SB 64 creates a School Choice Flex Account (SCFA) and a Special Education Flex Account (SEFA) program administered by a new state trust. Parents of eligible students who enroll in qualifying private schools can direct state funds held in an SCFA or SEFA to pay permitted education expenses; the program is funded by transfers from the General Fund into the SCFA Trust.
The bill centralizes investment, distribution, auditing, and eligible‑school listing under a School Choice Flex Account Trust Board (built on the ScholarShare model) and the State Superintendent. It shifts portions of per‑student funding away from local districts into individually assigned state accounts, sets application and reporting requirements for schools and families, and limits the state’s conditions on private‑school eligibility while establishing audit and privacy requirements.
At a Glance
What It Does
Establishes a state trust to hold per‑student SCFA and SEFA balances that the Trust Board invests and disburses directly to eligible private schools for defined education expenses. The Superintendent runs application and eligibility processes and posts school information publicly.
Who It Affects
Parents of students who enroll in qualifying private schools, private full‑time day schools seeking state payments, the State Controller and Superintendent, the newly constituted Trust Board, and public school finance officials whose funding will be adjusted to reflect students on SCFAs/SEFAs.
Why It Matters
The bill converts a portion of K–12 funding into portable, account‑based allocations routed through a state trust, changing fiscal flows, oversight responsibilities, and how special education funding is delivered for students who leave public schools.
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What This Bill Actually Does
SB 64 sets up a School Choice Flex Account Trust in the State Treasury and instructs the Controller to transfer money from the General Fund into that trust to fund individual SCFAs for students enrolled in qualifying private schools and SEFAs for students with exceptional needs. The Trust holds a program account for student funds and an administrative account for running the program; the Trust Board is responsible for investing, accounting for, and disbursing funds to eligible schools on behalf of account beneficiaries.
The bill puts the Superintendent in charge of handling applications from parents and private schools, maintaining an online public roster of eligible schools, and accepting participation agreements from families that authorize the Trust Board to pay schools on the student’s behalf. Once a participation agreement is in place, the student retains access to the account so long as eligibility continues; the Superintendent also operates appeals and notice procedures before removing eligibility.Operational rules lock down how funds move: funds may be disbursed only to eligible schools and only for defined elementary and secondary expenses (books, supplies, tutoring, transportation, and—where specified—tuition for community college taken before high school graduation).
The Trust Board must provide secure online access for parents to review account activity, conduct random audits of disbursements and student eligibility, withhold ineligible payments, and require public disclosures about receipt and expenditure. The administrative account pays program costs and is subject to an annual limit tied to the program account size.The statute also narrows the state’s ability to condition a private school’s eligibility—limiting requirements mainly to accreditation, basic health and safety, and public disclosure—while prohibiting schools from rebating or returning SCFA/SEFA funds to families.
The article contains rules excluding routine homeschoolers unless they enroll in an eligible school for homeschooling purposes, and it makes clear that unused funds revert to the state for elementary and secondary education upon legislative appropriation.
The Five Things You Need to Know
For the 2027–28 school year the bill sets the initial per‑student SCFA deposit at $8,000 and the SEFA deposit at $16,000.
The Controller must transfer funds from the General Fund to the SCFA Trust at least three times each fiscal year, with the first transfer on August 1 and the final transfer on or before June 15, and reconcile to ensure total annual funding equals the required sum.
The SCFA Trust Board’s administrative account may not exceed 1 percent of the total amount in the program account in any given year; all other program moneys are segregated and continuously appropriated to the board.
The bill phases eligibility by parental taxable income for the program’s initial years (lower thresholds in the first two years, higher thresholds in the next two), creating an income‑targeted rollout rather than universal immediate access.
The Trust Board may disburse funds only to eligible schools, must randomly audit expenditures and enrollment, and may withhold or recoup ineligible disbursements; eligible schools may be accredited, pending accreditation (unless denied in prior two years), and must appear on a public superintendent‑maintained list.
Section-by-Section Breakdown
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Definitions that frame program scope
This section lays out the program’s universe: what counts as an SCFA and SEFA, who an eligible student is, what expenses qualify, and what an eligible school is. It narrows eligible recipients to children who could attend public school but enroll in qualifying private full‑time day schools, and it explicitly defines elementary/secondary eligible education expenses to include items beyond tuition—transportation, tutoring, testing fees, and even community college tuition taken before high school graduation. The definitions also introduce administrative vocabulary (program and administrative accounts, participation agreements) that structure later operational rules.
Creates the Trust and funds the program
This provision establishes the SCFA Trust as a State Treasury instrumentality with two internal accounts: a program account for student funds and an administrative account for running the Trust. The Controller must transfer amounts from the General Fund into the Trust equal to the aggregate of per‑student deposits credited to active accounts; transfers must occur multiple times a year and be reconciled. The statute also directs annual indexing of the per‑student deposit amounts by the same percentage used to set support for school districts, and it allows additional grants or gifts to the Trust.
Trust Board composition, powers, and administrative cap
SB 64 vests authority in a School Choice Flex Account Trust Board that builds atop the existing ScholarShare structure: ScholarShare members and the Superintendent are board members, plus two gubernatorial appointees representing religious and nonreligious private schools. The Board gets typical investment and reporting powers, can accept grants, adopt implementing regulations, audit accounts, and must return unclaimed funds to the state. Crucially, administrative costs are limited by statute to a fixed percentage of program assets, constraining the Board’s operating budget and tying management fees to program scale.
Parent application and participation agreements
The Superintendent must provide online and mail application routes for parents to request accounts and execute a standardized participation agreement that authorizes disbursements to a named eligible school. The bill sets an initial application deadline for a prior‑year April 1 and requires at least one additional in‑year opportunity; accounts opened midyear receive a prorated deposit. Once established, accounts remain active without yearly reapplication so long as eligibility persists, though parents must amend agreements when changing schools.
School enrollment, public posting, and accreditation barrier
The Superintendent must publish and regularly update a public list of eligible schools, contact information, and published tuition/fee schedules. Private full‑time day schools become eligible by applying; eligibility hinges on accreditation (or pending application not denied in prior two years) plus basic health and safety requirements. Beyond those narrow conditions, the state may not impose further eligibility requirements, limiting regulatory leverage over participating private schools.
Operations: disbursements, audits, and account access
The Board must create individual accounts, credit deposits and investment earnings to them, and provide secure online access for parents to review activity. Disbursements generally occur monthly to eligible schools under the participation agreement, though alternate schedules may be negotiated. The Board must randomly audit disbursements to verify enrollment, attendance, and proper use; it may withhold future payments to recoup ineligible disbursements. The statute also prohibits schools from sharing, refunding, or rebating SCFA/SEFA funds to families, making the school a third‑party beneficiary of the participation agreement.
Enforcement, appeals, and fiscal allocation rules
The Trust Board can suspend or terminate accounts for intent to defraud, with administrative hearings appealable under state adjudication procedures. The Legislature is directed to rebase the minimum funding guarantee to include these students and to apportion the per‑student cost between the General Fund and the student’s public school district in the same ratio as direct education funding, and provide for transfers from districts to the state as necessary. These mechanics reallocate local and state shares and create a statutory pathway for shifting funds when students leave public school rolls.
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Explore Education in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Income‑eligible families who enroll in qualifying private schools — the program gives them state‑allocated funds to pay for a range of education expenses, lowering out‑of‑pocket costs during the phased rollout.
- Private full‑time day schools that attain eligibility — they receive direct monthly disbursements for enrolled account beneficiaries and access to a wider applicant pool.
- Students with exceptional needs who receive SEFAs — the statute earmarks a larger SEFA and allows special‑education‑related services and expenses to follow the student into private settings.
- Investment managers and the ScholarShare/Trust infrastructure — managing the program account and investment earnings creates new asset management responsibilities and potential revenues tied to program scale.
Who Bears the Cost
- Local public school districts — the law rebases the minimum funding guarantee and redirects a proportionate share of per‑student funding to the state trust, reducing district resources for students who leave.
- The State General Fund — the Controller must transfer program sums into the Trust, increasing near‑term state obligations and creating fiscal exposure if enrollment or costs outpace expectations.
- The Trust Board and Superintendent’s offices — they inherit operational, compliance, and recordkeeping duties; the administrative cap limits available resources to fulfill those responsibilities.
- Eligible private schools — while they gain revenue, they also take on compliance burdens (audits, public disclosure) and may face liability for improper fund use or accidental rebates, which are explicitly prohibited.
Key Issues
The Core Tension
The central dilemma is between expanding parental choice by turning public dollars into portable, account‑based payments and preserving the fiscal integrity and programmatic accountability of the public education system; the bill advances portability and minimal private‑school conditions, but that choice transfers fiscal risk to state and local budgets and leaves unresolved safeguards—especially for special education and civil‑rights protections—that public systems currently guarantee.
SB 64 combines portability with a light regulatory touch for private schools, which creates practical and policy tensions. The bill channels state constitutional and budget processes: it requires rebasing of minimum funding guarantees and apportions costs between the General Fund and districts, but it leaves key implementation details—how districts will transfer funds, timing of reconciliations, and contingency plans if enrollment estimates are wrong—open to later legislative action or administrative rules.
That gap raises transition‑year fiscal mismatch risk and requires interagency coordination between the Controller, Department of Finance, county offices, districts, and the Trust Board.
The bill’s approach to special education is particularly fraught. SEFAs follow students with exceptional needs into private settings, but the statute does not solve the parallel duty of public districts to provide a free appropriate public education (FAPE) or clarify how IEP implementation, related services, and due‑process protections will be ensured when state money flows to private schools.
Random audits and disbursement withholding provide some safeguards, but operationalizing consistent IEP implementation and accountability for outcomes will demand new intergovernmental arrangements and legal clarity. Finally, limiting eligibility conditions for private schools reduces the state’s leverage to ensure curriculum, nondiscrimination, and civil‑rights compliance, placing greater weight on audits and public disclosure to detect abuses—tools that are blunt and reactive rather than preventive.
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