SB61 Alabama 2024 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

Regular Session 2024

Title

Creating Hope and Opportunity for Our Students’ Education (CHOOSE) Act of 2024, established to provide education savings accounts (ESAs) for parents of children to use in providing education services for those children.

Summary

SB61 creates Education Savings Accounts funded by refundable tax credits to help parents pay for education services for eligible Alabama students, starting in 2025-2026.

What This Bill Does

The Department of Revenue would establish Education Savings Accounts for the parent of an eligible student to pay qualifying educational expenses. The program is funded by a new refundable CHOOSE Act tax credit, with initial income limits (up to 300% of the federal poverty level) and later open to all, providing credits of up to $7,000 for students in participating schools or $2,000 for others (with a $4,000 family cap). Funds go into ESAs to pay participating schools or education service providers; they are not paid directly to children or parents, and unused funds are returned to the CHOOSE Act Fund. The program includes fraud prevention, audits, reporting, and enforcement powers (including suspension, recapture of funds, and appeals to the Alabama Tax Tribunal).

Who It Affects

• Parents of eligible students, who could receive a refundable tax credit to fund an Education Savings Account used to pay for qualifying educational expenses for their child (with income limits in early years and universal eligibility later).
• Eligible students and their education service providers or participating schools, who would participate in the program and receive ESA funds to cover qualifying expenses, and must meet program requirements (safety, accreditation, testing, reporting, privacy protections).

Key Provisions

• Creates the CHOOSE Act Fund in the State Treasury and requires the Legislature to appropriate at least $100 million annually.
• Establishes Education Savings Accounts (ESAs) funded by refundable CHOOSE Act tax credits to pay qualifying educational expenses through education service providers or participating schools.
• Sets eligibility and timing: ESAs start for 2025-2026; early years limit credits to families with AGI up to 300% of the federal poverty level, with universal eligibility beginning 2027 onward.
• Sets credit amounts: $7,000 per participating student in a participating school, $2,000 per participating student not in a participating school, and a $4,000 family cap for total credits; first 500 credits reserved for special-needs students.
• Imposes priority and distribution rules for credits (current participants and siblings first, then income-based priority; special-needs credits prioritized).
• Governs how ESAs are funded and spent: credits become deposits to ESAs and funds may be used to pay education providers or participating schools for qualifying expenses; funds cannot be paid directly to a student or parent; unused funds revert to the CHOOSE Act Fund at year end.
• Defines qualifying educational expenses (e.g., tuition, fees, books, tutoring, curricula, online learning, assessments, services for students with disabilities, and certain contracted district services).
• Outlines requirements for parents, participating students, education service providers, and participating schools, including documentation, agreement to comply with rules, and ongoing eligibility.
• Provides oversight and accountability: random audits, fraud reporting mechanisms, potential suspension or disqualification of providers, fund recapture, and appeals to the Alabama Tax Tribunal.
• Allows public schools and other providers to participate with safety, accreditation, financial solvency, testing, privacy, and reporting obligations; establishes flexibility for public schools acting as providers.
• Clarifies that participation is voluntary and not a mandate for any public or nonpublic school or district, and protects student records under FERPA.
• Effective date: the act becomes effective immediately after passage, with initial implementation and funding timeline aligned to 2025-2026.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Education