88R10956 KJE-F
By: Schatzline H.B. No. 5112
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of 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, another state, or 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) "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.
(6) "Postsecondary educational institution" means:
(A) an institution of higher education or a
private or independent institution of higher education as defined
by Section 61.003; or
(B) a career school or college as defined by
Section 132.001.
(7) "Program" means the education savings account
program established under this subchapter.
(8) "Program participant" means a child and a parent
of a child who has been accepted into the program.
Sec. 29.352. ESTABLISHMENT OF PROGRAM. (a) The
commissioner shall establish and administer an education savings
account program to provide funding for certain education-related
expenses of eligible children.
(b) The agency may contract with a private organization to
administer the program.
Sec. 29.353. ELIGIBLE CHILD. (a) A child is eligible to
participate in the program if the child is eligible to attend a
public school under Section 25.001.
(b) A child who establishes eligibility under this section
may continue participating in the program until the earliest of the
following dates:
(1) the date on which the child graduates from high
school;
(2) the date on which the child is no longer eligible
to attend a public school under Section 25.001;
(3) the date on which the child enrolls in a public
school, including an open-enrollment charter school; or
(4) the date on which the child is declared ineligible
for the program by the commissioner under this subchapter.
(c) Notwithstanding Subsection (b), the agency shall
establish procedures for, in the least disruptive manner possible:
(1) a child participating in the program to cease
participation and enroll in a public school, including an
open-enrollment charter school; and
(2) a child who previously participated in the program
and subsequently enrolled in a public school, including an
open-enrollment charter school, to resume participation in the
program.
Sec. 29.354. APPLICATION FOR PROGRAM. (a) A parent of an
eligible child may apply on behalf of the child for participation in
the program. The agency shall allow for the submission of
applications on a rolling basis.
(b) The agency shall by rule create an application form for
the program and 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 a publication
that describes the operation of the program, including:
(1) expenses allowed under the program under Section
29.356;
(2) a description of the responsibilities of program
participants and the duties of the agency under this subchapter;
and
(3) a statement regarding the rights afforded to a
child with a disability who is parentally placed in a private school
under the Individuals with Disabilities Education Act (20 U.S.C.
Section 1400 et seq.).
Sec. 29.355. PARTICIPATION IN PROGRAM. (a) To receive
funding under the program, a parent of an eligible child must agree
in writing to:
(1) ensure that the student will receive an education
that includes, at a minimum, the subjects of reading, language,
mathematics, social studies, and science;
(2) spend funds received through the program only for
expenses allowed under Section 29.356;
(3) notify the agency as soon as practicable if the
child enrolls in a public school, including an open-enrollment
charter school; and
(4) inform the agency if the child graduates from high
school.
(b) The agency shall provide annually to each program
participant the publication provided to applicants under Section
29.354.
Sec. 29.356. APPROVED PROVIDERS AND EDUCATION-RELATED
EXPENSES. (a) The commissioner shall by rule establish a process
for the preapproval of education service providers and vendors of
educational products for participation in the program. The
commissioner shall make the list of preapproved providers and
vendors readily available to applicants for the program and to
program participants.
(b) A payment from an account may be made only to a
preapproved education service provider or vendor of educational
products.
(c) Funds received under the program may be used only for
the following expenses incurred by a program participant:
(1) tuition and fees at a private school or
postsecondary educational institution or for a nonpublic online
educational course or program;
(2) the purchase of textbooks or other instructional
materials;
(3) payments for the purchase of a curriculum;
(4) fees for services provided by a private tutor or
teaching service;
(5) for a child with a disability, fees for
educational therapies or services provided by a practitioner,
provider, paraprofessional, or educational aide;
(6) computer hardware and software and other
technological devices primarily used for educational purposes;
(7) fees for a nationally norm-referenced achievement
test or examination, an advanced placement test or similar
examination, or any examination related to college or university
admission and a preparatory course for such a test or examination;
(8) services provided by a public school, including an
open-enrollment charter school, in a manner in which the child is
not counted toward the school's average daily attendance;
(9) uniforms required by a school or institution
described by Subdivision (1) in which the child is enrolled;
(10) tuition and fees for a summer education program
or specialized after-school education program;
(11) fees for transportation provided by a
fee-for-service transportation provider for the child to travel to
and from a preapproved education service provider or vendor of
educational products; and
(12) any other expense approved by the agency.
(d) Any funds remaining in a program participant's account
on the child's graduation from high school may be used by the child
for tuition, fees, textbooks, and other instructional materials to
attend or take courses from a postsecondary educational
institution.
Sec. 29.357. AMOUNT OF PAYMENT; FINANCING. (a) A child
participating in the program is entitled to receive annual funding
from the Foundation School Program equal to the state and local
maintenance and operations revenue to which the school district the
child would otherwise attend would be entitled to receive for the
child under Chapter 48 if the child were enrolled in the district.
(b) The parent of a child participating in the program may
make payments for the expenses of educational programs, services,
and products not covered by funds in the child's account.
(c) A payment under the program may not be financed using
money appropriated from the available school fund.
Sec. 29.358. ADMINISTRATION OF ACCOUNTS. (a) The agency
shall contract with a financial institution to establish and manage
an account for each child participating in the program. A program
participant must be able to access the participant's account by
using an online payment service.
(b) The commissioner shall make quarterly payments to each
program participant's account in equal amounts on or before dates
established by commissioner rule.
(c) The commissioner may deduct an amount from each
quarterly payment to a program participant's account to cover the
agency's cost of administering the program. The amount deducted
may not exceed three percent of the payment.
(d) A child's account is closed and any remaining funds are
returned to the state on the earliest of the following dates:
(1) the date on which the child graduates from a
baccalaureate degree program at a postsecondary educational
institution;
(2) the child's 26th birthday; or
(3) if the child has not enrolled in a postsecondary
educational institution within the four-year period following the
child's graduation from high school, the fourth anniversary of the
date on which the child graduates from high school.
Sec. 29.359. AUDITING OF ACCOUNT. (a) The agency shall
audit or contract with a private entity to audit accounts as
necessary to ensure compliance with applicable law and the
requirements of the program. At a minimum, the agency shall provide
for an annual random audit of a specified number of accounts
determined by the commissioner.
(b) In auditing an account, the agency or private entity
with which the agency contracts under Subsection (a) may require
that a program participant provide further information and
documentation regarding any payment from the participant's
account.
Sec. 29.360. SUSPENSION OF ACCOUNT. (a) The commissioner
by rule shall adopt procedures for the suspension and closure of an
account on a finding that a program participant has failed to comply
with applicable law or a requirement of the program or has
substantially misused funds received under the program.
(b) The procedures must allow for:
(1) a program participant to be declared ineligible to
participate in the program on a finding of intentional misconduct;
and
(2) an appeal to the commissioner of a finding under
Subdivision (1).
Sec. 29.361. REFUND PROHIBITED. An education service
provider or a vendor of educational products receiving funds
distributed under the program may not in any manner rebate, refund,
or credit to or share with a program participant, or any person on
behalf of a participant, any program funds paid or owed by the
participant to the provider or vendor.
Sec. 29.362. REFERRAL TO THE ATTORNEY GENERAL. (a) If the
agency obtains evidence of fraudulent use of an account, the
commissioner may refer the case to the attorney general for
investigation.
(b) With the consent of the appropriate local county or
district attorney, the attorney general has concurrent
jurisdiction with the consenting local prosecutor to prosecute an
offense referred to the attorney general under Subsection (a).
Sec. 29.363. EDUCATION SERVICE PROVIDER AND VENDOR
ACCOUNTABILITY. (a) The agency may declare an education service
provider or a vendor of educational products ineligible to
participate in the program if, after notice and hearing, the agency
finds that the provider or vendor 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 or products.
(b) An education service provider or vendor of educational
products may appeal to the commissioner a finding under Subsection
(a).
(c) If an education service provider or vendor of
educational products is declared ineligible to participate in the
program under this section, the agency shall:
(1) notify program participants of the declaration as
soon as practicable; and
(2) reject any account expenditure made to the
education service provider or vendor of educational products after
the date of the declaration.
Sec. 29.364. EDUCATION SERVICE PROVIDER AND VENDOR
AUTONOMY. (a) An education service provider or vendor of
educational products that receives funds distributed under the
program is not an agent of the state or federal government.
(b) The program does not expand the regulatory authority of
the state or any school district to impose any additional
regulation on an education service provider or vendor of
educational products except those reasonably necessary to enforce
the program as provided by this subchapter.
(c) An education service provider or vendor of educational
products may not be required to modify the provider's or vendor's
creed, practices, admissions policies, or curriculum, as
applicable, to receive money distributed under the program.
(d) In any proceeding challenging a rule adopted by a state
agency or officer under this subchapter, the agency or officer has
the burden of proof to establish that the rule:
(1) is necessary to implement or enforce the program
as provided by this subchapter; and
(2) does not impose an undue burden on a program
participant or an education service provider or vendor of
educational products that receives or seeks to receive money
distributed under the program.
Sec. 29.365. STUDENT RECORDS AND INFORMATION. On request
by the parent of a child participating in the program, the school
district or open-enrollment charter school that the child would
otherwise attend shall provide a copy of the child's school records
possessed by the district or school, if any, to the child's parent
or, if applicable, the private school the child attends.
Sec. 29.366. PARENT REVIEW COMMITTEE. (a) A parent review
committee is established to assist the commissioner in:
(1) determining whether certain expenses are allowed
under Section 29.356;
(2) reviewing an appeal of the agency's decision to
declare an education service provider or vendor of educational
products ineligible to participate in the program under Section
29.363; and
(3) implementing and administering the program.
(b) The committee consists of seven members appointed by the
commissioner. Each member must be a parent of a child participating
in the program. In making appointments to the committee, the
commissioner shall ensure that parents from at least four counties
are included.
(c) A member of the committee serves a one-year term at the
pleasure of the commissioner and may be reappointed.
(d) The commissioner or the commissioner's designee is the
nonvoting chair of the committee.
Sec. 29.367. GIFTS, GRANTS, AND DONATIONS. The
commissioner may solicit and accept gifts, grants, and donations
from any public or private source for the program.
Sec. 29.368. RIGHT TO INTERVENE IN CIVIL ACTION. (a) A
program participant may intervene in any civil action challenging
the constitutionality of the program.
(b) A court in which a civil action described by Subsection
(a) is filed may require that all program participants wishing to
intervene in the action file a joint brief. A program participant
may not be required to join a brief filed on behalf of the state or a
state agency.
Sec. 29.369. RULES. The commissioner shall adopt rules as
necessary to implement this subchapter. The rules may include:
(1) establishing a telephonic or online anonymous
fraud reporting service;
(2) requiring a surety bond from an education service
provider or vendor of educational products that receives more than
$100,000 per year from funds distributed under the program; or
(3) providing for an education service provider or
vendor of educational products to refund to a program participant's
account payments made from that account.
SECTION 2. This Act applies beginning with the 2023-2024
school year.
SECTION 3. Not later than 90 days after the effective date
of this Act, the commissioner of education shall adopt rules
necessary to implement the education savings account program under
Subchapter J, Chapter 29, Education Code, as added by this Act.
SECTION 4. 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. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.