I 

115TH CONGRESS 

2D SESSION H. R. 5199 

To amend the Elementary and Secondary Education Act of 1965 to allow 

parents of eligible military dependent children to establish Military Education Savings Accounts, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 7, 2018 

Mr. BANKS of Indiana (for himself, Mr. SCALISE, Mr. MCHENRY, Mr. WALKER, Mr. MESSER, Mr. ROKITA, Mr. RATCLIFFE, Mr. LOUDERMILK, Mr. 

DESJARLAIS, Mr. KELLY of Mississippi, Mr. MEADOWS, Mr. 

MOOLENAAR, Mr. BUCK, Mr. WEBSTER of Florida, Mrs. WAGNER, Mr. 

SMITH of Missouri, Mr. KELLY of Pennsylvania, Mr. LAMBORN, Mr. 

PERRY, Mr. HARRIS, Mr. LATTA, Mr. BUDD, Mr. DUNCAN of South 

Carolina, Mr. FARENTHOLD, Mr. PEARCE, Mr. GIBBS, Mr. PITTENGER, 

Mrs. BLACKBURN, Mr. BIGGS, and Mr. ESTES of Kansas) introduced the 

following bill; which was referred to the Committee on Education and the 

Workforce, and in addition to the Committee on Ways and Means, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Elementary and Secondary Education Act 

of 1965 to allow parents of eligible military dependent 

children to establish Military Education Savings Accounts, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Education Savings Ac3 counts for Military Families Act of 2018’’. 

4 SEC. 2. MILITARY EDUCATION SAVINGS ACCOUNTS. 

5 Title VII of the Elementary and Secondary Edu6 cation Act of 1965 (20 U.S.C. 7701 et seq.) is amended 

7 by inserting after section 7012 the following: 

8 ‘‘SEC. 7012A. MILITARY EDUCATION SAVINGS ACCOUNTS. 

9 ‘‘(a) IN GENERAL.—The Secretary of Education, in 

10 consultation with the Secretary of Defense, shall carry out 

11 a program under which the Secretary of Education shall— 

12 ‘‘(1) subject to the availability of funds pursu13 ant to section 7014(f), at the request of a parent of 

14 an eligible military dependent child, establish an ac15 count on behalf of such child (to be known as a 

16 ‘Military Education Savings Account’) into which 

17 the Secretary shall deposit funds in an amount de18 termined under subsection (d); and 

19 ‘‘(2) establish a procedure under which the par20 ent of the child may use funds in the account to pay 

21 for the educational expenses of the child in accord22 ance with this section. 

23 ‘‘(b) APPLICATION.— 

24 ‘‘(1) IN GENERAL.—To be eligible to participate 

25 in the program under this section for a school year, 

26 a parent of an eligible military dependent child shall 


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1 submit an application to the Secretary of Education 

2 in accordance with this subsection. 

3 ‘‘(2) APPLICATION PROCESS.—In carrying out 

4 paragraph (1), the Secretary of Education shall— 

5 ‘‘(A) accept applications on a year-round 

6 basis and establish procedures for approving 

7 applications in an expeditious manner; and 

8 ‘‘(B) create a standardized form that par9 ents can use to apply for the program and en10 sure that such form is readily available in writ11 ten and electronic formats, including on a pub12 licly accessible website. 

13 ‘‘(3) APPROVAL.—Subject to the availability of 

14 funds to carry out this section, the Secretary shall 

15 approve the application of a parent to establish a 

16 Military Education Savings Account if— 

17 ‘‘(A) the application is submitted in ac18 cordance with the application process estab19 lished by the Secretary pursuant to this sub20 section; 

21 ‘‘(B) the application demonstrates that the 

22 child on whose behalf the Military Education 

23 Savings Account is to be established is an eligi24 ble military dependent child; and 


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1 ‘‘(C) the parent who submits the applica2 tion enters into a written agreement with the 

3 Secretary pursuant to subsection (c). 

4 ‘‘(4) RENEWALS.—The Secretary of Education 

5 shall establish an expedited application process for 

6 the renewal of a previously established Military Edu7 cation Savings Account. 

8 ‘‘(c) WRITTEN AGREEMENT.—As a condition of par9 ticipating in the program under this section, the parent 

10 of a child on whose behalf a Military Education Savings 

11 Account is established shall enter into a written agreement 

12 with the Secretary under which the parent agrees— 

13 ‘‘(1) to provide the child with instruction in, at 

14 minimum, the fields of reading, language, mathe15 matics, science, and social studies; 

16 ‘‘(2) to not enroll the child in a public school 

17 on a full-time basis while participating in the pro18 gram; 

19 ‘‘(3) to use funds in the Military Education 

20 Savings Account only for the purposes authorized 

21 under this section; and 

22 ‘‘(4) to comply with all other requirements of 

23 this section. 

24 ‘‘(d) AMOUNT OF DEPOSITS.— 


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1 ‘‘(1) FIRST YEAR OF PROGRAM.—The amount 

2 of funds deposited into each Military Education Sav3 ings Account for the first school year for which such 

4 accounts are established under this section shall 

5 be— 

6 ‘‘(A) $4,500 for an account established for 

7 an eligible military dependent child described in 

8 subsection (t)(1)(A); and 

9 ‘‘(B) $2,500 for an account established for 

10 an eligible military dependent child described in 

11 subsection (t)(1)(B). 

12 ‘‘(2) SUBSEQUENT YEARS.—The amount of 

13 funds deposited into each Military Education Sav14 ings Account for any school year after the year de15 scribed in paragraph (1), shall be the amount deter16 mined under this subsection for the previous school 

17 year increased by a percentage equal to the percent18 age increase in the Chained Consumer Price Index 

19 for All Urban Consumers (as published by the Bu20 reau of Labor Statistics of the Department of 

21 Labor) over the period of such previous school year. 

22 ‘‘(3) SOURCE OF FUNDS.—In accordance with 

23 section 7014(f), funds deposited into a Military Edu24 cation Savings Account under this subsection shall 

25 be drawn from amounts otherwise appropriated to 


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1 carry out the impact aid program under section 

2 7003 and no additional funds may be appropriated 

3 for the purpose of carrying out this subsection. 

4 ‘‘(e) USE OF FUNDS.—Funds deposited into a Mili5 tary Education Savings Account for a school year may be 

6 used by the parent of an eligible military dependent child 

7 to make payments to a qualified educational service pro8 vider for— 

9 ‘‘(1) costs of attendance at a private elementary 

10 school or secondary school recognized by the State, 

11 which may include a private school that is a religious 

12 institution; 

13 ‘‘(2) private online learning programs; 

14 ‘‘(3) private tutoring; 

15 ‘‘(4) services provided by a public elementary 

16 school or secondary school attended by the child on 

17 a less than full-time basis, including individual class18 es and extracurricular activities and programs; 

19 ‘‘(5) textbooks, curriculum programs, or other 

20 instructional materials, including any supplemental 

21 materials required by a curriculum program, private 

22 school, private online learning program, or a public 

23 school, or any parent directed curriculum associated 

24 with K–12 education; 


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1 ‘‘(6) computer hardware or other technological 

2 devices that are used to help meet a student’s edu3 cational needs, except that such hardware or devices 

4 may not be purchased by a parent more than once 

5 in an 18-month period; 

6 ‘‘(7) educational software and applications; 

7 ‘‘(8) uniforms purchased from or through a pri8 vate school recognized by the State; 

9 ‘‘(9) fees for nationally standardized assessment 

10 exams, advanced placement exams, any exams re11 lated to college or university admission, or tuition or 

12 fees for preparatory courses for such exams; 

13 ‘‘(10) fees for summer education programs and 

14 specialized after-school education programs (but not 

15 including after-school childcare); 

16 ‘‘(11) educational services and therapies, in17 cluding occupational, behavioral, physical, speech18 language, and audiology therapies; 

19 ‘‘(12) fees for transportation paid to a fee-for20 service transportation provider for the student to 

21 travel to and from the facilities of a qualified edu22 cational service provider; 

23 ‘‘(13) costs of attendance at an institution of 

24 higher education; 


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1 ‘‘(14) costs associated with an apprenticeship or 

2 other vocational training program; 

3 ‘‘(15) fees for state-recognized industry certifi4 cation exams, and tuition or fees for preparatory 

5 courses for such exams; 

6 ‘‘(16) contributions to a college savings ac7 count, which may include contributions to a qualified 

8 tuition program (as defined in section 529(b)(1)(A) 

9 of the Internal Revenue Code of 1986) or other pre10 paid tuition plan offered by a State; or 

11 ‘‘(17) any other educational expenses approved 

12 by the Secretary. 

13 ‘‘(f) TRANSFER SCHEDULE.—The Secretary of Edu14 cation shall make quarterly transfers of the amount cal15 culated pursuant to subsection (d) for deposit into the ac16 count of each qualified student, except that the Secretary 

17 may make transfers according to another transfer sched18 ule if the Secretary determines that a transfer schedule 

19 other than quarterly transfers is necessary for the oper20 ation of the education savings account. Parents shall be 

21 required to complete an expense report issued by the Sec22 retary electronically or in paper format prior to the next 

23 quarter’s deposit. 

24 ‘‘(g) ROLLOVER.—Amounts remaining in the Military 

25 Education Savings Account of a student at the end of a 


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1 school year shall remain available for use in accordance 

2 with subsection (e) until the date on which such account 

3 terminates under subsection (h). 

4 ‘‘(h) TERMINATION AND RETURN OF FUNDS.— 

5 ‘‘(1) TERMINATION.—The Military Education 

6 Savings Account of a student shall terminate on— 

7 ‘‘(A) the date on which the student enrolls 

8 in a public elementary school or secondary 

9 school on a full-time basis; 

10 ‘‘(B) in the case of a student who is pur11 suing postsecondary education, the earlier of— 

12 ‘‘(i) the date on which the student 

13 completes postsecondary education; or 

14 ‘‘(ii) the date on which the student at15 tains the age of 22 years; 

16 ‘‘(C) in the case of a student who is an in17 dividual with a disability, the date on which the 

18 student attains the age of 26 years; or 

19 ‘‘(D) in the case of an individual not de20 scribed in subparagraphs (B) or (C), the earlier 

21 of— 

22 ‘‘(i) the date on which the student at23 tains the age of 22 years; or 


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1 ‘‘(ii) the expiration of any 4-year pe2 riod during which funds in the account are 

3 not used in accordance with this section. 

4 ‘‘(2) RETURN OF FUNDS.—Any funds remain5 ing in a Military Education Savings account before 

6 such account terminates under paragraph (1) shall 

7 be— 

8 ‘‘(A) returned to the Secretary of Edu9 cation; and 

10 ‘‘(B) used for the program under this sec11 tion. 

12 ‘‘(i) COMPULSORY ATTENDANCE REQUIREMENTS.— 

13 A State that receives funds under this title shall consider 

14 a child with a Military Education Savings Account for a 

15 school year as meeting the State’s compulsory school at16 tendance requirements for such school year. 

17 ‘‘(j) SPECIAL RULE.—In the case of a child with a 

18 Military Education Savings Account who attends a public 

19 school on a less than full-time basis in a school year— 

20 ‘‘(1) the child may not attend the public school 

21 free of charge; and 

22 ‘‘(2) funds in the account, in an amount deter23 mined pursuant to an agreement between the parent 

24 of the child and the local educational agency conVerDate Sep 11 2014 03:56 Mar 14, 2018 Jkt 079200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5199.IH H5199

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1 cerned, shall be used to pay for the child’s costs of 

2 attendance at such school. 

3 ‘‘(k) TAX TREATMENT OF ACCOUNTS.— 

4 ‘‘(1) IN GENERAL.—A Military Education Sav5 ings Account is exempt from taxation under subtitle 

6 A of the Internal Revenue Code of 1986. 

7 ‘‘(2) CONTRIBUTIONS AND DISTRIBUTIONS.— 

8 For purposes of such subtitle— 

9 ‘‘(A) any contribution to a military edu10 cation savings account by the Secretary under 

11 this Act shall not be includible in the gross in12 come of the individual for whose benefit such 

13 account is maintained or the parent of such in14 dividual; and 

15 ‘‘(B) any distribution from a military edu16 cation savings account which is permitted under 

17 this Act shall not be includible in the gross in18 come of the individual for whose benefit such 

19 account is maintained or the parent of such in20 dividual. 

21 ‘‘(l) PRIVACY.—Section 444 of the General Education 

22 Provisions Act (commonly known as the ‘Family Edu23 cational Rights and Privacy Act of 1974’) (20 U.S.C. 

24 1232g) shall apply to a qualified educational service pro25 vider in the same manner that such section applies to an 


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1 educational agency or institution (as that term is defined 

2 in such section). 

3 ‘‘(m) FRAUD PREVENTION AND REPORTING.—The 

4 Secretary of Education shall establish a website and a tele5 phone hotline that enable individuals to anonymously re6 port suspected fraud in the program under this section. 

7 The Secretary also shall conduct or contract for random, 

8 quarterly, or annual audits of accounts as needed to en9 sure compliance with this section. 

10 ‘‘(n) CONTRACT AUTHORITY.—The Secretary of 

11 Education may enter into one or more contracts for the 

12 purpose of carrying out the responsibilities of the Sec13 retary under this section. 

14 ‘‘(o) SURETY BOND.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall require 

16 each qualified educational service provider that re17 ceives not less than $100,000 in funds from Military 

18 Education Savings Accounts in a school year to post 

19 a surety bond, in an amount determined by the Sec20 retary, for such school year. 

21 ‘‘(2) RETENTION.—The Secretary shall pre22 scribe the circumstances under which a surety bond 

23 under paragraph (1) may be retained by the Sec24 retary. 


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1 ‘‘(p) REFUNDS.—The Secretary shall establish a 

2 process under which payments from a Military Education 

3 Savings Accounts to a qualified educational service pro4 vider may be refunded to the account in the event of fraud 

5 or nonperformance by the provider. 

6 ‘‘(q) RULES OF CONSTRUCTION.— 

7 ‘‘(1) NONAGENCY.—A qualified educational 

8 service provider that receives a payment from a Mili9 tary Education Savings Account pursuant to this 

10 section shall not be considered an agent of the State 

11 or the Federal Government solely because the pro12 vider received such payment. 

13 ‘‘(2) FEDERAL OR STATE SUPERVISION.—Noth14 ing in this section shall be construed to allow any 

15 agency of a State or the Federal Government to ex16 ercise control or supervision over any qualified edu17 cational service provider. 

18 ‘‘(3) IMPOSITION OF ADDITIONAL REQUIRE19 MENTS.—Nothing in this section shall be construed 

20 to require a qualified educational service provider to 

21 alter its creed, practices, admissions policy, or cur22 riculum in order to be eligible to receive payments 

23 from a Military Education Savings Account. 

24 ‘‘(4) TREATMENT OF ASSISTANCE.—For pur25 poses of any Federal law, assistance provided under 


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1 this section shall be considered assistance to the 

2 military dependent student or to the parents of a 

3 student on whose behalf a Military Education Sav4 ings Account is established and shall not be consid5 ered assistance to the qualified educational service 

6 provider that uses or receives funds from a Military 

7 Education Savings Account. 

8 ‘‘(r) LEGAL PROCEEDINGS.— 

9 ‘‘(1) BURDEN.—In any legal proceeding in 

10 which a qualified educational service provider chal11 lenges a requirement imposed by the Department of 

12 Education on the provider, the Department shall 

13 have the burden of establishing that the law is nec14 essary and does not impose any undue burden on 

15 the provider. 

16 ‘‘(2) LIMITATION ON LIABILITY.— 

17 ‘‘(A) IN GENERAL.—No liability shall arise 

18 on the part of an entity described in subpara19 graph (B) solely because such entity awards, 

20 uses, or receives funds from a Military Edu21 cation Savings Account. 

22 ‘‘(B) ENTITY DESCRIBED.—The entities 

23 described in this subparagraph are the fol24 lowing: 

25 ‘‘(i) The Department of Education. 


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1 ‘‘(ii) An entity that enters into a con2 tract with the Secretary pursuant to sub3 section (n). 

4 ‘‘(3) INTERVENTION.— 

5 ‘‘(A) IN GENERAL.—Except as provided in 

6 subparagraph (B), a parent of an eligible mili7 tary dependent student or a parent of a student 

8 on whose behalf a Military Education Savings 

9 Account is established may intervene in any 

10 legal proceeding in which the constitutionality 

11 of the program under this section is challenged 

12 under a State constitution or the Federal con13 stitution. 

14 ‘‘(B) EXCEPTION.—For purposes of judi15 cial administration, a court may— 

16 ‘‘(i) limit the number of parents al17 lowed to intervene in a proceeding under 

18 subparagraph (A); or 

19 ‘‘(ii) require all parents who have in20 tervened in a proceeding under subpara21 graph (A) to file a joint brief, except that 

22 no parent shall be required to join any 

23 brief filed on behalf of a State that is a de24 fendant in the proceeding. 


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1 ‘‘(s) ADMINISTRATIVE EXPENSES.—The Secretary 

2 may use not more than 5 percent of the funds made avail3 able to carry out this section for the direct costs of admin4 istering Military Education Savings Accounts. 

5 ‘‘(t) DEFINITIONS.—In this section: 

6 ‘‘(1) The term ‘eligible military dependent child’ 

7 means a child who— 

8 ‘‘(A)(i) has a parent on active duty in the 

9 uniformed services (as that term defined in sec10 tion 101 of title 37, United States Code, except 

11 that such term does not include an officer in 

12 the National Guard who has been activated); 

13 and 

14 ‘‘(ii) resides within the boundaries of a 

15 heavily impacted local educational agency; or 

16 ‘‘(B)(i) has a parent on active duty in the 

17 uniformed services (as that term defined in sec18 tion 101 of title 37, United States Code, except 

19 that such term does not include an officer in 

20 the National Guard who has been activated); 

21 ‘‘(ii) resides within the boundaries of a 

22 Federal military installation; and 

23 ‘‘(iii) does not reside within the boundaries 

24 of a heavily impacted local educational agency. 


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1 ‘‘(2) The term ‘heavily impacted local edu2 cational agency’ means a local educational agency el3 igible to receive a payment under section 7003(b)(2). 

4 ‘‘(3) The term ‘institution of higher education’ 

5 has the meaning given the term in section 102 of the 

6 Higher Education Act of 1965 (20 U.S.C. 1002). 

7 ‘‘(4) The term ‘qualified educational service 

8 provider’ means an entity or person that provides 

9 educational services for which funds may be ex10 pended under subsection (e), including— 

11 ‘‘(A) a private school; 

12 ‘‘(B) a private online learning program or 

13 course; 

14 ‘‘(C) an institution of higher education, in15 cluding a state institution of higher education, 

16 a junior or community college, or a postsec17 ondary vocational institution; 

18 ‘‘(D) a public school; 

19 ‘‘(E) a private tutor or entity that operates 

20 a tutoring facility; 

21 ‘‘(F) a provider of educational materials or 

22 curriculum; 

23 ‘‘(G) a provider of education-related thera24 pies or services; and 


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1 ‘‘(H) any other provider of educational 

2 services approved by the Secretary.’’. 

3 SEC. 3. AUTHORIZATION OF APPROPRIATIONS. 

4 Section 7014 of the Elementary and Secondary Edu5 cation Act of 1965 is amended by adding at the end the 

6 following: 

7 ‘‘(f) MILITARY EDUCATION SAVINGS ACCOUNTS.— 

8 ‘‘(1) SOURCE OF FUNDS AND PROHIBITION ON

9 ADDITIONAL APPROPRIATION.—Subject to paragraph 

10 (2), section 7012A shall be carried out using funds 

11 otherwise appropriated to carry out the impact aid 

12 program under section 7003 and no additional funds 

13 may be appropriated to carry out such section 

14 7012A. 

15 ‘‘(2) PROHIBITION ON USE OF CERTAIN

16 FUNDS.—In making funds available to carry out sec17 tion 7012A under paragraph (1), the Secretary of 

18 Education shall ensure that such funds are drawn 

19 only from amounts otherwise made available for the 

20 education of military dependent children under sec21 tion 7003 and not from other sources.’’. 

Æ 


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