An Act To Create Education Savings Accounts for Students with Special Needs
Maine Legislature, Session 128, LD 1132
Committee: Education and Cultural Affairs
Sponsors: GERRISH, BRAKEY, FARNSWORTH, SAMPSON, STEWART, KATZ, MASON
Amends: 20-A MRSA §7303, 20-A MRSA §15689

Legislative Document
No. 1132
H.P. 795
House of Representatives, March 23, 2017
An Act To Create Education Savings Accounts for Students with 
Special Needs
Reference to the Committee on Education and Cultural Affairs suggested and ordered 
printed.
ROBERT B. HUNT
Clerk
Presented by Representative GERRISH of Lebanon.
Cosponsored by Senator BRAKEY of Androscoggin and
Representatives: FARNSWORTH of Portland, SAMPSON of Alfred, STEWART of Presque 
Isle, Senators: KATZ of Kennebec, MASON of Androscoggin.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  20-A MRSA §7303 is enacted to read: 
§7303.  Education savings accounts 
The department shall, in accordance with this section, establish education savings 
accounts, referred to in this section as "savings accounts," for children with disabilities.  
Savings accounts may be used by the parents or legal guardians of such children for 
educational purposes in accordance with this section. 
1.  Establish savings accounts.  The department by rule shall establish an application 
process for a parent or legal guardian of a child with disabilities to request the 
establishment of a savings account.  An application requesting establishment of a savings 
account must be submitted to the department no later than January 1st preceding the 
school year in which the account will be used.  The department may establish a savings 
account only upon a demonstration by the parent or legal guardian that the child has been 
enrolled in a public school for at least one school year and that an individualized 
education program has been determined for the child. 
2.  Renewal, rollover and closure.  The department may annually renew a savings 
account and deposit funds into the account in accordance with subsection 3 if, in 
accordance with rules adopted by the department, the parent or legal guardian 
demonstrates that the child continues to have and follow an individualized education 
program and has completed a national norm-referenced achievement test.  Unspent funds 
in a savings account that is renewed remain in the savings account and may be used in 
accordance with subsection 4, except that no more than 75% of the funds deposited in any 
year may be carried forward.  Any unspent amount that is in excess of 75% of the funds 
deposited in that year must be transferred at the end of the fiscal year to the State 
Controller for handling in accordance with subsection 5.  If the requirements of this 
subsection are not met, the department shall close the savings account and transfer all 
funds in the savings account to the State Controller, who shall handle the funds as 
provided in subsection 5. 
3.  Maintenance of fund for postsecondary education.  After a child for whom a 
savings account has been created graduates from high school, no further funds may be 
deposited in the account, but to the extent there are funds remaining in the account, the 
fund, at the request of the child or the parent or legal guardian of the child, must, in 
accordance with rules adopted by the department, remain open and available to help fund 
a postsecondary course of education for the child.  If the child does not enroll in such a 
course within 4 years after graduating, the department shall close the savings account and 
transfer all funds in the savings account to the State Controller, who shall handle the 
funds as provided in subsection 5. 
4.  Funding and oversight.  The department shall administer and oversee savings 
accounts as follows. 
A.  Each year the department shall deposit into each active savings account 90% of 
the state subsidy that is attributable to the child for whom the savings account is 
established and that would otherwise have been provided to the child's school 
administrative unit under chapter 606-B.  The department shall also direct that school 
administrative unit to deposit into the savings account 90% of the school 
administrative unit's required contribution to the unit's total cost of education 
attributable to that child.  The department shall calculate these amounts and shall 
allocate the state funds to the extent possible in a manner consistent with the 
schedules applicable to state subsidy payments pursuant to section 15689-B. 
B.  The department and the State Controller may each separately receive up to 1/5 of 
that 10% of the state subsidy attributable to a child for whom a savings account is 
established that is not deposited in the savings account.  Funds received under this 
paragraph may be used to pay the costs of administering this section. 
C.  The parent or legal guardian of a child may expend funds in a savings account 
only through the use of a debit card and may use funds in the account to pay for only 
the following educational expenses: 
(1)  Tuition and fees at a private primary or secondary school; 
(2)  Textbooks; 
(3)  Educational therapies; 
(4)  Tutoring by a certified teacher or education technician II or III; 
(5)  Online classes; 
(6)  Test fees; 
(7)  Services provided by a public school, including access to or enrollment in 
extracurricular activities or individual classes; 
(8)  Reimbursement of fees for transportation related to the child's education, for 
which receipts must be provided to the department, up to $500 in any one year; 
(9)  Consumable materials relating to educational activities, up to $100 in any 
one year; and 
(10)  Tuition and fees at a university or vocational school recognized by the 
department in accordance with rules adopted by the department or accredited by a 
regional accrediting agency approved or recognized by the United States 
Department of Education. 
A parent or legal guardian of a child may not use funds in a savings account to pay in 
cash for any educational expense under this paragraph. 
D.  On a quarterly basis the department shall review all expenditures from savings 
accounts to ensure that they are in accordance with the requirements of this 
subsection and rules adopted under this section.  If at any time the department finds 
that expenditures from a savings account are not in accordance with the requirements 
of this subsection or rules adopted under this section, the department shall notify the 
parent or legal guardian of the child of the apparent misuse of funds and shall freeze 
the account so that no further expenditures may be made.  If, after an opportunity for 
hearing, the department determines that there was no misuse of funds, it shall 
unfreeze the account.  If the department determined there was in fact a misuse of 
funds, the department shall direct the parent or legal guardian to repay within 30 days 
to the State the amount of misused funds.  All repaid funds must be transferred to the 
State Controller for handling in accordance with subsection 5.  If the parent or legal 
guardian does not repay the full amount of misused funds or file an appeal of the 
department’s decision within the 30 days, the department shall close the savings 
account and transfer all funds in the savings account to the State Controller for 
handling in accordance with subsection 5.  A decision by the department under this 
paragraph is a final agency action that may be appealed to the Superior Court by a 
parent or legal guardian within 30 days of the decision in accordance with Maine 
Rules of Civil Procedure, Rule 80C. 
5.  Funds returned.  Any funds transferred out of or removed from a savings account 
or paid to the State by the parent or legal guardian of a child under this section and 
received by the State Controller must be handled by the State Controller in accordance 
with this subsection.  The State Controller shall divide the funds in the same proportion as 
the funds are deposited in the savings account from the State and the school 
administrative unit pursuant to subsection 4 and return the portion attributable to the 
school administrative unit to that unit and transfer the remainder to the unappropriated 
surplus of the General Fund. 
6.  Rules.  The department shall adopt rules necessary to implement this section.  
Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
Sec. 2.  20-A MRSA §15689, sub-§14 is enacted to read: 
14.  Adjustment for education savings accounts.  The commissioner shall reduce 
the state share of the total allocation to a school administrative unit in any year in which 
one or more education savings accounts under section 7303 are established for children 
within that school administrative unit.  The amount of the reduction must equal the total 
state subsidy that is attributable to all children in that school administrative unit for whom 
education savings accounts have been established, as determined by the department 
pursuant to section 7303, subsection 3, paragraph A. 
SUMMARY 
This bill directs the Department of Education to establish education savings accounts 
for children with disabilities that may be used by the parents or legal guardians of such 
children for certain educational purposes.  The funding for these accounts would come 
from shifting 90% of the essential programs and services funding that would otherwise be 
provided by the State and the school administrative unit for the child into the savings 
account.  The bill provides mechanisms for approval of educational expenditures and 
review of spending from the accounts.