of 17
362362 “F” under §§ 6-15-2105 and 6-15-2106 and State Board of Education rules; or 18
363363 (2) Public school district classified as 19
364364 in need of Level 5 — Intensive support under § 6 -15-2913 or § 6-15-2915; or 20
365365 (g) A student who is enrolling in kindergarten 21
366366 for the first time. 22
367367 (ii)(a) For the 2023 -2024 school year, a 23
368368 maximum of one and five -tenths percent (1.5%) of the 2022 -2023 total public 24
369369 school student enrollment may be approved to participate in the Arkansas 25
370370 Children's Educational Freedom Account Program. 26
371371 (b) However, the number of students approved 27
372372 to participate in the Arkansas Children's Educational Freedom Account Program 28
373373 under subdivision (a)(3)(A)(ii)(a) of this section shall not exceed the 29
374374 amount of funds made available for the Arkansas Children's Educational 30
375375 Freedom Account Program; 31
376376 (B)(i) For the 2024 -2025 school year, student eligibility shall 32
377377 expand to include students who meet at least one (1) of the following: 33
378378 (a) All students who are eligible under subdivision 34
379379 (a)(3)(A) of this section; 35
380380 (b) Students who were enrolled in the prior school 36 HB1020
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383383 year in public schools rated “D” or “F” under §§ 6 -15-2105 and 6-15-2106 and 1
384384 state board rules; and 2
385385 (c) Students whose parents are: 3
386386 (1) Veterans as identified under Title 38 of 4
387387 the United States Code; 5
388388 (2) In the uniformed service reserve 6
389389 components; 7
390390 (3) First responders; or 8
391391 (4) Law enforcement officers. 9
392392 (ii)(a) For the 2024 -2025 school year, a maximum of 10
393393 three percent (3%) of the 2022 -2023 total public school student enrollment 11
394394 may be approved to participate in the Arkansas Children's Educational Freedom 12
395395 Account Program. 13
396396 (b) The number of students approved to participate 14
397397 in the Arkansas Children's Educational Freedom Account Program under 15
398398 subdivision (a)(3)(B)(ii)(a) of this section shall: 16
399399 (1) Include any students who are continuing to 17
400400 participate in the Arkansas Children's Educational Freedom Account Program 18
401401 from the 2023-2024 school year; and 19
402402 (2) Not exceed the amount of funds made 20
403403 available for the Arkansas Children's Educational Freedom Account Program; 21
404404 and 22
405405 (C)(i) For the 2025 -2026 school year and each year thereafter, 23
406406 any resident of this state who is eligible to enroll in a public elementary 24
407407 or secondary school shall be eligible. 25
408408 (ii) Beginning with the 2025 -2026 school year, there shall 26
409409 be no limitation on student participation in the Arkansas Children's 27
410410 Educational Freedom Account Program. 28
411411 (b) In any year in which funds are insufficient to fund all 29
412412 applications for new accounts, first priority shall be given to students who 30
413413 are eligible under subdivision (a)(3)(A) of this section, followed by 31
414414 students eligible under subdivision (a)(3)(B) of this section. 32
415415 (c) In any year in which funds are insufficient to fund all continuing 33
416416 accounts, priority shall be given to students who have been in the Arkansas 34
417417 Children’s Educational Freedom Account Program the longest after priority has 35
418418 been given to students identified under subsection (b) of this section. 36 HB1020
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421421 (d) The State Board of Education shall promulgate rules: 1
422422 (1) For the implementation of the Arkansas Children’s 2
423423 Educational Freedom Account Program; and 3
424424 (2) To effectively and efficiently administer the Arkansas 4
425425 Children’s Educational Freedom Account Program, including without limitation: 5
426426 (A) The awarding of funds to participating students; 6
427427 (B) The oversight of the Arkansas Children’s Educational 7
428428 Freedom Account Program; and 8
429429 (C) Any other necessary aspects for the operation of the 9
430430 Arkansas Children’s Educational Freedom Account Program. 10
431431 (e)(1) Except as provided under subdivision (e)(2) of this section, a 11
432432 participating student may only participate in and receive funds from one (1) 12
433433 of the following: 13
434434 (A) The Arkansas Children's Educational Freedom Account 14
435435 Program established by this subchapter; or 15
436436 (B) The Philanthropic Investment in Arkansas Kids Program 16
437437 Act, § 6-18-2301 et seq. 17
438438 (2)(A) A student with a disability as described by subdivision 18
439439 (a)(3)(A)(i)(a) of this section who has an annual family income that is less 19
440440 than or equal to two hundred percent (200%) of the federal poverty guidelines 20
441441 as determined annually in the Federal Register by the United States 21
442442 Department of Health and Human Services under 42 U.S.C. § 9902(2), as 22
443443 required under the Philanthropic Investment in Arkansas Kids Program may 23
444444 receive funds from both the Arkansas Children's Educational Freedom Account 24
445445 Program established by this subchapter and the Philanthropic Investment in 25
446446 Arkansas Kids Program. 26
447447 (B) However, a student who qualifies under subdivision 27
448448 (e)(2)(A) of this section may receive funds from both the Arkansas Children's 28
449449 Educational Freedom Account Program established by this subchapter and the 29
450450 Philanthropic Investment in Arkansas Kids Program only to the extent 30
451451 necessary to cover qualifying expenses. 31
452452 (f) The student's parent shall submit an application for an account to 32
453453 the Department of Education in accordance with Arkansas Children’s 33
454454 Educational Freedom Account Program timelines established by the department. 34
455455 (g)(1) The department shall create a standard form that a parent may 35
456456 submit to establish his or her child's eligibility for the program. 36 HB1020
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459459 (2) The department shall ensure that the standard form required 1
460460 under subdivision (g)(1) of this section is publicly available and may be 2
461461 submitted through various sources, including without limitation the internet. 3
462462 (h)(1) As part of the application, a parent shall sign an agreement 4
463463 promising each of the following without limitation: 5
464464 (A)(i) Not to enroll his or her child full -time in a 6
465465 public school while his or her child is participating in the Arkansas 7
466466 Children’s Educational Freedom Account Program. 8
467467 (ii) However, a participating student may take 9
468468 approved courses at a public school participating as an approved provider; 10
469469 (B) To use account funds only for qualifying expenses of 11
470470 the participating student; 12
471471 (C) To comply with all Arkansas Children’s Educational 13
472472 Freedom Account Program requirements as established by the department 14
473473 according to state board rules; and 15
474474 (D) Beginning with the 2024 -2025 school year, in the case 16
475475 of any account used for qualifying educational expenses not associated with 17
476476 full-time enrollment in a participating school or a participating service 18
477477 provider, to agree to provide an education for his or her participating 19
478478 student in at least the subjects of English language arts, mathematics, 20
479479 social studies, and science. 21
480480 (2) The signed agreement required under subdivision (h)(1) of 22
481481 this section shall satisfy the compulsory school attendance requirements of § 23
482482 6-18-201. 24
483483 (i) The division shall: 25
484484 (1) Continue making deposits into a participating student’s 26
485485 account until: 27
486486 (A) The division determines that the participating student 28
487487 is no longer an eligible student; 29
488488 (B) The division determines that there was substantial 30
489489 misuse of account funds, as defined by the state board; 31
490490 (C) A parent or a participating student withdraws from the 32
491491 Arkansas Children’s Educational Freedom Account Program; 33
492492 (D) A participating student enrolls full -time in a public 34
493493 school; 35
494494 (E) A participating student graduates from high school; or 36 HB1020
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497497 (F) A participating student completes the school year in 1
498498 the year in which he or she turns twenty -one (21) years of age; 2
499499 (2) Provide parents with a written explanation of the: 3
500500 (A) Allowable uses of funds; 4
501501 (B) Responsibilities of parents; and 5
502502 (C) Duties of the division and the role of any private 6
503503 financial management firms or other private organizations that the department 7
504504 may contract with to administer the Arkansas Children’s Educational Freedom 8
505505 Account Program or any aspect of the Arkansas Children’s Educational Freedom 9
506506 Account Program; and 10
507507 (3) Annually fund a participating student’s account as funds are 11
508508 available and in accordance with this law and state board rules. 12
509509 (j)(1) Upon notice to the division, a participating student may choose 13
510510 to stop receiving funds disbursed under this subchapter and enroll full -time 14
511511 in a public school. 15
512512 (2)(A) Enrolling as a full -time student in a public school shall 16
513513 result in the immediate suspension of payment of additional funds into the 17
514514 participating student’s account. 18
515515 (B)(i) However, for accounts that have been open for at 19
516516 least one (1) full academic year, the account shall remain open and active 20
517517 for the parent of a former participating student to make qualifying 21
518518 expenditures to educate the student from funds remaining in the account. 22
519519 (ii) When no funds remain in the former 23
520520 participating student’s account, the division may close the account. 24
521521 (3)(A) If a former participating student decides to return to 25
522522 the Arkansas Children’s Educational Freedom Account Program and is a current 26
523523 eligible student, payments into the former participating student’s existing 27
524524 account may resume if the account is still open and active. 28
525525 (B) A new account may be established if the former 29
526526 participating student’s previous account was closed. 30
527527 (k) The state board and the department may adopt rules to provide the 31
528528 least disruptive process for a participating student who desires to stop 32
529529 receiving funds disbursed under this subchapter and enroll full -time in a 33
530530 public school. 34
531531 35
532532 6-18-2507. Participating schools and participating service providers — 36 HB1020
533533
534534 15 11/20/2024 9:17:32 AM
535535 Eligibility — Participation. 1
536536 (a) To be eligible to participate in the Arkansas Children's 2
537537 Educational Freedom Account Program, a private school shall: 3
538538 (1)(A) Either: 4
539539 (i) Meet accreditation requirements established by 5
540540 the State Board of Education, the Arkansas Nonpublic School Accrediting 6
541541 Association, Inc., or its successor, or another accrediting association 7
542542 recognized by the state board; or 8
543543 (ii) Be an associate member of or have applied for 9
544544 accreditation by the Arkansas Nonpublic School Accrediting Association, Inc., 10
545545 or its successor, or another accrediting association recognized by the state 11
546546 board. 12
547547 (B) A private school shall no longer be eligible if: 13
548548 (i) The private school has not received 14
549549 accreditation within four (4) years of becoming eligible; 15
550550 (ii) The state board determines, based on 16
551551 information provided by the accrediting association, that the private school 17
552552 is ineligible or unable to continue the accreditation process; or 18
553553 (iii) It becomes impossible for the private school 19
554554 to obtain accreditation within four (4) years. 20
555555 (C) A private school that becomes ineligible under this 21
556556 section shall regain eligibility when the private school receives 22
557557 accreditation and is approved by the state board; 23
558558 (2)(A) Demonstrate fiscal soundness by having been in operation 24
559559 for at least one (1) school year or providing the Department of Education 25
560560 with a statement by a certified public accountant confirming that the private 26
561561 school is insured and the private school has sufficient capital or credit to 27
562562 operate in the upcoming school year. 28
563563 (B) In lieu of a statement provided under subdivision 29
564564 (a)(2)(A) of this section, a surety bond or letter of credit for the amount 30
565565 equal to the account funds needed by the private school for any quarter may 31
566566 be filed with the department; 32
567567 (3) Certify that it will not discriminate on any basis 33
568568 prohibited by 42 U.S.C. § 2000d, as it existed on January 1, 2023; 34
569569 (4) Remain academically accountable to a parent for meeting the 35
570570 educational needs of his or her participating student; 36 HB1020
571571
572572 16 11/20/2024 9:17:32 AM
573573 (5) Employ or contract only with teachers who hold at least 1
574574 baccalaureate degrees or have equivalent documented experience; 2
575575 (6) Comply with all applicable state laws and rules governing 3
576576 private schools; 4
577577 (7) Adhere to the tenets of its published disciplinary 5
578578 procedures before expelling a participating student; 6
579579 (8) Meet any other eligibility criteria set by state board 7
580580 rules; 8
581581 (9) Comply with all applicable health and safety laws and rules; 9
582582 (10) Hold valid occupancy of buildings as required by the 10
583583 relevant municipality in which the private school is located; 11
584584 (11) Exclude any individual from employment who may reasonably 12
585585 pose a risk to the appropriate use of funds disbursed under this subchapter; 13
586586 (12) Complete background checks and fingerprinting for any 14
587587 employee working in the private school; and 15
588588 (13) Maintain for audit purposes a background check of all 16
589589 employees. 17
590590 (b)(1) A public school district or open -enrollment public charter 18
591591 school located in the State of Arkansas that previously enrolled a student 19
592592 who is now a participating student under this subchapter shall provide the 20
593593 participating school or participating service provider that has enrolled the 21
594594 student who was previously enrolled in the public school district or open -22
595595 enrollment public charter school a copy of the participating student's school 23
596596 records to the extent permitted under the provisions of the Family 24
597597 Educational Rights and Privacy Act of 1974, 20 U.S.C. § 1232g, as it existed 25
598598 on January 1, 2023. 26
599599 (2) The requirement under subdivision (b)(1) of this section 27
600600 that a public school district or open -enrollment public charter school in 28
601601 which a participating student was previously enrolled be located in the State 29
602602 of Arkansas does not apply to a student currently participating in the 30
603603 Succeed Scholarship Program, § 6 -41-901 et seq. 31
604604 (c) By not later than June 30, 2024, the state board shall adopt rules 32
605605 providing for program eligibility for participating service providers that 33
606606 are not participating schools, including without limitation an application 34
607607 process that is executed, at a minimum, annually for the purpose of 35
608608 determining service provider eligibility. 36 HB1020
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610610 17 11/20/2024 9:17:32 AM
611611 (d) The department shall maintain a list of service providers 1
612612 determined to be eligible to participate in the program and make the list 2
613613 available on the department's website. 3
614614 (e) The department may bar a service provider from accepting payments 4
615615 from accounts and restrict the service provider’s ability to serve additional 5
616616 participating students if the department determines that the participating 6
617617 service provider has: 7
618618 (1) Failed to maintain continuing eligibility criteria 8
619619 established by the state board; 9
620620 (2) Demonstrated a gross or persistent lack of academic 10
621621 competence, as defined by the state board; 11
622622 (3) Intentionally or substantially misrepresented information or 12
623623 failed to refund any overpayments in a timely manner, as defined by the state 13
624624 board; or 14
625625 (4) Routinely failed to provide participating students with 15
626626 promised educational goods or services, as defined by the state board. 16
627627 (f)(1) The department shall create procedures to ensure that a fair 17
628628 process exists to determine whether a participating service provider may be 18
629629 barred from receiving payments from accounts under subsection (e) of this 19
630630 section. 20
631631 (2) If the department bars a participating service provider from 21
632632 receiving payments from accounts under this section, it shall notify parents 22
633633 and participating students of its decision within three (3) days of its 23
634634 decision on the department's website and through attempted individual 24
635635 communications. 25
636636 (3) A participating service provider may appeal the department’s 26
637637 decision to bar it from receiving payments from accounts to the state board. 27
638638 (g) The following may be subject to review and an audit of funds 28
639639 received related to this subchapter and as directed by the state board: 29
640640 (1) A participating service provider; and 30
641641 (2) A participating school. 31
642642 (h) The state board shall promulgate rules to implement this 32
643643 subchapter. 33
644644 34
645645 6-18-2508. Students with disabilities. 35
646646 The Department of Education shall ensure that parents of students with 36 HB1020
647647
648648 18 11/20/2024 9:17:32 AM
649649 disabilities identified under the Individuals with Disabilities Education 1
650650 Act, 20 U.S.C. § 1400 et seq., as it existed on January 1, 2023, receive: 2
651651 (1) Notice that participation in the Arkansas Children’s 3
652652 Educational Freedom Account Program is a parental placement under 20 U.S.C. § 4
653653 1412, as it existed on January 1, 2023; and 5
654654 (2) An explanation of the rights that parentally placed students 6
655655 possess under the Individuals with Disabilities Education Act, 20 U.S.C. § 7
656656 1400 et seq., as it existed on January 1, 2023, and any applicable state laws 8
657657 and rules. 9
658658 10
659659 6-18-2509. Testing. 11
660660 (a)(1) Each participating school and participating service provider 12
661661 shall provide for each participating student to annually take an assessment 13
662662 approved by the State Board of Education, which shall include: 14
663663 (A) An examination identified by the state board that is 15
664664 required for students attending public schools; or 16
665665 (B) A state board-approved nationally recognized norm -17
666666 referenced test or a statewide assessment, which measures, at a minimum, 18
667667 literacy and math. 19
668668 (2)(A) However, a participating student who has an 20
669669 individualized service plan and is determined by a participating private 21
670670 school to need an exemption from standardized testing due to the existence of 22
671671 a significant cognitive disability is not required to take the test required 23
672672 under subdivision (a)(1) of this section. 24
673673 (B) If a student is not required to take the test required 25
674674 under subdivision (a)(1) of this section, a participating private school 26
675675 shall annually make provision for the student to take an alternate assessment 27
676676 approved by the state board or prepare a portfolio that provides information 28
677677 on a student's progress to the student's parent or guardian. 29
678678 (b) For a participating student who is served by a participating 30
679679 service provider that is not a private school that is a participating school 31
680680 during or after the 2024 -2025 school year, his or her parent shall provide 32
681681 for his or her child who is a participating student to take an approved 33
682682 examination meeting the standards established under subsection (a) of this 34
683683 section. 35
684684 (c)(1) The Department of Education shall develop a process for the 36 HB1020
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687687 collection and aggregate reporting of the results of examinations required 1
688688 under this section, which shall include the public dissemination of the 2
689689 results collected by participating private schools and participating service 3
690690 providers. 4
691691 (2) However, the reporting required under subdivision (c)(1) of 5
692692 this section shall: 6
693693 (A) Not identify any individual student; and 7
694694 (B) Ensure that the summary results of the examinations 8
695695 required under this section are provided to parents of participating 9
696696 students. 10
697697 11
698698 6-18-2510. Reports. 12
699699 (a)(1) Not later than September 30 of each year, the Department of 13
700700 Education shall submit a written report regarding the implementation of the 14
701701 Arkansas Children's Educational Freedom Account Program to the: 15
702702 (A) Legislative Council, or if the General Assembly is in 16
703703 session, the Joint Budget Committee; 17
704704 (B) House Committee on Education; and 18
705705 (C) Senate Committee on Education. 19
706706 (2) The department may contract with an outside entity to 20
707707 compile the report required under subdivision (a)(1) of this section. 21
708708 (b) The report required under subdivision (a)(1) of this section shall 22
709709 include the following information without limitation: 23
710710 (1) The total number of students currently participating in the 24
711711 program; 25
712712 (2) A list of all participating schools and participating 26
713713 service providers; 27
714714 (3) The total student enrollment of each participating school 28
715715 and the percentage of the total enrollment of each school represented by 29
716716 participating students; 30
717717 (4) Aggregated test result data for participating students, from 31
718718 the most recent year available; 32
719719 (5) The percentage of funds used for each type of qualifying 33
720720 expense; 34
721721 (6) An analysis of the program's fiscal impact; 35
722722 (7) The retention rates for participating students enrolled in 36 HB1020
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724724 20 11/20/2024 9:17:32 AM
725725 participating schools; 1
726726 (8) The results of a parental satisfaction survey that shall be 2
727727 administered by the department; and 3
728728 (9) Other relevant data as determined by the department. 4
729729 5
730730 6-18-2511. Legal proceedings. 6
731731 (a) There shall be no liability on the part of the Department of 7
732732 Education or the state or of any public school or public school district 8
733733 based on the award of or use of an account under this subchapter. 9
734734 (b) Nothing in this section shall be construed as a waiver of 10
735735 sovereign immunity or any other defenses available to the State of Arkansas. 11
736736 12
737737 SECTION 2. Arkansas Code § 6 -20-2305(b), concerning education 13
738738 categories of funding in addition to state foundation funding aid, is amended 14
739739 to add an additional subdivision read as follows: 15
740740 (7)(A) For the 2025 -2026 school year and each school year 16
741741 thereafter, special education funding shall be three thousand eighty hundred 17
742742 sixty-two dollars ($3,862) multiplied by the number of students who receive 18
743743 special education and related services required by an individualized 19
744744 education plan. 20
745745 (B) Funding for students who receive special education and 21
746746 related services required by an individualized education plan under 22
747747 subdivision (b)(7)(A) of this section shall be distributed based on rules 23
748748 promulgated by the state board. 24
749749 (C) Funding for students who receive special education and 25
750750 related services required by an individualized education plan shall not be 26
751751 incorporated into the state foundation funding aid amount established under 27
752752 subsection (a) of this section. 28
753753 29
754754 SECTION 3. Arkansas Code § 9 -28-113(j), concerning the use of state 30
755755 and federal funding for the placement of a foster child in a nonpublic 31
756756 school, is amended to read as follows: 32
757757 (j)(1) Notwithstanding any of the provisions of this section, if it is 33
758758 in the best interest of the child, a foster child may be placed in a 34
759759 nonpublic school, including a private, parochial, or home school. 35
760760 (2)(A) Except as provided in subdivision (j)(2)(B) of this 36 HB1020
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762762 21 11/20/2024 9:17:32 AM
763763 section, state State or federal funding shall not be used for the placement 1
764764 of a foster child in a nonpublic school, including a private, parochial, or 2
765765 home school. 3
766766 (B) The prohibition under subdivision (j)(2)(A) of this 4
767767 section shall not apply to a foster child who receives an Arkansas Children's 5
768768 Educational Freedom Account Fund under § 6 -18-2501 et seq. 6
769769 7
770770 SECTION 4. Arkansas Code § 19 -5-1277 is repealed. 8
771771 19-5-1277. Arkansas Children's Educational Freedom Account Fund. 9
772772 (a) There is created on the books of the Treasurer of State, the 10
773773 Auditor of State, and the Chief Fiscal Officer of the State a miscellaneous 11
774774 fund to be known as the “Arkansas Children’s Educational Freedom Account 12
775775 Fund”. 13
776776 (b)(1) Notwithstanding any other provisions of law, for fiscal year 14
777777 2024 and each fiscal year thereafter, in addition to all other amounts 15
778778 required under the Arkansas Children's Educational Freedom Account Program, 16
779779 the Department of Education shall include in its annual budget request 17
780780 submitted under § 19 -4-301 et seq., and the Governor shall include in each 18
781781 recommendation submitted to the General Assembly under § 19 -4-201, an 19
782782 appropriation to the Department of Education, Division of Elementary and 20
783783 Secondary Education, for the greater of an amount not less than two percent 21
784784 (2%) of: 22
785785 (A) Net public school enrollment adjusted for state 23
786786 foundation funding aid purposes; or 24
787787 (B) The total number of eligible program applications 25
788788 received by the division, if available, multiplied by the prior year's 26
789789 statewide net foundation funding aid allotted per student. 27
790790 (2) The amount appropriated under subdivision (b)(1) of this 28
791791 section shall be transferred by the division to the fund to be used solely to 29
792792 meet the obligations required under the program, except as otherwise provided 30
793793 in this section. 31
794794 (3) The Governor shall include a recommendation, as required 32
795795 under § 19-4-201, that the total amount of funds appropriated to the division 33
796796 that was not transferred to the fund during the previous fiscal year due to 34
797797 an accumulated balance from previous fiscal years as provided under 35
798798 subsection (c) of this section be reappropriated for the subsequent fiscal 36 HB1020
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800800 22 11/20/2024 9:17:32 AM
801801 year. 1
802802 (c) Each fiscal year, the amount required to be requested and 2
803803 recommended for appropriation under subsection (b) of this section shall be 3
804804 reduced by the sum of: 4
805805 (1) Any unused, accumulated amounts transferred to the fund due 5
806806 to the requirements under this subsection from previous years; and 6
807807 (2) Any unused appropriations made to the department due to the 7
808808 requirements under this subsection that were not transferred to the fund due 8
809809 to an accumulated balance from previous years. 9
810810 10
811811 SECTION 5. Arkansas Code Title 19, Chapter 5, Subchapter 12, is 11
812812 amended to add an additional section to read as follows: 12
813813 19-5-1287. Community Schools Act Fund. 13
814814 (a) There is created on the books of the Treasurer of State, the 14
815815 Auditor of State, and the Chief Fiscal Officer of the State a miscellaneous 15
816816 fund to be known as the “Community Schools Act Fund”. 16
817817 (b) The fund shall consist of: 17
818818 (1) General revenues authorized by law; and 18
819819 (2) Moneys obtained from private or public grants, gifts, 19
820820 interagency transfers, or donations that are designated to be credited to the 20
821821 fund. 21
822822 (c) The fund shall be used by the Division of Elementary and Secondary 22
823823 Education in furtherance of the purposes established under the Community 23
824824 Schools Act, § 6-15-3001 et seq. 24
825825 (d) Moneys remaining in the fund at the end of each fiscal year shall 25
826826 carry forward and be made available for the purposes stated in this section 26
827827 in the next fiscal year. 27
828828 28
829829 29
830830 30
831831 31
832832 32
833833 33
834834 34
835835 35
836836 36