An Act to establish education savings accounts.

Be it enacted by the Legislature of the State of South Dakota:

Section 1. That a NEW SECTION be added to a NEW CHAPTER in title 13:

Terms used in this chapter mean:

(1) "Curriculum," a course of study for a specific content area or grade level, which is approved by the Department of Education;

(2) "Eligible student," a child who:

(a) Has not reached the age of nineteen prior to July first of the current school year;

(b) Is, or during the applicable school year will be, in any educational grade level from kindergarten through twelve;

(c) Is a United States citizen or an alien who has permanent resident status;

(d) Is a resident of this state; and

(e) Is not and will not, during the applicable school year, be enrolled full-time in a school district in this state;

(3) "Microschool," an educational entity that:

(a) Is registered with the secretary of state;

(b) Is located within this state;

(c) Provides educational services to students who receive alternative instruction in accordance with chapter 13-27; and

(d) Requires enrollment and the payment of tuition;

(4) "Parent," a biological or adoptive parent, stepparent, legal guardian, or custodian of an eligible student; and

(5) "Qualifying school,":

(a) An accredited nonpublic school located in this state;

(b) A microschool;

(c) A provider that offers virtual coursework approved by the Department of Education, but not on behalf of a school district; or

(d) A provider of alternative instruction, in accordance with   13-27-3.

Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 13:

Upon submission of an initial application by a parent, and approval by the Department of Education, the department shall establish and provide the parent access to an education savings account. Moneys in the account may be expended only for the following:

(1) Tuition and fees required for:

(a) Enrollment at an accredited nonpublic school located within this state;

(b) Enrollment at a microschool;

(c) Virtual coursework approved by the department and offered by a provider, but not on behalf of a school district;

(2) The purchase of curricula and associated instructional materials or supplies;

(3) The purchase of educationally related technological devices and associated hardware and services; and

(4) The fee for any standardized college or university entrance examination approved by the department.

Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 13:

The Department of Education shall consider each initial and renewal application in the order it is received.

The department may not approve more applications than those for which moneys have been appropriated.

For the second and any subsequent year of continuous participation, the parent shall submit a renewal application to the department.

Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 13:

If the number of applications exceeds the moneys that have been appropriated for the purposes of this Act, the Department of Education shall prioritize the approval of the applications as follows:

(1) Renewal applications;

(2) Applications in which the household income is less than one hundred and fifty percent of eligibility for reduced price meals through the National School Lunch Program, as defined in 42 U.S.C.   1751 et seq. (January 1, 2025);

(3) Applications in which the household income is at least one hundred and fifty percent but no greater than two hundred percent of eligibility for reduced price meals through the National School Lunch Program, as defined in 42 U.S.C.   1751 et seq. (January 1, 2025); and

(4) Any remaining applications.

Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 13:

Upon approval of an initial or a renewal application, the department shall deposit into an education savings account an amount equal to forty percent of the per student equivalent, as defined in   13-13-10.1. The number of students eligible to receive an education savings account is determined, each year, in accordance with the amount appropriated for that purpose.

If an eligible student is enrolled in a school district for a portion of the instructional day, the department must pro rate the amount to be deposited.

Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 13:

Any moneys that remain unexpended, in an account, as of each June thirtieth, revert to the state.

Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 13:

The Department of Education shall conduct random compliance audits of education savings accounts and shall refer any cases of suspected fraud to the attorney general for an investigation and if applicable, a civil action for the recovery of moneys.

Section 8. That a NEW S