Texas House Bill 3 Summary
Introduction
Education Savings Accounts (ESAs) empower parents to customize education to their child’s unique needs. State law limits spending to qualified educational expenses and parents decide how funds are spent.
The House plan will provide school choice to 100,000 Texas students with an ESA tied to the state Average Daily Attendance (ADA). The plan also strengthens participant protection and allows the program to expand with demand.
Key House Bill Changes to Senate Bill 2
Strengthened legal protections for students, homeschool families, and private schools.
Provides a pathway to expand the program to meet parent demand.
Increases ESA amount and indexes it to grow with public funding increases.
Ensures an ongoing, 100% universal program. No limitation based on prior year’s enrollment.
Simplifies prioritization for low-income families.
ESA Funding
If a student enrolls in a school accredited by the Texas Private School Accreditation Commission, the student receives an ESA of 85% of the average statewide ADA.
If the participant is also a child with a disability, the student will receive what they are entitled to receive in public schools.
All participating students are entitled to at least $2,000 to use on qualifying educational expenses.
Participating Students
Texas children from PK through grade 12 are eligible to apply for an ESA. If there are more applicants than funds can support, priority will go first to students with disabilities, next to low-income students, and followed by middle-income students. The remaining positions will be open to all students.
Participating Educators
Any accredited school (or school in the process of being accredited) or non-profit college can opt in to serve ESA students. Active or retired teachers from accredited K-12 schools or non-profit colleges can tutor ESA students. Licensed therapists can serve ESA students.
Legal protections
ESAs are completely opt-in. Recipients of funds cannot be considered state actors. Limitations and requirements that are contrary to religious or constitutional values cannot be imposed. Strong legal protections ensure parents and educators can make the best decisions for children: participants will not be required to modify their values, instruction, curriculum, admission or employment policies. No federal funds will be used.
Administrator
The Comptroller would administer the program with the help of up to five Educational Assistance Organizations (EAOs). Interested educators would apply to the Comptroller; students would apply to an EAO. EAOs would help participating families find options in their community and manage account transactions.
Revenue Source
ESAs would be funded by state revenue. No federal funds nor funds from Texas’ public school accounts are used.
Accountability
With ESAs, parents and teachers collaborate directly to provide children the instruction and support they need, when they need it. This is effective accountability.
ESAs provide financial safeguards and transparency: funds are held in a program account, may only be used for qualified educational expenses, and the program would be independently audited. Spending on non-qualified educational items would result in suspension.
ESAs provide academic transparency: certified educational assistance organizations will be required to publish an annual report regarding student enrollment and waitlists, family satisfaction, assessment results, financial impact, and college, career, and military readiness.