Title: Military Education Savings Account Act of 2018
Policy area: Education

Summary:
Military Education Savings Account Act of 2018
This bill amends the Elementary and Secondary Education Act of 1965 to direct the Department of Education to establish a program to provide children with parents on active duty in the uniformed services with funds for specified educational purposes. Children of active duty service members who reside in a local education agency that receives payments under the Impact Aid Program are eligible to receive funds.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2517 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  2d Session
                                S. 2517

 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 SENATE OF THE UNITED STATES

                             March 7, 2018

    Mr. Sasse (for himself, Mr. Scott, and Mr. Lee) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Military Education Savings Account 
Act of 2018''.

SEC. 2. MILITARY EDUCATION SAVINGS ACCOUNTS.

    Title VII of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7701 et seq.) is amended by inserting after section 7012 the 
following:

``SEC. 7012A. MILITARY EDUCATION SAVINGS ACCOUNTS.

    ``(a) In General.--The Secretary of Education, in consultation with 
the Secretary of Defense, shall carry out a program under which the 
Secretary of Education shall--
            ``(1) subject to the availability of funds pursuant to 
        section 7014(f), at the request of a parent of an eligible 
        military dependent child, establish an account on behalf of 
        such child (to be known as a `Military Education Savings 
        Account') into which the Secretary shall deposit funds in an 
        amount determined under subsection (d); and
            ``(2) establish a procedure under which the parent of the 
        child may use funds in the account to pay for the educational 
        expenses of the child in accordance with this section.
    ``(b) Application.--
            ``(1) In general.--To be eligible to participate in the 
        program under this section for a school year, a parent of an 
        eligible military dependent child shall submit an application 
        to the Secretary in accordance with this subsection.
            ``(2) Application process.--In carrying out paragraph (1), 
        the Secretary shall--
                    ``(A) accept applications on a year-round basis and 
                establish procedures for approving applications in an 
                expeditious manner; and
                    ``(B) create a standardized form that parents can 
                use to apply for the program and ensure that such form 
                is readily available in written and electronic formats, 
                including on a publicly accessible website.
            ``(3) Approval.--Subject to the availability of funds to 
        carry out this section, the Secretary shall approve the 
        application of a parent to establish a Military Education 
        Savings Account if--
                    ``(A) the application is submitted in accordance 
                with the application process established by the 
                Secretary pursuant to this subsection;
                    ``(B) the application demonstrates that the child 
                on whose behalf the Military Education Savings Account 
                is to be established is an eligible military dependent 
                child; and
                    ``(C) the parent who submits the application enters 
                into a written agreement with the Secretary pursuant to 
                subsection (c).
            ``(4) Renewals.--The Secretary shall establish an expedited 
        application process for the renewal of a previously established 
        Military Education Savings Account.
    ``(c) Written Agreement.--As a condition of participating in the 
program under this section, the parent of a child on whose behalf a 
Military Education Savings Account is established shall enter into a 
written agreement with the Secretary under which the parent agrees--
            ``(1) to provide the child with instruction in, at minimum, 
        the fields of reading, language, mathematics, science, and 
        social studies;
            ``(2) to not enroll the child in a public school on a full-
        time basis while participating in the program;
            ``(3) to use funds in the Military Education Savings 
        Account only for the purposes authorized under this section; 
        and
            ``(4) to comply with all other requirements of this 
        section.
    ``(d) Amount of Deposits.--
            ``(1) First year of program.--The amount of funds deposited 
        into each Military Education Savings Account for the first 
        school year for which such accounts are established under this 
        section shall be--
                    ``(A) $4,500 for an account established for an 
                eligible military dependent child described in 
                subsection (t)(1)(A); and
                    ``(B) $2,500 for an account established for an 
                eligible military dependent child described in 
                subsection (t)(1)(B).
            ``(2) Subsequent years.--The amount of funds deposited into 
        each Military Education Savings Account for any school year 
        after the year described in paragraph (1), shall be the amount 
        determined under this subsection for the previous school year 
        increased by a percentage equal to the percentage increase in 
        the Chained Consumer Price Index for All Urban Consumers (as 
        published by the Bureau of Labor Statistics of the Department 
        of Labor) over the period of such previous school year.
            ``(3) Source of funds.--In accordance with section 7014(f), 
        funds deposited into a Military Education Savings Account under 
        this subsection shall be drawn from amounts otherwise 
        appropriated to carry out the impact aid program under section 
        7003 and no new appropriation may be made for the purpose of 
        carrying out this subsection.
    ``(e) Use of Funds.--Funds deposited into a Military Education 
Savings Account for a school year may be used by the parent of an 
eligible military dependent child to make payments to a qualified 
educational service provider for--
            ``(1) costs of attendance at a private elementary school or 
        secondary school recognized by the State, which may include a 
        private school that is a religious institution;
            ``(2) private online learning programs;
            ``(3) private tutoring;
            ``(4) services provided by a public elementary school or 
        secondary school attended by the child on a less than full-time 
        basis, including individual classes and extracurricular 
        activities and programs;
            ``(5) textbooks, curriculum programs, or other 
        instructional materials, including any supplemental materials 
        required by a curriculum program, private school, private 
        online learning program, or a public school, or any parent 
        directed curriculum associated with kindergarten through grade 
        12 education;
            ``(6) computer hardware or other technological devices that 
        are used to help meet a student's educational needs, except 
        that such hardware or devices may not be purchased by a parent 
        more than once in an 18-month period;
            ``(7) educational software and applications;
            ``(8) uniforms purchased from or through a private school 
        recognized by the State;
            ``(9) fees for nationally standardized assessment 
        examinations, advanced placement examinations, any exams 
        related to admission to an institution of higher education, or 
        tuition or fees for preparatory courses for such examinations;
            ``(10) fees for summer education programs and specialized 
        after-school education programs (but not including after-school 
        childcare);
            ``(11) educational services and therapies, including 
        occupational, behavioral, physical, speech-language, and 
        audiology therapies;
            ``(12) fees for transportation paid to a fee-for-service 
        transportation provider for the student to travel to and from 
        the facilities of a qualified educational service provider;
            ``(13) costs of attendance at an institution of higher 
        education;
            ``(14) costs associated with an apprenticeship or other 
        vocational training program;
            ``(15) fees for State-recognized industry certification 
        examinations, and tuition or fees for preparatory courses for 
        such examinations;
            ``(16) contributions to a college savings account, which 
        may include contributions to a qualified tuition program (as 
        defined in section 529(b)(1) of the Internal Revenue Code of 
        1986, without regard to subparagraph (B) thereof) or other 
        prepaid tuition plan offered by a State; or
            ``(17) any other educational expenses approved by the 
        Secretary.
    ``(f) Transfer Schedule.--The Secretary shall make quarterly 
transfers of the amount calculated pursuant to subsection (d) for 
deposit into the account of each qualified student, except that the 
Secretary may make transfers according to another transfer schedule if 
the Secretary determines that a transfer schedule other than quarterly 
transfers is necessary for the operation of the Military Education 
Savings Account. Parents shall be required to complete an expense 
report issued by the Secretary electronically or in paper format prior 
to the next quarter's deposit.
    ``(g) Rollover.--Amounts remaining in the Military Education 
Savings Account of a student at the end of a school year shall remain 
available for use in accordance with subsection (e) until the date on 
which such account terminates under subsection (h).
    ``(h) Termination and Return of Funds.--
            ``(1) Termination.--The Military Education Savings Account 
        of a student shall terminate on--
                    ``(A) the date on which the student enrolls in a 
                public elementary school or secondary school on a full-
                time basis;
                    ``(B) in the case of a student who is pursuing 
                postsecondary education, the earlier of--
                            ``(i) the date on which the student 
                        completes postsecondary education; or
                            ``(ii) the date on which the student 
                        attains the age of 22 years;
                    ``(C) in the case of a student who is an individual 
                with a disability, the date on which the student 
                attains the age of 26 years; or
                    ``(D) in the case of an individual not described in 
                subparagraphs (B) or (C), the earlier of--
                            ``(i) the date on which the student attains 
                        the age of 22 years; or
                            ``(ii) the expiration of any 4-year period 
                        during which funds in the account are not used 
                        in accordance with this section.
            ``(2) Return of funds.--Any funds remaining in a Military 
        Education Savings Account before such account terminates under 
        paragraph (1) shall be--
                    ``(A) returned to the Secretary; and
                    ``(B) used for the program under this section.
    ``(i) 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 attendance requirements for such school year.
    ``(j) 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 determined 
        pursuant to an agreement between the parent of the child and 
        the local educational agency concerned, shall be used to pay 
        for the child's costs of attendance at such school.
    ``(k) Tax Treatment of Accounts.--
            ``(1) In general.--A Military Education Savings 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 education 
                savings account by the Secretary under this section 
                shall not be includible in the gross income of the 
                individual for whose benefit such account is maintained 
                or the parent of such individual; and
                    ``(B) any distribution from a military education 
                savings account which is permitted under this section 
                shall not be includible in the gross income of the 
                individual for whose benefit such account is maintained 
                or the parent of such individual.
    ``(l) Privacy.--Section 444 of the General Education Provisions Act 
(commonly known as the `Family Educational Rights and Privacy Act of 
1974') (20 U.S.C. 1232g) shall apply to a qualified educational service 
provider in the same manner that such section applies to an educational 
agency or institution (as that term is defined in such section).
    ``(m) 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 
annual audits of accounts as needed to ensure compliance with this 
section.
    ``(n) Contract Authority.--The Secretary of Education may enter 
into one or more contracts for the purpose of carrying out the 
responsibilities of the Secretary under this section.
    ``(o) Surety Bond.--
            ``(1) In general.--The Secretary shall require each 
        qualified educational service provider that receives not less 
        than $100,000 in funds from Military Education Savings Accounts 
        in a school year to post a surety bond, in an amount determined 
        by the Secretary, for such school year.
            ``(2) Retention.--The Secretary shall prescribe the 
        circumstances under which a surety bond under paragraph (1) may 
        be retained by the Secretary.
    ``(p) Refunds.--The Secretary shall establish a process under which 
payments from a Military Education Savings Account to a qualified 
educational service provider may 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 Military Education Savings 
        Account pursuant to this section shall not be considered an 
        agent of the State or the Federal Government solely because the 
        provider received such payment.
            ``(2) Federal or state supervision.--Nothing in this 
        section shall be construed to allow any agency of a State or 
        the Federal Government to exercise control or supervision over 
        any qualified educational service provider.
            ``(3) No imposition of additional requirements.--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 Military Education Savings Account.
            ``(4) Treatment of assistance.--For purposes 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 Savings 
        Account is established and shall not be considered 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 challenges a requirement imposed 
        by the Department 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.--
                    ``(A) In general.--No liability shall arise on the 
                part of an entity described in subparagraph (B) solely 
                because such entity awards, uses, or receives funds 
                from a Military Education Savings Account.
                    ``(B) Entity described.--The entities described in 
                this subparagraph are the following:
                            ``(i) The Department.
                            ``(ii) An entity that enters into a 
                        contract with the Secretary pursuant to 
                        subsection (n).
            ``(3) Intervention.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a parent of an eligible military 
                dependant 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 
                Constitution of the United States.
                    ``(B) Exception.--For purposes of judicial 
                administration, a court may--
                            ``(i) limit the number of parents allowed 
                        to intervene in a proceeding under subparagraph 
                        (A); or
                            ``(ii) require all parents who have 
                        intervened in a proceeding under subparagraph 
                        (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 defendant 
                        in the proceeding.
    ``(s) Administrative Expenses.--The Secretary may use not more than 
5 percent of the funds made available to carry out this section for the 
direct costs of administering Military Education Savings Accounts.
    ``(t) Definitions.--In this section:
            ``(1) The term `eligible military dependent child' means a 
        child who--
                    ``(A)(i) has a parent on active duty in the 
                uniformed services (as that term defined in section 101 
                of title 37, United States Code, except that such term 
                does not include an officer in the National Guard who 
                has been activated); and
                    ``(ii) resides within the boundaries of a heavily 
                impacted local educational agency; or
                    ``(B)(i) has a parent on active duty in the 
                uniformed services (as that term defined in section 101 
                of title 37, United States Code, except that such term 
                does not include an officer in the National Guard who 
                has been activated); and
                    ``(ii) resides within the boundaries of a local 
                educational agency eligible to receive a basic support 
                payment under section 7003(b)(1) that is not a heavily 
                impacted local educational agency.
            ``(2) The term `heavily impacted local educational agency' 
        means a local educational agency eligible to receive a payment 
        under section 7003(b)(2).
            ``(3) The term `institution of higher education' has the 
        meaning given the term in section 102 of the Higher Education 
        Act of 1965.
            ``(4) The term `qualified educational service provider' 
        means an entity or person that provides educational services 
        for which funds may be expended under subsection (e), 
        including--
                    ``(A) a private school;
                    ``(B) a private online learning program or course;
                    ``(C) an institution of higher education, including 
                a State institution of higher education, a junior or 
                community college, or a postsecondary vocational 
                institution;
                    ``(D) a public school;
                    ``(E) a private tutor or entity that operates a 
                tutoring facility;
                    ``(F) a provider of educational materials or 
                curricula;
                    ``(G) a provider of education-related therapies or 
                services; and
                    ``(H) any other provider of educational services 
                approved by the Secretary.''.

SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

    Section 7014 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 7714) is amended by adding at the end the following:
    ``(f) Military Education Savings Accounts.--
            ``(1) Source of funds and prohibition on new 
        appropriation.--Subject to paragraph (2), section 7012A shall 
        be carried out using funds otherwise appropriated to carry out 
        section 7003 and no new appropriation may be made to carry out 
        such section 7012A.
            ``(2) Prohibition on use of certain funds.--In making funds 
        available to carry out section 7012A under paragraph (1), the 
        Secretary shall ensure that such funds are drawn only from 
        amounts otherwise made available for the education of military 
        dependent children under section 7003 and not from other 
        sources.''.
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