By: Middleton S.B. No. 176
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of the Texas Parental Empowerment
Program and an insurance premium tax credit for contributions made
for purposes of that program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. SHORT TITLE. This Act may be cited as the Texas
Parental Empowerment Act of 2023.
SECTION 2. FINDINGS. The legislature finds that:
(a) parents should be empowered to direct the education of
their child;
(b) there is not one best educational option for all Texas
school children;
(c) children belong to their parents, not the government;
(d) the best education for Texas school children is one
directed by their parents, with all educational options made
available and accessible, wherein money follows the child to the
educational option that best meets their unique educational needs;
(e) in Espinoza v. Montana Department of Revenue(2020) and
in Carson v. Makin (2022), the United States Supreme Court found
that state prohibitions on the use of generally available state
tuition assistance programs for religious schools violates the Free
Exercise Clause of the First Amendment of the United States
Constitution; and
(f) this Act is intended to further provide for the general
diffusion of knowledge and to empower parents of students in this
state to direct the education of their children.
SECTION 3. Chapter 29, Education Code, is amended by adding
Subchapter J to read as follows:
SUBCHAPTER J. TEXAS PARENTAL EMPOWERMENT PROGRAM
Sec. 29.351. DEFINITIONS. In this subchapter:
(1) "Account" means a parental empowerment account
established under the program.
(2) "Certified educational assistance organization"
means an educational assistance organization certified under
Section 29.355 to administer the program.
(3) "Child with a disability" means a child who is
eligible to participate in a school district's special education
program under Section 29.003.
(4) "Institution of higher education" and "private or
independent institution of higher education" have the meanings
assigned by Section 61.003.
(5) "Non-enrolled student" means a student who
receives instruction as described by Section 29.916(a)(1) from a
nonpublic school.
(6) "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.
(7) "Program" means the Texas Parental Empowerment
Program established under this subchapter.
(8) "Program participant" means a child and a parent
of a child enrolled in the program.
Sec. 29.352. PURPOSE. The purpose of the Texas Parental
Empowerment Program is to provide students with additional
educational options in order to achieve a general diffusion of
knowledge and to empower parents of students in this state to direct
the education of their children.
Sec. 29.353. ESTABLISHMENT OF PROGRAM. The comptroller
shall establish the Texas Parental Empowerment Program to provide
funding for approved education-related expenses of eligible
children admitted into the program.
Sec. 29.354. TEXAS PARENTAL EMPOWERMENT PROGRAM FUND. (a)
The Texas Parental Empowerment Program fund is an account in the
general revenue fund to be administered by the comptroller.
(b) The fund is composed of:
(1) money transferred to the fund under Section
29.361A(a);
(2) general revenue transferred to the fund;
(3) money appropriated to the fund;
(4) gifts, grants, and donations received under
Section 29.371;
(5) contributions to the fund for which an entity
receives a credit against the entity's state premium tax liability
under Chapter 230, Insurance Code; and
(6) any other money available for purposes of the
program.
(c) Money in the fund may be appropriated only to the
comptroller for purposes of making payments to program participants
and administering the program under this subchapter.
Sec. 29.355. SELECTION OF CERTIFIED EDUCATIONAL ASSISTANCE
ORGANIZATIONS. (a) An organization may apply to the comptroller
for certification as a certified educational assistance
organization during an application period established by the
comptroller.
(b) To be eligible for certification, the organization
must:
(1) have the ability to perform the duties and
functions required of a certified educational assistance
organization under this subchapter as provided by the
organization's charter;
(2) be exempt from federal tax under Section 501(a) of
the Internal Revenue Code of 1986 by being listed as an exempt
organization in Section 501(c)(3) of that code;
(3) be in good standing with the state; and
(4) be able to administer the program, including the
ability to:
(A) accept, process, and track applications for
the program; and
(B) verify that program funding is used only for
approved education-related expenses.
(c) The comptroller shall certify at least one but no more
than three educational assistance organizations to assist in
administering the program, including by verifying:
(1) a child's eligibility for the program; and
(2) the use of funds in a program participant's account
only for purposes approved under Section 29.360.
Sec. 29.356. ELIGIBLE CHILD. (a) A child is eligible to
participate in the program if the child:
(1) is enrolled in a school district, including a
public charter school, and was enrolled in that district or public
charter school during the entire preceding school year;
(2) is entering kindergarten for the first time; or
(3) is currently participating in the Texas Parental
Empowerment Program, established by this Chapter, and participated
in the program during the preceding school year.
(b) A child who is currently not enrolled in a public
school, but is otherwise eligible to enroll in public school under
Section 25.001, is eligible for the program, subject to available
funding described by Section 29.361A.
(c) A child who establishes eligibility under this section
may participate in the program until the earliest of the following
dates:
(1) the date on which the child graduates from high
school, except as provided by Section 29.363;
(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 comptroller under this subchapter.
Sec. 29.357. APPLICATION TO PROGRAM. (a) A parent of an
eligible child may apply to a certified educational assistance
organization to enroll the child in the program for the following
school year. The parent must provide any information requested by
the organization for purposes of verifying the child's eligibility
for the program.
(b) Each certified educational assistance organization
shall create an application form for the program and make the
application form readily available to interested parents through
various sources, including the organization's Internet website.
The organization shall ensure that the application form is capable
of being submitted to the organization electronically.
(c) Each certified educational assistance organization
shall post on the organization's Internet website and provide to
each parent who submits an application form to the organization a
publication that describes the operation of the program, including:
(1) expenses allowed under the program under Section
29.360;
(2) the organization's expense reporting
requirements; and
(3) a description of the responsibilities of program
participants and the duties of the organization under this
subchapter.
(d) Subject to the availability of funding, a certified
educational assistance organization shall admit into the program
each child for whom the organization received an application under
this section if the organization verifies that the child is
eligible to participate in the program. If available funding is
insufficient to admit each eligible child into the program, the
organization shall prioritize admitting children in the following
order:
(1) children who participated in the program in the
preceding school year;
(2) siblings of children who participated in the
program in the preceding school year; and
(3) children with a disability, as defined by Section
29.351(3).
Sec. 29.358. PARTICIPATION IN PROGRAM. (a) To receive
funding under the program, a parent of an eligible child must agree
to:
(1) spend money received through the program only for
expenses allowed under Section 29.360; and
(2) notify the parent's certified educational
assistance organization not later than 30 days after the date on
which the child:
(A) enrolls in a public school, including an
open-enrollment charter school;
(B) graduates from high school; or
(C) is no longer eligible to enroll in a public
school under Section 25.001.
(b) The parent of a child participating in the program is
the trustee of the child's account.
(c) Each certified educational assistance organization
shall provide annually to each program participant for whom the
organization is responsible the publication provided under Section
29.357(c). The publication may be provided electronically.
Sec. 29.359. APPROVED PROVIDERS; PARENTAL REVIEW
COMMITTEE. (a) The comptroller shall by rule establish a parental
review committee to review applications for preapproval of
education service providers and vendors of educational products for
participation in the program. The committee shall create a process
for program participants to request the preapproval of education
service providers and vendors of educational products for
participation in the program. The comptroller shall post on the
comptroller's Internet website and provide to each certified
educational assistance organization the list of preapproved
providers and vendors.
(b) The committee is made up of nine parents of school-aged
children, appointed as follows:
(1) three members appointed by the Governor:
(A) one parent of a child enrolled in public
school;
(B) one parent of a child enrolled in a private
school;
(C) one parent of a non-enrolled child;
(2) three members appointed by the Lieutenant
Governor:
(A) one parent of a child enrolled in public
school;
(B) one parent of a child enrolled in a private
school;
(C) one parent of a non-enrolled child; and
(3) three members appointed by the Speaker of the
Texas House of Representatives:
(A) one parent of a child enrolled in public
school;
(B) one parent of a child enrolled in a private
school;
(C) one parent of a non-enrolled child.
(c) Any person required to register as a lobbyist under
Chapter 305, Government Code, for the purpose of lobbying a member
of the legislature and any person employed by a nonprofit state
association or organization that primarily represents political
subdivisions and hires or contracts with a person required to
register as a lobbyist under Chapter 305, Government Code, is
prohibited from serving on the parental review committee.
(d) The committee shall approve an education service
provider or vendor of educational products for participation in the
program no later than 30 days after receipt of a complete
application, if the provider or vendor:
(1) for a private school, executes a notarized
affidavit, with supporting documents, concerning the school's
qualification to serve program participants, including evidence
of:
(A) annual administration of a nationally
norm-referenced assessment instrument;
(B) valid certificate of occupancy;
(C) policy statements regarding:
(i) admissions;
(ii) curriculum;
(iii) safety;
(iv) student to teacher ratios; and
(v) assessments;
(D) the school's agreement that program
participants are eligible to apply for scholarships offered by the
school to the same extent as other children; and
(E) accreditation by an organization recognized
by the Texas Education Agency or accreditation by Texas Private
School Accreditation Commission;
(2) for a private tutor, therapist, or teaching
service:
(A) executes a notarized affidavit, with
supporting documents, concerning the tutor's, therapist's, or
service's qualification to serve program participants, including
evidence that the tutor or therapist or each employee of the service
who intends to provide services to a program participant:
(i) is certified under Subchapter B,
Chapter 21;
(ii) holds a relevant license or
accreditation issued by a state, regional, or national licensing or
accreditation organization; or
(iii) is employed in a teaching or tutoring
capacity at an institution of higher education or private or
independent institution of higher education; and
(B) the tutor or therapist or each employee of
the teaching service who intends to provide educational services to
a program participant either:
(i) completes a national criminal history
record information review; or
(ii) provides to the comptroller
documentation indicating that the tutor, therapist, or employee, as
applicable, has completed a national criminal history record
information review within a period established by comptroller rule;
(3) for an online educational course or program
provider, executes a notarized affidavit, with supporting
documents, concerning the provider's qualification to serve
program participants; or
(4) for any provider or vendor not described by
Subdivision (1), (2), or (3), presents any necessary supporting
documents concerning the provider's or vendor's qualification to
serve program participants.
(e) The comptroller shall review the national criminal
history record information or documentation for each private tutor,
therapist, or teaching service who submits an application. The
tutor, therapist, or service must provide the comptroller with any
information requested by the comptroller to enable the comptroller
to complete the review. The comptroller shall report the findings
of the review to the parental review committee.
(f) Each certified educational assistance organization
shall post on the organization's Internet website the list of
preapproved education service providers and vendors of educational
products provided under Subsection (a).
Sec. 29.360. APPROVED EDUCATION-RELATED EXPENSES. (a)
Subject to Subsection (b), money received under the program may be
used only for the following expenses incurred by a program
participant at a preapproved education service provider or vendor:
(1) tuition and fees:
(A) at a private school;
(B) at an institution of higher education or a
private or independent institution of higher education;
(C) for an online educational course or program;
(D) a provider or vender approved under
Subsection (b)(4);
(2) the purchase of textbooks or other instructional
materials or uniforms required by a school, institution, course, or
program described by Subdivision (1) in which the child is
enrolled;
(3) fees for services provided by a private tutor or
teaching service;
(4) fees for educational therapies or services
provided by a practitioner or provider, only for fees or portions of
fees that are not covered by any federal, state, or local government
benefits such as Medicaid or the Children's Health Insurance
Program (CHIP) or by any private insurance that the child is
enrolled in at the time of receiving the therapies or services;
(5) fees for services provided by a public school,
including individual classes and extracurricular programs;
(6) curriculum for instruction described by Section
29.916(a)(1);
(7) fees for a nationally standardized
norm-referenced achievement test, an advanced placement
examination, or any exams related to admissions to an institution
of higher education;
(8) transportation services between the residence of
the program participant and an education service provider, not to
exceed $1,000 per school year; or
(9) computer hardware and technological devices
primarily used for an educational purpose, not to exceed 10% of the
amount deposited to a program participant's account, including:
(A) calculators;
(B) personal computers;
(C) laptops;
(D) tablet devices;
(E) microscopes;
(F) telescopes; and
(G) printers.
(b) Money received under the program may not be used to pay
any person who is:
(1) related to the program participant within the
third degree of consanguinity or affinity, as determined under
Chapter 573, Government Code; or
(2) a member of the program participant's household.
(c) A finding that a program participant used money
distributed under the program to pay for an expense not allowed
under Subsection (a) does not affect the validity of any payment
made by the participant for an expense that is allowed under that
subsection.
Sec. 29.361. AMOUNT OF PAYMENT; FINANCING. (a) The
comptroller shall establish and maintain an account for each
program participant.
(b) Each year that the child participates in the program a
payment from the state to the program participant's account shall
be made in an amount that is equal to the state average maintenance
and operations expenditures per student in average daily attendance
for the preceding state fiscal year, as specified in Section
29.361A.
(c) Any money remaining in a program participant's account
at the end of a fiscal year is carried forward to the next fiscal
year unless another provision of this subchapter mandates the
closure of the account.
(d) The parent of a child participating in the program may
make payments for the expenses of educational programs, services,
and products not covered by money in the program participant's
account.
(e) A payment under this section may not be financed using
federal money.
(f) Not later than November 1 of each even-numbered year,
the comptroller shall submit to the legislature an estimate of the
total amount of funding required for the program for the following
state fiscal biennium.
Sec. 29.361A. SOURCES OF FUNDING. (a) For students
eligible to participate under Section 29.356(a), the comptroller
shall transfer an amount that is equal to the state average
maintenance and operations expenditures per student in average
daily attendance for the preceding state fiscal year from the
foundation school fund to be deposited in the account of a program
participant, described by Section 29.365(a).
(b) For students eligible to participate under Section
29.356(b), the comptroller shall deposit an amount equal to the
state average maintenance and operations expenditures per student
in average daily attendance for the preceding state fiscal year
from funds described by Sections 29.354(b)(2), (3), (4), (5), and
(6).
(c) Nothing in this section authorizes the use of federal
funds for the program.
Sec. 29.362. ADMINISTRATION OF ACCOUNTS. (a) The
comptroller shall make payments as necessary to each program
participant's account on or before the first day of the month.
(b) The comptroller may not deduct any amount from each
quarterly payment to a program participant's account to cover the
comptroller's cost of administering the program.
(c) The comptroller may use funds made available for the
program to cover the comptroller's cost of administering the
program.
(d) The comptroller shall disburse to each certified
educational assistance organization, as necessary, an amount from
the total amount of money appropriated for purposes of this
subchapter to cover the organization's cost of administering the
program. The total amount disbursed to certified educational
assistance organizations under this subsection for a fiscal year
may not exceed five percent of the amount appropriated for purposes
of this subchapter for that fiscal year.
(e) Before each payment is made under Subsection (a), each
certified educational assistance organization shall:
(1) compare the list of program participants for whom
the organization is responsible with public school enrollment lists
maintained by the agency; and
(2) notify the comptroller if the organization
determines that a program participant is enrolled in a public
school, including an open-enrollment charter school.
(f) Except as provided by Section 29.363, on the date on
which a child who participated in the program is no longer eligible
to participate in the program under Section 29.356(c), the child's
account is closed and any remaining money is returned to the state
for deposit in the Texas Parental Empowerment Program fund to be
used for program participants described by Section 29.356(b).
Sec. 29.363. APPLICATION FOR PROGRAM EXTENSION. (a) Each
certified educational assistance organization shall develop a form
pursuant to this section.
(b) A program participant may submit an application form to
the program participant's organization requesting an extension on
the use of funds remaining in the program participant's account for
an approved purpose, including:
(1) fees and tuition for:
(A) occupational licensing and certification;
(B) occupational licensing and certification
courses;
(C) enrollment in institutions of higher
education, including career schools and colleges as defined by
Section 132.001;
(2) the purchase of textbooks or other instructional
materials or uniforms required by a school, institution, course, or
program described by Subdivision (1) in which the program
participant is expected to be enrolled.
(c) The certified educational assistance organization shall
approve an extension of the program participants account if:
(1) the program participant has submitted the
application form to the organization no later than 30 days before
the program participant graduates high school or receives an
equivalent degree;
(2) the program participant has provided the
organization with documentation regarding the intended use of the
funds remaining in the program participant's account; and
(3) the intended use of the funds remaining in the use
of the participant's account are an approved purpose pursuant to
subsection (b).
(d) Each certified educational assistance organization
shall notify the comptroller of the program participants for which
the organization has approved the application for program extension
no later than 30 days after the program participant has submitted
the application for program extension.
(e) The certified educational assistance organization shall
notify the program participant in writing no later than 30 days
after the program participant has submitted the application that
their application for program extension has been approved. If the
application for program extension has been denied, the organization
shall notify the program participant in writing no later than 30
days after the program participant has submitted the application
that their application has been denied. The notification of denial
must specify the grounds for denial.
(f) An extension of the program participant's account does
not entitle the program participant to additional deposits by the
comptroller to the program participant's account, as described by
Section 29.362.
(g) Only the funds remaining in the program participant's
account on the day the program participant graduates high school or
receives an equivalent degree shall be made available to the
program participant, pursuant to this section.
Sec. 29.364. RANDOM AUDITING. (a) The comptroller may
contract with a private entity to randomly audit accounts and the
certified educational assistance organizations as necessary to
ensure compliance with applicable law and the requirements of the
program.
(b) In conducting an audit, the comptroller or private
entity may require that a program participant or certified
educational assistance organization provide additional information
and documentation regarding any payment made under the program.
(c) The private entity shall report to the comptroller any
violation of this subchapter or other relevant law found by the
entity during an audit conducted under this section.
Sec. 29.365. SUSPENSION OF ACCOUNT. (a) The comptroller
shall suspend the account of a program participant who fails to
comply with applicable law or a requirement of the program.
(b) On suspension of an account under Subsection (a), the
comptroller shall notify the program participant in writing that
the account has been suspended and that no additional payments may
be 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 must take any corrective action required by the
comptroller within the timeframe required by the comptroller.
(c) On the expiration of the 10-day period under Subsection
(b), the comptroller shall:
(1) order permanent closure of the suspended account
and declare the program participant ineligible for the program;
(2) order temporary reinstatement of the account,
conditioned on the performance of a specified action by the
participant; or
(3) order full reinstatement of the account.
(d) The comptroller may recover money distributed under the
program that was used for expenses not allowed under Section 29.360
from the program participant or the entity that received the money
if the participant's account is suspended or closed under this
section.
Sec. 29.366. TUITION AND FEES; REFUND PROHIBITED. (a) An
education service provider may not charge a child participating in
the program an amount greater than the standard amount charged for
that service by the provider.
(b) An education service provider or a vendor of educational
products receiving money 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
money paid or owed by the participant to the provider or vendor.
Sec. 29.367. REFERRAL TO ATTORNEY GENERAL. (a) If the
comptroller or a certified educational assistance organization
obtains evidence of fraudulent use of an account, the comptroller
or organization 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. 29.368. SPECIAL EDUCATION NOTICE. (a) Each certified
educational assistance organization shall post on the
organization's Internet website and provide to each parent who
submits an application for the program on behalf of a child with a
disability a notice that:
(1) states that a private school is not subject to laws
regarding the provision of educational services in the same manner
as a public school, and a child with a disability attending a
private school may not receive the services a child with a
disability attending a public school is entitled to receive under
federal and state law; and
(2) provides information regarding rights to which a
child with a disability is entitled under federal and state law if
the child attends a public school, including:
(A) rights provided under the Individuals with
Disabilities Education Act (20 U.S.C. Section 1400 et seq.),
including:
(i) an individualized education program;
(ii) educational services provided in the
least restrictive environment;
(iii) instruction from certified teachers;
(iv) due process hearings to ensure proper
and full implementation of an individualized education program;
(v) transition and planning services; and
(vi) supplementary aids and services;
(B) rights provided under Subchapter A; and
(C) other rights provided under federal or state
law.
(b) A private school in which a child with a disability who
is participating in the program enrolls shall provide to the
child's parent a copy of the notice required under Subsection (a).
Sec. 29.369. PROGRAM PARTICIPANT, PROVIDER, AND VENDOR
AUTONOMY. (a) An education service provider or vendor of
educational products that receives money 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 to impose any additional regulation on an education
service provider or vendor of educational products except those
reasonably necessary to prevent fraudulent use of program funds.
(c) No school district or municipality has the regulatory
authority to impose any regulation on an education service
provider, vendor of educational products, or program participants.
(d) An education service provider may not be required to
modify the provider's sincerely held religious beliefs, statement
of beliefs, creed, practices, admissions policies, curriculum,
performance standards, or assessments, as applicable, to receive
money distributed under the program.
(e) The curriculum or assessment requirements, performance
standards, practices, or creed of the education program provided to
non-enrolled students may not be required to be changed in order for
the non-enrolled student to participate in the program.
(f) With respect to a non-enrolled student's education
program, nothing in this subchapter shall be construed to permit an
agency of this state, a public school district, or any other
governmental body to exercise control, regulatory authority, or
supervision over a non-enrolled student or parent or person
standing in parental relation to a non-enrolled student beyond the
control, regulatory authority, or supervision in effect on January
1, 2023.
(g) 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. 29.370. STUDENT RECORDS AND INFORMATION. (a) On
request by the parent of a child participating or seeking to
participate 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.
(b) The agency shall provide to each certified educational
assistance organization any information available to the agency
requested by the organization regarding a child who participates or
seeks to participate in the program. The organization may not
retain information provided under this subsection beyond the period
necessary to determine a child's eligibility to participate in the
program.
Sec. 29.371. GIFTS, GRANTS, AND DONATIONS. The comptroller
may solicit and accept gifts, grants, and donations from any public
or private source for any expenses related to the administration of
the program, including the initial implementation of the program.
Sec. 29.372. RULES; PROCEDURES. (a) The comptroller shall
adopt rules and procedures only as necessary to implement,
administer, and enforce this subchapter, in accordance with Section
29.359.
(b) A rule adopted under Subsection (a) is binding on an
organization that applies for certification as an educational
assistance organization and a state or local governmental entity,
including a political subdivision, as necessary to implement,
administer, and enforce this subchapter.
Sec. 29.373 PARENTAL AND STUDENT RIGHT TO INTERVENE IN
CIVIL ACTION. (a) A program participant may intervene in any civil
action challenging the constitutionality of the program or the
insurance premium tax credit under Chapter 230, Insurance Code.
(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.
SECTION 4. Section 411.109, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) The comptroller is entitled to obtain criminal history
record information maintained by the department about a person who
is a private tutor, a therapist, or an employee of a teaching
service who intends to provide educational services to a child
participating in the program established under Subchapter J,
Chapter 29, Education Code, and is seeking approval to receive
money distributed under that program.
SECTION 5. Subtitle B, Title 3, Insurance Code, is amended
by adding Chapter 230 to read as follows:
CHAPTER 230. CREDIT AGAINST PREMIUM TAXES FOR CONTRIBUTIONS TO
TEXAS PARENTAL EMPOWERMENT PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 230.001. DEFINITIONS. In this chapter:
(1) "Fund" means the Texas Parental Empowerment
Program fund under Section 29.354, 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. CREDIT. An entity may apply for a credit
against the entity's state premium tax liability in the amount and
under the conditions provided by this chapter. The comptroller
shall award credits as provided by Section 230.053.
Sec. 230.052. AMOUNTS; LIMITATION ON TOTAL CREDITS. (a)
Subject to Subsections (b) and (c), the amount of an entity's credit
is equal to the amount contributed to the fund during the period
covered by the tax report or 100 percent of the entity's state
premium tax liability for the report.
(b) For the 2024 state fiscal year, the total amount of
credits that may be awarded under this chapter may not exceed $200
million. For each subsequent state fiscal year, the total amount of
credits that may be awarded is:
(1) the same total amount of credits available under
this subsection for the previous state fiscal year, if Subdivision
(2) does not apply; or
(2) 125 percent of the total amount of credits
available under this subsection for the previous state fiscal year,
if the total amount of credits awarded in the previous state fiscal
year was at least 90 percent of the total amount of credits
available under this subsection for that fiscal year.
(c) The comptroller by rule shall prescribe procedures by
which the comptroller may allocate credits under this chapter. The
procedures must provide that credits are allocated first to
entities that received preliminary approval for a credit under
Section 230.0525 and that apply under Section 230.053. The
procedures must provide that any remaining credits are allocated to
entities that apply under Section 230.053 on a first-come,
first-served basis, based on the date the contribution was
initially made.
(d) The comptroller may require an entity to notify the
comptroller of the amount the entity intends or expects to apply for
under this chapter before the beginning of a state fiscal year or at
any other time required by the comptroller.
Sec. 230.0525. PRELIMINARY APPROVAL FOR CREDIT. (a) Before
making a contribution to the fund, an entity may apply to the
comptroller for preliminary approval of a credit under this chapter
for the contribution.
(b) An entity must apply for preliminary approval on a form
provided by the comptroller that includes the amount the entity
expects to contribute and any other information the comptroller
requires.
(c) The comptroller shall grant preliminary approval for
credits under this chapter on a first-come, first-served basis,
based on the date the comptroller receives the application for
preliminary approval.
(d) The comptroller shall grant preliminary approval for a
credit under this chapter for a state fiscal year if the sum of the
amount of the credit and the total amount of all other credits
preliminarily approved under this chapter does not exceed the
amount provided by Section 230.052(b).
(e) Final award of a credit preliminarily approved under
this section remains subject to the limitations under Section
230.052(a) and all other requirements of this chapter.
Sec. 230.053. APPLICATION FOR CREDIT. (a) An entity must
apply for a credit under this chapter on or with the tax report
covering the period in which the contribution was made.
(b) The comptroller shall adopt a form for the application
for the credit. An entity must use this form in applying for the
credit.
(c) Subject to Section 230.052(c), the comptroller may
award a credit to an entity that applies for the credit under
Subsection (a) if the entity is eligible for the credit and the
credit is available under Section 230.052(b). The comptroller has
broad discretion in determining whether to grant or deny an
application for a credit.
(d) The comptroller shall notify an entity in writing of the
comptroller's decision to grant or deny the application under
Subsection (a). If the comptroller denies an entity's application,
the comptroller shall include in the notice of denial the reasons
for the comptroller's decision.
(e) If the comptroller denies an entity's application under
Subsection (a), the entity may request in writing a reconsideration
of the application not later than the 10th day after the date the
notice under Subsection (d) is received. If the entity does not
request a reconsideration of the application on or before that
date, the comptroller's decision is final.
(f) An entity that requests a reconsideration under
Subsection (e) may submit to the comptroller, not later than the
30th day after the date the request for reconsideration is
submitted, additional information and documents to support the
entity's request for reconsideration.
(g) The comptroller's reconsideration of an application
under this section is not a contested case under Chapter 2001,
Government Code. The comptroller's decision on a request for
reconsideration of an application is final and is not appealable.
(h) This section does not create a cause of action to
contest a decision of the comptroller to deny an application for a
credit under this chapter.
Sec. 230.054. RULES; PROCEDURES. The comptroller shall
adopt rules and procedures 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.
Sec. 230.056. NOTICE OF AVAILABILITY OF CREDIT. The
comptroller shall provide notice of the availability of the credit
under this chapter on the comptroller's Internet website, in the
instructions for insurance premium tax report forms, and in any
notice sent to an entity concerning the requirement to file an
insurance premium tax report.
SECTION 6. Chapter 30, Civil Practice and Remedies Code, is
amended by adding Section 30.023 to read as follows:
Sec. 30.023. AWARD OF ATTORNEY'S FEES IN ACTIONS
CHALLENGING CERTAIN EDUCATION LAWS. (a) Notwithstanding any other
law, any person, including an entity, attorney, or law firm, who
seeks declaratory or injunctive relief to prevent this state, a
political subdivision, any governmental entity or public official
in this state, or any person in this state from enforcing any
statute, ordinance, rule, regulation, or any other type of law that
empowers parents to direct their child's education, including money
following the child to any educational option the parent elects and
the use of a insurance premium tax credit program to fund in whole
or in part a parental empowerment program, in any state or federal
court, or that represents any litigant seeking such relief in any
state or federal court, is jointly and severally liable to pay the
costs and attorney's fees of the prevailing party.
(b) For purposes of this section, a party is considered a
prevailing party if a state or federal court:
(1) dismisses any claim or cause of action brought
against the party that seeks the declaratory or injunctive relief
described by Subsection (a), regardless of the reason for the
dismissal; or
(2) enters judgment in the party's favor on any such
claim or cause of action.
(c) Regardless of whether a prevailing party sought to
recover costs or attorney's fees in the underlying action, a
prevailing party under this section may bring a civil action to
recover costs and attorney's fees against a person, including an
entity, attorney, or law firm, that sought declaratory or
injunctive relief described by Subsection (a) not later than the
third anniversary of the date on which, as applicable:
(1) the dismissal or judgment described by Subsection
(b) becomes final on the conclusion of appellate review; or
(2) the time for seeking appellate review expires.
(d) It is not a defense to an action brought under
Subsection (c) that:
(1) a prevailing party under this section failed to
seek recovery of costs or attorney's fees in the underlying action;
(2) the court in the underlying action declined to
recognize or enforce the requirements of this section; or
(3) the court in the underlying action held that any
provisions of this section are invalid, unconstitutional, or
preempted by federal law, notwithstanding the doctrines of issue or
claim preclusion.
SECTION 7. Subchapter J, Chapter 29, Education Code, as
added by this Act, applies beginning with the 2024-2025 school
year.
SECTION 8. An entity may apply for a credit under Chapter
230, Insurance Code, as added by this Act, only for a contribution
made on or after the effective date of this Act.
SECTION 9. Not later than February 15, 2024, the
comptroller of public accounts shall adopt rules as provided by
Section 230.054, Insurance Code, as added by this Act.
SECTION 10. Chapter 230, Insurance Code, as added by this
Act, applies only to a tax report originally due on or after the
effective date of this Act.
SECTION 11. (a) The constitutionality and other validity
under the state or federal constitution of all or any part of
Subchapter J, Chapter 29, Education Code, as added by this Act, or
Chapter 230, Insurance 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, except
that this section does not authorize an award of attorney's fees
against this state and Section 37.009, Civil Practice and Remedies
Code, does not apply to an action filed under this section. This
section does not authorize a taxpayer suit to contest the denial of
a tax credit by the comptroller of public accounts.
(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 J, Chapter 29, Education Code, as
added by this Act, or Chapter 230, Insurance 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 J,
Chapter 29, Education Code, as added by this Act, or Chapter 230,
Insurance Code, as added by this Act.
(e) There is a direct appeal to the Texas 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 J,
Chapter 29, Education Code, as added by this Act, or Chapter 230,
Insurance 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 Texas 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 12. If any provision of this Act or its application
to any person or circumstance is held invalid, the invalidity does
not affect other provisions or applications of this Act that can be
given effect without the invalid provision or application, and to
this end the provisions of this Act are declared severable.
SECTION 13. This Act takes effect January 1, 2024.