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House Bill 2173 |
House Author: Cook, Byron et al. |
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Effective: 6-15-07 |
Senate Sponsor: Brimer |
The Prepaid Higher Education Tuition Board oversees two college savings plans: the Texas Guaranteed Tuition Plan, which allows Texas families to prepay college tuition and is backed by the full faith and credit of the state, and Tomorrow’s College Investment Plan, which works much like a 401(k) but with after-tax dollars. The board temporarily suspended enrollment in the guaranteed tuition plan in 2003 because of uncertainty about the effects of tuition deregulation. House Bill 2173 amends the Education Code to continue the board until September 1, 2019. In addition to across-the-board sunset provisions, the bill requires the board to establish criteria and procedures to guide it in determining when and under what conditions to reopen new enrollment in the prepaid higher education tuition program once new enrollment in the program is suspended, with the procedures requiring the board to consider the current program structure and determine whether any statutory or administrative changes are needed for the board to reopen new enrollment in an actuarially sound manner. The bill also requires the board to adopt an enrollment application form that indicates the information the applicant must provide for the application to be considered, including the purchaser's annual household income and highest educational level; the beneficiary's race or ethnicity; how the purchaser first learned about the program; and how the purchaser intends to finance the prepaid tuition contract. To provide sufficient time for program investments to mature in an actuarially sound manner with regard to the amounts prepaid under a contract entered into after December 31, 2003, the bill allows the board to require a maturity period between the time a purchaser enters into the contract and the time the board must act on its contractual obligation to pay any tuition or fees on behalf of the beneficiary. The bill also sets forth the board's obligations with respect to the college enrollment of a beneficiary of a prepaid tuition contract entered into after December 31, 2003.