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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) "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. (a) The board |
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shall develop and implement the Texas Save and Match Program, under |
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which money contributed to a savings trust account by an account |
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owner under the higher education savings plan under Subchapter G or |
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paid by a purchaser under a prepaid tuition contract under |
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Subchapter F or H on behalf of an eligible beneficiary may be |
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matched with: |
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(1) contributions made by any person to the program |
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for use in making additional savings trust account contributions |
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under Subchapter G or in prepaying additional tuition and fees or |
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purchasing additional tuition units under prepaid tuition |
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contracts under Subchapters F and H on behalf of eligible |
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beneficiaries selected as provided by board rule; or |
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(2) money appropriated by the legislature for the |
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program to be used for the purposes described by Subdivision (1). |
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(b) Notwithstanding other law, for purposes of Subchapter |
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I, Chapter 659, Government Code: |
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(1) the program is considered an eligible charitable |
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organization entitled to participate in a state employee charitable |
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campaign under Subchapter I, Chapter 659, Government Code; and |
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(2) a state employee is entitled to authorize a |
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payroll deduction for contributions to the program as a charitable |
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contribution under Section 659.132, Government Code. |
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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 of this state; and |
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(2) have a household adjusted gross income, for the |
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most recently completed tax year, that is not more than 120 percent |
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of the state median household adjusted gross income. |
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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 from the individual |
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who 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) The board by rule shall |
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prescribe: |
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(1) the maximum number of years for which a |
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beneficiary is eligible for matching funds under the program; and |
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(2) the maximum annual amount of contributions to a |
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savings trust account under Subchapter G or of payments under a |
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prepaid tuition contract under Subchapter F or H that are eligible |
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for a match under the program. |
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(b) In determining the amount of matching funds to which |
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eligible beneficiaries are entitled under the program, the board by |
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rule may adopt match ratios under which matching fund amounts are |
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awarded in inverse relation to beneficiaries' household adjusted |
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gross incomes. |
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(c) Withdrawals from a matching account for a savings trust |
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account may be used only for qualified higher education expenses as |
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defined by Subchapter G of the eligible beneficiary for whom the |
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matching account is established. Funds in the matching account |
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must be disbursed directly to providers of qualified higher |
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education services and may not be disbursed directly to the |
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beneficiary. |
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(d) Prepaid tuition and fees or tuition units in a matching |
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account for the beneficiary of a prepaid tuition contract may be |
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redeemed only by the board or by a qualified institution of higher |
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education in the manner prescribed by the board on behalf of the |
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beneficiary. |
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(e) Any unused funds or unused prepaid tuition and fees or |
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tuition units in a matching account that are not withdrawn or |
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redeemed for the beneficiary before the beneficiary's 30th birthday |
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are forfeited, and the applicable matching funds shall be returned |
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to the pool of matching funds maintained by the board. |
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Sec. 54.805. MATCHING ACCOUNT ADMINISTRATION. (a) A |
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matching account established on behalf of a beneficiary under this |
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subchapter must be accounted for 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, prepaid tuition and fees, |
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or tuition units in a beneficiary's matching account shall be |
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withdrawn or redeemed before money is withdrawn from the |
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beneficiary's savings trust account under Subchapter G or prepaid |
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tuition and fees or tuition units are redeemed from the prepaid |
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tuition contract for the beneficiary under Subchapter F or H. |
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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 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 for a savings trust account or prepaid |
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tuition contract the balance of the matching account opened under |
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this subchapter on behalf of the beneficiary of the account or |
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contract. |
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Sec. 54.806. EFFECT OF ACCOUNT BALANCE ON BENEFICIARY'S |
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ELIGIBILITY FOR STUDENT FINANCIAL ASSISTANCE. The balance of a |
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beneficiary's matching account under this subchapter 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 other financial resources, |
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for purposes of determining the beneficiary's eligibility for a |
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TEXAS grant or any other state-funded student financial assistance. |
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Sec. 54.807. GIFTS, GRANTS, AND DONATIONS. The board may |
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solicit and accept gifts, grants, and donations from any public or |
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private source for the purposes of this subchapter. |
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Sec. 54.808. 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; |
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(3) providing incentives for employers to contribute |
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matching funds to the program; |
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(4) partnering with public school districts and |
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educational agencies to create a program information portal |
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designed to increase program awareness and accessibility among |
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school districts, parents, and students; and |
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(5) partnering with financial institutions or prepaid |
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card providers to develop user interface opportunities that |
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increase the ease and efficiency with which contributions or |
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purchases can be made under Subchapter F, G, or H. |
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Sec. 54.809. PROGRAM PROMOTION AND MARKETING; REPORT. |
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(a) The board shall coordinate with community members throughout |
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the state, including members of the medical, educational, |
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nonprofit, and business communities, to promote and market the |
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program to further the goals and targets of the most recent revision |
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of "Closing the Gaps," the state's master plan for higher |
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education. |
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(b) Not later than December 1 of each year, the board shall |
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submit to the governor, lieutenant governor, speaker of the house |
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of representatives, Legislative Budget Board, Legislative Audit |
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Committee, state auditor, and Texas Higher Education Coordinating |
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Board a report detailing the collaborative promotion and marketing |
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efforts under this section. The board may include the report in the |
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report required by Section 54.777. |
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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. Section 54.777(a), Education Code, is amended to |
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read as follows: |
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(a) Not later than December 1 of each year, the board shall |
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submit to the governor, lieutenant governor, speaker of the house |
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of representatives, Legislative Budget Board, Legislative Audit |
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Committee, state auditor, and Texas Higher Education Coordinating |
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Board a report including: |
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(1) the fiscal transactions of the board and the plan |
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manager under this subchapter during the preceding fiscal year; |
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(2) the market and book value of the fund as of the end |
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of the preceding fiscal year; |
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(3) the asset allocations of the fund expressed in |
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percentages of stocks, fixed income, cash, or other financial |
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investments; |
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(4) the rate of return on the investment of the fund's |
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assets during the preceding fiscal year; [and] |
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(5) an actuarial valuation of the assets and |
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liabilities of the program, including the extent to which the |
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program's liabilities are unfunded; and |
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(6) a breakdown of the following information relating |
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to purchasers and beneficiaries of prepaid tuition contracts |
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entered into during the preceding fiscal year: |
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(A) the annual gross household income of |
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purchasers; |
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(B) the highest educational level achieved by |
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purchasers; and |
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(C) the race or ethnicity of beneficiaries. |
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SECTION 4. 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 5. 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 6. 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), the department |
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may consider as assets or resources a right to assets held in or a |
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right to receive payments or benefits under any fund, plan, or |
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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 7. Section 54.7521, Education Code, is repealed. |
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SECTION 8. The Prepaid Higher Education Tuition Board shall |
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adopt the initial rules required by Subchapter I, Chapter 54, |
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Education Code, as added by this Act, not later than November 1, |
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2011. For that purpose, the board may adopt the initial rules in |
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the manner provided by law for the adoption of emergency rules. |
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SECTION 9. The Texas Save and Match Program established by |
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this Act is an expansion of the Texas Save and Match program created |
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under Section 54.7521, Education Code. On and after the effective |
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date of Section 7 of this Act, the 501(c)(3) foundation created |
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under Section 54.7521, Education Code, to provide matching funds |
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under that program may continue to accept tax-deductible donations |
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for the purpose of providing matching funds under the program |
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established by this Act. |
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SECTION 10. Subchapter I, Chapter 54, Education Code, as |
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added by this Act, applies to a prepaid tuition contract purchased |
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for a beneficiary under Subchapter H, Chapter 54, Education Code, |
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regardless of whether the prepaid tuition contract was purchased |
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before, on, or after the effective date of this Act. Subchapter I, |
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Chapter 54, Education Code, as added by this Act, applies only to a |
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prepaid tuition contract purchased for a beneficiary under |
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Subchapter F, Chapter 54, Education Code, or a savings trust |
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account opened for a beneficiary under Subchapter G, Chapter 54, |
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Education Code, on or after January 1, 2012. |
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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. (a) Except as provided by Subsection (b) of this |
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section, this Act takes effect September 1, 2011. |
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(b) Section 7 of this Act takes effect January 1, 2012. |