By: Creighton, West S.B. No. 1094
Zaffirini
A BILL TO BE ENTITLED
AN ACT
relating to the payment of apprenticeship education expenses using
the state's programs for paying, 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 54.605(a), 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 in an
institution of higher education, a private or independent
institution of higher education, [or] a career school or college,
or an apprenticeship program described by Section 54.619(i); or
(2) is projected to graduate from high school not
later than the third anniversary of the date the program is
terminated.
SECTION 2. Section 54.619, Education Code, is amended by
adding Subsection (i) to read as follows:
(i) Notwithstanding other provisions of this subchapter,
any contract benefits purchased under this subchapter may be
applied to the payment of apprenticeship program expenses for a
registered apprenticeship program as if the apprenticeship program
were an institution of higher education or private or independent
institution of higher education. On the purchaser's request, the
board shall apply, in accordance with Section 54.628, any existing
amount of prepaid tuition contract benefits to the payment of
apprenticeship program expenses. The board is not responsible for
the payment of apprenticeship program expenses in excess of that
amount. The board may adopt rules as necessary to implement this
subsection. In this subsection, "apprenticeship program expenses"
means expenses for fees, books, supplies, and equipment required
for a beneficiary to participate in an apprenticeship program that
is registered and certified with the United States Department of
Labor under the National Apprenticeship Act (29 U.S.C. Section 50
et seq.).
SECTION 3. Section 54.701(8), Education Code, is amended to
read as follows:
(8) "Qualified higher education expenses" has the
meaning assigned by Section 529, Internal Revenue Code of 1986, as
amended, and includes expenses for fees, books, supplies, and
equipment required for the beneficiary to participate in an
apprenticeship program that is registered and certified with the
United States Department of Labor under the National Apprenticeship
Act (29 U.S.C. Section 50 et seq.).
SECTION 4. Section 54.751, Education Code, is amended by
adding Subdivisions (1-a) and (9-a) and amending Subdivisions (2)
and (6) to read as follows:
(1-a) "Apprenticeship program expenses" means the
expenses for fees, books, supplies, and equipment required for a
beneficiary to participate in a registered apprenticeship program.
(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:
(A) undergraduate tuition and required fees at a
general academic teaching institution, two-year institution of
higher education, private or independent institution of higher
education, medical and dental unit, career school, or accredited
out-of-state institution of higher education; and
(B) apprenticeship program expenses.
(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:
(A) undergraduate tuition and required fees at a
general academic teaching institution, two-year institution of
higher education, private or independent institution of higher
education, medical and dental unit, career school, or accredited
out-of-state institution of higher education; or
(B) apprenticeship program expenses.
(9-a) "Registered apprenticeship program" means an
apprenticeship program that is registered and certified with the
United States Department of Labor under the National Apprenticeship
Act (29 U.S.C. Section 50 et seq.).
SECTION 5. Section 54.753(a), 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, medical and dental unit, career
school, or accredited out-of-state institution of higher education
or all or a portion of the beneficiary's apprenticeship program
expenses 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 6. Sections 54.754(a), (d), and (e), Education
Code, are amended to read as follows:
(a) In accordance with this subchapter, when a beneficiary
under a prepaid tuition contract redeems one or more tuition units
to pay costs of tuition and required fees or apprenticeship program
expenses, the board shall apply money in the fund, in the amount
provided by Section 54.765 to pay all or the applicable portion of
the costs 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, medical and dental unit, or accredited out-of-state
institution of higher education in which the beneficiary enrolls or
the beneficiary's apprenticeship program expenses. Subject to
Subsection (b)(2) and the other provisions of this section, a
beneficiary may redeem any type of tuition unit for attendance at an
institution, [or] unit, or program described by this section. A
general academic teaching institution or two-year institution of
higher education shall accept the amount transferred to the
institution under Section 54.765(c) when the unit or units are
redeemed as payment for all or the applicable portion of the
beneficiary's tuition and required fees.
(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, medical and
dental unit, career school, or accredited out-of-state institution
of higher education at which the beneficiary enrolls or
apprenticeship program expenses, the beneficiary is responsible
for paying the amount of the difference between the amount of
tuition and required fees or expenses 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 or unit or the beneficiary's apprenticeship program
expenses.
(e) If the beneficiary redeems fewer tuition units to pay
the cost of tuition and required fees or apprenticeship program
expenses than the number of units purchased on behalf of the
beneficiary under a prepaid tuition contract, other than to defer
redemption as permitted in accordance with Section 54.758, the
purchaser may:
(1) redeem for cash the amount of the purchase price of
the excess units, plus annual interest earned on that money,
accrued at a rate set by the board not to exceed five percent
annually; or
(2) transfer the remaining units to another
beneficiary in accordance with this subchapter.
SECTION 7. Section 54.758(a), Education Code, is amended to
read as follows:
(a) A prepaid tuition contract must permit the beneficiary
to elect to pay from a source other than tuition units purchased
under the contract the beneficiary's tuition and required fees or
apprenticeship program expenses for some or all of the tuition and
required fees or apprenticeship program expenses to which the
beneficiary is entitled to payment under the contract, and to defer
to a subsequent semester or other academic term the right to payment
of the beneficiary's tuition and required fees or apprenticeship
program expenses by using tuition units remaining under the
contract.
SECTION 8. Section 54.765(f), Education Code, is amended to
read as follows:
(f) When a beneficiary enrolls at a private or independent
institution of higher education, medical and dental unit, career
school, [or] accredited out-of-state institution of higher
education, or registered apprenticeship program, 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 or apprenticeship program expenses 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 had the highest tuition and required fee
cost;
(B) for a Type II unit, at a general academic
teaching institution that 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 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.
SECTION 9. 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, medical and dental
units, career schools, [and] accredited out-of-state institutions
of higher education, and registered apprenticeship programs on
behalf of beneficiaries; and
(3) make refunds under prepaid tuition contracts.
SECTION 10. Sections 54.769(b) and (c), 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, medical and
dental unit, career school, or accredited out-of-state institution
of higher education or apprenticeship program expenses 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, medical and dental
unit, career school, or accredited out-of-state institution of
higher education or apprenticeship program expenses under a prepaid
tuition contract.
SECTION 11. Section 54.774(a), 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,
medical and dental unit, career school, [or] accredited
out-of-state institution of higher education, or registered
apprenticeship program; or
(2) is projected to graduate from high school not
later than the third anniversary of the date the program is
terminated.
SECTION 12. Section 54.775(b), 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, medical and
dental unit, career school, [or] accredited out-of-state
institution of higher education, or registered apprenticeship
program at which a beneficiary may enroll or is enrolled. The
institution, [or] unit, or program shall keep the information
confidential.
SECTION 13. Section 54.806(b), Education Code, is amended
to read as follows:
(b) Notwithstanding Subsection (a), the board or program
entity may release information described by Subsection (a) to the
extent required by 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 registered
apprenticeship program at which a beneficiary may enroll or is
enrolled. The institution, [or] school, or program receiving
information described by Subsection (a) shall keep the information
confidential.
SECTION 14. The change in law made by this Act regarding the
application of prepaid tuition contract benefits to the payment of
apprenticeship program expenses for a registered apprenticeship
program applies to contract benefits purchased under Subchapters F
and H, Chapter 54, Education Code, as amended by this Act, before,
on, or after the effective date of this Act.
SECTION 15. This Act takes effect September 1, 2021.