Oversight committee approves interim voucher rules under the condition that regular rulemaking starts immediately to address “substantive” questions and concerns

The Joint Legislative Committee on Administrative Rules (JLCAR), the state’s legislative oversight body, approved the interim rules for the statewide school voucher program along party lines on Thursday, August 19, under the condition that the NH Department of Education and State Board of Education begin the regular rulemaking process immediately. 

There were significant concerns with the revised interim rule proposal, which removed all oversight of the scholarship organization by the state and removed protections for students’ personal information, including health, financial, and school records data. There were also concerns around special education services and rights, as well as concerns that background checks are not required for education provider staff, including those who come in direct contact with children. 

“The school voucher program is giving away public dollars with no oversight. We can’t violate the public’s trust and allow a program to be hastily implemented,” said JLCAR member and Senator Becky Whitley (D-Hopkinton). 

The original proposal included over 70 significant concerns and questions and over 40 wording edits. Many of the concerns pertained to conflicts with existing state law and with the Department of Education’s dereliction of authority over the scholarship organization. 

In response, the Department addressed some of the concerns with revisions and incorporated the JLCAR staff attorneys’ language suggestions. But some of the other concerns were removed completely, which prompted questions from both the committee and from the JLCAR staff attorneys.

Watch a recording of the committee meeting here.

The Department’s attorney, Chris Bond, responded by saying that some of the open concerns are addressed in the sole-source contract with the Children’s Scholarship Fund that the Executive Council approved. The remaining concerns would be addressed in the regular rulemaking process, he said.

Representative Terry Roy (R-Deerfield), who also serves on JLCAR, pushed back on the criticism, saying that the issues and concerns could be resolved in the regular rulemaking process. 

JLCAR attorneys will continue to work with the Department on the next iteration of rules but identified nine potential pieces of legislation that would address ambiguities in the state law that authorizes the school voucher program. 

Lack of oversight

The revised rules removed all of the state oversight of the scholarship organization, which is responsible for the design, administration, and monitoring of the school voucher program and the associated public tax dollars. 

According to our analysis, the scholarship organization would be handling roughly $70 million in public funds over the next three years, with virtually no oversight under the current statute and rules. 

Bond said that while the contract with the Children’s Scholarship Fund provided some guardrails, oversight would be addressed in the regular rulemaking process. 

Protections for students and families

The adopted rules do not include basic protections for students and families pertaining to safety or privacy. 

There is no requirement for education service providers to perform criminal background checks on their employees, including those that would have direct contact with students. 

Additionally, there is no requirement that a “negative” criminal background check — presumably meaning that the employee has a criminal record — would result in the service provider being barred from participating in the voucher program. In other words, a service provider could employ people with a criminal record — including those with direct student contact — and still receive state funding. 

There are also no protections for students’ confidential information, including health, financial, and school records. 

Student data privacy has been an issue of interest among families, educators, and advocates, especially over the past year with the rise in educational technology software and data mining. During committee hearings, lawmakers and members of the public expressed concern that there was a lack of protections for students and their families; however, protections were not included in the statute or in the rules. 

Ambiguities regarding special education rights and services

NH Association of Special Education Administrators representative Jerry Zelin stated that the interim rule proposal’s sections on special education services and rights conflict with state and federal disability laws

Since families are already considering whether or not to enroll in the school voucher program, and there could be substantial changes to their rights and services, the rules must properly and accurately reflect state and federal law, he said. 

The interim rules, he said, delegate the duties both to identify and notify changes and forfeitures in special education rights to the scholarship organization. These changes and forfeitures are complex and “momentous,” and parents deserve adequate notice of them. 

Zelin also raised concerns that the school voucher rules allow the scholarship organization to use a letter from “a medical professional licensed to practice in any state in the United States” in determining whether a student would qualify for the special education differentiated aid (an additional $1,800 per student per year), which could mean that many more students would qualify for special education aid.

“Doctors like to say yes” to parents, he said, which could lead to students being identified who would not otherwise qualify. 

The Department’s legal counsel, Chris Bond, responded by saying that the Department is working with its “federal partners” to “work it out” for the regular rulemaking process and is still working on understanding the details. 

While the Department is working with partners, the impact on families who enroll this school year remains unclear. 

About the school voucher program

The statewide school voucher program, which was passed as part of the state budget in June 2021, allows for the use of taxpayer funds to pay for private and homeschooling expenses through “Education Freedom Accounts,” or vouchers. 

The school voucher program has been overwhelmingly opposed by the public in hearings, polling, and in the news due to concerns over the absence of accountability or transparency provisions, the cost to the state and to local school districts, and objections over using public tax dollars to fund private education. 

When it was first introduced in January 2021, lawmakers had significant concerns over the technicalities of the bill. The House Education Committee retained the bill after a day-long executive session where members went through each piece of the legislation, raising questions and problems with the legal language. However, the bill was incorporated into the state budget, evading scrutiny from lawmakers and the public, and with zero work sessions to iron out the open questions. 

Several of those questions were raised by JLCAR staff attorneys, and ultimately led to ambiguities that couldn’t be worked out in the rules. 

Recommendations for legislation

JLCAR staff identified nine  pieces of legislation that would help clarify the law and rulemaking, including:

  • The statute defines scholarship organization as a singular organization not plural organizations, and the statute is written as if there is one organization. (See RSA 194-F:1, XII and throughout.) Additionally, the Parent and Education Service Provider Advisory Commission appears to be one commission, not multiple commissions established by/for each scholarship organization. It is also unclear whether the provisions of RSA 91-A apply to the meetings of the Commission since it has been established by statute in RSA 194-F:5, I. The Board had in its initial, proposed interim rule proposal language to allow for multiple scholarship organizations and Commissions;
  • The statute states EFA funds shall not constitute taxable income. (RSA 194-F:2, VI.) This may conflict with federal tax law;
  • If the legislative intent was to allow for more than one scholarship organization, RSA 194-F:3, II. may need to be clarified as it requires “the” scholarship organization to develop a standard application, and if there is more than one scholarship organization, it is not clear whether the standardized form shall be the same across the organizations;
  • The statute permits subcontracting for certain services and does not require approval to do so. See RSA 194-F:4, II., RSA 194-F:4, VI. (b), and RSA 194-F:4, X. If the contracts need Governor and Executive Council approval, the statute may need to be clarified;
  •  The statute does not address the role of the Board of Education, and oversight by the Department of Education is minimal. The initial, proposed interim rule did have some oversight to include review of applications and records retention policies. The conditional approval request removes all oversight. Additionally, RSA 194-F:4, XV grants rulemaking authority to the Department rather than the Board which is the authorized rulemaking authority pursuant to RSA 21-G:9, II(b). The roles of the two may need to be clarified (See generally RSA 194-F:4.) Further, the statute grants to the scholarship organization authority that is typically given to the executive agency and may represent an impermissible delegation of authority. RSA 541-A:22, III(e) states that an agency shall not by rule delegate its rulemaking authority to anyone other than the agency named in the statute. RSA 194-F:4, XV only grants the Department rulemaking authority necessary for the administration of the statute. The policies and procedures developed by the organization will not have the legal effect of administrative rules.
  • There is no provision in the statute to require that the education service providers get a criminal background check and no stipulation that a negative background check will result in a bar from participation in the EFA program. If these are needed, the statute will need to be amended.
  • The statute does not address any protections needed to keep confidential personal student information including health care information which the scholarship organization may have or obtain, and the conditional approval request removes the requirements to develop protocols to protect confidential student information. The statute may need to be clarified to provide parents and students protections when the scholarship organization has in its possession confidential student information. 
  • The program specifically bars payment for homeschooling and will need to be amended if the intent was to permit it. See RSA 194-F:2, IX.
  • Scholarship organizations are approved by the Dept. of Revenue Administration pursuant to RSA 77-G:1, XVII(d) and RSA 77-G:5, II(a). There appears to be no clear authority to allow the Dept. of Education to suspend or remove a scholarship organization from participation in the EFA program, and certainly no authority to remove its designation as an approved scholarship organization under RSA 77-G. These issues need to be clarified in RSA 194-F. 

Next steps

The State Board of Education is expected to adopt the interim rules at its next meeting on Friday, August 27. If the rules are adopted, the Children’s Scholarship Fund may begin enrolling students. 

Meanwhile, the Department and State Board must begin the regular rulemaking process immediately.  

Learn More

WEBINAR: Education in the State Budget