HB 984

relating to the establishment of an empowerment scholarship account
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
(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
(6)  "Postsecondary educational institution" means:
(A)  an institution of higher education or a
private or independent institution of higher education as defined
(B)  a career school or college as defined by
(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
(3)  promote and preserve the liberties and rights of
(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
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
(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
Sec. 29.355.  ENROLLMENT IN PROGRAM.  (a)  A parent of an
eligible child may enroll the child in the program for the following
(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
(1)  expenses allowed under the program under Section
(2)  expense reporting requirements; and
(3)  a description of the responsibilities of program
participants and the duties of the comptroller under this
Sec. 29.356.  PARTICIPATION IN PROGRAM.  (a)  To receive
funding under the program, a parent of an eligible child must agree
(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
(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:
(A)  at a private school accredited by an
organization that is recognized by the Texas Private School
(B)  at a postsecondary educational institution;
(C)  for an online educational course or program;
(2)  the purchase of textbooks or other instructional
(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
(5)  fees for services provided by a private tutor or
(6)  for a child with a disability, fees for
educational therapies or services provided by a practitioner or
(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
(9)  fees for the management of the participant's
account charged by a financial institution.
(b)  Expenses allowed under Subsection (a) do not include
(1)  consumable supplies, including paper, pens,
pencils, folders, and notebooks;
(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
(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
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
(2)  the amount the child's parent receives under
(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
(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
(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
(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
(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
(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
(c)  On the expiration of the 10-day period under Subsection
(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
(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
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
(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
(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
(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
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
(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
(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
(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,
(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
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
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
(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
(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.
(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
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
SECTION 3.  Notwithstanding Section 29.359(b), Education
Code, as added by this Act, not later than September 15, 2026, 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 2026-2027
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, 2025.