82R2031 KSD-F
By: Turner H.B. No. 3612
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) "Program" means the Texas Save and Match Program
established under this subchapter.
Sec. 54.802. TEXAS SAVE AND MATCH PROGRAM. (a) The board
shall develop and implement the Texas Save and Match Program, under
which money contributed to a savings trust account by an account
owner under the higher education savings plan under Subchapter G or
paid by a purchaser under a prepaid tuition contract under
Subchapter F or H on behalf of an eligible beneficiary may be
matched with:
(1) contributions made by any person to the program
for use in making additional savings trust account contributions
under Subchapter G or in prepaying additional tuition and fees or
purchasing additional tuition units under prepaid tuition
contracts under Subchapters F and H on behalf of eligible
beneficiaries selected as provided by board rule; or
(2) money appropriated by the legislature for the
program to be used for the purposes described by Subdivision (1).
(b) Notwithstanding other law, for purposes of Subchapter
I, Chapter 659, Government Code:
(1) the 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 program as a charitable
contribution under Section 659.132, Government Code.
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 of this state; and
(2) have a household adjusted gross income, for the
most recently completed tax year, that is not more than 120 percent
of the state median household adjusted gross income.
(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 from 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) The board by rule shall
prescribe:
(1) the maximum number of years for which a
beneficiary is eligible for matching funds under the program; and
(2) the maximum annual amount of contributions to a
savings trust account under Subchapter G or of payments under a
prepaid tuition contract under Subchapter F or H that are eligible
for a match under the program.
(b) In determining the amount of matching funds to which
eligible beneficiaries are entitled under the program, the board by
rule may adopt match ratios under which matching fund amounts are
awarded in inverse relation to beneficiaries' household adjusted
gross incomes.
(c) Withdrawals from a matching account for a savings trust
account may be used only for qualified higher education expenses as
defined by Subchapter G of the eligible beneficiary for whom the
matching account is established. Funds in the matching account
must be disbursed directly to providers of qualified higher
education services and may not be disbursed directly to the
beneficiary.
(d) Prepaid tuition and fees or tuition units in a matching
account for the beneficiary of a prepaid tuition contract 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
beneficiary.
(e) Any unused funds or unused prepaid tuition and fees or
tuition units in a matching account that are not withdrawn or
redeemed for the beneficiary before the beneficiary's 30th birthday
are forfeited, and the applicable matching funds shall be returned
to the pool of matching funds maintained by the board.
Sec. 54.805. MATCHING ACCOUNT ADMINISTRATION. (a) A
matching account established on behalf of a beneficiary under this
subchapter must be accounted for separately from the beneficiary's
prepaid tuition contract balance or savings trust account balance.
(b) To the extent possible, money, prepaid tuition and fees,
or tuition units in a beneficiary's matching account shall be
withdrawn or redeemed before money is withdrawn from the
beneficiary's savings trust account under Subchapter G or prepaid
tuition and fees or tuition units are redeemed from the prepaid
tuition contract for the beneficiary under Subchapter F or H.
(c) Information relating to the beneficiary of a matching
account, including personally identifiable information regarding
the beneficiary, is confidential and not subject to disclosure
under Chapter 552, Government Code.
(d) The board shall, to the extent possible, provide with
any periodic statement for a savings trust account or prepaid
tuition contract the balance of the matching account opened under
this subchapter on behalf of the beneficiary of the account or
contract.
Sec. 54.806. EFFECT OF ACCOUNT BALANCE ON BENEFICIARY'S
ELIGIBILITY FOR STUDENT FINANCIAL ASSISTANCE. The balance of a
beneficiary's matching account under this subchapter may not be
considered as available to the beneficiary, or otherwise included
in the beneficiary's household income or other financial resources,
for purposes of determining the beneficiary's eligibility for a
TEXAS grant or any other state-funded student financial assistance.
Sec. 54.807. GIFTS, GRANTS, AND DONATIONS. The board may
solicit and accept gifts, grants, and donations from any public or
private source for the purposes of this subchapter.
Sec. 54.808. 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;
(3) providing incentives for employers to contribute
matching funds to the program;
(4) partnering with public school districts and
educational agencies to create a program information portal
designed to increase program awareness and accessibility among
school districts, parents, and students; and
(5) partnering with financial institutions or prepaid
card providers to develop user interface opportunities that
increase the ease and efficiency with which contributions or
purchases can be made under Subchapter F, G, or H.
Sec. 54.809. PROGRAM PROMOTION AND MARKETING; REPORT.
(a) The board shall coordinate with community members throughout
the state, including members of the medical, educational,
nonprofit, and business communities, to promote and market the
program to further the goals and targets of the most recent revision
of "Closing the Gaps," the state's master plan for higher
education.
(b) Not later than December 1 of each year, the board shall
submit to the governor, lieutenant governor, speaker of the house
of representatives, Legislative Budget Board, Legislative Audit
Committee, state auditor, and Texas Higher Education Coordinating
Board a report detailing the collaborative promotion and marketing
efforts under this section. The board may include the report in the
report required by Section 54.777.
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. Section 54.777(a), Education Code, is amended to
read as follows:
(a) Not later than December 1 of each year, the board shall
submit to the governor, lieutenant governor, speaker of the house
of representatives, Legislative Budget Board, Legislative Audit
Committee, state auditor, and Texas Higher Education Coordinating
Board a report including:
(1) the fiscal transactions of the board and the plan
manager under this subchapter during the preceding fiscal year;
(2) the market and book value of the fund as of the end
of the preceding fiscal year;
(3) the asset allocations of the fund expressed in
percentages of stocks, fixed income, cash, or other financial
investments;
(4) the rate of return on the investment of the fund's
assets during the preceding fiscal year; [and]
(5) an actuarial valuation of the assets and
liabilities of the program, including the extent to which the
program's liabilities are unfunded; and
(6) a breakdown of the following information relating
to purchasers and beneficiaries of prepaid tuition contracts
entered into during the preceding fiscal year:
(A) the annual gross household income of
purchasers;
(B) the highest educational level achieved by
purchasers; and
(C) the race or ethnicity of beneficiaries.
SECTION 4. 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 5. 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 6. 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), 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 7. Section 54.7521, Education Code, is repealed.
SECTION 8. The Prepaid Higher Education Tuition Board shall
adopt the initial rules required by Subchapter I, Chapter 54,
Education Code, as added by this Act, not later than November 1,
2011. For that purpose, the board may adopt the initial rules in
the manner provided by law for the adoption of emergency rules.
SECTION 9. The Texas Save and Match Program established by
this Act is an expansion of the Texas Save and Match program created
under Section 54.7521, Education Code. On and after the effective
date of Section 7 of this Act, the 501(c)(3) foundation created
under Section 54.7521, Education Code, to provide matching funds
under that program may continue to accept tax-deductible donations
for the purpose of providing matching funds under the program
established by this Act.
SECTION 10. Subchapter I, Chapter 54, Education Code, as
added by this Act, applies to a prepaid tuition contract purchased
for a beneficiary under Subchapter H, Chapter 54, Education Code,
regardless of whether the prepaid tuition contract was purchased
before, on, or after the effective date of this Act. 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, 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, 2012.
SECTION 11. 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 12. 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 13. (a) Except as provided by Subsection (b) of this
section, this Act takes effect September 1, 2011.
(b) Section 7 of this Act takes effect January 1, 2012.