Local Education Freedom Act of 2016

Summary: Local Education Freedom Act of 2016 This bill requires a state to carry out an education voucher program as a condition of receiving federal funds for elementary and secondary education.  Through&nbsp;the program, a parent of an eligible child may enter into an agreement with a state educational agency (SEA) if the child's school receives federal funds on the condition of implementing a federal mandate with which the parent disagrees. An SEA shall: (1)&nbsp;provide an education savings account to each eligible child whose parent enters into such an agreement, and (2) disburse to each account an amount equal to the state's average per-pupil expenditure. The funds in an education savings account may be used only for:  tuition and fees for a qualifying provider; textbooks, supplemental materials, and supplies; specified examination fees; transportation; a contribution to a qualified tuition program or specified education savings account; and other education expenses approved by the SEA. A "qualifying provider" is an SEA-approved entity that complies with specified requirements and is: (1) a public or nonpublic school; (2) a home school, provided that the eligible child was enrolled in a public school during the previous academic year; (3) a tutoring facility; (4) a provider of distance learning or specialized instructional support services; or (5) an institution of higher education. In general, a qualified provider may not discriminate against program participants or applicants on the basis of race, color, national origin, or sex. However, the prohibition on sex discrimination shall not apply to religiously affiliated providers to the extent that&nbsp;such application is inconsistent with the provider's religious tenets or beliefs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Local Education Freedom Act of 
2016''.

SEC. 2. EDUCATION VOUCHER PROGRAM.

    (a) In General.--Notwithstanding any other provision of law, as a 
condition of receiving Federal funds for elementary and secondary 
education, each State shall carry out the program described under this 
Act.
    (b) Basic Elements.--
            (1) Parental choice in education.--
                    (A) In general.--Beginning with the 2017-2018 
                academic year, a parent of an eligible child may--
                            (i) enter into an agreement with a State 
                        educational agency for any academic year during 
                        which the eligible child will be in a grade for 
                        which the State provides free public education 
                        if--
                                    (I) the public school in which the 
                                eligible child is enrolled, or will be 
                                enrolled, receives Federal funds on the 
                                condition of implementing a Federal 
                                mandate; and
                                    (II) the parent disagrees with such 
                                mandate; and
                            (ii) renew such agreement for each 
                        succeeding academic year during which the 
                        eligible child will be in a grade for which the 
                        State provides free public education.
                    (B) Agreement.--An agreement under this paragraph 
                shall be entered into, or renewed, in a manner and on a 
                form determined by each State educational agency.
            (2) Education savings accounts.--
                    (A) In general.--Each State educational agency 
                shall--
                            (i) provide an education savings account to 
                        each eligible child whose parent enters into an 
                        agreement under paragraph (1)(A)(i) with the 
                        State educational agency for an academic year; 
                        and
                            (ii) maintain such account for each 
                        succeeding academic year for which the parent 
                        renews the agreement under paragraph 
                        (1)(A)(ii).
                    (B) Requirements.--An education savings account 
                provided under this paragraph shall meet the following 
                requirements:
                            (i) The education savings account, and any 
                        funds deposited into such account, shall belong 
                        to the eligible child for whom the account was 
                        provided, and such child shall be the 
                        designated beneficiary of the account.
                            (ii) The only funds that may be deposited 
                        into the education savings account are the 
                        funds that a State educational agency disburses 
                        in accordance with subparagraph (C).
                            (iii) The funds in the education savings 
                        account may be used only for the purpose of 
                        paying for the education expenses described in 
                        subsection (c) of the eligible child.
                            (iv) The parent of the eligible child shall 
                        have the authority to direct the use of the 
                        funds in the education savings account to one 
                        or more qualifying providers that do not 
                        implement the Federal mandate with which the 
                        parent disagrees.
                            (v) Upon direction by the parent of the 
                        eligible child, a State educational agency 
                        shall distribute the funds in the education 
                        savings account to the designated qualifying 
                        providers.
                    (C) Amount of funds.--
                            (i) In general.--Subject to clause (ii), 
                        beginning on August 1 of each academic year, 
                        each State educational agency shall disburse an 
                        amount equal to the average per-pupil 
                        expenditure of the State to each education 
                        savings account provided under this paragraph.
                            (ii) Quarterly disbursement.--Each State 
                        educational agency shall disburse the amount of 
                        funds provided under this subparagraph in 4 
                        equal quarterly deposits.
                            (iii) Continued availability of funds.--
                        Except as provided in clause (iv), any amounts 
                        remaining in an education savings account on 
                        the last day of the period covered by an 
                        agreement under paragraph (1)(A) shall remain 
                        available for use during a succeeding academic 
                        year.
                            (iv) Recapture of funds.--Each State 
                        educational agency shall recapture any amounts 
                        remaining in an education savings account on 
                        the last day of the period covered by an 
                        agreement under paragraph (1)(A) if--
                                    (I) the parent of the eligible 
                                child ends or violates the terms of the 
                                agreement during the covered period;
                                    (II) the parent does not renew the 
                                agreement for the immediately 
                                succeeding academic year; or
                                    (III) the child for whom the 
                                education savings account was provided 
                                no longer qualifies as an eligible 
                                child.
    (c) Eligible Education Expenses.--The funds in an education savings 
account provided under subsection (b)(2) may be used only for the 
following education expenses:
            (1) Tuition and fees for a qualifying provider, including 
        any costs and fees for tutoring services, specialized 
        instructional support services, extracurricular activities, 
        dual credit courses, and individual courses.
            (2) Required textbooks, supplemental materials, and 
        supplies.
            (3) Textbooks, supplemental materials, and supplies for 
        self-study.
            (4) Fees for any--
                    (A) national norm-referenced achievement 
                examination;
                    (B) advanced placement or similar examination; or
                    (C) standardized examination required for admission 
                to an institution of higher education.
            (5) Transportation for travel to and from a qualifying 
        provider, except that not more than $2,000 from the education 
        savings account may be used for this purpose each academic 
        year.
            (6) A contribution to a qualified tuition program (as 
        defined in section 529(b) of the Internal Revenue Code of 1986) 
        with respect to which the eligible child is a designated 
        beneficiary.
            (7) A contribution to a Coverdell education savings account 
        (as defined in section 530(b) of the Internal Revenue Code of 
        1986) with respect to which the eligible child is a designated 
        beneficiary, except that not more than $2,000 from the 
        education savings account may be used for this purpose each 
        academic year.
            (8) Any other education expense approved by the State 
        educational agency.
    (d) Responsibilities of State Educational Agency.--
            (1) Annual list of qualifying providers.--
                    (A) Creation.--Beginning on September 1, 2016, each 
                State educational agency shall--
                            (i) approve entities as qualifying 
                        providers for the 2017-2018 academic year; and
                            (ii) prepare a list of such qualifying 
                        providers.
                    (B) Maintenance.--For each academic year succeeding 
                the 2017-2018 academic year, each State educational 
                agency shall renew the list of qualifying providers.
                    (C) Availability on website of state educational 
                agency.--Each State educational agency shall make the 
                annual list of qualifying providers publicly available 
                on the website of the State educational agency.
            (2) Accountability.--Each State educational agency shall 
        take such steps as are necessary to ensure the proper 
        implementation of this Act, including--
                    (A) conducting periodic audits of education savings 
                accounts provided under subsection (b)(2);
                    (B) ensuring that the funds in such accounts are 
                used in accordance with this Act;
                    (C) freezing or revoking an education savings 
                account if fraud is detected; and
                    (D) if appropriate, referring any parent or 
                qualifying provider found to be using an education 
                savings account for unlawful purposes for criminal 
                prosecution.
            (3) Transfer of academic records.--Upon request by a State 
        educational agency, and if applicable, the public school in 
        which an eligible child was enrolled during the previous 
        academic year shall provide the complete academic records of 
        such child to any qualifying provider that is a school and that 
        has admitted the child.
    (e) Requirements and Rights of Qualifying Providers.--
            (1) Admissions.--A qualifying provider may--
                    (A) enforce the admissions requirements of any 
                school or program offered by the qualifying provider; 
                and
                    (B) subject to paragraph (4), accept the eligible 
                children who are best qualified to attend such school 
                or program.
            (2) Transfer of academic records.--Each qualifying provider 
        that is a school shall agree, as a condition of participating 
        in the program under this Act, to provide the complete academic 
        records of an eligible child attending the school pursuant to 
        an agreement under subsection (b)(1)(A) to any other school to 
        which such child transfers.
            (3) Refunds and rebates.--
                    (A) General prohibition.--A qualifying provider 
                that receives funds from an education savings account 
                provided under subsection (b)(2) may not--
                            (i) refund, or provide a rebate, of any 
                        portion of such funds to the eligible child who 
                        is the designated beneficiary of the education 
                        savings account or a parent of such child; or
                            (ii) share such funds with such child or 
                        parent in any manner.
                    (B) Exception.--Any refund that is needed for an 
                item that is being returned, or an item or service that 
                has not been provided, shall be provided to the State 
                educational agency, and the State educational agency 
                shall deposit the amounts refunded into the education 
                savings account from which such amounts were originally 
                distributed.
            (4) Nondiscrimination.--
                    (A) In general.--A qualifying provider may not 
                discriminate against program participants or applicants 
                on the basis of race, color, national origin, or sex.
                    (B) Single sex schools, classes, or activities.--
                Notwithstanding subparagraph (A) or any other provision 
                of law, a qualifying provider may offer a single sex 
                school, class, or activity.
                    (C) Religiously affiliated qualifying providers.--
                            (i) In general.--Notwithstanding any other 
                        provision of law--
                                    (I) the prohibition of sex 
                                discrimination in subparagraph (A) 
                                shall not apply to a qualifying 
                                provider that is operated by, 
                                supervised by, controlled by, or 
                                connected to a religious organization 
                                to the extent that the application of 
                                such subparagraph is inconsistent with 
                                the religious tenets or beliefs of such 
                                provider; and
                                    (II) a qualifying provider that is 
                                operated by, supervised by, controlled 
                                by, or connected to a religious 
                                organization may exercise its right in 
                                matters of employment consistent with 
                                title VII of the Civil Rights Act of 
                                1964 (42 U.S.C. 2000e et seq.), 
                                including the exemptions in such title.
                            (ii) Maintenance of purpose.--
                        Notwithstanding any other provision of law, the 
                        receipt of funds from an education savings 
                        account provided under subsection (b)(2) shall 
                        not, consistent with the first amendment to the 
                        Constitution of the United States--
                                    (I) necessitate any change in the 
                                teaching mission of a qualifying 
                                provider;
                                    (II) require a qualifying provider 
                                to remove religious art, icons, 
                                scriptures, or other symbols; or
                                    (III) preclude a qualifying 
                                provider from retaining religious terms 
                                in its name, selecting board members on 
                                a religious basis, or including 
                                religious references in the mission 
                                statements, charters, or other 
                                governing documents of such provider.
    (f) Rules of Construction.--
            (1) Treatment of assistance.--For purposes of any Federal 
        law or program--
                    (A) no assistance provided under this Act may be 
                treated as assistance to any qualifying provider; and
                    (B) the amount of any funds in an education savings 
                account provided under subsection (b)(2) may not be 
                treated as income of the eligible child who is the 
                designated beneficiary of the education savings account 
                or a parent of such child.
            (2) No ability to control curriculum.--Nothing in this Act 
        shall be construed to authorize any officer or employee of the 
        Federal Government, through grants, contracts, or other 
        cooperative agreements, to mandate, direct, or control the 
        curriculum, program of instruction, instructional content, 
        academic standards, assessments, or allocation of resources of 
        a State or of any school in a State.
            (3) No extension of regulatory authority.--Nothing in this 
        Act shall be construed to expand the regulatory authority of a 
        State government or the Federal Government to impose any 
        additional regulations on nonpublic schools beyond the 
        regulations necessary to enforce the requirements of this Act.
    (g) Transition.--Each State educational agency shall take steps to 
ensure a smooth transition to the program under this Act in order to 
ensure that education savings accounts are available to eligible 
children beginning with the 2017-2018 academic year.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Eligible child.--The term ``eligible child'' means a 
        child--
                    (A) who--
                            (i) is enrolling in a public school; or
                            (ii) was enrolled in a public school during 
                        the previous academic year; and
                    (B) whose parent disagrees with a Federal mandate 
                that the school implements as a condition of receiving 
                Federal funds.
            (2) ESEA terms.--The terms ``average per-pupil 
        expenditure'', ``child'', ``distance learning'', ``free public 
        education'', ``parent'', ``specialized instructional support 
        services'', ``State'', and ``State educational agency'' have 
        the meanings given such terms in section 8101 of the Elementary 
        and Secondary Education Act of 1965 (20 U.S.C. 7801).
            (3) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given such 
        term in section 102(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1002(a)).
            (4) Qualifying provider.--The term ``qualifying provider'' 
        means an entity that--
                    (A) is--
                            (i) a public school;
                            (ii) a nonpublic school;
                            (iii) a home school, provided that the 
                        eligible child was enrolled in a public school 
                        during the previous academic year;
                            (iv) a tutoring facility;
                            (v) a provider of distance learning;
                            (vi) a provider of specialized 
                        instructional support services; or
                            (vii) an institution of higher education;
                    (B) notifies a State educational agency of the 
                intent to become a qualifying provider; and
                    (C) agrees to comply with the requirements of 
                section 2(e).
            (5) School.--The term ``school''--
                    (A) means a preschool, kindergarten, elementary 
                school, or secondary school; and
                    (B) includes charter schools.