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FISCAL NOTE
Senate Bill 202
Committee: Finance and Taxation EducationSponsor: Senator Larry Stutts
Analyst: John Friedenreich Date: 05/11/2023
Senate Bill 202as reported by the Committee on Finance and Taxation Education would
increase the obligations of the non-reverting Parental Rights in Children’s Education (PRICE)
ESA Fund, created by this bill and funded from appropriations from the Education Trust Fund
(ETF), in amounts not to exceed $50,000,000 for the first three years of the program, to annually
fund each participating student’s education savings account (ESA) to cover qualifying
educational expenses. This bill would: (1) set the amount to be deposited into each ESA for the
2024-2025 school year at $6,900 per student, (2) provide for the annual adjustment of this
amount based on the percentage change of the ETF’s share of the Foundation Program from the
prior year, and (3) phase-in student eligibility over three school years.
This bill could further increase the annual obligations of the ETF by an undetermined amount
dependent on the number of homeschool students that participate in this program.
In addition, this bill would increase the obligations of the Alabama Department of Revenue
(ADOR) by an undetermined amount to administer this program, to include: (1) periodically
auditing ESAs and education service providers to ensure compliance with the provisions of this
bill; (2) implementing an ESA payment portal for services provided by participating schools or
education service providers; and (3) ensuring that public schools and school districts providing
services to a participating student receive the appropriate pro rata share of the students’ ESA
based on the percentage of total instruction provided to the student.
These obligations would be offset, in whole or in part, by funding from the PRICE
Administration Fund, created by this bill, which would receive annual transfers from the PRICE
ESA Fund in amounts equal to the lesser of $2 million or 3% of the amount appropriated each
year to the PRICE ESA Fund, as provided by this bill, to: (1) be used by ADOR to administer
the PRICE program; and (2) reimburse members of the Parent Advisory Board, established FN-AA5LSS-2
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pursuant to the provisions of this bill, for reasonable and necessary expenses, in the same
manner as state employees. This bill would also provide that any monies remaining in this fund
at the end of the fiscal year would revert to the PRICE ESA Fund and would allow the
Legislature to make additional appropriations to this fund upon documented need of funds to
provide for the administration of the program.
This bill would also provide that funds deposited into an ESA do not constitute taxable income.