Voucher Bill Puts Challengers’ Lawyers On The Hook For Fees

The text as introduced · 6,915 words

89R4056 KJE-F

By: Shaheen
H.B. No. 612

A BILL TO BE ENTITLED

AN ACT

relating to the establishment of an education savings account

program, an insurance premium tax credit for contributions made for

purposes of that program, and the award of attorney's fees in

actions challenging certain educational choice laws.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The legislature finds that:

(1) parents should be empowered to direct their

children's education;

(2) there is not one best educational option for all

children in this state;

(3) children belong to their parents, not to the

government;

(4) the best education for children in this state is

one directed by their parents, with all educational options made

available and accessible through a program in which money follows

each child to the educational option that best meets the child's

unique educational needs; and

(5) in Espinoza v. Montana Department of Revenue , 591

U.S. 464 (2020), and Carson v. Makin , 596 U.S. 767 (2022), the

United States Supreme Court held that state prohibitions on the use

of generally available state tuition assistance programs for

children to attend religious schools violate the Free Exercise

Clause of the First Amendment to the United States Constitution.

SECTION 2. Chapter 30, Civil Practice and Remedies Code, is

amended by adding Section 30.024 to read as follows:

Sec. 30.024. AWARD OF ATTORNEY'S FEES IN ACTIONS

CHALLENGING CERTAIN EDUCATIONAL CHOICE 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 or a political subdivision, governmental entity, public

official, or other person in this state from enforcing any statute,

ordinance, rule, regulation, or other type of law that empowers

parents to direct their children's education, including an

educational choice program in which money follows a child to an

educational option selected by the child's parent or an insurance

premium tax credit program used in whole or in part to pay for such

an educational choice 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 3. 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) "Certified educational assistance organization"

means the 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) "Fund" means the education savings account program

fund.

(5) "Institution of higher education" and "private or

independent institution of higher education" have the meanings

assigned by Section 61.003.

(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 education savings account

program established under this subchapter.

(8) "Program participant" means a child and a parent

of a child enrolled in the program.

Sec. 29.352. PURPOSES. The purposes of the education

savings account program are to provide school-aged children with

additional educational options in order to achieve a general

diffusion of knowledge and to empower parents to direct their

children's education.

Sec. 29.353. ESTABLISHMENT OF PROGRAM. The comptroller

shall establish the education savings account program to provide

funding for approved education-related expenses of eligible

children admitted into the program.

Sec. 29.354. EDUCATION SAVINGS ACCOUNT PROGRAM FUND. (a)

The education savings account program fund is an account in the

general revenue fund to be administered by the comptroller.

(b) The fund is composed of:

(1) general revenue transferred to the fund;

(2) money appropriated to the fund;

(3) gifts, grants, and donations received under

Section 29.371;

(4) 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

(5) 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, an 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 taxation 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 not 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 is eligible to attend a

public school under Section 25.001 and:

(1) attended a public school during the entire

preceding school year;

(2) is entering kindergarten for the first time; or

(3) participated in the program during the preceding

school year.

(b) Notwithstanding Subsection (a), a child who is eligible

to attend a public school under Section 25.001 is eligible to

participate in the program if the comptroller determines that

sufficient funding is available for the first year of the child's

participation in the program from money in the fund.

(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 or obtains a high school equivalency certificate;

(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, each 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 during

the preceding school year;

(2) siblings of children who participated in the

program during the preceding school year; and

(3) children with a disability.

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 obtains a high

school equivalency certificate; 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 admitted by the

organization 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 and approve applications for preapproval

of education service providers and vendors of educational products.

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 parental review committee consists of nine parents

of school-aged children, appointed as follows:

(1) three members appointed by the governor as

follows:

(A) one parent of a child enrolled in a public

school;

(B) one parent of a child enrolled in a private

school other than a home school; and

(C) one parent of a child being homeschooled;

(2) three members appointed by the lieutenant governor

as follows:

(A) one parent of a child enrolled in a public

school;

(B) one parent of a child enrolled in a private

school other than a home school; and

(C) one parent of a child being homeschooled; and

(3) three members appointed by the speaker of the

house of representatives as follows:

(A) one parent of a child enrolled in a public

school;

(B) one parent of a child enrolled in a private

school other than a home school; and

(C) one parent of a child being homeschooled.

(c) A person may not serve as a member of the parental review

committee if the person is:

(1) required to register as a lobbyist under Chapter

305, Government Code, for the purpose of lobbying a member of the

legislature; or

(2) 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.

(d) The parental review committee shall create a process for

program participants to request the preapproval of education

service providers and vendors of educational products.

(e) The parental review committee shall approve an

education service provider or vendor of educational products for

participation in the program not later than the 30th day after the

date the committee receives the provider's or vendor's 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) the annual administration of a nationally

standardized norm-referenced assessment instrument;

(B) a 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 agency or the 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.

(f) 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

comptroller's findings from the review to the parental review

committee.

(g) 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;

or

(D) at another education service provider;

(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) payments for the purchase of a curriculum;

(4) fees for classes or other educational services or

extracurricular programs provided by a public school;

(5) fees for services provided by a private tutor or

teaching service;

(6) 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;

(7) costs of computer hardware and other technological

devices that are primarily used for educational purposes, including

a calculator, personal computer, laptop, tablet, microscope,

telescope, or printer, not to exceed in any year 10 percent of the

total amount deposited in the program participant's account that

year;

(8) fees for a nationally standardized

norm-referenced achievement test, an advanced placement test or

similar examination, or any examination related to college or

university admission; and

(9) fees for transportation services provided by a

fee-for-service transportation provider for the child to travel to

and from an education service provider, not to exceed $1,000 per

school year.

(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) A parent of

an eligible child shall receive each year that the child

participates in the program a payment from the state to the child's

account in an amount equal to the state average maintenance and

operations expenditures per student in average daily attendance for

the preceding state fiscal year.

(b) Any money remaining in a child'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.

(c) 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 child's account.

(d) A payment under Subsection (a) may not be financed using

federal money.

(e) 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. 29.362. ADMINISTRATION OF ACCOUNTS. (a) The

comptroller shall establish and maintain an account for each child

participating in the program.

(b) The comptroller shall make payments to each program

participant's account on a schedule set by comptroller rule.

(c) The comptroller may use money available for the program

to cover the comptroller's cost of administering the program. The

comptroller may not reduce any payment to a program participant's

account for purposes of this subsection.

(d) The comptroller shall disburse to each certified

educational assistance organization 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 under this subsection for a state 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 (b), each

certified educational assistance organization shall:

(1) compare the list of program participants admitted

by the organization 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 fund.

Sec. 29.363. ACCOUNT EXTENSION. (a) A program participant

may apply to the participant's certified educational assistance

organization for an extension to allow for:

(1) the child's account to remain open after the date

on which the child's account would otherwise be closed under

Section 29.362(f) for a reason described by Section 29.356(c)(1);

and

(2) the money remaining in the account to be used for

expenses described by Subsection (e).

(b) Each certified educational assistance organization

shall create an application form for the extension of a child's

account under Subsection (a) and make the application form readily

available to program participants through various sources,

including the organization's Internet website.

(c) A certified educational assistance organization shall

approve an application for the extension of a child's account

submitted under this section if the program participant:

(1) submits the application form not later than the

30th day before the date on which the child is anticipated to

graduate from high school or obtain a high school equivalency

certificate; and

(2) includes with the application form documentation

regarding the intended use of the money remaining in the account for

expenses described by Subsection (e).

(d) Not later than the 30th day after receipt of an

application under this section, a certified educational assistance

organization shall:

(1) approve or deny the application; and

(2) notify in writing:

(A) the program participant regarding the

organization's decision on the application and, if the application

is denied, the grounds for denial; and

(B) the comptroller regarding the approval of an

application.

(e) Money remaining in a child's account extended under this

section on the date on which the account would otherwise be closed

under Section 29.362(f) may be used only for the following expenses

incurred by the child:

(1) tuition and fees:

(A) for courses that lead to occupational

licensing or certification; or

(B) at an institution of higher education, a

private or independent institution of higher education, or a career

school or college, as that term is defined by Section 132.001;

(2) the purchase of textbooks or other instructional

materials or uniforms required by a course or institution described

by Subdivision (1) in which the child is enrolled; and

(3) fees to obtain an occupational license or

certification, including fees for an examination necessary to

obtain the license or certification.

(f) Section 29.361(a) does not apply to a program

participant whose account is extended under this section.

Sec. 29.364. RANDOM AUDITING. (a) The comptroller may

contract with a private entity to randomly audit accounts and

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 take any corrective action 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 to the organization 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) A rule adopted or action taken related to the

program by an individual, governmental entity, court of law, or

program administrator may not:

(1) consider the actions of an education service

provider, vendor of educational products, or program participant to

be the actions of an agent of state government;

(2) limit:

(A) an education service provider's ability to

determine the methods used to educate the provider's students or to

exercise the provider's religious or institutional values; or

(B) a program participant's ability to determine

the participant's educational content or to exercise the

participant's religious values;

(3) obligate an education service provider or program

participant to act contrary to the provider's or participant's

religious or institutional values, as applicable;

(4) impose any regulation on an education service

provider, vendor of educational products, or program participant

beyond those regulations necessary to enforce the requirements of

the program; or

(5) require as a condition of receiving money

distributed under the program:

(A) an education service provider to modify the

provider's creed, practices, admissions policies, curriculum,

performance standards, employment policies, or assessments; or

(B) a program participant to modify the

participant's creed, practices, curriculum, performance standards,

or assessments.

(b) In a 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 by clear and convincing evidence

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.

(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. 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 (b-1) and amending Subsection (c) to read as

follows:

(b-1) The comptroller is entitled to obtain criminal

history record information as provided by Subsection (c) about a

person who is a private tutor, a therapist, or an employee of a

teaching service or school 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.

(c) Subject to Section 411.087 and consistent with the

public policy of this state, the comptroller is entitled to:

(1) obtain through the Federal Bureau of Investigation

criminal history record information maintained or indexed by that

bureau that pertains to a person described by Subsection (a) , [ or ]

(b) , or (b-1) ; and

(2) obtain from the department or any other criminal

justice agency in this state criminal history record information

maintained by the department or that criminal justice agency that

relates to a person described by Subsection (a) , [ or ] (b) , or (b-1) .

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

EDUCATION SAVINGS ACCOUNT PROGRAM

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 230.001. DEFINITIONS. In this chapter:

(1) "Fund" means the education savings account 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 230.054.

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 lesser of the amount contributed to the fund during

the period covered by the tax report or the amount of the entity's

state premium tax liability for the report.

(b) For the 2026 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 230.053 and that apply under Section 230.054. The

procedures must provide that any remaining credits are allocated to

entities that apply under Section 230.054 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. 230.053. 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. 230.054. 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. 230.055. RULES; PROCEDURES. The comptroller shall

adopt rules and procedures to implement, administer, and enforce

this chapter.

Sec. 230.056. 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. 230.057. 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. Subchapter J, Chapter 29, Education Code, as

added by this Act, applies beginning with the 2026-2027 school

year.

SECTION 7. 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 8. Not later than February 15, 2026, the

comptroller of public accounts shall adopt rules as provided by

Section 230.055, Insurance Code, as added by this Act.

SECTION 9. 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 10. (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, 37.3(a)(1), 38.6(a) and (b),

40.1(b), and 49.4.

SECTION 11. 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 12. This Act takes effect January 1, 2026.