AN ACT
1-1 relating to authorizing the use of certain prepaid tuition
1-2 contracts to cover an additional period of attendance at an
1-3 institution of higher education or attendance at a proprietary
1-4 school.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 54.6001, Education Code, is amended to
1-7 read as follows:
1-8 Sec. 54.6001. PUBLIC PURPOSE. An educated population being
1-9 necessary to the social development and economic health of this
1-10 state, the legislature finds and declares it to be an urgent public
1-11 necessity to assist young Texans in obtaining a higher education.
1-12 Because the state's population is rapidly growing and is diverse,
1-13 the state is required to use all of the higher education facilities
1-14 and resources within the state, both public and private, to provide
1-15 a wide variety of educational environments and instructional
1-16 options and to preserve the partnership between the state and
1-17 private or independent institutions of higher education and between
1-18 the state and proprietary schools, as defined by Section 132.001,
1-19 that offer a two-year associate degree as approved by the Texas
1-20 Higher Education Coordinating Board. Therefore, the prepaid higher
1-21 education tuition program is established to help Texas students
1-22 attend the institution that best meets their individual needs.
1-23 SECTION 2. Section 54.601, Education Code, is amended to
1-24 read as follows:
2-1 Sec. 54.601. DEFINITIONS. In this subchapter:
2-2 (1) "Beneficiary" means a person who is entitled to
2-3 receive benefits under a prepaid tuition contract.
2-4 (2) "Board" means the Prepaid Higher Education Tuition
2-5 Board.
2-6 (3) "Estimated average private tuition and required
2-7 fees" means an estimated average of tuition and required fees to be
2-8 charged by private or independent institutions of higher education
2-9 as determined annually by the board.
2-10 (4) "Fund" means the Texas tomorrow fund.
2-11 (5) "Institution of higher education" has the meaning
2-12 assigned by Section 61.003.
2-13 (6) "Prepaid tuition contract" means a contract
2-14 entered into under this subchapter by the board and a purchaser to
2-15 provide for the payment of higher education tuition and required
2-16 fees of a beneficiary.
2-17 (7) "Private or independent institution of higher
2-18 education" has the meaning assigned by Section 61.003.
2-19 (8) "Program" means the prepaid higher education
2-20 tuition program.
2-21 (9) "Proprietary school" means a proprietary school,
2-22 as defined by Section 132.001, that offers a two-year associate
2-23 degree as approved by the Texas Higher Education Coordinating
2-24 Board.
2-25 (10) "Public junior college" has the meaning assigned
2-26 by Section 61.003.
3-1 (11) [(10)] "Public senior college or university" has
3-2 the meaning assigned by Section 61.003.
3-3 (12) [(11)] "Purchaser" means a person who is
3-4 obligated to make payments under a prepaid tuition contract.
3-5 SECTION 3. Subsection (a), Section 54.605, Education Code,
3-6 is amended to read as follows:
3-7 (a) A prepaid tuition contract remains in effect after the
3-8 program is terminated if, when the program is terminated, the
3-9 beneficiary:
3-10 (1) has been accepted by or is enrolled in an
3-11 institution of higher education, [or] a private or independent
3-12 institution of higher education, or a proprietary school; or
3-13 (2) is projected to graduate from high school not
3-14 later than the third anniversary of the date the program is
3-15 terminated.
3-16 SECTION 4. Subsection (b), Section 54.618, Education Code,
3-17 is amended to read as follows:
3-18 (b) The board may:
3-19 (1) adopt an official seal;
3-20 (2) adopt rules to implement this subchapter;
3-21 (3) sue and be sued;
3-22 (4) enter into contracts and other necessary
3-23 instruments;
3-24 (5) enter into agreements or other transactions with
3-25 the United States, state agencies, including institutions of higher
3-26 education, private or independent institutions of higher education,
4-1 proprietary schools, and local governments;
4-2 (6) appear in its own behalf before governmental
4-3 agencies;
4-4 (7) contract for necessary goods and services and
4-5 engage the services of private consultants, actuaries, trustees,
4-6 records administrators, managers, legal counsel, and auditors for
4-7 administrative or technical assistance;
4-8 (8) solicit and accept gifts, grants, loans, and other
4-9 aid from any source or participate in any other way in any
4-10 government program to carry out this subchapter;
4-11 (9) impose administrative fees;
4-12 (10) contract with a person to market the program;
4-13 (11) purchase liability insurance covering the board
4-14 and employees and agents of the board; and
4-15 (12) establish other policies, procedures, and
4-16 eligibility criteria to implement this subchapter.
4-17 SECTION 5. Section 54.619, Education Code, is amended by
4-18 adding Subsection (h) to read as follows:
4-19 (h) Notwithstanding other provisions of this subchapter, any
4-20 contract benefits purchased under this subchapter may be applied to
4-21 the payment of tuition and required fees at a proprietary school as
4-22 if the proprietary school were an institution of higher education
4-23 or private or independent institution of higher education. On the
4-24 purchaser's request, the board shall apply, in accordance with
4-25 Section 54.628, any existing amount of prepaid tuition contract
4-26 benefits to the payment of tuition and required fees at a
5-1 proprietary school. The board is not responsible for the payment
5-2 of tuition and required fees at the proprietary school in excess of
5-3 that amount. The board may adopt rules as necessary to implement
5-4 this subsection.
5-5 SECTION 6. Subsection (a), Section 54.6252, Education Code,
5-6 is amended to read as follows:
5-7 (a) The board may permit the purchaser of a prepaid tuition
5-8 contract for a senior college plan or a private college plan at any
5-9 time during which the contract is in effect and before the
5-10 beneficiary graduates from high school to enter into a supplemental
5-11 contract to prepay the tuition and required fees of the beneficiary
5-12 for a number of undergraduate credit hours, in addition to the
5-13 undergraduate credit hours included in the primary contract, equal
5-14 to the number of credit hours purchased for one year under the
5-15 primary contract. The additional credit hours must be for the same
5-16 type of institution as the credit hours purchased under the primary
5-17 contract.
5-18 SECTION 7. (a) The change in law made by this Act regarding
5-19 the application of prepaid tuition contract benefits to the payment
5-20 of tuition and required fees at a proprietary school applies to
5-21 contract benefits purchased under Subchapter F, Chapter 54,
5-22 Education Code, as amended by this Act, before, on, or after the
5-23 effective date of this Act.
5-24 (b) Except as provided by Subsection (c) of this section,
5-25 the amendment made by this Act to Section 54.6252, Education Code,
5-26 does not apply to a prepaid tuition contract entered into before
6-1 the effective date of this Act.
6-2 (c) The Prepaid Higher Education Tuition Board may permit
6-3 the purchaser of a prepaid tuition contract entered into before the
6-4 effective date of this Act to amend the contract to conform to
6-5 Section 54.6252, Education Code, as amended by this Act. The board
6-6 may require the purchaser to make increased or additional payments
6-7 as necessary to compensate for any additional costs that the board
6-8 estimates will be incurred under the contract because of the
6-9 contract amendment.
6-10 SECTION 8. This Act takes effect September 1, 1999.
6-11 SECTION 9. The importance of this legislation and the
6-12 crowded condition of the calendars in both houses create an
6-13 emergency and an imperative public necessity that the
6-14 constitutional rule requiring bills to be read on three several
6-15 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 315 passed the Senate on
March 11, 1999, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendment on May 25, 1999, by a
viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 315 passed the House, with
amendment, on May 22, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor