H.B. No. 2173
 
 
 
 
AN ACT
  relating to the continuation and functions of the Prepaid Higher
  Education Tuition Board.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 54.603, Education Code, is amended to
  read as follows:
         Sec. 54.603.  SUNSET PROVISION. The Prepaid Higher
  Education Tuition Board is subject to Chapter 325, Government Code
  (Texas Sunset Act). Unless continued in existence as provided by
  that chapter, the board is abolished and the programs established
  under this subchapter and under Subchapter G terminate September 1,
  2019 [2007].
         SECTION 2.  Sections 54.608(b), (c), and (f), Education
  Code, are amended to read as follows:
         (b)  A person [An officer, employee, or paid consultant of a
  Texas trade association in the field of higher education] may not be
  a member [or employee] of the board and may not be a board employee
  employed in a "bona fide executive, administrative, or professional
  capacity," as that phrase is used for purposes of establishing an
  exemption to the overtime provisions of the federal Fair Labor
  Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if:
               (1)  the [who is exempt from the state's position
  classification plan or is compensated at or above the amount
  prescribed by the General Appropriations Act for step 1, salary
  group 17, of the position classification salary schedule.
         [(c)  A] person [who] is [the spouse of] an officer, employee
  [manager], or paid consultant of a Texas trade association in the
  field of higher education, banking, securities, or investments; or
               (2)  the person's spouse is an officer, manager, or paid
  consultant of a Texas trade association in the field of higher
  education, banking, securities, or investments [may not be a board
  member and may not be a board employee who is exempt from the
  state's position classification plan or is compensated at or above
  the amount prescribed by the General Appropriations Act for step 1,
  salary group 17, of the position classification salary schedule].
         (f)  In [For the purposes of] this section, " [a] Texas trade
  association" means [is] a [nonprofit,] cooperative[,] and
  voluntarily joined statewide association of business or
  professional competitors in this state designed to assist its
  members and its industry or profession in dealing with mutual
  business or professional problems and in promoting their common
  interest.
         SECTION 3.  Subchapter F, Chapter 54, Education Code, is
  amended by adding Section 54.6085 to read as follows:
         Sec. 54.6085.  PREPAID HIGHER EDUCATION TUITION BOARD ETHICS
  POLICY. (a)  In addition to any other requirements provided by law,
  the board shall adopt and enforce an ethics policy that provides
  standards of conduct relating to the management and investment
  decisions of the board. The ethics policy must include provisions
  that address the following issues as they apply to the management
  and investment decisions of the board:
               (1)  general ethical standards;
               (2)  conflicts of interest, including disclosure and
  recusal requirements;
               (3)  the acceptance of gifts and entertainment; and
               (4)  compliance with and enforcement of the ethics
  policy.
         (b)  The ethics policy must include provisions applicable
  to:
               (1)  members of the board;
               (2)  the comptroller; and
               (3)  employees of the board.
         SECTION 4.  Section 54.609, Education Code, is amended by
  amending Subsection (a) and adding Subsection (c) to read as
  follows:
         (a)  It is a ground for removal from the board if a member:
               (1)  does not have at the time of taking office the
  applicable qualifications required by Section 54.606(b);
               (2)  is ineligible for membership under [violates a
  prohibition established by] Section 54.608;
               (3) [(2)]  cannot because of illness or disability
  discharge the member's duties for a substantial part of the term for
  which the member is appointed; or
               (4) [(3)]  is absent from more than half of the
  regularly scheduled board meetings that the member is eligible to
  attend during a calendar year unless the absence is excused by
  majority vote of the board.
         (c)  If the staff of the board has knowledge that a potential
  ground for removal exists, the staff shall notify the presiding
  officer of the board of the potential ground.  The presiding officer
  shall then notify the governor and the attorney general that a
  potential ground for removal exists.  If the potential ground for
  removal involves the presiding officer, the staff of the board
  shall notify the next highest ranking officer of the board, who
  shall then notify the governor and the attorney general that a
  potential ground for removal exists.
         SECTION 5.  Section 54.610, Education Code, is amended by
  amending Subsection (a) and adding Subsection (c) to read as
  follows:
         (a)  A person who is appointed to and qualifies for office as
  [Before] a member of the board may not vote, deliberate, or be
  counted as a member in attendance at a meeting of the board until
  the person completes a [assume the member's duties and before an
  appointed member may be confirmed by the senate, the member must
  complete at least one course of the] training program that complies
  with [established under] this section.
         (c)  A person appointed to the board is entitled to
  reimbursement, as provided by the General Appropriations Act, for
  the travel expenses incurred in attending the training program
  regardless of whether the attendance at the program occurs before
  or after the person qualifies for office.
         SECTION 6.  Section 54.617, Education Code, is amended by
  amending Subsections (c) and (d) and adding Subsection (e) to read
  as follows:
         (c)  The board shall maintain a system to promptly and
  efficiently act on complaints filed with the board. The board shall
  maintain information about parties to the complaint, the subject
  matter of the complaint, a summary of the results of the review or
  investigation of the complaint, and its disposition [keep
  information about each complaint filed with the board. The
  information shall include:
               [(1)  the date the complaint is received;
               [(2)  the name of the complainant;
               [(3)  the subject matter of the complaint;
               [(4)     a record of all persons contacted in relation to
  the complaint;
               [(5)     a summary of the results of the review or
  investigation of the complaint; and
               [(6)     for complaints for which the board took no
  action, an explanation of the reason the complaint was closed
  without action].
         (d)  The board shall make information available describing
  its procedures for complaint investigation and resolution [keep a
  file for each written complaint filed with the board that the board
  has authority to resolve. The board shall provide to the person
  filing the complaint and the persons or entities complained about
  the board's policies and procedures pertaining to complaint
  investigation and resolution. The board, at least quarterly and
  until final disposition of the complaint, shall notify the person
  filing the complaint and the persons or entities complained about
  of the status of the complaint unless the notice would jeopardize an
  undercover investigation].
         (e)  The board shall periodically notify the complaint
  parties of the status of the complaint until final disposition.
         SECTION 7.  Subchapter F, Chapter 54, Education Code, is
  amended by adding Sections 54.6175 and 54.6185 to read as follows:
         Sec. 54.6175.  USE OF TECHNOLOGY. The board shall implement
  a policy requiring the board to use appropriate technological
  solutions to improve the board's ability to perform its functions.
  The policy must ensure that the public is able to interact with the
  staff of the board on the Internet. 
         Sec. 54.6185.  COMPLIANCE WITH SUNSET MANAGEMENT
  RECOMMENDATIONS. (a) The board shall:
               (1)  comply with and implement the management action
  recommendations regarding the board adopted by the Sunset Advisory
  Commission on January 10, 2007, as a result of its review of the
  board; and
               (2)  report to the Sunset Advisory Commission not later
  than November 1, 2008, the information the Sunset Advisory
  Commission requires regarding the board's implementation of the
  recommendations as required by Subdivision (1).
         (b)  This section expires June 1, 2009.
         SECTION 8.  Section 54.619, Education Code, is amended by
  adding Subsections (c-1) and (k) to read as follows:
         (c-1)  If the beneficiary of a prepaid tuition contract
  entered into after December 31, 2003, under Section 54.623, 54.624,
  or 54.625 enrolls in an institution of higher education, the board:
               (1)  shall pay to the institution the tuition and
  required fees of the institution; and
               (2)  may pay to the purchaser all or part of any amount
  paid or accrued under the contract that exceeds the tuition and
  required fees of the institution if the board determines that it may
  do so in a manner consistent with the actuarial soundness of the
  program.
         (k)  The board by rule shall establish criteria and
  procedures to guide the board in determining when and under what
  conditions to reopen new enrollment in the program in the event new
  enrollment in the program is suspended under Subsection (j). The
  procedure must require that, each year in which new enrollment in
  the program is suspended, the board consider the current structure
  of the program and determine whether any statutory or
  administrative changes are needed to enable the board to reopen new
  enrollment in the program in an actuarially sound manner.
         SECTION 9.  Subchapter F, Chapter 54, Education Code, is
  amended by adding Section 54.6195 to read as follows:
         Sec. 54.6195.  APPLICATION FOR ENROLLMENT. (a)  The board
  shall adopt a form for an application for enrollment in the program.  
  The form must indicate the information that the applicant is
  required to provide in order for the application to be considered,
  including the information required by Subsection (b) and any other
  information the board considers appropriate.
         (b)  An application for enrollment in the program must
  include the following information:
               (1)  the annual household income of the purchaser;
               (2)  the highest educational level of the purchaser;
               (3)  the race or ethnicity of the beneficiary;
               (4)  how the purchaser first learned about the program;
  and
               (5)  how the purchaser intends to finance the prepaid
  tuition contract.
         SECTION 10.  Section 54.621, Education Code, is amended by
  amending Subsection (a) and adding Subsection (d) to read as
  follows:
         (a)  Except as provided by Subsection (d), the [The]
  beneficiary of a prepaid tuition contract must be younger than 18
  years of age or 18 years of age or older and enrolled in high school
  at the time the purchaser enters into the contract and must be:
               (1)  a resident of this state at the time the purchaser
  enters into the contract; or
               (2)  a nonresident who is the child of a parent who is a
  resident of this state at the time that parent enters into the
  contract.
         (d)  In order 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 board may 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.
         SECTION 11.  Section 54.624(b), Education Code, is amended
  to read as follows:
         (b)  When the beneficiary of a senior college plan prepaid
  tuition contract entered into on or before December 31, 2003,
  enrolls in a public senior college or university, the university
  shall accept as payment in full of the beneficiary's tuition and
  required fees the lesser of:
               (1)  the amount of tuition and required fees charged by
  the institution; or
               (2)  an amount paid by the board under the contract
  equal to the weighted average amount of tuition and required fees of
  all public senior colleges and universities for that semester or
  other academic period as determined by the board.
         SECTION 12.  Section 54.608(e), Education Code, is repealed.
         SECTION 13.  Not later than September 1, 2008, the Prepaid
  Higher Education Tuition Board shall conduct a study to determine
  the feasibility of the board and an institution of higher education
  entering into an agreement under which the institution offers
  tuition discounts or other benefits to beneficiaries of prepaid
  tuition contracts who enroll in the institution.  The study must
  include an analysis of the benefits of such an agreement to the
  board and to institutions of higher education and an evaluation of
  the level of interest in such agreements on the part of institutions
  of higher education.
         SECTION 14.  This Act takes effect immediately if it
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.  
  If this Act does not receive the vote necessary for immediate
  effect, this Act takes effect September 1, 2007.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2173 was passed by the House on May 2,
  2007, by the following vote:  Yeas 143, Nays 0, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 2173 on May 24, 2007, by the following vote:  Yeas 144, Nays 0,
  2 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 2173 was passed by the Senate, with
  amendments, on May 22, 2007, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor