Title: Child Safety Accounts Act
Policy area: Education

Summary:
Child Safety Accounts Act
This bill creates child safety accounts (CSAs) in the District of Columbia for students experiencing safety issues at school (e.g., incidents of bullying, sexual misconduct, fighting or physical assaults on the student, gang activity or drug usage, or food safety needs). Once the Office of School Security determines that an issue exists, parents are given the opportunity to enroll in CSAs for tuition and fees at qualified schools, tutoring services, textbooks, transportation costs, therapy costs to cope with safety incidents, and college courses.
The bill sets forth procedures for scholarship granting organizations to accept donations for CSAs and pay out scholarships for students.
CSA donors must be taxpayers, individuals, or corporations who
Finally, this bill establishes a District program to provide tax credits against income tax imposed by the District on (1) certified donors to CSAs, and (2) parents for eligible expenses above the amount provided by the CSA.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2538 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 2538

 To create child safety accounts in the District of Columbia, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 7, 2019

  Mr. Banks introduced the following bill; which was referred to the 
                   Committee on Oversight and Reform

_______________________________________________________________________

                                 A BILL


 
 To create child safety accounts in the District of Columbia, 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 ``Child Safety Accounts Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) The term ``certified donation'' means a donation 
        certified by the finance authority as eligible for a tax 
        credit.
            (2) The term ``child safety account'' means an account 
        created and managed by the treasurer of the District of 
        Columbia for each qualified student who has experienced a 
        safety issue and opts into a child safety account.
            (3) The term ``Department'' means the Office of the State 
        Superintendent of Education of the District of Columbia.
            (4) The term ``elementary school'' means an institutional 
        day or residential school (including a school with a virtual 
        presence), including a public elementary charter school, that 
        provides elementary education, as determined under District of 
        Columbia law.
            (5) The term ``educational scholarships'' means a 
        scholarship provided to a qualifying student to top off the 
        education of their choice.
            (6) The term ``eligible expenses'' means any education 
        expense necessary for a qualified student, including--
                    (A) tuition or courses at a qualified school;
                    (B) textbooks;
                    (C) tutoring by an authorized provider;
                    (D) transportation to and from a qualified school;
                    (E) therapy necessary to cope with the trauma of a 
                safety incident;
                    (F) college courses; and
                    (G) other required education materials.
            (7) The term ``finance authority'' means the Chief 
        Financial Officer of the District of Columbia or an individual 
        authorized authority designated by the Mayor of the District of 
        Columbia to manage the child safety accounts.
            (8) The term ``fraud'' means any child safety account funds 
        spent on items that does not qualify as an eligible expense, or 
        any other fraud related to the use of such accounts (including 
        falsifying information related to a safety incident or District 
        of Columbia residence for the purpose of receiving such an 
        account).
            (9) The term ``parent'' has the meaning given that term in 
        section 8101 of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 7801).
            (10) The term ``poverty line'' means the poverty line (as 
        defined in section 673(2) of the Community Services Block Grant 
        Act (42 U.S.C. 9902(2)) applicable to a family of the size 
        involved.
            (11) The term ``qualified donor'' means a taxpayer, 
        individual, or corporation, who--
                    (A) files a District of Columbia income tax return;
                    (B) cannot be claimed as a dependent on another 
                taxpayer return;
                    (C) has donated to a scholarship granting 
                organization; and
                    (D) has been certified by the finance authority to 
                make the donation specified.
            (12) The term ``qualified school'' means an elementary 
        school or secondary school in the District of Columbia that--
                    (A) ensures employees are permitted to work in a 
                school by District of Columbia law and who are not a 
                threat to student safety;
                    (B) ensures financial stability with yearly 
                independent financial audits provided to the finance 
                authority; and
                    (C) ensures funds from child safety accounts are 
                spent appropriately for the education of students.
            (13) The term ``qualified student'' means any student who--
                    (A) is a resident of the District of Columbia;
                    (B) is enrolled in a qualified school; and
                    (C) has attended a qualified school for not less 
                than 100 days.
            (14) The term ``safety issue'' means a reported incident 
        of--
                    (A) bullying (physical, verbal, cyber);
                    (B) sexual harassment;
                    (C) sexual abuse;
                    (D) sexual misconduct;
                    (E) gang activity;
                    (F) fights;
                    (G) suicide attempts or threats;
                    (H) shootings;
                    (I) drug use;
                    (J) special safety needs;
                    (K) food safety needs;
                    (L) health related safety issues;
                    (M) act of violence against the qualified student; 
                or
                    (N) other safety concerns and fears as determined 
                by a qualified student and parent.
            (15) The term ``scholarship granting organization'' means 
        an organization authorized by the finance authority to accept 
        funds and use such funds to provide scholarships to qualified 
        students.
            (16) The term ``secondary school'' means an institutional 
        day or residential school (including a school with a virtual 
        presence), including a public secondary charter school, that 
        provides secondary education, as determined under District of 
        Columbia law, except that the term does not include any 
        education beyond grade 12.
            (17) The term ``top off'' means the payment of tuition or 
        other eligible expense above the amount provided with the child 
        safety account.
            (18) The term ``uncertified donation'' means a donation 
        that is not eligible for a tax credit because the amount of 
        such donation exceeds the amount eligible for such tax credit.

SEC. 3. CREATION OF CSA.

    (a) Report.--Upon receipt of a report of an issue of school safety 
at a qualified school, such school shall--
            (1) submit such report to the Office of School Security of 
        the District of Columbia; and
            (2) provide a copy of the report to each family and 
        educator involved.
    (b) Investigation.--The Office of School Security shall complete an 
investigation of the report not later than 15 days after receiving such 
report to determine whether the report has merit.
    (c) Parental Notice.--The school shall inform the parents of the 
student on whose behalf the report was submitted--
            (1) whether the investigation has determined a school 
        safety issue exists at the school; and
            (2) in a case in which the investigation determines that 
        such a safety issue exists, that the parents have an 
        opportunity to enroll in a child safety account.

SEC. 4. DUTIES OF THE OFFICE OF THE STATE SUPERINTENDENT OF EDUCATION 
              OF THE DISTRICT OF COLUMBIA.

    The Office of the State Superintendent of Education of the District 
of Columbia shall--
            (1) carry out random quarterly audits of child safety 
        accounts to check for fraud; and
            (2) seek to enter into a contract with a private entity 
        that shall administer the child safety account program under 
        this Act, including--
                    (A) registering vendors that provide the services 
                eligible to be purchased using child safety accounts, 
                including the registering of private schools eligible 
                to participate; and
                    (B) providing verification of purchases by setting 
                up an online platform with registered vendors allowing 
                for instant authorization of such purchases.

SEC. 5. ADMINISTRATION OF PROGRAM.

    (a) CSA Account Creation and Funding.--Upon a parent signing an 
agreement on the proper usage and responsibilities of a child safety 
account, the private entity that has entered into a contract under 
section 4(2) shall--
            (1) create a child safety account for the student of the 
        parent--
                    (A) which the student--
                            (i) is eligible to automatically renew each 
                        year until the date on which the student--
                                    (I) graduates from a secondary 
                                school;
                                    (II) is no longer a qualified 
                                student; or
                                    (III) has turned 18 years of age; 
                                and
                            (ii) in a case in which funds remain in the 
                        child safety account after the period described 
                        in clause (i), may use for postsecondary 
                        education; and
            (2) in a case in which funds remain after being used in 
        accordance with paragraph (1)(A)(ii), ensure that the funds 
        from which will revert back to the District of Columbia;
            (3) ensure that the Department will deduct the amount 
        provided to such child safety account for each year of the 
        period described in paragraph (1)(A)(i) in an amount equal to 
        the average yearly per pupil cost for qualified school of the 
        student, except that--
                    (A) the amount shall be prorated based on the 
                number of days remaining in the school year if the 
                safety incident occurs after the school year has 
                already started; and
                    (B) in the case of a student with an individual 
                education plan or an accommodation plan issued under 
                section 504 of the Rehabilitation Act of 1973, such 
                amount shall be increased to equal the per pupil 
                expenditure for such a student;
            (4) notify the Department and the qualified school in which 
        the student was previously enrolled of the account creation, 
        including the amount deposited into the account; and
            (5) provide the parent with a letter of account creation 
        until a debit card can be issued, which shall be accepted at a 
        qualified school until such time payment can be made with the 
        use of a debit card.
    (b) Funds for the Program.--
            (1) Private entity requirements.--Not later than August 1 
        of each year, the private entity shall submit to the finance 
        authority the amount of funds necessary for child safety 
        accounts. In determining the amount of funds to request--
                    (A) for each family living at not more than 185 
                percent of the poverty line, the amount of funds for a 
                child safety account shall be an amount equal to 90 
                percent of the uniform per student amount used by the 
                District of Columbia to determine the amount of annual 
                payments to District of Columbia public schools with 
                respect to the academic year involved;
                    (B) for each family living at or greater than 186 
                percent of the poverty line, but not greater than 300 
                percent of the poverty line, the amount of funds for a 
                child safety account shall be an amount equal to 85 
                percent of the uniform per student amount used by the 
                District of Columbia to determine the amount of annual 
                payments to District of Columbia public schools with 
                respect to the academic year involved; and
                    (C) for each family living at greater than 300 
                percent of the poverty line, the amount of funds for a 
                child safety account shall be an amount equal to 80 
                percent of the uniform per student amount used by the 
                District of Columbia to determine the amount of annual 
                payments to District of Columbia public schools with 
                respect to the academic year involved.
            (2) Finance authority requirements.--The finance authority 
        shall transfer to the private entity the amount requested under 
        paragraph (1) from any funds or revenues available to the 
        District of Columbia public schools for purposes of the program 
        under this Act.
            (3) Administrative purposes.--The private entity shall use 
        not more than 5 percent of the funds received from the finance 
        authority under paragraph (2) for administrative purposes.

SEC. 6. FRAUD.

    (a) In General.--Not later than 60 days after the date of enactment 
of this Act, the finance authority will establish a committee to meet 
on a quarterly basis to review any allegations of fraud found 
discovered as a result of the audits of child safety accounts under 
section 4, and which shall be composed of the following members:
            (1) An employee of each type of qualified school.
            (2) A home education expert.
            (3) A member of the finance authority staff.
    (b) First Meeting.--The commission will have its first meeting 
following the first quarterly audit carried out by the Office of the 
State Superintendent of Education of the District of Columbia.
    (c) Simple Mistake.--If a disputed expenditure is determined to be 
a simple mistake, the parent will be required to repay the expense.
    (d) Expenditure Fraud.--If the finance authority determines that 
the disputed expenditure was not a simple mistake on the part of the 
parent--
            (1) in a case in which the amount of such expenditure may 
        lead to a conviction of misdemeanor fraud under District of 
        Columbia law--
                    (A) for a parent with no previous disputed 
                expenditures in such an amount that was determined to 
                be fraud by the finance authority, the parent shall be 
                required to repay the disputed amount, the child safety 
                account shall be frozen until such time as the 
                repayment is made, and upon repayment, the parent may 
                resume using the child safety account; and
                    (B) for a parent with a previous expenditure in 
                such an amount that was determined to be fraud by the 
                finance authority, the child safety account shall be 
                frozen and the parent shall not be eligible for any 
                child safety accounts in the District of Columbia on or 
                after such determination; and
            (2) in a case in which the amount of such expenditure may 
        lead to a felony conviction under District of Columbia law, the 
        child safety account involved shall be frozen, the case shall 
        be remanded to the Attorney General of the District of 
        Columbia, and the parent shall not be eligible for any child 
        safety accounts in the District of Columbia on or after such 
        determination.
    (e) Safety Incident or Falsifying Residency Fraud.--In a case where 
the parent is found to have falsified the safety incident, or falsified 
residency in the District of Columbia, leading to creation of the 
account and the amount of expenditures resulting from the falsified 
account may lead to a conviction of misdemeanor fraud under District of 
Columbia law, the child safety account shall be frozen, and the parent 
shall not be eligible for any child safety accounts in the District of 
Columbia on or after such determination, and the Attorney General of 
the District of Columbia shall be notified.

SEC. 7. SCHOLARSHIP GRANTING ORGANIZATIONS.

    (a) Applications.--To be authorized as a scholarship granting 
organization to accept donations and pay out scholarships to students 
under this section, an organization shall submit an application to the 
finance authority at such time, in such manner, and containing such 
information as the authority may require, which shall include an 
assurance that the organization--
            (1) is an organization described in section 501(c)(3) of 
        the Internal Revenue Code of 1986; and
            (2) will submit an independent yearly audit to the finance 
        authority not later than October 1 of each year.
    (b) Donation Process.--Not later than 60 days after the date of 
enactment of this Act, the finance authority shall create a process 
to--
            (1) accept donation pledges and provide certificates to the 
        donor and the scholarship granting organization, and to ensure 
        donors are handled in an equal manner across all donors;
            (2) for the purpose of ensuring that a donation does not 
        exceed any limits imposed on donations by the finance 
        authority, ensure certificates of donor-allowed amounts will be 
        provided to the donor before the amounts are given to the 
        scholarship granting organization;
            (3) ensure that no donation is directed to a specific 
        student or school, and authorize donations for a specific type 
        of qualified school (including a private or religious school), 
        or for students affected by a specific type of safety issue;
            (4) create a process for certifying donation amounts for 
        the topping off process;
            (5) create a receipt to be used by the scholarship granting 
        organization to provide to the donor that indicates the amount 
        of the certified donation amount for purposes of a tax credit; 
        and
            (6) in a case in which the total donations from all donors 
        for a tax year exceed the allowable tax credits, pro-rate the 
        certified donation amounts across such donors for such tax 
        year, and ensure that any amount over such reduced amounts 
        would be uncertified and not eligible for a tax credit.
    (c) SGO Requirements.--Each scholarship granting organization shall 
carry out the following:
            (1) Certified donations.--Accepting certified donations 
        from individuals and corporations, providing qualified donors 
        of such donations with a finance authority receipt, and 
        certifying to the finance authority all revenue earned from 
        interest and investments on such donations are used for 
        scholarships described in paragraph (3).
            (2) Noncertified donations.--Creating a process for 
        handling noncertified donations, which includes--
                    (A) mailing a form to the donor, to--
                            (i) determine whether the donor would like 
                        a refund of the noncertified portion of the 
                        donation;
                            (ii) determine whether the donor would like 
                        the noncertified portion for additional 
                        scholarships;
                            (iii) notify the donor that such form shall 
                        be returned within 15 business days if the 
                        donor would like the noncertified donations to 
                        be used for scholarships; and
                            (iv) notify the donor that if the 
                        noncertified portion is used for scholarships, 
                        these funds cannot be used as a tax credit, and 
                        the donor would only be eligible to use them as 
                        a charitable donation under Federal and State 
                        laws;
                    (B) keeping for 5 years returned forms for auditing 
                purposes;
                    (C) certifying to the finance authority all revenue 
                earned from interest and investments on such donations 
                are used for scholarships; and
                    (D) ensuring noncertified donations are used for 
                scholarships and not for administration purposes.
            (3) Scholarships for students.--
                    (A) Applications.--Accepting applications from 
                qualified students who have received a child safety 
                account and are seeking a scholarship to top off their 
                eligible expenses not covered by such account.
                    (B) Payment of scholarships.--Ensuring that each 
                scholarship is--
                            (i) awarded not later than March 1 of each 
                        year for the next school year;
                            (ii) has a payment schedule so that 
                        scholarship payments are provided to the parent 
                        of the student or to the qualified school in 
                        which the student is enrolled;
                            (iii) not a multiyear scholarship; and
                            (iv) portable throughout the school year if 
                        the student changes to another qualified 
                        school, and may be prorated according to the 
                        time frame left in the school year.
                    (C) Submission of data.--Submitting, on an annual 
                basis, the following data (which contains no 
                identifiable student information) to the finance 
                authority:
                            (i) Amount of scholarship provided.
                            (ii) Data on type of school.
                            (iii) Data on the safety issue.
    (d) Audits.--The finance authority will review the scholarship 
granting organization financial audits and terminate the organization 
if proper guidelines are not followed or remedied in a timely manner.

SEC. 8. DC TAX CREDITS.

    (a) DC Tax Credit for Certified Donations.--There is established in 
the District of Columbia a program to provide tax credits against 
income taxes imposed by the District of Columbia for certified 
donations described in section 5. Such program shall be administered by 
the Mayor consistent with the following:
            (1) The initial amount of the tax credit donations in the 
        first year will be $100 million dollars.
            (2) Donors will be allowed to take a tax credit of 100 
        percent of their certified donation up to their tax liability. 
        Any excess credit may be rolled over for up to 5 years.
            (3) Each year tax credit donations reach 90 percent of the 
        yearly limit, the limit will be increased by 25 percent the 
        following year.
            (4) A taxpayer may donate in excess of the certified amount 
        to the scholarship granting organization. This excess cannot be 
        used in tax credit calculations, but may be utilized as a 
        normal charitable donation on the taxpayer's income tax return.
    (b) DC Tax Credit for Certain Education Expenses.--There is 
established in the District of Columbia a program to provide tax 
credits against income taxes imposed by the District of Columbia for 
eligible expenses above the amount provided under a child safety 
account. Such program shall be administered by the Mayor consistent 
with the following:
            (1) Parents will be allowed to top off tuition or other 
        eligible expenses.
            (2) The parent may claim these expenses as a personal 
        income tax credit against income taxes imposed by the District 
        of Columbia.
            (3) This tax credit will not be limited by the parent tax 
        liability so as to ensure parents with lower incomes to better 
        afford to move their student to a safe educational environment.
                                 <all>