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AN ACT
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relating to the administration and operation of the state's |
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programs for paying, prepaying, or saving toward the costs of |
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attending an institution of higher education, including the powers |
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and duties of the Prepaid Higher Education Tuition Board. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 54.602, Education Code, is amended by |
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adding Subsection (c) to read as follows: |
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(c) Unless otherwise specified, the provisions of this |
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subchapter concerning the following requirements applicable to the |
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board under this subchapter also apply to the board for purposes of |
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Subchapters G, H, I, and J of this chapter: |
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(1) membership; |
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(2) appointments of members; |
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(3) removal of members; |
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(4) ethics policy; |
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(5) training; |
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(6) board officers; |
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(7) compensation; |
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(8) meetings; |
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(9) public interest information and complaints; |
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(10) use of technology; |
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(11) program and facility accessibility; |
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(12) executive director; and |
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(13) staff. |
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SECTION 2. Section 54.633, Education Code, is amended by |
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adding Subsection (n) to read as follows: |
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(n) If the comptroller determines that the purpose of a |
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direct-support organization established under Subsection (e) has |
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been substantially complied with, the comptroller may dissolve the |
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organization. On dissolution, the title to all funds and |
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properties then owned by the organization shall transfer to the |
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Texas Match the Promise Foundation. |
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SECTION 3. Section 54.641(a), Education Code, is amended to |
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read as follows: |
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(a) Not later than January 31 [1] of each year, the board |
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shall furnish without charge to each purchaser a statement of: |
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(1) the amount paid by the purchaser under the prepaid |
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tuition contract; |
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(2) the number of credit hours originally covered by |
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the contract; |
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(3) the number of credit hours remaining under the |
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contract; and |
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(4) any other information the board determines by rule |
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is necessary or appropriate. |
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SECTION 4. Section 54.701(8), Education Code, is amended to |
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read as follows: |
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(8) "Qualified higher education expenses" has the |
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meaning assigned by [means tuition, fees, or expenses for books,
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supplies, and equipment required for the enrollment or attendance
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of an individual at an eligible educational institution, the costs
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of room and board, and any other higher education expenses that may
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be permitted under] Section 529, Internal Revenue Code of 1986, as |
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amended. |
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SECTION 5. Section 54.702(a), Education Code, is amended to |
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read as follows: |
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(a) The board shall: |
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(1) develop and implement the plan in a manner |
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consistent with this subchapter; |
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(2) select the financial institution or institutions |
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to serve as plan manager; and |
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(3) adopt rules to implement this subchapter |
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[governing withdrawal of money from a savings trust account and
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develop policies and penalties for nonqualified withdrawals]. |
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SECTION 6. The heading to Section 54.708, Education Code, |
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is amended to read as follows: |
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Sec. 54.708. CONTRIBUTIONS AND WITHDRAWALS[; PENALTY FOR
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NONQUALIFIED WITHDRAWAL]. |
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SECTION 7. Section 54.708(b), Education Code, is amended to |
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read as follows: |
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(b) An account owner may withdraw all or part of the balance |
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of an account on prior notice as authorized by board rules. [The
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board shall adopt rules governing the determination whether a
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withdrawal is a qualified withdrawal or a nonqualified withdrawal.
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The rules may require an account owner requesting to make a
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qualified withdrawal to provide a certification of qualified higher
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education expenses.] |
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SECTION 8. Sections 54.751(2), (6), and (7), Education |
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Code, are amended to read as follows: |
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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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medical and dental unit, career school, or accredited out-of-state |
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institution of higher education. |
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(6) "Prepaid tuition contract" means a contract under |
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which a person purchases from the board on behalf of a beneficiary |
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one or more tuition units that the beneficiary is entitled to apply |
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to the payment of the beneficiary's undergraduate tuition and |
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required fees at a general academic teaching institution, two-year |
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institution of higher education, private or independent |
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institution of higher education, medical and dental unit, career |
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school, or accredited out-of-state institution of higher |
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education. |
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(7) "Medical and dental unit," "private ["Private] or |
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independent institution of higher education," "public junior |
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college," "public state college," "public technical institute," |
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and "recognized accrediting agency" have the meanings assigned by |
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Section 61.003. |
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SECTION 9. Section 54.753, Education Code, is amended by |
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amending Subsection (a) and adding Subsection (c-1) to read as |
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follows: |
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(a) Under the program, a purchaser may prepay the costs of |
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all or a portion of a beneficiary's undergraduate tuition and |
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required fees at a general academic teaching institution, two-year |
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institution of higher education, private or independent |
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institution of higher education, medical and dental unit, career |
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school, or accredited out-of-state institution of higher education |
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by entering into a prepaid tuition contract with the board to |
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purchase one or more tuition units of a type described by this |
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section at the applicable price established by the board for that |
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type of unit for the year in which the unit is purchased. The |
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portion of the beneficiary's undergraduate tuition and required |
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fees for which a tuition unit may be redeemed at a particular |
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general academic teaching institution or two-year institution of |
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higher education is assigned to the tuition unit at the time of |
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purchase, and the tuition unit may be redeemed to pay that portion |
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of the tuition and fees at the general academic teaching |
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institution or two-year institution of higher education in any |
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academic year in which the unit is redeemed in accordance with this |
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subchapter. The purchaser may purchase one type of unit or a |
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combination of two or three types of units. |
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(c-1) On or before June 1, each general academic teaching |
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institution and each two-year institution of higher education shall |
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annually provide information for the next fall semester to the |
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board in a format requested by the board, to assist the board in |
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determining tuition unit sales prices for the next sales period and |
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redemption values for the next academic year. |
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SECTION 10. Sections 54.754(a) and (d), Education Code, are |
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amended to read as follows: |
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(a) In accordance with this subchapter, when a beneficiary |
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under a prepaid tuition contract redeems one or more tuition units |
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to pay costs of tuition and required fees, the board shall apply |
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money in the fund, in the amount provided by Section 54.765 to pay |
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all or the applicable portion of the costs of the beneficiary's |
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tuition and required fees at the 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, medical and dental |
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unit, or accredited out-of-state institution of higher education in |
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which the beneficiary enrolls. Subject to Subsection (b)(2) and the |
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other provisions of this section, a beneficiary may redeem any type |
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of tuition unit for attendance at an institution or unit described |
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by this section. A general academic teaching institution or |
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two-year institution of higher education shall accept the amount |
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transferred to the institution under Section 54.765(c) when the |
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unit or units are redeemed as payment for all or the applicable |
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portion of the beneficiary's tuition and required fees. |
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(d) If a beneficiary redeems fewer tuition units of the type |
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or combination of types necessary to pay the total cost of the |
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beneficiary's tuition and required fees at the general academic |
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teaching institution, two-year institution of higher education, |
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private or independent institution of higher education, medical and |
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dental unit, career school, or accredited out-of-state institution |
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of higher education at which the beneficiary enrolls, the |
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beneficiary is responsible for paying the amount of the difference |
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between the amount of tuition and required fees for which the |
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beneficiary pays through the redemption of one or more tuition |
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units and the total cost of the beneficiary's tuition and required |
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fees at the institution or unit. |
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SECTION 11. Section 54.765(f), Education Code, is amended |
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to read as follows: |
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(f) When a beneficiary enrolls at a private or independent |
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institution of higher education, medical and dental unit, career |
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school, or accredited out-of-state institution of higher |
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education, on written authorization from the purchaser of the |
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tuition unit or units for that beneficiary, the comptroller or the |
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comptroller's authorized representative shall transfer to the |
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institution the lesser of: |
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(1) an amount equal to the current cost of the tuition |
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and required fees that would be covered by redemption of the number |
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and type of tuition units the beneficiary is redeeming if the |
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beneficiary were redeeming the unit or units at a general academic |
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teaching institution or two-year institution of higher education as |
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follows: |
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(A) for a Type I unit, at the general academic |
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teaching institution that had the highest tuition and required fee |
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cost; |
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(B) for a Type II unit, at a general academic |
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teaching institution that had tuition and required fee cost at the |
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weighted average; and |
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(C) for a Type III unit, at a two-year |
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institution of higher education that had tuition and required fee |
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cost at the weighted average; or |
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(2) an amount equal to the total purchase price of the |
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tuition unit or units the beneficiary redeems for the semester or |
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other academic term plus the portion of the total return on assets |
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of the fund attributable to that amount. |
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SECTION 12. Section 54.767, Education Code, is amended to |
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read as follows: |
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Sec. 54.767. USE OF FUND ASSETS. The assets of the fund may |
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be used only to: |
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(1) pay the costs of program administration and |
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operations; |
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(2) make payments to general academic teaching |
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institutions, two-year institutions of higher education, private |
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or independent institutions of higher education, medical and dental |
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units, career schools, and accredited out-of-state institutions of |
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higher education on behalf of beneficiaries; and |
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(3) make refunds under prepaid tuition contracts. |
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SECTION 13. Sections 54.769(b) and (c), Education Code, are |
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amended to read as follows: |
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(b) The rights of a purchaser, beneficiary, or successor in |
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interest of a purchaser or beneficiary in and under a prepaid |
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tuition contract and the payment of tuition and required fees for a |
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beneficiary under a prepaid tuition contract to a general academic |
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teaching institution, two-year institution of higher education, |
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private or independent institution of higher education, medical and |
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dental unit, career school, or accredited out-of-state institution |
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of higher education under this chapter are exempt from attachment, |
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levy, garnishment, execution, and seizure for the satisfaction of |
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any debt, judgment, or claim against a purchaser, beneficiary, or |
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successor in interest of a purchaser or beneficiary. |
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(c) A claim or judgment against a purchaser, beneficiary, or |
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successor in interest of a purchaser or beneficiary does not impair |
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or entitle the claim or judgment holder to assert or enforce a lien |
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against: |
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(1) the rights of a purchaser, beneficiary, or |
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successor in interest of a purchaser or beneficiary in and under a |
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prepaid tuition contract; or |
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(2) the right of a beneficiary to the payment of |
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tuition and required fees to 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, medical and dental |
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unit, career school, or accredited out-of-state institution of |
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higher education under a prepaid tuition contract. |
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SECTION 14. Section 54.774(a), Education Code, is amended |
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to read as follows: |
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(a) A prepaid tuition contract remains in effect after the |
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program is terminated if, when the program is terminated, the |
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beneficiary: |
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(1) has been accepted by or is enrolled 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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medical and dental unit, career school, or accredited out-of-state |
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institution of higher education; or |
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(2) is projected to graduate from high school not |
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later than the third anniversary of the date the program is |
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terminated. |
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SECTION 15. Section 54.775(b), Education Code, is amended |
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to read as follows: |
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(b) Notwithstanding Subsection (a), the board may release |
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information described by that subsection to a general academic |
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teaching institution, two-year institution of higher education, |
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private or independent institution of higher education, medical and |
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dental unit, career school, or accredited out-of-state institution |
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of higher education at which a beneficiary may enroll or is |
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enrolled. The institution or unit shall keep the information |
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confidential. |
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SECTION 16. Section 54.776, Education Code, is amended to |
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read as follows: |
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Sec. 54.776. STATEMENT REGARDING STATUS OF PREPAID TUITION |
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CONTRACT. Not later than January 31 [1] of each year, the board |
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shall provide without charge to each purchaser a statement of: |
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(1) the amount paid by the purchaser under the prepaid |
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tuition contract; |
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(2) the total number of each type of tuition unit |
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covered by the contract at any one time; |
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(3) the number of each type of tuition unit remaining |
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under the contract; |
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(4) the value of the purchasers' tuition units if |
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redeemed at any general academic teaching institution or two-year |
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institution of higher education designated for that year by the |
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purchaser in the time and manner required by the board, not to |
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exceed five institutions; and |
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(5) any other information the board determines by rule |
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is necessary or appropriate. |
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SECTION 17. Sections 54.708(c), (d), (e), and (f), |
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Education Code, are repealed. |
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SECTION 18. This Act takes effect immediately if it |
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receives a vote of two-thirds of all the members elected to each |
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house, as provided by Section 39, Article III, Texas Constitution. |
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If this Act does not receive the vote necessary for immediate |
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effect, this Act takes effect September 1, 2019. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 3655 was passed by the House on May 3, |
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2019, by the following vote: Yeas 136, Nays 4, 2 present, not |
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voting; and that the House concurred in Senate amendments to H.B. |
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No. 3655 on May 22, 2019, by the following vote: Yeas 145, Nays 0, |
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1 present, not voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 3655 was passed by the Senate, with |
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amendments, on May 14, 2019, by the following vote: Yeas 31, Nays |
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0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: __________________ |
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Date |
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__________________ |
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Governor |