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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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 Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.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 442-FN - AS AMENDED BY THE SENATE 01/18/2024 0101s 04/05/2024 1414s 24-3061 02/05 STATE OF NEW HAMPSHIRE In the Year of Our Lord Two Thousand Twenty Four AN ACT relative to student eligibility for education freedom accounts and the scholarship organization's costs of administering the program, extending phase-out grants for education freedom accounts, and revising the definitions of average daily membership in attendance and average daily membership in residence.

Be it Enacted by the Senate and House of Representatives in General Court convened:

and Amendment to SB 442-FN - Page 2 - II.

SB 442-FN - AS AMENDED BY THE SENATE - Page 2 - 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.

LBAAmendment 24-3061to AmendedSB 1/22/24442-FN SB- 442-FN-Page FISCAL3 NOTE- AS2024-1414s AMENDED BYANALYSIS THEThis SENATEbill: (AMENDMENT #2024-0101s) AN ACT relative to student eligibility for education freedom accounts.

FISCALI. IMPACT:

[Raises Xthe ]annual Statehousehold [income ]threshold Countyfor [eligible Xstudents ]and Localreduces [the ]amount Nonethat Estimatedthe Statescholarship Impactorganization -may Increaseretain / (Decrease) FY 2024 FY 2025 FY 2026 FY 2027 Revenue $0 $0 $0 $0 Revenue Fund(s) None Expenditures $0 Indeterminable Funding Source(s) Education Trust Fund Appropriations $0 $0 $0 $0 Funding Source(s) None • Does this bill provide sufficient funding to cover estimatedadministrative exp[X]costs. N/Aes? • 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 Indeterminable Local Expenditures $0 Indeterminable METHODOLOGY:

ThisII. bill adds eligibility to the education freedom account (EFA) program for any student whose enrollment transfer request was denied pursuant to RSA 193:3 and exhausted all appeals granted in RSA 193:3.

AsExtends ofthe Novemberphase-out 2023,grants 4,552provided studentsunder were in the EFAeducation programfreedom withaccount an(EFA) annualizedprogram costand estimateddirects atthe $23.8department millionof witheducation theto typicallysubmit grantan averagingannual toreport beregarding $5,235EFA perfunding student.and costs.

TheIII. current average education grant to public district schools is $6,217, which includes cost for an adequate education and extraordinary needs grant.

ThisRevises billthe coulddefinitions resultof average daily membership in anattendance indeterminable(ADMA) numberand average daily membership in residence (ADMR) for school funding from the education trust fund for the purpose of newhome studentseducated accessingpupils and pupils participating in the EFA program.

The following is information relative to the different situations in which a student may access the EFA program:

 Students accessing the program by going from the non-public or home education systems and entering the EFA program would likely result in a grant of $5,235 for each student.

The average grant size for these students would likely match the average grant provided to a district student.

This would result in a net cost to the state as these students accessed the program through proposed removal of income requirements.

 Students leaving a charter public school would have a net cost savings to the state of $4,365 to the state;

$9,600 (current average charter school rate) – $5,235 (average EFA) = $4,365.

 Student leaving a traditional district system would have a net cost to the state if the student left a community that had a statewide education property tax (SWEPT) grant in excess of the calculated cost of adequate education.

This net cost would be $5,235 per student.

 Students leaving a non-excess SWEPT community would see the adequacy grant go to the EFA program for educating the student instead of the school district.

This would result an approximate decrease of $982 ($6,217 - $5,235) in state adequacy grants, and a decrease in local revenues per student.

This would also result in a net cost to the state due to the EFA phase-out grant being paid.

The EFA phase-out grant compensates districts at a rate of 50 cents on the dollar in year one and 25 cents in year two, for the cost of an adequate education grant portion only ($5,248) for any student leaving the district and going to the EFA program.

Therefore, this grant would cost on average $2,624 for each student leaving a district (50 percent of $5,248) in year one.

As students potentially leave traditional district schools and join the EFA program, districts may feel pressure to reduce their local expenditures to better fit the reduced population served.

It is unknown the impact this would have on local expenditures, but this could potentially result in an indeterminable decrease.

AGENCIES CONTACTED:

Department of Education