This website will be unavailable from Friday, April 26, 2024 at 6:00 p.m. through Monday, April 29, 2024 at 7:00 a.m. due to data center maintenance.

 
 
  By: Simmons H.B. No. 58
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment of a tax credit scholarship and
  educational
  expense assistance program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  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
  CERTAIN EDUCATIONAL ASSISTANCE ORGANIZATION
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 230.001.  DEFINITIONS.  In this chapter:
               (1)  "Educational assistance organization" means an
  organization that:
                     (A)  has the ability according to the
  organization's charter to award scholarships to or pay educational
  expenses for eligible students in:
                           (i)  public elementary or secondary schools
  located in this state; or
                           (ii)  nonpublic elementary or secondary
  schools located in this state:
                                 (a)  that meet the requirements of
  Section 230.052;
                                 (b)  at which a student may fulfill
  this state's compulsory attendance requirements; and
                                 (c)  that are not in violation of the
  federal Civil Rights Act of 1964 (42 U.S.C. Section 2000a et seq.);
  and
                     (B)  uses part of its annual revenue for the
  purpose provided by Paragraph (A).
               (2)  "State premium tax liability" means any liability
  incurred by an entity under Chapter 221, 222, or 224.
         Sec. 230.002.  RULES; PROCEDURES. (a) The comptroller
  shall adopt rules and procedures to implement, administer, and
  enforce this chapter.
         (b)  A rule adopted under Subsection (a) is binding on an
  organization that applies for certification as an educational
  assistance organization, an entity that applies for a credit, and a
  state or local governmental entity, including a political
  subdivision, as necessary to implement, administer, and enforce
  this chapter.
  SUBCHAPTER B.  SCHOLARSHIP AND EDUCATIONAL EXPENSE ASSISTANCE
  PROGRAM
         Sec. 230.051.  SELECTION OF CERTIFIED EDUCATIONAL
  ASSISTANCE ORGANIZATIONS. (a) An organization may apply to the
  comptroller for certification as a certified educational
  assistance organization during an application period provided by
  the comptroller.
         (b)  To be eligible for certification, the organization:
               (1)  must:
                     (A)  be exempt from federal tax under Section
  501(a) of the Internal Revenue Code of 1986 by being listed as an
  exempt organization in Section 501(c)(3) of that code;
                     (B)  be in good standing with the state;
                     (C)  be located in the state;
                     (D)  of the organization's annual revenue from
  contributions that are designated for scholarships or educational
  expense assistance for eligible students under this chapter,
  allocate:
                           (i)  at least 75 percent for scholarships
  for eligible students to attend nonpublic schools;
                           (ii)  at least 15 percent for assistance for
  educational expenses, including tuition, transportation, and
  instructional materials and other supplies, and for other related
  educational expense assistance as described by this section; and
                           (iii)  not more than 10 percent for
  administrative expenses;
                     (E)  award scholarships and assistance for
  qualifying educational expenses to eligible students who
  demonstrate the greatest financial and academic need;
                     (F)  agree to give each donor a receipt for money
  contributed to the organization that includes the name of the
  organization, the name of the donor, the amount of the
  contribution, the information required by Section 230.054(c), and
  any other information required by the comptroller;
                     (G)  demonstrate experience and technical
  expertise in:
                           (i)  accepting, processing, and tracking
  applications for scholarships or educational expense assistance;
  and
                           (ii)  awarding scholarships to students in
  primary or secondary schools;
                     (H)  agree to be independently audited on an
  annual basis and file the audit with the comptroller; and
                     (I)  disburse within two academic years of receipt
  contributions received from and designated by entities for
  scholarships or educational expense assistance under this chapter;
  and
               (2)  may not:
                     (A)  award all scholarships under this chapter to
  students who attend a particular school or pay educational expenses
  incurred only at a particular school;
                     (B)  provide to a student a scholarship in an
  annual amount that exceeds the amount provided under Section
  230.055(a) or (b), unless the money used to provide the portion of
  the scholarship in excess of that amount was contributed by a person
  other than an entity that notifies the organization under Section
  230.054(c) that the entity may apply for a tax credit for the
  contribution; and
                     (C)  provide to a student educational expense
  assistance in excess of the amount provided under Section
  230.055(c) per academic year, unless the money used to provide the
  portion of the assistance in excess of that amount was contributed
  by a person other than an entity that notifies the organization
  under Section 230.054(c) that the entity may apply for a tax credit
  for the contribution, including assistance for:
                           (i)  facility fees;
                           (ii)  instructional materials;
                           (iii)  school supplies;
                           (iv)  tutoring;
                           (v)  academic after-school programs;
                           (vi)  school or lab fees; and
                           (vii)  transportation expenses, including
  the cost to transfer from one public school to another.
         (c)  The comptroller shall certify one organization as the
  primary certified educational assistance organization and one
  organization as the secondary certified educational assistance
  organization. The comptroller shall select the organizations to
  certify as the primary and secondary certified educational
  assistance organizations from among the organizations that apply
  under Subsection (a) and meet the requirements of Subsection (b).
  The comptroller has broad discretion in selecting the primary and
  secondary certified educational assistance organizations.
         (d)  The comptroller shall notify all organizations that
  apply under Subsection (a) of the comptroller's selections under
  Subsection (c).
         (e)  The comptroller shall attempt to maintain one primary
  and one secondary certified educational assistance organization at
  all times. The comptroller shall provide an application period
  under Subsection (a) as soon as practicable after the comptroller
  learns there is, or is likely to be, a vacancy for the primary or
  secondary certified educational assistance organization.
         (f)  The comptroller's selections under Subsection (c) are
  final and are not appealable.
         Sec. 230.0511.  PERFORMANCE OF CERTIFIED EDUCATIONAL
  ASSISTANCE ORGANIZATION POWERS AND DUTIES. (a) Except as provided
  by Subsection (b), the organization certified as the primary
  certified educational assistance organization shall perform the
  powers and duties assigned to the certified educational assistance
  organization under this chapter.
         (b)  The organization certified as the secondary certified
  educational assistance organization shall perform the powers and
  duties assigned to the certified educational assistance
  organization under this chapter if:
               (1)  the organization certified as the primary
  certified educational assistance organization has its
  certification revoked; or
               (2)  the comptroller otherwise determines the
  organization certified as the primary educational assistance
  organization is unable to perform the powers and duties assigned to
  the certified educational assistance organization under this
  chapter.
         (c)  A reference in this chapter or other law to the
  certified educational assistance organization means the
  organization performing the powers and duties of the certified
  educational assistance organization under Subsection (a) or (b).
         Sec. 230.0512.  INFORMATION REGARDING SCHOLARSHIPS. (a)
  The certified educational assistance organization shall make
  information about scholarships under this chapter available to
  parents of a student who is eligible to apply for assistance under
  Section 230.053(a)(3)(E) through the organization's Internet
  website.
         (b)  The information made available must include a notice
  that:
               (1)  states that a nonpublic school is not subject to
  laws regarding the provision of educational services in the same
  manner as a public school, and a student with a disability attending
  a nonpublic school may not receive the services a student with a
  disability attending a public school is entitled to receive under
  federal and state law; and
               (2)  provides information regarding rights to which a
  student with a disability is entitled under federal and state law if
  the student attends a public school, including:
                     (A)  rights provided under the Individuals with
  Disabilities Education Act (20 U.S.C. Section 1400 et seq.),
  including:
                           (i)  an individualized education program;
                           (ii)  educational services provided in the
  least restrictive environment;
                           (iii)  instruction from certified teachers;
                           (iv)  due process hearings to ensure proper
  and full implementation of an individualized education program;
                           (v)  transition and planning services; and
                           (vi)  supplementary aids and services;
                     (B)  rights provided under Subchapter A, Chapter
  29, Education Code; and
                     (C)  other rights provided under federal or state
  law.
         Sec. 230.0513.  REPORTING NUMBER OF SCHOLARSHIP RECIPIENTS.
  (a) Not later than October 1 of each year, the certified
  educational assistance organization shall notify the commissioner
  of education and the Legislative Budget Board of the likely number
  of students who will enroll in a nonpublic school instead of a
  public school using scholarships under this chapter, disaggregated
  by the school district or open-enrollment charter school the
  students would otherwise attend.
         (b)  Not later than March 1 of each year, the certified
  educational assistance organization shall provide final
  information to the commissioner of education and the Legislative
  Budget Board regarding the actual number of students described by
  Subsection (a), disaggregated in the same manner as the initial
  information under that subsection.
         Sec. 230.052.  NONPUBLIC SCHOOL REQUIREMENTS. The certified
  educational assistance organization may not award scholarships to
  or pay educational expenses for eligible students enrolled in a
  nonpublic school unless the nonpublic school executes a notarized
  affidavit, with supporting documents, concerning the school's
  qualification for scholarships and educational expense assistance
  for eligible students who receive assistance from the certified
  educational assistance organization, including evidence of:
               (1)  accreditation by the Texas Education Agency or by
  an organization that is recognized by the Texas Private School
  Accreditation Commission;
               (2)  annual administration of a nationally
  norm-referenced assessment instrument or the appropriate
  assessment instrument required under Section 39.023, Education
  Code;
               (3)  valid certificate of occupancy; and
               (4)  policy statements regarding:
                     (A)  admissions;
                     (B)  curriculum;
                     (C)  safety;
                     (D)  food service inspection; and
                     (E)  student to teacher ratios.
         Sec. 230.053.  ELIGIBILITY OF STUDENTS; INCLUSION IN
  CALCULATION OF EQUALIZED WEALTH LEVEL. (a) A student is eligible
  to apply to the certified educational assistance organization for a
  scholarship or educational expense assistance under this chapter
  if:
               (1)  the student resides in a public school district
  located in whole or in part in a county; and
               (2)  the student:
                     (A)  is eligible under Section 29.003, Education
  Code, to participate in a school district's special education
  program; or
                     (B)  covered by Section 504, Rehabilitation Act of
  1973 (29 U.S.C. Section 794).
         (b)  A student may continue to receive assistance under this
  chapter until the earlier of the date the student graduates from
  high school or the student's 22nd birthday if the student:
               (1)  meets the requirements of Subsection (a)(1); and
               (2)  previously qualified under Subsections (a)(2) and
  (3)(E).
         (c)  The certified educational assistance organization shall
  award scholarships and educational expense assistance to eligible
  students who apply in accordance with this chapter.
         (d)  The certified educational assistance organization shall
  provide to each parent of a student with a disability who applies
  for a scholarship or educational expense assistance under this
  chapter a written copy of the notice described by Section
  230.0512(b). Before the organization may award a scholarship or
  educational expense assistance to the student, the student's parent
  must sign and return the notice to the organization.
         Sec. 230.054.  CREDIT FOR CONTRIBUTIONS. (a) An entity may
  apply for a credit under this chapter only for money contributed to
  the certified educational assistance organization and designated
  for scholarships or educational expense assistance for eligible
  students.
         (b)  An entity may not apply for a credit under this chapter
  for a contribution made to the certified educational assistance
  organization if:
               (1)  the entity requires that the contribution benefit
  a particular person or school; or
               (2)  the contribution is designated to provide a
  scholarship or educational expense assistance for an entity
  employee or for a spouse or dependent of an entity employee.
         (c)  An entity shall notify the certified educational
  assistance organization in writing when the entity makes a
  contribution if the entity may apply for a tax credit under this
  chapter for the contribution. An entity may not apply for a credit
  for the contribution unless the entity provides the notification at
  the time the contribution is made. The certified educational
  assistance organization shall indicate on the receipt provided
  under Section 230.051(b)(1)(F) that the entity made the
  notification under this subsection.
         Sec. 230.055.  LIMIT ON AMOUNT OF SCHOLARSHIP OR EDUCATIONAL
  EXPENSE ASSISTANCE. (a) Except as provided by Subsection (b), the
  maximum scholarship amount the certified educational assistance
  organization may award to a student under this chapter using money
  contributed by an entity that notifies the organization under
  Section 230.054(c) that the entity may apply for a tax credit for
  the contribution may not exceed 75 percent of the state average
  maintenance and operations expenditures per student for the
  preceding state fiscal year.
         (b)  A student who receives a payment to an education savings
  account under Section 29.358, Education Code, for a year is
  eligible to receive for the same year a scholarship from the
  certified educational assistance organization if the student is
  eligible for that assistance. The maximum scholarship amount the
  certified educational assistance organization may award to a
  student to whom this subsection applies using money contributed by
  an entity that notifies the organization under Section 230.054(c)
  that the entity may apply for a tax credit for the contribution may
  not exceed the sum of:
               (1)  the difference between the amount of the payment
  under Section 29.358, Education Code, and the full tuition amount
  for the student's nonpublic school; and
               (2)  a transportation allowance not to exceed $500.
         (c)  The maximum educational expense assistance the
  certified educational assistance organization may award to a
  student under this chapter using money contributed by an entity
  that notifies the organization under Section 230.054(c) that the
  entity may apply for a tax credit for the contribution may not
  exceed $500 for the 2018 state fiscal year, increased by five
  percent each subsequent year.
         Sec. 230.056.  REVOCATION. (a) The comptroller shall
  revoke the certification provided under Section 230.051 if the
  comptroller finds that the certified educational assistance
  organization:
               (1)  is no longer eligible under Section 230.051; or
               (2)  intentionally and substantially violates this
  chapter.
         (b)  The comptroller has broad discretion in determining
  whether to revoke a certification under Subsection (a).
         (c)  The comptroller shall notify the certified educational
  assistance organization in writing of the comptroller's decision to
  revoke the organization's certification. If the comptroller
  revokes the organization's certification, the comptroller shall
  include in the notice of revocation the reasons for the revocation.
         (d)  If the comptroller revokes the certified educational
  assistance organization's certification under Subsection (a), the
  organization may request in writing a reconsideration of the
  revocation not later than the 10th day after the date of the notice
  under Subsection (c) or the revocation is final.
         (e)  An organization that requests a reconsideration under
  Subsection (d) may submit to the comptroller not later than the 30th
  day after the date the request for reconsideration is submitted
  additional information and documents to support the organization's
  request for reconsideration.
         (f)  The comptroller's reconsideration of a revocation under
  this section is not a contested case under Chapter 2001, Government
  Code. The comptroller's decision on a request for reconsideration
  of a revocation is final and is not appealable.
         (g)  This section does not create a cause of action to
  contest a decision of the comptroller to revoke the certified
  educational assistance organization's certification under this
  chapter.
         (h)  Revocation of a certification under this section does
  not affect the validity of a tax credit relating to a contribution
  made before the date of revocation.
         Sec. 230.057.  REPORT OF NET SAVINGS TO PUBLIC EDUCATION.
  (a) In this section, "net savings" means any positive difference in
  a state fiscal year between:
               (1)  the amount by which state spending on public
  education for that year is reduced as a result of students receiving
  scholarships and educational expense assistance from the certified
  educational assistance organization under this chapter; and
               (2)  the amount by which state revenue derived from
  Chapters 221, 222, and 224 is reduced as a result of tax credits
  under this chapter.
         (b)  Not later than December 31 of each even-numbered year,
  the comptroller shall determine the amount of net savings for the
  previous state fiscal biennium and make available to the public a
  report of that amount of savings.
  SUBCHAPTER C. CREDIT
         Sec. 230.101.  CREDIT. An entity may apply for a credit
  against the entity's state premium tax liability in the amount and
  under the conditions and limitations provided by this chapter. The
  comptroller shall award credits as provided by Section 230.103.
         Sec. 230.102.  AMOUNTS; LIMITATION ON TOTAL CREDITS. (a)
  Subject to Subsections (b) and (c), the amount of an entity's credit
  is equal to the lesser of the amount of the qualifying contributions
  made to the certified educational assistance organization or 50
  percent of the entity's state premium tax liability.
         (b)  The total amount of tax credits that may be awarded
  under this chapter for each state fiscal year may not exceed $25
  million.
         (c)  The comptroller by rule shall prescribe procedures by
  which the comptroller may allocate credits under this chapter. The
  procedures must provide that credits are allocated on a first-come,
  first-served basis, based on the date the contribution was
  initially made.
         (d)  The comptroller may require an entity to notify the
  comptroller of the amount the entity intends or expects to apply for
  under this chapter before the beginning of a state fiscal year or at
  any other time required by the comptroller.
         Sec. 230.103.  APPLICATION FOR CREDIT. (a) An entity must
  apply for a credit under this chapter on or with the tax return for
  the taxable year during which the qualifying contributions were
  made and submit with the application each receipt issued under
  Section 230.051(b)(1)(F) that includes the information required by
  Section 230.054(c).
         (b)  The comptroller shall adopt a form for the application
  for the credit. An entity must use this form in applying for the
  credit.
         (c)  The comptroller may award a credit to an entity that
  applies for the credit under Subsection (a) if the entity is
  eligible for the credit and the credit is available under Section
  230.102(b). The comptroller has broad discretion in determining
  whether to grant or deny an application for a credit.
         (d)  The comptroller shall notify an entity in writing of the
  comptroller's decision to grant or deny the application under
  Subsection (a). If the comptroller denies an entity's application,
  the comptroller shall include in the notice of denial the reasons
  for the comptroller's decision.
         (e)  If the comptroller denies an entity's application under
  Subsection (a), the entity may request in writing a reconsideration
  of the application not later than the 10th day after the date of the
  notice under Subsection (d). If the entity does not request a
  reconsideration of the application on or before that date, the
  comptroller's decision is final.
         (f)  An entity that requests a reconsideration under
  Subsection (e) may submit to the comptroller not later than the 30th
  day after the date the request for reconsideration is submitted
  additional information and documents to support the entity's
  request for reconsideration.
         (g)  The comptroller's reconsideration of an application
  under this section is not a contested case under Chapter 2001,
  Government Code. The comptroller's decision on a request for
  reconsideration of an application is final and is not appealable.
         (h)  This section does not create a cause of action to
  contest a decision of the comptroller to deny an application for a
  credit under this chapter.
         Sec. 230.104.  ASSIGNMENT PROHIBITED; EXCEPTION. An entity
  may not convey, assign, or transfer the credit allowed under this
  chapter to another entity unless all of the assets of the entity are
  conveyed, assigned, or transferred in the same transaction.
         Sec. 230.105.  NOTICE OF AVAILABILITY OF CREDIT. The
  comptroller shall provide notice of the availability of the credit
  under this chapter on the comptroller's Internet website, in the
  instructions for insurance premium tax report forms, and in any
  notice sent to an entity concerning the requirement to file an
  insurance premium tax report.
         SECTION 2.02.  An entity may apply for a credit under Chapter
  230, Insurance Code, as added by this article, only for an
  expenditure made on or after the effective date of this article.
         SECTION 2.03.  Not later than February 15, 2018, the
  comptroller of public accounts shall adopt rules as provided by
  Section 230.002(a), Insurance Code, as added by this article.
         SECTION 2.04.  The comptroller of public accounts shall make
  the initial determination of net savings and report regarding that
  savings as required by Section 230.057, Insurance Code, as added by
  this article, not later than December 31, 2020, based on the state
  fiscal biennium ending August 31, 2019.
         SECTION 2.05.  This article applies only to a report
  originally due on or after the effective date of this article.
         SECTION 2.06.  This article takes effect January 1, 2018.
  ARTICLE 3. JUDICIAL REVIEW
         SECTION 3.01.  (a) The constitutionality and other validity
  under the state or federal constitution of all or any part of
  Subchapter J, Chapter 29, Education Code, as added by this Act, or
  Chapter 230, Insurance Code, as added by this Act, may be determined
  in an action for declaratory judgment in a district court in Travis
  County under Chapter 37, Civil Practice and Remedies Code, except
  that this section does not authorize an award of attorney's fees
  against this state and Section 37.009, Civil Practice and Remedies
  Code, does not apply to an action filed under this section. This
  section does not authorize a taxpayer suit to contest the denial of
  a tax credit by the comptroller of public accounts.
         (b)  An appeal of a declaratory judgment or order, however
  characterized, of a district court, including an appeal of the
  judgment of an appellate court, holding or otherwise determining
  that all or any part of Subchapter J, Chapter 29, Education Code, as
  added by this Act, or Chapter 230, Insurance Code, as added by this
  Act, is constitutional or unconstitutional, or otherwise valid or
  invalid, under the state or federal constitution is an accelerated
  appeal.
         (c)  If the judgment or order is interlocutory, an
  interlocutory appeal may be taken from the judgment or order and is
  an accelerated appeal.
         (d)  A district court in Travis County may grant or deny a
  temporary or otherwise interlocutory injunction or a permanent
  injunction on the grounds of the constitutionality or
  unconstitutionality, or other validity or invalidity, under the
  state or federal constitution of all or any part of Subchapter J,
  Chapter 29, Education Code, as added by this Act, or Chapter 230,
  Insurance Code, as added by this Act.
         (e)  There is a direct appeal to the Texas Supreme Court from
  an order, however characterized, of a trial court granting or
  denying a temporary or otherwise interlocutory injunction or a
  permanent injunction on the grounds of the constitutionality or
  unconstitutionality, or other validity or invalidity, under the
  state or federal constitution of all or any part of Subchapter J,
  Chapter 29, Education Code, as added by this Act, or Chapter 230,
  Insurance Code, as added by this Act.
         (f)  The direct appeal is an accelerated appeal.
         (g)  This section exercises the authority granted by Section
  3-b, Article V, Texas Constitution.
         (h)  The filing of a direct appeal under this section will
  automatically stay any temporary or otherwise interlocutory
  injunction or permanent injunction granted in accordance with this
  section pending final determination by the Texas Supreme Court,
  unless the supreme court makes specific findings that the applicant
  seeking such injunctive relief has pleaded and proved that:
               (1)  the applicant has a probable right to the relief it
  seeks on final hearing; and
               (2)  the applicant will suffer a probable injury that
  is imminent and irreparable, and that the applicant has no other
  adequate legal remedy.
         (i)  An appeal under this section, including an
  interlocutory, accelerated, or direct appeal, is governed, as
  applicable, by the Texas Rules of Appellate Procedure, including
  Rules 25.1(d)(6), 26.1(b), 28.1, 28.3, 32.1(g), 37.3(a)(1),
  38.6(a) and (b), 40.1(b), and 49.4.
  ARTICLE 4. EFFECTIVE DATE
         SECTION 4.01.  Except as otherwise provided by this Act:
               (1)  this Act takes effect immediately if it receives a
  vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution; and (2) if
  this Act does not receive the vote necessary for immediate effect,
  this Act takes effect 91 days after the last day of the legislative
  session.