1-1 By: Carona S.B. No. 1527
1-2 (In the Senate - Filed March 12, 1999; March 15, 1999, read
1-3 first time and referred to Committee on Education; April 16, 1999,
1-4 reported adversely, with favorable Committee Substitute by the
1-5 following vote: Yeas 8, Nays 0; April 16, 1999, sent to printer.)
1-6 COMMITTEE SUBSTITUTE FOR S.B. No. 1527 By: Zaffirini
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to authorization of prepaid tuition contracts for
1-10 proprietary schools under the prepaid higher education tuition
1-11 program.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 54.6001, Education Code, is amended to
1-14 read as follows:
1-15 Sec. 54.6001. PUBLIC PURPOSE. An educated population being
1-16 necessary to the social development and economic health of this
1-17 state, the legislature finds and declares it to be an urgent public
1-18 necessity to assist young Texans in obtaining a higher education.
1-19 Because the state's population is rapidly growing and is diverse,
1-20 the state is required to use all of the higher education facilities
1-21 and resources within the state, both public and private, to provide
1-22 a wide variety of educational environments and instructional
1-23 options and to preserve the partnership between the state and
1-24 private or independent institutions of higher education and between
1-25 the state and proprietary schools, as defined by Section 132.001,
1-26 that offer a two-year associate degree as approved by the Texas
1-27 Higher Education Coordinating Board. Therefore, the prepaid higher
1-28 education tuition program is established to help Texas students
1-29 attend the institution that best meets their individual needs.
1-30 SECTION 2. Section 54.601, Education Code, is amended to
1-31 read as follows:
1-32 Sec. 54.601. DEFINITIONS. In this subchapter:
1-33 (1) "Beneficiary" means a person who is entitled to
1-34 receive benefits under a prepaid tuition contract.
1-35 (2) "Board" means the Prepaid Higher Education Tuition
1-36 Board.
1-37 (3) "Estimated average private tuition and required
1-38 fees" means an estimated average of tuition and required fees to be
1-39 charged by private or independent institutions of higher education
1-40 as determined annually by the board.
1-41 (4) "Fund" means the Texas tomorrow fund.
1-42 (5) "Institution of higher education" has the meaning
1-43 assigned by Section 61.003.
1-44 (6) "Prepaid tuition contract" means a contract
1-45 entered into under this subchapter by the board and a purchaser to
1-46 provide for the payment of higher education tuition and required
1-47 fees of a beneficiary.
1-48 (7) "Private or independent institution of higher
1-49 education" has the meaning assigned by Section 61.003.
1-50 (8) "Program" means the prepaid higher education
1-51 tuition program.
1-52 (9) "Proprietary school" means a proprietary school,
1-53 as defined by Section 132.001, that offers a two-year associate
1-54 degree as approved by the Texas Higher Education Coordinating
1-55 Board.
1-56 (10) "Public junior college" has the meaning assigned
1-57 by Section 61.003.
1-58 (11) [(10)] "Public senior college or university" has
1-59 the meaning assigned by Section 61.003.
1-60 (12) [(11)] "Purchaser" means a person who is
1-61 obligated to make payments under a prepaid tuition contract.
1-62 SECTION 3. Subsection (a), Section 54.605, Education Code,
1-63 is amended to read as follows:
1-64 (a) A prepaid tuition contract remains in effect after the
2-1 program is terminated if, when the program is terminated, the
2-2 beneficiary:
2-3 (1) has been accepted by or is enrolled in an
2-4 institution of higher education, [or] a private or independent
2-5 institution of higher education, or a proprietary school; or
2-6 (2) is projected to graduate from high school not
2-7 later than the third anniversary of the date the program is
2-8 terminated.
2-9 SECTION 4. Subsection (b), Section 54.618, Education Code,
2-10 is amended to read as follows:
2-11 (b) The board may:
2-12 (1) adopt an official seal;
2-13 (2) adopt rules to implement this subchapter;
2-14 (3) sue and be sued;
2-15 (4) enter into contracts and other necessary
2-16 instruments;
2-17 (5) enter into agreements or other transactions with
2-18 the United States, state agencies, including institutions of higher
2-19 education, private or independent institutions of higher education,
2-20 proprietary schools, and local governments;
2-21 (6) appear in its own behalf before governmental
2-22 agencies;
2-23 (7) contract for necessary goods and services and
2-24 engage the services of private consultants, actuaries, trustees,
2-25 records administrators, managers, legal counsel, and auditors for
2-26 administrative or technical assistance;
2-27 (8) solicit and accept gifts, grants, loans, and other
2-28 aid from any source or participate in any other way in any
2-29 government program to carry out this subchapter;
2-30 (9) impose administrative fees;
2-31 (10) contract with a person to market the program;
2-32 (11) purchase liability insurance covering the board
2-33 and employees and agents of the board; and
2-34 (12) establish other policies, procedures, and
2-35 eligibility criteria to implement this subchapter.
2-36 SECTION 5. Section 54.619, Education Code, is amended by
2-37 adding Subsection (h) to read as follows:
2-38 (h) Notwithstanding other provisions of this subchapter, any
2-39 contract benefits purchased under this subchapter may be applied to
2-40 the payment of tuition and required fees at a proprietary school as
2-41 if the proprietary school were an institution of higher education
2-42 or private or independent institution of higher education. On the
2-43 purchaser's request, the board shall apply, in accordance with
2-44 Section 54.628, any existing amount of prepaid tuition contract
2-45 benefits to the payment of tuition and required fees at a
2-46 proprietary school. The board is not responsible for the payment
2-47 of tuition and required fees at the proprietary school in excess of
2-48 that amount. The board may adopt rules as necessary to implement
2-49 this subsection.
2-50 SECTION 6. The change in law made by this Act regarding the
2-51 application of prepaid tuition contract benefits to the payment of
2-52 tuition and required fees at a proprietary school applies to
2-53 contract benefits purchased under Subchapter F, Chapter 54,
2-54 Education Code, as amended by this Act, before, on, or after the
2-55 effective date of this Act.
2-56 SECTION 7. This Act takes effect September 1, 1999.
2-57 SECTION 8. The importance of this legislation and the
2-58 crowded condition of the calendars in both houses create an
2-59 emergency and an imperative public necessity that the
2-60 constitutional rule requiring bills to be read on three several
2-61 days in each house be suspended, and this rule is hereby suspended.
2-62 * * * * *