(a) To participate in the program, a parent of an eligible student who is seventeen (17) years of age or younger, or an eligible student who has reached the age of eighteen (18) must agree in writing to:

(1) Ensure the provision of an education for the participating student that satisfies the compulsory school attendance requirement provided in § 49-6-3001(c)(1) through enrollment in a private school, as defined in § 49-6-3001(c)(3)(A)(iii), that meets the requirements established by the department and the state board for a Category I, II, or III private school;

(2) Not enroll the participating student in a public school while participating in the program;

(3) Release the LEA in which the participating student resides from all obligations to educate the participating student while participating in the program. Participation in the program has the same effect as a parental refusal to consent to the receipt of services under the Individuals with Disabilities Education Act (IDEA) (20 U.S.C. § 1414);

(4) Only use the funds deposited in a participating student's ESA for one (1) or more of the following expenses of the student:

(A) Tuition or fees at a participating school;

(B) Textbooks required by a participating school;

(C) Tutoring services provided by a tutor or tutoring facility that meets the requirements established by the department and the state board;

(D) Fees for transportation to and from a participating school or educational provider paid to a fee-for-service transportation provider;

(E) Fees for early postsecondary opportunity courses and examinations required for college admission;

(F) Computer hardware, technological devices, or other technology fees approved by the department, if the computer hardware, technological device, or technology fee is used for the student's educational needs and is purchased through a participating school, private school, or provider;

(G) School uniforms, if required by a participating school;

(H) Tuition and fees for summer education programs and specialized afterschool education programs, as approved by the department, which do not include afterschool childcare;

(I) Tuition and fees at an eligible postsecondary institution;

(J) Textbooks required by an eligible postsecondary institution;

(K) Educational therapy services provided by therapists that meet the requirements established by the department and the state board; or

(L) Fees for the management of the ESA by a private or non-profit financial management organization, as approved by the department. The fees must not exceed two percent (2%) of the funds deposited in a participating student's ESA in a fiscal year; and

(5) Verify that the student's household income meets the requirements of § 49-6-2602(3)(D) by providing a federal income tax return from the previous year or by providing proof that the parent of an eligible student who is seventeen (17) years of age or younger, or an eligible student who has reached the age of eighteen (18), is eligible to enroll in the state's temporary assistance for needy families (TANF) program. Household income must be verified under this subdivision (a)(5):

(A) When the parent of the eligible student or the eligible student, as applicable, submits an application to participate in the program; and

(B) At least once every year, according to the schedule and income-verification process developed by the department.

(b) This part does not prohibit a parent or third party from paying the costs of educational programs and services for a participating student that are not covered by the funds in an ESA.

(c) When a participating student reaches eighteen (18) years of age, the rights accorded to, and any consent required of, the participating student's parent under this part transfer from the participating student's parent to the participating student.

(d) For purposes of continuity of educational attainment, and subject to the eligibility requirements of § 49-6-2602(3)(A) and (B), a participating student may participate in the program, unless the student is suspended or terminated from participating in the program under § 49-6-2608, until:

(1) The participating student:

(A) Enrolls in a public school;

(B) Ceases to be a resident of the LEA in which the student resided when the student began participating in the program;

(C) Graduates or withdraws from high school; or

(D) Reaches twenty-two (22) years of age between the commencement of the school year and the conclusion of the school year, whichever occurs first; or

(2) The parent of the participating student or the participating student, as applicable:

(A) Fails to verify that the participating student's household income meets the requirements of § 49-6-2602(3)(D) according to the schedule and income-verification process developed by the department; or

(B) Verifies, according to the schedule and income-verification process developed by the department, that the participating student's household income does not meet the requirements of § 49-6-2602(3)(D).

(e) A participating student, who is otherwise eligible to return to the student's LEA, may return to the student's LEA at any time after enrolling in the program. Upon a participating student's return to the student's LEA, the student's ESA will be closed and any remaining funds must be returned to the state treasurer to be placed in the basic education program account of the education trust fund of 1992 under §§ 49-3-357 and 49-3-358.

(f)

(1) If a participating student ceases to be a resident of the LEA in which the student resided when the student began participating in the program, then the student's ESA will be closed and any remaining funds must be returned to the state treasurer to be placed in the basic education program account of the education trust fund of 1992 under §§ 49-3-357 and 49-3-358.

(2) If the parent of a participating student or the participating student, as applicable, fails to verify that the participating student's household income meets the requirements of § 49-6-2602(3)(D) according to the schedule and income-verification process developed by the department, or if the parent of a participating student or the participating student, as applicable, verifies, according to the schedule and income-verification process developed by the department, that the participating student's household income does not meet the requirements of § 49-6-2602(3)(D), then the student's ESA will be closed and any remaining funds must be returned to the state treasurer to be placed in the basic education program account of the education trust fund of 1992 under §§ 49-3-357 and 49-3-358.

(g) Any funds remaining in a participating student's ESA upon graduation from high school or exiting the program by reaching twenty-two (22) years of age may be used by the student when the student becomes a legacy student to attend or take courses from an eligible postsecondary institution, with qualifying expenses subject to the conditions of subdivision (a)(4).

(h) A participating student's ESA will be closed, and any remaining funds must be returned to the state treasurer to be placed in the basic education program account of the education trust fund of 1992 under §§ 49-3-357 and 49-3-358, after the first of the following events:

(1) Upon a legacy student's graduation from an eligible postsecondary institution;

(2) After four (4) consecutive years elapse immediately after a legacy student enrolls in an eligible postsecondary institution;

(3) After a participating student or legacy student exits the program and is not enrolled in an eligible postsecondary institution; or

(4) After a participating or legacy student reaches twenty-two (22) years of age and is not enrolled in an eligible postsecondary institution.

(i) Funds received pursuant to this part:

(1) Constitute a scholarship provided for use on qualified educational expenses listed in subdivision (a)(4); and

(2) Do not constitute income of a parent of a participating student under title 67, chapter 2 or any other state law.

(j) A student who is eligible for both the program created under this part and an individualized education account under the Individualized Education Act, compiled in chapter 10, part 14 of this title, may apply for both programs but must only participate and receive assistance from one (1) program.

(k) A participating student is ineligible to participate in a sport sanctioned by an association that regulates interscholastic athletics for the first year in which the student attends a participating school if:

(1) The participating student attended a Tennessee public school and participated in that sport;

(2) The student participated in that sport in the year immediately preceding the year in which the participating student enrolled in the participating school; and

(3) The participating student has not relocated outside the LEA in which the Tennessee public school that the participating student formerly attended is located.

(l) The state board shall adopt rules regarding the spending requirements for ESA funds and the use of any unspent funds, as well as rules providing for determining that a student is no longer participating in the program or that a student's ESA should be closed. The rules must be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.