By:AAPatrick S.B.ANo.A1410 A BILL TO BE ENTITLED AN ACT 1 2 relating to the establishment 3 of the Texas Equal Opportunity Scholarship Program. 4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 5 SECTIONA1.AAChapter 29, Education Code, is amended by adding 6 7 Subchapter N to read as follows: SUBCHAPTER N. TEXAS EQUAL OPPORTUNITY SCHOLARSHIP PROGRAM 8 Sec.A29.551.AADEFINITIONS. 9 (1)AA"Certified 10 organization" means an organization certified under Section 29.552. (2)AA"Eligible student" means a student who meets the 11 12 In this subchapter: requirements of Section 29.559. (3)AA"Opportunity 13 scholarship" means a Texas Equal 14 Opportunity Scholarship Program scholarship awarded under Section 15 29.557. (4)AA"Qualified nonpublic school" means a school that 16 17 meets the requirements of Section 29.560. 18 Sec.A29.552.AACERTIFICATION OF ORGANIZATIONS; 19 ADMINISTRATION 20 certify not more than three organizations that meet the eligibility 21 requirements 22 Opportunity Scholarship Program. The comptroller shall select and 23 certify 24 comptroller determines are likely to best administer the program OF of three PROGRAM. Section (a) The 29.553 geographically to comptroller administer diverse 1 may the select Texas organizations and Equal that the S.B.ANo.A1410 1 from among the eligible organizations that apply. 2 (b)AAA certified organization may accept donations and award 3 opportunity scholarships in this state under the conditions and 4 limitations provided by this subchapter. 5 Sec.A29.553.AAELIGIBILITY REQUIREMENTS 6 APPLYING FOR CERTIFICATION. 7 ORGANIZATIONS comptroller for certification under Section 29.552. 8 9 (b)AAAn (a) FOR organization An organization may apply to the is eligible for selection and certification by the comptroller if the organization: 10 (1)AAaccording to the organization 's charter, has the 11 primary purpose of awarding scholarships to or paying educational 12 expenses for eligible students in Apublic elementary or secondary 13 schools located in this state; 14 (2)AAuses its annual revenue for the purpose provided 15 by Subdivision (1), except for a portion of the revenue that may be 16 used for reasonable operating expenses; (3)AAis exempt from federal tax under Section 501(a), 17 18 Internal Revenue Code of 1986, by being listed 19 organization in Section 501(c)(3) of that code and meeting all 20 other applicable requirements for that exemption; 21 (6)AAdemonstrates, exempt (5)AAis located in this state; 23 an (4)AAis in good standing with this state; 22 as within the previous 24 period, 25 five-year students in elementary and secondary schools; and 26 27 experience and expertise in awarding scholarships to (7)AAagrees to be independently audited on an annual basis and file the audit report with the comptroller if certified. 2 S.B.ANo.A1410 Sec.A29.554.AAREQUIREMENTS FOR CERTIFIED ORGANIZATIONS. 1 2 A certified organization shall: (1)AAcomply 3 4 (a) at all times with the eligibility requirements under Section 29.553(b); (2)AAsubmit 5 to an annual independent audit under 6 guidelines provided by the comptroller and file the audit report 7 with the comptroller; (3)AAexcept 8 9 10 as provided by Section 29.556(b), distribute all money received from donations under this subchapter within two school years of receipt; 11 (4)AAgive each donor a receipt for money donated to the 12 certified organization under this subchapter that includes the name 13 of the certified organization, the name of the donor, the amount of 14 the 15 comptroller; and donation, and any other information required by the 16 (5)AAof the amount of money received from donations 17 made by donors for the purpose of providing scholarships under this 18 subchapter including all money donated by entities applying for a 19 tax 20 Insurance Code, or Subchapter K, Chapter 171, Tax Code: 21 22 23 24 25 26 27 credit in connection with the donation under Chapter 230, (A)AAdistribute not less than 95 percent in the form of opportunity scholarships; and (B)AAuse not more than five percent to pay expenses of operating the organization. (b)AAA certified organization may not: (1)AAaward all opportunity scholarships to students who attend a particular school; or 3 S.B.ANo.A1410 (2)AAprovide opportunity scholarships in a manner that 1 2 does not comply with Sections 29.556 and 29.557. Sec.A29.555.AAREVOCATION 3 OF CERTIFICATION. (a) The 4 comptroller shall revoke a certification under Section 29.552 if 5 the comptroller finds that a certified organization: (1)AAis 6 7 in compliance with the requirements of Section 29.554; or (2)AAotherwise 8 9 not intentionally and substantially violates this subchapter. 10 (b)AARevocation of a certification under this section does 11 not affect the validity of a tax credit under Chapter 230, Insurance 12 Code, or Subchapter K, Chapter 171, Tax Code, relating to a donation 13 made before the date of revocation. Sec.A29.556.AAALLOCATION OF OPPORTUNITY SCHOLARSHIP MONEY. 14 15 (a) 16 organization 's money available to award opportunity scholarships 17 for each school year, the certified organization shall use: 18 Except as provided (1)AAnot more by than Subsection 80 percent (b), to of award a certified opportunity 19 scholarships under Section 29.557 to eligible students to attend 20 qualified nonpublic schools in this state; and 21 22 23 24 25 (2)AAnot more than 20 percent to award opportunity scholarships under Section 29.557 to eligible students to attend: (A)AAtuition-supported prekindergarten programs at public schools in this state; or (B)AAeducational after-school programs, if the 26 eligible students receiving the opportunity scholarships to attend 27 after-school programs attend public schools in this state. 4 S.B.ANo.A1410 (b)AAIf 1 a certified scholarship Subsection (a)(1) or (2) who applies for a school year but does not 4 award the maximum amount of the organization 's money allowed by the 5 applicable subdivision for the year, the certified organization 6 shall 7 applicable subdivision for the year and use the money to award 8 opportunity 9 applicable subdivision for subsequent school years. scholarships remaining to student maximum 3 the eligible the opportunity forward each awards 2 carry to organization money eligible described available students under described Sec.A29.557.AAAWARD OF OPPORTUNITY SCHOLARSHIPS. 10 by the by the (a) For 11 each school year a certified organization shall award opportunity 12 scholarships according to the allocations prescribed by Section 13 29.556(a) 14 section. to eligible certified students who apply (b)AAA 16 scholarships 17 (1)AAthe 18 according certified to the organization award by this groups in the manner provided by Subsections (c) and (d): applicants shall provided 15 to organization as opportunity following shall priority give first 19 priority to applicants, and the siblings of those applicants, who 20 were 21 organization for the current school year and who are applying to 22 renew the opportunity scholarship for the next school year; awarded 23 an (2)AAthe opportunity certified scholarship organization by the shall certified give second 24 priority 25 assigned a performance rating of unacceptable performance under 26 Section 39.054; and 27 to applicants (3)AAthe who currently certified attend organization 5 a campus shall that give is third S.B.ANo.A1410 1 priority to all other applicants. 2 (c)AAA certified organization may not award an opportunity 3 scholarship to an applicant in the priority group described by 4 Subsection 5 organization awards an opportunity scholarship to each eligible 6 student in the priority group described by Subsection (b)(1) who 7 applies for that year. A certified organization may not award an 8 opportunity 9 described (b)(2) for scholarship by Subsection a to school an year unless applicant (b)(3) for a in the the school certified priority year group unless the 10 certified organization awards an opportunity scholarship to each 11 eligible student in the priority groups described by Subsections 12 (b)(1) and (2) who apply for that year. (d)AAIf 13 a certified to is one but or to not all, award an opportunity 15 students in a priority group described by Subsection (b) who apply, 16 the certified organization shall use a lottery system to award 17 opportunity scholarships to eligible students in that group who 18 apply. Sec.A29.558.AALIMITATION ON more, able 14 19 scholarship organization AMOUNTS OF eligible OPPORTUNITY 20 SCHOLARSHIPS. 21 for a school year to a student to attend a qualified nonpublic 22 school or a tuition-supported prekindergarten program at a public 23 school may not exceed the amount of funding equal to 80 percent of 24 the statewide average amount of state and local funding provided to 25 school districts under Chapter 42 for a student in average daily 26 attendance. 27 (a) The amount of an opportunity scholarship awarded (b)AAThe amount of an opportunity scholarship awarded for a 6 S.B.ANo.A1410 1 school year to a student to attend an educational after-school 2 program may not exceed $1,000. 3 4 Sec.A29.559.AAELIGIBILITY OF STUDENTS. (a) A student is eligible for an opportunity scholarship if: 5 (1)AAresides in the state of Texas; 6 (2)AAattended a public school for the majority of a 7 preceding year; and either (A)AAis 8 at risk 9 (B)AAresides dropping out of school as defined in Section 29.081; or, 10 of in a household that had, in the 11 household 's 12 household 13 guidelines 14 reduced-price lunch program established under 42 U.S.C. Section 15 1751 et seq. 16 (b) most income recently not necessary filed greater to federal than qualify 200 for income percent the tax of return, the national a income free or A child who establishes eligibility under Subsection 17 (a) is entitled to continue participating until the earlier of the 18 date on which the child graduates from high school or the child 's 19 21st birthday. 20 Sec.A29.560.AANONPUBLIC SCHOOL REQUIREMENTS. (a) A 21 certified organization may not award an opportunity scholarship for 22 a student to attend a nonpublic school unless the nonpublic school: 23 24 (1)AAis accredited by an organization that is recognized by the Texas Private School Accreditation Commission; 25 (2)AAannually administers a nationally norm-referenced 26 assessment instrument or each appropriate assessment instrument 27 required under Section 39.023; 7 S.B.ANo.A1410 (3)AAqualifies 1 2 a school at which a student may fulfill this state 's compulsory attendance requirements; (4)AAis not in violation of the federal Civil Rights Act 3 4 as of 1964 (42 U.S.C. Section 2000a et seq.); 5 (5)AAholds a valid certificate of occupancy; and 6 (6)AAhas written policy statements regarding: 7 (A)AAadmissions; 8 (B)AAcurriculum; 9 (C)AAsafety; 10 (D)AAfood service inspection; and 11 (E)AAstudent to teacher ratios. (b)AAA 12 nonpublic school that enrolls or accepts for 13 enrollment a student who applies for or is awarded an opportunity 14 scholarship shall provide to the certified organization to which 15 the student applies or that awards the opportunity scholarship a 16 notarized affidavit, with supporting documents, showing that the 17 nonpublic school meets the requirements of Subsection (a). Sec.A29.561.AARULES; PROCEDURES. 18 (a) The comptroller shall 19 adopt rules and procedures to implement, administer, and enforce 20 this subchapter. 21 (b)AAA rule adopted under Subsection (a) is binding on any 22 state 23 subdivision, as necessary to implement, administer, and enforce 24 this subchapter. 25 26 27 or local governmental entity, including a political SECTIONA2.AASubtitle B, Title 3, Insurance Code, is amended by adding Chapter 230 to read as follows: CHAPTER 230. CREDIT AGAINST PREMIUM TAXES 8 S.B.ANo.A1410 1 FOR DONATIONS TO TEXAS EQUAL OPPORTUNITY SCHOLARSHIP PROGRAM SUBCHAPTER A. 2 Sec.A230.001.AADEFINITIONS. 3 by Section 29.551, Education Code. (2)AA"State premium tax liability" means any liability 6 7 In this chapter: (1)AA"Certified organization" has the meaning assigned 4 5 GENERAL PROVISIONS incurred by an entity under Chapters 221 through 226. SUBCHAPTER B. 8 Sec.A230.051.AAELIGIBILITY. 9 CREDIT An entity is eligible for a 10 credit against the entity 's state premium tax liability in the 11 amount and under the conditions and limitations provided by this 12 chapter. Sec.A230.052.AAAMOUNT 13 OF CREDIT; LIMITATION ON RETURN OF 14 CREDIT. (a)AAThe amount of the credit is equal to the lesser of the 15 amount of donations made to a certified organization or fifteen 16 percent of the entity 's state premium tax liability after applying 17 any other applicable credits. (b)AAAn 18 entity is not entitled to have a donation to a 19 certified organization returned because of a change in the entity 's 20 state premium tax liability or in the amount of the entity ' tax s 21 credit allowed under this chapter as a result of a federal or state 22 audit, 23 change in the entity 's tax liability. The certified organization to 24 which an entity makes a donation shall notify the entity of this 25 provision. 26 27 assessment, redetermination, amended Sec.A230.053.AAAPPLICATION FOR CREDIT. return, (a) or similar An entity must apply for a credit under this chapter on or with the tax return for 9 S.B.ANo.A1410 1 the taxable year for which the credit is claimed. (b)AAThe comptroller shall adopt a form for the application 2 3 for the credit. An entity must use this form in applying for the 4 credit. The comptroller shall make the form available in electronic 5 and paper format in the same manner as other tax forms. Sec.A230.054.AARULES; 6 PROCEDURES. (a) The comptroller 7 shall adopt rules and procedures to implement, administer, and 8 enforce this chapter. (b)AAA rule adopted under Subsection (a) is binding on any 9 10 state or local governmental entity, including a political 11 subdivision, as necessary to implement, administer, and enforce 12 this chapter. 13 Sec.A230.055.AAASSIGNMENT PROHIBITED; EXCEPTION. An entity 14 may not convey, assign, or transfer the credit allowed under this 15 chapter to another entity unless all of the assets of the entity are 16 conveyed, assigned, or transferred in the same transaction. 17 SECTIONA3.AAChapter 18 Subchapter K to read as follows: 171, Tax Code, is amended by adding 19 SUBCHAPTER K. TAX CREDIT FOR DONATIONS TO TEXAS EQUAL OPPORTUNITY 20 SCHOLARSHIP PROGRAM 21 Sec.A171.601.AADEFINITION. In this subchapter, "certified 22 organization" has the meaning assigned by Section 29.551, Education 23 Code. 24 Sec.A171.602.AAENTITLEMENT TO CREDIT. A taxable entity is 25 entitled to a credit in the amount and under the conditions and 26 limitations provided by this subchapter against the tax imposed 27 under this chapter. 10 S.B.ANo.A1410 Sec.A171.603.AAQUALIFICATION. 1 A taxable entity qualifies 2 for a credit under this subchapter if the taxable entity donates 3 money to a certified organization. 4 Sec.A171.604.AAAMOUNT (a) OF CREDIT; LIMITATION ON RETURN OF 5 CREDIT. The amount of the credit is equal to the lesser of the 6 amount of donations made to a certified organization during the 7 privilege period or fifteen percent of the amount of franchise tax 8 due, after applying any other applicable credits. 9 (b)AAA taxable entity is not entitled to have a donation 10 returned because of a change in the taxable entity 's tax liability 11 under this chapter or in the amount of the taxable entity 's tax 12 credit allowed under this subchapter as a result of a federal or 13 state 14 similar change in the taxable entity 's tax liability. The certified 15 organization 16 notify the taxable entity of this provision. audit, assessment, to which a redetermination, taxable entity makes Sec.A171.605.AAAPPLICATION FOR CREDIT. 17 amended a (a) return, donation or shall A taxable entity 18 must apply for a credit under this subchapter on or with the tax 19 report for the period for which the credit is claimed. (b)AAThe comptroller shall adopt a form for the application 20 21 for the credit. 22 the 23 electronic and paper format in the same manner as other tax forms. 24 credit. A taxable entity must use this form in applying for The comptroller Sec.A171.606.AARULES; shall make PROCEDURES. the (a) form The available in comptroller 25 shall adopt rules and procedures to implement, administer, and 26 enforce this subchapter. 27 (b)AAA rule adopted under Subsection (a) is binding on any 11 S.B.ANo.A1410 1 state or local governmental entity, including a political 2 subdivision, as necessary to implement, administer, and enforce 3 this subchapter. Sec.A171.607.AAASSIGNMENT PROHIBITED; EXCEPTION. 4 A taxable 5 entity may not convey, assign, or transfer the credit allowed under 6 this subchapter to another taxable entity unless all assets of the 7 taxable entity are conveyed, assigned, or transferred in the same 8 transaction. SECTIONA4.AA(a) 9 The constitutionality and other validity 10 under the state or federal constitution of all or any part of 11 Subchapter N, Chapter 29, Education Code, Chapter 230, Insurance 12 Code, or 13 may 14 district court in Travis County under Chapter 37, Civil Practice 15 and Remedies Code. be Subchapter K, Chapter 171, Tax Code, as added by this Act, determined in an action for declaratory judgment in a 16 (b)AAAn appeal of a declaratory judgment or order, however 17 characterized, of a district court, including an appeal of the 18 judgment of an appellate court, holding or otherwise determining 19 that all or any part of Subchapter N, Chapter 29, Education Code, 20 Chapter 230, Insurance Code, or Subchapter K, Chapter 171, Tax 21 Code, as added by this Act, is constitutional or unconstitutional, 22 or 23 constitution is an accelerated appeal. 24 otherwise (c)AAIf valid the or invalid, judgment or under order the is state or federal interlocutory, an 25 interlocutory appeal may be taken from the judgment or order and is 26 an accelerated appeal. 27 (d)AAA district court in Travis County may grant or deny a 12 S.B.ANo.A1410 1 temporary or otherwise 2 injunction 3 unconstitutionality, or other validity or invalidity, under the 4 state or federal constitution of all or any part of Subchapter N, 5 Chapter 6 Subchapter K, Chapter 171, Tax Code, as added by this Act. on 29, the interlocutory grounds Education Code, of injunction the Chapter or a permanent constitutionality 230, Insurance Code, or or 7 (e)AAThere is a direct appeal to the supreme court from an 8 order, however characterized, of a trial court granting or denying 9 a temporary or otherwise interlocutory injunction or a permanent 10 injunction on 11 unconstitutionality, or other validity or invalidity, under the 12 state or federal constitution of all or any part of Subchapter N, 13 Chapter 14 Subchapter K, Chapter 171, Tax Code, as added by this Act. 29, the grounds Education Code, of the Chapter constitutionality 230, Insurance Code, or or 15 (f)AAThe direct appeal is an accelerated appeal. 16 (g)AAThis section exercises the authority granted by Section 17 3-b, Article V, Texas Constitution. (h)AAThe filing of a direct appeal under this section will 18 19 automatically 20 injunction or permanent injunction granted in accordance with this 21 section pending final determination by the supreme court, unless 22 the 23 seeking such injunctive relief has pleaded and proved that: 24 25 supreme stay court any makes temporary specific or otherwise findings that interlocutory the applicant (1)AAthe applicant has a probable right to the relief it seeks on final hearing; and 26 (2)AAthe applicant will suffer a probable injury that 27 is imminent and irreparable, and that the applicant has no other 13 S.B.ANo.A1410 1 adequate legal remedy. (i)AAAn 2 appeal under accelerated, this direct appeal, including interlocutory, 4 applicable, by the Texas Rules of Appellate Procedure, including 5 Rules 6 38.6(a) and (b), 40.1(b), and 49.4. SECTIONA5.AAA 7 26.1(b), credit 28.1, may be 28.3, is an 3 25.1(d)(6), or section, 32.1(g), claimed under governed, as 37.3(a)(1), Chapter 230, 8 Insurance Code, or Subchapter K, Chapter 171, Tax Code, as added by 9 this Act, only for a donation made on or after January 1, 2014. SECTIONA6.AASubchapter 10 N, Chapter 29, Education Code, as 11 added by this Act, applies beginning with the 2013-2014 school 12 year. 13 14 SECTIONA7.AA(a) Except as provided by Subsection (b) of this section: 15 (1)AAthis Act takes effect immediately if it receives a 16 vote of two-thirds of all the members elected to each house, as 17 provided by Section 39, Article III, Texas Constitution; and 18 19 20 21 (2)AAif this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2013. (b)AAChapter 230, Insurance Code, and Subchapter K, Chapter 171, Tax Code, as added by this Act, take effect January 1, 2014. 14