Texas 2019 - 86th Regular

Texas Senate Bill SB1664 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R11170 MM-F
2	2	By: Buckingham S.B. No. 1664
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the administration and operation of the state's
8	8	programs for paying, prepaying, or saving toward the costs of
9	9	attending an institution of higher education, including the powers
10	10	and duties of the Prepaid Higher Education Tuition Board.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 54.602, Education Code, is amended by
13	13	adding Subsection (c) to read as follows:
14	14	(c) Unless otherwise specified, the provisions of this
15	15	subchapter concerning the following requirements applicable to the
16	16	board under this subchapter also apply to the board for purposes of
17	17	Subchapters G, H, I, and J of this chapter:
18	18	(1) membership;
19	19	(2) appointments of members;
20	20	(3) removal of members;
21	21	(4) ethics policy;
22	22	(5) training;
23	23	(6) board officers;
24	24	(7) compensation;
25	25	(8) meetings;
26	26	(9) public interest information and complaints;
27	27	(10) use of technology;
28	28	(11) program and facility accessibility;
29	29	(12) executive director; and
30	30	(13) staff.
31	31	SECTION 2. Section 54.641(a), Education Code, is amended to
32	32	read as follows:
33	33	(a) Not later than January 31 [1] of each year, the board
34	34	shall furnish without charge to each purchaser a statement of:
35	35	(1) the amount paid by the purchaser under the prepaid
36	36	tuition contract;
37	37	(2) the number of credit hours originally covered by
38	38	the contract;
39	39	(3) the number of credit hours remaining under the
40	40	contract; and
41	41	(4) any other information the board determines by rule
42	42	is necessary or appropriate.
43	43	SECTION 3. Section 54.701(8), Education Code, is amended to
44	44	read as follows:
45	45	(8) "Qualified higher education expenses" has the
46	46	meaning assigned by [means tuition, fees, or expenses for books,
47	47	supplies, and equipment required for the enrollment or attendance
48	48	of an individual at an eligible educational institution, the costs
49	49	of room and board, and any other higher education expenses that may
50	50	be permitted under] Section 529, Internal Revenue Code of 1986, as
51	51	amended.
52	52	SECTION 4. Section 54.702(a), Education Code, is amended to
53	53	read as follows:
54	54	(a) The board shall:
55	55	(1) develop and implement the plan in a manner
56	56	consistent with this subchapter;
57	57	(2) select the financial institution or institutions
58	58	to serve as plan manager; and
59	59	(3) adopt rules to implement this subchapter
60	60	[governing withdrawal of money from a savings trust account and
61	61	develop policies and penalties for nonqualified withdrawals].
62	62	SECTION 5. The heading to Section 54.708, Education Code,
63	63	is amended to read as follows:
64	64	Sec. 54.708. CONTRIBUTIONS AND WITHDRAWALS[; PENALTY FOR
65	65	NONQUALIFIED WITHDRAWAL].
66	66	SECTION 6. Section 54.708(b), Education Code, is amended to
67	67	read as follows:
68	68	(b) An account owner may withdraw all or part of the balance
69	69	of an account on prior notice as authorized by board rules. [The
70	70	board shall adopt rules governing the determination whether a
71	71	withdrawal is a qualified withdrawal or a nonqualified withdrawal.
72	72	The rules may require an account owner requesting to make a
73	73	qualified withdrawal to provide a certification of qualified higher
74	74	education expenses.]
75	75	SECTION 7. Sections 54.751(2), (6), and (7), Education
76	76	Code, are amended to read as follows:
77	77	(2) "Beneficiary" means the person designated under a
78	78	prepaid tuition contract as the person entitled to apply one or more
79	79	tuition units purchased under the contract to the payment of the
80	80	person's undergraduate tuition and required fees at a general
81	81	academic teaching institution, medical and dental unit, two-year
82	82	institution of higher education, private or independent
83	83	institution of higher education, career school, or accredited
84	84	out-of-state institution of higher education.
85	85	(6) "Prepaid tuition contract" means a contract under
86	86	which a person purchases from the board on behalf of a beneficiary
87	87	one or more tuition units that the beneficiary is entitled to apply
88	88	to the payment of the beneficiary's undergraduate tuition and
89	89	required fees at a general academic teaching institution, medical
90	90	and dental unit, two-year institution of higher education, private
91	91	or independent institution of higher education, career school, or
92	92	accredited out-of-state institution of higher education.
93	93	(7) "Medical and dental unit," "private ["Private] or
94	94	independent institution of higher education," "public junior
95	95	college," "public state college," "public technical institute,"
96	96	and "recognized accrediting agency" have the meanings assigned by
97	97	Section 61.003.
98	98	SECTION 8. Section 54.752(b), Education Code, is amended to
99	99	read as follows:
100	100	(b) In addition to the board's powers assigned under
101	101	Subchapters F and G, the board has the powers necessary or proper to
102	102	carry out this subchapter, including the power to:
103	103	(1) adopt rules to implement this subchapter;
104	104	(2) sue and be sued;
105	105	(3) enter into contracts and other necessary
106	106	instruments;
107	107	(4) enter into agreements or other transactions with
108	108	the United States, state agencies, general academic teaching
109	109	institutions, medical and dental units, two-year institutions of
110	110	higher education, and local governments;
111	111	(5) appear on its own behalf before governmental
112	112	agencies;
113	113	(6) contract for necessary goods and services,
114	114	including specifying in the contract duties to be performed by the
115	115	provider of a good or service that are a part of or are in addition
116	116	to the person's primary duties under the contract;
117	117	(7) engage the services of private consultants,
118	118	actuaries, trustees, records administrators, managers, legal
119	119	counsel, and auditors for administrative or technical assistance;
120	120	(8) solicit and accept gifts, grants, loans, and other
121	121	aid from any source or participate in any other way in any
122	122	government program to carry out this subchapter;
123	123	(9) impose administrative fees;
124	124	(10) contract with a person to market the program;
125	125	(11) purchase liability insurance covering the board
126	126	and employees and agents of the board; and
127	127	(12) establish other policies, procedures, and
128	128	eligibility criteria to implement this subchapter.
129	129	SECTION 9. Sections 54.753(a), (b), (c), (d), and (e),
130	130	Education Code, are amended to read as follows:
131	131	(a) Under the program, a purchaser may prepay the costs of
132	132	all or a portion of a beneficiary's undergraduate tuition and
133	133	required fees at a general academic teaching institution, medical
134	134	and dental unit, two-year institution of higher education, private
135	135	or independent institution of higher education, career school, or
136	136	accredited out-of-state institution of higher education by
137	137	entering into a prepaid tuition contract with the board to purchase
138	138	one or more tuition units of a type described by this section at the
139	139	applicable price established by the board for that type of unit for
140	140	the year in which the unit is purchased. The portion of the
141	141	beneficiary's undergraduate tuition and required fees for which a
142	142	tuition unit may be redeemed at a particular general academic
143	143	teaching institution, medical and dental unit, or two-year
144	144	institution of higher education is assigned to the tuition unit at
145	145	the time of purchase, and the tuition unit may be redeemed to pay
146	146	that portion of the tuition and fees at the general academic
147	147	teaching institution, medical and dental unit, or two-year
148	148	institution of higher education in any academic year in which the
149	149	unit is redeemed in accordance with this subchapter. The purchaser
150	150	may purchase one type of unit or a combination of two or three types
151	151	of units.
152	152	(b) The assigned value of a tuition unit, purchased as
153	153	provided by this section, when used to pay the cost of tuition and
154	154	required fees at a general academic teaching institution, medical
155	155	and dental unit, or two-year institution of higher education, is
156	156	equal to one percent of the amount necessary for the academic year
157	157	in which the unit is redeemed to cover the applicable cost of
158	158	undergraduate resident tuition and required fees for one academic
159	159	year consisting of 30 semester credit hours as follows:
160	160	(1) for a Type I tuition unit, the cost of
161	161	undergraduate resident tuition and required fees charged by the
162	162	general academic teaching institution or medical and dental unit,
163	163	as applicable, with the highest such tuition and fee costs,
164	164	determined as provided by Subsection (d);
165	165	(2) for a Type II tuition unit, the weighted average
166	166	undergraduate resident tuition and required fees charged by general
167	167	academic teaching institutions or medical and dental units, as
168	168	applicable, determined as provided by Subsection (e); and
169	169	(3) for a Type III tuition unit, the weighted average
170	170	undergraduate resident tuition and required fees of two-year
171	171	institutions of higher education, determined as provided by
172	172	Subsection (f).
173	173	(c) Each year, the board shall establish the price at which
174	174	each type of tuition unit may be purchased during the next sales
175	175	period and the percentage of the total cost of undergraduate
176	176	resident tuition and required fees for one academic year consisting
177	177	of 30 semester credit hours for which each type of tuition unit may
178	178	be redeemed at each general academic teaching institution, medical
179	179	and dental unit, and two-year institution. The percentage shall be
180	180	based on the total cost of required tuition and fees at a particular
181	181	general academic teaching institution, medical and dental unit, or
182	182	two-year institution of higher education in relation to the amount
183	183	determined for the institution or unit with the highest cost or
184	184	weighted average cost, as applicable. The purchase price
185	185	established for each type of unit must be equal to the applicable
186	186	cost of tuition and required fees as determined under this section
187	187	for the most recent academic year that began before the beginning of
188	188	the sales period. The sales period to which those prices apply
189	189	expires on the first anniversary of the date the units become
190	190	available for purchase at the prices established for that year. On
191	191	or before June 1, each general academic teaching institution,
192	192	medical and dental unit, and two-year institution of higher
193	193	education shall annually provide information for the upcoming fall
194	194	semester to the board in a format requested by the board, to assist
195	195	the board in determining tuition unit sales prices for the upcoming
196	196	sales period and redemption values for the upcoming academic year.
197	197	(d) The board shall base the purchase price of a Type I
198	198	tuition unit on one percent of the cost of the undergraduate
199	199	resident tuition and required fees for the applicable academic year
200	200	at the general academic teaching institution or medical and dental
201	201	unit, as applicable, with the highest such tuition and fee cost for
202	202	that academic year.
203	203	(e) The board shall base the purchase price of a Type II
204	204	tuition unit on one percent of the cost of the weighted average
205	205	general academic teaching institution or medical and dental unit,
206	206	as applicable, undergraduate resident tuition and required fees for
207	207	the applicable academic year. That cost is determined by:
208	208	(1) for each general academic teaching institution or
209	209	medical and dental unit, as applicable, multiplying the average
210	210	amount of the institution's or unit's undergraduate resident
211	211	tuition and required fees for an academic year consisting of 30
212	212	semester credit hours by the number of full-time equivalent
213	213	undergraduate resident students at that institution or unit;
214	214	(2) adding together the products computed under
215	215	Subdivision (1) for each institution or unit; and
216	216	(3) dividing the sum determined under Subdivision (2)
217	217	by the total number of full-time equivalent undergraduate resident
218	218	students at all general academic teaching institutions or medical
219	219	and dental units, as applicable.
220	220	SECTION 10. Sections 54.754(a), (b), (c), and (d),
221	221	Education Code, are amended to read as follows:
222	222	(a) In accordance with this subchapter, when a beneficiary
223	223	under a prepaid tuition contract redeems one or more tuition units
224	224	to pay costs of tuition and required fees, the board shall apply
225	225	money in the fund, in the amount provided by Section 54.765 to pay
226	226	all or the applicable portion of the costs of the beneficiary's
227	227	tuition and required fees at the general academic teaching
228	228	institution, medical and dental unit, two-year institution of
229	229	higher education, private or independent institution of higher
230	230	education, or accredited out-of-state institution of higher
231	231	education in which the beneficiary enrolls. Subject to Subsection
232	232	(b)(2) and the other provisions of this section, a beneficiary may
233	233	redeem any type of tuition unit for attendance at an institution or
234	234	unit described by this section. A general academic teaching
235	235	institution, medical and dental unit, or two-year institution of
236	236	higher education shall accept the amount transferred to the
237	237	institution or unit under Section 54.765(c) when the unit or units
238	238	are redeemed as payment for all or the applicable portion of the
239	239	beneficiary's tuition and required fees.
240	240	(b) To pay for the entire cost of undergraduate resident
241	241	tuition and required fees for an academic year consisting of 30
242	242	semester credit hours, redemption of 100 Type I tuition units is
243	243	required at the general academic teaching institution or medical
244	244	and dental unit, as applicable, with the highest tuition and fee
245	245	cost as described by Section 54.753(d), redemption of 100 Type II
246	246	tuition units is required at a general academic teaching
247	247	institution or medical and dental unit, as applicable, with the
248	248	applicable tuition and fee cost at the weighted average as
249	249	described by Subsection (e) of that section, and redemption of 100
250	250	Type III units is required at a two-year institution of higher
251	251	education with the applicable tuition and fee cost at the weighted
252	252	average as described by Subsection (f) of that section. The number
253	253	of tuition units that must be redeemed to pay for the entire cost of
254	254	tuition and required fees for an academic year at another general
255	255	academic teaching institution, medical and dental unit, or two-year
256	256	institution of higher education may be higher or lower:
257	257	(1) in proportion to the amount that the cost of
258	258	tuition and required fees at that institution or unit is higher or
259	259	lower than the amount determined for the institution or unit with
260	260	the highest cost or weighted average cost, as applicable; or
261	261	(2) if a more or less valuable type of tuition unit is
262	262	redeemed.
263	263	(c) To assist purchasers in determining the number of
264	264	tuition units a beneficiary must redeem to cover the costs of
265	265	tuition and required fees at general academic teaching
266	266	institutions, medical and dental units, and two-year institutions
267	267	of higher education, each year the board shall prepare a tuition
268	268	unit redemption chart and shall post the chart on an Internet
269	269	website. The chart must show for each general academic teaching
270	270	institution, for each medical and dental unit, and for each
271	271	two-year institution of higher education the number of each type of
272	272	units purchased that year that would be required to cover the cost
273	273	of tuition and required fees, based on an academic year consisting
274	274	of 30 semester credit hours.
275	275	(d) If a beneficiary redeems fewer tuition units of the type
276	276	or combination of types necessary to pay the total cost of the
277	277	beneficiary's tuition and required fees at the general academic
278	278	teaching institution, medical and dental unit, two-year
279	279	institution of higher education, private or independent
280	280	institution of higher education, career school, or accredited
281	281	out-of-state institution of higher education at which the
282	282	beneficiary enrolls, the beneficiary is responsible for paying the
283	283	amount of the difference between the amount of tuition and required
284	284	fees for which the beneficiary pays through the redemption of one or
285	285	more tuition units and the total cost of the beneficiary's tuition
286	286	and required fees at the institution or unit.
287	287	SECTION 11. Section 54.756(e), Education Code, is amended
288	288	to read as follows:
289	289	(e) Notwithstanding any provision of Subchapter B, the
290	290	tuition and required fees charged by a general academic teaching
291	291	institution, medical and dental unit, or two-year institution of
292	292	higher education that are paid for with tuition units shall be
293	293	determined as if the beneficiary of that contract were a resident
294	294	student.
295	295	SECTION 12. Sections 54.765(c) and (f), Education Code, are
296	296	amended to read as follows:
297	297	(c) When a beneficiary enrolls at a general academic
298	298	teaching institution, medical and dental unit, or two-year
299	299	institution of higher education, on written authorization from the
300	300	purchaser of the tuition unit or units for that beneficiary, the
301	301	comptroller or the comptroller's authorized representative shall
302	302	transfer to the institution or unit an amount equal to the lesser
303	303	of:
304	304	(1) the sum of:
305	305	(A) the total purchase price of the tuition unit
306	306	or units the beneficiary redeems for the semester or other academic
307	307	term; and
308	308	(B) the amount determined under Subsection (d);
309	309	or
310	310	(2) an amount equal to 101 percent of the amount of
311	311	tuition and required fees covered by the tuition units being
312	312	redeemed.
313	313	(f) When a beneficiary enrolls at a private or independent
314	314	institution of higher education, career school, or accredited
315	315	out-of-state institution of higher education, on written
316	316	authorization from the purchaser of the tuition unit or units for
317	317	that beneficiary, the comptroller or the comptroller's authorized
318	318	representative shall transfer to the institution the lesser of:
319	319	(1) an amount equal to the current cost of the tuition
320	320	and required fees that would be covered by redemption of the number
321	321	and type of tuition units the beneficiary is redeeming if the
322	322	beneficiary were redeeming the unit or units at a general academic
323	323	teaching institution, medical and dental unit, or two-year
324	324	institution of higher education as follows:
325	325	(A) for a Type I unit, at the general academic
326	326	teaching institution or medical and dental unit, as applicable,
327	327	that had the highest tuition and required fee cost;
328	328	(B) for a Type II unit, at a general academic
329	329	teaching institution or medical and dental unit, as applicable,
330	330	that had tuition and required fee cost at the weighted average; and
331	331	(C) for a Type III unit, at a two-year
332	332	institution of higher education that had tuition and required fee
333	333	cost at the weighted average; or
334	334	(2) an amount equal to the total purchase price of the
335	335	tuition unit or units the beneficiary redeems for the semester or
336	336	other academic term plus the portion of the total return on assets
337	337	of the fund attributable to that amount.
338	338	SECTION 13. Section 54.767, Education Code, is amended to
339	339	read as follows:
340	340	Sec. 54.767. USE OF FUND ASSETS. The assets of the fund may
341	341	be used only to:
342	342	(1) pay the costs of program administration and
343	343	operations;
344	344	(2) make payments to general academic teaching
345	345	institutions, medical and dental units, two-year institutions of
346	346	higher education, private or independent institutions of higher
347	347	education, career schools, and accredited out-of-state
348	348	institutions of higher education on behalf of beneficiaries; and
349	349	(3) make refunds under prepaid tuition contracts.
350	350	SECTION 14. Section 54.7671(b), Education Code, is amended
351	351	to read as follows:
352	352	(b) For purposes of a transfer of money from an account
353	353	under this subchapter, the value of the account at the time of
354	354	transfer is the lesser of:
355	355	(1) an amount equal to the cost, at the time of the
356	356	transfer, of the tuition and required fees that would be covered by
357	357	redemption of the number and type of tuition units to be transferred
358	358	from the account if the beneficiary were redeeming the units at a
359	359	general academic teaching institution, medical and dental unit, or
360	360	two-year institution of higher education as follows:
361	361	(A) for a Type I unit, at the general academic
362	362	teaching institution or medical and dental unit, as applicable,
363	363	that had the highest tuition and required fee cost;
364	364	(B) for a Type II unit, at a general academic
365	365	teaching institution or medical and dental unit, as applicable,
366	366	that had tuition and required fee cost at the weighted average; and
367	367	(C) for a Type III unit, at a two-year
368	368	institution of higher education that had tuition and required fee
369	369	cost at the weighted average; or
370	370	(2) an amount equal to the total purchase price of the
371	371	tuition units to be transferred from the account, plus the portion
372	372	of the total return on assets of the fund attributable to that
373	373	amount.
374	374	SECTION 15. Sections 54.769(b) and (c), Education Code, are
375	375	amended to read as follows:
376	376	(b) The rights of a purchaser, beneficiary, or successor in
377	377	interest of a purchaser or beneficiary in and under a prepaid
378	378	tuition contract and the payment of tuition and required fees for a
379	379	beneficiary under a prepaid tuition contract to a general academic
380	380	teaching institution, medical and dental unit, two-year
381	381	institution of higher education, private or independent
382	382	institution of higher education, career school, or accredited
383	383	out-of-state institution of higher education under this chapter are
384	384	exempt from attachment, levy, garnishment, execution, and seizure
385	385	for the satisfaction of any debt, judgment, or claim against a
386	386	purchaser, beneficiary, or successor in interest of a purchaser or
387	387	beneficiary.
388	388	(c) A claim or judgment against a purchaser, beneficiary, or
389	389	successor in interest of a purchaser or beneficiary does not impair
390	390	or entitle the claim or judgment holder to assert or enforce a lien
391	391	against:
392	392	(1) the rights of a purchaser, beneficiary, or
393	393	successor in interest of a purchaser or beneficiary in and under a
394	394	prepaid tuition contract; or
395	395	(2) the right of a beneficiary to the payment of
396	396	tuition and required fees to a general academic teaching
397	397	institution, medical and dental unit, two-year institution of
398	398	higher education, private or independent institution of higher
399	399	education, career school, or accredited out-of-state institution
400	400	of higher education under a prepaid tuition contract.
401	401	SECTION 16. Section 54.774(a), Education Code, is amended
402	402	to read as follows:
403	403	(a) A prepaid tuition contract remains in effect after the
404	404	program is terminated if, when the program is terminated, the
405	405	beneficiary:
406	406	(1) has been accepted by or is enrolled at a general
407	407	academic teaching institution, medical and dental unit, two-year
408	408	institution of higher education, private or independent
409	409	institution of higher education, career school, or accredited
410	410	out-of-state institution of higher education; or
411	411	(2) is projected to graduate from high school not
412	412	later than the third anniversary of the date the program is
413	413	terminated.
414	414	SECTION 17. Section 54.775(b), Education Code, is amended
415	415	to read as follows:
416	416	(b) Notwithstanding Subsection (a), the board may release
417	417	information described by that subsection to a general academic
418	418	teaching institution, medical and dental unit, two-year
419	419	institution of higher education, private or independent
420	420	institution of higher education, career school, or accredited
421	421	out-of-state institution of higher education at which a beneficiary
422	422	may enroll or is enrolled. The institution or unit shall keep the
423	423	information confidential.
424	424	SECTION 18. Section 54.776, Education Code, is amended to
425	425	read as follows:
426	426	Sec. 54.776. STATEMENT REGARDING STATUS OF PREPAID TUITION
427	427	CONTRACT. Not later than January 31 [1] of each year, the board
428	428	shall provide without charge to each purchaser a statement of:
429	429	(1) the amount paid by the purchaser under the prepaid
430	430	tuition contract;
431	431	(2) the total number of each type of tuition unit
432	432	covered by the contract at any one time;
433	433	(3) the number of each type of tuition unit remaining
434	434	under the contract;
435	435	(4) the value of the purchasers' tuition units if
436	436	redeemed at any general academic teaching institution, medical and
437	437	dental unit, or two-year institution of higher education designated
438	438	for that year by the purchaser in the time and manner required by
439	439	the board, not to exceed five institutions or units; and
440	440	(5) any other information the board determines by rule
441	441	is necessary or appropriate.
442	442	SECTION 19. Sections 54.708(c), (d), (e), and (f),
443	443	Education Code, are repealed.
444	444	SECTION 20. This Act takes effect immediately if it
445	445	receives a vote of two-thirds of all the members elected to each
446	446	house, as provided by Section 39, Article III, Texas Constitution.
447	447	If this Act does not receive the vote necessary for immediate
448	448	effect, this Act takes effect September 1, 2019.