An Act To Create Education Savings Accounts for Maine Students
Maine Legislature, Session 128, LD 1131
Committee: Education and Cultural Affairs
Sponsors: HANLEY, THIBODEAU, CRAIG, GINZLER, LYFORD, O'CONNOR, SIMMONS, STROM, CYRWAY
Amends: 20-A MRSA §7303, 20-A MRSA §15689

Legislative Document
No. 1131
H.P. 794
House of Representatives, March 23, 2017
An Act To Create Education Savings Accounts for Maine Students
Reference to the Committee on Education and Cultural Affairs suggested and ordered 
printed.
ROBERT B. HUNT
Clerk
Presented by Representative HANLEY of Pittston.
Cosponsored by President THIBODEAU of Waldo and
Representatives: CRAIG of Brewer, GINZLER of Bridgton, LYFORD of Eddington, 
O'CONNOR of Berwick, SIMMONS of Waldoboro, STROM of Pittsfield, Senator: CYRWAY 
of Kennebec.
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 Treasurer of State, in consultation with the department, shall, in accordance with 
this section, establish education savings accounts, referred to in this section as "savings 
accounts."  A savings account may be used by the parent or legal guardian of a child for 
educational purposes in accordance with subsection 3 for one school year and may be 
renewed for such use for subsequent years in accordance with subsection 2. 
1.  Establish savings accounts.  The Treasurer of State shall establish savings 
accounts as follows. 
A.  The Treasurer of State by rule shall establish an application process for a parent 
or legal guardian of a child to request the establishment of a savings account.  The 
Treasurer of State: 
(1)  May establish a savings account for a child only if the child will be receiving 
education provided by one or more educational entities certified under subsection 
4; 
(2)  May establish a savings account for a child who will receive some education 
through a public school as long as the majority of the child's education is being 
provided by one or more educational entities certified under subsection 4; and 
(3)  May not establish a savings account for a child who will be home-schooled 
or who will be enrolled full-time in a public school. 
B.  The Treasurer of State may authorize private financial management entities to 
manage savings accounts established under this section and may establish reasonable 
fees for services that a private financial management entity may charge to a savings 
account. 
2.  Renewal, rollover and closure.  The Treasurer of State may annually renew a 
savings account and deposit funds into the savings account in accordance with subsection 
if the parent or legal guardian at whose request a savings account was established 
applies for a renewal and the Treasurer of State finds that the requirements of this section 
and rules adopted under this section have been met. 
A.  Unspent funds in a savings account that is renewed remain in the savings account 
and may be used in accordance with subsection 3. 
B.  If a parent or legal guardian at whose request a savings account was established 
does not apply for a renewal or the Treasurer of State finds that the requirements of 
this section or rules adopted under this section have not been met, the Treasurer of 
State shall close the savings account and provide all funds in the savings account to 
the State Controller who shall transfer them to the unappropriated surplus of the 
General Fund. 
3.  Funding and oversight.  The Treasurer of State shall oversee savings accounts as 
follows. 
A.  Each year the Treasurer of State shall direct the department to deposit into each 
active savings account 90% of the state subsidy attributable to the child for whom the 
savings account is established 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.  New 
funds may not be deposited in a savings account after the child graduates from high 
school. 
B.  The Treasurer of State may receive for and use to pay the costs of administering 
this section up to 3% of the state subsidy attributable to the child for whom a savings 
account is established. 
C.  The Treasurer of State shall establish and administer a savings account in a 
manner that allows the parent or legal guardian of the child for whom the savings 
account was established to expend funds in the account only for the following 
educational expenses, and the parent or legal guardian may use funds in the savings 
account only to pay for these educational expenses: 
(1)  The following costs of education provided by one or more educational 
entities certified under subsection 4: 
(a)  Tuition and fees charged by the educational entity, including charges for 
tutoring services; and 
(b)  The costs of textbooks required as part of the instruction by the 
educational entity; 
(2)  Transportation costs, for which receipts must be provided to the Treasurer of 
State, for travel to and from any educational entities certified under subsection 4, 
up to $750 in any school year; 
(3)  Test fees for a national achievement examination, advanced placement or 
similar examination required for admission to a college or university; and 
(4)  Costs of higher education, if the child graduates from high school with an 
active savings account and there are funds remaining in the savings account. 
D.  The Treasurer of State 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 Treasurer of State finds that 
expenditures from a savings account are not in accordance with the requirements of 
this subsection or rules adopted under this section, the Treasurer of State shall notify 
the parent or legal guardian of the child for whom the savings account was 
established and if, after an opportunity for hearing, the department determines that 
there was in fact a misuse of the funds, the Treasurer of State shall close the savings 
account and provide all funds in the savings account to the State Controller, who shall 
transfer them to the unappropriated surplus of the General Fund. 
4.  Certification of educational entities.  The department shall adopt rules providing 
for the certification of private educational entities that may receive funds from a savings 
account pursuant to subsection 3, paragraph C.  The rules must provide for the 
certification of any of the following that the department determines provides adequate 
educational services to children: 
A.  A private school; 
B.  An entity, other than a school administrative unit or the State, providing a 
program of distance learning; and 
C.  A person or entity providing educational tutoring who is accredited by a 
recognized accrediting organization. 
Rules adopted by the department under this subsection must provide for appropriate 
periodic review of educational entities certified under this subsection to ensure the 
adequacy of educational services provided by the entities.  The rules must provide for the 
decertification of any entity the department finds not to be providing adequate 
educational services.  The rules must also require the school administrative unit in which 
a child resides to provide any appropriate and necessary academic records to a certified 
educational entity at the request of the child's parent or legal guardian. 
Rules adopted by the department pursuant to this subsection are routine technical rules as 
defined in Title 5, chapter 375, subchapter 2-A. 
5.  Rules.  The Treasurer of State shall adopt rules necessary to implement this 
section.  Rules adopted by the Treasurer of State pursuant to this section 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 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 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 savings accounts 
have been established, as determined by the department pursuant to section 7303, 
subsection 3, paragraph A. 
SUMMARY 
This bill directs the Treasurer of State to establish education savings accounts that 
may be used by the parents or legal guardians of children to pay for the education of their 
children outside of the public school system.  The funding for these savings 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 each child into a 
savings account.  The bill specifies what educational expenditures are permitted and 
provides for review of spending from the accounts.