‘‘(i) the date on which the student at-
tains the age of 22 years; or 
‘‘(ii) the expiration of any 2-year pe-
riod during which funds in the account are 
not used in accordance with this section. 
‘‘(2) RETURN OF FUNDS.—Any funds remain-
ing in a Military Education Savings Account on the 
date such account terminates under paragraph (1) 
shall be returned to the Treasury of the United 
States and shall be used to carry out the program 
under this section. 
‘‘(k) COMPULSORY ATTENDANCE REQUIREMENTS.— 
A State that receives funds under this title shall consider 
a child with a Military Education Savings Account for a 
school year as meeting the State’s compulsory school at-
tendance requirements for such school year. 
‘‘(l) SPECIAL RULE.—In the case of a child with a 
Military Education Savings Account who attends a public 
school on a less than full-time basis in a school year— 
‘‘(1) the child may not attend the public school 
free of charge; and 
‘‘(2) funds in the account, in an amount deter-
mined pursuant to an agreement between the parent 
of the child and the local educational agency con-
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cerned, shall be used to pay for the child’s costs of 
attendance at such school. 
‘‘(m) TAX TREATMENT OF ACCOUNTS.— 
‘‘(1) IN GENERAL.—A Military Education Sav-
ings Account is exempt from taxation under subtitle 
A of the Internal Revenue Code of 1986. 
‘‘(2) CONTRIBUTIONS
AND
DISTRIBUTIONS.— 
For purposes of such subtitle— 
‘‘(A) any contribution to a military edu-
cation savings account by the Secretary under 
this Act shall not be includible in the gross in-
come of the individual for whose benefit such 
account is maintained or the parent of such in-
dividual; and 
‘‘(B) any distribution from a military edu-
cation savings account which is permitted under 
this Act shall not be includible in the gross in-
come of the individual for whose benefit such 
account is maintained or the parent of such in-
dividual. 
‘‘(n) FRAUD PREVENTION AND REPORTING.—The 
Secretary shall establish a website and a telephone hotline 
that enable individuals to anonymously report suspected 
fraud in the program under this section. The Secretary 
also shall conduct or contract for random, quarterly, or 
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annual audits of accounts as needed to ensure compliance 
with this section. 
‘‘(o) CONTRACT AUTHORITY.—The Secretary may 
enter into one or more contracts for the purpose of car-
rying out the responsibilities of the Secretary under this 
section. 
‘‘(p) REFUNDS.—The Secretary shall establish a 
process under which payments from a Military Education 
Savings Accounts to a qualified educational service pro-
vider shall be refunded to the account in the event of fraud 
or nonperformance by the provider. 
‘‘(q) RULES OF CONSTRUCTION.— 
‘‘(1) NONAGENCY.—A qualified educational 
service provider that receives a payment from a Mili-
tary Education Savings Account pursuant to this 
section shall not be considered an agent of the State 
or the Federal Government solely because the pro-
vider received such payment. 
‘‘(2) FEDERAL OR STATE SUPERVISION.—Noth-
ing in this section shall be construed to allow any 
agency of a State or the Federal Government to ex-
ercise control or supervision over any qualified edu-
cational service provider. 
‘‘(3) IMPOSITION
OF
ADDITIONAL
REQUIRE-
MENTS.—No Federal requirements shall apply to a 
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qualified educational service provider other than the 
requirements specifically set forth in this section. 
Nothing in this section shall be construed to require 
a qualified educational service provider to alter its 
creed, practices, admissions policy, or curriculum in 
order to be eligible to receive payments from a Mili-
tary Education Savings Account. 
‘‘(4) TREATMENT
OF
ASSISTANCE.—For pur-
poses of any Federal law, assistance provided under 
this section shall be considered assistance to the 
military dependent student or to the parents of a 
student on whose behalf a Military Education Sav-
ings Account is established and shall not be consid-
ered assistance to the qualified educational service 
provider that uses or receives funds from a Military 
Education Savings Account. 
‘‘(r) LEGAL PROCEEDINGS.— 
‘‘(1) BURDEN.—In any legal proceeding in 
which a qualified educational service provider chal-
lenges a requirement imposed by the Department of 
Education on the provider, the Department shall 
have the burden of establishing that the requirement 
is necessary and does not impose any undue burden 
on the provider. 
‘‘(2) LIMITATION ON LIABILITY.— 
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‘‘(A) IN GENERAL.—No liability shall arise 
on the part of an entity described in subpara-
graph (B) solely because such entity awards, 
uses, or receives funds from a Military Edu-
cation Savings Account. 
‘‘(B) ENTITY
DESCRIBED.—The entities 
described in this subparagraph are the fol-
lowing: 
‘‘(i) The Department of Education. 
‘‘(ii) An entity that enters into a con-
tract with the Secretary pursuant to sub-
section (g) or subsection (o). 
‘‘(iii) A qualified educational service 
provider. 
‘‘(3) INTERVENTION.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), a parent of an eligible mili-
tary dependent student or a parent of a student 
on whose behalf a Military Education Savings 
Account is established may intervene in any 
legal proceeding in which the constitutionality 
of the program under this section is challenged 
under a State constitution or the Federal con-
stitution. 
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‘‘(B) EXCEPTION.—For purposes of judi-
cial administration, a court may— 
‘‘(i) limit the number of parents al-
lowed to intervene in a proceeding under 
subparagraph (A); or 
‘‘(ii) require all parents who have in-
tervened in a proceeding under subpara-
graph (A) to file a joint brief, except that 
no parent shall be required to join any 
brief filed on behalf of a State that is a de-
fendant in the proceeding. 
‘‘(s) ADMINISTRATIVE EXPENSES.—The Secretary 
may use not more than 5 percent of the funds made avail-
able to carry out this section for the direct costs of admin-
istering Military Education Savings Accounts. 
‘‘(t) DEFINITIONS.—In this section: 
‘‘(1) The terms ‘commissioned officer’, ‘enlisted 
member’, and ‘warrant officer’ have the meanings 
given those terms in section 101(b) of title 10, 
United States Code. 
‘‘(2) The term ‘eligible military dependent child’ 
means a child who— 
‘‘(A) has a parent on active duty in the 
uniformed services (as that term is defined in 
section 101 of title 37, United States Code, ex-
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cept that such term does not include an officer 
in the National Guard who has been activated); 
and 
‘‘(B) in the case of a child seeking to es-
tablish a Military Education Savings account 
for the first time, was enrolled in a public ele-
mentary school or a public secondary school for 
not less than 100 consecutive days in the pre-
ceding school year. 
‘‘(3) The term ‘institution of higher education’ 
has the meaning given the term in section 102 of the 
Higher Education Act of 1965 (20 U.S.C. 1002). 
‘‘(4) The term ‘qualified educational service 
provider’ means an entity or person that is licensed 
by a State to provide one or more of the educational 
services for which funds may be expended under 
subsection (e), including— 
‘‘(A) a private school; 
‘‘(B) a non-public online learning program 
or course provider; 
‘‘(C) a State institution of higher edu-
cation, which may include a community college 
or a technical college; 
‘‘(D) a public school; 
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‘‘(E) a private tutor or entity that operates 
a tutoring facility; 
‘‘(F) a provider of educational materials or 
curriculum; 
‘‘(G) a provider of education-related thera-
pies or services; or 
‘‘(H) any other provider of educational 
services licensed by a State to provide such 
services.’’. 
SEC. 3. AUTHORIZATION OF APPROPRIATIONS. 
Section 7014 of the Elementary and Secondary Edu-
cation Act of 1965 is amended by adding at the end the 
following: 
‘‘(f) MILITARY EDUCATION SAVINGS ACCOUNTS.— 
For the purpose of carrying out section 7012A— 
‘‘(1) there are authorized to be appropriated 
$1,200,000,000 for fiscal year 2022; and 
‘‘(2) for each fiscal year beginning after fiscal 
year 2022, the amount authorized to be appro-
priated shall be the amount authorized to be appro-
priated for the previous fiscal year increased by the 
percentage increase in the Chained Consumer Price 
Index for All Urban Consumers (as published by the 
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Bureau of Labor Statistics of the Department of 
Labor) over the period of such previous fiscal year.’’. 
Æ 
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