S.B. No. 1094
AN ACT
relating to the payment of certain 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 a registered 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 tuition and required fees 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
registered apprenticeship program tuition and required fees. The
board is not responsible for the payment of registered
apprenticeship program tuition and required fees in excess of that
amount. The board may adopt rules as necessary to implement this
subsection. In this subsection, "registered apprenticeship
program" means an apprenticeship program that is registered and
certified with the United States Department of Labor under Section
1 of the National Apprenticeship Act (29 U.S.C. Section 50 et seq.).
SECTION 3. Section 54.751, Education Code, is amended by
amending Subdivisions (2) and (6) and adding Subdivision (9-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:
(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) registered apprenticeship program tuition
and required fees.
(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) registered apprenticeship program tuition
and required fees.
(9-a) "Registered apprenticeship program" means an
apprenticeship program that is registered and certified with the
United States Department of Labor under Section 1 of the National
Apprenticeship Act (29 U.S.C. Section 50 et seq.).
SECTION 4. 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 registered apprenticeship program 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. Sections 54.754(a) and (d), 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, 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, career school, [or] accredited out-of-state institution of
higher education, or registered apprenticeship program in which the
beneficiary enrolls. 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, school,
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, or registered apprenticeship
program 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, [or] unit, school, or program.
SECTION 6. 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 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 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, 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 8. 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 registered apprenticeship
program 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 registered apprenticeship program under a
prepaid tuition contract.
SECTION 9. 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 10. 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, school, or program shall keep the
information confidential.
SECTION 11. Section 54.801(1), Education Code, is amended
to read as follows:
(1) "Accredited out-of-state institution of higher
education," "career school," "general academic teaching
institution," "medical and dental unit," "private or independent
institution of higher education," "registered apprenticeship
program," and "two-year institution of higher education" have the
meanings assigned by Section 54.751.
SECTION 12. 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, 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, unit, [or]
school, or program receiving information described by Subsection
(a) shall keep the information confidential.
SECTION 13. The change in law made by this Act regarding the
application of prepaid tuition contract benefits to the payment of
tuition and required fees 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 14. This Act takes effect September 1, 2021.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1094 passed the Senate on
April 23, 2021, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendment on May 28, 2021, by the
following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1094 passed the House, with
amendment, on May 25, 2021, by the following vote: Yeas 138,
Nays 1, one present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor