Bill Text: TX SB3 | 2017-2018 | 85th Legislature | Engrossed


Bill Title: Relating to the establishment of an education savings account program and a tax credit scholarship and educational expense assistance program.

Spectrum: Partisan Bill (Republican 8-0)

Status: (Engrossed) 2017-05-12 - Referred to Public Education [SB3 Detail]

Download: Texas-2017-SB3-Engrossed.html
 
 
  By: Taylor of Galveston, et al. S.B. No. 3
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment of an education savings account
  program and a tax credit scholarship and educational expense
  assistance program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1.  EDUCATION SAVINGS ACCOUNT PROGRAM
         SECTION 1.01.  Chapter 29, Education Code, is amended by
  adding Subchapter J to read as follows:
  SUBCHAPTER J.  EDUCATION SAVINGS ACCOUNT PROGRAM
         Sec. 29.351.  DEFINITIONS. In this subchapter:
               (1)  "Account" means an education savings account
  established under the program.
               (2)  "Child with a disability" means a child who is:
                     (A)  eligible to participate in a school
  district's special education program under Section 29.003; or
                     (B)  covered by Section 504, Rehabilitation Act of
  1973 (29 U.S.C. Section 794).
               (3)  "Curriculum" means a complete course of study for
  a particular content area or grade level.
               (4)  "Financial institution" means a bank, credit
  union, savings bank, or savings and loan association organized
  under the laws of this state, the laws of another state, or federal
  law that has its main office or a branch office in this state. The
  term does not include any institution the deposits of which are not
  insured by the Federal Deposit Insurance Corporation or the
  National Credit Union Administration.
               (5)  "Institution of higher education" and "private or
  independent institution of higher education" have the meanings
  assigned by Section 61.003.
               (6)  "Parent" means a resident of this state who is a
  natural or adoptive parent, managing or possessory conservator,
  legal guardian, custodian, or other person with legal authority to
  act on behalf of a child.
               (7)  "Program" means the education savings account
  program established under this subchapter.
               (8)  "Program participant" means a child and a parent
  of a child enrolled in the program.
         Sec. 29.352.  PURPOSES.  The purposes of the education
  savings account program are to:
               (1)  improve public schools and overall academic
  performance;
               (2)  promote efficiency;
               (3)  promote and preserve the liberties and rights of
  the people; and
               (4)  increase parental options.
         Sec. 29.353.  ESTABLISHMENT OF PROGRAM. (a)  The
  comptroller shall establish and administer an education savings
  account program to provide funding for certain education-related
  expenses of eligible children.
         (b)  The comptroller, with cooperation from the agency,
  shall ensure that information about the program is readily
  available to the public through various sources, including the
  agency's Internet website.
         (c)  The comptroller shall make information about the
  program available to parents of a child with a disability or a child
  who is educationally disadvantaged through the comptroller's
  Internet website. The information made available to parents of a
  child with a disability must include a notice that:
               (1)  states that a private school is not subject to laws
  regarding the provision of educational services in the same manner
  as a public school, and a child with a disability attending a
  private school may not receive the services a child with a
  disability attending a public school is entitled to receive under
  federal and state law; and
               (2)  provides information regarding rights to which a
  child with a disability is entitled under federal and state law if
  the child attends a public school, including:
                     (A)  rights provided under the Individuals with
  Disabilities Education Act (20 U.S.C. Section 1400 et seq.),
  including:
                           (i)  an individualized education program;
                           (ii)  educational services provided in the
  least restrictive environment;
                           (iii)  instruction from certified teachers;
                           (iv)  due process hearings to ensure proper
  and full implementation of an individualized education program;
                           (v)  transition and planning services; and
                           (vi)  supplementary aids and services;
                     (B)  rights provided under Subchapter A, Chapter
  29; and
                     (C)  other rights provided under federal or state
  law.
         Sec. 29.3531.  EDUCATION SAVINGS ACCOUNT PROGRAM FUND.
  (a)  The education savings account program fund is an account in
  the general revenue fund to be administered by the comptroller.
         (b)  The fund is composed of:
               (1)  general revenue transferred to the fund;
               (2)  money appropriated to the fund;
               (3)  gifts, grants, and donations received under
  Section 29.371; and
               (4)  any other money available for purposes of the
  program.
         (c)  Money in the fund may be appropriated only to the
  comptroller for purposes of making payments to program participants
  and administering the program under this subchapter.
         Sec. 29.354.  ELIGIBLE CHILD. (a)  A child is eligible to
  participate in the program if the child:
               (1)  is eligible to attend a public school under
  Section 25.001;
               (2)  is a member of a household with a total annual
  income that is at or below 175 percent of the income guidelines
  necessary to qualify for the national free or reduced-price lunch
  program established under 42 U.S.C. Section 1751 et seq.;
               (3)  attended a public school in this state during the
  entire preceding academic year; and
               (4)  resides in a public school district located in
  whole or in part in a county:
                     (A)  with a population of 285,000 or more based
  upon the 2010 census; or
                     (B)  in which the residents have approved
  participation in the program and receipt of scholarships and
  educational expense assistance under Chapter 230, Insurance Code,
  as provided by Subsection (a-1).
         (a-1)  The residents of a county with a population of less
  than 285,000 may vote at a general election to allow children
  residing in that county to participate in the program and to receive
  scholarships and educational expense assistance under Chapter 230,
  Insurance Code, subject to applicable eligibility requirements.  
  The county shall hold an election described by this subsection on
  the next uniform election date that permits compliance with
  applicable deadlines for the election if the county receives a
  petition requesting the election signed by at least five percent of
  the registered voters residing in the county.
         (b)  A child who establishes eligibility under this section
  may participate in the program until the earliest of the following
  dates:
               (1)  the date that is three months after the date on
  which the child graduates from high school;
               (2)  the date on which the child is no longer eligible
  to attend a public school under Section 25.001;
               (3)  the date on which the child enrolls in a public
  school, including an open-enrollment charter school; or
               (4)  the date on which the child is declared ineligible
  for the program by the comptroller under this subchapter.
         (c)  Notwithstanding Subsection (b), the comptroller shall
  establish guidelines for, in the least disruptive manner possible:
               (1)  a child participating in the program to cease
  participation and enroll in a public school, including an
  open-enrollment charter school; and
               (2)  a child who previously participated in the program
  and subsequently enrolled in a public school, including an
  open-enrollment charter school, to resume participation in the
  program.
         Sec. 29.355.  ENROLLMENT IN PROGRAM. (a)  A parent of an
  eligible child may enroll the child in the program for the following
  school year.
         (b)  The comptroller shall by rule create an enrollment form
  for the program and make the enrollment form readily available to
  interested parents through various sources, including the
  comptroller's Internet website. An enrollment form for the program
  must be submitted to the comptroller electronically.
         (c)  The comptroller shall post on the comptroller's
  Internet website and provide to each parent who submits an
  enrollment form a publication that describes the operation of the
  program, including:
               (1)  expenses allowed under the program under Section
  29.357;
               (2)  expense reporting requirements; and
               (3)  a description of the responsibilities of program
  participants and the duties of the comptroller under this
  subchapter.
         (d)  The comptroller shall provide to each parent who submits
  an enrollment form for a child with a disability a written copy of
  the notice described by Section 29.353(c).  Before the parent may
  receive funding under the program, the parent must sign and return
  the notice to the comptroller.
         Sec. 29.356.  PARTICIPATION IN PROGRAM. (a)  To receive
  funding under the program, a parent of an eligible child must agree
  to:
               (1)  spend funds received through the program only for
  expenses allowed under Section 29.357;
               (2)  notify the comptroller if the child enrolls in a
  public school, including an open-enrollment charter school, not
  later than the 30th day after the date of enrollment; and
               (3)  inform the comptroller if the child graduates from
  high school.
         (b)  The parent of a child participating in the program is
  the trustee of the child's account.
         (c)  The comptroller shall provide annually to each program
  participant the publication provided under Section 29.355(c).
         Sec. 29.357.  APPROVED EDUCATION-RELATED EXPENSES.
  (a)  Funds received under the program may be used only for the
  following expenses incurred by a program participant:
               (1)  tuition and fees:
                     (A)  at a private school accredited by an
  organization that is recognized by the Texas Private School
  Accreditation Commission;
                     (B)  at an institution of higher education or a
  private or independent institution of higher education; or
                     (C)  for an online educational course or program;
               (2)  the purchase of textbooks or other instructional
  materials required by a school, institution, course, or program
  described by Subdivision (1) in which the child is enrolled;
               (3)  fees for classes or other educational services
  provided by a public school, if the classes or services do not
  qualify the child to be included in the school's average daily
  attendance;
               (4)  fees for services provided by a private tutor or
  teaching service;
               (5)  costs of transportation to and from school, not to
  exceed $500 per year;
               (6)  for a child with a disability, fees for
  educational therapies or services provided by a practitioner or
  provider;
               (7)  costs of computer hardware and software and other
  technological devices prescribed by a physician to facilitate a
  child's education, not to exceed in any year 10 percent of the total
  amount paid to the program participant's account that year;
               (8)  fees for a nationally norm-referenced achievement
  test or examination, an assessment instrument adopted by the agency
  under Section 39.023, an advanced placement test or similar
  examination, or any examination related to college or university
  admission;
               (9)  fees for the management of the participant's
  account charged by a financial institution; and
               (10)  costs of breakfast or lunch provided to a child
  during the school day by a private school.
         (b)  Expenses allowed under Subsection (a) do not include
  expenses for:
               (1)  consumable supplies, including paper, pens,
  pencils, folders, and notebooks;
               (2)  food, other than breakfast or lunch as authorized
  under Subsection (a)(10); or
               (3)  before-school or after-school child care and child
  care during school holidays and vacations.
         (c)  An education service provider or vendor of educational
  products must provide a program participant with a receipt for each
  expense allowed under Subsection (a) charged by the provider or
  vendor to the participant.
         (d)  The content, subject to Section 29.364(c), or religious
  nature of a product or service may not be considered in determining
  whether a payment for the product or service is an expense allowed
  under Subsection (a).
         (e)  A finding that a program participant used funds
  distributed under the program to pay for an expense not allowed
  under Subsection (a) does not affect the validity of any payment
  made by the participant for an expense that is allowed under that
  subsection.
         Sec. 29.358.  AMOUNT OF PAYMENT; FINANCING. (a)  A parent
  of an eligible child shall receive each year that the child
  participates in the program a payment from the state to the child's
  account in an amount that is equal to:
               (1)  75 percent of the state average maintenance and
  operations expenditures per student for the preceding state fiscal
  year; or
               (2)  if the child is a child with a disability, 90
  percent of the state average maintenance and operations
  expenditures per student for the preceding state fiscal year.
         (b)  In addition to any funding the district receives under
  Chapter 42, for each child participating in the program, the school
  district the child would otherwise attend is entitled to receive
  for the first year in which the child participates in the program an
  amount equal to 50 percent of the difference between:
               (1)  the state average maintenance and operations
  expenditures per student for the preceding state fiscal year; and
               (2)  the amount the child's parent receives under
  Subsection (a) for the year.
         (c)  For the first year a child participates in the program,
  the child is included in the weighted average daily attendance of
  the school district the child would otherwise attend for purposes
  of determining the district's equalized wealth level under Chapter
  41.
         (d)  Any funds remaining in a child's account at the end of a
  fiscal year are carried forward to the next fiscal year unless
  another provision of this subchapter mandates the closure of the
  account.
         (e)  The parent of a child participating in the program may
  make payments for the expenses of educational programs, services,
  and products not covered by funds in the child's account.
         (f)  A payment under Subsection (a) may not be financed using
  federal funds or money appropriated from the permanent school fund
  or the available school fund.
         Sec. 29.359.  ADMINISTRATION OF ACCOUNTS. (a)  The
  comptroller may contract with one or more financial institutions to
  establish and manage an account for each child participating in the
  program. A program participant must be able to access the
  participant's account by using an online or electronic transfer
  payment service.
         (b)  The comptroller shall make quarterly payments to each
  program participant's account in equal amounts, with the first
  payment for each school year made on September 1 and the remaining
  payments made on or before the 15th day of November, February, and
  May.
         (c)  The comptroller may deduct an amount from each quarterly
  payment to a program participant's account to cover the
  comptroller's cost of administering the program. The amount
  deducted may not exceed five percent of the payment.
         (d)  Not later than 30 days after the end of each fiscal year,
  the comptroller shall reconcile payments made to and from all
  accounts under the program.
         (e)  On the date on which a child who participated in the
  program is no longer eligible to participate in the program under
  Section 29.354(b), the child's account is closed and any remaining
  funds are returned to the state for deposit in the education savings
  account program fund.
         (f)  The comptroller may contract with a private entity to
  administer all or any part of the program.
         Sec. 29.360.  RANDOM AUDITING OF ACCOUNTS. (a)  The
  comptroller shall contract with a private entity to randomly audit
  accounts as necessary to ensure compliance with applicable law and
  the requirements of the program.
         (b)  In auditing an account, the comptroller or private
  entity may require that a program participant provide further
  information and documentation regarding any payment from the
  participant's account.
         (c)  The private entity shall report to the comptroller any
  violation of this subchapter or other relevant law found by the
  entity during an audit conducted under this section.
         Sec. 29.361.  SUSPENSION OF ACCOUNT. (a)  The comptroller
  shall suspend the account of a program participant who fails to
  comply with applicable law or a requirement of the program,
  including a requirement under Section 29.356(a), or who
  substantially misuses funds received under the program.
         (b)  On suspension of an account under Subsection (a), the
  comptroller shall notify the program participant in writing that
  the account has been suspended and that no further payments may be
  made from the account. The notification must specify the grounds
  for the suspension and state that the participant has 10 business
  days to respond and take any corrective action required by the
  comptroller.
         (c)  On the expiration of the 10-day period under Subsection
  (b), the comptroller shall:
               (1)  order permanent closure of the suspended account
  and declare the program participant ineligible for the program;
               (2)  order temporary reinstatement of the account,
  conditioned on the performance of a specified action by the
  participant; or
               (3)  order full reinstatement of the account.
         (d)  The comptroller may recover funds distributed under the
  program that were used for expenses not allowed under Section
  29.357(a) from the program participant or the entity that received
  the funds if the participant's account is suspended or closed under
  this section.
         Sec. 29.362.  TUITION AND FEES; REFUND PROHIBITED. (a)  An
  education service provider may not charge a child participating in
  the program an amount greater than the standard amount charged for
  that service by the provider.
         (b)  An education service provider or a vendor of educational
  products receiving funds distributed under the program may not in
  any manner rebate, refund, or credit to or share with a program
  participant, or any person on behalf of a participant, any program
  funds paid or owed by the participant to the provider or vendor.
         Sec. 29.363.  REFERRAL TO ATTORNEY GENERAL. (a)  If the
  comptroller obtains evidence of fraudulent use of an account, the
  comptroller may refer the case to the attorney general for
  investigation.
         (b)  With the consent of the appropriate local county or
  district attorney, the attorney general has concurrent
  jurisdiction with the consenting local prosecutor to prosecute an
  offense referred to the attorney general under Subsection (a).
         Sec. 29.364.  PROVIDER ACCOUNTABILITY. (a)  To receive
  funds distributed under the program, a private school must be
  accredited by an organization that is recognized by the Texas
  Private School Accreditation Commission.
         (b)  A practitioner or provider who provides educational
  therapies or services for a child with a disability must be licensed
  or accredited by a regional or national accrediting organization to
  receive funds distributed under the program.
         (c)  A private tutor, teaching service, or online
  educational course or program provider must apply to and be
  approved by the commissioner to receive funds distributed under the
  program.
         (d)  To be eligible for approval under Subsection (c), a
  private tutor or each employee of a teaching service who intends to
  provide educational services to a program participant must:
               (1)  be a teacher who:
                     (A)  is certified under Subchapter B, Chapter 21;
                     (B)  holds a National Board Certification issued
  by the National Board for Professional Teaching Standards; or
                     (C)  has experience teaching at an institution of
  higher education or private or independent institution of higher
  education; and
               (2)  either:
                     (A)  complete a national criminal history record
  information review; or
                     (B)  provide to the commissioner documentation
  indicating that the tutor or employee, as applicable, has completed
  a national criminal history record information review within a
  period established by commissioner rule.
         (e)  The commissioner shall review the national criminal
  history record information or documentation for each private tutor
  or teaching service who submits an application under Subsection
  (c).  The tutor or teaching service must provide the commissioner
  with any information requested by the commissioner to enable the
  commissioner to complete the review.
         (f)  The commissioner shall maintain and provide to the
  comptroller a list of private tutors, teaching services, and online
  educational courses or program providers approved to receive funds
  distributed under the program.  The comptroller shall post the list
  on the comptroller's Internet website.
         (g)  A private tutor, teaching service, or online
  educational course or program provider may appeal to the
  comptroller the commissioner's rejection of an application
  submitted under Subsection (c).
         (h)  The commissioner may adopt rules necessary to exercise
  the commissioner's powers and duties under this section.
         Sec. 29.365.  PROGRAM PARTICIPANT, PROVIDER, AND VENDOR
  AUTONOMY. (a)  An education service provider or vendor of
  educational products that receives funds distributed under the
  program is not an agent of the state or federal government.
         (b)  Except as provided by this subchapter, the comptroller,
  the commissioner, the agency, the State Board of Education, any
  other state agency, or any school district may not:
               (1)  regulate the educational program of an education
  service provider or vendor of educational products that receives
  funds distributed under the program; or
               (2)  exercise control or supervision over a program
  participant or an education service provider or vendor of
  educational products that receives funds distributed under the
  program.
         (c)  The program does not expand the regulatory authority of
  the state or any school district to impose any additional
  regulation on an education service provider or vendor of
  educational products except those reasonably necessary to enforce
  the program as provided by this subchapter.
         (d)  A private school may not be required to modify the
  school's creed, practices, admissions policies, curriculum,
  performance standards, or assessments to receive funds distributed
  under the program.
         (e)  A private school voluntarily selected by a parent for
  the parent's child to attend, with or without governmental
  assistance, may not be required to comply with any state law or rule
  governing the applicable educational program that was not in effect
  on January 1, 2017.
         (f)  In any proceeding challenging a rule adopted by a state
  agency or officer under this subchapter, the agency or officer has
  the burden of proof to establish that the rule:
               (1)  is necessary to implement or enforce the program
  as provided by this subchapter; and
               (2)  does not impose an undue burden on a program
  participant or an education service provider or vendor of
  educational products that receives or seeks to receive funds
  distributed under the program.
         Sec. 29.366.  STUDENT RECORDS AND INFORMATION. (a)  On
  request by the parent of a child participating in the program, the
  school district or open-enrollment charter school that the child
  would otherwise attend shall provide a copy of the child's school
  records possessed by the district or school, if any, to the child's
  parent or, if applicable, the private school the child attends.
         (b)  The agency shall provide to the comptroller any
  information available to the agency requested by the comptroller
  regarding a child who participates or seeks to participate in the
  program. The comptroller may not retain information provided under
  this subsection beyond the period necessary to determine:
               (1)  a child's eligibility to participate in the
  program; or
               (2)  the amount of a payment to a program participant's
  account under Section 29.358.
         Sec. 29.367.  REPORTING NUMBER OF PARTICIPANTS. (a)  Not
  later than October 1 of each year, the comptroller shall notify the
  commissioner and the Legislative Budget Board of the number of
  eligible children likely to participate in the program,
  disaggregated by the school district or open-enrollment charter
  school the eligible children would otherwise attend.
         (b)  Not later than March 1 of each year, the comptroller
  shall provide final information to the commissioner and the
  Legislative Budget Board regarding the number of children
  participating in the program, disaggregated in the same manner as
  the initial information under Subsection (a).
         Sec. 29.368.  ANNUAL SURVEY. The comptroller may conduct an
  annual parental satisfaction survey that asks each parent of a
  child participating in the program to express:
               (1)  the parent's overall level of satisfaction with
  the program; and
               (2)  the parent's opinion on specified topics and
  issues relevant to the effectiveness of the program.
         Sec. 29.369.  PARENT REVIEW COMMITTEE. (a)  A parent review
  committee is established to assist the comptroller, at the
  comptroller's request, in:
               (1)  determining whether certain expenses are allowed
  under Section 29.357; and
               (2)  reviewing an appeal of the commissioner's decision
  to reject an application of a private tutor, teaching service, or
  online educational course or program provider for approval under
  Section 29.364 to receive funds distributed under the program.
         (b)  The committee consists of the comptroller, or a
  representative designated by the comptroller, and eight members
  appointed by the comptroller.  Each appointed member must be a
  parent of a child participating in the program.  In making
  appointments to the committee, the comptroller shall ensure that
  parents from at least four counties are included.
         (c)  An appointed member of the committee serves a one-year
  term at the pleasure of the comptroller and may be reappointed.
         (d)  The comptroller or the representative designated by the
  comptroller, as applicable, is the chair of the committee and may
  vote on a matter before the committee only if there is a tie.
         Sec. 29.370.  RULES. The comptroller shall:
               (1)  adopt rules as necessary to implement this
  subchapter, including:
                     (A)  rules regarding expense reporting
  requirements for program participants; and
                     (B)  rules for implementing this subchapter in a
  manner that ensures compliance with federal law regarding
  confidentiality of student educational information, including the
  Family Educational Rights and Privacy Act of 1974 (20 U.S.C.
  Section 1232g); and
               (2)  coordinate as necessary to:
                     (A)  calculate annually the savings to the state
  from the implementation of the program; and
                     (B)  prevent fraud in financial transactions
  under the program, including by adopting measures to permit
  anonymous fraud reporting by telephone hotline or online
  communication.
         Sec. 29.371.  GIFTS, GRANTS, AND DONATIONS. The comptroller
  may solicit and accept gifts, grants, and donations from any public
  or private source for any expenses related to the administration of
  the program, including the initial implementation of the program.
         SECTION 1.02.  Section 42.253, Education Code, is amended by
  adding Subsection (b-1) to read as follows:
         (b-1)  Notwithstanding Subsection (b), the commissioner
  shall adjust enrollment estimates and entitlement for each school
  district for each school year based on information provided by the
  comptroller under Section 29.367 and the certified educational
  assistance organization under Section 230.0513, Insurance Code.
  This subsection expires September 1, 2021.
         SECTION 1.03.  Section 411.0901, Government Code, is amended
  by adding Subsection (a-1) to read as follows:
         (a-1)  The Texas Education Agency is entitled to obtain
  criminal history record information maintained by the department
  about a person who is a private tutor or an employee of a teaching
  service who intends to provide educational services to a child
  participating in the program established under Subchapter J,
  Chapter 29, Education Code, and is seeking approval to receive
  funds distributed under that program.
         SECTION 1.04.  This article applies beginning with the
  2018-2019 school year.
  ARTICLE 2.  TAX CREDIT SCHOLARSHIP AND EDUCATIONAL EXPENSE
  ASSISTANCE PROGRAM
         SECTION 2.01.  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
  CERTIFIED EDUCATIONAL ASSISTANCE ORGANIZATION
  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.
         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.  SELECTION OF CERTIFIED EDUCATIONAL
  ASSISTANCE ORGANIZATIONS. (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)  of the organization's annual revenue from
  contributions that are designated for scholarships or educational
  expense assistance for eligible students under this chapter,
  allocate:
                           (i)  at least 75 percent for scholarships
  for eligible students to attend nonpublic schools;
                           (ii)  at least 15 percent for assistance for
  educational expenses, including tuition, transportation, and
  instructional materials and other supplies, and for other related
  educational expense assistance as described by this section; and
                           (iii)  not more than 10 percent for
  administrative expenses;
                     (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; and
                     (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
               (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) or (b), 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(c) per academic year, 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; and
                           (vii)  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.  INFORMATION REGARDING SCHOLARSHIPS.
  (a)  The certified educational assistance organization shall make
  information about scholarships under this chapter available to
  parents of a student who is eligible to apply for assistance under
  Section 230.053(a)(3)(E) through the organization's Internet
  website.
         (b)  The information made available must include a notice
  that:
               (1)  states that a nonpublic school is not subject to
  laws regarding the provision of educational 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; and
               (2)  provides 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:
                     (A)  rights provided under the Individuals with
  Disabilities Education Act (20 U.S.C. Section 1400 et seq.),
  including:
                           (i)  an individualized education program;
                           (ii)  educational services provided in the
  least restrictive environment;
                           (iii)  instruction from certified teachers;
                           (iv)  due process hearings to ensure proper
  and full implementation of an individualized education program;
                           (v)  transition and planning services; and
                           (vi)  supplementary aids and services;
                     (B)  rights provided under Subchapter A, Chapter
  29, Education Code; and
                     (C)  other rights provided under federal or state
  law.
         Sec. 230.0513.  REPORTING NUMBER OF SCHOLARSHIP RECIPIENTS.
  (a)  Not later than October 1 of each year, the certified
  educational assistance organization shall notify the commissioner
  of education and the Legislative Budget Board of the likely number
  of students who will enroll in a nonpublic school instead of a
  public school using scholarships under this chapter, disaggregated
  by the school district or open-enrollment charter school the
  students would otherwise attend.
         (b)  Not later than March 1 of each year, the certified
  educational assistance organization shall provide final
  information to the commissioner of education and the Legislative
  Budget Board regarding the actual number of students described by
  Subsection (a), disaggregated in the same manner as the initial
  information under that subsection.
         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 that is 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; and
               (4)  policy statements regarding:
                     (A)  admissions;
                     (B)  curriculum;
                     (C)  safety;
                     (D)  food service inspection; and
                     (E)  student to teacher ratios.
         Sec. 230.053.  ELIGIBILITY OF STUDENTS; INCLUSION IN
  CALCULATION OF EQUALIZED WEALTH LEVEL.  (a)  A student is eligible
  to apply to the certified educational assistance organization for a
  scholarship or educational expense assistance under this chapter
  if:
               (1)  the student resides in a public school district
  located in whole or in part in a county:
                     (A)  with a population of 285,000 or more based
  upon the 2010 census; or
                     (B)  in which the residents have approved
  participation in the program under Subchapter J, Chapter 29,
  Education Code, and receipt of scholarships and educational expense
  assistance under this chapter, as provided by Section 29.354(a-1),
  Education Code;
               (2)  the student attended a public school in this state
  during the entire preceding academic year; and
               (3)  the student:
                     (A)  is in foster care;
                     (B)  is in institutional care;
                     (C)  has a parent who is on active duty in the
  military;
                     (D)  resides in a household with income not
  greater than 175 percent of the income guidelines necessary to
  qualify for the national free or reduced-price lunch program
  established under 42 U.S.C. Section 1751 et seq.; or
                     (E)  is eligible under Section 29.003, Education
  Code, to participate in a school district's special education
  program, or is covered by Section 504, Rehabilitation Act of 1973
  (29 U.S.C. Section 794).
         (b)  In addition to the students eligible under Subsection
  (a), a student is eligible to apply for assistance from the
  certified educational assistance organization under this chapter
  if the student:
               (1)  meets the requirements of Subsection (a)(1); and
               (2)  previously qualified under Subsections (a)(2) and
  (3).
         (c)  A student may continue to receive assistance under this
  chapter until the earlier of the date the student graduates from
  high school or the student's 22nd birthday if the student:
               (1)  meets the requirements of Subsection (a)(1); and
               (2)  previously qualified under Subsections (a)(2) and
  (3)(E).
         (d)  The certified educational assistance organization shall
  award scholarships and educational expense assistance to eligible
  students who apply in accordance with this chapter.
         (e)  The certified educational assistance organization shall
  provide to each parent of a student with a disability who applies
  for a scholarship or educational expense assistance under this
  chapter a written copy of the notice described by Section
  230.0512(b).  Before the organization may award a scholarship or
  educational expense assistance to the student, the student's parent
  must sign and return the notice to the organization.
         (f)  A student who receives a scholarship under this chapter
  is included for the first year the student receives the scholarship
  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.
         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)  Except as provided by Subsection (b), the
  maximum scholarship amount 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 75 percent of the state average
  maintenance and operations expenditures per student for the
  preceding state fiscal year.
         (b)  A student who receives a payment to an education savings
  account under Section 29.358, Education Code, for a year is
  eligible to receive for the same year a scholarship from the
  certified educational assistance organization if the student is
  eligible for that assistance. The maximum scholarship amount the
  certified educational assistance organization may award to a
  student to whom this subsection applies 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 sum of:
               (1)  the difference between the amount of the payment
  under Section 29.358, Education Code, and the full tuition amount
  for the student's nonpublic school; and
               (2)  a transportation allowance not to exceed $500.
         (c)  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 2018 state fiscal year, increased by five
  percent each subsequent year.
         Sec. 230.056.  REVOCATION.  (a)  The comptroller shall
  revoke the certification provided under Section 230.051 if the
  comptroller finds that the 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 the certified educational
  assistance organization in writing of the comptroller's decision to
  revoke the organization's certification.  If the comptroller
  revokes the organization's certification, the comptroller shall
  include in the notice of revocation the reasons for the revocation.
         (d)  If the comptroller revokes the 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 the 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 each state fiscal year may not exceed $25
  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 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. 230.103.  APPLICATION FOR CREDIT.  (a)  An entity must
  apply for a credit under this chapter on or with the tax return for
  the taxable year during which the qualifying contributions were
  made 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 2.02.  An entity may apply for a credit under Chapter
  230, Insurance Code, as added by this article, only for an
  expenditure made on or after the effective date of this article.
         SECTION 2.03.  Not later than February 15, 2018, the
  comptroller of public accounts shall adopt rules as provided by
  Section 230.002(a), Insurance Code, as added by this article.
         SECTION 2.04.  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 article, not later than December 31, 2020, based on the state
  fiscal biennium ending August 31, 2019.
         SECTION 2.05.  This article applies only to a report
  originally due on or after the effective date of this article.
         SECTION 2.06.  This article takes effect January 1, 2018.
  ARTICLE 3.  JUDICIAL REVIEW
         SECTION 3.01.  (a)  The constitutionality and other
  validity under the state or federal constitution of all or any part
  of Subchapter J, Chapter 29, Education Code, as added by this Act,
  or 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 Subchapter J, Chapter 29, Education Code, as
  added by this Act, or 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 Subchapter J,
  Chapter 29, Education Code, as added by this Act, or 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 Subchapter J,
  Chapter 29, Education Code, as added by this Act, or 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.
  ARTICLE 4.  EFFECTIVE DATE
         SECTION 4.01.  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 September 1, 2017.
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