By: Patrick S.B. No. 1410
 
 
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment of the Texas Equal Opportunity
  Scholarship Program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 29, Education Code, is amended by adding
  Subchapter N to read as follows:
  SUBCHAPTER N. TEXAS EQUAL OPPORTUNITY SCHOLARSHIP PROGRAM
         Sec. 29.551.  DEFINITIONS. In this subchapter:
               (1)  "Certified organization" means an organization
  certified under Section 29.552.
               (2)  "Eligible student" means a student who meets the
  requirements of Section 29.559.
               (3)  "Opportunity scholarship" means a Texas Equal
  Opportunity Scholarship Program scholarship awarded under Section
  29.557.
               (4)  "Qualified nonpublic school" means a school that
  meets the requirements of Section 29.560.
         Sec. 29.552.  CERTIFICATION OF ORGANIZATIONS;
  ADMINISTRATION OF PROGRAM. (a) The comptroller may select and
  certify not more than three organizations that meet the eligibility
  requirements of Section 29.553 to administer the Texas Equal
  Opportunity Scholarship Program. The comptroller shall select and
  certify three geographically diverse organizations that the
  comptroller determines are likely to best administer the program
  from among the eligible organizations that apply.
         (b)  A certified organization may accept donations and award
  opportunity scholarships in this state under the conditions and
  limitations provided by this subchapter.
         Sec. 29.553.  ELIGIBILITY REQUIREMENTS FOR ORGANIZATIONS
  APPLYING FOR CERTIFICATION. (a) An organization may apply to the
  comptroller for certification under Section 29.552.
         (b)  An organization is eligible for selection and
  certification by the comptroller if the organization:
               (1)  according to the organization's charter, has the
  primary purpose of awarding scholarships to or paying educational
  expenses for eligible students in  public elementary or secondary
  schools located in this state;
               (2)  uses its annual revenue for the purpose provided
  by Subdivision (1), except for a portion of the revenue that may be
  used for reasonable operating expenses;
               (3)  is exempt from federal tax under Section 501(a),
  Internal Revenue Code of 1986, by being listed as an exempt
  organization in Section 501(c)(3) of that code and meeting all
  other applicable requirements for that exemption;
               (4)  is in good standing with this state;
               (5)  is located in this state;
               (6)  demonstrates, within the previous five-year
  period, experience and expertise in awarding scholarships to
  students in elementary and secondary schools; and
               (7)  agrees to be independently audited on an annual
  basis and file the audit report with the comptroller if certified.
         Sec. 29.554.  REQUIREMENTS FOR CERTIFIED ORGANIZATIONS. (a)
  A certified organization shall:
               (1)  comply at all times with the eligibility
  requirements under Section 29.553(b);
               (2)  submit to an annual independent audit under
  guidelines provided by the comptroller and file the audit report
  with the comptroller;
               (3)  except as provided by Section 29.556(b),
  distribute all money received from donations under this subchapter
  within two school years of receipt;
               (4)  give each donor a receipt for money donated to the
  certified organization under this subchapter that includes the name
  of the certified organization, the name of the donor, the amount of
  the donation, and any other information required by the
  comptroller; and
               (5)  of the amount of money received from donations
  made by donors for the purpose of providing scholarships under this
  subchapter including all money donated by entities applying for a
  tax credit in connection with the donation under Chapter 230,
  Insurance Code, or Subchapter K, Chapter 171, Tax Code:
                     (A)  distribute not less than 95 percent in the
  form of opportunity scholarships; and
                     (B)  use not more than five percent to pay
  expenses of operating the organization.
         (b)  A certified organization may not:
               (1)  award all opportunity scholarships to students who
  attend a particular school; or
               (2)  provide opportunity scholarships in a manner that
  does not comply with Sections 29.556 and 29.557.
         Sec. 29.555.  REVOCATION OF CERTIFICATION. (a) The
  comptroller shall revoke a certification under Section 29.552 if
  the comptroller finds that a certified organization:
               (1)  is not in compliance with the requirements of
  Section 29.554; or
               (2)  otherwise intentionally and substantially
  violates this subchapter.
         (b)  Revocation of a certification under this section does
  not affect the validity of a tax credit under Chapter 230, Insurance
  Code, or Subchapter K, Chapter 171, Tax Code, relating to a donation
  made before the date of revocation.
         Sec. 29.556.  ALLOCATION OF OPPORTUNITY SCHOLARSHIP MONEY.
  (a) Except as provided by Subsection (b), of a certified
  organization's money available to award opportunity scholarships
  for each school year, the certified organization shall use:
               (1)  not more than 80 percent to award opportunity
  scholarships under Section 29.557 to eligible students to attend
  qualified nonpublic schools in this state; and
               (2)  not more than 20 percent to award opportunity
  scholarships under Section 29.557 to eligible students to attend:
                     (A)  tuition-supported prekindergarten programs
  at public schools in this state; or
                     (B)  educational after-school programs, if the
  eligible students receiving the opportunity scholarships to attend
  after-school programs attend public schools in this state.
         (b)  If a certified organization awards the maximum
  opportunity scholarship to each eligible student described by
  Subsection (a)(1) or (2) who applies for a school year but does not
  award the maximum amount of the organization's money allowed by the
  applicable subdivision for the year, the certified organization
  shall carry forward the remaining money available under the
  applicable subdivision for the year and use the money to award
  opportunity scholarships to eligible students described by the
  applicable subdivision for subsequent school years.
         Sec. 29.557.  AWARD OF OPPORTUNITY SCHOLARSHIPS. (a) For
  each school year a certified organization shall award opportunity
  scholarships according to the allocations prescribed by Section
  29.556(a) to eligible students who apply as provided by this
  section.
         (b)  A certified organization shall award opportunity
  scholarships to applicants according to the following priority
  groups in the manner provided by Subsections (c) and (d):
               (1)  the certified organization shall give first
  priority to applicants, and the siblings of those applicants, who
  were awarded an opportunity scholarship by the certified
  organization for the current school year and who are applying to
  renew the opportunity scholarship for the next school year;
               (2)  the certified organization shall give second
  priority to applicants who currently attend a campus that is
  assigned a performance rating of unacceptable performance under
  Section 39.054; and
               (3)  the certified organization shall give third
  priority to all other applicants.
         (c)  A certified organization may not award an opportunity
  scholarship to an applicant in the priority group described by
  Subsection (b)(2) for a school year unless the certified
  organization awards an opportunity scholarship to each eligible
  student in the priority group described by Subsection (b)(1) who
  applies for that year. A certified organization may not award an
  opportunity scholarship to an applicant in the priority group
  described by Subsection (b)(3) for a school year unless the
  certified organization awards an opportunity scholarship to each
  eligible student in the priority groups described by Subsections
  (b)(1) and (2) who apply for that year.
         (d)  If a certified organization is able to award an
  opportunity scholarship to one or more, but not all, eligible
  students in a priority group described by Subsection (b) who apply,
  the certified organization shall use a lottery system to award
  opportunity scholarships to eligible students in that group who
  apply.
         Sec. 29.558.  LIMITATION ON AMOUNTS OF OPPORTUNITY
  SCHOLARSHIPS. (a) The amount of an opportunity scholarship awarded
  for a school year to a student to attend a qualified nonpublic
  school or a tuition-supported prekindergarten program at a public
  school may not exceed the amount of funding equal to 80 percent of
  the statewide average amount of state and local funding provided to
  school districts under Chapter 42 for a student in average daily
  attendance.
         (b)  The amount of an opportunity scholarship awarded for a
  school year to a student to attend an educational after-school
  program may not exceed $1,000.
         Sec. 29.559.  ELIGIBILITY OF STUDENTS. (a) A student is
  eligible for an opportunity scholarship if:
               (1)  resides in the state of Texas;
               (2)  attended a public school for the majority of a
  preceding year; and either
                     (A)  is at risk of dropping out of school as
  defined in Section 29.081; or,
                     (B)  resides in a household that had, in the
  household's most recently filed federal income tax return, a
  household income not greater than 200 percent of the income
  guidelines necessary to qualify for the national free or
  reduced-price lunch program established under 42 U.S.C. Section
  1751 et seq.
          (b) A child who establishes eligibility under Subsection
  (a) is entitled to continue participating until the earlier of the
  date on which the child graduates from high school or the child's
  21st birthday.
         Sec. 29.560.  NONPUBLIC SCHOOL REQUIREMENTS. (a) A
  certified organization may not award an opportunity scholarship for
  a student to attend a nonpublic school unless the nonpublic school:
               (1)  is accredited by an organization that is
  recognized by the Texas Private School Accreditation Commission;
               (2)  annually administers a nationally norm-referenced
  assessment instrument or each appropriate assessment instrument
  required under Section 39.023;
               (3)  qualifies as a school at which a student may
  fulfill this state's compulsory attendance requirements;
               (4)  is not in violation of the federal Civil Rights Act
  of 1964 (42 U.S.C. Section 2000a et seq.);
               (5)  holds a valid certificate of occupancy; and
               (6)  has written policy statements regarding:
                     (A)  admissions;
                     (B)  curriculum;
                     (C)  safety;
                     (D)  food service inspection; and
                     (E)  student to teacher ratios.
         (b)  A nonpublic school that enrolls or accepts for
  enrollment a student who applies for or is awarded an opportunity
  scholarship shall provide to the certified organization to which
  the student applies or that awards the opportunity scholarship a
  notarized affidavit, with supporting documents, showing that the
  nonpublic school meets the requirements of Subsection (a).
         Sec. 29.561.  RULES; PROCEDURES. (a) The comptroller shall
  adopt rules and procedures to implement, administer, and enforce
  this subchapter.
         (b)  A rule adopted under Subsection (a) is binding on any
  state or local governmental entity, including a political
  subdivision, as necessary to implement, administer, and enforce
  this subchapter.
         SECTION 2.  Subtitle B, Title 3, Insurance Code, is amended
  by adding Chapter 230 to read as follows:
  CHAPTER 230. CREDIT AGAINST PREMIUM TAXES
  FOR DONATIONS TO TEXAS EQUAL OPPORTUNITY SCHOLARSHIP PROGRAM
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 230.001.  DEFINITIONS. In this chapter:
               (1)  "Certified organization" has the meaning assigned
  by Section 29.551, 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.  ELIGIBILITY. An entity is eligible for a
  credit against the entity's state premium tax liability in the
  amount and under the conditions and limitations provided by this
  chapter.
         Sec. 230.052.  AMOUNT OF CREDIT; LIMITATION ON RETURN OF
  CREDIT. (a)  The amount of the credit is equal to the lesser of the
  amount of donations made to a certified organization or fifteen
  percent of the entity's state premium tax liability after applying
  any other applicable credits.
         (b)  An entity is not entitled to have a donation to a
  certified organization returned because of a change in the entity's
  state premium tax liability or in the amount of the entity's tax
  credit allowed under this chapter as a result of a federal or state
  audit, assessment, redetermination, amended return, or similar
  change in the entity's tax liability. The certified organization to
  which an entity makes a donation shall notify the entity of this
  provision.
         Sec. 230.053.  APPLICATION FOR CREDIT. (a) An entity must
  apply for a credit under this chapter on or with the tax return for
  the taxable year for which the credit is claimed.
         (b)  The comptroller shall adopt a form for the application
  for the credit. An entity must use this form in applying for the
  credit. The comptroller shall make the form available in electronic
  and paper format in the same manner as other tax forms.
         Sec. 230.054.  RULES; PROCEDURES. (a) The comptroller
  shall adopt rules and procedures to implement, administer, and
  enforce this chapter.
         (b)  A rule adopted under Subsection (a) is binding on any
  state or local governmental entity, including a political
  subdivision, as necessary 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.
         SECTION 3.  Chapter 171, Tax Code, is amended by adding
  Subchapter K to read as follows:
  SUBCHAPTER K. TAX CREDIT FOR DONATIONS TO TEXAS EQUAL OPPORTUNITY
  SCHOLARSHIP PROGRAM
         Sec. 171.601.  DEFINITION. In this subchapter, "certified
  organization" has the meaning assigned by Section 29.551, Education
  Code.
         Sec. 171.602.  ENTITLEMENT TO CREDIT. A taxable entity is
  entitled to a credit in the amount and under the conditions and
  limitations provided by this subchapter against the tax imposed
  under this chapter.
         Sec. 171.603.  QUALIFICATION. A taxable entity qualifies
  for a credit under this subchapter if the taxable entity donates
  money to a certified organization.
         Sec. 171.604.  AMOUNT OF CREDIT; LIMITATION ON RETURN OF
  CREDIT. (a) The amount of the credit is equal to the lesser of the
  amount of donations made to a certified organization during the
  privilege period or fifteen percent of the amount of franchise tax
  due, after applying any other applicable credits.
         (b)  A taxable entity is not entitled to have a donation
  returned because of a change in the taxable entity's tax liability
  under this chapter or in the amount of the taxable entity's tax
  credit allowed under this subchapter as a result of a federal or
  state audit, assessment, redetermination, amended return, or
  similar change in the taxable entity's tax liability. The certified
  organization to which a taxable entity makes a donation shall
  notify the taxable entity of this provision.
         Sec. 171.605.  APPLICATION FOR CREDIT. (a) A taxable entity
  must apply for a credit under this subchapter on or with the tax
  report for the period for which the credit is claimed.
         (b)  The comptroller shall adopt a form for the application
  for the credit. A taxable entity must use this form in applying for
  the credit. The comptroller shall make the form available in
  electronic and paper format in the same manner as other tax forms.
         Sec. 171.606.  RULES; PROCEDURES. (a) The comptroller
  shall adopt rules and procedures to implement, administer, and
  enforce this subchapter.
         (b)  A rule adopted under Subsection (a) is binding on any
  state or local governmental entity, including a political
  subdivision, as necessary to implement, administer, and enforce
  this subchapter.
         Sec. 171.607.  ASSIGNMENT PROHIBITED; EXCEPTION. A taxable
  entity may not convey, assign, or transfer the credit allowed under
  this subchapter to another taxable entity unless all assets of the
  taxable entity are conveyed, assigned, or transferred in the same
  transaction.
         SECTION 4.  (a) The constitutionality and other validity
  under the state or federal constitution of all or any part of
  Subchapter N, Chapter 29, Education Code, Chapter 230, Insurance
  Code, or Subchapter K, Chapter 171, Tax 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.
         (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 N, Chapter 29, Education Code,
  Chapter 230, Insurance Code, or Subchapter K, Chapter 171, Tax
  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 N,
  Chapter 29, Education Code, Chapter 230, Insurance Code, or
  Subchapter K, Chapter 171, Tax Code, as added by this Act.
         (e)  There is a direct appeal to the 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 N,
  Chapter 29, Education Code, Chapter 230, Insurance Code, or
  Subchapter K, Chapter 171, Tax 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 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 5.  A credit may be claimed under Chapter 230,
  Insurance Code, or Subchapter K, Chapter 171, Tax Code, as added by
  this Act, only for a donation made on or after January 1, 2014.
         SECTION 6.  Subchapter N, Chapter 29, Education Code, as
  added by this Act, applies beginning with the 2013-2014 school
  year.
         SECTION 7.  (a) Except as provided by Subsection (b) of this
  section:
               (1)  this Act takes effect immediately if it receives a
  vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution; and
               (2)  if this Act does not receive the vote necessary for
  immediate effect, this Act takes effect September 1, 2013.
         (b)  Chapter 230, Insurance Code, and Subchapter K, Chapter
  171, Tax Code, as added by this Act, take effect January 1, 2014.