S.B. No. 1941
AN ACT
relating to the administration and operation of the state's
programs for prepaying or saving toward the costs of attending an
institution of higher education.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 54.603, Education Code, is amended to
read as follows:
Sec. 54.603. SUNSET PROVISION. The Prepaid Higher
Education Tuition Board is subject to Chapter 325, Government Code
(Texas Sunset Act). Unless continued in existence as provided by
that chapter, the board is abolished and the programs established
under this subchapter and under Subchapters [Subchapter] G and H
terminate September 1, 2019.
SECTION 2. Section 54.751, Education Code, is amended by
amending Subdivisions (2) and (6) and adding Subdivision (3-a) to
read as follows:
(2) "Beneficiary" means the person designated under a
prepaid tuition contract as the person entitled to apply one or more
tuition units purchased under the contract to the payment of the
person's undergraduate tuition and required fees at a general
academic teaching institution, two-year institution of higher
education, private or independent institution of higher education,
career school, or accredited out-of-state institution of higher
education.
(3-a) "Career school" means a career school or college
as defined by Section 132.001 that offers a two-year associate
degree as approved by the Texas Higher Education Coordinating
Board.
(6) "Prepaid tuition contract" means a contract under
which a person purchases from the board on behalf of a beneficiary
one or more tuition units that the beneficiary is entitled to apply
to the payment of the beneficiary's undergraduate tuition and
required fees at a general academic teaching institution, two-year
institution of higher education, private or independent
institution of higher education, career school, or accredited
out-of-state institution of higher education.
SECTION 3. Section 54.7521, Education Code, is amended to
read as follows:
Sec. 54.7521. TEXAS SAVE AND MATCH PROGRAM. (a) The board
by rule shall develop and shall implement the Texas Save and Match
program under which money paid by a purchaser under a prepaid
tuition contract may be matched with:
(1) contributions made by any person to the Texas Save
and Match program and used to purchase additional tuition units on
behalf of beneficiaries selected as provided by board rule; and
(2) money appropriated by the legislature for the
Texas Save and Match program and used to purchase additional
tuition units on behalf of beneficiaries:
(A) whose annual household income is below the
state median family income, adjusted for household size;
(B) whose enrollment in the program would, as
determined by the board, promote the participation goals and
targets of the most recent revision of "Closing the Gaps," the
state's master plan for higher education; or
(C) who meet other criteria established by board
rule.
(b) Notwithstanding other law, for purposes of Subchapter
I, Chapter 659, Government Code:
(1) the Texas Save and Match program is considered an
eligible charitable organization entitled to participate in a state
employee charitable campaign under Subchapter I, Chapter 659,
Government Code; and
(2) a state employee is entitled to authorize a
payroll deduction for contributions to the Texas Save and Match
program as a charitable contribution under Section 659.132,
Government Code.
SECTION 4. Subsection (a), Section 54.753, Education Code,
is amended to read as follows:
(a) Under the program, a purchaser may prepay the costs of
all or a portion of a beneficiary's undergraduate tuition and
required fees at a general academic teaching institution, two-year
institution of higher education, private or independent
institution of higher education, career school, or accredited
out-of-state institution of higher education by entering into a
prepaid tuition contract with the board to purchase one or more
tuition units of a type described by this section at the applicable
price established by the board for that type of unit for the year in
which the unit is purchased. The portion of the beneficiary's
undergraduate tuition and required fees for which a tuition unit
may be redeemed at a particular general academic teaching
institution or two-year institution of higher education is assigned
to the tuition unit at the time of purchase, and the tuition unit
may be redeemed to pay that portion of the tuition and fees at the
general academic teaching institution or two-year institution of
higher education in any academic year in which the unit is redeemed
in accordance with this subchapter. The purchaser may purchase one
type of unit or a combination of two or three types of units.
SECTION 5. Subsection (d), Section 54.754, Education Code,
is amended to read as follows:
(d) If a beneficiary redeems fewer tuition units of the type
or combination of types necessary to pay the total cost of the
beneficiary's tuition and required fees at the general academic
teaching institution, two-year institution of higher education,
private or independent institution of higher education, career
school, or accredited out-of-state institution of higher education
at which the beneficiary enrolls, the beneficiary is responsible
for paying the amount of the difference between the amount of
tuition and required fees for which the beneficiary pays through
the redemption of one or more tuition units and the total cost of
the beneficiary's tuition and required fees at the institution.
SECTION 6. Subsections (a), (b), (c), (f), and (g), Section
54.765, Education Code, are amended to read as follows:
(a) Except as provided by Subsection (h) [(e)], the
comptroller is the custodian of the assets of the fund.
(b) The comptroller shall pay money from the fund [on a
warrant drawn by the comptroller] supported only by [on] a voucher
signed by the comptroller or the comptroller's authorized
representative. The comptroller may designate the plan manager as
the comptroller's authorized representative to pay expenditures or
transfer funds under this section and Sections 54.766 and 54.767.
(c) When a beneficiary enrolls at a general academic
teaching institution or two-year institution of higher education,
on written authorization from the purchaser of the tuition unit or
units for that beneficiary, the comptroller or the comptroller's
authorized representative shall transfer to the institution an
amount equal to the lesser of:
(1) the sum of:
(A) the total purchase price of the tuition unit
or units the beneficiary redeems for the semester or other academic
term; and
(B) the amount determined under Subsection (d);
or
(2) an amount equal to 101 percent of the amount of
tuition and required fees covered by the tuition units being
redeemed.
(f) When a beneficiary enrolls at a private or independent
institution of higher education, career school, or accredited
out-of-state institution of higher education, on written
authorization from the purchaser of the tuition unit or units for
that beneficiary, the comptroller or the comptroller's authorized
representative shall transfer to the institution the lesser of:
(1) an amount equal to the current cost of the tuition
and required fees that would be covered by redemption of the number
and type of tuition units the beneficiary is redeeming if the
beneficiary were redeeming the unit or units at a general academic
teaching institution or two-year institution of higher education as
follows:
(A) for a Type I unit, at the general academic
teaching institution that[, in the sales year in which the unit was
purchased,] had the highest tuition and required fee cost;
(B) for a Type II unit, at a general academic
teaching institution that[, in the sales year in which the unit was
purchased,] had tuition and required fee cost at the weighted
average; and
(C) for a Type III unit, at a two-year
institution of higher education that[, in the sales year in which
the unit was purchased,] had tuition and required fee cost at the
weighted average; or
(2) an amount equal to the total purchase price of the
tuition unit or units the beneficiary redeems for the semester or
other academic term plus the portion of the total return on assets
of the fund attributable to that amount.
(g) The comptroller annually shall provide to the board a
sworn statement of the amount of the fund's assets in the
comptroller's or plan manager's custody. The plan manager shall
provide to the comptroller a quarterly report of all funds
distributed during the previous quarter. The comptroller may
require more frequent reports or may request that the plan manager
provide any additional information at any time necessary to ensure
that the fund's assets are adequately protected.
SECTION 7. Section 54.767, Education Code, is amended to
read as follows:
Sec. 54.767. USE OF FUND ASSETS. The assets of the fund may
be used only to:
(1) pay the costs of program administration and
operations;
(2) make payments to general academic teaching
institutions, two-year institutions of higher education, private
or independent institutions of higher education, career schools,
and accredited out-of-state institutions of higher education on
behalf of beneficiaries; and
(3) make refunds under prepaid tuition contracts.
SECTION 8. Subsection (b), Section 54.7671, Education Code,
is amended to read as follows:
(b) For purposes of a transfer of money from an account
under this subchapter, the value of the account at the time of
transfer is the lesser of:
(1) an amount equal to the cost, at the time of the
transfer, of the tuition and required fees that would be covered by
redemption of the number and type of tuition units to be transferred
from the account if the beneficiary were redeeming the units at a
general academic teaching institution or two-year institution of
higher education as follows:
(A) for a Type I unit, at the general academic
teaching institution that[, in the sales year in which the unit was
purchased,] had the highest tuition and required fee cost;
(B) for a Type II unit, at a general academic
teaching institution that[, in the sales year in which the unit was
purchased,] had tuition and required fee cost at the weighted
average; and
(C) for a Type III unit, at a two-year
institution of higher education that[, in the sales year in which
the unit was purchased,] had tuition and required fee cost at the
weighted average; or
(2) an amount equal to the total purchase price of the
tuition units to be transferred from the account, plus the portion
of the total return on assets of the fund attributable to that
amount.
SECTION 9. Subsections (b) and (c), Section 54.769,
Education Code, are amended to read as follows:
(b) The rights of a purchaser, beneficiary, or successor in
interest of a purchaser or beneficiary in and under a prepaid
tuition contract and the payment of tuition and required fees for a
beneficiary under a prepaid tuition contract to a general academic
teaching institution, two-year institution of higher education,
private or independent institution of higher education, career
school, or accredited out-of-state institution of higher education
under this chapter are exempt from attachment, levy, garnishment,
execution, and seizure for the satisfaction of any debt, judgment,
or claim against a purchaser, beneficiary, or successor in interest
of a purchaser or beneficiary.
(c) A claim or judgment against a purchaser, beneficiary, or
successor in interest of a purchaser or beneficiary does not impair
or entitle the claim or judgment holder to assert or enforce a lien
against:
(1) the rights of a purchaser, beneficiary, or
successor in interest of a purchaser or beneficiary in and under a
prepaid tuition contract; or
(2) the right of a beneficiary to the payment of
tuition and required fees to a general academic teaching
institution, two-year institution of higher education, private or
independent institution of higher education, career school, or
accredited out-of-state institution of higher education under a
prepaid tuition contract.
SECTION 10. Subsection (a), Section 54.774, Education Code,
is amended to read as follows:
(a) A prepaid tuition contract remains in effect after the
program is terminated if, when the program is terminated, the
beneficiary:
(1) has been accepted by or is enrolled at a general
academic teaching institution, two-year institution of higher
education, private or independent institution of higher education,
career school, or accredited out-of-state institution of higher
education; or
(2) is projected to graduate from high school not
later than the third anniversary of the date the program is
terminated.
SECTION 11. Subsection (b), Section 54.775, Education Code,
is amended to read as follows:
(b) Notwithstanding Subsection (a), the board may release
information described by that subsection to a general academic
teaching institution, two-year institution of higher education,
private or independent institution of higher education, career
school, or accredited out-of-state institution of higher education
at which a beneficiary may enroll or is enrolled. The institution
shall keep the information confidential.
SECTION 12. The Texas Save and Match program is entitled to
participate in the state employee charitable campaign conducted
during the autumn of 2009 without regard to any limitation on the
time during which an organization must apply to participate in the
campaign.
SECTION 13. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1941 passed the Senate on
April 23, 2009, by the following vote: Yeas 30, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1941 passed the House on
May 26, 2009, by the following vote: Yeas 145, Nays 0, one
present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor