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A BILL TO BE ENTITLED
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AN ACT
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relating to the Prepaid Tuition Unit Undergraduate Education |
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Program, Higher Education Savings Plans, the Texas Save & Match |
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Program and the treatment of a beneficiary's assets under the plans |
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in determining eligibility for student financial assistance and |
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other programs. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter H, Education Code, is amended to read |
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as follows: |
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Sec. 54.751. DEFINITIONS. In this subchapter: |
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(1) "Accredited out-of-state institution of higher |
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education" means a public or private institution of higher |
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education that: |
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(A) is located outside this state; and |
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(B) is accredited by a recognized accrediting |
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agency. |
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(2) "Beneficiary" means the person designated under a |
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prepaid tuition contract as the person entitled to apply one or more |
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tuition units purchased under the contract to the payment of the |
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person's undergraduate tuition and required fees at a general |
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academic teaching institution, two-year institution of higher |
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education, private or independent institution of higher education, |
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or accredited out-of-state institution of higher education. |
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(3) "Board" means the Prepaid Higher Education Tuition |
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Board. |
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(4) "Fund" means the Texas tomorrow fund II. |
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(5) "General academic teaching institution" has the |
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meaning assigned by Section 61.003, except that the term does not |
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include a public state college. |
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(6) "Matching account" means an account in the Texas |
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Save & Match Program established under this section. |
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(7) "Participating beneficiary" means a beneficiary |
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for whom a matching account has been opened under this section. |
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(8) [(6)] "Prepaid tuition contract" means a contract |
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under which a person purchases from the board on behalf of a |
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beneficiary one or more tuition units that the beneficiary is |
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entitled to apply to the payment of the beneficiary's undergraduate |
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tuition and required fees at a general academic teaching |
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institution, two-year institution of higher education, private or |
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independent institution of higher education, or accredited |
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out-of-state institution of higher education. |
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(9) [(7)] "Private or independent institution of |
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higher education," "public junior college," "public state |
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college," "public technical institute," and "recognized |
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accrediting agency" have the meanings assigned by Section 61.003. |
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(10) [(8)] "Program" means the prepaid tuition unit |
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undergraduate education program. |
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(11) [(9)] "Purchaser" means a person who enters into |
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a prepaid tuition contract with the board on behalf of a beneficiary |
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for the purchase of one or more tuition units. |
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(12) [(10)] "Required fee" means a fee, other than a |
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laboratory fee for a specific course, that is charged by a public or |
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private institution of higher education to all students at the |
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institution who are not exempt from the fee. For purposes of this |
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subdivision, a fee is a required fee only to the extent that the fee |
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is considered a qualified higher education expense under Internal |
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Revenue Code provisions applicable to the program. |
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(13) [(11)] "Two-year institution of higher |
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education" means a public junior college, a public state college, |
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and a public technical institute. |
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SECTION 2. Section 54.7521, Education Code, is amended to |
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read as follows: |
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Sec. 54.7521. TEXAS SAVE AND MATCH PROGRAM. The board by |
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rule shall develop and shall implement the Texas Save and Match |
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program under which money paid by a purchaser under a prepaid |
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tuition contract or higher education savings plan, applicable to |
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plans and programs under Subchapters F, G, and H of this section, |
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may be matched with: |
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(1) contributions made by any person to the Texas Save |
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and Match program and used to purchase additional tuition units or |
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savings plan contributions on behalf of beneficiaries selected as |
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provided by board rule; and |
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(2) money appropriated by the legislature for the |
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Texas Save and Match program and used to purchase additional |
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tuition units or savings plan contributions on behalf of |
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beneficiaries: |
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(A) whose annual household income is below 400% |
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of the Federal Poverty Level [the state median family income], |
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adjusted for household size; |
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(B) whose enrollment in the program would, as |
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determined by the board, promote the participation goals and |
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targets of the most recent revision of "Closing the Gaps," the |
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state's master plan for higher education; or |
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(C) who meet other criteria established by board |
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rule. |
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SECTION 3. Subchapter H, Education Code, is amended by |
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adding Sections 54.7522, 54.7523, 54.7524, and 54.7525 as follows: |
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Sec. 54.7522. SAVE & MATCH PROGRAM RATIOS. For those |
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beneficiaries deemed eligible under Section 75.7521 of this |
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subchapter, the board shall develop a variable formula to match |
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purchases based upon annual household income. Depending on |
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availability of funds, for each eligible dollar contributed to the |
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prepaid tuition unit contract account or higher education savings |
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plan, the board shall match these contributions 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. 54.7523 ADMINISTRATION OF MATCH ACCOUNT |
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(1) Contributions made to the beneficiary's savings |
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trust account or prepaid tuition contract are matched with grant |
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funds to the beneficiary's matching account as provided by this |
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section. |
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(2) A matching account opened on behalf of a |
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beneficiary under this section must be accounted separately from |
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the beneficiary's traditional prepaid tuition unit balance or |
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savings trust account balance. |
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(3) To the extent possible, assets in match accounts |
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shall be expended prior to redemption of tuition units or qualified |
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withdrawal from the beneficiary's primary account. |
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(4) Information relating to the beneficiary of a |
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matching account established on behalf of the beneficiary under |
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Section 54.717, including any personally identifiable information |
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about the beneficiary, is confidential and is not subject to |
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disclosure under Chapter 552, Government Code. |
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(5) The board shall, to the extent possible, provide |
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the matching account balance with the periodic account statement |
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for each beneficiary participating in the program established under |
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Section 54.7521. |
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Sec. 54.7524 LIMITS ON PARTICIPATION |
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(a) To be initially eligible to participate in the program, |
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a beneficiary, at the time a savings trust account is opened on the |
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beneficiary's behalf, 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 individual who purchases tuition units or opens a savings |
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trust account on the beneficiary's behalf under this subchapter, at |
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the time the individual enters into a savings trust agreement with |
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the board and in the manner prescribed by board rule, information |
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necessary to determine the beneficiary's eligibility. |
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(c) An eligible beneficiary may participate in the program |
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for a time period not to exceed five years if the beneficiary |
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continues to meet the eligibility criteria prescribed by Subsection |
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(d). The five-year period can be either consecutive or |
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non-consecutive. The board shall prescribe procedures for |
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verifying a participating beneficiary's annual and continual |
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eligibility under this section. |
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(d) A participating beneficiary may receive a matching |
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grant to the beneficiary's matching account in any particular |
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calendar year only if at least $100 is contributed to the |
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beneficiary's savings trust account during that year. |
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Contributions to a beneficiary's savings trust account or prepaid |
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tuition contract account in excess of $500 in any calendar year are |
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not eligible for a matching grant to the beneficiary's matching |
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account. |
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(e) Any funds in a matching account that are not withdrawn |
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by the beneficiary's 30th birthday are forfeited and shall be |
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returned to the pool of matching funds maintained by the |
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direct-support organization established to operate this section. |
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Sec. 54.7525 DEMONSTRATIONS To fulfill the intent of the |
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Texas Save & Match Program established under Section 54.7521, the |
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Board may establish pilot projects under the program in an effort to |
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incentivize participation in the plan, including projects that |
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encourage participation by: |
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(a) awarding additional matching grants based on a |
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beneficiary's achievement of specified academic goals; |
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(b) offering additional seed matching grants on the opening |
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of a savings trust account; and |
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(c) providing incentives for employers to contribute |
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matching funds to the program. |
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SECTION 4. Subchapter H, Chapter 54, Education Code, is |
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amended by adding Sections 54.761 to read as follows |
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Sec. 54.761. EFFECT OF ACCOUNT BALANCE ON BENEFICIARY'S |
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ELIGIBILITY FOR STUDENT FINANCIAL ASSISTANCE. Money in a |
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beneficiary's savings trust account or matching account may not be |
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considered as available to the beneficiary, or otherwise included |
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in the 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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SECTION 5. Subchapter H, Education Code, is amended by |
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adding Section 54.762 as follows: |
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Sec. 54.762. REMITTANCE OF ACTUARIAL SOUNDNESS (OR |
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ENROLLMENT) FEE FOR CERTAIN INDIVIDUALS. For beneficiaries deemed |
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eligible under Section 54.7521, the board may waive the amount of |
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any enrollment fee charged by the board for a new account under this |
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subchapter only for a beneficiary whose household adjusted gross |
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income for the most recently completed tax year is not more than 200 |
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percent of the federal poverty level. If waived for any |
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beneficiary, the actuarial soundness fee must be remitted to the |
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plan fund through funds collected or appropriated to operate the |
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program. |
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SECTION 6. 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 UNIT |
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UNDERGRADUATE EDUCATION PROGRAMS AND HIGHER EDUCATION SAVINGS |
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PLANS. For purposes of determining whether a child meets family |
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income and resource requirements for eligibility for the child |
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health plan, the commission may not consider as income or resources |
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a right to assets held in or a right to receive payments or benefits |
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under any fund or plan established under Subchapters F, G and H, |
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Chapter 54, Education Code, including an interest in a savings |
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trust account, prepaid tuition contract account, or related |
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matching account. |
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SECTION 7. 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 UNIT |
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UNDERGRADUATE EDUCATION PROGRAMS AND HIGHER EDUCATION SAVINGS |
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PLANS. For purposes of determining the amount of financial |
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assistance granted to an individual under this chapter for the |
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support of dependent children or determining whether the family |
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meets household income and resource requirements for financial |
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assistance under this chapter, the department may not consider the |
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right to assets held in or the right to receive payments or benefits |
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under any fund or plan established under Subchapters F, G and H, |
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Chapter 54, Education Code, including an interest in a savings |
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trust account, prepaid tuition unit contract account, or related |
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matching account. |
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SECTION 8. 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 UNIT |
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UNDERGRADUATE EDUCATION PROGRAMS AND HIGHER EDUCATION SAVINGS |
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PLANS. In determining eligibility and need for medical assistance, |
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the department may not consider as assets or resources a right to |
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assets held in or a right to receive payments or benefits under any |
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fund or plan established under Subchapters G and H, Chapter 54, |
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Education Code, including an interest in a savings trust account, |
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prepaid tuition contract account, or related matching account. |
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SECTION 9. The Prepaid Higher Education Tuition Board shall |
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adopt rules as required by Section 54.752, Education Code, as added |
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by this Act, not later than November 1, 2009. |
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SECTION 10. The changes in law made by this Act to |
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Subchapter H, Chapter 54, Education Code, apply to a prepaid |
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tuition unit undergraduate contract account opened for a |
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beneficiary under Subchapter H, Chapter 54, Education Code, on or |
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after January 1, 2010. |
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SECTION 11. If before implementing any provision of this |
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Act 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 12. 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 13. This Act takes effect September 1, 2009. |