The Florida Senate

1009.98  Florida Prepaid College Program.--

(1)  FLORIDA PREPAID COLLEGE PROGRAM; CREATION.--There is created a Florida Prepaid College Program to provide a medium through which the cost of registration and dormitory residence may be paid in advance of enrollment in a state postsecondary institution at a rate lower than the projected corresponding cost at the time of actual enrollment. Such payments shall be combined and invested in a manner that yields, at a minimum, sufficient interest to generate the difference between the prepaid amount and the cost of registration and dormitory residence at the time of actual enrollment. Students who enroll in a state postsecondary institution pursuant to this section shall be charged no fees in excess of the terms delineated in the advance payment contract.

(2)  PREPAID COLLEGE PLANS.--At a minimum, the board shall make advance payment contracts available for two independent plans to be known as the community college plan and the university plan. The board may also make advance payment contracts available for a dormitory residence plan. The board may restrict the number of participants in the community college plan, university plan, and dormitory residence plan, respectively. However, any person denied participation solely on the basis of such restriction shall be granted priority for participation during the succeeding year.

(a)1.  Through the community college plan, the advance payment contract shall provide prepaid registration fees for a specified number of undergraduate semester credit hours not to exceed the average number of hours required for the conference of an associate degree. Qualified beneficiaries shall bear the cost of any laboratory fees associated with enrollment in specific courses. Each qualified beneficiary shall be classified as a resident for tuition purposes, pursuant to s. 1009.21, regardless of his or her actual legal residence.

2.  Effective July 1, 1998, the board may provide advance payment contracts for additional fees delineated in s. 1009.23, not to exceed the average number of hours required for the conference of an associate degree, in conjunction with advance payment contracts for registration fees. Community college plan contracts purchased prior to July 1, 1998, shall be limited to the payment of registration fees as defined in s. 1009.97

(b)1.  Through the university plan, the advance payment contract shall provide prepaid registration fees for a specified number of undergraduate semester credit hours not to exceed the average number of hours required for the conference of a baccalaureate degree. Qualified beneficiaries shall bear the cost of any laboratory fees associated with enrollment in specific courses. Each qualified beneficiary shall be classified as a resident for tuition purposes pursuant to s. 1009.21, regardless of his or her actual legal residence.

2.  Effective July 1, 1998, the board may provide advance payment contracts for additional fees delineated in s. 1009.24(8)-(11), for a specified number of undergraduate semester credit hours not to exceed the average number of hours required for the conference of a baccalaureate degree, in conjunction with advance payment contracts for registration fees. Such contracts shall provide prepaid coverage for the sum of such fees, to a maximum of 45 percent of the cost of registration fees. University plan contracts purchased prior to July 1, 1998, shall be limited to the payment of registration fees as defined in s. 1009.97

(c)  The cost of participation in contracts authorized under paragraph (a) or paragraph (b) shall be based primarily on the current and projected registration fees within the Florida Community College System or the State University System, respectively, and the number of years expected to elapse between the purchase of the plan on behalf of a qualified beneficiary and the exercise of the benefits provided in the plan by such beneficiary.

(d)  Through the dormitory residence plan, the advance payment contract may provide prepaid housing fees for a maximum of 10 semesters of full-time undergraduate enrollment in a state university. Dormitory residence plans shall be purchased in increments of 2 semesters. The cost of participation in the dormitory residence plan shall be based primarily on the average current and projected housing fees within the State University System and the number of years expected to elapse between the purchase of the plan on behalf of a qualified beneficiary and the exercise of the benefits provided in the plan by such beneficiary. Qualified beneficiaries shall have the highest priority in the assignment of housing within university residence halls. Qualified beneficiaries shall bear the cost of any additional elective charges such as laundry service or long-distance telephone service. Each state university may specify the residence halls or other university-held residences eligible for inclusion in the plan. In addition, any state university may request immediate termination of a dormitory residence contract based on a violation or multiple violations of rules of the residence hall or other university-held residences. In the event that sufficient housing is not available for all qualified beneficiaries, the board shall refund the purchaser or qualified beneficiary an amount equal to the fees charged for dormitory residence during that semester. If a qualified beneficiary fails to be admitted to a state university or chooses to attend a community college that operates one or more dormitories or residency opportunities, or has one or more dormitories or residency opportunities operated by the community college direct-support organization, the qualified beneficiary may transfer or cause to have transferred to the community college, or community college direct-support organization, the fees associated with dormitory residence. Dormitory fees transferred to the community college or community college direct-support organization may not exceed the maximum fees charged for state university dormitory residence for the purposes of this section, or the fees charged for community college or community college direct-support organization dormitories or residency opportunities, whichever is less.

(3)  TRANSFER OF BENEFITS TO PRIVATE AND OUT-OF-STATE COLLEGES AND UNIVERSITIES AND TO CAREER CENTERS.--A qualified beneficiary may apply the benefits of an advance payment contract toward:

(a)  An independent college or university that is located and chartered in Florida, that is not for profit, that is accredited by the Commission on Colleges of the Southern Association of Colleges and Schools or the Accrediting Council for Independent Colleges and Schools, and that confers degrees as defined in s. 1005.02

(b)  An out-of-state college or university that is not for profit and is accredited by a regional accrediting association, and that confers degrees.

(c)  An applied technology diploma program or career certificate program conducted by a community college listed in s. 1004.02(2) or career center operated by a district school board.

The board shall transfer or cause to be transferred to the institution designated by the qualified beneficiary an amount not to exceed the redemption value of the advance payment contract at a state postsecondary institution. If the cost of registration or housing fees at such institution is less than the corresponding fees at a state postsecondary institution, the amount transferred may not exceed the actual cost of registration and housing fees. A transfer authorized under this subsection may not exceed the number of semester credit hours or semesters of dormitory residence contracted on behalf of a qualified beneficiary. Notwithstanding any other provision in this section, an institution must be an "eligible educational institution" under s. 529 of the Internal Revenue Code to be eligible for the transfer of advance payment contract benefits.

(4)  ADVANCE PAYMENT CONTRACTS.--The board shall develop advance payment contracts for registration and may develop advance payment contracts for dormitory residence as provided in this section. Advance payment contracts shall be exempt from chapter 517 and the Florida Insurance Code. Such contracts shall include, but not be limited to, the following:

(a)  The amount of the payment or payments and the number of payments required from a purchaser on behalf of a qualified beneficiary.

(b)  The terms and conditions under which purchasers shall remit payments, including, but not limited to, the date or dates upon which each payment shall be due.

(c)  Provisions for late payment charges and for default.

(d)  Provisions for penalty fees for withdrawals from the fund.

(e)  Except for an advance payment contract entered into pursuant to subsection (9) or s. 1009.983, the name and date of birth of the qualified beneficiary on whose behalf the contract is drawn and the terms and conditions under which another person may be substituted as the qualified beneficiary.

(f)  The name of any person who may terminate the contract. The terms of the contract shall specify whether the contract may be terminated by the purchaser, the qualified beneficiary, a specific designated person, or any combination of these persons.

(g)  The terms and conditions under which a contract may be terminated, modified, or converted, the name of the person entitled to any refund due as a result of termination of the contract pursuant to such terms and conditions, and the amount of refund, if any, due to the person so named.

(h)  The number of semester credit hours or semesters of dormitory residence contracted by the purchaser.

(i)  The state postsecondary system toward which the contracted credit hours or semesters of dormitory residence will be applied.

(j)  The assumption of a contractual obligation by the board to the qualified beneficiary to provide for a specified number of semester credit hours of undergraduate instruction at a state postsecondary institution, not to exceed the average number of credit hours required for the conference of the degree that corresponds to the plan purchased on behalf of the qualified beneficiary or to provide for a specified number of semesters of dormitory residence, not to exceed the number of semesters of full-time enrollment required for the conference of a baccalaureate degree.

(k)  The period of time after which advance payment contracts that have not been terminated or the benefits used shall be considered terminated. Time expended by a qualified beneficiary as an active duty member of any of the armed services of the United States shall be added to the period of time specified by the board. No purchaser or qualified beneficiary whose advance payment contract is terminated pursuant to this paragraph shall be entitled to a refund. Notwithstanding chapter 717, the board shall retain any moneys paid by the purchaser for an advance payment contract that has been terminated in accordance with this paragraph. Such moneys may be transferred to the Florida Prepaid Tuition Scholarship Program to provide matching funds for prepaid tuition scholarships for economically disadvantaged youths who remain drug free and crime free.

(l)  Other terms and conditions deemed by the board to be necessary or proper.

(5)  REFUNDS.--

(a)  No refund shall exceed the amount paid into the fund by the purchaser except as provided in paragraphs (b) and (c).

(b)  If the beneficiary is awarded a scholarship, the terms of which cover the benefits included in the advance payment contracts, moneys paid for the purchase of the advance payment contracts shall be refunded to the purchaser in semester installments coinciding with the tuition by the beneficiary in an amount which, in total, does not exceed the redemption value of the advance payment contract at a state postsecondary institution.

(c)  In the event of the death or total disability of the beneficiary, moneys paid for the purchase of advance payment contracts shall be refunded to the purchaser in an amount not to exceed the redemption value of the advance payment contract at a state postsecondary institution.

(d)  If an advance payment contract is converted from one registration plan to a plan of lesser value, the amount refunded shall not exceed the difference between the amount paid for the original contract and the amount that would have been paid for the contract to which the plan is converted had the converted plan been purchased under the same payment plan at the time the original advance payment contract was executed.

(e)  No refund shall be authorized through an advance payment contract for any school year partially attended but not completed. For purposes of this section, a school year partially attended but not completed shall mean any one semester whereby the student is still enrolled at the conclusion of the official drop-add period but withdraws before the end of such semester. If a beneficiary does not complete a community college plan or university plan for reasons other than specified in paragraph (c), the purchaser shall receive a refund of the amount paid into the fund for the remaining unattended years of the advance payment contract pursuant to rules promulgated by the board.

(6)  CONFIDENTIALITY OF ACCOUNT INFORMATION.--Information that identifies the purchasers or beneficiaries of any plan promulgated under this section and their advance payment account activities is exempt from the provisions of s. 119.07(1). However, the board may authorize the program's records administrator to release such information to a community college, college, or university in which a beneficiary may enroll or is enrolled. Community colleges, colleges, and universities shall maintain such information as exempt from the provisions of s. 119.07(1).

(7)  OBLIGATIONS OF BOARD.--The state shall agree to meet the obligations of the board to qualified beneficiaries if moneys in the fund fail to offset the obligations of the board. The Legislature shall appropriate to the Florida Prepaid College Trust Fund the amount necessary to meet the obligations of the board to qualified beneficiaries.

(8)  PROGRAM TERMINATION.--In the event that the state determines the prepaid program to be financially infeasible, the state may discontinue the provision of the program. Any qualified beneficiary who has been accepted by and is enrolled or is within 5 years of enrollment in an eligible independent college or university or state postsecondary institution shall be entitled to exercise the complete benefits for which he or she has contracted. All other contract holders shall receive a refund of the amount paid in and an additional amount in the nature of interest at a rate that corresponds, at a minimum, to the prevailing interest rates for savings accounts provided by banks and savings and loan associations.

(9)  SCHOLARSHIPS.--A nonprofit organization described in s. 501(c)(3) of the United States Internal Revenue Code and exempt from taxation under s. 501(a) of the United States Internal Revenue Code may purchase advance payment contracts for a scholarship program that has been approved by the board and is operated by the purchasing organization.

History.--s. 488, ch. 2002-387; s. 126, ch. 2004-357.