By: Watson S.B. No. 1760
(In the Senate - Filed March 11, 2009; March 20, 2009, read
first time and referred to Committee on Higher Education;
April 16, 2009, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 5, Nays 0; April 16, 2009,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1760 By: Patrick
A BILL TO BE ENTITLED
AN ACT
relating to the administration of the Texas Save and Match Program
to assist qualifying beneficiaries under the state's prepaid
tuition plans and college savings plans and to the treatment of a
beneficiary's assets under prepaid tuition plans and college
savings plans in determining eligibility for student financial
assistance and other assistance programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 54, Education Code, is amended by adding
Subchapter I to read as follows:
SUBCHAPTER I. TEXAS SAVE AND MATCH PROGRAM
Sec. 54.801. DEFINITIONS. In this subchapter:
(1) "Beneficiary" means a beneficiary on whose behalf
a purchaser enters into a prepaid tuition contract with the board
under Subchapter F or H or for whom a savings trust account is
opened under Subchapter G.
(2) "Board" means the Prepaid Higher Education Tuition
Board.
(3) "Participating beneficiary" means a beneficiary
for whom a matching account has been opened under this subchapter.
(4) "Program" means the Texas Save and Match Program
established under this subchapter.
Sec. 54.802. TEXAS SAVE AND MATCH PROGRAM. The board shall
develop and implement the Texas Save and Match Program under which
the board:
(1) opens a matching account for each eligible
beneficiary, as determined by Section 54.803; and
(2) matches money paid by a purchaser under a prepaid
tuition contract under Subchapter F or H on behalf of the
beneficiary, or contributed to a savings trust account by an
account owner under the Higher Education Savings Plan under
Subchapter G on behalf of the beneficiary with matching
contributions or a matching purchase of tuition units, as
applicable, using money appropriated by the legislature for the
program and any contributions made by any person to the
beneficiary's matching account.
Sec. 54.803. INITIAL ELIGIBILITY FOR PARTICIPATION IN
PROGRAM. (a) To be initially eligible to participate in the
program, a beneficiary, at the time a prepaid tuition contract is
entered into on the beneficiary's behalf under Subchapter F or H, or
a savings trust account is opened on the beneficiary's behalf under
Subchapter G, as applicable, must:
(1) be:
(A) a resident of this state; or
(B) a dependent for purposes of Section 152,
Internal Revenue Code of 1986, of a resident described by Paragraph
(A);
(2) be younger than seven years of age; and
(3) have a household adjusted gross income, for the
most recently completed tax year, that is not more than 400 percent
of the federal poverty level.
(b) To determine whether a beneficiary is initially
eligible to participate in the program, the board shall solicit
from the purchaser who enters into a prepaid tuition contract on the
beneficiary's behalf under Subchapter F or H, or the individual who
opens a savings trust account on the beneficiary's behalf under
Subchapter G, as applicable, at the time the purchaser or
individual enters into the contract or agreement with the board and
in the manner prescribed by board rule, information necessary to
determine the beneficiary's eligibility.
Sec. 54.804. LIMITATIONS. (a) An eligible beneficiary may
participate in the program for not more than five calendar years if
the beneficiary continues to meet the criteria prescribed by
Section 54.803(a). The five-year period may be consecutive or
nonconsecutive. The board shall prescribe procedures for verifying
a participating beneficiary's continued eligibility under this
section.
(b) A participating beneficiary may receive a matching
grant or a purchase of matching tuition units to the beneficiary's
matching account in any particular calendar year only if at least
$100 is paid under a prepaid tuition contract under Subchapter F or
H or is contributed to the beneficiary's savings trust account
under Subchapter G, as applicable, during that year. Contributions
or purchases in excess of $500 in any calendar year are not eligible
for a match under the program.
(c) Withdrawals from a matching account may be used only for
qualified higher educational expenses of the participating
beneficiary for whom the matching account is established. Funds in
a matching account must be disbursed directly to providers of
qualified higher education services and may not be disbursed
directly to the beneficiary.
(d) Tuition units in a participating beneficiary's matching
account may be redeemed only by the board or by a qualified
institution of higher education in the manner prescribed by the
board on behalf of the participating beneficiary.
(e) Any funds or unused tuition units in a matching account
that are not withdrawn or redeemed by the participating beneficiary
before the beneficiary's 30th birthday are forfeited and shall be
returned to a pool of matching funds maintained by the board.
Sec. 54.805. MATCH RATIOS. The board shall develop a
variable formula based on adjusted annual household income to
determine the amount of matching funds or matching purchases of
tuition units to which eligible participating beneficiaries are
entitled under the program in a year. Depending on the availability
of funds, for each dollar contributed to a participating
beneficiary's savings trust account under Subchapter G or paid by a
purchaser under a prepaid tuition contract on behalf of the
beneficiary under Subchapter F or H in a calendar year, the board
shall match the contribution or purchase using the following
guidelines:
(1) $2, if the beneficiary's household adjusted income
for the most recently completed tax year is less than or equal to
200 percent of the federal poverty level;
(2) $1, if the beneficiary's household adjusted income
for the most recently completed tax year is more than 200 percent of
the federal poverty level but not more than 300 percent of the
federal poverty level; or
(3) 50 cents, if the beneficiary's household adjusted
income for the most recently completed tax year is more than 300
percent of the federal poverty level but not more than 400 percent
of the federal poverty level.
Sec. 54.806. MATCHING ACCOUNT ADMINISTRATION. (a) A
matching account opened on behalf of a beneficiary under this
subchapter must be accounted separately from the beneficiary's
prepaid tuition contract balance or savings trust account balance.
(b) To the extent possible, money or tuition units in a
participating beneficiary's matching account shall be withdrawn or
redeemed before money is withdrawn or tuition units are redeemed
under Subchapter F, G, or H, as applicable.
(c) Information relating to the beneficiary of a matching
account, including personally identifiable information regarding
the beneficiary, is confidential and is not subject to disclosure
under Chapter 552, Government Code.
(d) The board shall, to the extent possible, provide with
any periodic statement provided by the board in regard to a
beneficiary the balance of the matching account opened on the
beneficiary's behalf under this subchapter.
Sec. 54.807. EFFECT OF ACCOUNT BALANCE ON BENEFICIARY'S
ELIGIBILITY FOR STUDENT FINANCIAL ASSISTANCE. Money or tuition
units in a beneficiary's matching account may not be considered as
available to the beneficiary, or otherwise included in the
beneficiary's household income or financial resources, for
purposes of determining the beneficiary's eligibility for a TEXAS
grant or any other state-funded student financial assistance.
Sec. 54.808. SOLICITATION AND ACCEPTANCE OF GIFTS, GRANTS,
AND DONATIONS. The board may accept gifts, grants, and donations
from any public or private source for the purposes of this
subchapter.
Sec. 54.809. PILOT PROJECTS UNDER PROGRAM. To fulfill the
intent of the program, the board may establish pilot projects under
the program in an effort to incentivize participation in the
Prepaid Higher Education Tuition Program under Subchapter F, the
Higher Education Savings Program under Subchapter G, and the
Prepaid Tuition Unit Undergraduate Education Program under
Subchapter H, including projects that incentivize participation
by:
(1) awarding additional matching grants based on a
beneficiary's achievement of specified academic goals;
(2) offering additional seed matching grants on the
opening of a savings trust account or the purchase of a prepaid
tuition contract; and
(3) providing incentives for employers to contribute
matching funds to the program.
Sec. 54.810. RULES. The board shall adopt rules for the
administration of this subchapter.
SECTION 2. Section 54.702, Education Code, is amended by
adding Subsection (c-1) to read as follows:
(c-1) The board shall waive the amount of any enrollment fee
charged by the board for a new account under this subchapter for any
beneficiary whose household adjusted gross income for the most
recently completed tax year is not more than 200 percent of the
federal poverty level.
SECTION 3. Subchapter C, Chapter 62, Health and Safety
Code, is amended by adding Section 62.1012 to read as follows:
Sec. 62.1012. EXCLUSION OF ASSETS IN PREPAID TUITION
PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. For purposes of
determining whether a child meets family income and resource
requirements for eligibility for the child health plan, the
commission may not consider as income or resources a right to assets
held in or a right to receive payments or benefits under:
(1) any fund or plan established under Subchapter F,
G, H, or I, Chapter 54, Education Code, including an interest in a
savings trust account, prepaid tuition contract, or related
matching account; or
(2) any qualified tuition program of any state that
meets the requirements of Section 529, Internal Revenue Code of
1986.
SECTION 4. Subchapter A, Chapter 31, Human Resources Code,
is amended by adding Section 31.0039 to read as follows:
Sec. 31.0039. EXCLUSION OF ASSETS IN PREPAID TUITION
PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. For purposes of
determining the amount of financial assistance granted to an
individual under this chapter for the support of dependent children
or determining whether the family meets household income and
resource requirements for financial assistance under this chapter,
the department may not consider the right to assets held in or the
right to receive payments or benefits under:
(1) any fund or plan established under Subchapter F,
G, H, or I, Chapter 54, Education Code, including an interest in a
savings trust account, prepaid tuition contract, or related
matching account; or
(2) any qualified tuition program of any state that
meets the requirements of Section 529, Internal Revenue Code of
1986.
SECTION 5. Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Section 32.02611 to read as follows:
Sec. 32.02611. EXCLUSION OF ASSETS IN PREPAID TUITION
PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. (a) Except as
provided by Subsection (b), in determining eligibility and need for
medical assistance, the department may not consider as assets or
resources a right to assets held in or a right to receive payments
or benefits under:
(1) any fund or plan established under Subchapter F,
G, H, or I, Chapter 54, Education Code, including an interest in a
savings trust account, prepaid tuition contract, or related
matching account; or
(2) any qualified tuition program of any state that
meets the requirements of Section 529, Internal Revenue Code of
1986.
(b) In determining eligibility and need for medical
assistance for an applicant who may be eligible on the basis of the
applicant's eligibility for medical assistance for the aged, blind,
or disabled under 42 U.S.C. Section 1396a(a)(10), as amended, the
department may consider as assets or resources a right to assets
held in or a right to receive payments or benefits under any fund,
plan, or tuition program described by Subsection (a).
(c) Notwithstanding Subsection (b), the department shall
seek a federal waiver authorizing the department to exclude, for
purposes of determining the eligibility of an applicant described
by that subsection, the right to assets held in or a right to
receive payments or benefits under any fund, plan, or tuition
program described by Subsection (a) if the fund, plan, or tuition
program was established before the 21st birthday of the beneficiary
of the fund, plan, or tuition program.
SECTION 6. Section 54.7521, Education Code, is repealed.
SECTION 7. The Prepaid Higher Education Tuition Board shall
adopt rules as required by Subchapter I, Chapter 54, Education
Code, as added by this Act, not later than November 1, 2009.
SECTION 8. Subchapter I, Chapter 54, Education Code, as
added by this Act, applies only to a prepaid tuition contract
purchased for a beneficiary under Subchapter F or H, Chapter 54,
Education Code, or a savings trust account opened for a beneficiary
under Subchapter G, Chapter 54, Education Code, on or after January
1, 2010.
SECTION 9. If before implementing any provision of this Act
a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 10. The changes in law made by this Act apply to a
person who receives health benefits coverage under Chapter 62,
Health and Safety Code, financial assistance under Chapter 31,
Human Resources Code, or medical assistance under Chapter 32, Human
Resources Code, on or after the effective date of this Act,
regardless of the date on which eligibility for coverage or
assistance was initially determined.
SECTION 11. This Act takes effect September 1, 2009.
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