MISSISSIPPI LEGISLATURE
2023 Regular Session
To: Education; Appropriations
By: Representative Brown (20th)
AN ACT TO CREATE NEW SECTION 37-189-1, MISSISSIPPI CODE OF 1972, TO ESTABLISH THE "MISSISSIPPI SCHOLARSHIP ACT (MSA)"; TO CREATE NEW SECTION 37-189-3, MISSISSIPPI CODE OF 1972, TO DEFINE CERTAIN TERMS; TO CREATE NEW SECTION 37-189-5, MISSISSIPPI CODE OF 1972, TO ESTABLISH THE MISSISSIPPI SCHOLARSHIP BOARD AND TO PROVIDE FOR APPOINTMENTS TO THE BOARD; TO CREATE NEW SECTION 37-189-7, MISSISSIPPI CODE OF 1972, TO PRESCRIBE THE BOARD'S POWERS; TO CREATE NEW SECTION 37-189-9, MISSISSIPPI CODE OF 1972, TO ESTABLISH THE MISSISSIPPI SCHOLARSHIP PROGRAM TO PROVIDE FUNDS TO PUBLIC SCHOOL PARENTS FOR SELECTING THE EDUCATIONAL OPTION THAT MEETS THE EDUCATION NEEDS OF THE PARENT'S CHILD; TO CREATE NEW SECTION 37-189-11, MISSISSIPPI CODE OF 1972, TO ESTABLISH THE MISSISSIPPI SCHOLARSHIP PROGRAM FUND AND THE MISSISSIPPI SCHOLARSHIP PROGRAM EXPENSE FUND IN THE STATE TREASURY; TO CREATE NEW SECTION 37-189-13, MISSISSIPPI CODE OF 1972, TO PRESCRIBE QUALIFYING EXPENSES FOR WHICH FUNDS DEPOSITED INTO A MISSISSIPPI SCHOLARSHIP ACCOUNT MAY BE USED; TO CREATE NEW SECTION 37-189-15, MISSISSIPPI CODE OF 1972, TO REQUIRE A PARENT TO ANNUALLY RENEW AN ELIGIBLE STUDENT'S MISSISSIPPI SCHOLARSHIP; TO CREATE NEW SECTION 37-189-17, MISSISSIPPI CODE OF 1972, TO PRESCRIBE THE DUTIES OF THE MISSISSIPPI SCHOLARSHIP BOARD RELATING TO THE ADMINISTRATION OF SCHOLARSHIP ACCOUNTS; TO CREATE NEW SECTION 37-189-19, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE BOARD TO ARRANGE FOR THE AUDITING OF INDIVIDUAL SCHOLARSHIP ACCOUNTS AND EDUCATION SERVICE PROVIDERS; TO CREATE NEW SECTION 37-189-21, MISSISSIPPI CODE OF 1972, TO ESTABLISH REQUIREMENTS FOR EDUCATION SERVICE PROVIDERS ACCEPTING PAYMENTS FROM A SCHOLARSHIP ACCOUNT; TO CREATE NEW SECTION 37-189-23, MISSISSIPPI CODE OF 1972, TO REQUIRE A SCHOOL DISTRICT IN WHICH A SCHOLARSHIP RECIPIENT WAS LAST ENROLLED TO PROVIDE AN EDUCATION SERVICE PROVIDER WITH A COPY OF THE STUDENT'S RECORDS; TO CREATE NEW SECTION 37-189-25, MISSISSIPPI CODE OF 1972, TO ABSOLVE PUBLIC ENTITIES FROM ANY LIABILITY BASED ON THE AWARD OF A MISSISSIPPI SCHOLARSHIP; TO CREATE NEW SECTION 37-189-27, MISSISSIPPI CODE OF 1972, TO REQUIRE THE GOVERNOR TO INCLUDE FUNDING FOR THE SCHOLARSHIP ACCOUNT PROGRAM IN THE GOVERNOR'S ANNUAL BUDGET REQUEST FOR THE STATE DEPARTMENT OF EDUCATION; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. The following shall be codified as Section 37-189-1, Mississippi Code of 1972:
37-189-1. This chapter shall be known and may be cited as the "Mississippi Scholarship Act (MSA)."
SECTION 2. The following shall be codified as Section 37-189-3, Mississippi Code of 1972:
37-189-3. As used in this chapter, the following words and phrases have the meanings ascribed in this section unless the context clearly indicates otherwise:
(a) "Account" or "scholarship" means a Mississippi Scholarship account awarded pursuant to this chapter, to which funds are allocated by the board to the parent or parents of an eligible Mississippi Scholarship student in order to pay qualifying education expenses to educate the student pursuant to the requirements and conditions of this chapter.
(b) "Board" means the Mississippi Scholarship Board.
(c) "Curriculum" means a complete course of study for a particular content area or grade level, including any supplemental materials required by the curriculum.
(d) "Education service provider" means a person or organization that receives payments from Mississippi Scholarship accounts to provide educational goods and services to Mississippi Scholarship students.
(e) "Eligible recipient" means a child who:
(i) Is a resident of this state; and
(ii) 1. Is enrolled full time and attending a public elementary or secondary school program in this state for at least forty-five (45) calendar days during an instructional term at the time of application and until an award letter is issued by the board;
2. Was enrolled full time in a public elementary or secondary school program in this state for the entire instructional term the previous year; or
3. Is eligible at the time of application to enroll in a kindergarten program in this state. However, if on July 1, 2025, the participation rate of the combined number of students in the Mississippi Scholarship Program and students eligible who have applied to participate in the Mississippi Scholarship Program during the previous school year is less than five percent (5%) of net public school enrollment for the previous school year, then, effective July 1, 2027, a child is considered an eligible recipient if the child is enrolled, eligible to be enrolled, or required to be enrolled in a kindergarten program or public elementary or secondary school program in this state at the time of application.
(f) "Mississippi Scholarship funds" means the monies deposited in a Mississippi Scholarship student's account in accordance with the requirements of this chapter.
(g) "Mississippi Scholarship student" means a student who receives a scholarship pursuant to this chapter.
(h) "Parent" means a biological parent, legal guardian, custodian or other person with legal authority to act on behalf of an eligible recipient.
(i) "Participating school" means any school that provides education to elementary or secondary students and has notified the board of its intention to participate in the program and comply with the program's requirements.
(j) "Resident school district" means the public school district in which the student resides.
(k) "Treasurer" means the Treasurer of the State of Mississippi.
SECTION 3. The following shall be codified as Section 37-189-5, Mississippi Code of 1972:
37-189-5. (1) The Mississippi Scholarship Program is administered by the Mississippi Scholarship Board. The board consists of the following seven (7) members:
(a) The Treasurer or the Treasurer's designee;
(b) The State Auditor or the Auditor's designee;
(c) The State Attorney General or the Attorney General's designee;
(d) The State Superintendent of Public Education or the superintendent's designee;
(e) The Commissioner of Higher Education or the commissioner's designee; and
(f) Two (2) members appointed by the Governor, with the advice and consent of the Senate, who are parents of Mississippi Scholarship students, or for the initial appointments of board members, parents who intend to apply for the Mississippi Scholarship on behalf of eligible recipients, to be appointed subject to the following requirements:
(i) Only state residents are eligible for appointment to the board;
(ii) The members must reside in geographically diverse areas of the state;
(iii) The members initially must be appointed to staggered terms as follows:
1. One (1) member appointed by the Governor for a term of two (2) years; and
2. One (1) member appointed by the Governor for a term of three (3) years.
After the initial staggering of terms, appointed board members shall serve for a term of three (3) years and are eligible for reappointment at the expiration of their terms; and
(iv) If there is a vacancy among appointed members, the vacancy must be filled by appointment for the unexpired term of a person meeting the requirements of this section by the Governor, with the advice and consent of the Senate. Members of the board shall serve until the later of the expiration of the term for which the member was appointed or the appointment of his or her successor.
(2) Members of the board shall serve without compensation. The board may reimburse members for all reasonable and necessary expenses, including travel expenses, actually incurred by board members in the conduct of their official duties. Any expense reimbursements must be made from the Mississippi Scholarship Program Expense Fund at the same rate paid to state employees.
(3) The Treasurer is the chairman and presiding officer of the board. The Treasurer may provide office space and staff to the board upon request of the board.
(4) A majority of the members of the board constitutes a quorum for the transaction of the business of the board.
(5) Members of the board are subject to the ethical standards and financial disclosure requirements of the State of Mississippi.
SECTION 4. The following shall be codified as Section 37-189-7, Mississippi Code of 1972:
37-189-7. The board may take any action necessary to effectuate the provisions of this chapter and to successfully administer the Mississippi Scholarship Program, subject to applicable state and federal law, including, but not limited to, the following actions:
(a) Adopt and amend bylaws;
(b) Execute contracts and other instruments for necessary goods and services, employ necessary personnel and engage the services of private consultants, actuaries, auditors, counsel, managers, trustees and any other contractor or professional needed for rendering professional and technical assistance and advice;
(c) Implement the program through the use of financial organizations as account depositories and managers;
(d) Develop and impose requirements, policies, procedures and guidelines to implement and manage the program;
(e) Determine whether an expenditure of Mississippi Scholarship funds is or was a qualifying expense to educate a Mississippi Scholarship student. The board may approve or deny expenditures by a majority vote;
(f) Review any appeals made pursuant to this chapter;
(g) Establish the method by which monies in the Mississippi Scholarship Expense Fund are allocated to pay for administrative costs and assess, collect and expend administrative fees, charges and penalties;
(h) Authorize the assessment, collection and retention of fees and charges against the amounts paid into and the earnings on the Mississippi Scholarship funds by a financial institution, investment manager, fund manager or other professional managing or investing the Mississippi Scholarship funds and accounts;
(i) Invest and reinvest any of the funds and accounts under the board's control with a financial institution, an investment manager, a fund manager or other professionals investing the funds and accounts; and
(j) Solicit and accept gifts, including bequests and other testamentary gifts made by will, trust or other disposition, grants, loans, aid and property, real or personal, of any nature and from any source, or participate in any federal, state or local governmental program in carrying out the purposes of this chapter. The board must use the property received to effectuate the desires of the donor and may convert the property received into cash within one hundred eighty (180) days of receipt.
SECTION 5. The following shall be codified as Section 37-189-9, Mississippi Code of 1972:
37-189-9. (1) The Mississippi Scholarship Program is established to provide the option for a parent to better meet the individual education needs of the parent's eligible child. The program must be operational before July 1, 2024.
(2) The board shall create a standard application form that a parent can submit to establish the student's eligibility for the award of Mississippi Scholarship funds, which award will be placed in an educational services scholarship account to be used for qualifying education expenses on behalf of the eligible recipient. Information about scholarship funds and the application process must be made available on the board's website.
(3) The board shall make applications available before March 1, 2024, and shall begin accepting applications immediately. The board may update the application as needed. The board shall issue an award letter to eligible recipients within forty-five (45) days of receipt of a completed application and all required documentation.
(4) The board shall approve an application for a Mississippi Scholarship if all of the following circumstances are met:
(a) A parent submits an application for a Mississippi Scholarship in accordance with the rules promulgated by the board;
(b) A student on whose behalf the parent is applying is an eligible recipient;
(c) The parent signs an agreement with the board, promising to do all of the following:
(i) To provide an education for the eligible recipient in at least the subjects of reading, language, mathematics, science and social studies;
(ii) To use the Mississippi Scholarship funds exclusively for qualifying expenses as provided for in Section 37-189-13;
(iii) To comply with the rules and requirements of the Mississippi Scholarship Program; and
(iv) To afford the Mississippi Scholarship student opportunities for educational enrichment such as organized athletics, art, music or literature.
(5) An application for a Mississippi Scholarship is confidential and not a public record subject to release under the Mississippi Public Records Act.
SECTION 6. The following shall be codified as Section 37-189-11, Mississippi Code of 1972:
37-189-11. (1) There is created in the State Treasury a special revenue fund known as the "Mississippi Scholarship Program Fund." The fund is administered by the Treasurer and consists of funds transferred by the State Department of Education in accordance with this chapter. All interest and other returns derived from the deposit and investment of monies in the Mississippi Scholarship Program Fund must be credited to the fund. Any balance, including accrued interest and other returns, remaining in the fund at the end of each fiscal year may not revert to the General Fund but must remain in the fund and be expended as provided by this section.
(2) The amount of Mississippi Scholarship funds made available to an eligible recipient on a yearly basis must be equal to one hundred percent (100%) of the prior year's statewide average of state K-12 education funding allotted per pupil based on net enrollment. However, the amount of the funding to an eligible recipient who is awarded a Mississippi Scholarship account for less than a full fiscal year must be prorated based on the portion of the fiscal year the eligible recipient is awarded the Mississippi Scholarship account. Before the submission of the State Department of Education's budget request each year, the board shall notify the State Department of Education of the total number of eligible Mississippi Scholarship applications received by the board for purposes of facilitating the necessary transfer of monies pursuant to this chapter.
(3) Expenditures from the Mississippi Scholarship Program Fund must be limited to the purposes set forth in this chapter. However, an amount not to exceed five percent (5%) of the fund must be transferred annually to the Mississippi Scholarship Program Expense Fund established in subsection (8) of this section to cover the annual administrative costs of the Mississippi Scholarship Program. If the number of Mississippi Scholarship accounts increases significantly after any fiscal year, the Treasurer may request an appropriation by the Legislature to the Mississippi Scholarship Program Expense Fund in an amount equal to the administrative costs associated with the increase in Mississippi Scholarship accounts.
(4) The first deposit of Mississippi Scholarship funds into an eligible recipient account is subject to the execution of the parental agreement required by this chapter. Upon execution of the required parental agreement, and subject to the provisions of this chapter, one-half (1/2) of the total annually required deposit must be made no later than August 15 of every year into an eligible recipient's Mississippi Scholarship account, and one-half (1/2) of the total annually required deposit must be made no later than January 15 of every year. Any funds remaining in a Mississippi Scholarship account at the end of a fiscal year may be carried over to the next fiscal year upon successful renewal of the account.
(5) Funds deposited in a student's Mississippi Scholarship account do not constitute taxable income to the parent or the Mississippi Scholarship student.
(6) The board shall continue to make deposits into an eligible recipient's Mississippi Scholarship account in accordance with this section unless any of the following conditions occur:
(a) A parent of an eligible recipient fails to renew a Mississippi Scholarship account or withdraws from the Mississippi Scholarship Program;
(b) The board determines that a student is no longer eligible for a Mississippi Scholarship;
(c) The board suspends or revokes participation in the Mississippi Scholarship Program for failure to comply with the requirements of this chapter;
(d) The Mississippi Scholarship student successfully completes a secondary education program; or
(e) The Mississippi Scholarship student reaches twenty-one (21) years of age.
(7) If any of the conditions in subsection (6) of this section occur, the board must notify the parent that the eligible recipient's account will be closed in forty-five (45) calendar days. If a parent fails to adequately address the condition or conditions upon which closure is based or does not respond within thirty (30) calendar days of receipt of notice, the board must close the account, and any remaining monies must be returned to the state.
(8) (a) There is created in the State Treasury a special revenue fund known as the "Mississippi Scholarship Program Expense Fund." The fund consists of: monies received pursuant to this section; monies, if any, transferred from special revenue funds administered by the Treasurer; any governmental or private grants; and state general fund appropriations, if any, for the Mississippi Scholarship Program. All interest and other returns derived from the deposit and investment of monies in the Mississippi Scholarship Program Expense Fund must be credited to the fund. Any balance, including accrued interest and other returns, remaining in the fund at the end of each fiscal year may not revert to the General Fund but must remain in the fund and be expended as provided by this section.
(b) All expenses incurred by the Treasurer or the board in developing and administering the Mississippi Scholarship Program are payable from the Mississippi Scholarship Expense Fund.
SECTION 7. The following shall be codified as Section 37-189-13, Mississippi Code of 1972:
37-189-13. (1) Parents of a Mississippi Scholarship student shall agree to use the funds deposited in their student's Mississippi Scholarship account only for the following qualifying expenses to educate the student:
(a) Ongoing services provided by a public school district, including, without limitation, individual classes and extracurricular activities and programs;
(b) Tuition and fees at a participating school;
(c) Tutoring services provided by an individual or a tutoring facility, so long as the tutoring services are not provided by a member of the Mississippi Scholarship student's immediate family;
(d) Fees for nationally standardized assessments, advanced placement examinations, any examinations related to college or university admission, and tuition or fees, or both, for preparatory courses for these exams;
(e) Tuition and fees for programs of study or the curriculum of courses that lead to an industry-recognized credential that satisfies a workforce need;
(f) Tuition and fees for online learning programs;
(g) Tuition and fees for alternative education programs, apprenticeships, pre-apprenticeships and internships;
(h) Fees for after-school or summer education programs;
(i) Educational services and therapies, including, but not limited to, occupational, behavioral, physical, speech-language and audiology therapies;
(j) Curriculum as required by a participating school or program;
(k) Fees for transportation paid to a fee-for-service transportation provider for the student to travel to and from an education service provider; and
(l) Any other qualified expenses as approved by the Mississippi Scholarship Board.
(2) This section may not be construed to require a Mississippi Scholarship student to be enrolled, full time or part time, in either a nonpublic school or a nonpublic online school.
(3) Mississippi Scholarship funds may not be refunded, rebated or shared with a parent or student in any manner. Any refund or rebate for goods or services purchased with Mississippi Scholarship funds must be credited directly to a student's Mississippi Scholarship account.
(4) This section may not be construed to prohibit the parents of a Mississippi Scholarship student from making payments for the costs of educational goods and services not covered by the funds in their student's Mississippi Scholarship account. However, personal deposits into a Mississippi Scholarship account are not permitted.
SECTION 8. The following shall be codified as Section 37-189-15, Mississippi Code of 1972:
37-189-15. (1) A parent must renew an eligible recipient's Mississippi Scholarship on an annual basis. Notwithstanding any changes in eligibility, a Mississippi Scholarship student who has qualified previously for a Mississippi Scholarship account remains eligible to apply for renewal until one (1) of the conditions set forth in subsection (6) of Section 37-189-11 occurs. The board shall verify with the State Department of Education the following information by July 1 of every year:
(a) A list of all active Mississippi Scholarship accounts;
(b) The resident school district of each Mississippi Scholarship student; and
(c) For a Mississippi Scholarship student who chooses to attend a participating school, annual confirmation of the student's continued attendance at a school outside of the resident school district.
(2) If a parent fails to renew an eligible recipient's Mississippi Scholarship, the board shall notify the parent that the eligible recipient's account will be closed in forty-five (45) calendar days. If a parent chooses not to renew or does not respond within thirty (30) calendar days of receipt of notice, the board must close the account, and any remaining monies must be returned to the state.
(3) If an eligible recipient decides to return to the Mississippi Scholarship Program after failing to renew, the recipient must reapply.
(4) The board, in consultation with the State Department of Education, may adopt rules and policies to provide the least disruptive process for Mississippi Scholarship students who desire to stop receiving Mississippi Scholarship payments to return full time to a public school in their resident school district.
(5) The board, in consultation with the State Department of Education, may adopt rules and policies for Mississippi Scholarship students who want to continue to receive services provided by a public school or district in the student's resident school district, including individual classes and extracurricular programs, in combination with an individualized educational program. The board, in consultation with the State Department of Education, shall ensure that any public school or school district providing these services receives the appropriate pro rata share of a student's Mississippi Scholarship funds based on the percentage of total instruction provided to the student by the public school or resident school district. School boards shall charge tuition to Mississippi Scholarship students who enroll for services in a public school within the local school district. Mississippi Scholarship students who enroll for services part time in public school may not be included in net enrollment for state education funding purposes. This subsection may not be construed to prohibit a Mississippi Scholarship student from using the funds deposited in the student's account on both services provided by a public school or district and other qualifying expenses, including educational services offered by a nonpublic school.
SECTION 9. The following shall be codified as Section 37-189-17, Mississippi Code of 1972:
37-189-17. (1) In addition to the duties, obligations and authority stated in this chapter, the board has the following duties, obligations and authority with respect to the administration of Mississippi Scholarship accounts:
(a) To maintain an updated list of participating schools and to ensure that the list is publicly available through various sources, including the Internet;
(b) To provide parents with a written explanation of the allowable uses of Mississippi Scholarship funds, the responsibilities of parents, the duties of the board and the role of any private financial management firms or other private organizations that the board may contract with to administer the Mississippi Scholarship Program or any aspect of the program; and
(c) To ensure that parents of students with a disability receive notice that participation in the Mississippi Scholarship Program is a parental placement under 20 USC Section 1412 of the Individuals with Disabilities Education Act (IDEA) along with an explanation of the rights that parentally placed students possess under IDEA and any applicable state laws and regulations.
(2) The board may contract with private organizations to administer the Mississippi Scholarship Program. This includes, but is not limited to, private financial management firms to manage Mississippi Scholarship accounts.
(3) The board shall implement, or contract with a private organization to implement, a commercially viable, cost-effective and parent-friendly system for payment for services from Mississippi Scholarship accounts to participating schools or educational service providers, including, but not limited to, the use of debit cards or other electronic or online fund transfers. However, a Mississippi Scholarship account may not be reduced for debit card or electronic payment fees.
(4) The board shall seek to implement a commercially viable, cost-effective and parent-friendly system for publicly rating, reviewing and sharing information about participating schools and education service providers, ideally as part of the same system that facilitates the electronic or online funds transfers so as to create a one-stop-shop for parents and Mississippi Scholarship students.
(5) If an education service provider requires partial payment of tuition or fees before the start of the academic year to reserve space for a Mississippi Scholarship student admitted to the education service provider, such partial payment may be paid before the start of the school year in which the Mississippi Scholarship is awarded and deducted in an equitable manner from subsequent Mississippi Scholarship deposits to ensure adequate funds remain available throughout the school year; however, if a Mississippi Scholarship student decides not to use the education service provider, the partial reservation payment must be returned to the board by the education service provider and credited to the student's Mississippi Scholarship account.
(6) The board may accept gifts and grants from any source to cover administrative costs, to inform the public about the Mississippi Scholarship Program, or to provide additional funding for Mississippi Scholarship accounts.
(7) The board may propose rules and policies, including emergency rules, if necessary, to meet timelines set forth in this chapter and which are necessary for the administration of this chapter, including:
(a) Establishing or contracting for the establishment of a fraud reporting system;
(b) Requiring a surety bond for education service providers receiving more than One Hundred Thousand Dollars ($100,000.00) in Mississippi Scholarship funds;
(c) Procedures for refunding payments from education service providers back to Mississippi Scholarship accounts; and
(d) Procedures for entering into reciprocal agreements with other state education savings account agencies or entities, whether public or nonpublic, to recognize and allow education service providers approved in other states to receive payments from Mississippi Scholarship accounts under this chapter.
(8) (a) The rules or policies adopted by the board should avoid excessive bureaucracy and overly prescriptive mandates and must focus on encouraging participation in the program and encouraging education service providers to provide parents and Mississippi Scholarship students with a broad array of educational options.
(b) Rules and policies that do not avoid excessive bureaucracy and overly prescriptive mandates may be appealed by the parent of an eligible student or the parent of a potentially eligible student to a court of general jurisdiction.
(c) The court shall determine all questions of law, including the interpretation of a constitutional or statutory provision or a rule adopted by the Mississippi Scholarship Board, without regard to any previous determination that may have been made on the question in any action before the board.
SECTION 10. The following shall be codified as Section 37-189-19, Mississippi Code of 1972:
37-189-19. (1) The board may propose rules for the auditing of individual Mississippi Scholarship accounts and shall conduct or contract for the random auditing of individual Mississippi Scholarship accounts as needed to ensure compliance with the requirements of this chapter and rules promulgated under this chapter.
(2) As part of the auditing process, the board may remove a parent or eligible recipient from the Mississippi Scholarship program and close a Mississippi Scholarship account for failure to comply with the terms of the parental agreement required by this chapter, failure to comply with applicable laws, failure of the student to remain eligible, or intentional and fraudulent misuse of Mississippi Scholarship funds. The board shall create procedures to ensure that a fair process exists to determine the removal of a parent or eligible recipient from the Mississippi Scholarship program. A parent or Mississippi Scholarship student may appeal the decision to make the student ineligible for funds to the board.
(3) The board may conduct or contract for the audit of education service providers accepting payments from Mississippi Scholarship accounts if it determines that the education service provider has:
(a) Intentionally and substantially misrepresented information or failed to refund any overpayments in a timely manner; or
(b) Routinely failed to provide students with promised educational goods or services.
(4) If the board determines that an education service provider intentionally and substantially has misused Mississippi Scholarship funds, the board may bar the education service provider from continuing to receive payments. The board shall create procedures to ensure that a fair process exists to determine whether an education service provider may be barred from receiving payment from Mississippi Scholarship accounts. An education service provider may appeal a decision to bar it from receiving payments to the board. If the board bars an education service provider from receiving payments from Mississippi Scholarship accounts, it must notify parents and students of its decision within ten (10) business days.
(5) If the board obtains evidence of potential fraudulent use of Mississippi Scholarship funds, it may refer suspected cases to the State Auditor for purposes of investigation, collection and potential criminal investigation.
SECTION 11. The following shall be codified as Section 37-189-21, Mississippi Code of 1972:
37-189-21. (1) To be eligible to accept payments from a Mississippi Scholarship account, an education service provider must:
(a) Submit notice to the board that it wishes to participate in the Mississippi Scholarship Program;
(b) Provide participating parents with a receipt for all qualifying educational expenses for the Mississippi Scholarship student;
(c) Agree not to refund, rebate or share Mississippi Scholarship funds with parents or students in any manner, except that funds may be remitted or refunded to a Mississippi Scholarship account in accordance with Section 37-189-13;
(d) Certify that it will not discriminate on any basis prohibited by 42 USC 1981;
(e) Agree to submit any employee who will have contact with Mississippi Scholarship students to a criminal background check; and
(f) In the case of a participating school, provide notice of enrollment annually to the superintendent of the local school district for any student whose tuition is being paid through the Mississippi Scholarship Program.
(2) This chapter does not limit the independence or autonomy of a nonpublic education service provider or make the actions of a nonpublic education service provider the actions of state government.
(3) Nonpublic education service providers must be given maximum freedom to provide for the educational needs of Mississippi Scholarship students without governmental control.
(4) A participating nonpublic school or education service provider is not required to alter its creed, practices, admission policy, hiring policy or curriculum in order to accept eligible recipients whose parents pay tuition or fees from a Mississippi Scholarship account pursuant to this chapter.
(5) This chapter does not expand the regulatory authority of the state, its officers or any school district to impose any additional regulation on education service providers beyond those necessary to enforce the requirements of the program.
SECTION 12. The following shall be codified as Section 37-189-23, Mississippi Code of 1972:
37-189-23. The resident school district or school district in which a Mississippi Scholarship student was last enrolled, as applicable, shall provide an education service provider that has enrolled the student with a complete copy of the student's school records, while complying with the Family Educational Rights and Privacy Act of 1974 (20 USC Section 1232 g).
SECTION 13. The following shall be codified as Section 37-189-25, Mississippi Code of 1972:
37-189-25. (1) Liability does not arise on the part of the board, state or any school district based on the award or use of a Mississippi Scholarship awarded pursuant to this chapter.
(2) It is the intention of the Legislature in the enactment of this chapter that if any part of this chapter is challenged in court as violating either the state or federal constitution, the parents of eligible Mississippi Scholarship students should be deemed to have standing to be parties to such litigation and should be permitted by the court to intervene if they are not already parties to the litigation.
(3) If any provision of this chapter or the application of any provision of this chapter to any person or circumstance is held invalid by a court of competent jurisdiction, the remainder of this chapter or the application of its provisions to persons or circumstances other than those to which it is held invalid is not affected.
SECTION 14. The following shall be codified as Section 37-189-27, Mississippi Code of 1972:
37-189-27. (1) Notwithstanding any other provision of this chapter to the contrary, for fiscal year 2024 and each subsequent fiscal year, in addition to all other amounts required by law, the State Department of Education shall include in its budget request, and the Governor shall include in each budget recommendation submitted to the Legislature, an appropriation to the State Department of Education for the greater of an amount not less than five percent (5%) of net public school enrollment or the total number of eligible Mississippi Scholarship account applications received by the Mississippi Scholarship Board, if available, multiplied by the prior year's statewide average of state funding allotted per pupil. The amount appropriated must be transferred by the State Department of Education to the Mississippi Scholarship Board to be used solely to meet the Mississippi Scholarship Account Program obligations set forth in this chapter. The Governor also shall provide in each budget recommendation for the reappropriation for expenditures during the ensuing fiscal year the balance to the State Department of Education which was not transferred to the Mississippi Scholarship Board due to an accumulated balance from prior years, as provided under subsection (2) of this section.
(2) Each fiscal year, the amount required to be requested and included in the budget bill for appropriation under subsection (1) of this section must be reduced by the sum of:
(a) Any unused accumulated amounts transferred to the Mississippi Scholarship Board for these purposes from previous years; and
(b) Any unused appropriations made to the State Department of Education for these purposes which were not transferred to the Mississippi Scholarship Board due to an accumulated balance from prior years.
SECTION 15. This act shall take effect and be in force from and after July 1, 2023.