Who decides whether a private school can participate in Texas's Education Freedom Accounts program, and what laws disqualify a school?

Plain-English summary

The Acting Comptroller asked the Attorney General about which private schools may participate in the Texas Education Freedom Accounts (TEFA) program, the state's education-savings-account program, supplying facts about certain schools. The AG declined to decide the schools' eligibility, then gave general legal guidance on the law that governs it.

Who decides eligibility? The Comptroller's Office, not the Attorney General. The Eighty-ninth Legislature vested the Comptroller with the exclusive duty to establish and administer TEFA, including finding the facts that bear on a participant's eligibility (through preapproval rules, audits, and enforcement). The AG said his office "has no greater statutory role in deciding who qualifies for the TEFA program than we do in dictating which private schools are accredited in Texas," and that unexplored fact questions are beyond an AG opinion. So the factual eligibility determinations belong to the Comptroller alone.

What does the law require? The AG answered the legal question of what "other relevant law" means in Education Code section 29.358(h)(2), which allows a provider or vendor to participate "until . . . [it] violates [the subchapter] . . . or other relevant law." Because that phrase is undefined and appears in provisions about receiving, administering, and spending program funds, the AG read it to incorporate existing laws governing the lawful operation of entities that want to participate. Two examples the AG gave: no educational entity can lawfully provide material support to a foreign terrorist organization, and designated transnational criminal organizations (including some associated with the People's Republic of China) cannot lawfully acquire real property in Texas. A school or vendor that violates those "other relevant laws" is ineligible.

The AG emphasized that the Comptroller has broad tools, hiring consultants and counsel, requesting information to verify eligibility, contracting for annual audits, and suspending providers, to find the facts that apply these laws, and that the practical task of vetting and timely approving providers rests with the Comptroller.

What this means for you

If you work in the Comptroller's Office administering TEFA

The opinion confirms the eligibility fact-finding is yours, not the AG's. It also tells you the legal scope of "other relevant law" in section 29.358(h)(2): it reaches beyond the TEFA subchapter to existing laws on lawful operation, including the material-support and property-ownership prohibitions the AG identified. The Legislature gave you the tools, consultants and counsel (§ 29.352(a)(2)), information requests (§ 29.358(d)), annual third-party audits (§ 29.363), and suspension authority (§ 29.364(a)), to develop the facts and act on them.

If you operate a private school or education service provider seeking TEFA approval

Eligibility decisions are made by the Comptroller, not the AG, and they turn on facts the Comptroller develops. Beyond the TEFA subchapter's own requirements, the AG read "other relevant law" to include laws on lawful operation: a provider that violates the bar on material support to a foreign terrorist organization, or that is a designated transnational criminal organization barred from owning Texas real property, would be ineligible.

If you are a parent relying on the program

This opinion does not name or clear any particular school. It clarifies who decides eligibility (the Comptroller) and that providers linked to foreign terrorist organizations or designated transnational criminal organizations fall outside the program. The AG expressly left the school-by-school determinations to the Comptroller.

Common questions

Q: Does the Attorney General decide which schools can join TEFA?
A: No. The AG said the Comptroller's Office has the exclusive statutory duty to find the facts that decide eligibility, and that the AG does not resolve those fact questions.

Q: What is "other relevant law" in the TEFA statute?
A: An undefined phrase in section 29.358(h)(2) that the AG read to incorporate existing laws governing the lawful operation of providers and vendors, not just the TEFA subchapter itself.

Q: What kinds of laws can disqualify a provider?
A: The AG gave two examples: the prohibition on providing material support to foreign terrorist organizations, and the bar on designated transnational criminal organizations acquiring real property in Texas. A provider that violates such laws is ineligible.

Q: Did the AG say any specific school was or wasn't eligible?
A: No. The AG declined to make factual eligibility determinations, leaving them to the Comptroller.

Background and statutory framework

The Texas Education Freedom Accounts program is administered by the Comptroller, whom the Legislature charged with the exclusive duty to "establish" and "administer" the program (Educ. Code § 29.352), including establishing a preapproval process (§ 29.358) and adopting implementing rules (§ 29.372). The Acting Comptroller exercises that authority as Chief Clerk (Gov't Code § 403.003(a)(2)). Because eligibility turns on facts, and the AG does not resolve unexplored fact questions, the AG declined the factual determinations and offered legal guidance only.

The legal question was the meaning of "other relevant law" in section 29.358(h)(2), which lets an approved provider or vendor participate until it "violates [the] subchapter . . . or other relevant law." The phrase is undefined (§ 29.351). Using dictionary meaning (American Pearl Group v. National Payment Systems) and noting the phrase appears in provisions about receipt, administration, and expenditure of program funds (§§ 29.358(g)(4), (h)(2), 29.363(c)), the AG read it to incorporate existing restrictions on lawful operation, consistent with the presumption that a statute is enacted "with complete knowledge of the existing law" (Acker v. Texas Water Commission; Erlenbaugh v. United States). Examples include the prohibition on material support to foreign terrorist organizations (Penal Code § 76.02-03; cf. 18 U.S.C. §§ 2339A-B) and the bar on property acquisition by designated transnational criminal organizations (Prop. Code §§ 5.253, 5.251(3), (7)).

The opinion then catalogs the Comptroller's fact-finding tools, engaging consultants and counsel (§ 29.352(a)(2)), requesting information to verify eligibility (§ 29.358(d)), contracting for annual audits of participant eligibility (§ 29.363(a), (g)), and immediately suspending providers that fail to comply with applicable law (§ 29.364(a)), and reiterates that the duty to find facts and apply "relevant law" rests with the Comptroller.

Citations and references

Statutes:
- Tex. Educ. Code ch. 29, subch. J — Education Freedom Accounts program, including administration (§ 29.352), preapproval (§ 29.358), audits (§ 29.363), and suspension (§ 29.364)
- Tex. Prop. Code § 5.253 — property ownership restrictions on transnational criminal organizations

Key cases:
- Am. Pearl Grp., L.L.C. v. Nat'l Payment Sys., L.L.C., 715 S.W.3d 383 (Tex. 2025) — dictionary meaning of undefined terms
- Acker v. Tex. Water Comm'n, 790 S.W.2d 299 (Tex. 1990) — statutes enacted with knowledge of existing law

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0509
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2026/kp-0509.pdf

Original opinion text

January 24, 2026

The Honorable Kelly Hancock
Acting Comptroller of Public Accounts
Post Office Box 13528
Austin, Texas 78711-3528

Opinion No. KP-0509
Re: Eligibility of certain private schools to participate in the Texas Education Freedom Accounts program (RQ-0625-KP)

Dear Acting Comptroller Hancock:

You requested an opinion concerning eligibility to participate in the Texas Education Freedom Accounts ("TEFA") program and, to that end, invoke a limited set of facts regarding certain private schools. But the Eighty-ninth Legislature unambiguously vested the Comptroller's Office—whose authority you exercise as Chief Clerk, TEX. GOV'T CODE § 403.003(a)(2)—with the exclusive duty of "establish[ing]" and "administer[ing]" the TEFA program. TEX. EDUC. CODE § 29.352. Part of that charge includes your obligation to find facts bearing on participants' eligibility. See, e.g., id. §§ 29.358 (obligating the Comptroller to "by rule establish a process for . . . preapproval"), .372 (obligating the Comptroller to "adopt rules and procedures as necessary to implement, administer, and enforce" the relevant subchapter). Nonetheless, your inquiry improperly shifts the responsibility of making these factual determinations to the Attorney General. Our office has no greater statutory role in deciding who qualifies for the TEFA program than we do in dictating which private schools are accredited in Texas. Neither can our office decide unexplored fact questions, which lie beyond the reach of an attorney general opinion—as we have repeatedly and consistently emphasized. See, e.g., Tex. Att'y Gen. Op. No. KP-0452 (2023) at 3; Tex. Att'y Gen. Op. No. MW-0390 (1981) at 4. At bottom, the open factual questions that lie at the heart of your request are to be resolved by the Comptroller's Office alone.

However, while we cannot shoulder your statutory responsibilities, we can offer general legal guidance in support of your duty to ensure the TEFA program is not used as a means of unlawfully subsidizing designated enemies of the state. The Education Code makes clear that "[a]n education service provider or vendor of educational products that receives approval under [section 29.358] may participate in the program until . . . [it] no longer meets the requirements under [that] section[] or . . . violates [subchapter J] . . . or other relevant law." TEX. EDUC. CODE § 29.358(h)(2) (emphasis added). But the term "other relevant law" is undefined. See TEX. EDUC. CODE § 29.351. This requires that we determine the proper scope of "other relevant law" incorporated by the Education Code. See Request Letter at 1–2.

Dictionary definitions prove helpful in understanding the phrase's ordinary meaning. Am. Pearl Grp., L.L.C. v. Nat'l Payment Sys., L.L.C., 715 S.W.3d 383, 387 (Tex. 2025). Indeed, a variety of contemporary sources reveal that the term "relevant" sounds in its associated context. See, e.g., AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE (5th ed. 2022) (referencing "a bearing on or connection with the matter at hand"); see also, e.g., MERRIAM-WEBSTER COLLEGIATE DICTIONARY (12th ed. 2025) (same); WEBSTER'S NEW WORLD COLLEGE DICTIONARY 1226 (5th ed. 2014) (same). Here, of course, the phrase "other relevant law" appears three times within the Education Code: twice within section 29.358, and once within section 29.363. See generally TEX. EDUC. CODE §§ 29.358(g)(4) ("An education service provider or vendor of educational products must agree to . . . return any money received, including any interest or other additions received related to the money, in violation of this subchapter or other relevant law to the comptroller for deposit into the program fund." (emphasis added)), (h)(2) ("An education service provider or vendor of educational products that receives approval under this section may participate in the program until the earliest of the date on which the provider or vendor . . . violates this subchapter or other relevant law." (emphasis added)), .363(c) ("The private entity shall report to the comptroller any violation of this subchapter or other relevant law and any transactions the entity determines to be unusual or suspicious found by the entity during an audit conducted under this section." (emphasis added)). Each of these references are united in that they build upon provisions governing the receipt, administration, and expenditure of program funds. Compare id. § 29.358(g)(4), and id. § 29.358(h)(2), with id. § 29.363(c). This uniform context reveals that the phrase "other relevant law" implicates extant restrictions on the lawful operation of entities that aspire to participate in the TEFA program—echoing the blackletter presumption that this framework was "enacted by the [L]egislature with complete knowledge of the existing law and with reference to it." Acker v. Tex. Water Comm'n, 790 S.W.2d 299, 301 (Tex. 1990); accord Erlenbaugh v. United States, 409 U.S. 239, 244 (1972).

That sweeping backdrop bears several restrictions that could prove relevant to your administration of the TEFA program. For example, no educational entity can lawfully provide foreign terrorist organizations with material support. See, e.g., TEX. PENAL CODE § 76.02–03; cf. 18 U.S.C. §§ 2339A–B. Nor can designated transnational criminal organizations—including those associated with the "People's Republic of China," 86 Fed. Reg. 4909, 4914 (2021)—lawfully "purchase or otherwise acquire an interest in real property in this state." TEX. PROP. CODE § 5.253; see also id. § 5.251(3), (7). It follows that schools or vendors who violate these "other relevant law[s]" are rendered ineligible for the TEFA program. See generally TEX. EDUC. CODE § 29.358(h)(2).

[Footnote: Our longstanding policy counsels against any more detailed discussion due to ongoing litigation, Tex. Att'y Gen. Op. No. GA-0502 (2007) at 3–4, in which the Attorney General is defending these laws from challenge by some of the same entities referenced in your request. See generally Council on American-Islamic Relations Texas Dallas Fort Worth v. Abbott, No. 1:25-CV-01878 (W.D. Tex. Nov. 20, 2025); Beijing Daxing Huaxin Xingbang Science and Technology Development Research Center v. Paxton, 1:25-CV-01981 (W.D. Tex. Dec. 4, 2025).]

Unsurprisingly, the Legislature vested the Comptroller's Office with sweeping authority in support of your obligation to find facts that implicate these restrictions. See generally TEX. CONST. art. IV, §§ 1, 23. Among that legislative endowment is "the authority to[] . . . engage the services of private consultants, actuaries, trustees, records administrators, managers, and legal counsel for administrative and technical assistance," id. § 29.352(a)(2); to request "information" from providers or vendors in order "to verify . . . eligibility for preapproval," id. § 29.358(d); as well as the obligation to "contract with a private entity" that "audit[s] accounts and program participant eligibility data not less than once per year to ensure compliance by[]" both "education service providers and vendors" alike, id. § 29.363(a); see also id. § 29.363(g) (requiring that "[e]ach education service provider" supply "the state auditor [with] proof of a third-party audit or financial review consistent with the provider's accreditation commission standards"). Likewise, the Legislature has directed that you "immediately suspend" otherwise approved providers and vendors upon "finding that [either] . . . has failed to remain in good standing by complying with . . . applicable law." Id. § 29.364(a); see also, e.g., id. §§ 29.358(g)(4), .364(d) (providing for recovery of "money distributed under the program" in certain scenarios).

This is all to say that we agree Texans "deserve the highest assurance that no taxpayer dollars will be used[] . . . to support institutions with ties to a foreign terrorist organization, a transnational criminal network, or any adversarial foreign government." Request Letter at 2. The TEFA program is anything but a statutory subterfuge for granting fungible subsidies to unlawful enterprises. See supra p. 2. Still, this does little more than return us to the obvious: Your role as Acting Comptroller carries with it the duty to diligently find facts upon which the TEFA program can be lawfully administered—scrutinizing each provider and vendor hoping to participate—while timely approving the many other providers and vendors awaiting your determinations.

S U M M A R Y

Texas Education Code section 29.358(h)(2)'s "other relevant law" provision incorporates by reference other laws that govern the lawful operation of educational service providers and vendors that aspire to participate in the Texas Education Freedom Accounts program. This includes the prohibition on property ownership by transnational criminal organizations as well as the categorical bar on providing material support to foreign terrorist organizations, both of which govern educational service providers and vendors alike. But the Legislature has charged the Comptroller with the exclusive duty of finding facts on which such "relevant law" can be applied.

Very truly yours,

KEN PAXTON
Attorney General of Texas

BRENT WEBSTER, First Assistant Attorney General
LESLEY FRENCH, Chief of Staff
D. FORREST BRUMBAUGH, Deputy Attorney General for Legal Counsel
JOSHUA C. FIVESON, Chair, Opinion Committee