Senate Bill No. 302 (S.B. 302) of the 78th Session of the Nevada Legislature established the education savings account program, pursuant to which grants of money are made to certain parents on behalf of their children to defray the cost of instruction outside the public school system. (Chapter 332, Statutes of Nevada 2015, at page 1824) Following a legal challenge of S.B. 302, the Nevada Supreme Court held in Schwartz v. Lopez, 132 Nev. 732 (2016), that the legislation was valid under Section 2 of Article 11 of the Nevada Constitution, which requires a uniform system of common schools, and under Section 10 of Article 11 of the Nevada Constitution, which prohibits the use of public money for a sectarian purpose. However, the Nevada Supreme Court found that the Legislature did not make an appropriation for the support of the education savings account program and held that the use of any money appropriated for K-12 public education for the education savings account program would violate Sections 2 and 6 of Article 11 of the Nevada Constitution. The Court enjoined the enforcement of section 16 of S.B. 302, which amended NRS 387.124, to require that all money deposited in education savings accounts be subtracted from each school district's quarterly apportionments from the State Distributive School Account. During the 80th Session of the Nevada Legislature, the Legislature repealed the entirety of the provisions governing the education savings account program. (Chapter 537, Statutes of Nevada 2019, at page 3294) Sections 5-26 of this bill reenact the provisions that were repealed during the 80th Session of the Nevada Legislature, with some revisions. In response to the Schwartz decision, section 27 of this bill appropriates money to fund the administration of the education savings account program for the 2023-2025 biennium. Section 15 of this bill: (1) creates the Account for Educational Choice in the State General Fund; (2) requires the Account to be administered by the State Treasurer; and (3) authorizes the State Treasurer to accept gifts and grants for deposit in the Account. Section 15 also: (1) restricts the use of the money in the Account to making grants under the education savings account program and for other purposes authorized by the Legislature; and (2) authorizes any money in the Account for expenditure as a continuing appropriation for such purposes. Sections 18 and 20 of this bill require the reversion of any balance remaining in an education savings account that has been terminated or not renewed to the Account. Section 27 makes an appropriation to the Office of the State Treasurer to administer the education savings account program and to make grants pursuant to the education savings account program. Sections 16 and 28 of this bill limit the number of grants that may be made in a school year to first-time applicants in a school district under the education savings account program. In addition, when more applications are received than money is available, section 20 requires that grants be awarded in the order in which applications are approved. Section 17 of this bill requires the State Treasurer to comply with the State Budget Act in administering the program and, as part of the budgeting process, to estimate the amount of money required for the program for each biennium. Section 18 authorizes the State Treasurer to enter into an agreement to establish an education savings account without a guarantee that money will be deposited in the account. No agreement may obligate the State to make a grant in excess of the amount appropriated or authorized for the education savings account program. Section 18 provides for the establishment of education savings accounts for children who are at least 5 years of age and less than 7 years of age and children of active duty members of the military, regardless of whether those children had been enrolled in a public school in Nevada for not less than 2 consecutive quarters of the school year preceding the establishment of an education savings account for such a child. Sections 8, 10, 11 and 23 of this bill allow the State Treasurer to approve as a participating entity in the education savings account program a person or entity that is located outside Nevada or that meets criteria established by the State Treasurer for participating in the program. Existing law requires each school district to report to the Department of Education, on a quarterly basis, the average daily enrollment of pupils in the school district. The enrollment of pupils in each school district is used to calculate the yearly apportionment that will be provided for each district. Existing law also includes a “hold harmless” provision, pursuant to which a school district with a significant decline in enrollment is protected against a corresponding reduction in apportionments from the State Education Fund. (NRS 387.1223) Section 2 of this bill provides that children in the school district who are receiving grants from the education savings account program are not to be included in the count of pupils in a school district for determining enrollment or for the purpose of computing the yearly apportionment, under most circumstances.

Statutes affected:
As Introduced: 387.045, 387.1223, 388A.471
BDR: 387.045, 387.1223, 388A.471