Texas 2011 - 82nd Regular

Texas Senate Bill SB1325 Compare Versions

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1	1	By: Watson S.B. No. 1325
2	2	(In the Senate - Filed March 9, 2011; March 16, 2011, read
3	3	first time and referred to Committee on Higher Education;
4	4	April 18, 2011, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 7, Nays 0; April 18, 2011,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 1325 By: Watson
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to the administration of the Texas Save and Match Program
13	13	to assist qualifying beneficiaries under the state's prepaid
14	14	tuition unit program and college savings plans and to the treatment
15	15	of a beneficiary's assets under a prepaid tuition program or a
16	16	college savings plan in determining eligibility for student
17	17	financial assistance and other assistance programs.
18	18	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
19	19	SECTION 1. Chapter 54, Education Code, is amended by adding
20	20	Subchapter I to read as follows:
21	21	SUBCHAPTER I. TEXAS SAVE AND MATCH PROGRAM
22	22	Sec. 54.801. DEFINITIONS. In this subchapter:
23	23	(1) "Accredited out-of-state institution of higher
24	24	education," "career school," "general academic teaching
25	25	institution," "private or independent institution of higher
26	26	education," and "two-year institution of higher education" have the
27	27	meanings assigned by Section 54.751.
28	28	(2) "Beneficiary" means a beneficiary on whose behalf
29	29	a purchaser enters into a prepaid tuition contract with the board
30	30	under Subchapter H or for whom a savings trust account is opened
31	31	under Subchapter G.
32	32	(3) "Board" means the Prepaid Higher Education Tuition
33	33	Board.
34	34	(4) "Fund" means the Texas save and match trust fund
35	35	established under Section 54.808.
36	36	(5) "Program" means the Texas Save and Match Program
37	37	established under this subchapter.
38	38	(6) "Program entity" means the Texas Match the Promise
39	39	Foundation, a Texas nonprofit corporation, or any other tax-exempt
40	40	charitable organization established by law to implement the
41	41	program.
42	42	Sec. 54.802. TEXAS SAVE AND MATCH PROGRAM. (a) The board,
43	43	in cooperation with the program entity, shall administer the Texas
44	44	Save and Match Program, under which money contributed to a savings
45	45	trust account by an account owner under a higher education savings
46	46	plan established under Subchapter G or paid by a purchaser under a
47	47	prepaid tuition contract under Subchapter H on behalf of an
48	48	eligible beneficiary may be matched with:
49	49	(1) contributions made by any person to the program
50	50	entity for use in making additional savings trust account
51	51	contributions under Subchapter G or in purchasing additional
52	52	tuition units under prepaid tuition contracts under Subchapter H;
53	53	or
54	54	(2) money appropriated by the legislature for the
55	55	program to be used by the board to make additional savings trust
56	56	account contributions under Subchapter G or to purchase additional
57	57	tuition units under Subchapter H.
58	58	(b) In addition to the board's powers assigned under
59	59	Subchapters F, G, and H, the board has the powers necessary or
60	60	proper to carry out its duties under this subchapter, including the
61	61	power to:
62	62	(1) sue and be sued;
63	63	(2) enter into contracts and other necessary
64	64	instruments;
65	65	(3) enter into agreements or other transactions with
66	66	the United States, state agencies, general academic teaching
67	67	institutions, two-year institutions of higher education, and local
68	68	governments;
69	69	(4) appear on its own behalf before governmental
70	70	agencies;
71	71	(5) contract for necessary goods and services,
72	72	including specifying in the contract duties to be performed by the
73	73	provider of a good or service that are a part of or are in addition
74	74	to the person's primary duties under the contract;
75	75	(6) engage the services of private consultants,
76	76	actuaries, trustees, records administrators, managers, legal
77	77	counsel, and auditors for administrative or technical assistance;
78	78	(7) solicit and accept gifts, grants, donations,
79	79	loans, and other aid from any source or participate in any other
80	80	manner in any government program to carry out this subchapter;
81	81	(8) impose administrative fees;
82	82	(9) contract with a person to market the program;
83	83	(10) purchase liability insurance covering the board
84	84	and employees and agents of the board; and
85	85	(11) establish other policies, procedures, and
86	86	eligibility criteria to implement this subchapter.
87	87	(c) Notwithstanding other law, for purposes of Subchapter
88	88	I, Chapter 659, Government Code:
89	89	(1) the program entity is considered an eligible
90	90	charitable organization entitled to participate in a state employee
91	91	charitable campaign under Subchapter I, Chapter 659, Government
92	92	Code; and
93	93	(2) a state employee is entitled to authorize a
94	94	payroll deduction for contributions to the program entity as a
95	95	charitable contribution under Section 659.132, Government Code.
96	96	Sec. 54.803. INITIAL ELIGIBILITY FOR PARTICIPATION IN
97	97	PROGRAM. (a) To be initially eligible to participate in the
98	98	program, a beneficiary, at the time a prepaid tuition contract is
99	99	entered into on the beneficiary's behalf under Subchapter H or a
100	100	savings trust account is opened on the beneficiary's behalf under
101	101	Subchapter G, as applicable, must be:
102	102	(1) a resident of this state; or
103	103	(2) a dependent for purposes of Section 152, Internal
104	104	Revenue Code of 1986, of a resident of this state.
105	105	(b) To be initially eligible to receive matching funds
106	106	described by Section 54.802(a)(2) under the program, a beneficiary,
107	107	at the time a prepaid tuition contract is entered into on the
108	108	beneficiary's behalf under Subchapter H, or a savings trust account
109	109	is opened on the beneficiary's behalf under Subchapter G, as
110	110	applicable, must be eligible for free meals under the national free
111	111	or reduced-price breakfast and lunch program.
112	112	Sec. 54.804. LIMITATIONS. A matching account established
113	113	by the board or program entity on behalf of a beneficiary under this
114	114	subchapter is forfeited and reverts to the board or program entity
115	115	on the occurrence of any of the following:
116	116	(1) the 10th anniversary of the date the beneficiary
117	117	is projected to graduate from high school, as indicated by the
118	118	purchaser in the enrollment contract, except that time spent by the
119	119	beneficiary as an active duty member of the United States armed
120	120	services tolls the period described by this subdivision;
121	121	(2) a change of beneficiary by the account owner or
122	122	purchaser of the matched account;
123	123	(3) a contract cancellation of the matched account and
124	124	refund request;
125	125	(4) the successful completion by the beneficiary of an
126	126	associate or bachelor's degree program;
127	127	(5) transfer of the matched account to another
128	128	qualified tuition program of any state that meets the requirements
129	129	of Section 529, Internal Revenue Code of 1986; or
130	130	(6) any other event the board or program entity
131	131	determines would be inconsistent with the program's purposes.
132	132	Sec. 54.805. MATCHING ACCOUNT ADMINISTRATION. (a) A
133	133	matching account established by the board or program entity on
134	134	behalf of a beneficiary under this subchapter must be accounted for
135	135	separately from the beneficiary's prepaid tuition contract balance
136	136	or savings trust account balance.
137	137	(b) To the extent possible, money or tuition units in a
138	138	beneficiary's matching account shall be used or redeemed after
139	139	money is used from the beneficiary's savings trust account under
140	140	Subchapter G or tuition units are redeemed from the prepaid tuition
141	141	contract for the beneficiary under Subchapter H.
142	142	(c) To the extent possible, the board shall include
143	143	information about a matching account in the periodic statement
144	144	provided to applicable account owners and purchasers under
145	145	Subchapters G and H.
146	146	Sec. 54.806. CONFIDENTIALITY. (a) Records in the custody
147	147	of the board or program entity relating to the participation of
148	148	specific purchasers, beneficiaries, applicants, scholarship
149	149	recipients, or donors under the program are confidential.
150	150	(b) Notwithstanding Subsection (a), the board or program
151	151	entity may release information described by Subsection (a) to the
152	152	extent required by a general academic teaching institution,
153	153	two-year institution of higher education, private or independent
154	154	institution of higher education, career school, or accredited
155	155	out-of-state institution of higher education at which a beneficiary
156	156	may enroll or is enrolled. The institution or school receiving
157	157	information described by Subsection (a) shall keep the information
158	158	confidential.
159	159	(c) Notwithstanding any other provision of this subchapter,
160	160	the board or program entity may release information to the Internal
161	161	Revenue Service or to any state tax agency as required by applicable
162	162	tax law.
163	163	(d) Notwithstanding any other provision of this subchapter,
164	164	the board or program entity may release information relating to
165	165	donors who authorize release of that information.
166	166	Sec. 54.807. PILOT PROJECTS UNDER PROGRAM. To fulfill the
167	167	intent of the program, the board may use funds described by Section
168	168	54.802(a)(2) to establish pilot projects under the program in an
169	169	effort to incentivize participation in the higher education savings
170	170	program under Subchapter G and the prepaid tuition unit
171	171	undergraduate education program under Subchapter H, including
172	172	projects that incentivize participation by:
173	173	(1) awarding additional matching grants based on a
174	174	beneficiary's achievement of specified academic goals;
175	175	(2) providing initial matching grants and paying
176	176	application fees;
177	177	(3) providing incentives for employers to contribute
178	178	matching funds to the program; and
179	179	(4) creating a program information portal designed to
180	180	increase program awareness and accessibility among school
181	181	districts, parents, and students.
182	182	Sec. 54.808. TEXAS SAVE AND MATCH TRUST FUND; AGREEMENTS
183	183	BETWEEN BOARD AND PROGRAM ENTITY REGARDING PROGRAM ENTITY FUNDS.
184	184	(a) The Texas save and match trust fund is established as a trust
185	185	fund to be held with the comptroller.
186	186	(b) Money in the fund may be spent without appropriation and
187	187	only to establish matching accounts, make deposits, purchase
188	188	tuition units, and award matching grants and scholarships under the
189	189	program and to pay the costs of program administration and
190	190	operations.
191	191	(c) The board may invest, reinvest, and direct the
192	192	investment of any available money in the fund.
193	193	(d) Interest and income from the assets of the fund shall be
194	194	credited to and deposited in the fund.
195	195	(e) The board and the program entity may enter into an
196	196	agreement under which the board may hold and manage funds of the
197	197	program entity and provide services to the program entity.
198	198	Sec. 54.809. RULES. The board shall adopt rules for the
199	199	administration of this subchapter.
200	200	SECTION 2. Subchapter A, Chapter 56, Education Code, is
201	201	amended by adding Section 56.007 to read as follows:
202	202	Sec. 56.007. EXCLUSION OF ASSETS IN PREPAID TUITION
203	203	PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. Notwithstanding any
204	204	other law, the right of a person to assets held in or the right to
205	205	receive payments or benefits under any fund or plan established
206	206	under Subchapter G, H, or I, Chapter 54, including an interest in a
207	207	savings trust account, prepaid tuition account, or related matching
208	208	account, may not be considered an asset of the person, or otherwise
209	209	included in the person's household income or other financial
210	210	resources, for purposes of determining the person's eligibility for
211	211	a TEXAS grant or any other state-funded student financial
212	212	assistance.
213	213	SECTION 3. Subchapter C, Chapter 62, Health and Safety
214	214	Code, is amended by adding Section 62.1012 to read as follows:
215	215	Sec. 62.1012. EXCLUSION OF ASSETS IN PREPAID TUITION
216	216	PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. For purposes of
217	217	determining whether a child meets family income and resource
218	218	requirements for eligibility for the child health plan, the
219	219	commission may not consider as income or resources a right to assets
220	220	held in or a right to receive payments or benefits under:
221	221	(1) any fund or plan established under Subchapter G,
222	222	H, or I, Chapter 54, Education Code, including an interest in a
223	223	savings trust account, prepaid tuition contract, or related
224	224	matching account; or
225	225	(2) any qualified tuition program of any state that
226	226	meets the requirements of Section 529, Internal Revenue Code of
227	227	1986.
228	228	SECTION 4. Subchapter A, Chapter 31, Human Resources Code,
229	229	is amended by adding Section 31.0039 to read as follows:
230	230	Sec. 31.0039. EXCLUSION OF ASSETS IN PREPAID TUITION
231	231	PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. For purposes of
232	232	determining the amount of financial assistance granted to an
233	233	individual under this chapter for the support of dependent children
234	234	or determining whether the family meets household income and
235	235	resource requirements for financial assistance under this chapter,
236	236	the department may not consider the right to assets held in or the
237	237	right to receive payments or benefits under:
238	238	(1) any fund or plan established under Subchapter G,
239	239	H, or I, Chapter 54, Education Code, including an interest in a
240	240	savings trust account, prepaid tuition contract, or related
241	241	matching account; or
242	242	(2) any qualified tuition program of any state that
243	243	meets the requirements of Section 529, Internal Revenue Code of
244	244	1986.
245	245	SECTION 5. Subchapter B, Chapter 32, Human Resources Code,
246	246	is amended by adding Section 32.02611 to read as follows:
247	247	Sec. 32.02611. EXCLUSION OF ASSETS IN PREPAID TUITION
248	248	PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. (a) Except as
249	249	provided by Subsection (b), in determining eligibility and need for
250	250	medical assistance, the department may not consider as assets or
251	251	resources a right to assets held in or a right to receive payments
252	252	or benefits under:
253	253	(1) any fund or plan established under Subchapter G,
254	254	H, or I, Chapter 54, Education Code, including an interest in a
255	255	savings trust account, prepaid tuition contract, or related
256	256	matching account; or
257	257	(2) any qualified tuition program of any state that
258	258	meets the requirements of Section 529, Internal Revenue Code of
259	259	1986.
260	260	(b) In determining eligibility and need for medical
261	261	assistance for an applicant who may be eligible on the basis of the
262	262	applicant's eligibility for medical assistance for the aged, blind,
263	263	or disabled under 42 U.S.C. Section 1396a(a)(10), the department
264	264	may consider as assets or resources a right to assets held in or a
265	265	right to receive payments or benefits under any fund, plan, or
266	266	tuition program described by Subsection (a).
267	267	(c) Notwithstanding Subsection (b), the department shall
268	268	seek a federal waiver authorizing the department to exclude, for
269	269	purposes of determining the eligibility of an applicant described
270	270	by that subsection, the right to assets held in or a right to
271	271	receive payments or benefits under any fund, plan, or tuition
272	272	program described by Subsection (a) if the fund, plan, or tuition
273	273	program was established before the 21st birthday of the beneficiary
274	274	of the fund, plan, or tuition program.
275	275	SECTION 6. Section 54.7521, Education Code, is repealed.
276	276	SECTION 7. The Prepaid Higher Education Tuition Board shall
277	277	adopt the initial rules required by Subchapter I, Chapter 54,
278	278	Education Code, as added by this Act, not later than May 31, 2012.
279	279	SECTION 8. The Texas Save and Match Program established by
280	280	this Act is an expansion of the Texas Save and Match program created
281	281	under Section 54.7521, Education Code. On and after the effective
282	282	date of the repeal of Section 54.7521, Education Code, by this Act,
283	283	the tax-exempt charitable organization created under that section
284	284	to provide matching funds under that program may continue to accept
285	285	tax-deductible donations for the purpose of providing matching
286	286	funds under the program established by this Act.
287	287	SECTION 9. Subchapter I, Chapter 54, Education Code, as
288	288	added by this Act, applies to a prepaid tuition contract purchased
289	289	for a beneficiary under Subchapter H, Chapter 54, Education Code,
290	290	regardless of whether the prepaid tuition contract was purchased
291	291	before, on, or after the effective date of this Act. Subchapter I,
292	292	Chapter 54, Education Code, as added by this Act, applies only to a
293	293	savings trust account opened for a beneficiary under Subchapter G,
294	294	Chapter 54, Education Code, on or after January 1, 2012.
295	295	SECTION 10. If before implementing any provision of this
296	296	Act a state agency determines that a waiver or authorization from a
297	297	federal agency is necessary for implementation of that provision,
298	298	the agency affected by the provision shall request the waiver or
299	299	authorization and may delay implementing that provision until the
300	300	waiver or authorization is granted.
301	301	SECTION 11. The changes in law made by this Act apply to a
302	302	person who receives health benefits coverage under Chapter 62,
303	303	Health and Safety Code, financial assistance under Chapter 31,
304	304	Human Resources Code, or medical assistance under Chapter 32, Human
305	305	Resources Code, on or after the effective date of this Act,
306	306	regardless of the date on which eligibility for coverage or
307	307	assistance was initially determined.
308	308	SECTION 12. (a) Except as provided by Subsection (b) of
309	309	this section, this Act takes effect September 1, 2011.
310	310	(b) Section 6 of this Act takes effect January 1, 2012.
311	311	* * * * *