Revision: June 4, 2024, 9:41 a.m.
HB 1665-FN - AS AMENDED BY THE SENATE
05/22/2024 1809s
2024 SESSION
24-2646
02/10
HOUSE BILL 1665-FN
SPONSORS: Rep. Cordelli, Carr. 7; Rep. Ladd, Graf. 5; Rep. Pitre, Straf. 1; Rep. Noble, Hills. 2; Rep. Soti, Rock. 35; Rep. Verville, Rock. 2; Rep. Brouillard, Rock. 1; Rep. A. Lekas, Hills. 38; Sen. Murphy, Dist 16
COMMITTEE: Education
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AMENDED ANALYSIS
This bill:
I. Raises the annual household income threshold for eligible students and reduces the amount that the scholarship organization may retain to cover administrative costs.
II. Extends the phase-out grants provided under the education freedom account (EFA) program and directs the department of education to submit an annual report regarding EFA funding and costs.
III. Revises the definitions of average daily membership in attendance (ADMA) and average daily membership in residence (ADMR) for school funding from the education trust fund for the purpose of home educated pupils and pupils participating in the EFA program.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
05/22/2024 1809s 24-2646
02/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Four
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Education Freedom Accounts; Definitions. Amend RSA 194-F:1, VI to read as follows:
VI. "Eligible student" means a resident of this state who is eligible to enroll in a public elementary or secondary school and whose annual household income at the time the student applies for the program is less than or equal to [350] 400 percent of the federal poverty guidelines as updated annually in the Federal Register by the United States Department of Health and Human Services under 42 U.S.C. section 9902(2). No income threshold need be met in subsequent years, provided the student otherwise qualifies. Students in the special school district within the department of corrections established in RSA 194:60 shall not be eligible students.
2 Education Freedom Accounts; Authority and Responsibilities of the Scholarship Organization. Amend RSA 194-F:4, V to read as follows:
V. The scholarship organization may withhold from deposits or deduct from EFAs an amount to cover the costs of administering the EFA program, up to a maximum of [10] 8 percent annually.
3 Extension of Phase-Out of Grants to 2029. Amend RSA 194-F:10, II to read as follows:
II. The phase-out grants will terminate for new EFA students receiving an EFA effective July 1, [2026] 2029.
4 New Section; Education Freedom Accounts; Reporting Requirement. Amend RSA 194-F by inserting after section 12 the following new section:
194-F:12-a Department Reporting Requirement. On or before November 1, 2024, and each November 1 thereafter, the department shall submit a report to the governor and council and the legislative oversight commission established in RSA 194-F:12 regarding:
I. The amount of education adequacy aid provided to each school district attributed to students in the first year of the education freedom account program; and
II. Phase-out grants provided to each school district attributed to students in the second and third year of the education freedom account program.
5 School Funding; ADMA and ADMR; Home Educated Pupils and Pupils Participating in the EFA program. Amend RSA 198:38, I and I-a to read as follows:
I.(a) "Average daily membership in attendance" or "ADMA" means the average daily membership in attendance, as defined in RSA 189:1-d, III, of pupils in kindergarten through grade 12, in the determination year. ADMA shall only include pupils who are legal residents of New Hampshire pursuant to RSA 193:12 and educated at school district expense which may include public academies or out-of-district placements. For the purpose of calculating funding for municipalities, the ADMA shall not include pupils attending chartered public schools, but shall include pupils attending a charter conversion school approved by the school district in which the pupil resides.
(b) For the purpose of calculating ADMA, each pupil who is home educated in compliance with RSA 193-A, or who is participating in an education freedom account in compliance with RSA 194-F, and who is enrolled in a school board approved public [high] school academic course in grades 7 through 12 shall count as an additional 0.15 pupil for each such academic course taken in a public [high] school. [The department of education shall only make grant payments for such pupils to the extent of available appropriations.] In this subparagraph, "public [high] school" shall have the same meaning as "[high] standard school" as defined in RSA [194:23] 189:24.
I-a.(a) "Average daily membership in residence" or "ADMR" means the average daily membership in residence, as defined in RSA 189:1-d, IV, of pupils in kindergarten through grade 12, in the determination year. ADMR shall only include pupils who are legal residents of New Hampshire pursuant to RSA 193:12 and educated at school district expense which may include public academies or out-of-district placements. For the purpose of calculating funding for municipalities, the ADMR shall not include pupils attending chartered public schools, but shall include pupils attending a charter conversion school approved by the school district in which the pupil resides.
(b) For the purpose of calculating ADMR, each pupil who is home educated in compliance with RSA 193-A, or who is participating in an education freedom account in compliance with RSA 194-F, and who is enrolled in a school board approved public [high] school academic course in grades 7 through 12 shall count as an additional 0.15 pupil for each such academic course taken in a public [high] school. [The department of education shall only make grant payments for such pupils to the extent of available appropriations.] In this subparagraph, "public [high] school" shall have the same meaning as "[high] standard school" as defined in RSA [194:23] 189:24.
6 Effective Date. This act shall take effect 60 days after its passage.
24-2646
Amended 6/4/24
HB 1665-FN- FISCAL NOTE
AS AMENDED BY THE SENATE (AMENDMENT #2024-1809s)
FISCAL IMPACT: [ X ] State [ ] County [ X ] Local [ ] None
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Estimated State Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
Revenue | $0 | $0 | $0 | $0 | ||
Revenue Fund(s) | None | |||||
Expenditures | $0 | Education Freedom Accounts - $1,554,592 Increase in FY 2025, Indeterminable in FY 2026 and Beyond
Home Educated/EFA Adequacy to Districts - $154,818 Increase in FY 2025 Indeterminable in FY 2026 and Beyond
EFA Phase Out Grants to Districts - Indeterminable Increase in FY 2027 | ||||
Funding Source(s) | Education Trust Fund | |||||
Appropriations | $0 | Statutory authority exists for the Department of Education to draw a warrant to access funds to make necessary payments for adequacy grants and education freedom accounts | ||||
Funding Source(s) | Education Trust Fund | |||||
• Does this bill provide sufficient funding to cover estimated expenditures? [X] N/A • Does this bill authorize new positions to implement this bill? [X] N/A | ||||||
| ||||||
Estimated Political Subdivision Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
Local Revenue | $0 | Home Educated/EFA Student Adequacy $154,818 Increase in FY 2025 Indeterminable Increase in FY 2026 and Beyond
EFA Phase Out Grants - Indeterminable Increase in FY 2027 | ||||
Local Expenditures | $0 | $0 | $0 | $0 | ||
METHODOLOGY:
This bill makes the following changes relative to education freedom accounts (EFAs):
Based on assumptions provided by the Department of Education (see below), it is estimated that an approximate 6.00% of New Hampshire households fall within 350 and 400 percent if evenly distributed. Based on this estimate and the current number of students enrolled in the EFA program, this bill could potentially increase enrollment by approximately 296 students. The estimated increase in cost due to the increase in enrollment of approximately 296 students with the typical grant averaging $5,252 would be approximately $1,554,592. These estimated costs could first be incurred beginning in FY 2025.
The following assumptions and calculations are being used to determine an estimated increase by increasing the federal poverty level guideline from 350 percent to 400 percent:
The EFA student would still be receiving the same funding based on their eligibility and approval based on RSA 194-F so there would not be a direct fiscal impact. This bill would limit how much the scholarship organization would receive for administering the EFA program. There would be 2 percent of additional EFA grant funds available for eligible students to spend on qualifying expenses.
This would not have an indeterminable fiscal impact in FY 2027 through FY 2029. It will extend the phase-out expense an additional 3 years rather than the phase-out expense no longer being included as part of the program. The phase-out grant for FY 2023 was $643,938.89 and for FY 2024 was $887,840.
As school year 2024 data isn't available to determine the impact on FY 2025, school year 2023 data was used as a proxy to determine the financial impact as this is the most recent available data. As demonstrated in the table below, expanding home educated student adequacy to grades 7 through 12 for school year 2023 would result in a $154,817.64 payment for FY 2025.
Fiscal Year | 2025 |
School Year | 2023 |
Grades | 7-12 |
Total ADM | 37.02 |
FY24 ADM Aid | $4,182.00 |
FY 2024 Payment | $154,817.64 |
If home education adequacy was guaranteed as this bill intends, the Department states districts may increase home education reporting consistency. This would result in an additional indeterminable fiscal impact increase.
There would also be an indeterminate increase in expanding student adequacy to public schools for EFA students in grades 7 through 12 taking individual courses in public schools, and therefore an indeterminable increase cost.
AGENCIES CONTACTED:
Department of Education