By: Garcia S.B. No. 1858

A BILL TO BE ENTITLED

AN ACT

relating to programs in public schools designed to facilitate planning and saving for higher education and facilitate personal financial literacy instruction.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter A, Chapter 28, Education Code, is amended by adding Section 28.0024 to read as follows:

Sec. 28.0024. SCHOOL-BASED SAVINGS PROGRAM. (a) A school district or open-enrollment charter school may establish a school-based savings program to facilitate increased awareness of the importance of saving for higher education and facilitate personal financial literacy instruction. A district or school may offer the program in conjunction with a person financial literacy course under Section 28.0021.

(b) A school-based savings program may, through partnerships with financial institutions, as defined by Section 201.101, Finance Code, promote:

(1) general savings, by offering savings accounts or certificates of deposit through partner financial institutions; or

(2) savings dedicated for higher education, by offering accounts through partner financial institutions that are dedicated exclusively to paying expenses associated with higher education, including:

(A) an account authorized under Section 529, Internal Revenue Code of 1986;

(B) a Coverdell education savings account established under 26 U.S.C. Section 530;

(C) a certificate of deposit;

(D) a savings account; and

(E) a Roth IRA.

(c) A district or school establishing a program under this section shall seek to establish partnerships with financial institutions, public sector partners, private businesses, nonprofit organizations, or philanthropic organizations in the community. A partnership between a district or school and:

(1) a financial institution may allow a student in the program or another adult in the student's family to have an opportunity to establish an account described under Subsection (b); and

(2) a financial institution, public sector partner, private business, or nonprofit or philanthropic organization may provide:

(A) a structure for the management of the program; and

(B) incentives that encourage contribution to a school-based account under Subsection (b), including incentives that provide matching funds or seed funding.

SECTION 2. Section 56.007, Education Code, is amended to read as follows:

Sec. 56.007. EXCLUSION OF ASSETS IN PREPAID TUITION PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. Notwithstanding any other law, the right of a person to assets held in or the right to receive payments or benefits under any fund, school-based account, or plan established under Section 28.0024(b)(2) up to the amount of the highest cost of undergraduate resident tuition and required fees for a 30-semester hour academic year at a Texas public college or university or Subchapter G, H, or I, Chapter 54, including an interest in a savings trust account, prepaid tuition account, or related matching account, may not be considered an asset of the person, or otherwise included in the person's household income or other financial resources, for purposes of determining the person's eligibility for a TEXAS grant or any other state-funded student financial assistance.

SECTION 3. Section 31.0039, Human Resources Code, is amended to read as follows:

Sec. 31.0039. EXCLUSION OF ASSETS IN PREPAID TUITION PROGRAMS AND HIGHER EDUCATION SAVINGS PLANS. For purposes of determining the amount of financial assistance granted to an individual under this chapter for the support of dependent children or determining whether the family meets household income and resource requirements for financial assistance under this chapter, the department may not consider the right to assets held in or the right to receive payments or benefits under:

(1) any fund, school-based account, or plan established under Section 28.0024(b)(2), Education Code, up to the amount of the highest cost of undergraduate resident tuition and required fees for a 30-semester hour academic year at a Texas public college or university. or Subchapter G, H, or I, Chapter 54, Education Code, including an interest in a savings trust account, prepaid tuition contract, or related matching account; or

(2) any qualified tuition program of any state that meets the requirements of Section 529, Internal Revenue Code of 1986.

SECTION 4. Subchapter A, Chapter 33, Human Resources Code, is amended by adding Section 33.0291 to read as follows:

Sec. 33.0291. EXCLUSION OF SCHOOL-BASED ACCOUNTS. For purposes of determining whether a person meets family income and resource requirements for eligibility for the supplemental nutrition assistance program, the commission may not consider as income or resources a right to assets held in or a right to receive payments or benefits under a school-based account established under Section 28.0024(b)(2), Education Code up to the amount of the highest cost of undergraduate resident tuition and required fees for a 30-semester hour academic year at a Texas public college or university.

SECTION 5. If before implementing any provision of this Act a state agency determines that a waiver or authorization from a federal agency is necessary for implementation of that provision, the agency affected by the provision shall request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.

SECTION 6. 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, 2015.