88R6150 JES-D
 
  By: Toth H.B. No. 2114
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment of an empowerment scholarship account
  program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 29, Education Code, is amended by adding
  Subchapter J to read as follows:
  SUBCHAPTER J.  EMPOWERMENT SCHOLARSHIP ACCOUNT PROGRAM
         Sec. 29.351.  DEFINITIONS. In this subchapter:
               (1)  "Account" means an empowerment scholarship
  account established under the program.
               (2)  "Child with a disability" means a child who is:
                     (A)  eligible to participate in a school
  district's special education program under Section 29.003; or
                     (B)  covered by Section 504, Rehabilitation Act of
  1973 (29 U.S.C. Section 794).
               (3)  "Curriculum" means a complete course of study for
  a particular content area or grade level.
               (4)  "Financial institution" means a bank, credit
  union, savings bank, or savings and loan association organized
  under the laws of this state, the laws of another state, or federal
  law that has its main office or a branch office in this state. The
  term does not include any institution the deposits of which are not
  insured by the Federal Deposit Insurance Corporation or the
  National Credit Union Administration.
               (5)  "Parent" means a resident of this state who is a
  natural or adoptive parent, managing or possessory conservator,
  legal guardian, custodian, or other person with legal authority to
  act on behalf of a child.
               (6)  "Postsecondary educational institution" means:
                     (A)  an institution of higher education or a
  private or independent institution of higher education as defined
  by Section 61.003; or
                     (B)  a career school or college as defined by
  Section 132.001.
               (7)  "Program" means the empowerment scholarship
  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 empowerment
  scholarship account program are to:
               (1)  improve public schools and overall academic
  performance;
               (2)  promote efficiency;
               (3)  promote and preserve the liberties and rights of
  the people; and
               (4)  increase parental options.
         Sec. 29.353.  ESTABLISHMENT OF PROGRAM. (a) The
  comptroller shall establish and administer an empowerment
  scholarship account program to provide funding for certain
  education-related expenses of eligible children.
         (b)  The comptroller, with cooperation from the agency,
  shall ensure that information about the program is readily
  available to the public through various sources, including the
  agency's Internet website. The comptroller shall make information
  about the program available to parents of children eligible to
  participate in the program through the comptroller's Internet
  website.
         Sec. 29.354.  ELIGIBLE CHILD. (a)  A child is eligible to
  participate in the program if the child is eligible to attend a
  public school under Section 25.001.
         (b)  A child may participate in the program until the
  earliest of the following dates:
               (1)  the date on which the child graduates from high
  school;
               (2)  the date on which the child is no longer eligible
  to attend a public school under Section 25.001;
               (3)  the date on which the child enrolls in a public
  school, including an open-enrollment charter school; or
               (4)  the date on which the child is declared ineligible
  for the program by the comptroller under this subchapter.
         (c)  Notwithstanding Subsection (b), the comptroller shall
  establish guidelines for, in the least disruptive manner possible:
               (1)  a child participating in the program to cease
  participation and enroll in a public school, including an
  open-enrollment charter school; and
               (2)  a child who previously participated in the program
  and subsequently enrolled in a public school, including an
  open-enrollment charter school, to resume participation in the
  program.
         Sec. 29.355.  ENROLLMENT IN PROGRAM. (a) A parent of an
  eligible child may enroll the child in the program for the following
  school year.
         (b)  The comptroller shall by rule create an enrollment form
  for the program and make the enrollment form readily available to
  interested parents through various sources, including the
  comptroller's Internet website.
         (c)  The comptroller shall provide to each parent who submits
  an enrollment form a publication that describes the operation of
  the program, including:
               (1)  expenses allowed under the program under Section
  29.357;
               (2)  expense reporting requirements; and
               (3)  a description of the responsibilities of program
  participants and the duties of the comptroller under this
  subchapter.
         Sec. 29.356.  PARTICIPATION IN PROGRAM. (a) To receive
  funding under the program, a parent of an eligible child must agree
  to:
               (1)  spend funds received through the program only for
  expenses allowed under Section 29.357;
               (2)  notify the comptroller if the child enrolls in a
  public school, including an open-enrollment charter school, not
  later than the 30th day after the date of enrollment; and
               (3)  inform the comptroller if the child graduates from
  high school.
         (b)  The parent of a child participating in the program is
  the trustee of the child's account.
         (c)  The comptroller shall provide annually to each program
  participant the publication provided under Section 29.355(c).
         Sec. 29.357.  APPROVED EDUCATION-RELATED EXPENSES. (a)  
  Funds received under the program may be used only for the following
  expenses incurred by a program participant:
               (1)  tuition and fees:
                     (A)  at a private school accredited by an
  organization that is recognized by the Texas Private School
  Accreditation Commission;
                     (B)  at a postsecondary educational institution;
  or
                     (C)  for an online educational course or program;
               (2)  the purchase of textbooks or other instructional
  materials;
               (3)  the purchase of a curriculum;
               (4)  fees for classes or other educational services
  provided by a public school, if the classes or services do not
  qualify the child to be included in the school's average daily
  attendance;
               (5)  fees for services provided by a private tutor or
  teaching service;
               (6)  for a child with a disability, fees for
  educational therapies or services provided by a practitioner or
  provider;
               (7)  costs of computer hardware and software and other
  technological devices, not to exceed in any year 10 percent of the
  total amount paid to the program participant's account that year;
               (8)  fees for a nationally norm-referenced achievement
  test or examination, an assessment instrument adopted by the agency
  under Section 39.023, an advanced placement test or similar
  examination, or any examination related to college or university
  admission; and
               (9)  fees for the management of the participant's
  account charged by a financial institution.
         (b)  Expenses allowed under Subsection (a) do not include
  expenses for:
               (1)  consumable supplies, including paper, pens,
  pencils, folders, and notebooks;
               (2)  food; or
               (3)  before-school or after-school child care or child
  care during school holidays and vacations.
         (c)  An education service provider or vendor of educational
  products must provide a program participant with a receipt for each
  expense allowed under Subsection (a) charged by the provider or
  vendor to the participant.
         (d)  The content or religious nature of a product or service
  may not be considered in determining whether a payment for the
  product or service is an expense allowed under Subsection (a).
         (e)  A finding that a program participant used funds
  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. 29.358.  AMOUNT OF PAYMENT; FINANCING. (a)  A parent of
  an eligible child shall receive each year that the child
  participates in the program quarterly payments from the state to
  the child's account equal to a total amount of $10,000.
         (b)  In addition to any funding the district receives under
  Chapter 48, for each child participating in the program, the school
  district the child would otherwise attend is entitled to receive
  for the first year in which the child participates in the program an
  amount equal to 50 percent of the difference between:
               (1)  the state average maintenance and operations
  expenditures per student in average daily attendance for the
  preceding fiscal year; and
               (2)  the amount the child's parent receives under
  Subsection (a) for the year.
         (c)  Any funds remaining in a child's account at the end of a
  fiscal year are 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 funds in the child's account.
         (e)  A payment under Subsection (a) may not be financed using
  federal funds or money appropriated from the available school fund.
         Sec. 29.359.  ADMINISTRATION OF ACCOUNTS. (a) The
  comptroller may contract with one or more financial institutions to
  establish and manage an account for each child participating in the
  program. A program participant must be able to access the
  participant's account by using a debit card or online or electronic
  transfer payment service.
         (b)  The comptroller shall make quarterly payments to each
  program participant's account in equal amounts on or before the
  15th day of August, November, February, and May.
         (c)  The comptroller may deduct an amount from each quarterly
  payment to a program participant's account to cover the
  comptroller's cost of administering the program. The amount
  deducted may not exceed five percent of the payment.
         (d)  Not later than 30 days after the end of each fiscal year,
  the comptroller shall reconcile payments made to and from all
  accounts under the program.
         (e)  On the date on which a child who participated in the
  program is no longer eligible to participate in the program under
  Section 29.354(b), the child's account is closed and any remaining
  funds are returned to the state for deposit in the foundation school
  fund.
         (f)  The comptroller may contract with a private entity to
  administer all or any part of the program.
         Sec. 29.360.  RANDOM AUDITING OF ACCOUNTS. (a) The
  comptroller shall contract with a private entity to randomly audit
  accounts as necessary to ensure compliance with applicable law and
  the requirements of the program.
         (b)  In auditing an account, the comptroller or private
  entity may require that a program participant provide further
  information and documentation regarding any payment from the
  participant's account.
         (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. 29.361.  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,
  including a requirement under Section 29.356(a), or who
  substantially misuses funds received under 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 further 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 funds distributed under the
  program that were used for expenses not allowed under Section
  29.357(a) from the program participant or the entity that received
  the funds if the participant's account is suspended or closed under
  this section.
         Sec. 29.362.  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 funds distributed under the program may not in
  any manner rebate, refund, or credit to or share with a program
  participant, or any person on behalf of a participant, any program
  funds paid or owed by the participant to the provider or vendor.
         Sec. 29.363.  REFERRAL TO ATTORNEY GENERAL. (a) If the
  comptroller obtains evidence of fraudulent use of an account, the
  comptroller 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. 29.364.  PROVIDER ACCOUNTABILITY. (a) A private
  school must be accredited by an organization that is recognized by
  the Texas Private School Accreditation Commission to receive funds
  distributed under the program.
         (b)  A private tutor or teaching service and a practitioner
  or provider who provides educational therapies or services for a
  child with a disability must be licensed or accredited by a regional
  or national accrediting organization to receive funds distributed
  under the program.
         Sec. 29.365.  PROGRAM PARTICIPANT, PROVIDER, AND VENDOR
  AUTONOMY. (a) An education service provider or vendor of
  educational products that receives funds distributed under the
  program is not an agent of the state or federal government.
         (b)  Except as provided by this subchapter, the comptroller,
  the agency, the State Board of Education, any other state agency, or
  any school district may not:
               (1)  regulate the educational program of an education
  service provider or vendor of educational products that receives
  funds distributed under the program; or
               (2)  exercise control or supervision over a program
  participant or an education service provider or vendor of
  educational products that receives funds distributed under the
  program.
         (c)  The program does not expand the regulatory authority of
  the state or any school district to impose any additional
  regulation on an education service provider or vendor of
  educational products except those reasonably necessary to enforce
  the program as provided by this subchapter.
         (d)  A private school may not be required to modify the
  school's creed, practices, admissions policies, curriculum,
  performance standards, or assessments to receive funds distributed
  under the program.
         (e)  A private school voluntarily selected by a parent for
  the parent's child to attend or a parent who homeschools the
  parent's child, with or without governmental assistance, may not be
  required to comply with any state law or rule governing the
  applicable educational program that was not in effect on January 1,
  2023.
         (f)  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 funds
  distributed under the program.
         Sec. 29.366.  STUDENT RECORDS AND INFORMATION. (a) On
  request by the parent of a child participating in the program, the
  school district or open-enrollment charter school that the child
  would otherwise attend shall provide a copy of the child's school
  records possessed by the district or school, if any, to the child's
  parent or, if applicable, the private school the child attends.
         (b)  The agency shall provide to the comptroller any
  information available to the agency requested by the comptroller
  regarding a child who participates or seeks to participate in the
  program.
         Sec. 29.367.  REPORTING NUMBER OF PARTICIPANTS. (a) Not
  later than October 1 of each year, the comptroller shall notify the
  commissioner and the Legislative Budget Board of the number of
  eligible children likely to participate in the program,
  disaggregated by the school district or open-enrollment charter
  school the eligible children would otherwise attend.
         (b)  Not later than March 1 of each year, the comptroller
  shall provide final information to the commissioner and the
  Legislative Budget Board regarding the number of children
  participating in the program, disaggregated in the same manner as
  the initial information under Subsection (a).
         Sec. 29.368.  ANNUAL SURVEY. The comptroller may conduct an
  annual parental satisfaction survey that asks each parent of a
  child participating in the program to express:
               (1)  the parent's overall level of satisfaction with
  the program; and
               (2)  the parent's opinion on specified topics and
  issues relevant to the effectiveness of the program.
         Sec. 29.369.  RULES. The comptroller shall:
               (1)  adopt rules as necessary to implement this
  subchapter, including:
                     (A)  rules regarding expense reporting
  requirements for program participants; and
                     (B)  rules for implementing this subchapter in a
  manner that ensures compliance with federal law regarding
  confidentiality of student educational information, including the
  Family Educational Rights and Privacy Act of 1974 (20 U.S.C.
  Section 1232g); and
               (2)  coordinate as necessary to:
                     (A)  calculate annually the savings to the state
  from the implementation of the program; and
                     (B)  prevent fraud in financial transactions
  under the program, including by adopting measures to permit
  anonymous fraud reporting by telephone hotline or online
  communication.
         Sec. 29.370.  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.
         SECTION 2.  Section 48.266, Education Code, is amended by
  adding Subsection (b-1) to read as follows:
         (b-1)  Notwithstanding Subsection (b), the commissioner
  shall adjust enrollment estimates and entitlement for each school
  district for each school year based on information provided by the
  comptroller under Section 29.367. This subsection expires
  September 1, 2026.
         SECTION 3.  Notwithstanding Section 29.359(b), Education
  Code, as added by this Act, not later than September 15, 2024, the
  comptroller shall make the initial payment to each program
  participant's education savings account as provided by Subchapter
  J, Chapter 29, Education Code, as added by this Act.
         SECTION 4.  This Act applies beginning with the 2024-2025
  school year.
         SECTION 5.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution. If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2023.