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  H.B. No. 3655
 
 
 
 
AN ACT
  relating to the administration and operation of the state's
  programs for paying, prepaying, or saving toward the costs of
  attending an institution of higher education, including the powers
  and duties of the Prepaid Higher Education Tuition Board.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 54.602, Education Code, is amended by
  adding Subsection (c) to read as follows:
         (c)  Unless otherwise specified, the provisions of this
  subchapter concerning the following requirements applicable to the
  board under this subchapter also apply to the board for purposes of
  Subchapters G, H, I, and J of this chapter:
               (1)  membership;
               (2)  appointments of members;
               (3)  removal of members;
               (4)  ethics policy;
               (5)  training;
               (6)  board officers;
               (7)  compensation;
               (8)  meetings;
               (9)  public interest information and complaints;
               (10)  use of technology;
               (11)  program and facility accessibility;
               (12)  executive director; and
               (13)  staff.
         SECTION 2.  Section 54.633, Education Code, is amended by
  adding Subsection (n) to read as follows:
         (n)  If the comptroller determines that the purpose of a
  direct-support organization established under Subsection (e) has
  been substantially complied with, the comptroller may dissolve the
  organization.  On dissolution, the title to all funds and
  properties then owned by the organization shall transfer to the
  Texas Match the Promise Foundation.
         SECTION 3.  Section 54.641(a), Education Code, is amended to
  read as follows:
         (a)  Not later than January 31 [1] of each year, the board
  shall furnish without charge to each purchaser a statement of:
               (1)  the amount paid by the purchaser under the prepaid
  tuition contract;
               (2)  the number of credit hours originally covered by
  the contract;
               (3)  the number of credit hours remaining under the
  contract; and
               (4)  any other information the board determines by rule
  is necessary or appropriate.
 
         SECTION 4.  Section 54.701(8), Education Code, is amended to
  read as follows:
               (8)  "Qualified higher education expenses" has the
  meaning assigned by [means tuition, fees, or expenses for books,
  supplies, and equipment required for the enrollment or attendance
  of an individual at an eligible educational institution, the costs
  of room and board, and any other higher education expenses that may
  be permitted under] Section 529, Internal Revenue Code of 1986, as
  amended.
         SECTION 5.  Section 54.702(a), Education Code, is amended to
  read as follows:
         (a)  The board shall:
               (1)  develop and implement the plan in a manner
  consistent with this subchapter;
               (2)  select the financial institution or institutions
  to serve as plan manager; and
               (3)  adopt rules to implement this subchapter
  [governing withdrawal of money from a savings trust account and
  develop policies and penalties for nonqualified withdrawals].
         SECTION 6.  The heading to Section 54.708, Education Code,
  is amended to read as follows:
         Sec. 54.708.  CONTRIBUTIONS AND WITHDRAWALS[; PENALTY FOR
  NONQUALIFIED WITHDRAWAL].
         SECTION 7.  Section 54.708(b), Education Code, is amended to
  read as follows:
         (b)  An account owner may withdraw all or part of the balance
  of an account on prior notice as authorized by board rules. [The
  board shall adopt rules governing the determination whether a
  withdrawal is a qualified withdrawal or a nonqualified withdrawal.
  The rules may require an account owner requesting to make a
  qualified withdrawal to provide a certification of qualified higher
  education expenses.]
         SECTION 8.  Sections 54.751(2), (6), and (7), Education
  Code, are amended to read as follows:
               (2)  "Beneficiary" means the person designated under a
  prepaid tuition contract as the person entitled to apply one or more
  tuition units purchased under the contract to the payment of the
  person's undergraduate tuition and required fees at a general
  academic teaching institution, two-year institution of higher
  education, private or independent institution of higher education,
  medical and dental unit, career school, or accredited out-of-state
  institution of higher education.
               (6)  "Prepaid tuition contract" means a contract under
  which a person purchases from the board on behalf of a beneficiary
  one or more tuition units that the beneficiary is entitled to apply
  to the payment of the beneficiary's undergraduate tuition and
  required fees at a general academic teaching institution, two-year
  institution of higher education, private or independent
  institution of higher education, medical and dental unit, career
  school, or accredited out-of-state institution of higher
  education.
               (7)  "Medical and dental unit," "private ["Private] or
  independent institution of higher education," "public junior
  college," "public state college," "public technical institute,"
  and "recognized accrediting agency" have the meanings assigned by
  Section 61.003.
         SECTION 9.  Section 54.753, Education Code, is amended by
  amending Subsection (a) and adding Subsection (c-1) to read as
  follows:
         (a)  Under the program, a purchaser may prepay the costs of
  all or a portion of a beneficiary's undergraduate tuition and
  required fees at a general academic teaching institution, two-year
  institution of higher education, private or independent
  institution of higher education, medical and dental unit, career
  school, or accredited out-of-state institution of higher education
  by entering into a prepaid tuition contract with the board to
  purchase one or more tuition units of a type described by this
  section at the applicable price established by the board for that
  type of unit for the year in which the unit is purchased. The
  portion of the beneficiary's undergraduate tuition and required
  fees for which a tuition unit may be redeemed at a particular
  general academic teaching institution or two-year institution of
  higher education is assigned to the tuition unit at the time of
  purchase, and the tuition unit may be redeemed to pay that portion
  of the tuition and fees at the general academic teaching
  institution or two-year institution of higher education in any
  academic year in which the unit is redeemed in accordance with this
  subchapter. The purchaser may purchase one type of unit or a
  combination of two or three types of units.
         (c-1)  On or before June 1, each general academic teaching
  institution and each two-year institution of higher education shall
  annually provide information for the next fall semester to the
  board in a format requested by the board, to assist the board in
  determining tuition unit sales prices for the next sales period and
  redemption values for the next academic year.
         SECTION 10.  Sections 54.754(a) and (d), Education Code, are
  amended to read as follows:
         (a)  In accordance with this subchapter, when a beneficiary
  under a prepaid tuition contract redeems one or more tuition units
  to pay costs of tuition and required fees, the board shall apply
  money in the fund, in the amount provided by Section 54.765 to pay
  all or the applicable portion of the costs of the beneficiary's
  tuition and required fees at the general academic teaching
  institution, two-year institution of higher education, private or
  independent institution of higher education, medical and dental
  unit, or accredited out-of-state institution of higher education in
  which the beneficiary enrolls. Subject to Subsection (b)(2) and the
  other provisions of this section, a beneficiary may redeem any type
  of tuition unit for attendance at an institution or unit described
  by this section. A general academic teaching institution or
  two-year institution of higher education shall accept the amount
  transferred to the institution under Section 54.765(c) when the
  unit or units are redeemed as payment for all or the applicable
  portion of the beneficiary's tuition and required fees.
         (d)  If a beneficiary redeems fewer tuition units of the type
  or combination of types necessary to pay the total cost of the
  beneficiary's tuition and required fees at the general academic
  teaching institution, two-year institution of higher education,
  private or independent institution of higher education, medical and
  dental unit, career school, or accredited out-of-state institution
  of higher education at which the beneficiary enrolls, the
  beneficiary is responsible for paying the amount of the difference
  between the amount of tuition and required fees for which the
  beneficiary pays through the redemption of one or more tuition
  units and the total cost of the beneficiary's tuition and required
  fees at the institution or unit.
         SECTION 11.  Section 54.765(f), Education Code, is amended
  to read as follows:
         (f)  When a beneficiary enrolls at a private or independent
  institution of higher education, medical and dental unit, career
  school, or accredited out-of-state institution of higher
  education, on written authorization from the purchaser of the
  tuition unit or units for that beneficiary, the comptroller or the
  comptroller's authorized representative shall transfer to the
  institution the lesser of:
               (1)  an amount equal to the current cost of the tuition
  and required fees that would be covered by redemption of the number
  and type of tuition units the beneficiary is redeeming if the
  beneficiary were redeeming the unit or units at a general academic
  teaching institution or two-year institution of higher education as
  follows:
                     (A)  for a Type I unit, at the general academic
  teaching institution that had the highest tuition and required fee
  cost;
                     (B)  for a Type II unit, at a general academic
  teaching institution that had tuition and required fee cost at the
  weighted average; and
                     (C)  for a Type III unit, at a two-year
  institution of higher education that had tuition and required fee
  cost at the weighted average; or
               (2)  an amount equal to the total purchase price of the
  tuition unit or units the beneficiary redeems for the semester or
  other academic term plus the portion of the total return on assets
  of the fund attributable to that amount.
         SECTION 12.  Section 54.767, Education Code, is amended to
  read as follows:
         Sec. 54.767.  USE OF FUND ASSETS. The assets of the fund may
  be used only to:
               (1)  pay the costs of program administration and
  operations;
               (2)  make payments to general academic teaching
  institutions, two-year institutions of higher education, private
  or independent institutions of higher education, medical and dental
  units, career schools, and accredited out-of-state institutions of
  higher education on behalf of beneficiaries; and
               (3)  make refunds under prepaid tuition contracts.
         SECTION 13.  Sections 54.769(b) and (c), Education Code, are
  amended to read as follows:
         (b)  The rights of a purchaser, beneficiary, or successor in
  interest of a purchaser or beneficiary in and under a prepaid
  tuition contract and the payment of tuition and required fees for a
  beneficiary under a prepaid tuition contract to a general academic
  teaching institution, two-year institution of higher education,
  private or independent institution of higher education, medical and
  dental unit, career school, or accredited out-of-state institution
  of higher education under this chapter are exempt from attachment,
  levy, garnishment, execution, and seizure for the satisfaction of
  any debt, judgment, or claim against a purchaser, beneficiary, or
  successor in interest of a purchaser or beneficiary.
         (c)  A claim or judgment against a purchaser, beneficiary, or
  successor in interest of a purchaser or beneficiary does not impair
  or entitle the claim or judgment holder to assert or enforce a lien
  against:
               (1)  the rights of a purchaser, beneficiary, or
  successor in interest of a purchaser or beneficiary in and under a
  prepaid tuition contract; or
               (2)  the right of a beneficiary to the payment of
  tuition and required fees to a general academic teaching
  institution, two-year institution of higher education, private or
  independent institution of higher education, medical and dental
  unit, career school, or accredited out-of-state institution of
  higher education under a prepaid tuition contract.
         SECTION 14.  Section 54.774(a), Education Code, is amended
  to read as follows:
         (a)  A prepaid tuition contract remains in effect after the
  program is terminated if, when the program is terminated, the
  beneficiary:
               (1)  has been accepted by or is enrolled at a general
  academic teaching institution, two-year institution of higher
  education, private or independent institution of higher education,
  medical and dental unit, career school, or accredited out-of-state
  institution of higher education; or
               (2)  is projected to graduate from high school not
  later than the third anniversary of the date the program is
  terminated.
         SECTION 15.  Section 54.775(b), Education Code, is amended
  to read as follows:
         (b)  Notwithstanding Subsection (a), the board may release
  information described by that subsection to a general academic
  teaching institution, two-year institution of higher education,
  private or independent institution of higher education, medical and
  dental unit, career school, or accredited out-of-state institution
  of higher education at which a beneficiary may enroll or is
  enrolled. The institution or unit shall keep the information
  confidential.
         SECTION 16.  Section 54.776, Education Code, is amended to
  read as follows:
         Sec. 54.776.  STATEMENT REGARDING STATUS OF PREPAID TUITION
  CONTRACT. Not later than January 31 [1] of each year, the board
  shall provide without charge to each purchaser a statement of:
               (1)  the amount paid by the purchaser under the prepaid
  tuition contract;
               (2)  the total number of each type of tuition unit
  covered by the contract at any one time;
               (3)  the number of each type of tuition unit remaining
  under the contract;
               (4)  the value of the purchasers' tuition units if
  redeemed at any general academic teaching institution or two-year
  institution of higher education designated for that year by the
  purchaser in the time and manner required by the board, not to
  exceed five institutions; and
               (5)  any other information the board determines by rule
  is necessary or appropriate.
         SECTION 17.  Sections 54.708(c), (d), (e), and (f),
  Education Code, are repealed.
         SECTION 18.  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, 2019.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I certify that H.B. No. 3655 was passed by the House on May 3,
  2019, by the following vote:  Yeas 136, Nays 4, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 3655 on May 22, 2019, by the following vote:  Yeas 145, Nays 0,
  1 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 3655 was passed by the Senate, with
  amendments, on May 14, 2019, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor