Texas 2021 - 87th Regular

Texas Senate Bill SB1698 Compare Versions

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1	1	87R9066 BEF-F
2	2	By: Paxton S.B. No. 1698
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a franchise or insurance premium tax credit for
8	8	contributions made to certain educational assistance
9	9	organizations.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Chapter 171, Tax Code, is amended by adding
12	12	Subchapter N to read as follows:
13	13	SUBCHAPTER N. TAX CREDIT FOR CONTRIBUTIONS TO CERTAIN EDUCATIONAL
14	14	ASSISTANCE ORGANIZATIONS
15	15	Sec. 171.701. DEFINITION. In this subchapter, "educational
16	16	assistance organization" means an organization that:
17	17	(1) has the ability according to the organization's
18	18	charter to award scholarships to or pay educational expenses for
19	19	eligible students in:
20	20	(A) public elementary or secondary schools
21	21	located in this state; or
22	22	(B) nonpublic elementary or secondary schools
23	23	located in this state:
24	24	(i) that meet the requirements of Section
25	25	171.704;
26	26	(ii) at which a student may fulfill this
27	27	state's compulsory attendance requirements; and
28	28	(iii) that are not in violation of the
29	29	federal Civil Rights Act of 1964 (42 U.S.C. Section 2000a et seq.);
30	30	and
31	31	(2) uses part of its annual revenue for the purpose
32	32	provided by Subdivision (1).
33	33	Sec. 171.702. ELIGIBILITY REQUIREMENTS FOR CERTIFICATION
34	34	OF EDUCATIONAL ASSISTANCE ORGANIZATION. (a) An organization may
35	35	apply to the comptroller for certification as a certified
36	36	educational assistance organization.
37	37	(b) To be eligible for certification, an organization:
38	38	(1) must:
39	39	(A) be exempt from federal tax under Section
40	40	501(a) of the Internal Revenue Code by being listed as an exempt
41	41	organization in Section 501(c)(3) of that code;
42	42	(B) be in good standing with the state;
43	43	(C) be located in the state;
44	44	(D) agree to allocate at least 90 percent of its
45	45	annual revenue from contributions that are designated for
46	46	scholarships or educational expense assistance for eligible
47	47	students under this subchapter for student scholarships and
48	48	assistance for educational expenses, including tuition,
49	49	transportation, textbooks, and other supplies, and for other
50	50	related educational expense assistance as described by this
51	51	section;
52	52	(E) agree to award scholarships and assistance
53	53	for qualifying educational expenses to eligible students who
54	54	demonstrate the greatest financial and academic need;
55	55	(F) agree to provide each donor a receipt for
56	56	money contributed to the organization that includes the name of the
57	57	organization, the name of the donor, the amount of the
58	58	contribution, the information required by Section 171.707(c), and
59	59	any other information required by the comptroller;
60	60	(G) demonstrate experience and technical
61	61	expertise in:
62	62	(i) accepting, processing, and tracking
63	63	applications for scholarships or educational expense assistance;
64	64	and
65	65	(ii) awarding scholarships to students in
66	66	primary or secondary schools;
67	67	(H) agree to be independently audited on an
68	68	annual basis and file the audit with the comptroller; and
69	69	(I) agree to disburse within two academic years
70	70	of receipt contributions received from and designated by entities
71	71	for scholarships or educational expense assistance under this
72	72	subchapter; and
73	73	(2) may not:
74	74	(A) award all scholarships under this subchapter
75	75	to students who attend a particular school or pay educational
76	76	expenses incurred only at a particular school;
77	77	(B) provide to a student a scholarship in an
78	78	annual amount that exceeds the amount provided under Section
79	79	171.708(a) or (b) unless the money used to provide the portion of
80	80	the scholarship in excess of that amount was contributed by a person
81	81	other than an entity that provides notice under Section 171.707(c)
82	82	that the entity may apply for a tax credit for the contribution; and
83	83	(C) provide to a student educational expense
84	84	assistance in excess of the amount provided under Section
85	85	171.708(c), unless the money used to provide the portion of the
86	86	assistance in excess of that amount was contributed by a person
87	87	other than an entity that provides notice under Section 171.707(c)
88	88	that the entity may apply for a tax credit for the contribution,
89	89	including assistance for:
90	90	(i) facility fees;
91	91	(ii) textbooks;
92	92	(iii) school supplies;
93	93	(iv) tutoring;
94	94	(v) academic after-school programs;
95	95	(vi) school or lab fees;
96	96	(vii) before-school or after-school child
97	97	care; and
98	98	(viii) transportation expenses, including
99	99	the cost to transfer from one public school to another.
100	100	(c) The comptroller may certify not more than 25 certified
101	101	educational assistance organizations. The comptroller may certify
102	102	as a certified educational assistance organization an organization
103	103	that applies under Subsection (a) if the organization meets the
104	104	requirements of Subsection (b). The comptroller has broad
105	105	discretion in determining whether to grant or deny an application
106	106	for certification.
107	107	(d) The comptroller shall notify an organization in writing
108	108	of the comptroller's decision to grant or deny the application
109	109	under Subsection (a). If the comptroller denies an organization's
110	110	application, the comptroller shall include in the notice of denial
111	111	the reasons for the comptroller's decision.
112	112	(e) If the comptroller denies an organization's application
113	113	under Subsection (a), the organization may request in writing a
114	114	reconsideration of the application not later than the 10th day
115	115	after the date the notice under Subsection (d) is received. If the
116	116	organization does not request a reconsideration of the application
117	117	on or before that date, the comptroller's decision is final. An
118	118	organization may not request reconsideration of an application if
119	119	the comptroller denied the application because 25 organizations
120	120	were already certified as certified educational assistance
121	121	organizations.
122	122	(f) An organization that requests a reconsideration under
123	123	Subsection (e) may submit to the comptroller, not later than the
124	124	30th day after the date the request for reconsideration is
125	125	submitted, additional information and documents to support the
126	126	organization's request for reconsideration.
127	127	(g) The comptroller's reconsideration of an application
128	128	under this section is not a contested case under Chapter 2001,
129	129	Government Code. The comptroller's decision on a request for
130	130	reconsideration of an application is final and is not appealable.
131	131	(h) This section does not create a cause of action to
132	132	contest a decision of the comptroller to deny an application for
133	133	certification as a certified educational assistance organization.
134	134	Sec. 171.703. ALLOCATION OF MONEY DESIGNATED FOR
135	135	SCHOLARSHIPS OR EDUCATIONAL EXPENSE ASSISTANCE. Of the amount
136	136	required to be allocated as provided by Section 171.702(b)(1)(D), a
137	137	certified educational assistance organization shall use:
138	138	(1) at least 80 percent to award scholarships as
139	139	described by Sections 171.708(a) and (b); and
140	140	(2) not more than 20 percent to award educational
141	141	expense assistance as described by Section 171.708(c).
142	142	Sec. 171.704. NONPUBLIC SCHOOL REQUIREMENTS. A certified
143	143	educational assistance organization may award scholarships to or
144	144	pay educational expenses for eligible students enrolled in a
145	145	nonpublic school if the nonpublic school executes a notarized
146	146	affidavit, with supporting documents, concerning the school's
147	147	qualification for scholarships and educational expense assistance
148	148	for eligible students who receive assistance from a certified
149	149	educational assistance organization, including evidence of:
150	150	(1) accreditation or of actively being in the process
151	151	of accreditation by the Texas Education Agency or by an
152	152	organization recognized by the Texas Private School Accreditation
153	153	Commission;
154	154	(2) annual administration of a nationally
155	155	norm-referenced assessment instrument or the appropriate
156	156	assessment instrument required under Section 39.023, Education
157	157	Code;
158	158	(3) valid certificate of occupancy; and
159	159	(4) policy statements regarding:
160	160	(A) admissions;
161	161	(B) curriculum;
162	162	(C) safety;
163	163	(D) food service inspection; and
164	164	(E) student to teacher ratios.
165	165	Sec. 171.705. ELIGIBILITY FOR CREDIT. A taxable entity may
166	166	apply for a credit against the tax imposed under this chapter in the
167	167	amount and under the conditions provided by this subchapter. The
168	168	comptroller shall award credits as provided by Section 171.711.
169	169	Sec. 171.706. ELIGIBILITY OF STUDENTS; NOTICE TO CERTAIN
170	170	PARENTS; INCLUSION IN AVERAGE DAILY ATTENDANCE. (a) To be eligible
171	171	to apply for assistance from a certified educational assistance
172	172	organization under this subchapter:
173	173	(1) a student:
174	174	(A) must:
175	175	(i) be in foster care;
176	176	(ii) be in institutional care; or
177	177	(iii) reside in a household with income not
178	178	greater than 250 percent of the income guidelines necessary to
179	179	qualify for the national free or reduced-price lunch program
180	180	established under 42 U.S.C. Section 1751 et seq.; and
181	181	(B) must:
182	182	(i) have been enrolled in a public school
183	183	during the preceding school year;
184	184	(ii) be enrolling in school in this state
185	185	for the first time;
186	186	(iii) be the sibling of a child who is
187	187	eligible to apply under this section; or
188	188	(iv) if the student attends a nonpublic
189	189	school:
190	190	(a) qualify as a student who is not
191	191	counted toward a public school's average daily attendance during
192	192	the year in which the student receives the scholarship or
193	193	educational expense assistance to attend the school, except as
194	194	provided by Subsection (f); and
195	195	(b) be located in a county with a
196	196	population greater than 50,000; or
197	197	(2) the student must have previously qualified under
198	198	Subdivision (1).
199	199	(a-1) Notwithstanding Subsection (a), a school district
200	200	located in a county described by that subsection may vote at a
201	201	general election to allow students to participate in the tax credit
202	202	scholarship program described by this subchapter.
203	203	(b) In addition to the students eligible under Subsection
204	204	(a), a student is eligible to apply for assistance from a certified
205	205	educational assistance organization under this subchapter if the
206	206	student:
207	207	(1) is in kindergarten through grade 12 and eligible
208	208	under Section 29.003, Education Code, to participate in a school
209	209	district's special education program; and
210	210	(2) has an individualized education program under
211	211	Section 29.005, Education Code.
212	212	(c) A school district shall provide written notice of the
213	213	availability of assistance under this subchapter to the parent of a
214	214	student who is eligible to apply for assistance under Subsection
215	215	(b). The notice under this subsection must inform the parent that a
216	216	qualifying school is not subject to laws regarding the provision of
217	217	education services in the same manner as a public school, and a
218	218	student with disabilities attending a qualifying school may not
219	219	receive the services a student with disabilities attending a public
220	220	school is entitled to receive under federal and state law. The
221	221	notice must provide information regarding rights a student with
222	222	disabilities is entitled to under federal and state law if the
223	223	student attends a public school, including:
224	224	(1) rights provided under the Individuals with
225	225	Disabilities Education Act (20 U.S.C. Section 1400 et seq.),
226	226	including:
227	227	(A) an individualized education program;
228	228	(B) education services provided in the least
229	229	restrictive environment;
230	230	(C) instruction from certified teachers;
231	231	(D) due process hearings to ensure proper and
232	232	full implementation of an individualized education program;
233	233	(E) transition and planning services; and
234	234	(F) supplementary aids and services;
235	235	(2) rights provided under Subchapter A, Chapter 29,
236	236	Education Code; and
237	237	(3) other rights provided under federal or state law
238	238	to a student with a disability who attends a public school.
239	239	(d) A student who establishes eligibility under Subsection
240	240	(b) may continue to receive assistance under this subchapter until
241	241	the earlier of the date the student graduates from high school or
242	242	the student's 22nd birthday.
243	243	(e) A certified educational assistance organization shall
244	244	award scholarships and educational expense assistance to eligible
245	245	students who apply in accordance with this subchapter.
246	246	(f) A student who receives a scholarship under this
247	247	subchapter is included in the average daily attendance of the
248	248	school district the student would otherwise attend for purposes of
249	249	determining if the district's revenue levels exceed the district's
250	250	entitlement under Section 48.257, Education Code.
251	251	Sec. 171.707. CREDIT FOR CONTRIBUTIONS. (a) A taxable
252	252	entity may apply for a credit under this subchapter only for money
253	253	contributed to a certified educational assistance organization and
254	254	designated for scholarships or educational expense assistance for
255	255	eligible students.
256	256	(b) A taxable entity may not apply for a credit under this
257	257	subchapter for a contribution made to a certified educational
258	258	assistance organization if:
259	259	(1) the taxable entity requires that the contribution
260	260	benefit a particular person or school; or
261	261	(2) the contribution is designated to provide a
262	262	scholarship or educational expense assistance for a taxable entity
263	263	employee or for a spouse or dependent of a taxable entity employee.
264	264	(c) An entity shall notify a certified educational
265	265	assistance organization in writing when the entity makes a
266	266	contribution if the entity may apply for a tax credit under this
267	267	subchapter or Chapter 230, Insurance Code, for the contribution. An
268	268	entity may not apply for a tax credit for the contribution unless
269	269	the entity provides the notice at the time the contribution is made.
270	270	The certified educational assistance organization shall indicate
271	271	on the receipt provided under Section 171.702(b)(1)(F) that the
272	272	entity provided notice under this subsection.
273	273	Sec. 171.708. LIMIT ON AMOUNT OF SCHOLARSHIP OR EDUCATIONAL
274	274	EXPENSE ASSISTANCE. (a) Except as provided by Subsection (b), the
275	275	maximum scholarship amount a certified educational assistance
276	276	organization may award to a student under this subchapter using
277	277	money contributed by an entity that provides notice under Section
278	278	171.707(c) that the entity may apply for a tax credit for the
279	279	contribution may not exceed 75 percent of the state average
280	280	maintenance and operations expenditures per student in average
281	281	daily attendance.
282	282	(b) The maximum scholarship amount under Subsection (a) may
283	283	not exceed 50 percent of the state average maintenance and
284	284	operations expenditures per student in average daily attendance if
285	285	the student receiving the scholarship resides in a household with
286	286	income greater than 175 percent of the income guidelines necessary
287	287	to qualify for the national free or reduced-price lunch program
288	288	established under 42 U.S.C. Section 1751 et seq. This subsection
289	289	does not apply to a student who is eligible for assistance under
290	290	Section 171.706(b) or (d).
291	291	(c) The maximum educational expense assistance a certified
292	292	educational assistance organization may award to a student under
293	293	this subchapter using money contributed by an entity that provides
294	294	notice under Section 171.707(c) that the entity may apply for a tax
295	295	credit for the contribution may not exceed $500 for the 2022 state
296	296	fiscal year, increased by five percent each subsequent year.
297	297	Sec. 171.709. AMOUNTS; LIMITATION ON TOTAL CREDITS. (a)
298	298	Subject to Subsections (b) and (c), the amount of a taxable entity's
299	299	credit is equal to the lesser of the amount of the qualifying
300	300	contributions made by the taxable entity during the period covered
301	301	by the report or 50 percent of the taxable entity's tax liability
302	302	under this chapter for the report.
303	303	(b) For the 2022 state fiscal year, the total amount of tax
304	304	credits that may be awarded under this subchapter and Chapter 230,
305	305	Insurance Code, may not exceed $100 million. For each subsequent
306	306	state fiscal year, the total amount of tax credits that may be
307	307	awarded is an amount equal to 110 percent of the total amount of tax
308	308	credits that may be awarded in the previous state fiscal year.
309	309	(c) The comptroller by rule shall prescribe procedures by
310	310	which the comptroller may allocate credits under this subchapter.
311	311	The procedures must provide that credits are allocated first to
312	312	taxable entities that received preliminary approval for a credit
313	313	under Section 171.710 and that apply under Section 171.711. The
314	314	procedures must provide that any remaining credits are allocated to
315	315	taxable entities that apply under Section 171.711 on a first-come,
316	316	first-served basis, based on the date the contribution was
317	317	initially made.
318	318	(d) The comptroller may require a taxable entity to notify
319	319	the comptroller of the amount the taxable entity intends or expects
320	320	to apply for under this subchapter before the beginning of a state
321	321	fiscal year or at any other time required by the comptroller.
322	322	Sec. 171.710. PRELIMINARY APPROVAL FOR CREDIT. (a) Before
323	323	making a contribution to a certified educational assistance
324	324	organization, a taxable entity may apply to the comptroller for
325	325	preliminary approval of a credit under this subchapter for the
326	326	contribution.
327	327	(b) A taxable entity must apply for preliminary approval on
328	328	a form provided by the comptroller that includes the amount the
329	329	taxable entity expects to contribute and any other information the
330	330	comptroller requires.
331	331	(c) The comptroller shall grant preliminary approval for
332	332	tax credits under this subchapter and Chapter 230, Insurance Code,
333	333	on a first-come, first-served basis, based on the date the
334	334	comptroller receives the application for preliminary approval.
335	335	(d) The comptroller shall grant preliminary approval for a
336	336	credit under this subchapter for a state fiscal year if the sum of
337	337	the amount of the credit and the total amount of all other credits
338	338	preliminarily approved under this subchapter and Chapter 230,
339	339	Insurance Code, does not exceed the amount provided by Section
340	340	171.709(b).
341	341	(e) Final award of credit preliminarily approved under this
342	342	section remains subject to the limitations under Section 171.709(a)
343	343	and all other requirements of this subchapter.
344	344	Sec. 171.711. APPLICATION FOR CREDIT. (a) A taxable entity
345	345	must apply for a credit under this subchapter on or with the report
346	346	covering the period in which the contribution was made.
347	347	(b) The comptroller shall adopt a form for the application
348	348	for the credit. A taxable entity must use this form in applying for
349	349	the credit and submit with the application form each receipt
350	350	provided under Section 171.702(b)(1)(F) that includes the
351	351	information required by Section 171.707(c).
352	352	(c) Subject to Section 171.709(c), the comptroller may
353	353	award a credit to a taxable entity that applies for the credit under
354	354	Subsection (a) if the taxable entity is eligible for the credit and
355	355	the credit is available under Section 171.709(b). The comptroller
356	356	has broad discretion in determining whether to grant or deny an
357	357	application for a credit.
358	358	(d) The comptroller shall notify a taxable entity in writing
359	359	of the comptroller's decision to grant or deny the application
360	360	under Subsection (a). If the comptroller denies a taxable entity's
361	361	application, the comptroller shall include in the notice of denial
362	362	the reasons for the comptroller's decision.
363	363	(e) If the comptroller denies a taxable entity's
364	364	application under Subsection (a), the taxable entity may request in
365	365	writing a reconsideration of the application not later than the
366	366	10th day after the date the notice under Subsection (d) is received.
367	367	If the taxable entity does not request a reconsideration of the
368	368	application on or before that date, the comptroller's decision is
369	369	final.
370	370	(f) A taxable entity that requests a reconsideration under
371	371	Subsection (e) may submit to the comptroller, not later than the
372	372	30th day after the date the request for reconsideration is
373	373	submitted, additional information and documents to support the
374	374	taxable entity's request for reconsideration.
375	375	(g) The comptroller's reconsideration of an application
376	376	under this section is not a contested case under Chapter 2001,
377	377	Government Code. The comptroller's decision on a request for
378	378	reconsideration of an application is final and is not appealable.
379	379	(h) This section does not create a cause of action to
380	380	contest a decision of the comptroller to deny an application for a
381	381	credit under this subchapter.
382	382	Sec. 171.712. RULES; PROCEDURES. (a) The comptroller
383	383	shall adopt rules and procedures to implement, administer, and
384	384	enforce this subchapter.
385	385	(b) A rule adopted under Subsection (a) is binding on an
386	386	organization that applies for certification as an educational
387	387	assistance organization, a taxable entity that applies for a
388	388	credit, and a state or local governmental entity, including a
389	389	political subdivision, as necessary to implement, administer, and
390	390	enforce this subchapter.
391	391	Sec. 171.713. ASSIGNMENT PROHIBITED; EXCEPTION. A taxable
392	392	entity may not convey, assign, or transfer the credit allowed under
393	393	this subchapter to another taxable entity unless all assets of the
394	394	taxable entity are conveyed, assigned, or transferred in the same
395	395	transaction.
396	396	Sec. 171.714. REVOCATION. (a) The comptroller shall
397	397	revoke a certification provided under Section 171.702 if the
398	398	comptroller finds that a certified educational assistance
399	399	organization:
400	400	(1) is no longer eligible under Section 171.702; or
401	401	(2) intentionally and substantially violates this
402	402	subchapter.
403	403	(b) The comptroller has broad discretion in determining
404	404	whether to revoke a certification under Subsection (a).
405	405	(c) The comptroller shall notify a certified educational
406	406	assistance organization in writing of the comptroller's decision to
407	407	revoke the organization's certification. The comptroller shall
408	408	include in the notice of revocation the reasons for the proposed
409	409	revocation.
410	410	(d) If the comptroller notifies a certified educational
411	411	assistance organization of the proposed revocation of the
412	412	organization's certification, the organization may request in
413	413	writing a reconsideration of the proposed revocation not later than
414	414	the 10th day after the date the notice under Subsection (c) is
415	415	received. If the organization does not request reconsideration on
416	416	or before that date, the revocation is final.
417	417	(e) An organization that requests a reconsideration under
418	418	Subsection (d) may submit to the comptroller, not later than the
419	419	30th day after the date the request for reconsideration is
420	420	submitted, additional information and documents to support the
421	421	organization's request for reconsideration.
422	422	(f) The comptroller's reconsideration of a proposed
423	423	revocation under this section is not a contested case under Chapter
424	424	2001, Government Code. The comptroller's decision on a request for
425	425	reconsideration of a proposed revocation is final and is not
426	426	appealable.
427	427	(g) This section does not create a cause of action to
428	428	contest a decision of the comptroller to revoke a certified
429	429	educational assistance organization's certification under this
430	430	subchapter.
431	431	(h) Revocation of a certification under this section does
432	432	not affect the validity of a tax credit relating to a contribution
433	433	made before the date of revocation.
434	434	Sec. 171.715. REPORT OF NET SAVINGS TO PUBLIC EDUCATION.
435	435	(a) In this section, "net savings" means any positive difference in
436	436	a state fiscal year between:
437	437	(1) the amount by which state spending on public
438	438	education for that year is reduced as a result of students receiving
439	439	scholarships and educational expense assistance from certified
440	440	educational assistance organizations under this subchapter; and
441	441	(2) the amount by which state revenue derived from
442	442	this chapter and Chapter 230, Insurance Code, is reduced as a result
443	443	of tax credits under this subchapter and Chapter 230, Insurance
444	444	Code.
445	445	(b) Not later than December 31 of each even-numbered year,
446	446	the comptroller shall determine the amount of net savings for the
447	447	previous state fiscal biennium and make available to the public a
448	448	report of that amount of savings.
449	449	Sec. 171.716. NOTICE OF AVAILABILITY OF CREDIT. The
450	450	comptroller shall provide notice of the availability of the credit
451	451	under this subchapter on the comptroller's Internet website, in the
452	452	instructions for franchise tax report forms, and in any notice sent
453	453	to a taxable entity concerning the requirement to file a franchise
454	454	tax report.
455	455	SECTION 2. Subtitle B, Title 3, Insurance Code, is amended
456	456	by adding Chapter 230 to read as follows:
457	457	CHAPTER 230. CREDIT AGAINST PREMIUM TAXES FOR CERTAIN
458	458	CONTRIBUTIONS
459	459	SUBCHAPTER A. GENERAL PROVISIONS
460	460	Sec. 230.001. DEFINITIONS. In this chapter:
461	461	(1) "Educational assistance organization" has the
462	462	meaning assigned by Section 171.701, Tax Code.
463	463	(2) "State premium tax liability" means any liability
464	464	incurred by an entity under Chapters 221 through 226.
465	465	SUBCHAPTER B. CREDIT
466	466	Sec. 230.051. CREDIT. An entity may apply for a credit
467	467	against the entity's state premium tax liability in the amount and
468	468	under the conditions provided by this chapter. The comptroller
469	469	shall award credits as provided by Section 230.053.
470	470	Sec. 230.052. AMOUNTS; LIMITATION ON TOTAL CREDITS. (a)
471	471	Subject to Subsections (b) and (c), the amount of an entity's credit
472	472	is equal to the lesser of the amount of the qualifying contributions
473	473	made to a certified educational assistance organization during the
474	474	period covered by the tax report or 50 percent of the entity's state
475	475	premium tax liability for the report if the contributions and the
476	476	organizations that received the contributions meet the
477	477	requirements prescribed by Subchapter N, Chapter 171, Tax Code.
478	478	(b) For the 2022 state fiscal year, the total amount of tax
479	479	credits that may be awarded under this chapter and Subchapter N,
480	480	Chapter 171, Tax Code, may not exceed $100 million. For each
481	481	subsequent state fiscal year, the total amount of tax credits that
482	482	may be awarded is an amount equal to 110 percent of the total amount
483	483	of tax credits that may be awarded in the previous state fiscal
484	484	year.
485	485	(c) The comptroller by rule shall prescribe procedures by
486	486	which the comptroller may allocate credits under this chapter. The
487	487	procedures must provide that credits are allocated first to
488	488	entities that received preliminary approval for a credit under
489	489	Section 230.0525 and that apply under Section 230.053. The
490	490	procedures must provide that any remaining credits are allocated to
491	491	entities that apply under Section 230.053 on a first-come,
492	492	first-served basis, based on the date the contribution was
493	493	initially made.
494	494	(d) The comptroller may require an entity to notify the
495	495	comptroller of the amount the entity intends or expects to apply for
496	496	under this chapter before the beginning of a state fiscal year or at
497	497	any other time required by the comptroller.
498	498	Sec. 230.0525. PRELIMINARY APPROVAL FOR CREDIT. (a) Before
499	499	making a contribution to a certified educational assistance
500	500	organization, an entity may apply to the comptroller for
501	501	preliminary approval of a credit under this chapter for the
502	502	contribution.
503	503	(b) An entity must apply for preliminary approval on a form
504	504	provided by the comptroller that includes the amount the entity
505	505	expects to contribute and any other information the comptroller
506	506	requires.
507	507	(c) The comptroller shall grant preliminary approval for
508	508	tax credits under this chapter and Subchapter N, Chapter 171, Tax
509	509	Code, on a first-come, first-served basis, based on the date the
510	510	comptroller receives the application for preliminary approval.
511	511	(d) The comptroller shall grant preliminary approval for a
512	512	credit under this chapter for a state fiscal year if the sum of the
513	513	amount of the credit and the total amount of all other tax credits
514	514	preliminarily approved under this chapter and Subchapter N, Chapter
515	515	171, Tax Code, does not exceed the amount provided by Section
516	516	230.052(b).
517	517	(e) Final award of a credit preliminarily approved under
518	518	this section remains subject to the limitations under Section
519	519	230.052(a) and all other requirements of this chapter.
520	520	Sec. 230.053. APPLICATION FOR CREDIT. (a) An entity must
521	521	apply for a credit under this chapter on or with the tax report
522	522	covering the period in which the contribution was made.
523	523	(b) The comptroller shall adopt a form for the application
524	524	for the credit. An entity must use this form in applying for the
525	525	credit and submit with the application form each receipt provided
526	526	under Section 171.702(b)(1)(F), Tax Code, that includes the
527	527	information required by Section 171.707(c), Tax Code.
528	528	(c) Subject to Section 230.052(c), the comptroller may
529	529	award a credit to an entity that applies for the credit under
530	530	Subsection (a) if the entity is eligible for the credit and the
531	531	credit is available under Section 230.052(b). The comptroller has
532	532	broad discretion in determining whether to grant or deny an
533	533	application for a credit.
534	534	(d) The comptroller shall notify an entity in writing of the
535	535	comptroller's decision to grant or deny the application under
536	536	Subsection (a). If the comptroller denies an entity's application,
537	537	the comptroller shall include in the notice of denial the reasons
538	538	for the comptroller's decision.
539	539	(e) If the comptroller denies an entity's application under
540	540	Subsection (a), the entity may request in writing a reconsideration
541	541	of the application not later than the 10th day after the date the
542	542	notice under Subsection (d) is received. If the entity does not
543	543	request a reconsideration of the application on or before that
544	544	date, the comptroller's decision is final.
545	545	(f) An entity that requests a reconsideration under
546	546	Subsection (e) may submit to the comptroller, not later than the
547	547	30th day after the date the request for reconsideration is
548	548	submitted, additional information and documents to support the
549	549	entity's request for reconsideration.
550	550	(g) The comptroller's reconsideration of an application
551	551	under this section is not a contested case under Chapter 2001,
552	552	Government Code. The comptroller's decision on a request for
553	553	reconsideration of an application is final and is not appealable.
554	554	(h) This section does not create a cause of action to
555	555	contest a decision of the comptroller to deny an application for a
556	556	credit under this chapter.
557	557	Sec. 230.054. RULES; PROCEDURES. (a) The comptroller
558	558	shall adopt rules and procedures to implement, administer, and
559	559	enforce this chapter.
560	560	(b) A rule adopted under Subsection (a) is binding on an
561	561	organization that applies for certification as an educational
562	562	assistance organization, an entity that applies for a credit, and a
563	563	state or local governmental entity, including a political
564	564	subdivision, as necessary to implement, administer, and enforce
565	565	this chapter.
566	566	Sec. 230.055. ASSIGNMENT PROHIBITED; EXCEPTION. An entity
567	567	may not convey, assign, or transfer the credit allowed under this
568	568	chapter to another entity unless all of the assets of the entity are
569	569	conveyed, assigned, or transferred in the same transaction.
570	570	Sec. 230.056. NOTICE OF AVAILABILITY OF CREDIT. The
571	571	comptroller shall provide notice of the availability of the credit
572	572	under this chapter on the comptroller's Internet website, in the
573	573	instructions for insurance premium tax report forms, and in any
574	574	notice sent to an entity concerning the requirement to file an
575	575	insurance premium tax report.
576	576	SECTION 3. (a) The constitutionality and other validity
577	577	under the state or federal constitution of all or any part of
578	578	Subchapter N, Chapter 171, Tax Code, or Chapter 230, Insurance
579	579	Code, as added by this Act, may be determined in an action for
580	580	declaratory judgment in a district court in Travis County under
581	581	Chapter 37, Civil Practice and Remedies Code, except that this
582	582	section does not authorize an award of attorney's fees against this
583	583	state and Section 37.009, Civil Practice and Remedies Code, does
584	584	not apply to an action filed under this section. This section does
585	585	not authorize a taxpayer suit to contest the denial of a tax credit
586	586	by the comptroller of public accounts.
587	587	(b) An appeal of a declaratory judgment or order, however
588	588	characterized, of a district court, including an appeal of the
589	589	judgment of an appellate court, holding or otherwise determining
590	590	that all or any part of Subchapter N, Chapter 171, Tax Code, or
591	591	Chapter 230, Insurance Code, as added by this Act, is
592	592	constitutional or unconstitutional, or otherwise valid or invalid,
593	593	under the state or federal constitution is an accelerated appeal.
594	594	(c) If the judgment or order is interlocutory, an
595	595	interlocutory appeal may be taken from the judgment or order and is
596	596	an accelerated appeal.
597	597	(d) A district court in Travis County may grant or deny a
598	598	temporary or otherwise interlocutory injunction or a permanent
599	599	injunction on the grounds of the constitutionality or
600	600	unconstitutionality, or other validity or invalidity, under the
601	601	state or federal constitution of all or any part of Subchapter N,
602	602	Chapter 171, Tax Code, or Chapter 230, Insurance Code, as added by
603	603	this Act.
604	604	(e) There is a direct appeal to the Texas Supreme Court from
605	605	an order, however characterized, of a trial court granting or
606	606	denying a temporary or otherwise interlocutory injunction or a
607	607	permanent injunction on the grounds of the constitutionality or
608	608	unconstitutionality, or other validity or invalidity, under the
609	609	state or federal constitution of all or any part of Subchapter N,
610	610	Chapter 171, Tax Code, or Chapter 230, Insurance Code, as added by
611	611	this Act.
612	612	(f) The direct appeal is an accelerated appeal.
613	613	(g) This section exercises the authority granted by Section
614	614	3-b, Article V, Texas Constitution.
615	615	(h) The filing of a direct appeal under this section will
616	616	automatically stay any temporary or otherwise interlocutory
617	617	injunction or permanent injunction granted in accordance with this
618	618	section pending final determination by the Texas Supreme Court,
619	619	unless the supreme court makes specific findings that the applicant
620	620	seeking such injunctive relief has pleaded and proved that:
621	621	(1) the applicant has a probable right to the relief it
622	622	seeks on final hearing; and
623	623	(2) the applicant will suffer a probable injury that
624	624	is imminent and irreparable, and that the applicant has no other
625	625	adequate legal remedy.
626	626	(i) An appeal under this section, including an
627	627	interlocutory, accelerated, or direct appeal, is governed, as
628	628	applicable, by the Texas Rules of Appellate Procedure, including
629	629	Rules 25.1(d)(6), 26.1(b), 28.1, 28.3, 32.1(g), 37.3(a)(1),
630	630	38.6(a) and (b), 40.1(b), and 49.4.
631	631	SECTION 4. An entity may apply for a credit under Subchapter
632	632	N, Chapter 171, Tax Code, or Chapter 230, Insurance Code, as added
633	633	by this Act, only for an expenditure made on or after the effective
634	634	date of this Act.
635	635	SECTION 5. Not later than February 15, 2022, the
636	636	comptroller of public accounts shall adopt rules as provided by
637	637	Section 171.712(a), Tax Code, and Section 230.054(a), Insurance
638	638	Code, as added by this Act.
639	639	SECTION 6. The comptroller of public accounts shall make
640	640	the initial determination of net savings and report regarding that
641	641	savings as required by Section 171.715, Tax Code, as added by this
642	642	Act, not later than December 31, 2024, based on the state fiscal
643	643	biennium ending August 31, 2023.
644	644	SECTION 7. This Act applies only to a report originally due
645	645	on or after the effective date of this Act.
646	646	SECTION 8. This Act takes effect January 1, 2022.