Local Education Freedom Act of 2016

To require States to distribute funds for elementary and secondary education in the form of vouchers for eligible students, and for other purposes. 1. Short title This Act may be cited as the Local Education Freedom Act of 2016 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) (7) A contribution to a Coverdell education savings account (as defined in section 530(b) (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. (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. 3. Definitions In this Act: (1) Eligible Child The term eligible 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 State educational agency 20 U.S.C. 7801 (3) Institution of Higher Education The term institution of higher education 20 U.S.C. 1002(a) (4) Qualifying Provider The term qualifying provider (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.

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 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) 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 such application is inconsistent with the provider's religious tenets or beliefs.