85(R) SB 3 - Introduced version

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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.