SRC-HRD C.S.S.B. 1470 75(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 1470
By: Ellis
Finance
4-28-97
Committee Report (Substituted)


DIGEST 

Currently, Texas law does not provide for a supplemental prepaid tuition
plan for postgraduate studies.  This bill would create such a plan and
would make the plan available only to Texas Tomorrow Fund purchasers who
wish to invest an additional amount not to exceed 25 percent of the value
of their prepaid tuition.  The beneficiary would have the flexibility to
apply the value to tuition and fees for postgraduate studies. 

PURPOSE

As proposed, C.S.S.B. 1470 creates the graduate tuition assistance plan to
fund postgraduate studies, which would be made available only to Texas
Tomorrow Fund purchasers who wish to invest an additional amount.    

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 54.622, Education Code, to require the Prepaid
Higher Education Board (board) to make prepaid tuition contracts available
for the graduate tuition assistance plan. Makes conforming changes. 

SECTION 2. Amends Chapter 54F, Education Code, by adding Section 54.6252,
as follows: 

Sec. 54.6252.  GRADUATE TUITION ASSISTANCE PLAN.  Requires the board to
permit the purchaser of a plan other than a plan authorized by this
section to enter into a supplemental contract to provide the beneficiary
with a source of funds to apply toward the payment of tuition for graduate
studies.  Requires a contract for a graduate tuition assistance plan to
permit the purchaser to deposit an amount into the plan not to exceed 25
percent of each amount paid by the purchaser under the principal contract.
Requires the board to maintain a separate account for each contract.
Provides that Section 54.620(b) and Sections 54.620(d)(5) through (8) do
not apply to a contract for a graduate tuition assistance plan. Requires
the board to credit each account established under this section at least
monthly according to certain provisions.  Authorizes the beneficiary of
the plan to apply any portion of the current balance in the account to pay
tuition and required fees when the beneficiary is enrolled in a
postgraduate degree program at any accredited public or private
institution of higher education in or outside of this state at which the
beneficiary is enrolled.  Requires the board to pay to the institution the
applicable amount of the beneficiary's tuition and required fees. 

SECTION 3. Amends Section 54.631(b), Education Code, to provide that a
prepaid tuition contract for a plan other than a graduate tuition
assistance plan terminates on a certain date.  Provides that a prepaid
tuition contract for a graduate tuition assistance plan terminates on the
10th anniversary of the date the first payment of tuition or fees from the
account is made, not counting time spent by the beneficiary as an active
duty member of the United States armed services. 

SECTION 4. (a) Effective date: January 1, 1998
 
(b) Requires the board to begin offering contracts for graduate tuition
assistance plans not later than the first prepaid tuition contract
enrollment period after the effective date of this Act. 

SECTION 5. Emergency clause.

SUMMARY OF COMMITTEE CHANGES

SECTION 1.

Amends proposed Section 54.6252, Education Code, to require the board to
pay to the institution the applicable amount of the beneficiary's tuition
and required fees, rather than establish payment procedures to ensure that
the money is applied to tuition and fees as required by this subsection.
Deletes proposed Subsection (f). 

SECTION 4. 

Amends the proposed effective date to January 1, 1998.

Amends Section (b) to require the board to begin offering contracts for
graduate tuition assistance plans not later than the first prepaid tuition
contract enrollment period after the effective date of this Act, rather
than not later than January 1, 1998.