85R11702 KJE-F

By: Menéndez S.B. No. 2182

A BILL TO BE ENTITLED

AN ACT

relating to measures to increase participation in state programs relating to saving money or prepaying for college.

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

SECTION 1. Section 54.801(2), Education Code, is amended to read as follows:

(2) "Beneficiary" means a beneficiary on whose behalf a purchaser enters into a prepaid tuition contract with the board under Subchapter H, [or] for whom a savings trust account is opened under Subchapter G, or for whom a matching account is opened under Section 54.802(a-1).

SECTION 2. Section 54.802, Education Code, is amended by amending Subsection (a) and adding Subsections (a-1) and (d) to read as follows:

(a) The board, in cooperation with the program entity, shall administer the Texas Save and Match Program, under which money contributed to a savings trust account by an account owner under a higher education savings plan established under Subchapter G, [or] paid by a purchaser under a prepaid tuition contract under Subchapter H on behalf of an eligible beneficiary, or contributed to a matching account established under Subsection (a-1) may be matched with:

(1) contributions made by any person to the program entity for use in making additional savings trust account contributions under Subchapter G or in purchasing additional tuition units under prepaid tuition contracts under Subchapter H; or

(2) money appropriated by the legislature for the program to be used by the board to make additional savings trust account contributions under Subchapter G or to purchase additional tuition units under Subchapter H.

(a-1) The board by rule shall establish an automatic enrollment plan within the program through which a public or private entity may request a matching account to be established automatically, based on factors determined by the board in consultation with the public or private entity, by the board or program entity under this subchapter for a child who is not already a beneficiary of a savings trust account established under Subchapter G or of a prepaid tuition contract entered into under Subchapter H.

(d) For purposes of this subchapter, contributions to a matching account established by the board or program entity on behalf of a beneficiary under this subchapter may include, regardless of whether any corresponding funds are contributed to a savings trust account established under Subchapter G or paid under a prepaid tuition contract entered into under Subchapter H:

(1) initial deposits to the matching account;

(2) funds for the payment of application fees; and

(3) matching grants based on the beneficiary's income level or achievement of specified academic goals.

SECTION 3. Sections 54.803 and 54.804, Education Code, are amended to read as follows:

Sec. 54.803. INITIAL ELIGIBILITY FOR PARTICIPATION IN PROGRAM. (a) To be initially eligible to participate in the program, a beneficiary, at the time a prepaid tuition contract is entered into on the beneficiary's behalf under Subchapter H, [or] a savings trust account is opened on the beneficiary's behalf under Subchapter G, or a matching account is requested on the beneficiary's behalf under a plan established under Section 54.802(a-1), as applicable, must be:

(1) a resident of this state; or

(2) a dependent for purposes of Section 152, Internal Revenue Code of 1986, of a resident of this state.

(b) The board shall give preference to awarding [To be initially eligible to receive] matching funds described by Section 54.802(a)(2) under the program to [,] a beneficiary who, at the time a prepaid tuition contract is entered into on the beneficiary's behalf under Subchapter H, [or] a savings trust account is opened on the beneficiary's behalf under Subchapter G, or a matching account is requested on the beneficiary's behalf under a plan established under Section 54.802(a-1), as applicable, is [must be] eligible for free or reduced-price meals under the national free or reduced-price breakfast and lunch program.

Sec. 54.804. LIMITATIONS. A matching account established by the board or program entity on behalf of a beneficiary under this subchapter is forfeited and reverts to the board or program entity on the occurrence of any of the following, as applicable:

(1) the 10th anniversary of the date the beneficiary is projected to graduate from high school, as indicated by the purchaser in the enrollment contract, except that time spent by the beneficiary as an active duty member of the United States armed services tolls the period described by this subdivision;

(2) a change of beneficiary by the account owner or purchaser of the matched account;

(3) a contract cancellation of the matched account and refund request;

(4) the successful completion by the beneficiary of a [an associate or] bachelor's degree program;

(5) transfer of the matched account to another qualified tuition program of any state that meets the requirements of Section 529, Internal Revenue Code of 1986; or

(6) any other event the board or program entity determines would be inconsistent with the program's purposes.

SECTION 4. Section 54.805(c), Education Code, is amended to read as follows:

(c) The [To the extent possible, the] board shall include information about a matching account in the periodic statement provided to applicable account owners and purchasers under Subchapters G and H.

SECTION 5. Sections 54.807 and 54.809, Education Code, are amended to read as follows:

Sec. 54.807. PILOT PROJECTS UNDER PROGRAM. (a) To fulfill the intent of the program, the board, in collaboration with relevant stakeholders, shall [may use funds described by Section 54.802(a)(2) to] establish one or more pilot projects under the program in an effort to incentivize participation in the higher education savings program under Subchapter G and the prepaid tuition unit undergraduate education program under Subchapter H, including projects that incentivize participation by:

(1) awarding additional matching grants based on a beneficiary's achievement of specified academic goals;

(2) providing initial matching grants and paying application fees;

(3) providing incentives for employers to contribute matching funds to the program; and

(4) creating a program information portal designed to increase program awareness and accessibility among school districts, parents, and students.

(b) At least one pilot project established under this section must be an automatic enrollment plan described by Section 54.802(a-1). Under the pilot project, the board shall award matching grants based on a beneficiary's achievement of specified academic goals and may award other matching grants or provide other incentives for participation.

(c) The board shall use funds described by Section 54.802(a)(2) and may use funds described by Section 54.802(a)(1) to establish pilot projects under this section.

Sec. 54.809. RULES. The board shall adopt rules for the administration of this subchapter, including rules to:

(1) implement an automatic enrollment plan under Section 54.802(a-1); and

(2) establish a process for distributing funds described by Section 54.802(a)(2) among programs and plans under this subchapter.

SECTION 6. Chapter 54, Education Code, is amended by adding Subchapter I-1 to read as follows:

SUBCHAPTER I-1. COLLEGE SAVINGS PLANS TASK FORCE AND STUDY

Sec. 54.851. DEFINITIONS. In this subchapter:

(1) "Coordinating board" means the Texas Higher Education Coordinating Board.

(2) "Task force" means the college savings plans task force established under this subchapter.

Sec. 54.852. COLLEGE SAVINGS PLANS TASK FORCE. (a) The task force is established to:

(1) review and make recommendations for improvements to the higher education savings plan established under Subchapter G and the Texas Save and Match Program established under Subchapter I; and

(2) evaluate strategies to increase participation in the higher education savings plan established under Subchapter G, particularly among economically disadvantaged students, minority students, and students in geographical areas of the state with lower rates of participation in the plan.

(b) The task force is composed of 11 members, consisting of:

(1) one member appointed by the chair of the house of representatives committee with primary jurisdiction over higher education;

(2) one member appointed by the chair of the senate committee with primary jurisdiction over higher education;

(3) a representative of the coordinating board designated by the commissioner of higher education;

(4) a representative of the office of the comptroller designated by the comptroller;

(5) one member from the Texas Match the Promise Foundation;

(6) the director of the Texas GEAR UP program; and

(7) five members appointed by the commissioner of higher education as follows:

(A) one member with an interest in college savings accounts representing an organization providing financial stability services in the state;

(B) a representative of the Texas Parent Teacher Association;

(C) a representative of an institution of higher education;

(D) a representative of the philanthropic community; and

(E) a representative of a regional education service center.

(c) The task force shall meet at the call of the coordinating board or the comptroller.

(c-1) The task force must hold at least two public meetings not later than March 31, 2019. This subsection expires September 1, 2019.

(d) The task force shall:

(1) develop a selection process for participation in pilot projects established under Section 54.807 and provide guidance on those pilot projects; and

(2) provide guidance on the study conducted by the coordinating board under Section 54.853.

Sec. 54.853. STUDY AND REPORT ON COLLEGE SAVINGS PLANS. (a) The coordinating board shall conduct an ongoing study on the higher education savings plan established under Subchapter G and the Texas Save and Match Program established under Subchapter I.

(b) The study must:

(1) analyze potential strategies for increasing participation in the higher education savings plan, particularly among economically disadvantaged students, minority students, and students in geographical areas of the state with lower rates of participation in the plan, including methods to:

(A) enhance the competitiveness of the plan;

(B) reduce plan fees; and

(C) improve access to savings trust accounts established through the plan for low-income families;

(2) evaluate potential improvements to the Texas Save and Match Program to increase participation in the program, including changes recommended as a result of a pilot project established under Section 54.807; and

(3) identify potential sources of funding for the Texas Save and Match Program.

(c) Not later than June 1 of each even-numbered year, the coordinating board shall submit to the governor, the lieutenant governor, the speaker of the house of representatives, the comptroller, the standing legislative committees with primary jurisdiction over higher education, and the task force a report on the results of the study and any recommendations for legislative or other action.

(d) Not later than December 1 of each even-numbered year, the Prepaid Higher Education Tuition Board shall adopt rules to implement one or more of the recommendations in the report submitted under Subsection (c).

SECTION 7. Section 74.603, Property Code, is amended to read as follows:

Sec. 74.603. AUDIT; APPROPRIATION. (a) The unclaimed money received under this chapter or any other statute requiring the delivery of unclaimed property to the comptroller is subject to audit by the State Auditor and to appropriation by the legislature for enforcing and administering this title.

(b) Unclaimed money received under this chapter in an amount equal to or less than $5 and held by the comptroller for at least 20 years may be appropriated for the support of the Texas Save and Match Program under Subchapter I, Chapter 54, Education Code, and, in accordance with the General Appropriations Act, transferred to the Prepaid Higher Education Tuition Board for that purpose.

SECTION 8. Not later than 60 days after the effective date of this Act, the initial appointments or designations, as applicable, of the members of the task force established under Section 54.852, Education Code, as added by this Act, must be made.

SECTION 9. Not later than June 1, 2018, the Texas Higher Education Coordinating Board shall submit its initial report required under Section 54.853, Education Code, as added by this Act.

SECTION 10. Not later than September 30, 2019, the Prepaid Higher Education Tuition Board shall establish the pilot project required under Section 54.807(b), Education Code, as added by this Act.

SECTION 11. 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, 2017.