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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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 - Dead) 2017-05-12 - Referred to Public Education [SB3 Detail]

Download: Texas-2017-SB3-Introduced.html

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85R9199 KJE/BEF-D
By: Taylor of Galveston 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) "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.
(6) "Postsecondary educational institution" means:
(A) an institution of higher education or a
private or independent institution of higher education as defined
by Section 61.003; or
(B) a career school or college as defined by
Section 132.001.
(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. 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.
Sec. 29.354. ELIGIBLE CHILD. (a) A child is eligible to
participate in the program if the child is eligible to attend a
public school under Section 25.001 and:
(1) was born on or after September 1, 2012; or
(2) attended a public school during the entire
preceding academic year.
(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.
(c) The comptroller shall 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.
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 a postsecondary educational institution;
or
(C) for an online educational course or program;
(2) the purchase of textbooks or other instructional
materials;
(3) the purchase of a curriculum;
(4) 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;
(5) fees for services provided by a private tutor or
teaching service;
(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, 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; and
(9) fees for the management of the participant's
account charged by a financial institution.
(b) Expenses allowed under Subsection (a) do not include
expenses for:
(1) consumable supplies, including paper, pens,
pencils, folders, and notebooks;
(2) food; 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 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) if the child is a member of a household with a
total annual income that exceeds 200 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., 60 percent of the state average maintenance and
operations expenditures per student in average daily attendance for
the preceding fiscal year;
(2) if the child is a member of a household with a
total annual income that is at or below 200 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., 75 percent of the state average maintenance and
operations expenditures per student in average daily attendance for
the preceding fiscal year; or
(3) regardless of household income level, if the child
is a child with a disability, 90 percent of the state average
maintenance and operations expenditures per student in average
daily attendance for the preceding 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 in average daily attendance for the
preceding fiscal year; and
(2) the amount the child's parent receives under
Subsection (a) for the year.
(c) 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.
(d) 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.
(e) A payment under Subsection (a) may not be financed using
federal funds or money appropriated from 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 a debit card or online or electronic
transfer payment service.
(b) The comptroller shall make quarterly payments to each
program participant's account in equal amounts on or before the
15th day of August, 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 foundation school
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) A private
school must be accredited by an organization that is recognized by
the Texas Private School Accreditation Commission to receive funds
distributed under the program.
(b) A private tutor or teaching service and 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.
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 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 or a parent who homeschools the
parent's child, 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.
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. 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. 29.370. 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. This subsection expires
September 1, 2021.
SECTION 1.03. Notwithstanding Section 29.359(b), Education
Code, as added by this article, not later than September 15, 2018,
the comptroller shall make the initial payment to each program
participant's education savings account as provided by Subchapter
J, Chapter 29, Education Code, as added by this article.
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 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; 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), (b), or (c), 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(d) 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) textbooks;
(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 only one certified
educational assistance organization at any time. The comptroller
shall select the organization to certify as the certified
educational assistance organization from among the organizations
that apply under Subsection (a) and meet the requirements of
Subsection (b). The comptroller has broad discretion in selecting
the certified educational assistance organization.
(d) The comptroller shall notify all organizations that
apply under Subsection (a) of the comptroller's selection under
Subsection (c).
(e) The comptroller shall attempt to maintain one 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 certified educational assistance
organization.
(f) The comptroller's selection under Subsection (c) is
final and is not appealable.
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; 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; NOTICE TO CERTAIN
PARENTS; INCLUSION IN CALCULATION OF EQUALIZED WEALTH LEVEL. (a)
To be eligible to apply for assistance from the certified
educational assistance organization under this chapter:
(1) a student:
(A) must:
(i) be in foster care;
(ii) be in institutional care;
(iii) have a parent who is on active duty in
the military; or
(iv) have a household income not greater
than 200 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.; and
(B) must:
(i) have attended a public school during
the entire preceding academic year;
(ii) be starting school in the state for the
first time;
(iii) be the sibling of a student who is
eligible; or
(iv) if the student attends a nonpublic
school, qualify as a student who is not counted toward a public
school's average daily attendance during the year in which the
student receives the scholarship or educational expense assistance
to attend the school, except as provided by Subsection (g); or
(2) the student must have previously qualified under
Subdivision (1).
(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:
(1) the student is in kindergarten through grade 12
and eligible under Section 29.003, Education Code, to participate
in a school district's special education program; and
(2) an individualized education program has been
developed for the student under Section 29.005, Education Code.
(c) 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 assistance under Subsection
(b). The notice must inform the parent that a qualifying school is
not subject to laws regarding the provision of education services
in the same manner as a public school, and a student with
disabilities attending a qualifying school may not receive the
services a student with disabilities 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
disabilities 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.
(d) A student who establishes eligibility under Subsection
(b) 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.
(e) Notwithstanding any other provision of this section and
except as provided by Section 230.055(c), a student who receives a
payment to an education savings account under Section 29.358,
Education Code, for a year is not eligible to receive for the same
year a scholarship under this chapter.
(f) The certified educational assistance organization shall
award scholarships and educational expense assistance to eligible
students who apply in accordance with this chapter.
(g) 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 Subsections (b) and
(c), 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 in average
daily attendance for the preceding state fiscal year.
(b) The maximum scholarship amount under Subsection (a) may
not exceed 50 percent of the state average maintenance and
operations amount described by Subsection (a) if the student
receiving the scholarship has a household income 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. This subsection does not apply to a
student who is eligible for assistance under Section 230.053(b) or
(d).
(c) 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 only if the student
is eligible for assistance under Section 230.053(a)(1)(A)(i),
(ii), or (iii) or Section 230.053(b) or (d) or the student has a
household 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. 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.
(d) 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) For the 2018 state fiscal year, the total amount of tax
credits that may be awarded under this chapter may not exceed $100
million. For each subsequent state fiscal year, the total amount of
tax credits that may be awarded is an amount equal to 110 percent of
the total amount of tax credits awarded in the previous state fiscal
year.
(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.