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AB 19

Education expenses: Education Choice and Parental Empowerment Act of 2025.

2025-2026 Regular Session Introduced by Carl DeMaio

Creates a statewide Education Savings Account (ESA) funded by state deposits, allowing families to use funds for K-12, college, and vocational education to choose better schools.

In committee: Set, second hearing. Held under submission.
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Bill Summary · AB 19

AB 19 — Education Choice and Parental Empowerment Act of 2025

Author: DeMaio
Introduced: December 2, 2024
Status: In committee — set for second hearing; held under submission (last action April 28, 2025)
Classification: Bill; includes appropriations/fiscal effects; requires voter approval to become operative

Purpose / Intent

AB 19 would create a statewide Education Savings Account (ESA) program — the Education Choice and Parental Empowerment Act of 2025 — to give parents greater choice to enroll children in higher‑performing schools by crediting state funds into individual ESAs that can be used for K–12, postsecondary, and vocational education expenses.

Key provisions

  • Establishes an Education Savings Account (ESA) Trust as a fund in the State Treasury, administered by an ESA Trust Board with specified membership, powers, and duties.
  • Creates two accounts within the ESA Trust:
    • ESA Trust Program Account (moneys continuously appropriated to administer deposits/disbursements).
    • ESA Trust Administrative Account (pays administrative costs subject to statutory limits).
  • Eligibility and rollout:
    • 2027–28 through 2030–31: ESAs available to children eligible for K–12 enrollment based on parent/guardian income (means‑tested).
    • Beginning 2031–32: universal access — any child eligible for K–12 may establish an ESA.
  • Funding and deposits:
    • The bill specifies deposit amounts for 2027–28 (text truncated in provided version) and requires the Department of Finance, beginning July 1, 2028, to set the ESA deposit amount annually for the upcoming school year.
    • The State Controller must transfer required amounts from the General Fund to the ESA Trust.
  • Uses of ESA funds:
    • Deposits may be used for tuition and defined "eligible education expenses" at K–12, undergraduate/graduate, and vocational institutions.
    • “Eligible school” defined broadly to include community college/CSU/UC campuses, accredited (or qualifying) private K–12 schools, private and public colleges/universities, and vocational training providers.
  • Post‑secondary cap:
    • After an account beneficiary graduates high school or receives a high‑school equivalency, a $50,000 cap applies to the balance available for undergraduate/graduate or vocational expenses; the Department of Finance must index this cap annually using the California CPI.
  • Tax treatment:
    • For taxable years beginning on/after Jan 1, 2026, ESA distributions would be excluded from state gross income, and taxpayers may deduct state taxable income by the amount they contribute to an ESA.
  • Proposition 98 / education funding mechanics:
    • Requires the Legislature to recalculate the Prop 98 minimum guarantee to include eligible students not enrolled in public school (prior to the act’s operative date) in average daily attendance calculations.
    • The cost of ESA deposits would be apportioned between the General Fund and the resident public school district in the same ratio of state General Fund and local property tax revenue that would have funded that student in public school.

Who is affected

  • Students and families: K–12 students (means‑tested initially; universal beginning 2031–32) and their parents/guardians — provides new state deposits for educational expenses.
  • Public school districts: potential reduced enrollment/funding implications and new apportionment rules tied to Prop 98 recalculation.
  • Higher education institutions, private schools, and vocational providers: potential new payment source and participating provider obligations.
  • State fiscal entities: Department of Finance (annual deposit setting; CPI adjustments), State Controller (fund transfers), Superintendent (application procedures), and the ESA Trust Board (program administration).
  • Taxpayers: state income tax treatment changes for ESA contributions and distributions.

Procedural & timing notes

  • Operative date: Provisions become operative January 1, 2027 only if a companion Assembly Constitutional Amendment (to be voted statewide) is approved by voters on November 3, 2026.
  • Legislative actions to date: Introduced Dec 2024; multiple referrals and amendments; re‑referred to Revenue & Taxation and Education committees; as of April 28, 2025, set for second hearing and held under submission.
  • Fiscal impact: The bill creates ongoing state appropriations/transfers and alters K–14 funding calculations under Prop 98; it was referred to fiscal review and suspense file during committee consideration.

Note: The provided bill text is partially truncated; some implementation details (precise 2027–28 deposit amounts, ESA Trust Board composition, and administrative cost limits) are described in the full bill text but not included in the excerpt above.

Compiled from official sources — confirm details with the bill’s official record.

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