House Bill 1540, introduced in the North Dakota State Legislature on January 20, 2025, aims to enhance the state's education savings account program. The bill outlines key provisions for managing these accounts, which are designed to provide parents with more flexibility in funding their children's education, particularly in nonpublic schools or homeschooling environments.

One of the primary features of House Bill 1540 is the stipulation that if a parent withdraws a child from the education savings account program before the school year concludes, any remaining funds must be returned to the state. These funds will then be reallocated to support other accounts within the program. However, the bill allows students to transfer to another nonpublic school or homeschool while retaining their education savings account funds, promoting educational choice.

The bill designates the Bank of North Dakota as the administrator responsible for overseeing the program. This includes qualifying private financial management firms to manage the accounts, conducting annual audits, and ensuring compliance with regulations. Notably, the Bank has the authority to make parents ineligible for the program if there is substantial misuse of funds, and it can refer cases of suspected fraud to law enforcement.

In terms of accountability, participating private schools must adhere to health and safety laws, hold valid occupancy permits, and comply with nondiscrimination policies. These requirements aim to ensure that students are treated fairly and kept safe in educational settings funded by the program.

The introduction of House Bill 1540 has sparked discussions among lawmakers and stakeholders. Proponents argue that the bill enhances parental choice and accountability in education, while critics express concerns about the potential for misuse of funds and the implications for public school funding.

As the legislative session progresses, the bill's implications could significantly impact educational funding and parental control over educational choices in North Dakota. The outcome of this bill may set a precedent for similar initiatives in other states, reflecting a growing trend toward educational flexibility and privatization.