1-1     By:  Ellis                                            S.B. No. 1299

 1-2           (In the Senate - Filed March 12, 1997; March 18, 1997, read

 1-3     first time and referred to Committee on Finance; April 28, 1997,

 1-4     reported adversely, with favorable Committee Substitute by the

 1-5     following vote:  Yeas 13, Nays 0; April 28, 1997, sent to printer.)

 1-6     COMMITTEE SUBSTITUTE FOR S.B. No. 1299              By:  Barrientos

 1-7                            A BILL TO BE ENTITLED

 1-8                                   AN ACT

 1-9     relating to the payment of tuition and fees under a prepaid tuition

1-10     contract.

1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-12           SECTION 1.  Subchapter F, Chapter 54, Education Code, is

1-13     amended by adding Sections 54.6261 and 54.6262 to read as follows:

1-14           Sec. 54.6261.  DEFERRED USE OF PREPAID CREDIT HOURS.  (a)  A

1-15     prepaid tuition contract must permit the beneficiary to elect to

1-16     pay from another source the beneficiary's tuition and required fees

1-17     for some or all of the semester credit hours to which the

1-18     beneficiary is entitled to payment under the contract and to defer

1-19     to a subsequent semester or term the right to payment of the

1-20     beneficiary's tuition and required fees for the number of semester

1-21     credit hours remaining under the contract.  The beneficiary is

1-22     responsible for payment of the amount of tuition and required fees

1-23     for the number of semester credit hours that the beneficiary elects

1-24     not to pay under the contract.

1-25           (b)  This section does not affect the date on which a prepaid

1-26     tuition contract terminates under this subchapter and does not give

1-27     the beneficiary the right to any payment under the contract after

1-28     termination of the contract.

1-29           Sec. 54.6262.  APPLICATION OF UNUSED CREDIT HOURS TO GRADUATE

1-30     TUITION.  (a)  If the beneficiary of a prepaid tuition contract

1-31     registers in a graduate or professional degree program before the

1-32     termination of the contract and the beneficiary has not received

1-33     payment under the contract for tuition and required fees for all of

1-34     the semester credit hours to which the beneficiary is entitled, the

1-35     beneficiary may apply the value of the remaining semester credit

1-36     hours under the contract to the payment of the beneficiary's

1-37     tuition and required fees in the graduate or professional degree

1-38     program.

1-39           (b)  For purposes of this section, the value of a semester

1-40     credit hour under a prepaid tuition contract is equal to the

1-41     average amount of undergraduate tuition and required fees for a

1-42     semester credit hour that would have been paid under the contract

1-43     if the beneficiary registered in an undergraduate program for the

1-44     same term or semester for which the beneficiary applies the payment

1-45     to the beneficiary's tuition and required fees in a graduate or

1-46     professional degree program under this section.

1-47           (c)  This section does not affect the date on which a prepaid

1-48     tuition contract terminates under this subchapter and does not give

1-49     the beneficiary the right to any payment under the contract after

1-50     termination of the contract.

1-51           SECTION 2.  (a)  This Act takes effect January 1, 1998.

1-52           (b)  Except as provided by Subsection (c) of this section,

1-53     Sections 54.6261 and 54.6262, Education Code, as added by this Act,

1-54     do not apply to a prepaid tuition contract entered into before the

1-55     effective date of this Act.

1-56           (c)  The Prepaid Higher Education Tuition Board may permit

1-57     the purchaser of a prepaid tuition contract entered into before the

1-58     effective date of this Act to amend the contract to conform to

1-59     Sections 54.6261 and 54.6262, Education Code, as added by this Act.

1-60     The board may require the purchaser to make increased or additional

1-61     payments as necessary to compensate for any additional costs that

1-62     the board estimates will be incurred under the contract because of

1-63     the contract amendment.

1-64           SECTION 3.  The importance of this legislation and the

 2-1     crowded condition of the calendars in both houses create an

 2-2     emergency and an imperative public necessity that the

 2-3     constitutional rule requiring bills to be read on three several

 2-4     days in each house be suspended, and this rule is hereby suspended.

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