New Texas Law Lets School Districts Spend Non-Operational Budget Money on Cloud Services

The Measure is Seen as a Game-Changer for School Districts

A new law in Texas reclassifies cloud computing services and electricity as “personal property,” allowing school districts and public sector organizations throughout the state to use bond funding and other non-operational budget dollars to pay for cloud services in the same way they pay for physical hardware like servers and networking equipment.

Texas Senate Bill 58 (TX SB58) was passed by the Texas State Legislature in May 2021 and was signed into law by Gov. Greg Abbott in June. (See the full text of SB58 here:

For school districts and public sector agencies and organizations, this new law is a game-changer that allows them to purchase future-proofed cloud services with money previously restricted for the purchase of physical equipment and devices. It opens up new data storage and application delivery options that will enable districts to drastically reduce overspending and waste while providing state-of-the-art technology solutions to millions of students across the state.

From emails, photos, and music to productivity, educational, and security applications, cloud-based storage and computing services are an integral part of our daily lives. TX SB58 recognizes that relying on physical data servers and individual software installations on-premises is an antiquated model, and that taxpayer dollars can be spent far more efficiently to deliver the greatest impact for students and educators throughout Texas.