SB 130-FN - AS INTRODUCED
2021 SESSION
21-0923
06/04
SENATE BILL 130-FN
AN ACT relative to education freedom accounts.
SPONSORS: Sen. Bradley, Dist 3; Sen. Gray, Dist 6; Sen. Daniels, Dist 11; Sen. Ward, Dist 8;
Sen. Carson, Dist 14; Sen. Gannon, Dist 23; Sen. Giuda, Dist 2; Sen. Morse, Dist
22; Rep. Cordelli, Carr. 4; Rep. Ladd, Graf. 4
COMMITTEE: Education
─────────────────────────────────────────────────────────────────
ANALYSIS
This bill establishes the education freedom account program which permits the treasurer to
transfer adequate education grants, plus any differentiated aid that would have been provided to a
public school, to a scholarship organization for disbursement to parents to be used for certain
educational purposes.
---------------------------------------------------------------------------
Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
 SB 130-FN - AS INTRODUCED
21-0923
06/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty One
AN ACT relative to education freedom accounts.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 1 Title. This act shall be known as the “Education Freedom Account Act” or “EFA Act.” The
2 program created by it shall be known as the “Education Freedom Account Program” or “EFA
3 Program.”
4 2 New Chapter; Education Freedom Accounts. Amend RSA by inserting after chapter 194-D the
5 following new chapter:
6 CHAPTER 194-E
7 EDUCATION FREEDOM ACCOUNTS
8 194-E:1 Definitions. In this chapter:
9 I. “Adequate education grant” means the grant calculated under RSA 198:41.
10 II. “Curriculum” means the lessons and academic content taught in a specific course,
11 program, or grade level.
12 III. “Department” means the department of education.
13 IV. "Education freedom account” or “EFA” means the account to which funds are allocated
14 by the scholarship organization to the parent of an EFA student in order to pay for qualifying
15 education expenses to educate the EFA student under this chapter.
16 V. “Education service provider” means a person or organization that receives payments from
17 education freedom accounts to provide educational goods and services to EFA students.
18 VI. “Eligible student” means a resident of this state who is eligible to enroll in a public
19 elementary or secondary school including but not limited to;
20 (a) A student currently attending a New Hampshire school that is remote or hybrid.
21 (b) A student currently assigned to a New Hampshire public school with assessment
22 proficiency below 40 percent.
23 (c) A student currently attending a New Hampshire public school, including a chartered
24 public school or nonpublic school.
25 (d) A kindergarten or first grade student.
26 (e) A sibling of a student with an education freedom account.
27 VII. “EFA student” means an eligible student who is participating in the EFA program.
28 VIII. “Full-time” means more than 50 percent of instructional time.
29 IX. “Remote or hybrid” shall mean any public school that is not providing instruction in-
30 person where the student or the educator are both not physically present in the traditional
31 classroom due to full-time or part-time classroom closure.
 SB 130-FN - AS INTRODUCED
- Page 2 -
1 X. “Parent” means a biological or adoptive parent, legal guardian, custodian, or other person
2 with legal authority to act on behalf of an EFA student.
3 XI. “Program” means the education freedom account program established in this chapter.
4 XII. “Scholarship organization”, means a scholarship organization approved under RSA
5 77:G, that administers and implements the EFA Act.
6 XIII. "Treasurer" means the treasurer of the state of New Hampshire.
7 194-E:2 Program.
8 I. The treasurer shall transfer to the scholarship organization the per pupil adequate
9 education grant amount under RSA 198:40-a, plus any differentiated aid that would have been
10 provided to a public school for that eligible student. The transfers shall be made in accordance with
11 the distribution of adequate education grants under RSA 198:42.
12 II. Parents of an EFA student shall agree to use the funds deposited in their student’s EFA
13 only for the following qualifying expenses to educate the EFA student:
14 (a) Tuition and fees at a private school.
15 (b) Tuition and fees for non-public online learning programs.
16 (c) Tutoring services provided by an individual or a tutoring facility.
17 (d) Services contracted for and provided by a district public school, chartered public
18 school, public academy, or independent school, including, but not limited to, individual classes and
19 curricular activities and programs.
20 (e) Textbooks, curriculum, or other instructional materials, including, but not limited to,
21 any supplemental materials or associated online instruction required by either a curriculum or an
22 education service provider.
23 (f) Computer hardware, Internet connectivity, or other technological services and
24 devices, that are primarily used to help meet an EFA student’s educational needs.
25 (g) Educational software and applications.
26 (h) School uniforms.
27 (i) Fees for nationally standardized assessments, advanced placement examinations,
28 examinations related to college or university admission or awarding of credits and tuition and/or fees
29 for preparatory courses for such exams.
30 (j) Tuition and fees for summer education programs and specialized education programs.
31 (k) Tuition, fees, instructional materials, and examination fees at a career or technical
32 school.
33 (l) Educational services and therapies, including, but not limited to, occupational,
34 behavioral, physical, speech-language, and audiology therapies.
35 (m) Tuition and fees at an institution of higher education.
36 (n) Fees for transportation paid to a fee-for-service transportation provider for the
37 student to travel to and from an education service provider.
 SB 130-FN - AS INTRODUCED
- Page 3 -
1 (o) Any other educational expense approved by the scholarship organization.
2 III. The funds in an EFA may only be used for educational purposes in accordance with
3 paragraph II.
4 IV. EFA funds shall not be refunded, rebated, or shared with a parent or EFA student in
5 any manner. Any refund or rebate for goods or services purchased with EFA funds shall be credited
6 directly to the student’s EFA.
7 V. Parents may make payments for the costs of educational goods and services not covered
8 by the funds in their student’s EFA. However, personal deposits into an EFA shall not be permitted.
9 VI. Funds deposited in an EFA shall not constitute taxable income to the parent or the EFA
10 student.
11 VII. An EFA shall remain in force, and any unused funds shall roll over from quarter-to-
12 quarter and from year-to-year until the parent withdraws the EFA student from the EFA program or
13 until the EFA student graduates from high school, unless the EFA is closed because of a substantial
14 misuse of funds. Any unused funds shall revert to the treasurer and be allocated to fund other
15 EFAs.
16 VIII. Nothing in this chapter shall be construed to require that an EFA student must be
17 enrolled, full- or part-time, in either a private school or nonpublic online school.
18 194-E:3 Application for an Education Freedom Account.
19 I. A parent may apply to the scholarship organization to establish an EFA for an eligible
20 student. The scholarship organization shall accept and approve applications for the fall and spring
21 semesters each year and shall establish procedures for approving applications in an expeditious
22 manner.
23 II. The scholarship organization shall create a standard form that parents can submit to
24 establish their student’s eligibility for the EFA program and shall ensure that the application is
25 publicly available and may be submitted through various sources, including the Internet.
26 III. The scholarship organization shall approve an application for an EFA if:
27 (a) The parent submits an application for an EFA in accordance with application
28 procedures established by the scholarship organization.
29 (b) The student on whose behalf the parent is applying is an eligible student.
30 (c) Funds are available for the EFA.
31 (d) The parent signs an agreement with the scholarship organization promising:
32 (1) To provide an education for the eligible student in the core knowledge domains
33 under RSA 193-E:2-a.
34 (2) Not to enroll the eligible student as a full-time student in a public school while
35 participating in the EFA program.
36 (3) To use the funds in the EFA only for qualifying expenses to educate the eligible
37 student as established by the EFA program.
 SB 130-FN - AS INTRODUCED
- Page 4 -
1 (4) To comply with the rules and requirements of the EFA program.
2 IV. The signed agreement between the parent and the scholarship organization shall satisfy
3 the compulsory school attendance requirements of RSA 193:1.
4 V. The scholarship organization shall annually renew a student’s EFA if funds are available.
5 VI. Upon notice to the scholarship organization, an EFA student may choose to stop
6 receiving EFA funding and enroll full-time in a public school.
7 (a) Enrolling as a full-time student in the resident district public school shall result in
8 the immediate suspension of payment of additional funds into the student’s EFA. However, an EFA
9 that has been open for at least one full school year shall remain open and active for the parent to
10 make qualifying expenditures to educate the student from funds remaining in the EFA. When no
11 funds remain in the student’s EFA, the scholarship organization may close the EFA.
12 (b) If an eligible student decides to return to the EFA program, payments into the
13 student’s existing EFA may resume if the EFA is still open and active. A new EFA may be
14 established if the student’s EFA was closed.
15 194-E:4 Authority and Responsibilities of the Scholarship Organization. The scholarship
16 organization shall have the following additional duties, obligations, and authority:
17 I. The scholarship organization shall maintain an updated list of education service providers
18 and shall ensure that the list is publicly available through various sources, including the Internet.
19 II. The scholarship organization shall provide parents with a written explanation of the
20 allowable uses of EFA funds, the responsibilities of parents, the duties of the scholarship
21 organization, and the role of any financial management firms that the scholarship organization may
22 contract with to administer any aspect of the EFA program.
23 III. The scholarship organization shall ensure that parents of students with disabilities
24 receive notice that participation in the EFA program is a parental placement under 20 U.S.C. section
25 1412, Individuals with Disabilities Education Act (IDEA), along with an explanation of the rights
26 that parentally placed students possess under IDEA and any applicable state laws.
27 IV. The scholarship organization shall, in cooperation with the department, determine
28 eligibility for differentiated aid subject to any applicable state and federal laws.
29 V. The scholarship organization may withhold from deposits or deduct from EFAs an
30 amount to cover the costs of administering the EFA program, up to a maximum of 10 percent
31 annually.
32 VI. The scholarship organization shall implement a commercially viable system for payment
33 of services from EFAs to education service providers by electronic or online funds transfer.
34 (a) The scholarship organization shall not adopt a system that relies exclusively on
35 requiring parents to be reimbursed for out-of-pocket expenses, but rather shall provide maximum
36 flexibility to parents by facilitating direct payments to education service providers as well as
 SB 130-FN - AS INTRODUCED
- Page 5 -
1 requests for pre-approval of and reimbursements for qualifying expenses, including expenses
2 pursuant to RSA 194-E:2, II.
3 (b) A scholarship organization may contract with a private institution or organization to
4 develop the payment system.
5 VII. The scholarship organization may also seek to implement a commercially viable system
6 for parents to publicly rate, review, and share information about education service providers, ideally
7 as part of the same system that facilitates the electronic or online funds transfers.
8 VIII. If an education service provider requires partial payment of tuition or fees prior to the
9 start of the academic year to reserve space for an EFA student admitted to the education service
10 provider, such partial payment may be paid by the scholarship organization, if funds are available,
11 prior to the start of the school year in which the EFA is awarded and deducted in an equitable
12 manner from subsequent quarterly EFA deposits to ensure adequate funds remain available
13 throughout the school year; but if an EFA student decides not to use the education service provider,
14 the partial reservation payment shall be returned to the scholarship organization by such education
15 service provider and credited to the student’s EFA.
16 IX. The scholarship organization shall continue making deposits into a student’s EFA until:
17 (a) The scholarship organization determines that the EFA student is no longer an
18 eligible student.
19 (b) The scholarship organization determines that there was substantial misuse of the
20 funds in the EFA.
21 (c) The parent or EFA student withdraws from the EFA program.
22 (d) The EFA student enrolls full-time in the resident district public school.
23 (e) The EFA student graduates from high school.
24 X. The scholarship organization may conduct or contract for the auditing of individual EFAs,
25 and shall at a minimum conduct random audits of EFAs on an annual basis.
26 XI. The scholarship organization may make any parent or EFA student ineligible for the
27 EFA program in the event of intentional and substantial misuse of EFA funds.
28 (a) The scholarship organization shall create procedures to ensure that a fair process
29 exists to determine whether an intentional and substantial misuse of EFA funds has occurred.
30 (b) If an EFA student is free from personal misconduct, that student shall be eligible for
31 an EFA in the future if placed with a new guardian or other person with the legal authority to act on
32 behalf of the student.
33 (c) The scholarship organization may refer suspected cases of intentional and
34 substantial misuse of EFA funds to the attorney general for investigation if evidence of fraudulent
35 use of EFA funds is obtained.
36 (d) A parent or EFA student may appeal the scholarship organization’s decision to deny
37 eligibility for the EFA program to the department.
 SB 130-FN - AS INTRODUCED
- Page 6 -
1 XII. The scholarship organization may bar an education service provider from accepting
2 payments from EFAs if the scholarship organization determines that the education service provider
3 has:
4 (a) Intentionally and substantially misrepresented information or failed to refund any
5 overpayments in a timely manner.
6 (b) Routinely failed to provide students with promised educational goods or services.
7 XIII. The scholarship organization shall create procedures to ensure that a fair process
8 exists to determine whether an education service provider may be barred from receiving payments
9 from EFAs.
10