2015S0381-1 03/04/15
By: Huffines S.B. No. 1178
A BILL TO BE ENTITLED
AN ACT
relating to establishing an education savings account program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. 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
eligible to participate in a school district's special education
program under Section 29.003.
(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 or another state or under 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) "Institution of higher education" means:
(A) an accredited public senior college,
university, community college, state college, technical institute,
or junior college or the equivalent located in this state;
(B) a private or independent institution of
higher education as defined by Section 61.003; or
(C) a career school or college as defined by
Section 132.001.
(6) "Instructional material" has the meaning assigned
by Section 31.002.
(7) "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.
(8) "Participating private school" means a private
school located in this state that has notified the agency of its
intention to participate in the program and comply with the
program's requirements.
(9) "Program" means the education savings account
program created under this subchapter.
(10) "Program participant" means a child accepted into
the program and the child's parent.
Sec. 29.352. ESTABLISHMENT OF PROGRAM. (a) The
commissioner shall establish and administer the education savings
account program to provide funding to pay approved
education-related expenses of eligible students. The parent of a
child participating in the program may choose an education method
that best serves the child's needs, whether by private school,
private tutor, homeschooling, or another approved option.
(b) The annual number of new participants in the program is
limited to one-half of one percent of the total number of students
in average daily attendance in grades 1 through 12 in the state
during the previous school year. In the event that applicants
exceed available spots in any given year, the agency shall give
preference to any applicant who is a child with a disability or who
is educationally disadvantaged.
(c) The agency shall make information about the program
readily available to the public through various sources, including
the agency's Internet website. The agency shall make special
efforts to ensure that parents of a child with a disability or a
child who is educationally disadvantaged are made aware of the
program.
Sec. 29.353. ELIGIBLE CHILD. (a) A child is eligible to
participate in the program if the child:
(1) is eligible to attend school under Section 25.001;
and
(2) was enrolled in a public school district during
the preceding school year or is enrolling in first grade for the
first time.
(b) After a child establishes eligibility under Subsection
(a) and begins participating in the program, the child is eligible
to continue in the program, regardless of whether the child
continues to meet the requirements of Subsection (a), until the
earlier of the date on which the child graduates from high school or
the child's 21st birthday, unless the child:
(1) enrolls in a public school district or
open-enrollment charter school;
(2) changes residences and is no longer entitled under
Section 25.001 to attend school in the school district under which
the child's eligibility was established; or
(3) is declared ineligible for the program by order of
the commissioner.
Sec. 29.354. AGREEMENT REQUIRED. Before an eligible child
may receive funding under this subchapter, a parent of the child
must agree in writing:
(1) to provide an education for the child that
includes, at a minimum, the subjects of reading, grammar,
mathematics, social studies, and science;
(2) to spend program funding only on qualified
education expenses described by Section 29.356;
(3) to ensure that the child is annually administered
the appropriate assessment instruments under Section 29.358;
(4) to immediately notify the agency if the child
enrolls in a public school district or open-enrollment charter
school; and
(5) to inform the agency of the child's graduation from
high school.
Sec. 29.355. AMOUNT OF PAYMENT; FINANCING. (a) A child
participating in the program shall receive annual funding equal to
80 percent of the total average per student funding amount in the
school district the child would otherwise attend, based on that
district's funding during the preceding school year.
(b) Notwithstanding Subsection (a), a child participating
in the program who is a child with a disability or who is
educationally disadvantaged shall receive annual funding equal to
100 percent of the total average per student funding amount in the
school district the child would otherwise attend, based on that
district's funding during the preceding school year.
(c) The agency shall contract with an independent third
party for the purpose of determining if a child participating in the
program is a child with a disability or is educationally
disadvantaged.
(d) A child who participates in the program is included in
determining the average daily attendance under Section 42.005 of
the school district the child would otherwise attend. The amount of
program funding received by the child shall be subtracted from the
state funding payable to the school district.
Sec. 29.356. QUALIFIED EDUCATION EXPENSES; AGENCY
APPROVAL. (a) Program funding may only be used to pay the
following qualified education expenses incurred by a program
participant:
(1) tuition and fees at a participating private
school;
(2) the purchase of textbooks required by a
participating private school;
(3) the purchase of a curriculum;
(4) the purchase of instructional material;
(5) tuition or fees for an online educational course
or program;
(6) professional fees of a private tutor or teaching
service;
(7) for a child with a disability, professional fees
of a practitioner or provider of educational therapies or services;
(8) fees for a nationally standardized
norm-referenced achievement test or examination, an advanced
placement examination or similar examination, or any examination
related to college or university admission;
(9) tuition and fees at an institution of higher
education;
(10) the purchase of textbooks required by an
institution of higher education;
(11) contributions to a qualified tuition program
established for the child that meets the requirements of Section
529, Internal Revenue Code of 1986; and
(12) professional fees of a financial institution that
manages the participant's account.
(b) Education-related expenses that do not qualify under
Subsection (a) and that may not be paid with program funding
include:
(1) computer hardware or other technological devices;
(2) transportation;
(3) consumable educational supplies including paper,
pens, pencils, folders, and notebooks;
(4) food; and
(5) before-school or after-school child care and child
care during school holidays and vacations.
(c) All expense payments made from an account established
under this subchapter must be approved by the agency and may be made
only to a participating private school, institution of higher
education, private tutor, vendor, or other provider of education
services that has been approved by the agency.
(d) A participating private school, institution of higher
education, private tutor, vendor, or other provider of education
services under this subchapter must provide program participants
with a receipt for each qualifying education expense charged by the
school, institution, tutor, vendor, or provider.
(e) Nothing in this subchapter shall be construed to
prohibit or limit the ability of a program participant to pay, with
nonprogram funding, the costs of educational courses, materials,
supplies, or services not covered by the program.
Sec. 29.357. APPLICATION FOR PROGRAM. (a) From May 1 to
July 1 of each year, a parent may apply for participation in the
program on behalf of the parent's child for the following school
year.
(b) The agency shall use a standardized application form to
determine a child's eligibility for the program. The agency shall
make the application form readily available to interested parents
through various sources, including the agency's Internet website.
(c) The agency shall provide to each applicant, and annually
to each program participant, a publication that describes the
operation of the program, including the type of expenses covered by
the program, expense reporting requirements, a list of private
schools participating in the program, and a description of the
responsibilities of program participants and the agency.
Sec. 29.358. ACHIEVEMENT TESTING. (a) Each child
participating in the program shall be annually administered the
appropriate grade-level state assessment instruments, or
nationally standardized norm-referenced achievement tests, in math
and language arts. However, a child with a disability for whom
standardized testing is not appropriate is not subject to this
subsection.
(b) The results of all assessment instruments or tests
administered under this section shall be reported to the agency in
the manner required by the agency. The agency shall ensure that
results may be efficiently reported in a manner that complies with
student privacy laws and that allows aggregation of data by grade
level, gender, race, family income level, and number of years of
participation in the program.
(c) The agency shall publish the achievement test results,
associated learning gains, and program graduation rates on the
agency's Internet website.
(d) A student's failure to demonstrate satisfactory
academic progress, as determined under commissioner rule, may
constitute grounds for the commissioner to declare the student
ineligible for the program.
Sec. 29.359. ACCREDITATION. (a) A participating private
school must be accredited by a private organization recognized by
the commissioner before it may accept students under the program.
(b) A private tutor or teaching service, or a practitioner
or provider of educational therapies or services for a child with a
disability, must be licensed or accredited by a regional or
national accrediting organization recognized by the commissioner
before it may accept students under the program.
Sec. 29.360. ADMINISTRATION OF ACCOUNTS. (a) The agency
shall contract with a financial institution to establish and manage
accounts under the program. The institution shall establish an
account for each child participating in the program. Program
participants may access their account by using a debit card or
online payment service.
(b) Funding under the program shall be transferred to each
participant's account in quarterly installments of equal amount to
be made on or before the 25th day of August, November, February, and
May.
(c) The agency may deduct from each installment of funds an
amount, not to exceed three percent, to cover the agency's cost of
overseeing accounts and administering the program.
(d) The agency shall establish, based on market rates,
reasonable fees that may be charged by a financial institution that
manages accounts under the program.
Sec. 29.361. EXPENSE REPORTING. (a) On or before
quarterly deadlines established by the agency, program
participants must submit an expense report to the agency detailing
all transactions made on the participant's account during the
reporting quarter. Only expenses incurred during the reporting
quarter may be approved by the agency.
(b) An expense report must include:
(1) receipts and invoices documenting all
transactions made on the account; and
(2) a quarterly statement of account provided to the
participant by the financial institution that manages the account.
(c) The agency shall disallow any expense that is not a
qualified education expense under Section 29.356 or for which
documentation is incomplete. For each disallowed transaction, the
agency shall request repayment in full from the program
participant. Pending repayment, no additional program funding may
be transferred to the participant's account. If repayment is not
made on or before the 30th day after the request for repayment is
made, the commissioner shall close the account.
(d) A program participant may request agency approval of an
expense that was not preapproved by the agency. An approval request
under this subsection is only effective if:
(1) made in writing using the proper form provided by
the agency; and
(2) submitted to the agency before or concurrently
with the submission of the relevant expense report.
(e) Repeated violations of expense reporting requirements
by a program participant, whether intentional or unintentional, may
constitute grounds for the commissioner to declare the participant
ineligible for the program.
Sec. 29.362. AUDITING OF ACCOUNT. The agency shall audit
accounts as needed to ensure compliance with applicable law and the
requirements of the program. At a minimum, the agency shall conduct
one random audit of each account annually. In auditing an account,
the agency may require that a program participant provide further
information and documentation regarding any transaction on the
participant's account.
Sec. 29.363. SUSPENSION OF ACCOUNT. The commissioner shall
suspend the account of any program participant who fails to comply
with applicable law or a requirement of the program, including the
terms of an agreement under Section 29.354, or who commits a
substantial misuse of program funds. The commissioner shall notify
the participant in writing that the account has been suspended and
that no further transactions will be allowed on or disbursements
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 ordered by the
commissioner. Following the expiration of the 10-day period, the
commissioner shall:
(1) order permanent closure of the suspended account
and declare the participant ineligible for the program;
(2) order temporary reinstatement of the account,
conditioned on the performance of specified action by the
participant; or
(3) order full reinstatement of the account.
Sec. 29.364. TUITION AND FEES; REFUND PROHIBITED. (a) A
participating private school may not:
(1) charge a child participating in the program that
attends the school a tuition amount greater than the standard
tuition rate at the school; or
(2) assess any additional charge, other than a fee
that the board of trustees of a school district is authorized to
charge under Section 11.158, for providing an educational program
or service to the child.
(b) A participating private school, institution of higher
education, private tutor, vendor, or other provider of education
services under this subchapter may not in any manner refund to,
credit to, share with, or rebate to a program participant, or any
person on behalf of a participant, any program funds paid or owed by
the participant to the school, institution, tutor, vendor, or
provider.
Sec. 29.365. REFERRAL TO THE ATTORNEY GENERAL. If the
agency obtains evidence of fraudulent use of an account, the
commissioner may refer the case to the attorney general for
investigation and prosecution.
Sec. 29.366. SCHOOL ADMISSIONS. (a) A participating
private school may not refuse to enroll a child participating in the
program on the basis of the child's residence, race, national
origin, ethnic background, religion, disability, or academic
achievement.
(b) A participating private school may refuse to enroll a
child participating in the program if the child:
(1) has been expelled from a public or private school
at any time; or
(2) has a criminal record.
(c) A participating private school may not consider the
athletic ability of a child participating in the program in any
admissions process relating to the child.
(d) A participating private school may give admissions
preference to a currently enrolled child participating in the
program to achieve continuity and to siblings of a currently
enrolled child or children residing in the same household as a
currently enrolled child for the convenience of the parents of
those children.
Sec. 29.367. PROVIDER ACCOUNTABILITY. (a) A
participating private school must:
(1) comply with all applicable state or federal health
and safety laws;
(2) hold a valid occupancy permit, if required by the
political subdivision in which the school is located; and
(3) certify to the agency that the school has complied
with the conditions imposed by Section 29.366 and this section.
(b) A participating private school must conduct a criminal
background check on each school employee or prospective employee.
The school shall terminate or exclude from employment any person:
(1) ineligible under state law to work at the school;
and
(2) who, in the judgment of the school's management,
may pose a threat to the safety of students at the school.
(c) The agency may declare a participating private school,
institution of higher education, private tutor, vendor, or other
provider of education services ineligible for the program if, after
notice and hearing, the agency finds that the school, institution,
tutor, vendor, or provider has:
(1) failed to comply with applicable law or the
requirements of the program; or
(2) failed to provide a child participating in the
program with promised educational services.
(d) If the agency makes a declaration of ineligibility under
Subsection (c), it shall:
(1) immediately notify program participants of the
declaration of ineligibility; and
(2) disapprove any account expenditure made to the
school, institution, tutor, vendor, or provider after the date of
the declaration of ineligibility.
(e) Establishment of the program does not expand the
regulatory authority of the agency or any school district to impose
additional regulation on a private school, private tutor, or other
provider of private education services under the program beyond
what is necessary to enforce the requirements of the program.
Neither the agency nor any school district may in any way regulate
the educational program of a private school, private tutor, or
other provider of private education services under the program.
Sec. 29.368. BOND REQUIRED. (a) Except as provided by
Subsection (c), prior to the start of each school year, a
participating private school that anticipates receiving $50,000 or
more in tuition and fees from students participating in the program
during the school year must file a corporate surety bond with the
commissioner in an amount equal to the total amount of the
anticipated tuition and fees.
(b) A bond issued under Subsection (a) must be:
(1) issued in a form approved by the commissioner;
(2) issued by a company authorized to do business in
this state;
(3) payable to the state to be used only for repayment
of any funds received by the school under the program;
(4) conditioned on the compliance of the school and
its officers, agents, and employees with this subchapter and rules
adopted under this subchapter; and
(5) issued for a period corresponding to the school
year.
(c) The commissioner may waive the bond filing requirement
under Subsection (a) for any participating private school that
provides to the agency financial information demonstrating, to the
commissioner's satisfaction, that the school has the ability to
repay the total amount of tuition and fees the school anticipates
receiving from students participating in the program during the
school year.
Sec. 29.369. STUDENT RECORDS. The school district that a
child participating in the program would otherwise attend shall
provide to the child's parent or, if applicable, to a participating
private school the child attends, a complete copy of the child's
school records. This subsection does not require or authorize the
release of information except in conformity with the Family
Educational Rights and Privacy Act of 1974 (20 U.S.C. Section
1232g).
Sec. 29.370. ANNUAL SURVEY. The agency shall annually
request that a parent of each child participating in the program
complete a written survey that solicits the parent's:
(1) overall level of satisfaction with the program;
and
(2) opinion on specified topics and issues relevant to
the effectiveness of the program.
SECTION 2. This Act applies beginning with the 2015-2016
school year.
SECTION 3. Not later than 45 days after the effective date
of this Act, the commissioner of education, the State Board of
Education, the commissioner of higher education, and the
comptroller of public accounts shall adopt rules, procedures, and
forms necessary to implement the education savings account program
under Subchapter J, Chapter 29, Education Code, as added by this
Act, and to:
(1) calculate annually the savings to the state from
the implementation of the program; and
(2) prevent fraud in financial transactions under the
program, including measures to permit anonymous fraud reporting by
telephone hotline or online communication.
SECTION 4. (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, 2015.
(b) Section 29.358(c), Education Code, as added by this Act,
takes effect September 1, 2018.