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SB 2
Texas Senate•Passed
Summary
SB 2, “Relating to the establishment of an education savings account program”, was introduced in the Senate on Jan 24, 2025 by Sen. Charles Creighton (R) with 89 co-sponsors. It last saw action on May 3, 2025: Effective on 9/1/25.
Record
Text
SB 2 has 89 co-sponsors and 74 roll calls.
sb2/enrolled.txtS.B. No. 2AN ACTrelating to the establishment of an education savings accountprogram.BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:SECTION 1. The purpose of this Act is to:(1) provide additional educational options to assistfamilies in this state in exercising the right to direct theeducational needs of their children; and(2) achieve a general diffusion of knowledge.SECTION 2. Chapter 29, Education Code, is amended by addingSubchapter J to read as follows:SUBCHAPTER J. EDUCATION SAVINGS ACCOUNT PROGRAMSec. 29.351. DEFINITIONS. In this subchapter:(1) "Account" means an education savings accountestablished under the program.(2) "Certified educational assistance organization"means an organization certified under Section 29.354 to support theadministration of the program.(3) "Child with a disability" means a child who iseligible to participate in a school district's special educationprogram under Section 29.003.(4) "Higher education provider" means an institutionof higher education or a private or independent institution ofhigher education, as those terms are defined by Section 61.003.(5) "Parent" means a resident of this state who is anatural or adoptive parent, managing or possessory conservator,legal guardian, custodian, or other person with legal authority toact on behalf of a child.(6) "Participating child" means a child enrolled inthe program.(7) "Participating parent" means a parent of aparticipating child.(8) "Program" means the program established under thissubchapter.(9) "Program participant" means a participating childor a participating parent.Sec. 29.352. ESTABLISHMENT OF PROGRAM. (a) Thecomptroller shall establish and administer a program to providefunding for approved education-related expenses of childrenparticipating in the program and has the authority to:(1) execute contracts, agreements, and otherinstruments for goods and services;(2) engage the services of private consultants,actuaries, trustees, records administrators, managers, and legalcounsel for administrative and technical assistance; and(3) perform any duty assigned to a certifiededucational assistance organization under this subchapter.(b) The program confers a state benefit to programparticipants in addition to a free public education.Sec. 29.3521. AMOUNT OF APPROPRIATION; LIMITATION ONEXPENDITURES. (a) In the comptroller's legislative appropriationsrequest for each state fiscal biennium, the comptroller shall statethe amount of money necessary for the biennium to provide the amountspecified under Section 29.361 for each:(1) participating child;(2) child on the waiting list maintained by thecomptroller under Section 29.356(f) on the January 1 preceding thebiennium; and(3) child who is a sibling of a participating child andis eligible for the program under Section 29.355 for the first timeduring that biennium.(b) For purposes of Subsection (a), the comptroller shallspecify the amount described by that subsection for the first statefiscal year of the biennium and estimate the amount required for thesecond state fiscal year of the biennium.(c) Notwithstanding the amount stated in the comptroller'slegislative appropriations request under Subsection (a), theamount appropriated for purposes of the program for a state fiscalbiennium must be established by the legislature by appropriationfor that biennium.(c-1) Notwithstanding any other law, for the state fiscalbiennium beginning September 1, 2025, the amount spent for purposesof the program may not exceed $1 billion. This subsection expiresSeptember 1, 2027.(d) Notwithstanding any other provision of this subchapter,for each school year, the total amount of money spent for purposesof participation in the program by children described by Section29.356(b)(2)(D) may not exceed 20 percent of the amount of moneyappropriated from the program fund for that school year. Inallocating money under the program in accordance with thissubsection, the comptroller shall ensure children who were enrolledin a school district or open-enrollment charter school for at least90 percent of the preceding school year are prioritized.Sec. 29.353. PROGRAM FUND. (a) The program fund is anaccount in the general revenue fund to be administered by thecomptroller.(b) The fund is composed of:(1) general revenue transferred to the fund;(2) money appropriated to the fund;(3) interest and other earnings attributable to theinvestment of money in the fund;(4) gifts, grants, and donations received underSection 29.370; and(5) any other money available for purposes of theprogram.(c) Money in the fund may be used only for the purposesspecified by this subchapter.Sec. 29.3535. PROMOTION OF PROGRAM. Notwithstanding anyother law, the comptroller or the comptroller's designee may enterinto contracts or agreements and engage in marketing, advertising,and other activities to promote, market, and advertise thedevelopment and use of the program. The comptroller may use moneyfrom the program fund to pay for activities authorized under thissection.Sec. 29.354. SELECTION OF CERTIFIED EDUCATIONAL ASSISTANCEORGANIZATIONS. (a) An organization may apply to the comptrollerfor certification as a certified educational assistanceorganization during an application period established by thecomptroller.(b) To be eligible for certification, an organization must:(1) have the ability to perform one or more of theduties and functions required of a certified educational assistanceorganization under this subchapter;(2) be registered to do business in this state; and(3) be able to assist the comptroller in administeringthe program wholly or partly, including the ability to:(A) accept, process, and track applications forthe program;(B) assist prospective applicants, applicants,and program participants with finding preapproved educationservice providers and vendors of educational products;(C) accept and process payments for approvededucation-related expenses;(D) verify that program funding is used only forapproved education-related expenses;(E) verify that a program participant is eligibleto participate in the program;(F) accept, track, review, and resolve inquiriesand complaints received regarding the program; and(G) establish and maintain acomptroller-approved Internet website for the program.(c) The comptroller shall establish cybersecurityrequirements for certified educational assistance organizations,including the implementation of best practices developed underSection 2054.5181, Government Code.(d) The comptroller may certify not more than fiveeducational assistance organizations to support the administrationof the program, including by:(1) administering wholly or partly:(A) the application process under Section29.356; and(B) the program expenditures process underSection 29.360; and(2) assisting prospective applicants, applicants, andprogram participants with understanding approved education-relatedexpenses and finding preapproved education service providers andvendors of educational products.(e) A certified educational assistance organizationdesignated to perform duties described by Subsection (d)(2) shall:(1) communicate with parents interested inparticipating in the program and program participants throughsynchronous and asynchronous communication, prioritizingsynchronous communication, regarding:(A) the educational options available in thisstate;(B) how and when to apply to the program andpreapproved education service providers;(C) how to manage an account, includingrequesting payments;(D) program requirements; and(E) any other information necessary to fulfillthe organization's responsibilities under this subchapter; and(2) raise awareness regarding the availability of theprogram.(f) The comptroller may designate a certified educationalassistance organization to establish and maintain acomptroller-approved Internet website for the program.Sec. 29.355. ELIGIBLE CHILD. (a) A child is eligible toparticipate in the program and may, subject to available funding,enroll in the program for the semester following the semester inwhich the child's application is submitted under Section 29.356 if:(1) the child's parent establishes that the child is acitizen or national of the United States or was lawfully admittedinto the United States; and(2) the child is eligible to:(A) attend a school district or open-enrollmentcharter school under Section 25.001, including if the child is achild of a parent who is an active duty member of the United Statesarmed forces; or(B) enroll in a school district's oropen-enrollment charter school's prekindergarten program underSection 29.153.(a-1) A child's parent may establish proof of the child'sresidency in this state for purposes of verifying the child'seligibility to participate in the program under Subsection (a)(2)by submitting any of the following documents in the parent's name:(1) a utility bill;(2) a lease agreement or mortgage statement;(3) a driver's license or state ID;(4) a voter registration certificate;(5) a letter from a government agency; or(6) a notarized affidavit of residency.(b) A child who establishes eligibility under this sectionmay, subject to available funding and the requirements of thissubchapter, participate in the program until the earliest of thedate on which:(1) the child graduates from high school;(2) the child is no longer eligible to either attend aschool district or open-enrollment charter school under Section25.001 or enroll in a school district's or open-enrollment charterschool's prekindergarten program under Section 29.153, asapplicable;(3) the child enrolls in a school district oropen-enrollment charter school in a manner in which the child willbe counted toward the district's or school's average dailyattendance for purposes of the allocation of funding under theFoundation School Program; or(4) the child is declared ineligible for the programby the comptroller under this subchapter.Sec. 29.356. APPLICATION TO PROGRAM. (a) A parent of aneligible child may apply to a certified educational assistanceorganization designated by the comptroller to enroll the child inthe program for the following semester, term, or school year, asdetermined by the comptroller. The comptroller shall establishdeadlines by which an applicant must complete and submit anapplication form to participate in the program.(b) On receipt of more acceptable applications during anapplication period for admission under this section than availablepositions in the program due to insufficient funding, a certifiededucational assistance organization shall, at the direction of thecomptroller, fill the available positions by lottery of applicants,approving applicants:(1) in the following order:(A) siblings of participating children;(B) children to whom Paragraph (C) does notapply; and(C) children who previously ceased participationin the program due to enrollment in a school district oropen-enrollment charter school; and(2) within each of the groups described by Subdivision(1), in the following order, as applicable:(A) children with a disability who are members ofa household with a total annual income that is at or below 500percent of the federal poverty guidelines;(B) children who are members of a household witha total annual income that is at or below 200 percent of the federalpoverty guidelines;(C) children who are members of a household witha total annual income that is above 200 percent of the federalpoverty guidelines and below 500 percent of the federal povertyguidelines; and(D) children who are members of a household witha total annual income that is at or above 500 percent of the federalpoverty guidelines.(c) For purposes of Subsection (b), a certified educationalassistance organization that receives an application from aneligible child and the child's eligible sibling during the sameapplication cycle and approves the child's application shallapprove the sibling's application at the same time.(d) The comptroller shall adopt rules necessary toadminister Subsection (b). The comptroller shall provide forposting on the Internet website established and maintained for theprogram any rule adopted under this subsection.(e) The comptroller shall create an application form for theprogram and make the application form readily available throughvarious sources, including the Internet website established andmaintained for the program. The application form must state theapplication deadlines established by the comptroller underSubsection (a). Each certified educational assistanceorganization shall ensure that the organization is capable ofreceiving the application form, including any required supportingdocument, electronically.(f) The comptroller shall create and maintain a waiting listbased on the priority categories described by Subsection (b) forapplicants if, during an application period, there are moreacceptable applications for admission than there are availablepositions.(g) Each certified educational assistance organizationdesignated under Subsection (a) shall provide for posting on theInternet website established and maintained for the program acomptroller-approved applicant and participant handbook with adescription of the program, including:(1) expenses allowed under the program under Section29.359;(2) a list of preapproved education service providersand vendors of educational products under Section 29.358;(3) a description of the application process underthis section and the program expenditures process under Section29.360; and(4) a description of the responsibilities of programparticipants.(h) Each certified educational assistance organizationdesignated under Subsection (a) shall annually provide to eachparticipating parent served by the organization the informationdescribed by Subsection (g). The organization may provide theinformation electronically.(i) The comptroller or a certified educational assistanceorganization designated under Subsection (a):(1) may require the participating parent to submitannual notice regarding the parent's intent for the child tocontinue participating in the program for the next school year; and(2) may not require a program participant in goodstanding to annually resubmit an application for continuedparticipation in the program.(j) The agency shall provide to the comptroller theinformation necessary to make the determinations required underSubsection (b).Sec. 29.357. PARTICIPATION IN PROGRAM. (a) To receivefunding under the program, a participating parent must agree to:(1) request that program money be spent only forexpenses allowed under Section 29.359;(2) share or authorize the administrator of anassessment instrument to share with the program participant'scertified educational assistance organization the results of anyassessment instrument required to be administered to the childunder Section 29.358(b)(2)(B) or other law;(3) refrain from selling an item purchased withprogram money; and(4) notify the program participant's certifiededucational assistance organization not later than 30 business daysafter the date on which the child:(A) enrolls in a school district oropen-enrollment charter school;(B) graduates from high school; or(C) is no longer eligible to either:(i) enroll in a school district oropen-enrollment charter school under Section 25.001; or(ii) enroll in a school district's oropen-enrollment charter school's prekindergarten program underSection 29.153.(b) The administrator of an assessment instrument requiredto be administered under Section 29.358(b)(2)(B) or other law shallshare with a parent the participating child's results on theassessment instrument, including, if available, the participatingchild's percentile rank. A child's results and rank on anassessment instrument administered under this section areconfidential, are not subject to disclosure under Chapter 552,Government Code, and may only be shared as necessary to fulfill therequirements of this subchapter. In providing the results and rankfor an assessment instrument, the administrator shall ensurecompliance with state and federal law regarding the confidentialityof student educational information, including the FamilyEducational Rights and Privacy Act of 1974 (20 U.S.C. Section1232g).Sec. 29.358. PREAPPROVED PROVIDERS AND VENDORS. (a) Thecomptroller shall by rule establish a process for the preapprovalof education service providers and vendors of educational productsfor participation in the program. The comptroller shall allow forthe submission of applications on a rolling basis.(b) The comptroller shall approve an education serviceprovider or vendor of educational products for participation in theprogram if the provider or vendor:(1) has previously been approved by the agency toprovide supplemental special education services under SubchapterA-1 and remains in good standing with the agency;(2) for a private school, demonstrates:(A) accreditation by an organization recognizedby:(i) the Texas Private School AccreditationCommission; or(ii) the agency;(B) annual administration for students in grades3 through 12 of a nationally norm-referenced assessment instrumentor the appropriate assessment instrument required under SubchapterB, Chapter 39; and(C) the school has continuously operated a campusfor at least two school years preceding the date the school seeksapproval under this section;(3) for a school district or open-enrollment charterschool, demonstrates:(A) accreditation by the agency; and(B) the ability to provide services or productsto participating children in a manner in which the children are notcounted toward the district's or school's average daily attendance;(4) for a private tutor, therapist, or teachingservice, demonstrates that:(A) the tutor or therapist or each employee ofthe teaching service who intends to provide educational services toa participating child:(i) is an educator employed by or a retirededucator formerly employed by a school accredited by the agency, anorganization recognized by the agency, or an organizationrecognized by the Texas Private School Accreditation Commission;(ii) holds a relevant license oraccreditation issued by a state, regional, or nationalcertification or accreditation organization; or(iii) is employed in or retired from ateaching or tutoring capacity at a higher education provider;(B) the tutor or therapist or each employee ofthe teaching service who intends to provide educational services toa participating child provides to the comptroller a nationalcriminal history record information review completed for the tutor,therapist, or employee, as applicable, within a period establishedby comptroller rule or authorizes the comptroller or thecomptroller's designee to conduct a national criminal historyrecord information review of the tutor, therapist, or employee asprescribed by comptroller rule; and(C) the tutor or therapist or each employee ofthe teaching service who intends to provide educational services toa participating child is not:(i) required to be discharged or refused tobe hired by a school district under Section 22.085; or(ii) included in the registry under Section22.092;(5) for a higher education provider, demonstratesnationally recognized postsecondary accreditation; or(6) notwithstanding Subdivision (2), for a privateprovider serving children in prekindergarten or kindergarten,demonstrates that the provider meets the requirements to be aneligible private provider under Section 29.171.(b-1) The comptroller may approve a vendor of educationalproducts that provides products or services described by Section29.359(a)(1)(C), (2), (4), (6), (8), or (9) for participation inthe program in accordance with comptroller rule.(c) The comptroller may approve only an education serviceprovider located in this state or vendor of educational productsregistered to do business in this state.(d) An education service provider or vendor of educationalproducts shall provide information requested by the comptroller toverify the provider's or vendor's eligibility for preapproval underthis section. The comptroller may not approve a provider or vendorif the comptroller cannot verify the provider's or vendor'seligibility for preapproval.(e) Each applicant for approval under this section shallsubmit to the comptroller documentation demonstrating that eachperson employed by the applicant or provider who will interact witha participating child is not identified as having engaged inmisconduct described by Section 22.093(c)(1)(A) or (B) using theinteragency reportable conduct search engine established underChapter 810, Health and Safety Code.(f) The comptroller or the comptroller's designee shallreview the documentation for each person described by Subsection(e). Each applicant for approval under this section must providethe comptroller or the comptroller's designee with any informationrequested by the comptroller or designee to enable the comptrolleror designee to complete the review.(g) An education service provider or vendor of educationalproducts must agree to:(1) abide by the disbursement schedule under Section29.360(c) and all other requirements of this subchapter;(2) accept money from the program only foreducation-related expenses approved under Section 29.359;(3) notify the comptroller not later than the 30th dayafter the date that the provider or vendor no longer meets therequirements of this section; and(4) return any money received, including any interestor other additions received related to the money, in violation ofthis subchapter or other relevant law to the comptroller fordeposit into the program fund.(h) An education service provider or vendor of educationalproducts that receives approval under this section may participatein the program until the earliest of the date on which the provideror vendor:(1) no longer meets the requirements under thissection; or(2) violates this subchapter or other relevant law.Sec. 29.3585. PROVIDER AND VENDOR SUSPENSION AND REMOVAL.(a) The comptroller shall immediately suspend a preapprovededucation service provider or vendor of educational products onfinding that the provider or vendor:(1) is ineligible under this subchapter forparticipation in the program; or(2) has failed to remain in good standing by complyingwith a program requirement under this subchapter or otherapplicable law.(b) A payment may not be made from a program participant'saccount to a suspended provider or vendor.(c) On suspension under this section, the comptroller shallimmediately send notice of the suspension to the suspended provideror vendor and each certified educational assistance organization byfirst class mail and e-mail. The notice must include a statementthat:(1) specifies the grounds for suspending the provideror vendor;(2) no additional payments may be made to the provideror vendor from a program participant's account during theprovider's or vendor's suspension; and(3) the provider or vendor has 30 days to respond andtake any corrective action required to comply with programrequirements and applicable law.(d) Not later than the 30th day after the date thecomptroller provides notice of suspension under Subsection (c), thecomptroller shall:(1) remove the provider or vendor from the program;(2) conditionally reinstate the provider or vendor andrequire the provider or vendor to perform a specified action; or(3) unconditionally reinstate the provider or vendor.(e) On removing a provider or vendor from the program, thecomptroller shall notify the provider or vendor and each certifiededucational assistance organization of the removal.Sec. 29.359. APPROVED EDUCATION-RELATED EXPENSES. (a)Subject to Subsection (b), a participating parent may request thatprogram money be spent only for the following education-relatedexpenses incurred by a participating child at a preapprovededucation service provider or vendor of educational products:(1) tuition and fees for:(A) a private school;(B) a higher education provider;(C) an online educational course or program; or(D) a program that provides training for anindustry-based credential approved by the agency;(2) the purchase of textbooks or other instructionalmaterials or uniforms required by a private school, highereducation provider, or course in which the child is enrolled,including purchases made through a third-party vendor ofeducational products;(3) fees for classes or other educational servicesprovided by a school district or open-enrollment charter school ifthe classes or services do not qualify the child to be included inthe school's average daily attendance;(4) costs related to academic assessments;(5) fees for services provided by a private tutor orteaching service;(6) fees for transportation provided by afee-for-service transportation provider for the child to travel toand from a preapproved education service provider or vendor ofeducational products;(7) fees for educational therapies or servicesprovided by a practitioner or provider, only for fees that are notcovered by any federal, state, or local government benefits such asMedicaid or the Children's Health Insurance Program (CHIP) or byany private insurance that the child is enrolled in at the time ofreceiving the therapies or services;(8) costs of computer hardware or software and othertechnological devices required by an education service provider orvendor of educational products or prescribed by a physician tofacilitate a child's education, not to exceed in any year 10 percentof the total amount transferred to the participating child'saccount that year; and(9) costs of breakfast or lunch provided to a childduring the school day by a private school.(b) Money transferred under the program to a participatingchild's account may not be used to pay any person who is related tothe program participant within the third degree by consanguinity oraffinity, as determined under Chapter 573, Government Code.(c) A finding that a program participant requested thatprogram money be spent to pay for an expense not allowed underSubsection (a) does not affect the validity of any paymentrequested by the participant for an approved education-relatedexpense that is allowed under that subsection.Sec. 29.360. PROGRAM EXPENDITURES. (a) The comptrollershall disburse from the program fund to each certified educationalassistance organization the amount specified under Section29.361(a) for each participating child served by the organization.(b) To initiate payment to an education service provider orvendor of educational products for an education-related expenseapproved under Section 29.359, the participating parent must submita request in a form prescribed by comptroller rule to the certifiededucational assistance organization that serves the child.(c) Subject to Subsection (d) and Sections 29.362(f) and29.364, on receiving a request under Subsection (b), a certifiededucational assistance organization shall verify that the requestis for an expense approved under Section 29.359 and, not later thanthe 10th business day after the date the organization verifies therequest, send payment to the education service provider or vendorof educational products.(d) A disbursement under this section may not exceed theapplicable participating child's account balance.(e) A certified educational assistance organization shallprovide participating parents with electronic access to:(1) view the participating child's current accountbalance;(2) initiate the payment request process underSubsection (b); and(3) view a summary of past account activity, includingpayments from the account to education service providers andvendors of educational products.(f) A payment system established by a certified educationalassistance organization may not allow a program participant to:(1) withdraw cash or remove funds from a participatingchild's account; or(2) receive payment or reimbursement directly from theprogram.(g) A certified educational assistance organization may notrequire a program participant to pay a fee to the organization or anaffiliate of the organization related to the use of a participatingchild's account, including a transaction fee.Sec. 29.361. AMOUNT OF TRANSFER TO PARTICIPANT ACCOUNT;FINANCING. (a) Regardless of the deadline by which theparticipating parent applies for enrollment in the program underSection 29.356(a) and except as provided by Subsections (b), (b-1),and (d) of this section, a certified educational assistanceorganization shall transfer in accordance with Section 29.362 eachschool year that a participating child participates in the programmoney distributed to the organization from money available underSection 29.353 to the child's account to be held in trust for thebenefit of the child in an amount equal to:(1) 85 percent of the estimated statewide averageamount of state and local funding per student in average dailyattendance for the most recent school year for which thatinformation is available, as provided by the agency; or(2) for a child with a disability, subject toSubsection (b), the sum of the amount described by Subdivision (1)and the amount the school district in which the child wouldotherwise be enrolled would be entitled to receive for the childcalculated based on the child's individualized education program,as determined in accordance with Section 29.3615, and theprovisions of Chapter 48 that provide funding based on a child'sparticipation in a school district's special education programunder Subchapter A applicable for the school year preceding theschool year in which the child initially enrolls in the program.(b) The amount transferred to the account of a child with adisability for a school year under Subsection (a)(2) may not exceed$30,000.(b-1) Notwithstanding Subsection (a), a participating childwho is a home-schooled student, as defined by Section 29.916(a)(1),may not receive transfers under the program to the child's accountunder Subsection (a) in an amount that exceeds $2,000 for a schoolyear.(c) In determining the estimated statewide average amountof state and local funding per student in average daily attendancefor a school year under Subsection (a), the commissioner shall:(1) make the determination not later than January 15preceding the school year; and(2) include projected state and local funding underChapters 48 and 49 and the amount the state is required tocontribute to the Teacher Retirement System of Texas under Section825.404, Government Code, for the school year.(d) If a child enrolls in the program after the beginning ofa school year, the comptroller shall prorate the amount transferredto the participating child's account under Subsection (a) based onthe date the child enrolls in the program.(e) Any money remaining in a participating child's accountat the end of a fiscal year is carried forward to the next fiscalyear unless another provision of this subchapter mandates theclosure of the account.(f) A participating parent may make payments for theexpenses of educational programs, services, and products notcovered by money in the account of the parent's child.(g) A transfer under Subsection (a) may not be funded usingfederal money or money from the available school fund or the stateinstructional materials and technology fund.(h) Transfers to a participating child's account under thissubchapter do not constitute taxable income to a participatingparent, unless otherwise provided by federal or another state'slaw.(i) On dates consistent with satisfying the applicationdeadlines established under Section 29.356(a), the agency shallcalculate and report to the comptroller the amount specified underSubsection (a) for each participating child.Sec. 29.3611. ENROLLMENT IN PUBLIC SCHOOL. If a childceases participation in the program during a school year due to thechild's enrollment in a school district or open-enrollment charterschool:(1) the district or school is entitled to receive, inaddition to other funding to which the district or school isentitled to receive for the child, an allotment in an amount equalto the basic allotment multiplied by 0.1 for the child's averagedaily attendance at the district or school for that school year; and(2) the child may not be considered in evaluating theperformance of a school district or open-enrollment charter schoolunder the public school accountability system as prescribed byChapters 39 and 39A for the first school year after the child ceasesparticipation in the program.Sec. 29.3615. INDIVIDUALIZED EDUCATION PROGRAMS;EVALUATIONS. (a) The parent of a child who is not enrolled in aschool district or open-enrollment charter school may request thata school district conduct a full individual and initial evaluationof the child for purposes of determining the child's eligibilityfor:(1) special education services under Subchapter A; and(2) participation in the program as a child with adisability.(b) A school district that receives a request under thissection shall follow procedures, including for timely completion,for a full individual and initial evaluation in accordance with 20U.S.C. Sections 1412(a)(10)(A)(ii) and 1414 and Section 29.004 ofthis code not later than the 45th school day after the date thedistrict receives parental consent to conduct the evaluation.(c) If a school district determines based on an evaluationconducted under Subsection (b) that a child is eligible for specialeducation services, the district shall develop an individualizededucation program for the child for purposes of establishing thechild's eligibility to participate in the program as a child with adisability.(d) At the agency's request, a school district oropen-enrollment charter school shall provide to the agency achild's individualized education program developed under Section29.005 or Subsection (c) of this section, as applicable.(e) The agency may adopt rules as necessary to implementthis section, including rules regarding an appeal of adetermination of eligibility for special education services andservices to be provided as described in an individualized educationprogram developed in accordance with this section.Sec. 29.362. ADMINISTRATION OF ACCOUNTS. (a) On receiptof money distributed by the comptroller for purposes of makingtransfers to the accounts of participating children, a certifiededucational assistance organization shall hold that money in trustfor the benefit of children participating in the program and maketransfers to the account of each participating child served by theorganization as follows:(1) not later than July 1, at least one-quarter of thetotal annual amount;(2) not later than October 1, one-half of the totalannual amount; and(3) not later than April 1, the total remaining amountafter the transfers under Subdivisions (1) and (2).(b) Each year, the comptroller may deduct from the totalamount of money appropriated for purposes of this subchapter anamount, not to exceed three percent of that total amount, to coverthe comptroller's cost of administering the program.(c) The comptroller may disburse each state fiscal year atotal amount, not to exceed five percent of the amount of moneyappropriated for purposes of the program for that state fiscalyear, to the certified educational assistance organizations for thecost of providing services under this subchapter.(d) On or before the first day of October and February, acertified educational assistance organization shall:(1) verify with the agency that each participatingchild is not enrolled in a school district or open-enrollmentcharter school in a manner in which the child is counted toward thedistrict's or school's average daily attendance for purposes of theallocation of state funding under the Foundation School Program;and(2) notify the comptroller if the organizationdetermines that a participating child is:(A) enrolled in a school district oropen-enrollment charter school in a manner in which the child iscounted toward the district's or school's average daily attendancefor purposes of the allocation of state funding under theFoundation School Program; or(B) not enrolled in a preapproved private school.(e) The comptroller by rule shall establish a process bywhich a participating parent may authorize the comptroller or acertified educational assistance organization to make a paymentdirectly from the participant's account to a preapproved educationservice provider or vendor of educational products for an expenseallowed under Section 29.359.(f) On the date on which a child who participated in theprogram is no longer eligible to participate in the program underSection 29.355 and payments for any education-related expensesallowed under Section 29.359 from the child's account have beencompleted, the participating child's account shall be closed andany remaining money returned to the comptroller for deposit in theprogram fund.(g) Each quarter, any interest or other earningsattributable to money held by a certified educational assistanceorganization for purposes of the program shall be remitted to thecomptroller for deposit in the program fund.Sec. 29.363. AUDITING. (a) The comptroller shall contractwith a private entity to audit accounts and program participanteligibility data not less than once per year to ensure compliancewith applicable law and program requirements. The audit mustinclude a review of:(1) each certified educational assistanceorganization's internal controls over program transactions; and(2) compliance by:(A) certified educational assistanceorganizations with Section 29.354 and other program requirements;(B) program participants with Section 29.357(a)and other program requirements; and(C) education service providers and vendors ofeducational products with Section 29.358 and other programrequirements.(b) In conducting an audit, the private entity may require aprogram participant, education service provider or vendor ofeducational products, or certified educational assistanceorganization to provide information and documentation regardingany transaction occurring under the program.(c) The private entity shall report to the comptroller anyviolation of this subchapter or other relevant law and anytransactions the entity determines to be unusual or suspiciousfound by the entity during an audit conducted under this section.The comptroller shall report the violation or transaction to:(1) the applicable certified educational assistanceorganization;(2) the education service provider or vendor ofeducational products, as applicable; and(3) each participating parent who is affected by theviolation or transaction.(d) The state auditor shall audit each certifiededucational assistance organization's compliance with theorganization's duties to verify a child's eligibility toparticipate in the program under Section 29.355 and verify that arequest for payment is for an approved expense under Section29.360(c). Each organization shall submit to the state auditordocumentation of:(1) each item of residency documentation described bySection 29.355(a-1) reviewed by the organization;(2) each preapproved education-related expensecategory reviewed by the organization under Section 29.360(c);(3) the number of transactions approved by theorganization; and(4) the number of transactions denied by theorganization.(e) The state auditor may review and analyze individualtransactions approved by a certified educational assistanceorganization.(f) The state auditor shall randomly select 10 percent ofprogram applications on which to perform an eligibilityverification audit.(g) Each education service provider shall provide to thestate auditor proof of a third-party audit or financial reviewconsistent with the provider's accreditation commission standards.Sec. 29.364. SUSPENSION OF ACCOUNT. (a) The comptrollershall suspend the account of a participating child who fails toremain in good standing by complying with applicable law or arequirement of the program.(b) On suspension of an account under Subsection (a), thecomptroller shall notify the participating parent in writing thatthe account has been suspended and that no additional payments maybe made from the account. The notification must specify the groundsfor the suspension and state that the participating parent has 30days to respond and take any corrective action required by thecomptroller.(c) On the expiration of the 30-day period under Subsection(b), the comptroller shall:(1) order closure of the suspended account;(2) order temporary reinstatement of the account,conditioned on the performance of a specified action by theparticipating parent; or(3) order full reinstatement of the account.(d) The comptroller may recover money distributed under theprogram that was used for expenses not allowed under Section29.359, for a child who was not eligible to participate in theprogram at the time of the expenditure, or from an education serviceprovider or vendor of educational products that was not approved atthe time of the expenditure. The money and any interest or otheradditions received related to the money may be recovered from theparticipating parent or the education service provider or vendor ofeducational products that received the money in accordance withapplicable law if the participating child's account is suspended orclosed under this section. The comptroller shall deposit moneyrecovered under this subsection into the program fund.Sec. 29.365. TUITION AND FEES; REFUND PROHIBITED. (a) Aneducation service provider or vendor of educational products maynot charge a participating child an amount greater than thestandard amount charged for that service or product by the provideror vendor.(b) An education service provider or vendor of educationalproducts receiving money distributed under the program may not inany manner rebate, refund, or credit to or share with a programparticipant, or any person on behalf of a participant, any programmoney paid or owed by the participant to the provider or vendor.Sec. 29.366. REFERRAL TO DISTRICT ATTORNEY. If thecomptroller obtains evidence of fraudulent use of an account ormoney distributed under the program or any other violation of law bya certified educational assistance organization, education serviceprovider or vendor of educational products, or program participant,the comptroller shall notify the appropriate local county ordistrict attorney with jurisdiction over, as applicable:(1) the principal place of business of theorganization or provider or vendor; or(2) the residence of the program participant.Sec. 29.367. SPECIAL EDUCATION NOTICE. (a) A certifiededucational assistance organization shall post on the Internetwebsite established and maintained for the program and provide toeach parent who submits an application for the program a noticethat:(1) states that a private school is not subject tofederal and state laws regarding the provision of educationalservices to a child with a disability in the same manner as a schooldistrict or open-enrollment charter school; and(2) provides information regarding rights to which achild with a disability is entitled under federal and state law ifthe child attends a school district or open-enrollment charterschool, including:(A) rights provided under the Individuals withDisabilities Education Act (20 U.S.C. Section 1400 et seq.); and(B) rights provided under Subchapter A.(b) A private school in which a child with a disability whois a participating child enrolls shall provide to the participatingparent a copy of the notice required under Subsection (a).Sec. 29.368. PROGRAM PARTICIPANT, PROVIDER, AND VENDORAUTONOMY. (a) An education service provider or vendor ofeducational products that receives money distributed under theprogram is not a recipient of federal financial assistance and maynot be considered to be a state actor on the basis of receiving thatmoney.(b) A state agency or state official may not adopt a rule ortake other governmental action related to the program and acertified educational assistance organization may not take actionthat:(1) limits or imposes requirements that are contraryto the religious or institutional values or practices of aneducation service provider, vendor of educational products, orprogram participant; or(2) limits an education service provider, vendor ofeducational products, or program participant from freely:(A) determining the methods or curriculum toeducate students;(B) determining admissions and enrollmentpractices, policies, and standards;(C) modifying or refusing to modify theprovider's, vendor's, or participant's religious or institutionalvalues or practices, operations, conduct, policies, standards,assessments, or employment practices based on the provider's,vendor's, or participant's religious values or practices; or(D) exercising the provider's, vendor's, orparticipant's religious or institutional practices as theprovider, vendor, or participant determines.Sec. 29.369. STUDENT RECORDS AND INFORMATION. (a) Onrequest by the participating parent or parent of a child seeking toparticipate in the program, the school district or open-enrollmentcharter school that the child would otherwise attend shall providea copy of the child's school records possessed by the district orschool, if any, to the child's parent or, if applicable, the privateschool the child attends.(b) As necessary to verify a child's eligibility for theprogram, the agency, a school district, or an open-enrollmentcharter school shall provide to a certified educational assistanceorganization any information available to the agency, district, orschool requested by the organization regarding a child whoparticipates or seeks to participate in the program, includinginformation regarding the child's school district oropen-enrollment charter school enrollment status and whether thechild can be counted toward a school district's or open-enrollmentcharter school's average daily attendance for purposes of theallocation of funding under the Foundation School Program. Theorganization may not retain information provided under thissubsection beyond the period necessary to determine a child'seligibility to participate in the program.(c) A certified educational assistance organization or aneducation service provider or vendor of educational products thatobtains information regarding a participating child:(1) shall comply with state and federal law regardingthe confidentiality of student educational information; and(2) may not:(A) sell information regarding a participatingchild; or(B) distribute information regarding aparticipating child in a manner not described by Paragraph (A)without the program participant's consent.(d) A student record held by the comptroller or a certifiededucational assistance organization is confidential and notsubject to disclosure under Chapter 552, Government Code. Thecomptroller or a certified educational assistance organization mayredact information that constitutes student records from anyinformation the governmental body discloses under Section 552.021,Government Code, without the necessity of requesting a decisionfrom the attorney general under Subchapter G, Chapter 552,Government Code.Sec. 29.370. GIFTS, GRANTS, AND DONATIONS. The comptrollermay solicit and accept gifts, grants, and donations from any publicor private source for any expenses related to the administration ofthe program, including establishing the program and contracting forthe report required under Section 29.371.Sec. 29.371. ANNUAL REPORT. (a) The comptroller, incollaboration with the agency and the certified educationalassistance organizations, shall compile program data and produce anannual longitudinal report regarding:(1) the number of program applications received,accepted, and wait-listed, disaggregated by age;(2) program participant satisfaction;(3) the results of assessment instruments shared inaccordance with Section 29.357(a)(2);(4) the effect of the program on public and privateschool capacity and availability;(5) the amount of cost savings accruing to the state asa result of the program;(6) in a report submitted in an even-numbered yearonly, an estimate of the total amount of funding required for theprogram for the next state fiscal biennium;(7) the amount of gifts, grants, and donationsreceived under Section 29.370;(8) based on surveys of former program participants orother sources available to an organization, the number andpercentage of children participating in the program who, within oneyear after graduating from high school, are:(A) college ready, as indicated by earning aminimum of 12 non-remedial semester credit hours or the equivalentor an associate degree from a postsecondary educationalinstitution;(B) career ready, as indicated by:(i) earning a credential of value includedin a library of credentials established under Section 2308A.007,Government Code; or(ii) employment at or above the median wagein the child's region; or(C) military ready, as indicated by achieving apassing score set by the applicable military branch on the ArmedServices Vocational Aptitude Battery and enlisting in the armedforces of the United States or the Texas National Guard; and(9) the dropout rate, expulsion rate, and graduationrate of participating children who are children with a disability,both aggregated and disaggregated by the child's:(A) grade level;(B) age;(C) sex;(D) race or ethnicity; and(E) category under Section 29.356(b).(b) In producing the report, the comptroller shall:(1) use appropriate analytical and behavioral sciencemethodologies to ensure public confidence in the report; and(2) comply with the requirements regarding theconfidentiality of student educational information under theFamily Educational Rights and Privacy Act of 1974 (20 U.S.C.Section 1232g).(c) The report must cover a period of not less than fiveyears and include, subject to Subsection (b)(2), the data analyzedand methodology used.(d) The comptroller shall provide the report for posting onthe Internet website established and maintained for the program.(e) The comptroller shall provide the report, includingassessment data, to the commissioner.(f) The state auditor shall review and verify the validityof the contents of the comptroller's annual report required underthis section. If the state auditor finds any discrepancies in thereport, the state auditor may collect the data necessary to verifyand audit the data from the comptroller, the applicable certifiededucational assistance organizations, and the applicable educationservice providers and vendors of educational products.Sec. 29.3715. COLLECTION AND REPORTING OF DEMOGRAPHICINFORMATION. (a) The comptroller, in collaboration with theagency and the certified educational assistance organizations,shall collect and report demographic information regarding eachparticipating child. The report must include the followingdemographic information:(1) the child's grade;(2) the child's age;(3) the child's sex;(4) the child's race or ethnicity;(5) the school district in which the child resides;(6) the district campus that the child would otherwiseattend;(7) the child's zip code;(8) the child's date of enrollment in the program;(9) the child's category under Section 29.356(b); and(10) whether the child has a disability.(b) Not later than August 1 of each year, the comptrollershall submit a written report to the legislature summarizing thedemographic information collected under this section.Sec. 29.372. RULES; PROCEDURES. The comptroller shalladopt rules and procedures as necessary to implement, administer,and enforce this subchapter.Sec. 29.373. APPEAL; FINALITY OF DECISIONS. (a) A programparticipant may appeal to the comptroller an administrativedecision made by the comptroller or a certified educationalassistance organization under this subchapter, including adecision regarding eligibility, allowable expenses, or theparticipant's removal from the program.(b) An appeal under this subchapter does not constitute acontested case for any purpose.(c) This subchapter may not be construed to confer aproperty right on a certified educational assistance organization,education service provider, vendor of educational products, orprogram participant.(d) A decision of the comptroller made under this subchapteris final and not subject to appeal.Sec. 29.374. RIGHT TO INTERVENE IN CIVIL ACTION. (a) Aprogram participant, eligible child, education service provider,or vendor of educational products may intervene in any civil actionchallenging the constitutionality of the program.(b) A court in which a civil action described by Subsection(a) is filed may require that all program participants, eligiblechildren, education service providers, and vendors of educationalproducts wishing to intervene in the action file a joint brief. Aprogram participant, eligible child, education service provider,or vendor of educational products may not be required to join abrief filed on behalf of the state or a state agency.SECTION 3. Section 22.092(d), Education Code, is amended toread as follows:(d) The agency shall provide equivalent access to theregistry maintained under this section to:(1) private schools;(2) public schools; [and](3) nonprofit teacher organizations approved by thecommissioner for the purpose of participating in the tutoringprogram established under Section 33.913; and(4) the comptroller for the purpose of preapprovingeducation service providers and vendors of educational productsunder Section 29.358 for participation in the program establishedunder Subchapter J, Chapter 29.SECTION 4. Section 411.109, Government Code, is amended byadding Subsection (b-1) and amending Subsection (c) to read asfollows:(b-1) The comptroller is entitled to obtain criminalhistory record information as provided by Subsection (c) about aperson who is an employee of an education service provider or vendorof educational products who intends to provide educational servicesto a child participating in the program established underSubchapter J, Chapter 29, Education Code, and is seeking approvalto receive money distributed under that program.(c) Subject to Section 411.087 and consistent with thepublic policy of this state, the comptroller is entitled to:(1) obtain through the Federal Bureau of Investigationcriminal history record information maintained or indexed by thatbureau that pertains to a person described by Subsection (a), [or](b), or (b-1); and(2) obtain from the department or any other criminaljustice agency in this state criminal history record informationmaintained by the department or that criminal justice agency thatrelates to a person described by Subsection (a), [or] (b), or (b-1).SECTION 5. Section 810.002, Health and Safety Code, isamended to read as follows:Sec. 810.002. APPLICABILITY. This chapter applies to thefollowing state agencies:(1) the Department of Family and Protective Services;(2) the Health and Human Services Commission;(3) the Texas Education Agency; [and](4) the Texas Juvenile Justice Department; and(5) the comptroller of public accounts.SECTION 6. (a) Except as provided by Subsection (b) of thissection, Subchapter J, Chapter 29, Education Code, as added by thisAct, applies beginning with the 2026-2027 school year.(b) Section 29.3521(c), Education Code, as added by thisAct, applies beginning with the state fiscal biennium beginningSeptember 1, 2027.SECTION 7. (a) Not later than May 15, 2026, the comptrollerof public accounts shall adopt rules as provided by Sections29.356(d) and 29.372, Education Code, as added by this Act.(b) The comptroller of public accounts may identify rulesrequired by the passage of Subchapter J, Chapter 29, EducationCode, as added by this Act, that must be adopted on an emergencybasis for purposes of the 2026-2027 school year and may use theprocedures established under Section 2001.034, Government Code,for adopting those rules. The comptroller of public accounts is notrequired to make the finding described by Section 2001.034(a),Government Code, to adopt emergency rules under this subsection.SECTION 8. (a) The constitutionality and other validityunder the state or federal constitution of all or any part ofSubchapter J, Chapter 29, Education Code, as added by this Act, maybe determined in an action for declaratory judgment under Chapter37, Civil Practice and Remedies Code, in a district court in thecounty in which the violation is alleged to have occurred or wherethe plaintiff resides or has its principal place of business.(b) An order, however characterized, of a trial courtgranting or denying a temporary or otherwise interlocutoryinjunction or a permanent injunction on the grounds of theconstitutionality or unconstitutionality, or other validity orinvalidity, under the state or federal constitution of all or anypart of Subchapter J, Chapter 29, Education Code, as added by thisAct, may be reviewed only by direct appeal to the Texas SupremeCourt filed not later than the 15th business day after the date onwhich the order was entered. The Texas Supreme Court shall giveprecedence to appeals under this section over other matters.(c) The direct appeal is an accelerated appeal.(d) This section exercises the authority granted by Section3-b, Article V, Texas Constitution.(e) The filing of a direct appeal under this section willautomatically stay any temporary or otherwise interlocutoryinjunction or permanent injunction granted in accordance with thissection pending final determination by the Texas Supreme Court,unless the supreme court makes specific findings that the applicantseeking such injunctive relief has pleaded and proved that:(1) the applicant has a probable right to the relief itseeks on final hearing;(2) the applicant will suffer a probable injury thatis imminent and irreparable, and that the applicant has no otheradequate legal remedy; and(3) maintaining the injunction is in the publicinterest.(f) An appeal under this section, including aninterlocutory, accelerated, or direct appeal, is governed, asapplicable, by the Texas Rules of Appellate Procedure, includingRules 25.1(d)(6), 28.1, 32.1, 37.3(a)(1), 38.6(a) and (b), 40.1(b),and 49.4.(g) This section does not authorize an award of attorney'sfees against this state, and Section 37.009, Civil Practice andRemedies Code, does not apply to an action filed under this section.(h) The attorney general shall represent the state in anylegal action brought that challenges the constitutionality orvalidity of all or any part of Subchapter J, Chapter 29, EducationCode, as added by this Act.SECTION 9. It is the intent of the legislature that everyprovision, section, subsection, sentence, clause, phrase, or wordin this Act, and every application of the provisions in this Act toeach person or entity, is severable from each other. If anyapplication of any provision in this Act to any person, group ofpersons, or circumstances is found by a court to be invalid for anyreason:(1) the remaining applications of that provision toall other persons and circumstances shall be severed and may not beaffected; and(2) the court must allow continued operation of theprogram without regard for the severed provision rather thanrestrict program operation or participation.SECTION 10. This Act takes effect immediately if itreceives a vote of two-thirds of all the members elected to eachhouse, as provided by Section 39, Article III, Texas Constitution.If this Act does not receive the vote necessary for immediateeffect, this Act takes effect September 1, 2025.____________________________________________________________President of the SenateSpeaker of the HouseI hereby certify that S.B. No. 2 passed the Senate onFebruary 5, 2025, by the following vote: Yeas 19, Nays 12; andthat the Senate concurred in House amendments on April 24, 2025, bythe following vote: Yeas 19, Nays 12.______________________________Secretary of the SenateI hereby certify that S.B. No. 2 passed the House, withamendments, on April 17, 2025, by the following vote: Yeas 86,Nays 61.______________________________Chief Clerk of the HouseApproved:______________________________Date______________________________Governor
Relating to the establishment of an education savings account program.
Sponsors
Sen. Charles Creighton (R) sponsors SB 2, and 89 members have co-sponsored it.

Sen. · R–4 · Sponsor

Sen. · R–7 · Co-sponsor

Sen. · R–25 · Co-sponsor

Sen. · R–30 · Co-sponsor

Sen. · R–27 · Co-sponsor

Sen. · R–10 · Co-sponsor

Sen. · R–11 · Co-sponsor

Sen. · R–12 · Co-sponsor

Sen. · R–8 · Co-sponsor

Sen. · R–22 · Co-sponsor
Committees
SB 2 went before 2 committees: Education K-16 and Public Education.
History
SB 2 has taken 194 actions since Jan 24, 2025, the latest on May 3, 2025.
| Chamber | Action | |||
|---|---|---|---|---|
May 3, 2025 | — | Signed by the Governor | ||
May 3, 2025 | — | Effective on 9/1/25 | ||
Apr 29, 2025 | House | Signed in the House | ||
Apr 29, 2025 | — | Sent to the Governor | ||
Apr 28, 2025 | Senate | Signed in the Senate |
Votes
SB 2 went to 74 roll calls across both chambers, the latest on Apr 24, 2025 at 19–12.
| Chamber | Question | Yea | Nay | |||
|---|---|---|---|---|---|---|
Apr 24, 2025 | Senate | Senate concurs in House amendment(s) | 19 | 12 | ||
Apr 24, 2025 | Senate | Senate concurs in House amendment(s) | 19 | 12 | ||
Apr 24, 2025 | Senate | Senate concurs in House amendment(s) | 19 | 12 | ||
Apr 17, 2025 | House | Amendment tabled RV#285 | 86 | 60 | ||
Apr 17, 2025 | House | Amendment tabled RV#284 | 85 | 59 |
Source: capitol.texas.gov · legiscan.com
