Child Safety Accounts Act

Bill: 116-hr-2538
Sponsor: full_name: Rep. Banks, Jim [R-IN-3]
Introduced: 2019-05-07
Policy area: Education
Subjects: Accounting and auditing

Child health

Child safety and welfare

Civil actions and liability

Crimes against children

District of Columbia

Drug, alcohol, tobacco use

Education programs funding

Educational facilities and institutions

Elementary and secondary education

Fraud offenses and financial crimes

Government studies and investigations

Income tax credits

Juvenile crime and gang violence

Public contracts and procurement

Sex offenses

Social work, volunteer service, charitable organizations

State and local finance

State and local government operations

State and local taxation

Student aid and college costs

Tax administration and collection, taxpayers

Tax-exempt organizations

Violent crime
Latest action: action_date: 2019-05-07
text: Referred to the House Committee on Oversight and Reform.

Summaries:
action_date: 2019-05-07
action_desc: Introduced in House
text: <p><strong>Child Safety Accounts Act</strong> <p>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. <p>The bill sets forth procedures for scholarship granting organizations to accept donations for CSAs and pay out scholarships for students.</p> <p>CSA donors must be taxpayers, individuals, or corporations who</p> <ul> <li> file District income tax returns,</li> <li>cannot be claimed as a dependent on another taxpayer return,</li> <li>has donated to a scholarship granting organization, and</li> <li>has been certified by the Chief Financial Officer of the District to make the donation.</li> </ul> <p>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.</p>

tv_txt: I 116th CONGRESS 1st Session H. R. 2538 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.

1. Short title This Act may be cited as the Child Safety Accounts Act . 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. 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. 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. 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. 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. 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. 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.