80R14345 JRJ-D
 
  By: Cook of Navarro, Truitt, Flynn, H.B. No. 2173
      McClendon, Kolkhorst
 
Substitute the following for H.B. No. 2173:
 
  By:  Alonzo C.S.H.B. No. 2173
 
A BILL TO BE ENTITLED
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 Section 54.6175 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. 
       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.