Bill Text: TX SB542 | 2017-2018 | 85th Legislature | Introduced


Bill Title: Relating to an insurance premium tax credit for contributions made to certain educational assistance organizations.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-02-08 - Referred to Education [SB542 Detail]

Download: Texas-2017-SB542-Introduced.html
  85R4586 BEF-D
 
  By: Bettencourt S.B. No. 542
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to an insurance premium tax credit for contributions made
  to certain educational assistance organizations.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle B, Title 3, Insurance Code, is amended
  by adding Chapter 230 to read as follows:
  CHAPTER 230.  CREDIT AGAINST PREMIUM TAXES FOR CONTRIBUTIONS TO
  CERTAIN EDUCATIONAL ASSISTANCE ORGANIZATIONS
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 230.001.  DEFINITIONS.  In this chapter:
               (1)  "Designated contribution" means a contribution
  for which an entity provides notice under Section 230.152(c).
               (2)  "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 230.101;
                                 (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).
               (3)  "Eligible nonpublic school" means a school that
  meets the requirements of Section 230.101.
               (4)  "Net savings" means any positive difference in a
  state fiscal year between:
                     (A)  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
                     (B)  the amount by which state revenue derived
  from Chapters 221 through 226 is reduced as a result of tax credits
  under this chapter.
               (5)  "State premium tax liability" means any liability
  incurred by an entity under Chapters 221 through 226.
         Sec. 230.002.  TREATMENT OF CERTAIN CONTRIBUTIONS AS PROGRAM
  FUNDS. (a) In this chapter, "program funds" means money
  contributed to the certified educational assistance organization
  in a state fiscal year for which entities are granted tax credits
  under Subchapter D.
         (b)  Except as provided by Subsection (d), the certified
  educational assistance organization shall treat a designated
  contribution as program funds until the date the comptroller
  notifies the certified educational assistance organization that
  the entity that made the designated contribution:
               (1)  failed to apply for a credit under Section 230.155
  on or with the tax report covering the period in which the
  designated contribution was made; or
               (2)  was denied a credit under Subchapter D for the
  designated contribution.
         (c)  The comptroller shall promptly notify the certified
  educational assistance organization of a condition described by
  Subsection (b).
         (d)  If the comptroller expects that, for a state fiscal
  year, the amount of designated contributions will exceed the amount
  of credits available under this chapter, the comptroller may
  establish a reserve amount for the state fiscal year equal to the
  estimated amount of designated contributions that will qualify as
  program funds. If the comptroller establishes a reserve amount for
  a state fiscal year, the certified educational assistance
  organization is only required to treat as program funds an amount of
  designated contributions received in the state fiscal year equal to
  the reserve amount for that year.
         (e)  The certified educational assistance organization shall
  use designated contributions treated as program funds under this
  section for any purpose authorized by Subchapter C for the
  expenditure of program funds.
         Sec. 230.003.  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 bids for a contract to serve as the certified
  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.  CERTIFIED EDUCATIONAL ASSISTANCE ORGANIZATION
         Sec. 230.051.  CERTIFIED EDUCATIONAL ASSISTANCE
  ORGANIZATION; AWARD OF CONTRACT. (a)  An organization may submit a
  bid to the comptroller for a contract to serve as the certified
  educational assistance organization during a bidding period
  provided by the comptroller.
         (b)  To be eligible for a contract awarded under this
  section, an 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)  agree to allocate at least 90 percent of
  program funds in the manner provided by Section 230.106;
                     (E)  agree to 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
  donor, the amount of the contribution, the information required by
  Section 230.152(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)  agree to disburse program funds within two
  academic years of receipt; and
               (2)  may not:
                     (A)  establish eligibility requirements, other
  than the requirements under Section 230.102, for scholarships or
  educational expense assistance paid from program funds;
                     (B)  provide to a student a scholarship in an
  annual amount that exceeds the amount provided under Section
  230.104(a) or (b) unless the money used to provide the portion of
  the scholarship in excess of that amount is not program funds; or
                     (C)  provide to a student educational expense
  assistance in excess of the amount provided under Section
  230.104(c), unless the money used to provide the portion of the
  assistance in excess of that amount is not program funds.
         (c)  The comptroller may contract with only one certified
  educational assistance organization at any time.  The comptroller
  shall select a successful bidder from among the organizations that
  submit a bid under Subsection (a) and meet the requirements of
  Subsection (b) and award to that bidder a contract to serve as the
  certified educational assistance organization. The comptroller
  has broad discretion in awarding the certified educational
  assistance organization contract.
         (d)  The comptroller shall notify all organizations that
  submit a bid 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 a bidding 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.  TERMINATION OF CONTRACT. (a) A contract
  between the comptroller and a certified educational assistance
  organization entered into under Section 230.051 must include
  provisions regarding termination of the contract that are
  consistent with the requirements of this section.
         (b)  The comptroller shall terminate a contract 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.
         (c)  The comptroller has broad discretion in determining
  whether to terminate a contract under Subsection (b).
         (d)  The comptroller shall notify the certified educational
  assistance organization in writing of the comptroller's decision to
  terminate the organization's contract. The comptroller shall
  include in the notice of termination the reasons for the proposed
  termination.
         (e)  If the comptroller notifies the certified educational
  assistance organization of the proposed termination of the
  organization's contract, the organization may request in writing a
  reconsideration of the proposed termination not later than the 10th
  day after the date the notice under Subsection (d) is received.  If
  the organization does not request a reconsideration of the proposed
  termination on or before that date, the termination is final.
         (f)  An organization 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
  organization's request for reconsideration.
         (g)  The comptroller's reconsideration of a proposed
  termination under this section is not a contested case under
  Chapter 2001, Government Code. The comptroller's decision on a
  request for reconsideration of a proposed termination is final and
  is not appealable.
         (h)  Termination of a contract under this section does not
  affect the validity of a tax credit relating to a designated
  contribution made before the date of termination.
  SUBCHAPTER C.  SCHOLARSHIP AND EDUCATIONAL EXPENSE ASSISTANCE
  PROGRAM
         Sec. 230.101.  ELIGIBILITY OF NONPUBLIC SCHOOLS. The
  certified educational assistance organization may award
  scholarships to or pay educational expenses for eligible students
  enrolled in a nonpublic school if 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. 230.102.  ELIGIBILITY OF STUDENTS.  (a)  A student is
  eligible to apply to the certified educational assistance
  organization for a scholarship or educational expense assistance
  paid from program funds if the student was enrolled in a public
  school during the entire preceding school year or is enrolling in
  school in this state for the first time and the student:
               (1)  is in foster care;
               (2)  is in institutional care;
               (3)  has a parent who is on active duty in the military;
               (4)  resides in a household with 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.;
               (5)  is the sibling of a child who is eligible to apply
  under this section;
               (6)  previously qualified to apply under this section;
  or
               (7)  is in kindergarten through grade 12, is eligible
  under Section 29.003, Education Code, to participate in a school
  district's special education program, and has an individualized
  education program under Section 29.005, Education Code.
         (b)  A student who establishes eligibility under Subsection
  (a)(7) 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.
         (c)  The certified educational assistance organization shall
  award scholarships and educational expense assistance to eligible
  students who apply in accordance with this chapter.
         Sec. 230.103.  NOTICE TO CERTAIN PARENTS.  A school district
  shall provide written notice of the availability of assistance
  under this chapter to the parent of a student who is eligible to
  apply for assistance under Section 230.102(a)(7).  The notice must
  inform the parent:
               (1)  that an eligible nonpublic school is not subject
  to laws regarding the provision of education services in the same
  manner as a public school;
               (2)  that a student with a disability attending an
  eligible 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;
               (3)  of the 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;
               (4)  of the rights provided under Subchapter A, Chapter
  29, Education Code; and
               (5)  of any other rights provided under federal or
  state law to a student with a disability who attends a public
  school.
         Sec. 230.104.  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 paid from
  program funds 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 expenditures per student in average daily attendance for
  the preceding state fiscal year if the student receiving the
  scholarship resides in a household with 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 230.102(a)(7)
  or (b).
         (c)  The maximum educational expense assistance the
  certified educational assistance organization may award to a
  student under this chapter paid from program funds may not exceed
  $750 for the 2018 state fiscal year, increased by five percent each
  subsequent year.
         Sec. 230.105.  QUALIFIED EDUCATIONAL EXPENSES. (a) Except
  as provided by Subsection (c), the scholarship amount described by
  Section 230.104(a) or (b) may be used only to pay for the following
  qualified educational expenses incurred by the student awarded the
  scholarship who attends an eligible nonpublic school:
               (1)  tuition;
               (2)  transportation;
               (3)  textbooks;
               (4)  tutoring;
               (5)  academic after-school programs;
               (6)  instructional supplies required by the school;
               (7)  school or lab fees;
               (8)  before-school or after-school child care; and
               (9)  uniforms.
         (b)  Except as provided by Subsection (c), the educational
  expense assistance amount described by Section 230.104(c) may be
  used only to pay for the following qualified educational expenses
  incurred by the student awarded the educational expense assistance:
               (1)  facility fees;
               (2)  transportation expenses, including the cost to
  transfer from one public school to another;
               (3)  textbooks;
               (4)  tutoring;
               (5)  academic after-school programs;
               (6)  instructional supplies required by the school;
               (7)  school or lab fees; and
               (8)  before-school or after-school child care.
         (c)  In addition to the expenses described by Subsections (a)
  and (b), the scholarship or educational expense assistance amount
  awarded to a student eligible under Section 230.102(a)(7) or (b)
  may be used to pay for the following qualified educational
  expenses:
               (1)  educational therapies from a licensed or
  accredited practitioner or provider;
               (2)  a licensed or accredited paraprofessional or
  educational aide;
               (3)  tuition for vocational and life skills education;
  and
               (4)  associated services that include educational and
  psychological evaluations, assistive technology rentals, and
  translation services.
         Sec. 230.106.  ALLOCATION OF PROGRAM FUNDS. Of the program
  funds required to be allocated as provided by Section
  230.051(b)(1)(D), the certified educational assistance
  organization shall use:
               (1)  at least 80 percent to award scholarships
  described by Sections 230.104(a) and (b); and
               (2)  not more than 20 percent to award educational
  expense assistance as described by Section 230.104(c).
         Sec. 230.107.  REPORT OF NET SAVINGS TO PUBLIC EDUCATION.  
  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 D.  CREDIT
         Sec. 230.151.  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 230.155.
         Sec. 230.152.  CONTRIBUTIONS ELIGIBLE FOR CREDIT.  (a) An
  entity may apply for a credit under this chapter only for designated
  contributions made by the entity.
         (b)  An entity may not apply for a credit under this chapter
  for a designated 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 directed 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 provide written notice to the certified
  educational assistance organization 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 notice 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 provided notice
  under this subsection.
         Sec. 230.153.  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:
               (1)  the amount of designated contributions made to the
  certified educational assistance organization during the period
  covered by the tax report; or
               (2)  50 percent of the entity's state premium tax
  liability for the report.
         (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 that may be 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:
               (1)  credits are allocated first to entities that
  received preliminary approval under Section 230.154 and that apply
  under Section 230.155; and
               (2)  any credits remaining after the allocation under
  Subdivision (1) are allocated to entities that apply under Section
  230.155 on a first-come, first-served basis, based on the date the
  designated 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. 230.154.  PRELIMINARY APPROVAL FOR CREDIT. (a) Before
  making a contribution to the certified educational assistance
  organization, an entity may apply to the comptroller for
  preliminary approval for a credit under this chapter for the
  contribution.
         (b)  An entity must apply for preliminary approval on a form
  provided by the comptroller that includes the amount the entity
  expects to contribute and any other information the comptroller
  requires.
         (c)  The comptroller shall grant preliminary approval for
  credits under this chapter on a first-come, first-served basis,
  based on the date the comptroller receives the application for
  preliminary approval.
         (d)  The comptroller shall grant preliminary approval for a
  credit under this chapter for a state fiscal year if the sum of the
  amount of the credit and the total amount of all other credits
  preliminarily approved for that state fiscal year does not exceed
  the amount provided by Section 230.153(b).
         (e)  Final award of a credit preliminarily approved under
  this section remains subject to the limitations under Section
  230.153 and all other requirements of this chapter.
         Sec. 230.155.  APPLICATION FOR CREDIT.  (a)  An entity must
  apply for a credit under this chapter on or with the tax report
  covering the period in which the designated contribution was made.
         (b)  The comptroller shall adopt a form for the application
  for the credit. An entity must use this form in applying for the
  credit and must include with the application form each receipt
  issued under Section 230.051(b)(1)(F) that includes the
  information required by Section 230.152(c).
         (c)  Subject to Section 230.153(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 230.153(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 the
  notice under Subsection (d) is received. 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. 230.156.  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. 230.157.  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.  (a)  The constitutionality and other validity
  under the state or federal constitution of all or any part of
  Chapter 230, Insurance Code, as added by this Act, may be determined
  in an action for declaratory judgment in a district court in Travis
  County under Chapter 37, Civil Practice and Remedies Code, except
  that this section does not authorize an award of attorney's fees
  against this state and Section 37.009, Civil Practice and Remedies
  Code, does not apply to an action filed under this section.  This
  section does not authorize a taxpayer suit to contest the denial of
  a tax credit by the comptroller of public accounts.
         (b)  An appeal of a declaratory judgment or order, however
  characterized, of a district court, including an appeal of the
  judgment of an appellate court, holding or otherwise determining
  that all or any part of Chapter 230, Insurance Code, as added by
  this Act, is constitutional or unconstitutional, or otherwise valid
  or invalid, under the state or federal constitution is an
  accelerated appeal.
         (c)  If the judgment or order is interlocutory, an
  interlocutory appeal may be taken from the judgment or order and is
  an accelerated appeal.
         (d)  A district court in Travis County may grant or deny a
  temporary or otherwise interlocutory injunction or a permanent
  injunction on the grounds of the constitutionality or
  unconstitutionality, or other validity or invalidity, under the
  state or federal constitution of all or any part of Chapter 230,
  Insurance Code, as added by this Act.
         (e)  There is a direct appeal to the Texas Supreme Court from
  an order, however characterized, of a trial court granting or
  denying a temporary or otherwise interlocutory injunction or a
  permanent injunction on the grounds of the constitutionality or
  unconstitutionality, or other validity or invalidity, under the
  state or federal constitution of all or any part of Chapter 230,
  Insurance Code, as added by this Act.
         (f)  The direct appeal is an accelerated appeal.
         (g)  This section exercises the authority granted by Section
  3-b, Article V, Texas Constitution.
         (h)  The filing of a direct appeal under this section will
  automatically stay any temporary or otherwise interlocutory
  injunction or permanent injunction granted in accordance with this
  section pending final determination by the Texas Supreme Court,
  unless the supreme court makes specific findings that the applicant
  seeking such injunctive relief has pleaded and proved that:
               (1)  the applicant has a probable right to the relief it
  seeks on final hearing; and
               (2)  the applicant will suffer a probable injury that
  is imminent and irreparable, and that the applicant has no other
  adequate legal remedy.
         (i)  An appeal under this section, including an
  interlocutory, accelerated, or direct appeal, is governed, as
  applicable, by the Texas Rules of Appellate Procedure, including
  Rules 25.1(d)(6), 26.1(b), 28.1, 28.3, 32.1(g), 37.3(a)(1),
  38.6(a) and (b), 40.1(b), and 49.4.
         SECTION 3.  An entity may apply for a credit under Chapter
  230, Insurance Code, as added by this Act, only for an expenditure
  made on or after the effective date of this Act.
         SECTION 4.  Not later than February 15, 2018, the
  comptroller of public accounts shall adopt rules as provided by
  Section 230.003(a), Insurance Code, as added by this Act.
         SECTION 5.  The comptroller of public accounts shall make
  the initial determination of net savings and report regarding that
  savings as required by Section 230.107, Insurance Code, as added by
  this Act, not later than December 31, 2020, based on the state
  fiscal biennium ending August 31, 2019.
         SECTION 6.  This Act applies only to a report originally due
  on or after the effective date of this Act.
         SECTION 7.  This Act takes effect January 1, 2018.
feedback