By: Patrick S.B. No. 1410
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of the Texas Equal Opportunity
Scholarship Program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 29, Education Code, is amended by adding
Subchapter N to read as follows:
SUBCHAPTER N. TEXAS EQUAL OPPORTUNITY SCHOLARSHIP PROGRAM
Sec. 29.551. DEFINITIONS. In this subchapter:
(1) "Certified organization" means an organization
certified under Section 29.552.
(2) "Eligible student" means a student who meets the
requirements of Section 29.559.
(3) "Opportunity scholarship" means a Texas Equal
Opportunity Scholarship Program scholarship awarded under Section
29.557.
(4) "Qualified nonpublic school" means a school that
meets the requirements of Section 29.560.
Sec. 29.552. CERTIFICATION OF ORGANIZATIONS;
ADMINISTRATION OF PROGRAM. (a) The comptroller may select and
certify not more than three organizations that meet the eligibility
requirements of Section 29.553 to administer the Texas Equal
Opportunity Scholarship Program. The comptroller shall select and
certify three geographically diverse organizations that the
comptroller determines are likely to best administer the program
from among the eligible organizations that apply.
(b) A certified organization may accept donations and award
opportunity scholarships in this state under the conditions and
limitations provided by this subchapter.
Sec. 29.553. ELIGIBILITY REQUIREMENTS FOR ORGANIZATIONS
APPLYING FOR CERTIFICATION. (a) An organization may apply to the
comptroller for certification under Section 29.552.
(b) An organization is eligible for selection and
certification by the comptroller if the organization:
(1) according to the organization's charter, has the
primary purpose of awarding scholarships to or paying educational
expenses for eligible students in public elementary or secondary
schools located in this state;
(2) uses its annual revenue for the purpose provided
by Subdivision (1), except for a portion of the revenue that may be
used for reasonable operating expenses;
(3) is exempt from federal tax under Section 501(a),
Internal Revenue Code of 1986, by being listed as an exempt
organization in Section 501(c)(3) of that code and meeting all
other applicable requirements for that exemption;
(4) is in good standing with this state;
(5) is located in this state;
(6) demonstrates, within the previous five-year
period, experience and expertise in awarding scholarships to
students in elementary and secondary schools; and
(7) agrees to be independently audited on an annual
basis and file the audit report with the comptroller if certified.
Sec. 29.554. REQUIREMENTS FOR CERTIFIED ORGANIZATIONS. (a)
A certified organization shall:
(1) comply at all times with the eligibility
requirements under Section 29.553(b);
(2) submit to an annual independent audit under
guidelines provided by the comptroller and file the audit report
with the comptroller;
(3) except as provided by Section 29.556(b),
distribute all money received from donations under this subchapter
within two school years of receipt;
(4) give each donor a receipt for money donated to the
certified organization under this subchapter that includes the name
of the certified organization, the name of the donor, the amount of
the donation, and any other information required by the
comptroller; and
(5) of the amount of money received from donations
made by donors for the purpose of providing scholarships under this
subchapter including all money donated by entities applying for a
tax credit in connection with the donation under Chapter 230,
Insurance Code, or Subchapter K, Chapter 171, Tax Code:
(A) distribute not less than 95 percent in the
form of opportunity scholarships; and
(B) use not more than five percent to pay
expenses of operating the organization.
(b) A certified organization may not:
(1) award all opportunity scholarships to students who
attend a particular school; or
(2) provide opportunity scholarships in a manner that
does not comply with Sections 29.556 and 29.557.
Sec. 29.555. REVOCATION OF CERTIFICATION. (a) The
comptroller shall revoke a certification under Section 29.552 if
the comptroller finds that a certified organization:
(1) is not in compliance with the requirements of
Section 29.554; or
(2) otherwise intentionally and substantially
violates this subchapter.
(b) Revocation of a certification under this section does
not affect the validity of a tax credit under Chapter 230, Insurance
Code, or Subchapter K, Chapter 171, Tax Code, relating to a donation
made before the date of revocation.
Sec. 29.556. ALLOCATION OF OPPORTUNITY SCHOLARSHIP MONEY.
(a) Except as provided by Subsection (b), of a certified
organization's money available to award opportunity scholarships
for each school year, the certified organization shall use:
(1) not more than 80 percent to award opportunity
scholarships under Section 29.557 to eligible students to attend
qualified nonpublic schools in this state; and
(2) not more than 20 percent to award opportunity
scholarships under Section 29.557 to eligible students to attend:
(A) tuition-supported prekindergarten programs
at public schools in this state; or
(B) educational after-school programs, if the
eligible students receiving the opportunity scholarships to attend
after-school programs attend public schools in this state.
(b) If a certified organization awards the maximum
opportunity scholarship to each eligible student described by
Subsection (a)(1) or (2) who applies for a school year but does not
award the maximum amount of the organization's money allowed by the
applicable subdivision for the year, the certified organization
shall carry forward the remaining money available under the
applicable subdivision for the year and use the money to award
opportunity scholarships to eligible students described by the
applicable subdivision for subsequent school years.
Sec. 29.557. AWARD OF OPPORTUNITY SCHOLARSHIPS. (a) For
each school year a certified organization shall award opportunity
scholarships according to the allocations prescribed by Section
29.556(a) to eligible students who apply as provided by this
section.
(b) A certified organization shall award opportunity
scholarships to applicants according to the following priority
groups in the manner provided by Subsections (c) and (d):
(1) the certified organization shall give first
priority to applicants, and the siblings of those applicants, who
were awarded an opportunity scholarship by the certified
organization for the current school year and who are applying to
renew the opportunity scholarship for the next school year;
(2) the certified organization shall give second
priority to applicants who currently attend a campus that is
assigned a performance rating of unacceptable performance under
Section 39.054; and
(3) the certified organization shall give third
priority to all other applicants.
(c) A certified organization may not award an opportunity
scholarship to an applicant in the priority group described by
Subsection (b)(2) for a school year unless the certified
organization awards an opportunity scholarship to each eligible
student in the priority group described by Subsection (b)(1) who
applies for that year. A certified organization may not award an
opportunity scholarship to an applicant in the priority group
described by Subsection (b)(3) for a school year unless the
certified organization awards an opportunity scholarship to each
eligible student in the priority groups described by Subsections
(b)(1) and (2) who apply for that year.
(d) If a certified organization is able to award an
opportunity scholarship to one or more, but not all, eligible
students in a priority group described by Subsection (b) who apply,
the certified organization shall use a lottery system to award
opportunity scholarships to eligible students in that group who
apply.
Sec. 29.558. LIMITATION ON AMOUNTS OF OPPORTUNITY
SCHOLARSHIPS. (a) The amount of an opportunity scholarship awarded
for a school year to a student to attend a qualified nonpublic
school or a tuition-supported prekindergarten program at a public
school may not exceed the amount of funding equal to 80 percent of
the statewide average amount of state and local funding provided to
school districts under Chapter 42 for a student in average daily
attendance.
(b) The amount of an opportunity scholarship awarded for a
school year to a student to attend an educational after-school
program may not exceed $1,000.
Sec. 29.559. ELIGIBILITY OF STUDENTS. (a) A student is
eligible for an opportunity scholarship if:
(1) resides in the state of Texas;
(2) attended a public school for the majority of a
preceding year; and either
(A) is at risk of dropping out of school as
defined in Section 29.081; or,
(B) resides in a household that had, in the
household's most recently filed federal income tax return, 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.
(b) A child who establishes eligibility under Subsection
(a) is entitled to continue participating until the earlier of the
date on which the child graduates from high school or the child's
21st birthday.
Sec. 29.560. NONPUBLIC SCHOOL REQUIREMENTS. (a) A
certified organization may not award an opportunity scholarship for
a student to attend a nonpublic school unless the nonpublic school:
(1) is accredited by an organization that is
recognized by the Texas Private School Accreditation Commission;
(2) annually administers a nationally norm-referenced
assessment instrument or each appropriate assessment instrument
required under Section 39.023;
(3) qualifies as a school at which a student may
fulfill this state's compulsory attendance requirements;
(4) is not in violation of the federal Civil Rights Act
of 1964 (42 U.S.C. Section 2000a et seq.);
(5) holds a valid certificate of occupancy; and
(6) has written policy statements regarding:
(A) admissions;
(B) curriculum;
(C) safety;
(D) food service inspection; and
(E) student to teacher ratios.
(b) A nonpublic school that enrolls or accepts for
enrollment a student who applies for or is awarded an opportunity
scholarship shall provide to the certified organization to which
the student applies or that awards the opportunity scholarship a
notarized affidavit, with supporting documents, showing that the
nonpublic school meets the requirements of Subsection (a).
Sec. 29.561. RULES; PROCEDURES. (a) The comptroller shall
adopt rules and procedures to implement, administer, and enforce
this subchapter.
(b) A rule adopted under Subsection (a) is binding on any
state or local governmental entity, including a political
subdivision, as necessary to implement, administer, and enforce
this subchapter.
SECTION 2. Subtitle B, Title 3, Insurance Code, is amended
by adding Chapter 230 to read as follows:
CHAPTER 230. CREDIT AGAINST PREMIUM TAXES
FOR DONATIONS TO TEXAS EQUAL OPPORTUNITY SCHOLARSHIP PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 230.001. DEFINITIONS. In this chapter:
(1) "Certified organization" has the meaning assigned
by Section 29.551, Education Code.
(2) "State premium tax liability" means any liability
incurred by an entity under Chapters 221 through 226.
SUBCHAPTER B. CREDIT
Sec. 230.051. ELIGIBILITY. An entity is eligible for a
credit against the entity's state premium tax liability in the
amount and under the conditions and limitations provided by this
chapter.
Sec. 230.052. AMOUNT OF CREDIT; LIMITATION ON RETURN OF
CREDIT. (a) The amount of the credit is equal to the lesser of the
amount of donations made to a certified organization or fifteen
percent of the entity's state premium tax liability after applying
any other applicable credits.
(b) An entity is not entitled to have a donation to a
certified organization returned because of a change in the entity's
state premium tax liability or in the amount of the entity's tax
credit allowed under this chapter as a result of a federal or state
audit, assessment, redetermination, amended return, or similar
change in the entity's tax liability. The certified organization to
which an entity makes a donation shall notify the entity of this
provision.
Sec. 230.053. APPLICATION FOR CREDIT. (a) An entity must
apply for a credit under this chapter on or with the tax return for
the taxable year for which the credit is claimed.
(b) The comptroller shall adopt a form for the application
for the credit. An entity must use this form in applying for the
credit. The comptroller shall make the form available in electronic
and paper format in the same manner as other tax forms.
Sec. 230.054. 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 any
state or local governmental entity, including a political
subdivision, as necessary to implement, administer, and enforce
this chapter.
Sec. 230.055. 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.
SECTION 3. Chapter 171, Tax Code, is amended by adding
Subchapter K to read as follows:
SUBCHAPTER K. TAX CREDIT FOR DONATIONS TO TEXAS EQUAL OPPORTUNITY
SCHOLARSHIP PROGRAM
Sec. 171.601. DEFINITION. In this subchapter, "certified
organization" has the meaning assigned by Section 29.551, Education
Code.
Sec. 171.602. ENTITLEMENT TO CREDIT. A taxable entity is
entitled to a credit in the amount and under the conditions and
limitations provided by this subchapter against the tax imposed
under this chapter.
Sec. 171.603. QUALIFICATION. A taxable entity qualifies
for a credit under this subchapter if the taxable entity donates
money to a certified organization.
Sec. 171.604. AMOUNT OF CREDIT; LIMITATION ON RETURN OF
CREDIT. (a) The amount of the credit is equal to the lesser of the
amount of donations made to a certified organization during the
privilege period or fifteen percent of the amount of franchise tax
due, after applying any other applicable credits.
(b) A taxable entity is not entitled to have a donation
returned because of a change in the taxable entity's tax liability
under this chapter or in the amount of the taxable entity's tax
credit allowed under this subchapter as a result of a federal or
state audit, assessment, redetermination, amended return, or
similar change in the taxable entity's tax liability. The certified
organization to which a taxable entity makes a donation shall
notify the taxable entity of this provision.
Sec. 171.605. APPLICATION FOR CREDIT. (a) A taxable entity
must apply for a credit under this subchapter on or with the tax
report for the period for which the credit is claimed.
(b) The comptroller shall adopt a form for the application
for the credit. A taxable entity must use this form in applying for
the credit. The comptroller shall make the form available in
electronic and paper format in the same manner as other tax forms.
Sec. 171.606. RULES; PROCEDURES. (a) The comptroller
shall adopt rules and procedures to implement, administer, and
enforce this subchapter.
(b) A rule adopted under Subsection (a) is binding on any
state or local governmental entity, including a political
subdivision, as necessary to implement, administer, and enforce
this subchapter.
Sec. 171.607. ASSIGNMENT PROHIBITED; EXCEPTION. A taxable
entity may not convey, assign, or transfer the credit allowed under
this subchapter to another taxable entity unless all assets of the
taxable entity are conveyed, assigned, or transferred in the same
transaction.
SECTION 4. (a) The constitutionality and other validity
under the state or federal constitution of all or any part of
Subchapter N, Chapter 29, Education Code, Chapter 230, Insurance
Code, or Subchapter K, Chapter 171, Tax 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.
(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 N, Chapter 29, Education Code,
Chapter 230, Insurance Code, or Subchapter K, Chapter 171, Tax
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 N,
Chapter 29, Education Code, Chapter 230, Insurance Code, or
Subchapter K, Chapter 171, Tax Code, as added by this Act.
(e) There is a direct appeal to the 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 N,
Chapter 29, Education Code, Chapter 230, Insurance Code, or
Subchapter K, Chapter 171, Tax 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 supreme court, unless
the supreme court makes specific findings that the applicant
seeking such injunctive relief has pleaded and proved that:
(1) the applicant has a probable right to the relief it
seeks on final hearing; and
(2) the applicant will suffer a probable injury that
is imminent and irreparable, and that the applicant has no other
adequate legal remedy.
(i) An appeal under this section, including an
interlocutory, accelerated, or direct appeal, is governed, as
applicable, by the Texas Rules of Appellate Procedure, including
Rules 25.1(d)(6), 26.1(b), 28.1, 28.3, 32.1(g), 37.3(a)(1),
38.6(a) and (b), 40.1(b), and 49.4.
SECTION 5. A credit may be claimed under Chapter 230,
Insurance Code, or Subchapter K, Chapter 171, Tax Code, as added by
this Act, only for a donation made on or after January 1, 2014.
SECTION 6. Subchapter N, Chapter 29, Education Code, as
added by this Act, applies beginning with the 2013-2014 school
year.
SECTION 7. (a) Except as provided by Subsection (b) of this
section:
(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, 2013.
(b) Chapter 230, Insurance Code, and Subchapter K, Chapter
171, Tax Code, as added by this Act, take effect January 1, 2014.