ACTION 8 UPDATE: Legislature approves school choice bill, sending it to Gov. Kay Ivey for her signature

ACTION 8 UPDATE: The Alabama Legislature has given final approval to the CHOOSE Act, Gov. Kay Ivey’s education savings account bill.

Ivey is expected to sign it into law on Thursday.

The bill passed the Senate on Wednesday, after winning House approval on February 27.

“Today, we’ve finally overcome the last hurdle in enacting Alabama’s historic education savings account plan after the Alabama Senate strongly approved the CHOOSE Act,” Gov. Ivey said in a statement.

“While our state has a strong public education system, all Alabama families will soon have the right to choose their children’s schools. This monumental achievement would not have been possible without the unwavering support of Senate President Pro Tempore Greg Reed and Senator Arthur Orr. I am grateful for their efforts as well as our partners in the State House for maximizing education freedom in Alabama. We want every Alabama student – whether they are at a public school, private school, magnet, charter or homeschool – the opportunity to receive a high quality education. I look forward to signing the CHOOSE Act into law.”

The CHOOSE Act would give parents up to $7,000 in their tax money for them to use to pursue what they feel is the best education option for their children, including for private or church school or homeschool. The money would be in an Education Savings Account, or ESA.

The money would come as refundable income tax credits to parents of eligible students to offset the cost of certain educational expenses, beginning with the 2025-2026 school year and subject to the availability of funding. The bill would limit the accumulated balance in this fund to no more than $500 million and would require any excess funds to revert to the Education Trust Fund (ETF).

This bill provides that the amount of the refundable income tax credit shall be the lesser of: the actual cost of the qualifying educational expenses of a participating student or: $7,000, for an eligible student enrolled in a participating school or $2,000 for an eligible student not attending a participating school, not to exceed $4,000 in aggregate of all credits awarded to a parent.

The Alabama Department of Revenue will be in charge of operating the program.