Bill Text: TX SB2 | 2017 | 85th Legislature 1st Special Session | Engrossed


Bill Title: Relating to public school finance, including the establishment of a tax credit scholarship and educational expense assistance program.

Spectrum: Moderate Partisan Bill (Republican 6-1)

Status: (Engrossed) 2017-07-27 - Received from the Senate [SB2 Detail]

Download: Texas-2017-SB2-Engrossed.html
 
 
  By: Taylor of Galveston, et al. S.B. No. 2
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to public school finance, including the establishment of a
  tax credit scholarship and educational expense assistance program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  SECTION 1.  Effective September 1, 2018, Section 12.106,
  Education Code, is amended by adding Subsections (d) and (e) to read
  as follows:
         (d)  Subject to Subsection (e), in addition to other amounts
  provided by this section, a charter holder is entitled to receive,
  for the open-enrollment charter school, funding per student in
  average daily attendance in an amount equal to the guaranteed level
  of state and local funds per student per cent of tax effort under
  Section 46.032(a) multiplied by the lesser of:
               (1)  the state average interest and sinking fund tax
  rate imposed by school districts for the current year; or
               (2)  a rate that would result in a total amount to which
  charter schools are entitled under this subsection for the current
  year equal to $60 million.
         (e)  A charter holder is entitled to receive funding under
  Subsection (d) only if the most recent overall performance rating
  assigned to the open-enrollment charter school under Subchapter C,
  Chapter 39, reflects at least acceptable performance.
         SECTION 2.  Chapter 42, Education Code, is amended by adding
  Subchapter H to read as follows:
  SUBCHAPTER H. FINANCIAL HARDSHIP TRANSITION PROGRAM
         Sec. 42.451.  FINANCIAL HARDSHIP GRANTS. (a)  From amounts
  appropriated for this subchapter, the commissioner may administer a
  grant program that provides grants to school districts to defray
  financial hardships resulting from changes made to Chapter 41 and
  this chapter that apply after the 2016-2017 school year.
         (b)  The commissioner shall award grants under this
  subchapter to districts as provided by Section 42.452.
         (c)  Except as provided by Subsection (d), funding provided
  to a district under this subchapter is in addition to all other
  funding provided under Chapter 41 and this chapter.
         (d)  A district is not eligible for funding under this
  subchapter for a school year if the district receives for that
  school year an adjustment of the district's taxable value of
  property under Section 42.2521. A district may decline an
  adjustment under Section 42.2521 to maintain eligibility for
  funding under this subchapter.
         (e)  The commissioner may obtain additional information as
  needed from a district or other state or local agency to make
  determinations in awarding grants under this subchapter.
         Sec. 42.452.  AWARD OF GRANTS; AMOUNT. (a)  The
  commissioner shall award grants to school districts based on the
  following formula:
  HG = (PL-CL) X (TR) X (TAHG/TEHG)
  where:
         "HG" is the amount of a district's hardship grant;
         "PL" is the amount of funding under previous law to which a
  district would be entitled under Chapter 41 and this chapter as
  those chapters existed on January 1, 2017, determined using current
  school year data for the district;
         "CL" is the amount of current law funding under Chapter 41 and
  this chapter to which a district is entitled;
         "TR" is a district's maintenance and operations tax rate, as
  specified by the comptroller's most recent certified report;
         "TAHG" is the total funding available for grants under
  Section 42.456 for a school year; and
         "TEHG" is the sum of the combined amounts for all districts
  calculated by applying the formula (PL-CL) X (TR) for each
  district.
         (b)  A school district's hardship grant awarded under this
  subchapter for a school year may not exceed the lesser of:
               (1)  the amount equal to 10 percent of the total amount
  of funds available for grants under this subchapter for that school
  year; or
               (2)  the amount by which "PL" exceeds "CL" for that
  district for that school year.
         (c)  For purposes of calculating the formula under
  Subsection (a), the commissioner shall:
               (1)  if the value of (PL-CL) for a school district
  results in a negative number, use zero for the value of (PL-CL);
               (2)  if a school district's maintenance and operations
  tax rate ("TR") is greater than $1, use $1 for the value of "TR";
               (3)  use a maintenance and operations tax rate ("TR")
  of $1 for each open-enrollment charter school, each special-purpose
  school district established under Subchapter H, Chapter 11, and the
  South Texas Independent School District; and
               (4)  if (TAHG/TEHG) equals a value greater than one,
  use a value of one for (TAHG/TEHG).
         (d)  If funds remain available under this subchapter for a
  school year after determining initial grant amounts under
  Subsection (a), as adjusted to reflect the limits imposed by
  Subsection (b), the commissioner shall reapply the formula as
  necessary to award all available funds.
         (e)  If the commissioner reapplies the formula in accordance
  with Subsection (d), a school district that was ineligible under
  Section 42.455 for a grant during the initial application of the
  formula for that school year is eligible to receive a grant as a
  result of the formula reapplication.
         Sec. 42.453.  ELIGIBILITY OF OPEN-ENROLLMENT CHARTER
  SCHOOL.  An open-enrollment charter school is eligible for a grant
  under this subchapter in the same manner as a school district.
         Sec. 42.454.  REGIONAL EDUCATION SERVICE CENTERS AND COUNTY
  DEPARTMENTS OF EDUCATION NOT ELIGIBLE. A regional education
  service center or a county department of education is not eligible
  for a grant under this subchapter.
         Sec. 42.455.  CERTAIN SCHOOL DISTRICTS NOT ELIGIBLE. Except
  as provided by Section 42.452(e), a school district is not eligible
  for a grant under this subchapter if for the 2015-2016 school year
  the district's expenditures per student in weighted average daily
  attendance, excluding bond debt service payments, capital outlays,
  and facilities acquisition and construction costs, exceeded an
  amount that is equal to 120 percent of the state average amount for
  that school year of expenditures per student in weighted average
  daily attendance, excluding bond debt service payments, capital
  outlays, and facilities acquisition and construction costs, as
  those amounts are determined by the commissioner.
         Sec. 42.456.  FUNDING LIMIT. The amount of grants awarded by
  the commissioner under this subchapter may not exceed $100 million
  for the 2017-2018 school year or $50 million for the 2018-2019
  school year.
         Sec. 42.457.  NO ADJUSTMENT BASED ON REVISED DATA. The
  commissioner may not adjust the amount of a school district's grant
  under this subchapter based on revisions to the district's data
  received after a grant has been awarded.
         Sec. 42.458.  RULES. The commissioner may adopt rules as
  necessary to administer this subchapter.
         Sec. 42.459.  DETERMINATION FINAL. A determination by the
  commissioner under this subchapter is final and may not be
  appealed.
         Sec. 42.460.  EXPIRATION. This subchapter expires September
  1, 2019.
         SECTION 3.  Effective September 1, 2018, Section 46.032(a),
  Education Code, is amended to read as follows:
         (a)  Each school district is guaranteed a specified amount
  per student in state and local funds for each cent of tax effort to
  pay the principal of and interest on eligible bonds. The amount of
  state support, subject only to the maximum amount under Section
  46.034, is determined by the formula:
  EDA = (EDGL X ADA X EDTR X 100) - (EDTR X (DPV/100))
  where:
         "EDA" is the amount of state funds to be allocated to the
  district for assistance with existing debt;
         "EDGL" is the dollar amount guaranteed level of state and
  local funds per student per cent of tax effort, which is the lesser
  of:
               (1)  $40 [$35] or a greater amount for any year provided
  by appropriation; or
               (2)  the amount that would result in a total additional
  amount of state funds under this subchapter for the current year
  equal to $60 million in excess of the state funds to which school
  districts would have been entitled under this section if the
  guaranteed level amount were $35;
         "ADA" is the number of students in average daily attendance,
  as determined under Section 42.005, in the district;
         "EDTR" is the existing debt tax rate of the district, which is
  determined by dividing the amount budgeted by the district for
  payment of eligible bonds by the quotient of the district's taxable
  value of property as determined under Subchapter M, Chapter 403,
  Government Code, or, if applicable, under Section 42.2521, divided
  by 100; and
         "DPV" is the district's taxable value of property as
  determined under Subchapter M, Chapter 403, Government Code, or, if
  applicable, under Section 42.2521.
         SECTION 4.  Subtitle B, Title 3, Insurance Code, is amended
  by adding Chapter 230 to read as follows:
  CHAPTER 230.  CREDIT AGAINST PREMIUM TAXES FOR CONTRIBUTIONS TO
  CERTAIN EDUCATIONAL ASSISTANCE ORGANIZATIONS
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 230.001.  DEFINITIONS.  In this chapter:
               (1)  "Educational assistance organization" means an
  organization that:
                     (A)  has the ability according to the
  organization's charter to award scholarships to or pay educational
  expenses for eligible students in:
                           (i)  public elementary or secondary schools
  located in this state; or
                           (ii)  nonpublic elementary or secondary
  schools located in this state:
                                 (a)  that meet the requirements of
  Section 230.052;
                                 (b)  at which a student may fulfill
  this state's compulsory attendance requirements; and
                                 (c)  that are not in violation of the
  federal Civil Rights Act of 1964 (42 U.S.C. Section 2000a et seq.);
  and
                     (B)  uses part of its annual revenue for the
  purpose provided by Paragraph (A).
               (2)  "State premium tax liability" means any liability
  incurred by an entity under Chapter 221, 222, or 224.
               (3)  "Student with a disability" means a student who
  is:
                     (A)  eligible to participate in a school
  district's special education program under Section 29.003,
  Education Code; or
                     (B)  covered by Section 504, Rehabilitation Act of
  1973 (29 U.S.C. Section 794).
         Sec. 230.002.  RULES; PROCEDURES. (a)  The comptroller
  shall adopt rules and procedures to implement, administer, and
  enforce this chapter.
         (b)  A rule adopted under Subsection (a) is binding on an
  organization that applies for certification as an educational
  assistance organization, an entity that applies for a credit, and a
  state or local governmental entity, including a political
  subdivision, as necessary to implement, administer, and enforce
  this chapter.
  SUBCHAPTER B.  SCHOLARSHIP AND EDUCATIONAL EXPENSE ASSISTANCE
  PROGRAM
         Sec. 230.051.  CERTIFICATION OF EDUCATIONAL ASSISTANCE
  ORGANIZATION. (a)  An organization may apply to the comptroller
  for certification as a certified educational assistance
  organization during an application period provided by the
  comptroller.
         (b)  To be eligible for certification, the organization:
               (1)  must:
                     (A)  be exempt from federal tax under Section
  501(a) of the Internal Revenue Code of 1986 by being listed as an
  exempt organization in Section 501(c)(3) of that code;
                     (B)  be in good standing with the state;
                     (C)  be located in the state;
                     (D)  allocate at least 90 percent of its annual
  revenue from contributions that are designated for scholarships or
  educational expense assistance for eligible students under this
  chapter for student scholarships and assistance for educational
  expenses, including tuition, transportation, textbooks, and other
  supplies, and for other related educational expense assistance as
  described by this section;
                     (E)  award scholarships and assistance for
  qualifying educational expenses to eligible students who
  demonstrate the greatest financial and academic need;
                     (F)  agree to give each donor a receipt for money
  contributed to the organization that includes the name of the
  organization, the name of the donor, the amount of the
  contribution, the information required by Section 230.054(c), and
  any other information required by the comptroller;
                     (G)  demonstrate experience and technical
  expertise in:
                           (i)  accepting, processing, and tracking
  applications for scholarships or educational expense assistance;
  and
                           (ii)  awarding scholarships to students in
  primary or secondary schools;
                     (H)  agree to be independently audited on an
  annual basis and file the audit with the comptroller;
                     (I)  disburse within two academic years of receipt
  contributions received from and designated by entities for
  scholarships or educational expense assistance under this chapter;
  and
                     (J)  establish comprehensive and transparent
  criteria for how the organization will:
                           (i)  select recipients of scholarships and
  educational expense assistance; and
                           (ii)  determine the amount of the
  scholarship and educational expense assistance awarded to each
  recipient; and
               (2)  may not:
                     (A)  award all scholarships under this chapter to
  students who attend a particular school or pay educational expenses
  incurred only at a particular school;
                     (B)  provide to a student a scholarship in an
  annual amount that exceeds the amount provided under Section
  230.055(a) unless the money used to provide the portion of the
  scholarship in excess of that amount was contributed by a person
  other than an entity that notifies the organization under Section
  230.054(c) that the entity may apply for a tax credit for the
  contribution; and
                     (C)  provide to a student educational expense
  assistance in excess of the amount provided under Section
  230.055(b), unless the money used to provide the portion of the
  assistance in excess of that amount was contributed by a person
  other than an entity that notifies the organization under Section
  230.054(c) that the entity may apply for a tax credit for the
  contribution, including assistance for:
                           (i)  facility fees;
                           (ii)  instructional materials;
                           (iii)  school supplies;
                           (iv)  tutoring;
                           (v)  academic after-school programs;
                           (vi)  school or lab fees;
                           (vii)  before-school or after-school child
  care; and
                           (viii)  transportation expenses, including
  the cost to transfer from one public school to another.
         (c)  The comptroller shall certify one organization as the
  primary certified educational assistance organization and one
  organization as the secondary certified educational assistance
  organization. The comptroller shall select the organizations to
  certify as the primary and secondary certified educational
  assistance organizations from among the organizations that apply
  under Subsection (a) and meet the requirements of Subsection (b).
  The comptroller has broad discretion in selecting the primary and
  secondary certified educational assistance organizations.
         (d)  The comptroller shall notify all organizations that
  apply under Subsection (a) of the comptroller's selections under
  Subsection (c).
         (e)  The comptroller shall attempt to maintain one primary
  and one secondary certified educational assistance organization at
  all times. The comptroller shall provide an application period
  under Subsection (a) as soon as practicable after the comptroller
  learns there is, or is likely to be, a vacancy for the primary or
  secondary certified educational assistance organization.
         (f)  The comptroller's selections under Subsection (c) are
  final and are not appealable.
         Sec. 230.0511.  PERFORMANCE OF CERTIFIED EDUCATIONAL
  ASSISTANCE ORGANIZATION POWERS AND DUTIES. (a)  Except as provided
  by Subsection (b), the organization certified as the primary
  certified educational assistance organization shall perform the
  powers and duties assigned to the certified educational assistance
  organization under this chapter.
         (b)  The organization certified as the secondary certified
  educational assistance organization shall perform the powers and
  duties assigned to the certified educational assistance
  organization under this chapter if:
               (1)  the organization certified as the primary
  certified educational assistance organization has its
  certification revoked; or
               (2)  the comptroller otherwise determines the
  organization certified as the primary educational assistance
  organization is unable to perform the powers and duties assigned to
  the certified educational assistance organization under this
  chapter.
         (c)  A reference in this chapter or other law to the
  certified educational assistance organization means the
  organization performing the powers and duties of the certified
  educational assistance organization under Subsection (a) or (b).
         Sec. 230.0512.  ALLOCATION OF MONEY DESIGNATED FOR
  SCHOLARSHIPS OR EDUCATIONAL EXPENSE ASSISTANCE. Of the amount
  required to be allocated as provided by Section 230.051(b)(1)(D),
  the certified educational assistance organization shall use:
               (1)  at least 80 percent to award scholarships as
  described by Section 230.055(a); and
               (2)  not more than 20 percent to award educational
  expense assistance as described by Section 230.055(b).
         Sec. 230.052.  NONPUBLIC SCHOOL REQUIREMENTS. The certified
  educational assistance organization may not award scholarships to
  or pay educational expenses for eligible students enrolled in a
  nonpublic school unless the nonpublic school executes a notarized
  affidavit, with supporting documents, concerning the school's
  qualification for scholarships and educational expense assistance
  for eligible students who receive assistance from the certified
  educational assistance organization, including evidence of:
               (1)  accreditation by the Texas Education Agency or by
  an organization recognized by the Texas Private School
  Accreditation Commission;
               (2)  annual administration of a nationally
  norm-referenced assessment instrument or the appropriate
  assessment instrument required under Section 39.023, Education
  Code;
               (3)  valid certificate of occupancy; 
               (4)  policy statements regarding:
                     (A)  admissions;
                     (B)  curriculum;
                     (C)  safety;
                     (D)  food service inspection; and
                     (E)  student to teacher ratios; and
               (5)  the school's agreement that students who receive
  scholarships under this chapter are eligible to receive any
  scholarships offered by the school to the same extent as other
  students.
         Sec. 230.053.  ELIGIBILITY OF STUDENTS FOR SCHOLARSHIPS;
  INCLUSION IN CALCULATION OF EQUALIZED WEALTH LEVEL. (a)  A student
  is eligible to apply for a scholarship from the certified
  educational assistance organization under this chapter if the
  student:
               (1)  is a student with a disability;
               (2)  is eligible to attend a public school under
  Section 25.001, Education Code;
               (3)  was enrolled in a public school in this state
  during the entire preceding academic year; and
               (4)  will attend a nonpublic school in this state
  during the entire academic year for which the scholarship is
  awarded.
         (b)  A student who establishes eligibility under this
  section may apply for a scholarship from the certified educational
  assistance organization under this chapter for each academic year
  until the student:
               (1)  graduates from high school;
               (2)  is no longer eligible to attend a public school
  under Section 25.001, Education Code; or
               (3)  enrolls in a public school, including an
  open-enrollment charter school.
         (c)  Notwithstanding Subsection (b), the comptroller shall
  establish guidelines for, in the least disruptive manner possible:
               (1)  a student who has previously received a
  scholarship to enroll in a public school, including an
  open-enrollment charter school; and
               (2)  a student who previously received a scholarship
  and subsequently enrolled in a public school, including an
  open-enrollment charter school, to reestablish eligibility for a
  scholarship.
         (d)  The certified educational assistance organization shall
  award scholarships to eligible students who apply in accordance
  with this chapter to the extent money is available for that purpose.
         (e)  For the first year a student receives a scholarship
  under this chapter to attend a nonpublic school, the student is
  included in the weighted average daily attendance of the school
  district the student would otherwise attend for purposes of
  determining the district's equalized wealth level under Chapter 41,
  Education Code.
         (f)  A nonpublic school may not enroll a student who is
  awarded a scholarship under this chapter unless the nonpublic
  school:
               (1)  provides to the student's parent a written notice,
  in the primary language spoken by the parent, describing all
  expenses other than tuition required for the student to attend the
  nonpublic school; and
               (2)  receives from the parent a signed copy of the
  notice under Subdivision (1). 
         Sec. 230.0531.  ELIGIBILITY OF STUDENTS FOR EDUCATIONAL
  EXPENSE ASSISTANCE. (a)  A student is eligible to apply for
  educational expense assistance from the certified educational
  assistance organization under this chapter for an academic year if
  the student:
               (1)  is a student with a disability; and
               (2)  will attend a public school in this state during
  the entire academic year for which the educational expense
  assistance is awarded.
         (b)  A student who establishes eligibility under this
  section may apply for educational expense assistance from the
  certified educational assistance organization under this chapter
  for each academic year the student attends a public school in this
  state.
         (c)  The certified educational assistance organization shall
  award educational expense assistance to eligible students who apply
  in accordance with this chapter to the extent money is available for
  that purpose.
         Sec. 230.0532.  NOTICE TO CERTAIN PARENTS. A school
  district shall provide written notice of the availability of
  assistance under this chapter to the parent of a student who is
  eligible to apply for a scholarship to attend a nonpublic school
  under Section 230.053. The notice under this section must inform
  the parent that a nonpublic school is not subject to laws regarding
  the provision of education services in the same manner as a public
  school, and a student with a disability attending a nonpublic
  school may not receive the services a student with a disability
  attending a public school is entitled to receive under federal and
  state law. The notice must provide information regarding rights to
  which a student with a disability is entitled under federal and
  state law if the student attends a public school, including:
               (1)  rights provided under the Individuals with
  Disabilities Education Act (20 U.S.C. Section 1400 et seq.),
  including:
                     (A)  an individualized education program;
                     (B)  education services provided in the least
  restrictive environment;
                     (C)  instruction from certified teachers;
                     (D)  due process hearings to ensure proper and
  full implementation of an individualized education program;
                     (E)  transition and planning services; and
                     (F)  supplementary aids and services;
               (2)  rights provided under Subchapter A, Chapter 29,
  Education Code; and
               (3)  other rights provided under federal or state law.
         Sec. 230.054.  CREDIT FOR CONTRIBUTIONS. (a)  An entity may
  apply for a credit under this chapter only for money contributed to
  the certified educational assistance organization and designated
  for scholarships or educational expense assistance for eligible
  students.
         (b)  An entity may not apply for a credit under this chapter
  for a contribution made to the certified educational assistance
  organization if:
               (1)  the entity requires that the contribution benefit
  a particular person or school; or
               (2)  the contribution is designated to provide a
  scholarship or educational expense assistance for an entity
  employee or for a spouse or dependent of an entity employee.
         (c)  An entity shall notify the certified educational
  assistance organization in writing when the entity makes a
  contribution if the entity may apply for a tax credit under this
  chapter for the contribution. An entity may not apply for a credit
  for the contribution unless the entity provides the notification at
  the time the contribution is made. The certified educational
  assistance organization shall indicate on the receipt provided
  under Section 230.051(b)(1)(F) that the entity made the
  notification under this subsection.
         Sec. 230.055.  LIMIT ON AMOUNT OF SCHOLARSHIP OR EDUCATIONAL
  EXPENSE ASSISTANCE. (a)  The maximum scholarship amount the
  certified educational assistance organization may award to a
  student under this chapter for an academic year using money
  contributed by an entity that notifies the organization under
  Section 230.054(c) that the entity may apply for a tax credit for
  the contribution may not exceed the lesser of:
               (1)  $10,000; and
               (2)  the full tuition amount for the nonpublic school
  the student attends.
         (b)  The maximum educational expense assistance the
  certified educational assistance organization may award to a
  student under this chapter using money contributed by an entity
  that notifies the organization under Section 230.054(c) that the
  entity may apply for a tax credit for the contribution may not
  exceed $500 for the 2019 state fiscal year, increased by five
  percent each subsequent year.
         Sec. 230.056.  REVOCATION. (a)  The comptroller shall
  revoke a certification provided under Section 230.051 if the
  comptroller finds that a certified educational assistance
  organization:
               (1)  is no longer eligible under Section 230.051; or
               (2)  intentionally and substantially violates this
  chapter.
         (b)  The comptroller has broad discretion in determining
  whether to revoke a certification under Subsection (a).
         (c)  The comptroller shall notify a certified educational
  assistance organization in writing of the comptroller's decision to
  revoke the organization's certification.  If the comptroller
  revokes an organization's certification, the comptroller shall
  include in the notice of revocation the reasons for the revocation.
         (d)  If the comptroller revokes a certified educational
  assistance organization's certification under Subsection (a), the
  organization may request in writing a reconsideration of the
  revocation not later than the 10th day after the date of the notice
  under Subsection (c) or the revocation is final.
         (e)  An organization that requests a reconsideration under
  Subsection (d) may submit to the comptroller not later than the 30th
  day after the date the request for reconsideration is submitted
  additional information and documents to support the organization's
  request for reconsideration.
         (f)  The comptroller's reconsideration of a revocation under
  this section is not a contested case under Chapter 2001, Government
  Code.  The comptroller's decision on a request for reconsideration
  of a revocation is final and is not appealable.
         (g)  This section does not create a cause of action to
  contest a decision of the comptroller to revoke a certified
  educational assistance organization's certification under this
  chapter.
         (h)  Revocation of a certification under this section does
  not affect the validity of a tax credit relating to a contribution
  made before the date of revocation.
         Sec. 230.057.  REPORT OF NET SAVINGS TO PUBLIC EDUCATION.
  (a)  In this section, "net savings" means any positive difference
  in a state fiscal year between:
               (1)  the amount by which state spending on public
  education for that year is reduced as a result of students receiving
  scholarships and educational expense assistance from the certified
  educational assistance organization under this chapter; and
               (2)  the amount by which state revenue derived from
  Chapters 221, 222, and 224 is reduced as a result of tax credits
  under this chapter.
         (b)  Not later than December 31 of each even-numbered year,
  the comptroller shall determine the amount of net savings for the
  previous state fiscal biennium and make available to the public a
  report of that amount of savings.
  SUBCHAPTER C.  CREDIT
         Sec. 230.101.  CREDIT.  An entity may apply for a credit
  against the entity's state premium tax liability in the amount and
  under the conditions and limitations provided by this chapter.  The
  comptroller shall award credits as provided by Section 230.103.
         Sec. 230.102.  AMOUNTS; LIMITATION ON TOTAL CREDITS.  
  (a)  Subject to Subsections (b) and (c), the amount of an entity's
  credit is equal to the lesser of the amount of the qualifying
  contributions made to the certified educational assistance
  organization or 50 percent of the entity's state premium tax
  liability.
         (b)  The total amount of tax credits that may be awarded
  under this chapter for a state fiscal year may not exceed $75
  million.
         (c)  The comptroller by rule shall prescribe procedures by
  which the comptroller may allocate credits under this chapter.  The
  procedures must provide that credits are first allocated to
  entities that were granted preliminary approval for a credit under
  Section 230.1025 in the amount that was preliminarily approved.  
  The procedures must provide that any remaining credits are
  allocated on a first-come, first-served basis, based on the date
  the contribution was initially made.
         (d)  The comptroller may require an entity to notify the
  comptroller of the amount the entity intends or expects to apply for
  under this chapter before the beginning of a state fiscal year or at
  any other time required by the comptroller.
         Sec. 230.1025.  PRELIMINARY APPROVAL FOR CREDIT.
  (a)  Before making a contribution to the certified educational
  assistance organization, an entity may apply to the comptroller for
  preliminary approval of a credit under this chapter for the
  contribution.
         (b)  An entity must apply for preliminary approval of a
  credit on a form provided by the comptroller that includes the
  amount the entity expects to contribute and any other information
  required by the comptroller.
         (c)  The comptroller shall grant preliminary approval for
  credits under this chapter on a first-come, first-served basis,
  based on the date the application for preliminary approval is
  received by the comptroller. 
         (d)  The comptroller shall grant preliminary approval for a
  credit under this chapter if the total amount of credits
  preliminarily approved under this chapter does not exceed the
  amount provided by Section 230.102(b).
         (e)  A credit for which the comptroller grants preliminary
  approval remains subject to the limitation under Section 230.102(a)
  and any other limitations prescribed by this chapter.
         Sec. 230.103.  APPLICATION FOR CREDIT.  (a)  An entity must
  apply for a credit under this chapter on or with the tax return for
  the taxable year and submit with the application each receipt
  issued under Section 230.051(b)(1)(F) that includes the
  information required by Section 230.054(c).
         (b)  The comptroller shall adopt a form for the application
  for the credit. An entity must use this form in applying for the
  credit.
         (c)  The comptroller may award a credit to an entity that
  applies for the credit under Subsection (a) if the entity is
  eligible for the credit and the credit is available under Section
  230.102(b).  The comptroller has broad discretion in determining
  whether to grant or deny an application for a credit.
         (d)  The comptroller shall notify an entity in writing of the
  comptroller's decision to grant or deny the application under
  Subsection (a).  If the comptroller denies an entity's application,
  the comptroller shall include in the notice of denial the reasons
  for the comptroller's decision.
         (e)  If the comptroller denies an entity's application under
  Subsection (a), the entity may request in writing a reconsideration
  of the application not later than the 10th day after the date of the
  notice under Subsection (d).  If the entity does not request a
  reconsideration of the application on or before that date, the
  comptroller's decision is final.
         (f)  An entity that requests a reconsideration under
  Subsection (e) may submit to the comptroller not later than the 30th
  day after the date the request for reconsideration is submitted
  additional information and documents to support the entity's
  request for reconsideration.
         (g)  The comptroller's reconsideration of an application
  under this section is not a contested case under Chapter 2001,
  Government Code.  The comptroller's decision on a request for
  reconsideration of an application is final and is not appealable.
         (h)  This section does not create a cause of action to
  contest a decision of the comptroller to deny an application for a
  credit under this chapter.
         Sec. 230.104.  ASSIGNMENT PROHIBITED; EXCEPTION.  An entity
  may not convey, assign, or transfer the credit allowed under this
  chapter to another entity unless all of the assets of the entity are
  conveyed, assigned, or transferred in the same transaction.
         Sec. 230.105.  NOTICE OF AVAILABILITY OF CREDIT.  The
  comptroller shall provide notice of the availability of the credit
  under this chapter on the comptroller's Internet website, in the
  instructions for insurance premium tax report forms, and in any
  notice sent to an entity concerning the requirement to file an
  insurance premium tax report.
         SECTION 5.  (a)  The constitutionality and other validity
  under the state or federal constitution of all or any part of
  Chapter 230, Insurance Code, as added by this Act, may be determined
  in an action for declaratory judgment in a district court in Travis
  County under Chapter 37, Civil Practice and Remedies Code, except
  that this section does not authorize an award of attorney's fees
  against this state and Section 37.009, Civil Practice and Remedies
  Code, does not apply to an action filed under this section.  This
  section does not authorize a taxpayer suit to contest the denial of
  a tax credit by the comptroller of public accounts.
         (b)  An appeal of a declaratory judgment or order, however
  characterized, of a district court, including an appeal of the
  judgment of an appellate court, holding or otherwise determining
  that all or any part of Chapter 230, Insurance Code, as added by
  this Act, is constitutional or unconstitutional, or otherwise valid
  or invalid, under the state or federal constitution is an
  accelerated appeal.
         (c)  If the judgment or order is interlocutory, an
  interlocutory appeal may be taken from the judgment or order and is
  an accelerated appeal.
         (d)  A district court in Travis County may grant or deny a
  temporary or otherwise interlocutory injunction or a permanent
  injunction on the grounds of the constitutionality or
  unconstitutionality, or other validity or invalidity, under the
  state or federal constitution of all or any part of Chapter 230,
  Insurance Code, as added by this Act.
         (e)  There is a direct appeal to the Texas Supreme Court from
  an order, however characterized, of a trial court granting or
  denying a temporary or otherwise interlocutory injunction or a
  permanent injunction on the grounds of the constitutionality or
  unconstitutionality, or other validity or invalidity, under the
  state or federal constitution of all or any part of Chapter 230,
  Insurance Code, as added by this Act.
         (f)  The direct appeal is an accelerated appeal.
         (g)  This section exercises the authority granted by Section
  3-b, Article V, Texas Constitution.
         (h)  The filing of a direct appeal under this section will
  automatically stay any temporary or otherwise interlocutory
  injunction or permanent injunction granted in accordance with this
  section pending final determination by the Texas Supreme Court,
  unless the supreme court makes specific findings that the applicant
  seeking such injunctive relief has pleaded and proved that:
               (1)  the applicant has a probable right to the relief it
  seeks on final hearing; and
               (2)  the applicant will suffer a probable injury that
  is imminent and irreparable, and that the applicant has no other
  adequate legal remedy.
         (i)  An appeal under this section, including an
  interlocutory, accelerated, or direct appeal, is governed, as
  applicable, by the Texas Rules of Appellate Procedure, including
  Rules 25.1(d)(6), 26.1(b), 28.1, 28.3, 32.1(g), 37.3(a)(1),
  38.6(a) and (b), 40.1(b), and 49.4.
         SECTION 6.  An entity may apply for a credit under Chapter
  230, Insurance Code, as added by this Act, only for an expenditure
  made on or after September 1, 2018.
         SECTION 7.  The comptroller of public accounts shall make
  the initial determination of net savings and report regarding that
  savings as required by Section 230.057, Insurance Code, as added by
  this Act, not later than December 31, 2020, based on the state
  fiscal biennium ending August 31, 2019.
         SECTION 8.  Chapter 230, Insurance Code, as added by this
  Act, applies only to a report originally due on or after September
  1, 2018.
         SECTION 9.  (a)  The amount of $270,000,000 of the
  unencumbered appropriations from the general revenue fund for the
  state fiscal biennium ending August 31, 2019, made by S.B. 1, Acts
  of the 85th Legislature, Regular Session, 2017 (the General
  Appropriations Act), to the Health and Human Services Commission is
  transferred to the Texas Education Agency to be used by the agency
  during that state fiscal biennium as follows:
               (1)  $150,000,000 is allocated to fund financial
  hardship grants under Subchapter H, Chapter 42, Education Code, as
  added by this Act;
               (2)  $60,000,000 is allocated to fund payments to
  open-enrollment charter schools under Section 12.106(d), Education
  Code, as added by this Act; and
               (3)  $60,000,000 is allocated for the existing debt
  allotment under Section 46.032, Education Code, as amended by this
  Act.
         (b)  The Health and Human Services Commission shall identify
  the strategies and objectives out of which the transfer under
  Subsection (a) of this section is to be made.
         SECTION 10.  (a)  Except as otherwise provided by this Act:
               (1)  this Act takes effect immediately if it receives a
  vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution; and
               (2)  if this Act does not receive the vote necessary for
  immediate effect, this Act takes effect December 1, 2017.
         (b)  Chapter 230, Insurance Code, as added by this Act, takes
  effect September 1, 2018.
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