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.