81R5700 KEL-F
 
  By: Morrison H.B. No. 4351
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the administration and operation of, and the
  participation of state employees in, the state's programs for
  prepaying or saving toward the costs of attending an institution of
  higher education.
         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 Subchapters [Subchapter] G and H
  terminate September 1, 2019.
         SECTION 2.  Section 54.702, Education Code, is amended by
  adding Subsection (h) to read as follows:
         (h)  The board may enter into an interagency contract with
  the Employees Retirement System of Texas to allow an employee of
  this state to enroll in the plan during the retirement system's
  annual enrollment period. The board shall provide information and
  materials regarding the plan to the retirement system for
  distribution to state employees during the enrollment period.
         SECTION 3.  Section 54.751, Education Code, is amended by
  amending Subdivisions (2) and (6) and adding Subdivision (3-a) to
  read as follows:
               (2)  "Beneficiary" means the person designated under a
  prepaid tuition contract as the person entitled to apply one or more
  tuition units purchased under the contract to the payment of the
  person's undergraduate tuition and required fees at a general
  academic teaching institution, two-year institution of higher
  education, private or independent institution of higher education,
  career school, or accredited out-of-state institution of higher
  education.
               (3-a)  "Career school" means a career school or college
  as defined by Section 132.001 that offers a two-year associate
  degree as approved by the Texas Higher Education Coordinating
  Board.
               (6)  "Prepaid tuition contract" means a contract under
  which a person purchases from the board on behalf of a beneficiary
  one or more tuition units that the beneficiary is entitled to apply
  to the payment of the beneficiary's undergraduate tuition and
  required fees at a general academic teaching institution, two-year
  institution of higher education, private or independent
  institution of higher education, career school, or accredited
  out-of-state institution of higher education.
         SECTION 4.  Section 54.752, Education Code, is amended by
  adding Subsection (d) to read as follows:
         (d)  The board may enter into an interagency contract with
  the Employees Retirement System of Texas to allow an employee of
  this state to enroll in the program during the retirement system's
  annual enrollment period. The board shall provide information and
  materials regarding the program to the retirement system for
  distribution to state employees during the enrollment period.
         SECTION 5.  Section 54.7521, Education Code, is amended to
  read as follows:
         Sec. 54.7521.  TEXAS SAVE AND MATCH PROGRAM.  (a) The board
  by rule shall develop and shall implement the Texas Save and Match
  program under which money paid by a purchaser under a prepaid
  tuition contract may be matched with:
               (1)  contributions made by any person to the Texas Save
  and Match program and used to purchase additional tuition units on
  behalf of beneficiaries selected as provided by board rule; and
               (2)  money appropriated by the legislature for the
  Texas Save and Match program and used to purchase additional
  tuition units on behalf of beneficiaries:
                     (A)  whose annual household income is below the
  state median family income, adjusted for household size;
                     (B)  whose enrollment in the program would, as
  determined by the board, promote the participation goals and
  targets of the most recent revision of "Closing the Gaps," the
  state's master plan for higher education; or
                     (C)  who meet other criteria established by board
  rule.
         (b)  Notwithstanding other law, for purposes of Subchapter
  I, Chapter 659, Government Code:
               (1)  the Texas Save and Match program is considered an
  eligible charitable organization entitled to participate in a state
  employee charitable campaign under Subchapter I, Chapter 659,
  Government Code; and
               (2)  a state employee is entitled to authorize a
  payroll deduction for contributions to the Texas Save and Match
  program as a charitable contribution under Section 659.132,
  Government Code.
         SECTION 6.  Section 54.753(a), Education Code, is amended to
  read as follows:
         (a)  Under the program, a purchaser may prepay the costs of
  all or a portion of a beneficiary's undergraduate tuition and
  required fees at a general academic teaching institution, two-year
  institution of higher education, private or independent
  institution of higher education, career school, or accredited
  out-of-state institution of higher education by entering into a
  prepaid tuition contract with the board to purchase one or more
  tuition units of a type described by this section at the applicable
  price established by the board for that type of unit for the year in
  which the unit is purchased.  The portion of the beneficiary's
  undergraduate tuition and required fees for which a tuition unit
  may be redeemed at a particular general academic teaching
  institution or two-year institution of higher education is assigned
  to the tuition unit at the time of purchase, and the tuition unit
  may be redeemed to pay that portion of the tuition and fees at the
  general academic teaching institution or two-year institution of
  higher education in any academic year in which the unit is redeemed
  in accordance with this subchapter.  The purchaser may purchase one
  type of unit or a combination of two or three types of units.
         SECTION 7.  Section 54.754(d), Education Code, is amended to
  read as follows:
         (d)  If a beneficiary redeems fewer tuition units of the type
  or combination of types necessary to pay the total cost of the
  beneficiary's tuition and required fees at the general academic
  teaching institution, two-year institution of higher education,
  private or independent institution of higher education, career
  school, or accredited out-of-state institution of higher education
  at which the beneficiary enrolls, the beneficiary is responsible
  for paying the amount of the difference between the amount of
  tuition and required fees for which the beneficiary pays through
  the redemption of one or more tuition units and the total cost of
  the beneficiary's tuition and required fees at the institution.
         SECTION 8.  Sections 54.765(a), (b), (c), (f), and (g),
  Education Code, are amended to read as follows:
         (a)  Except as provided by Subsection (h) [(e)], the
  comptroller is the custodian of the assets of the fund.
         (b)  The comptroller shall pay money from the fund [on a
  warrant drawn by the comptroller] supported only by [on] a voucher
  signed by the comptroller or the comptroller's authorized
  representative. The comptroller may designate the plan manager as
  the comptroller's authorized representative to pay expenditures or
  transfer funds under this section and Sections 54.766 and 54.767.
         (c)  When a beneficiary enrolls at a general academic
  teaching institution or two-year institution of higher education,
  on written authorization from the purchaser of the tuition unit or
  units for that beneficiary, the comptroller or the comptroller's
  authorized representative shall transfer to the institution an
  amount equal to the lesser of:
               (1)  the sum of:
                     (A)  the total purchase price of the tuition unit
  or units the beneficiary redeems for the semester or other academic
  term;  and
                     (B)  the amount determined under Subsection (d);
  or
               (2)  an amount equal to 101 percent of the amount of
  tuition and required fees covered by the tuition units being
  redeemed.
         (f)  When a beneficiary enrolls at a private or independent
  institution of higher education, career school, or accredited
  out-of-state institution of higher education, on written
  authorization from the purchaser of the tuition unit or units for
  that beneficiary, the comptroller or the comptroller's authorized
  representative shall transfer to the institution the lesser of:
               (1)  an amount equal to the current cost of the tuition
  and required fees that would be covered by redemption of the number
  and type of tuition units the beneficiary is redeeming if the
  beneficiary were redeeming the unit or units at a general academic
  teaching institution or two-year institution of higher education as
  follows:
                     (A)  for a Type I unit, at the general academic
  teaching institution that[, in the sales year in which the unit was
  purchased,] had the highest tuition and required fee cost;
                     (B)  for a Type II unit, at a general academic
  teaching institution that[, in the sales year in which the unit was
  purchased,] had tuition and required fee cost at the weighted
  average; and
                     (C)  for a Type III unit, at a two-year
  institution of higher education that[, in the sales year in which
  the unit was purchased,] had tuition and required fee cost at the
  weighted average; or
               (2)  an amount equal to the total purchase price of the
  tuition unit or units the beneficiary redeems for the semester or
  other academic term plus the portion of the total return on assets
  of the fund attributable to that amount.
         (g)  The comptroller annually shall provide to the board a
  sworn statement of the amount of the fund's assets in the
  comptroller's or plan manager's custody. The plan manager shall
  provide to the comptroller a quarterly report of all funds
  distributed during the previous quarter. The comptroller may
  require more frequent reports or may request that the plan manager
  provide any additional information at any time necessary to ensure
  that the fund's assets are adequately protected.
         SECTION 9.  Section 54.767, Education Code, is amended to
  read as follows:
         Sec. 54.767.  USE OF FUND ASSETS.  The assets of the fund may
  be used only to:
               (1)  pay the costs of program administration and
  operations;
               (2)  make payments to general academic teaching
  institutions, two-year institutions of higher education, private
  or independent institutions of higher education, career schools,
  and accredited out-of-state institutions of higher education on
  behalf of beneficiaries; and
               (3)  make refunds under prepaid tuition contracts.
         SECTION 10.  Section 54.7671(b), Education Code, is amended
  to read as follows:
         (b)  For purposes of a transfer of money from an account
  under this subchapter, the value of the account at the time of
  transfer is the lesser of:
               (1)  an amount equal to the cost, at the time of the
  transfer, of the tuition and required fees that would be covered by
  redemption of the number and type of tuition units to be transferred
  from the account if the beneficiary were redeeming the units at a
  general academic teaching institution or two-year institution of
  higher education as follows:
                     (A)  for a Type I unit, at the general academic
  teaching institution that[, in the sales year in which the unit was
  purchased,] had the highest tuition and required fee cost;
                     (B)  for a Type II unit, at a general academic
  teaching institution that[, in the sales year in which the unit was
  purchased,] had tuition and required fee cost at the weighted
  average; and
                     (C)  for a Type III unit, at a two-year
  institution of higher education that[, in the sales year in which
  the unit was purchased,] had tuition and required fee cost at the
  weighted average; or
               (2)  an amount equal to the total purchase price of the
  tuition units to be transferred from the account, plus the portion
  of the total return on assets of the fund attributable to that
  amount.
         SECTION 11.  Sections 54.769(b) and (c), Education Code, are
  amended to read as follows:
         (b)  The rights of a purchaser, beneficiary, or successor in
  interest of a purchaser or beneficiary in and under a prepaid
  tuition contract and the payment of tuition and required fees for a
  beneficiary under a prepaid tuition contract to a general academic
  teaching institution, two-year institution of higher education,
  private or independent institution of higher education, career
  school, or accredited out-of-state institution of higher education
  under this chapter are exempt from attachment, levy, garnishment,
  execution, and seizure for the satisfaction of any debt, judgment,
  or claim against a purchaser, beneficiary, or successor in interest
  of a purchaser or beneficiary.
         (c)  A claim or judgment against a purchaser, beneficiary, or
  successor in interest of a purchaser or beneficiary does not impair
  or entitle the claim or judgment holder to assert or enforce a lien
  against:
               (1)  the rights of a purchaser, beneficiary, or
  successor in interest of a purchaser or beneficiary in and under a
  prepaid tuition contract; or
               (2)  the right of a beneficiary to the payment of
  tuition and required fees to a general academic teaching
  institution, two-year institution of higher education, private or
  independent institution of higher education, career school, or
  accredited out-of-state institution of higher education under a
  prepaid tuition contract.
         SECTION 12.  Section 54.774(a), Education Code, is amended
  to read as follows:
         (a)  A prepaid tuition contract remains in effect after the
  program is terminated if, when the program is terminated, the
  beneficiary:
               (1)  has been accepted by or is enrolled at a general
  academic teaching institution, two-year institution of higher
  education, private or independent institution of higher education,
  career school, or accredited out-of-state institution of higher
  education; or
               (2)  is projected to graduate from high school not
  later than the third anniversary of the date the program is
  terminated.
         SECTION 13.  Section 54.775(b), Education Code, is amended
  to read as follows:
         (b)  Notwithstanding Subsection (a), the board may release
  information described by that subsection to a general academic
  teaching institution, two-year institution of higher education,
  private or independent institution of higher education, career
  school, or accredited out-of-state institution of higher education
  at which a beneficiary may enroll or is enrolled.  The institution
  shall keep the information confidential.
         SECTION 14.  The Texas Save and Match program is entitled to
  participate in the state employee charitable campaign conducted
  during the autumn of 2009 without regard to any limitation on the
  time during which an organization must apply to participate in the
  campaign.
         SECTION 15.  (a) If this Act takes effect immediately, a
  state employee is entitled to enroll in the Texas tomorrow fund II
  plan during the Employees Retirement System of Texas' annual open
  enrollment period during the summer of 2009.
         (b)  If this Act takes effect September 1, 2009, it is the
  legislature's intent that the Employees Retirement System of Texas
  take the appropriate administrative actions necessary to ensure
  that state employees be allowed to enroll in the Texas tomorrow fund
  II plan effective September 1, 2009. Those administrative actions
  may include allowing state employees to participate in the annual
  open enrollment period during the summer of 2009.
         SECTION 16.  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, 2009.