| 1 | 1 | | 81R3720 KSD-D |
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| 2 | 2 | | By: Christian H.B. No. 4169 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the administration and use of public or private funds |
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| 8 | 8 | | designated for college scholarships. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subchapter A, Chapter 56, Education Code, is |
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| 11 | 11 | | amended by adding Section 56.005 to read as follows: |
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| 12 | 12 | | Sec. 56.005. ADMINISTRATION AND USE OF PUBLIC OR PRIVATE |
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| 13 | 13 | | FUNDS DESIGNATED FOR COLLEGE SCHOLARSHIPS. (a) In this section: |
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| 14 | 14 | | (1) "Private nonprofit organization" includes a |
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| 15 | 15 | | private or independent institution of higher education. |
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| 16 | 16 | | (2) "Private or independent institution of higher |
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| 17 | 17 | | education" has the meaning assigned by Section 61.003. |
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| 18 | 18 | | (3) "Public entity" includes an institution of higher |
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| 19 | 19 | | education. |
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| 20 | 20 | | (4) "Scholarship funds" includes all money from any |
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| 21 | 21 | | public or private source donated with the intention of assisting |
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| 22 | 22 | | students in paying the costs of attendance at an institution of |
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| 23 | 23 | | higher education or a private or independent institution of higher |
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| 24 | 24 | | education, including tuition and fees and costs for housing, books, |
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| 25 | 25 | | supplies, transportation, and other related personal expenses. |
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| 26 | 26 | | (b) A public entity or a private nonprofit organization that |
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| 27 | 27 | | maintains scholarship funds shall allocate annually all earnings of |
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| 28 | 28 | | those funds other than the percentage of those earnings calculated |
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| 29 | 29 | | in the manner prescribed by Subsection (c). |
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| 30 | 30 | | (c) For purposes of Subsection (b), the comptroller shall |
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| 31 | 31 | | develop a formula to calculate for each calendar year the |
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| 32 | 32 | | percentage of annual scholarship fund earnings that may be retained |
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| 33 | 33 | | under Subsection (b). The percentage shall be equal to the sum of |
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| 34 | 34 | | the following as determined by the comptroller: |
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| 35 | 35 | | (1) the rate of inflation for the state for the most |
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| 36 | 36 | | recent 12 months for which the information is available; and |
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| 37 | 37 | | (2) the percentage, if any, by which the state's |
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| 38 | 38 | | population increased in the preceding year. |
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| 39 | 39 | | (d) Any scholarship funds that originate in this state and |
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| 40 | 40 | | are awarded on a competitive basis may not be awarded to a person |
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| 41 | 41 | | who is not authorized by law to be present in the United States. |
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| 42 | 42 | | (e) Any scholarship funds awarded by a public entity or |
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| 43 | 43 | | private nonprofit organization that are not used by the recipient |
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| 44 | 44 | | within one year after the date of the award must be reallocated as |
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| 45 | 45 | | scholarship funds for the next distribution cycle. |
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| 46 | 46 | | (f) A manager or custodian of scholarship funds awarded by a |
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| 47 | 47 | | public entity or private nonprofit organization shall ensure that |
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| 48 | 48 | | the funds are used by recipients only to pay for the costs of |
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| 49 | 49 | | attendance at an institution of higher education or private or |
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| 50 | 50 | | independent institution of higher education, as applicable. |
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| 51 | 51 | | (g) On receipt of a complaint regarding a violation of this |
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| 52 | 52 | | section by an institution of higher education or a private or |
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| 53 | 53 | | independent institution of higher education, the comptroller shall |
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| 54 | 54 | | conduct an investigation of the complaint. If the comptroller |
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| 55 | 55 | | determines that the institution has violated a provision of this |
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| 56 | 56 | | section based on its investigation, the comptroller shall issue an |
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| 57 | 57 | | order requiring the institution to correct the violation not later |
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| 58 | 58 | | than the 45th day after the date of the order. If the institution |
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| 59 | 59 | | fails to correct the violation by that date, the comptroller shall: |
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| 60 | 60 | | (1) if the violation was committed by an institution |
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| 61 | 61 | | of higher education, prohibit the institution from receiving any |
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| 62 | 62 | | appropriations of general revenue funds until the violation has |
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| 63 | 63 | | been corrected; or |
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| 64 | 64 | | (2) if the violation was committed by a private or |
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| 65 | 65 | | independent institution of higher education, after notice and an |
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| 66 | 66 | | opportunity for a hearing, require the institution to immediately |
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| 67 | 67 | | relinquish to the comptroller all scholarship funds maintained by |
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| 68 | 68 | | the institution to be distributed as provided by Subsection (h). |
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| 69 | 69 | | (h) Scholarship funds relinquished to the comptroller under |
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| 70 | 70 | | Subsection (g)(2) shall be distributed as follows: |
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| 71 | 71 | | (1) a percentage equal to the percentage of the total |
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| 72 | 72 | | number of students enrolled in institutions of higher education or |
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| 73 | 73 | | private or independent institutions of higher education who are |
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| 74 | 74 | | enrolled in institutions of higher education shall be distributed |
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| 75 | 75 | | under the TEXAS grant program under Subchapter M; and |
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| 76 | 76 | | (2) a percentage equal to the percentage of the total |
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| 77 | 77 | | number of students enrolled in institutions of higher education or |
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| 78 | 78 | | private or independent institutions of higher education who are |
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| 79 | 79 | | enrolled in private or independent institutions of higher education |
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| 80 | 80 | | shall be distributed under the tuition equalization grant program |
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| 81 | 81 | | under Subchapter F, Chapter 61. |
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| 82 | 82 | | SECTION 2. Section 56.005, Education Code, as added by this |
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| 83 | 83 | | Act, applies only to scholarship funds received, retained, or |
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| 84 | 84 | | awarded on or after January 1, 2010. |
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| 85 | 85 | | SECTION 3. This Act takes effect September 1, 2009. |
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