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A BILL TO BE ENTITLED
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AN ACT
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relating to the administration of the Texas Save and Match Program |
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to assist qualifying beneficiaries under the state's prepaid |
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tuition plans and college savings plans and to the treatment of a |
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beneficiary's assets under prepaid tuition plans and college |
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savings plans in determining eligibility for student financial |
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assistance and other assistance programs. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 54, Education Code, is amended by adding |
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Subchapter I to read as follows: |
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SUBCHAPTER I. TEXAS SAVE AND MATCH PROGRAM |
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Sec. 54.801. DEFINITIONS. In this subchapter: |
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(1) "Beneficiary" means a beneficiary on whose behalf |
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a purchaser enters into a prepaid tuition contract with the board |
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under Subchapter F or H or for whom a savings trust account is |
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opened under Subchapter G. |
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(2) "Board" means the Prepaid Higher Education Tuition |
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Board. |
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(3) "Participating beneficiary" means a beneficiary |
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for whom a matching account has been opened under this subchapter. |
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(4) "Program" means the Texas Save and Match Program |
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established under this subchapter. |
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Sec. 54.802. TEXAS SAVE AND MATCH PROGRAM. The board shall |
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develop and implement the Texas Save and Match Program under which |
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the board: |
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(1) opens a matching account for each eligible |
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beneficiary, as determined by Section 54.803; and |
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(2) matches money paid by a purchaser under a prepaid |
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tuition contract under Subchapter F or H on behalf of the |
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beneficiary, or contributed to a savings trust account by an |
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account owner under the Higher Education Savings Plan under |
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Subchapter G on behalf of the beneficiary with matching |
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contributions or a matching purchase of tuition units, as |
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applicable, using money appropriated by the legislature for the |
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program and any contributions made by any person to the |
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beneficiary's matching account. |
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Sec. 54.803. INITIAL ELIGIBILITY FOR PARTICIPATION IN |
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PROGRAM. (a) To be initially eligible to participate in the |
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program, a beneficiary, at the time a prepaid tuition contract is |
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entered into on the beneficiary's behalf under Subchapter F or H, or |
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a savings trust account is opened on the beneficiary's behalf under |
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Subchapter G, as applicable, must: |
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(1) be: |
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(A) a resident of this state; or |
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(B) a dependent for purposes of Section 152, |
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Internal Revenue Code of 1986, of a resident described by Paragraph |
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(A); |
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(2) be younger than seven years of age; and |
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(3) have a household adjusted gross income, for the |
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most recently completed tax year, that is not more than 400 percent |
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of the federal poverty level. |
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(b) To determine whether a beneficiary is initially |
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eligible to participate in the program, the board shall solicit |
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from the purchaser who enters into a prepaid tuition contract on the |
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beneficiary's behalf under Subchapter F or H, or the individual who |
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opens a savings trust account on the beneficiary's behalf under |
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Subchapter G, as applicable, at the time the purchaser or |
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individual enters into the contract or agreement with the board and |
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in the manner prescribed by board rule, information necessary to |
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determine the beneficiary's eligibility. |
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Sec. 54.804. LIMITATIONS. (a) An eligible beneficiary may |
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participate in the program for not more than five calendar years if |
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the beneficiary continues to meet the criteria prescribed by |
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Section 54.803(a). The five-year period may be consecutive or |
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nonconsecutive. The board shall prescribe procedures for verifying |
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a participating beneficiary's continued eligibility under this |
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section. |
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(b) A participating beneficiary may receive a matching |
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grant or a purchase of matching tuition units to the beneficiary's |
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matching account in any particular calendar year only if at least |
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$100 is paid under a prepaid tuition contract under Subchapter F or |
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H or is contributed to the beneficiary's savings trust account |
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under Subchapter G, as applicable, during that year. Contributions |
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or purchases in excess of $500 in any calendar year are not eligible |
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for a match under the program. |
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(c) Withdrawals from a matching account may be used only for |
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qualified higher educational expenses of the participating |
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beneficiary for whom the matching account is established. Funds in |
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a matching account must be disbursed directly to providers of |
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qualified higher education services and may not be disbursed |
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directly to the beneficiary. |
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(d) Tuition units in a participating beneficiary's matching |
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account may be redeemed only by the board or by a qualified |
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institution of higher education in the manner prescribed by the |
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board on behalf of the participating beneficiary. |
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(e) Any funds or unused tuition units in a matching account |
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that are not withdrawn or redeemed by the participating beneficiary |
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before the beneficiary's 30th birthday are forfeited and shall be |
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returned to a pool of matching funds maintained by the board. |
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Sec. 54.805. MATCH RATIOS. The board shall develop a |
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variable formula based on adjusted annual household income to |
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determine the amount of matching funds or matching purchases of |
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tuition units to which eligible participating beneficiaries are |
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entitled under the program in a year. Depending on the availability |
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of funds, for each dollar contributed to a participating |
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beneficiary's savings trust account under Subchapter G or paid by a |
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purchaser under a prepaid tuition contract on behalf of the |
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beneficiary under Subchapter F or H in a calendar year, the board |
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shall match the contribution or purchase using the following |
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guidelines: |
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(1) $2, if the beneficiary's household adjusted income |
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for the most recently completed tax year is less than or equal to |
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200 percent of the federal poverty level; |
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(2) $1, if the beneficiary's household adjusted income |
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for the most recently completed tax year is more than 200 percent of |
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the federal poverty level but not more than 300 percent of the |
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federal poverty level; or |
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(3) 50 cents, if the beneficiary's household adjusted |
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income for the most recently completed tax year is more than 300 |
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percent of the federal poverty level but not more than 400 percent |
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of the federal poverty level. |
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Sec. 54.806. MATCHING ACCOUNT ADMINISTRATION. (a) A |
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matching account opened on behalf of a beneficiary under this |
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subchapter must be accounted separately from the beneficiary's |
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prepaid tuition contract balance or savings trust account balance. |
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(b) To the extent possible, money or tuition units in a |
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participating beneficiary's matching account shall be withdrawn or |
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redeemed before money is withdrawn or tuition units are redeemed |
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under Subchapter F, G, or H, as applicable. |
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(c) Information relating to the beneficiary of a matching |
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account, including personally identifiable information regarding |
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the beneficiary, is confidential and is not subject to disclosure |
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under Chapter 552, Government Code. |
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(d) The board shall, to the extent possible, provide with |
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any periodic statement provided by the board in regard to a |
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beneficiary the balance of the matching account opened on the |
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beneficiary's behalf under this subchapter. |
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Sec. 54.807. EFFECT OF ACCOUNT BALANCE ON BENEFICIARY'S |
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ELIGIBILITY FOR STUDENT FINANCIAL ASSISTANCE. Money or tuition |
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units in a beneficiary's matching account may not be considered as |
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available to the beneficiary, or otherwise included in the |
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beneficiary's household income or financial resources, for |
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purposes of determining the beneficiary's eligibility for a TEXAS |
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grant or any other state-funded student financial assistance. |
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Sec. 54.808. SOLICITATION AND ACCEPTANCE OF GIFTS, GRANTS, |
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AND DONATIONS. The board may accept gifts, grants, and donations |
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from any public or private source for the purposes of this |
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subchapter. |
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Sec. 54.809. PILOT PROJECTS UNDER PROGRAM. To fulfill the |
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intent of the program, the board may establish pilot projects under |
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the program in an effort to incentivize participation in the |
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Prepaid Higher Education Tuition Program under Subchapter F, the |
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Higher Education Savings Program under Subchapter G, and the |
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Prepaid Tuition Unit Undergraduate Education Program under |
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Subchapter H, including projects that incentivize participation |
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by: |
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(1) awarding additional matching grants based on a |
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beneficiary's achievement of specified academic goals; |
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(2) offering additional seed matching grants on the |
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opening of a savings trust account or the purchase of a prepaid |
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tuition contract; and |
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(3) providing incentives for employers to contribute |
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matching funds to the program. |
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Sec. 54.810. RULES. The board shall adopt rules for the |
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administration of this subchapter. |
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SECTION 2. Section 54.702, Education Code, is amended by |
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adding Subsection (c-1) to read as follows: |
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(c-1) The board shall waive the amount of any enrollment fee |
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charged by the board for a new account under this subchapter for any |
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beneficiary whose household adjusted gross income for the most |
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recently completed tax year is not more than 200 percent of the |
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federal poverty level. |
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SECTION 3. Subchapter C, Chapter 62, Health and Safety |
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Code, is amended by adding Section 62.1012 to read as follows: |
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Sec. 62.1012. EXCLUSION OF ASSETS IN PREPAID TUITION |
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PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. For purposes of |
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determining whether a child meets family income and resource |
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requirements for eligibility for the child health plan, the |
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commission may not consider as income or resources a right to assets |
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held in or a right to receive payments or benefits under: |
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(1) any fund or plan established under Subchapter F, |
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G, H, or I, Chapter 54, Education Code, including an interest in a |
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savings trust account, prepaid tuition contract, or related |
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matching account; or |
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(2) any qualified tuition program of any state that |
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meets the requirements of Section 529, Internal Revenue Code of |
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1986. |
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SECTION 4. Subchapter A, Chapter 31, Human Resources Code, |
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is amended by adding Section 31.0039 to read as follows: |
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Sec. 31.0039. EXCLUSION OF ASSETS IN PREPAID TUITION |
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PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. For purposes of |
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determining the amount of financial assistance granted to an |
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individual under this chapter for the support of dependent children |
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or determining whether the family meets household income and |
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resource requirements for financial assistance under this chapter, |
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the department may not consider the right to assets held in or the |
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right to receive payments or benefits under: |
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(1) any fund or plan established under Subchapter F, |
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G, H, or I, Chapter 54, Education Code, including an interest in a |
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savings trust account, prepaid tuition contract, or related |
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matching account; or |
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(2) any qualified tuition program of any state that |
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meets the requirements of Section 529, Internal Revenue Code of |
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1986. |
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SECTION 5. Subchapter B, Chapter 32, Human Resources Code, |
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is amended by adding Section 32.02611 to read as follows: |
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Sec. 32.02611. EXCLUSION OF ASSETS IN PREPAID TUITION |
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PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. (a) Except as |
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provided by Subsection (b), in determining eligibility and need for |
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medical assistance, the department may not consider as assets or |
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resources a right to assets held in or a right to receive payments |
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or benefits under: |
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(1) any fund or plan established under Subchapter F, |
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G, H, or I, Chapter 54, Education Code, including an interest in a |
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savings trust account, prepaid tuition contract, or related |
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matching account; or |
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(2) any qualified tuition program of any state that |
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meets the requirements of Section 529, Internal Revenue Code of |
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1986. |
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(b) In determining eligibility and need for medical |
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assistance for an applicant who may be eligible on the basis of the |
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applicant's eligibility for medical assistance for the aged, blind, |
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or disabled under 42 U.S.C. Section 1396a(a)(10), as amended, the |
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department may consider as assets or resources a right to assets |
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held in or a right to receive payments or benefits under any fund, |
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plan, or tuition program described by Subsection (a). |
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(c) Notwithstanding Subsection (b), the department shall |
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seek a federal waiver authorizing the department to exclude, for |
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purposes of determining the eligibility of an applicant described |
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by that subsection, the right to assets held in or a right to |
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receive payments or benefits under any fund, plan, or tuition |
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program described by Subsection (a) if the fund, plan, or tuition |
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program was established before the 21st birthday of the beneficiary |
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of the fund, plan, or tuition program. |
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SECTION 6. Section 54.7521, Education Code, is repealed. |
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SECTION 7. The Prepaid Higher Education Tuition Board shall |
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adopt rules as required by Subchapter I, Chapter 54, Education |
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Code, as added by this Act, not later than November 1, 2009. |
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SECTION 8. Subchapter I, Chapter 54, Education Code, as |
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added by this Act, applies only to a prepaid tuition contract |
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purchased for a beneficiary under Subchapter F or H, Chapter 54, |
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Education Code, or a savings trust account opened for a beneficiary |
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under Subchapter G, Chapter 54, Education Code, on or after January |
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1, 2010. |
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SECTION 9. If before implementing any provision of this Act |
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a state agency determines that a waiver or authorization from a |
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federal agency is necessary for implementation of that provision, |
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the agency affected by the provision shall request the waiver or |
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authorization and may delay implementing that provision until the |
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waiver or authorization is granted. |
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SECTION 10. The changes in law made by this Act apply to a |
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person who receives health benefits coverage under Chapter 62, |
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Health and Safety Code, financial assistance under Chapter 31, |
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Human Resources Code, or medical assistance under Chapter 32, Human |
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Resources Code, on or after the effective date of this Act, |
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regardless of the date on which eligibility for coverage or |
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assistance was initially determined. |
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SECTION 11. This Act takes effect September 1, 2009. |