CODING: Words stricken are deletions; words underlined are additions.





                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    

                            CHAMBER ACTION
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10                                                                

11  Senator Clary moved the following amendment:

12

13         Senate Amendment (with title amendment) 

14         On page 46, between lines 14 and 15,

15

16  insert:

17         Section 39.  Section 240.551, Florida Statutes, is

18  amended to read:

19         240.551  Florida Prepaid College Postsecondary

20  Education Expense Program.--

21         (1)  LEGISLATIVE INTENT.--The Legislature recognizes

22  that educational opportunity at the postsecondary level is a

23  critical state interest.  It further recognizes that

24  educational opportunity is best ensured through the provision

25  of postsecondary institutions that are geographically and

26  financially accessible. Accordingly, it is the intent of the

27  Legislature that a program be established through which many

28  of the costs associated with postsecondary attendance may be

29  paid in advance and fixed at a guaranteed level for the

30  duration of undergraduate enrollment.  It is similarly the

31  intent of the Legislature to provide a program that fosters

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  timely financial planning for postsecondary attendance and to

 2  encourage employer participation in such planning through

 3  program contributions on behalf of employees and the

 4  dependents of employees.

 5         (2)  DEFINITIONS.--As used in this section:

 6         (a)  "Advance payment contract" means a contract

 7  entered into by the board and a purchaser pursuant to this

 8  section.

 9         (b)  "Board" means the Florida Prepaid College

10  Postsecondary Education Expense Board.

11         (c)  "Fund" means the Florida Prepaid College

12  Postsecondary Education Expense Trust Fund.

13         (d)(g)  "Program" means the Florida Prepaid College

14  Postsecondary Education Expense Program.

15         (e)(d)  "Purchaser" means a person who makes or is

16  obligated to make advance registration or dormitory residence

17  payments in accordance with an advance payment contract.

18         (f)(e)  "Qualified beneficiary" means:

19         1.  A resident of this state at the time a purchaser

20  enters into an advance payment contract on behalf of the

21  resident;

22         2.  A nonresident who is the child of a noncustodial

23  parent who is a resident of this state at the time that such

24  parent enters into an advance payment contract on behalf of

25  the child; or

26         3.  For purposes of advance payment contracts entered

27  into pursuant to subsection (22) paragraph (5)(j), a graduate

28  of an accredited high school in this state who is a resident

29  of this state at the time he or she is designated to receive

30  the benefits of the advance payment contract.

31         (g)(h)  "Registration fee" means matriculation fee,

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  financial aid fee, building fee, and Capital Improvement Trust

 2  Fund fee.

 3         (h)(f)  "State postsecondary institution" means any

 4  community college identified in s. 240.3031 or university

 5  identified in s. 240.2011.

 6         (3)  FLORIDA PREPAID COLLEGE PROGRAM; CREATION.--There

 7  is created a Florida Prepaid College Postsecondary Education

 8  Expense Program to provide a medium through which the cost of

 9  registration and dormitory residence may be paid in advance of

10  enrollment in a state postsecondary institution at a rate

11  lower than the projected corresponding cost at the time of

12  actual enrollment.  Such payments shall be combined and

13  invested in a manner that yields, at a minimum, sufficient

14  interest to generate the difference between the prepaid amount

15  and the cost of registration and dormitory residence at the

16  time of actual enrollment. Students who enroll in a state

17  postsecondary institution pursuant to this section shall be

18  charged no fees in excess of the terms delineated in the

19  advance payment contract.

20         (4)  FLORIDA PREPAID COLLEGE TRUST FUND.--There is

21  created within the State Board of Administration the Florida

22  Prepaid College Postsecondary Education Expense Trust Fund.

23  The fund shall consist of state appropriations, moneys

24  acquired from other governmental or private sources, and

25  moneys remitted in accordance with advance payment contracts.

26  All funds deposited into the trust fund may be invested

27  pursuant to s. 215.47; however, such investment shall not be

28  mandatory. Dividends, interest, and gains accruing to the

29  trust fund shall increase the total funds available for the

30  program. Notwithstanding the provisions of chapter 717, funds

31  associated with terminated contracts terminated pursuant to

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  subsection (12) paragraph (6)(d) and canceled contracts for

 2  which no refunds have been claimed shall increase the total

 3  funds available for the program.  However, the board shall

 4  establish procedures for notifying purchasers who subsequently

 5  cancel their contracts of any unclaimed refund and shall

 6  establish a time period after which no refund may be claimed

 7  by a purchaser who canceled a contract. Any balance contained

 8  within the fund at the end of a fiscal year shall remain

 9  therein and shall be available for carrying out the purposes

10  of the program.  In the event that dividends, interest, and

11  gains exceed exceeds the amount necessary for program

12  administration and disbursements, the board may designate an

13  additional percentage of the fund to serve as a contingency

14  fund.  Moneys contained within the fund shall be exempt from

15  the investment requirements of s. 18.10. Any funds of a

16  direct-support organization created pursuant to subsection

17  (22) paragraph (5)(j) shall be exempt from the provisions of

18  this subsection paragraph.

19         (5)  PROGRAM ADMINISTRATION.--

20         (a)  The Florida Prepaid College Postsecondary

21  Education Expense Program shall be administered by the Florida

22  Prepaid College Postsecondary Education Expense Board as an

23  agency of the state.  The Florida Prepaid College

24  Postsecondary Education Expense Board is hereby created as a

25  body corporate with all the powers of a body corporate for the

26  purposes delineated in this section.  For the purposes of s.

27  6, Art. IV of the State Constitution, the board shall be

28  assigned to and administratively housed within the State Board

29  of Administration, but it shall independently exercise the

30  powers and duties specified in this section.

31         (b)  The board shall consist of seven members to be

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  composed of the Insurance Commissioner and Treasurer, the

 2  Comptroller, the Chancellor of the Board of Regents, the

 3  Executive Director of the State Board of Community Colleges,

 4  and three members appointed by the Governor and subject to

 5  confirmation by the Senate.  Each member appointed by the

 6  Governor shall possess knowledge, skill, and experience in the

 7  areas of accounting, actuary, risk management, or investment

 8  management.  Each member of the board not appointed by the

 9  Governor may name a designee to serve the board on behalf of

10  the member; however, any designee so named shall meet the

11  qualifications required of gubernatorial appointees to the

12  board. Members appointed by the Governor shall serve terms of

13  3 years except that, in making the initial appointments, the

14  Governor shall appoint one member to serve for 1 year, one

15  member to serve for 2 years, and one member to serve for 3

16  years.  Any person appointed to fill a vacancy on the board

17  shall be appointed in a like manner and shall serve for only

18  the unexpired term.  Any member shall be eligible for

19  reappointment and shall serve until a successor qualifies.

20  Members of the board shall serve without compensation but

21  shall be reimbursed for per diem and travel in accordance with

22  s. 112.061.  Each member of the board shall file a full and

23  public disclosure of his or her financial interests pursuant

24  to s. 8, Art. II of the State Constitution and corresponding

25  statute.

26         (c)(a)  The Governor shall appoint a member of the

27  board to serve as the initial chair of the board.  Thereafter,

28  the board shall elect a chair annually.  The board shall

29  annually elect a board member to serve as chair and a board

30  member to serve as vice chair and shall designate a

31  secretary-treasurer who need not be a member of the board.

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  The secretary-treasurer shall keep a record of the proceedings

 2  of the board and shall be the custodian of all printed

 3  material filed with or by the board and of its official seal.

 4  Notwithstanding the existence of vacancies on the board, a

 5  majority of the members shall constitute a quorum. The board

 6  shall take no official action in the absence of a quorum.  The

 7  board shall meet, at a minimum, on a quarterly basis at the

 8  call of the chair.

 9         (6)  FLORIDA PREPAID COLLEGE BOARD; DUTIES.--The board

10  shall:

11         (a)(b)  The board shall Appoint an executive director

12  to serve as the chief administrative and operational officer

13  of the board and to perform other duties assigned to him or

14  her by the board.

15         (b)  Administer the fund in a manner that is

16  sufficiently actuarially sound to defray the obligations of

17  the program. The board shall annually evaluate or cause to be

18  evaluated the actuarial soundness of the fund. If the board

19  perceives a need for additional assets in order to preserve

20  actuarial soundness, the board may adjust the terms of

21  subsequent advance payment contracts to ensure such soundness.

22         (c)  Establish a comprehensive investment plan for the

23  purposes of this section with the approval of the State Board

24  of Administration. The comprehensive investment plan shall

25  specify the investment policies to be utilized by the board in

26  its administration of the fund. The board may place assets of

27  the fund in savings accounts or use the same to purchase fixed

28  or variable life insurance or annuity contracts, securities,

29  evidence of indebtedness, or other investment products

30  pursuant to the comprehensive investment plan and in such

31  proportions as may be designated or approved under that plan.

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  Such insurance, annuity, savings, or investment products shall

 2  be underwritten and offered in compliance with the applicable

 3  federal and state laws, regulations, and rules by persons who

 4  are duly authorized by applicable federal and state

 5  authorities. Within the comprehensive investment plan, the

 6  board may authorize investment vehicles, or products incident

 7  thereto, as may be available or offered by qualified companies

 8  or persons. A contract purchaser may not direct the investment

 9  of his or her contribution to the trust fund and a contract

10  beneficiary may not direct the contribution made on his or her

11  behalf to the trust fund. Board members and employees of the

12  board are not prohibited from purchasing advance payment

13  contracts by virtue of their fiduciary responsibilities as

14  members of the board or official duties as employees of the

15  board.

16         (d)  Solicit proposals and contract, pursuant to s.

17  287.057, for the marketing of the Florida Prepaid College

18  Program. The entity designated pursuant to this paragraph

19  shall serve as a centralized marketing agent for the program

20  and shall be solely responsible for the marketing of the

21  program. Any materials produced for the purpose of marketing

22  the program shall be submitted to the board for review. No

23  such materials shall be made available to the public before

24  the materials are approved by the board. Any educational

25  institution may distribute marketing materials produced for

26  the program; however, all such materials shall have been

27  approved by the board prior to distribution. Neither the state

28  nor the board shall be liable for misrepresentation of the

29  program by a marketing agent.

30         (e)  Solicit proposals and contract, pursuant to s.

31  287.057, for a trustee services firm to select and supervise

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  investment programs on behalf of the board. The goals of the

 2  board in selecting a trustee services firm shall be to obtain

 3  the highest standards of professional trustee services, to

 4  allow all qualified firms interested in providing such

 5  services equal consideration, and to provide such services to

 6  the state at no cost and to the purchasers at the lowest cost

 7  possible. The trustee services firm shall agree to meet the

 8  obligations of the board to qualified beneficiaries if moneys

 9  in the fund fail to offset the obligations of the board as a

10  result of imprudent selection or supervision of investment

11  programs by such firm. Evaluations of proposals submitted

12  pursuant to this paragraph shall include, but not be limited

13  to, the following criteria:

14         1.  Adequacy of trustee services for supervision and

15  management of the program, including current operations and

16  staff organization and commitment of management to the

17  proposal.

18         2.  Capability to execute program responsibilities

19  within time and regulatory constraints.

20         3.  Past experience in trustee services and current

21  ability to maintain regular and continuous interactions with

22  the board, records administrator, and product provider.

23         4.  The minimum purchaser participation assumed within

24  the proposal and any additional requirements of purchasers.

25         5.  Adequacy of technical assistance and services

26  proposed for staff.

27         6.  Adequacy of a management system for evaluating and

28  improving overall trustee services to the program.

29         7.  Adequacy of facilities, equipment, and electronic

30  data processing services.

31         8.  Detailed projections of administrative costs,

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                                                  SENATE AMENDMENT

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 1  including the amount and type of insurance coverage, and

 2  detailed projections of total costs.

 3         (f)  Solicit proposals and contract, pursuant to s.

 4  287.057, for product providers to develop investment

 5  portfolios on behalf of the board to achieve the purposes of

 6  this section. Product providers shall be limited to authorized

 7  insurers as defined in s. 624.09, banks as defined in s.

 8  658.12, associations as defined in s. 665.012, authorized

 9  Securities and Exchange Commission investment advisers, and

10  investment companies as defined in the Investment Company Act

11  of 1940. All product providers shall have their principal

12  place of business and corporate charter located and registered

13  in the United States. In addition, each product provider shall

14  agree to meet the obligations of the board to qualified

15  beneficiaries if moneys in the fund fail to offset the

16  obligations of the board as a result of imprudent investing by

17  such provider. Each authorized insurer shall evidence superior

18  performance overall on an acceptable level of surety in

19  meeting its obligations to its policyholders and other

20  contractual obligations. Only qualified public depositories

21  approved by the Insurance Commissioner and Treasurer shall be

22  eligible for board consideration. Each investment company

23  shall provide investment plans as specified within the request

24  for proposals. The goals of the board in selecting a product

25  provider company shall be to provide all purchasers with the

26  most secure, well-diversified, and beneficially administered

27  postsecondary education expense plan possible, to allow all

28  qualified firms interested in providing such services equal

29  consideration, and to provide such services to the state at no

30  cost and to the purchasers at the lowest cost possible.

31  Evaluations of proposals submitted pursuant to this paragraph

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                                                  SENATE AMENDMENT

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 1  shall include, but not be limited to, the following criteria:

 2         1.  Fees and other costs charged to purchasers that

 3  affect account values or operational costs related to the

 4  program.

 5         2.  Past and current investment performance, including

 6  investment and interest rate history, guaranteed minimum rates

 7  of interest, consistency of investment performance, and any

 8  terms and conditions under which moneys are held.

 9         3.  Past experience and ability to provide timely and

10  accurate service in the areas of records administration,

11  benefit payments, investment management, and complaint

12  resolution.

13         4.  Financial history and current financial strength

14  and capital adequacy to provide products, including operating

15  procedures and other methods of protecting program assets.

16         (7)(c)  FLORIDA PREPAID COLLEGE BOARD; POWERS.--The

17  board shall have the powers necessary or proper to carry out

18  the provisions of this section, including, but not limited to,

19  the power to:

20         (a)1.  Adopt an official seal and rules.

21         (b)2.  Sue and be sued.

22         (c)3.  Make and execute contracts and other necessary

23  instruments.

24         (d)4.  Establish agreements or other transactions with

25  federal, state, and local agencies, including state

26  universities and community colleges.

27         (e)5.  Invest funds not required for immediate

28  disbursement.

29         (f)6.  Appear in its own behalf before boards,

30  commissions, or other governmental agencies.

31         (g)7.  Hold, buy, and sell any instruments,

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  obligations, securities, and property determined appropriate

 2  by the board.

 3         (h)8.  Require a reasonable length of state residence

 4  for qualified beneficiaries.

 5         (i)9.  Restrict the number of participants in the

 6  community college plan, university plan, and dormitory

 7  residence plan, respectively. However, any person denied

 8  participation solely on the basis of such restriction shall be

 9  granted priority for participation during the succeeding year.

10         (j)10.  Segregate contributions and payments to the

11  fund into various accounts and funds.

12         (k)11.  Contract for necessary goods and services,

13  employ necessary personnel, and engage the services of private

14  consultants, actuaries, managers, legal counsel, and auditors

15  for administrative or technical assistance.

16         (l)12.  Solicit and accept gifts, grants, loans, and

17  other aids from any source or participate in any other way in

18  any government program to carry out the purposes of this

19  section.

20         (m)13.  Require and collect administrative fees and

21  charges in connection with any transaction and impose

22  reasonable penalties, including default, for delinquent

23  payments or for entering into an advance payment contract on a

24  fraudulent basis.

25         (n)14.  Procure insurance against any loss in

26  connection with the property, assets, and activities of the

27  fund or the board.

28         (o)15.  Impose reasonable time limits on use of the

29  tuition benefits provided by the program. However, any such

30  limitation shall be specified within the advance payment

31  contract.

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1         (p)16.  Delineate the terms and conditions under which

 2  payments may be withdrawn from the fund and impose reasonable

 3  fees and charges for such withdrawal. Such terms and

 4  conditions shall be specified within the advance payment

 5  contract.

 6         (q)17.  Provide for the receipt of contributions in

 7  lump sums or installment payments.

 8         18.  Establish other policies, procedures, and criteria

 9  to implement and administer the provisions of this section.

10         (r)19.  Require that purchasers of advance payment

11  contracts verify, under oath, any requests for contract

12  conversions, substitutions, transfers, cancellations, refund

13  requests, or contract changes of any nature. Verification

14  shall be accomplished as authorized and provided for in s.

15  92.525(1)(a).

16         (d)  The board shall administer the fund in a manner

17  that is sufficiently actuarially sound to defray the

18  obligations of the program.  The board shall annually evaluate

19  or cause to be evaluated the actuarial soundness of the fund.

20  If the board perceives a need for additional assets in order

21  to preserve actuarial soundness, the board may adjust the

22  terms of subsequent advance payment contracts to ensure such

23  soundness.

24         (e)  The board, acting with the approval of the State

25  Board of Administration, shall establish a comprehensive

26  investment plan for the purposes of this section.  The

27  comprehensive investment plan shall specify the investment

28  policies to be utilized by the board in its administration of

29  the fund.  The board may place assets of the fund in savings

30  accounts or use the same to purchase fixed or variable life

31  insurance or annuity contracts, securities, evidence of

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  indebtedness, or other investment products pursuant to the

 2  comprehensive investment plan and in such proportions as may

 3  be designated or approved under that plan.  Such insurance,

 4  annuity, savings, or investment products shall be underwritten

 5  and offered in compliance with the applicable federal and

 6  state laws, regulations, and rules by persons who are duly

 7  authorized by applicable federal and state authorities.

 8  Within the comprehensive investment plan, the board may

 9  authorize investment vehicles, or products incident thereto,

10  as may be available or offered by qualified companies or

11  persons. A contract purchaser may not direct the investment of

12  his or her contribution to the trust fund, and a contract

13  beneficiary may not direct the contribution made on his or her

14  behalf to the trust fund. Board members and employees of the

15  board are not prohibited from purchasing advance payment

16  contracts by virtue of their fiduciary responsibilities as

17  members of the board or official duties as employees of the

18  board.

19         (s)(f)  The board may Delegate responsibility for

20  administration of the comprehensive investment plan required

21  in paragraph (6)(c)(e) to a person the board determines to be

22  qualified. Such person shall be compensated by the board.

23  Directly or through such person, the board may contract with a

24  private corporation or institution to provide such services as

25  may be a part of the comprehensive investment plan or as may

26  be deemed necessary or proper by the board or such person,

27  including, but not limited to, providing consolidated billing,

28  individual and collective recordkeeping and accountings, and

29  asset purchase, control, and safekeeping.

30         (t)  Endorse insurance coverage written exclusively for

31  the purpose of protecting advance payment contracts, and the

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  purchasers and beneficiaries thereof, which may be issued in

 2  the form of a group life policy and which is exempt from the

 3  provisions of part V of chapter 627.

 4         (u)  Solicit proposals and contract, pursuant to s.

 5  287.057, for the services of a records administrator. The

 6  goals of the board in selecting a records administrator shall

 7  be to provide all purchasers with the most secure,

 8  well-diversified, and beneficially administered postsecondary

 9  education expense plan possible, to allow all qualified firms

10  interested in providing such services equal consideration, and

11  to provide such services to the state at no cost and to the

12  purchasers at the lowest cost possible. Evaluations of

13  proposals submitted pursuant to this paragraph shall include,

14  but not be limited to, the following criteria:

15         1.  Fees and other costs charged to purchasers that

16  affect account values or operational costs related to the

17  program.

18         2.  Past experience in records administration and

19  current ability to provide timely and accurate service in the

20  areas of records administration, audit and reconciliation,

21  plan communication, participant service, and complaint

22  resolution.

23         3.  Sufficient staff and computer capability for the

24  scope and level of service expected by the board.

25         4.  Financial history and current financial strength

26  and capital adequacy to provide administrative services

27  required by the board.

28         (v)  Establish other policies, procedures, and criteria

29  to implement and administer the provisions of this section.

30         (g)  The board shall annually prepare or cause to be

31  prepared a report setting forth in appropriate detail an

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                                                  SENATE AMENDMENT

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    Amendment No.    





 1  accounting of the fund and a description of the financial

 2  condition of the program at the close of each fiscal year.

 3  Such report shall be submitted to the President of the Senate,

 4  the Speaker of the House of Representatives, and members of

 5  the State Board of Education on or before March 31 each year.

 6  In addition, the board shall make the report available to

 7  purchasers of advance payment contracts.  The board shall

 8  provide to the Board of Regents and the State Board of

 9  Community Colleges by March 31 each year complete advance

10  payment contract sales information including projected

11  postsecondary enrollments of qualified beneficiaries.  The

12  accounts of the fund shall be subject to annual audits by the

13  Auditor General or his or her designee.

14         (8)(h)  QUALIFIED STATE TUITION PROGRAM

15  STATUS.--Notwithstanding any other provision of this section,

16  the board may adopt rules necessary to enable the program to

17  retain its status as a "qualified state tuition prepaid

18  program" in order to maintain its tax exempt status or other

19  similar status of the program, purchasers, and qualified

20  beneficiaries under the Internal Revenue Code of 1986, as

21  defined in s. 220.03(1). The board shall inform purchasers of

22  changes to the tax or securities status of contracts purchased

23  through the program.

24         (i)  The board shall solicit proposals for the

25  marketing of the Florida Prepaid Postsecondary Education

26  Expense Program pursuant to s. 287.057.  The entity designated

27  pursuant to this paragraph shall serve as a centralized

28  marketing agent for the program and shall be solely

29  responsible for the marketing of the program.  Any materials

30  produced for the purpose of marketing the program shall be

31  submitted to the board for review.  No such materials shall be

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  made available to the public before the materials are approved

 2  by the board.  Any educational institution may distribute

 3  marketing materials produced for the program; however, all

 4  such materials shall have been approved by the board prior to

 5  distribution.  Neither the state nor the board shall be liable

 6  for misrepresentation of the program by a marketing agent.

 7         (j)  The board may establish a direct-support

 8  organization which is:

 9         1.  A Florida corporation, not for profit, incorporated

10  under the provisions of chapter 617 and approved by the

11  Secretary of State.

12         2.  Organized and operated exclusively to receive,

13  hold, invest, and administer property and to make expenditures

14  to or for the benefit of the program.

15         3.  An organization which the board, after review, has

16  certified to be operating in a manner consistent with the

17  goals of the program and in the best interests of the state.

18  Unless so certified, the organization may not use the name of

19  the program.

20         4.  Subject to an annual postaudit by an independent

21  certified public accountant in accordance with rules

22  promulgated by the board.  The annual audit shall be submitted

23  to the State Board of Administration and the Auditor General

24  for review.  The State Board of Administration and Auditor

25  General shall have the authority to require and receive from

26  the organization or its independent auditor any detail or

27  supplemental data relative to the operation of the

28  organization.  The identity of donors who desire to remain

29  anonymous shall be confidential and exempt from the provisions

30  of s. 119.07(1) and s. 24(a), Art. I of the State

31  Constitution, and such anonymity shall be maintained in the

                                  16
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  auditor's report. Information received by the organization

 2  that is otherwise confidential or exempt by law shall retain

 3  such status.  Any sensitive, personal information regarding

 4  contract beneficiaries, including their identities, is exempt

 5  from the provisions of s. 119.07(1) and s. 24(a), Art. I of

 6  the State Constitution.

 7

 8  The chair of the board and the executive director shall be

 9  directors of the direct-support organization and shall jointly

10  name three other individuals to serve as directors of the

11  organization.

12         (k)  The board may endorse insurance coverage written

13  exclusively for the purpose of protecting advance payment

14  contracts, and the purchasers or beneficiaries thereof, which

15  may be issued in the form of a group life policy and which is

16  exempt from the provisions of part V of chapter 627.

17         (9)  PREPAID COLLEGE PLANS.--At a minimum, the board

18  shall make advance payment contracts available for two

19  independent plans to be known as the community college plan

20  and the university plan. The board may also make advance

21  payment contracts available for a dormitory residence plan.

22         (a)1.  Through the community college plan, the advance

23  payment contract shall provide prepaid registration fees for a

24  specified number of undergraduate semester credit hours not to

25  exceed the average number of hours required for the conference

26  of an associate degree. The cost of participation in the

27  community college plan shall be based primarily on the average

28  current and projected registration fees within the State

29  Community College System and the number of years expected to

30  elapse between the purchase of the plan on behalf of a

31  qualified beneficiary and the exercise of the benefits

                                  17
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  provided in the plan by such beneficiary. Qualified

 2  beneficiaries shall bear the cost of any laboratory fees

 3  associated with enrollment in specific courses. Each qualified

 4  beneficiary shall be classified as a resident for tuition

 5  purposes, pursuant to s. 240.1201, regardless of his or her

 6  actual legal residence.

 7         2.  Effective July 1, 1998, the board may provide

 8  advance payment contracts for additional fees delineated in s.

 9  240.35, not to exceed the average number of hours required for

10  the conference of an associate degree, in conjunction with

11  advance payment contracts for registration fees. The cost of

12  purchasing such fees shall be based primarily on the average

13  current and projected fees within the State Community College

14  System and the number of years expected to elapse between the

15  purchase of the plan on behalf of the beneficiary and the

16  exercise of benefits provided in the plan by such beneficiary.

17  Community college plan contracts purchased prior to July 1,

18  1998, shall be limited to the payment of registration fees as

19  defined in subsection (2).

20         (b)1.  Through the university plan, the advance payment

21  contract shall provide prepaid registration fees for a

22  specified number of undergraduate semester credit hours not to

23  exceed the average number of hours required for the conference

24  of a baccalaureate degree. The cost of participation in the

25  university plan shall be based primarily on the current and

26  projected registration fees within the State University System

27  and the number of years expected to elapse between the

28  purchase of the plan on behalf of a qualified beneficiary and

29  the exercise of the benefits provided in the plan by such

30  beneficiary. Qualified beneficiaries shall bear the cost of

31  any laboratory fees associated with enrollment in specific

                                  18
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  courses. Each qualified beneficiary shall be classified as a

 2  resident for tuition purposes pursuant to s. 240.1201,

 3  regardless of his or her actual legal residence.

 4         2.  Effective July 1, 1998, the board may provide

 5  advance payment contracts for additional fees delineated in s.

 6  240.235(1), for a specified number of undergraduate semester

 7  credit hours not to exceed the average number of hours

 8  required for the conference of a baccalaureate degree, in

 9  conjunction with advance payment contracts for registration

10  fees. Such contracts shall provide prepaid coverage for the

11  sum of such fees, to a maximum of 45 percent of the cost of

12  registration fees. The costs of purchasing such fees shall be

13  based primarily on the average current and projected cost of

14  these fees within the State University System and the number

15  of years expected to elapse between the purchase of the plan

16  on behalf of the qualified beneficiary and the exercise of the

17  benefits provided in the plan by such beneficiary. University

18  plan contracts purchased prior to July 1, 1998, shall be

19  limited to the payment of registration fees as defined in

20  subsection (2).

21         (c)  Through the dormitory residence plan, the advance

22  payment contract may provide prepaid housing fees for a

23  maximum of 10 semesters of full-time undergraduate enrollment

24  in a state university. Dormitory residence plans shall be

25  purchased in increments of 2 semesters. The cost of

26  participation in the dormitory residence plan shall be based

27  primarily on the average current and projected housing fees

28  within the State University System and the number of years

29  expected to elapse between the purchase of the plan on behalf

30  of a qualified beneficiary and the exercise of the benefits

31  provided in the plan by such beneficiary. Qualified

                                  19
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  beneficiaries shall have the highest priority in the

 2  assignment of housing within university residence halls.

 3  Qualified beneficiaries shall bear the cost of any additional

 4  elective charges such as laundry service or long-distance

 5  telephone service. Each state university may specify the

 6  residence halls or other university-held residences eligible

 7  for inclusion in the plan. In addition, any state university

 8  may request immediate termination of a dormitory residence

 9  contract based on a violation or multiple violations of rules

10  of the residence hall or other university-held residences. In

11  the event that sufficient housing is not available for all

12  qualified beneficiaries, the board shall refund the purchaser

13  or qualified beneficiary an amount equal to the fees charged

14  for dormitory residence during that semester. If a qualified

15  beneficiary fails to be admitted to a state university or

16  chooses to attend a community college that operates one or

17  more dormitories or residency opportunities, or has one or

18  more dormitories or residency opportunities operated by the

19  community college direct-support organization, the qualified

20  beneficiary may transfer or cause to have transferred to the

21  community college, or community college direct-support

22  organization, the fees associated with dormitory residence.

23  Dormitory fees transferred to the community college or

24  community college direct-support organization may not exceed

25  the maximum fees charged for state university dormitory

26  residence for the purposes of this section, or the fees

27  charged for community college or community college

28  direct-support organization dormitories or residency

29  opportunities, whichever is less.

30         (10)  TRANSFER OF BENEFITS TO PRIVATE AND OUT-OF-STATE

31  COLLEGES AND UNIVERSITIES.--

                                  20
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1         (a)  A qualified beneficiary may apply a community

 2  college plan, university plan, or dormitory residence plan

 3  toward any eligible independent college or university. An

 4  independent college or university which is located and

 5  chartered in Florida, is not for profit, is accredited by the

 6  Commission on Colleges of the Southern Association of Colleges

 7  and Schools or the Accrediting Commission of the Association

 8  of Independent Colleges and Schools, and which confers degrees

 9  as defined in s. 246.021, shall be eligible for such

10  application. The board shall transfer, or cause to have

11  transferred, to the eligible independent college or university

12  designated by the qualified beneficiary an amount not to

13  exceed the redemption value of the advance payment contract

14  within a state postsecondary institution. In the event that

15  the cost of registration or housing fees at the independent

16  college or university is less than the corresponding fees at a

17  state postsecondary institution, the amount transferred shall

18  not exceed the actual cost of registration or housing fees. No

19  transfer authorized pursuant to this paragraph shall exceed

20  the number of semester credit hours or semesters of dormitory

21  residence contracted on behalf of a qualified beneficiary.

22         (b)  A qualified beneficiary may apply the benefits of

23  an advance payment contract toward an eligible out-of-state

24  college or university. An out-of-state college or university

25  which is not for profit and is accredited by a regional

26  accrediting association, and which confers baccalaureate

27  degrees, shall be eligible for such application. The board

28  shall transfer, or cause to have transferred, an amount not to

29  exceed the redemption value of the advance payment contract or

30  the original purchase price plus 5 percent compounded

31  interest, whichever is less, after assessment of a reasonable

                                  21
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  transfer fee. In the event that the cost of registration or

 2  housing fees charged the qualified beneficiary at the eligible

 3  out-of-state college or university is less than this

 4  calculated amount, the amount transferred shall not exceed the

 5  actual cost of registration or housing fees. Any remaining

 6  amount shall be transferred in subsequent semesters until the

 7  transfer value is depleted. No transfer authorized pursuant to

 8  this paragraph shall exceed the number of semester credit

 9  hours or semesters of dormitory residence contracted on behalf

10  of a qualified beneficiary.

11         (11)(6)(a)  ADVANCE PAYMENT CONTRACTS; CONTENTS.--The

12  board shall construct advance payment contracts for

13  registration and may construct advance payment contracts for

14  dormitory residence as provided in accordance with the

15  provisions of this section. Advance payment contracts

16  constructed for the purposes of this section shall be exempt

17  from the provisions of chapter 517 and the Florida Insurance

18  Code. The board may request assistance from the Department of

19  Legal Affairs in the development of the advance payment

20  contracts.  The contents of both Such contracts shall include,

21  but not be limited to, the following:

22         (a)1.  The amount of the payment or payments and the

23  number of payments required from a purchaser on behalf of a

24  qualified beneficiary.

25         (b)2.  The terms and conditions under which purchasers

26  shall remit payments, including, but not limited to, the date

27  or dates upon which each payment shall be due.

28         (c)3.  Provisions for late payment charges and for

29  default.

30         (d)4.  Provisions for penalty fees for withdrawals from

31  the fund.

                                  22
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1         (e)5.  Except for an advance payment contract entered

 2  into pursuant to subsection (22) paragraph (5)(j), the name

 3  and date of birth of the qualified beneficiary on whose behalf

 4  the contract is drawn and the terms and conditions under which

 5  another person may be substituted as the qualified

 6  beneficiary.

 7         (f)6.  The name of any person who may terminate the

 8  contract. The terms of the contract shall specify whether the

 9  contract may be terminated by the purchaser, the qualified

10  beneficiary, a specific designated person, or any combination

11  of these persons.

12         (g)7.  The terms and conditions under which a contract

13  may be terminated, modified, or converted, the name of the

14  person entitled to any refund due as a result of termination

15  of the contract pursuant to such terms and conditions, and the

16  amount of refund, if any, due to the person so named.

17         8.  The time limitations, if any, within which the

18  qualified beneficiary must claim his or her benefits through

19  the program.

20         9.  Other terms and conditions deemed by the board to

21  be necessary or proper.

22         (b)  In addition to the provisions of paragraph (a), an

23  advance payment contract for registration shall include, but

24  not be limited to, the following:

25         (h)1.  The number of semester credit hours or semesters

26  of dormitory residence contracted by the purchaser.

27         (i)2.  The state postsecondary system toward which the

28  contracted credit hours or semesters of dormitory residence

29  will be applied.

30         (j)3.  The assumption of a contractual obligation by

31  the board to the qualified beneficiary to provide for a

                                  23
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  specified number of semester credit hours of undergraduate

 2  instruction at a state postsecondary institution, not to

 3  exceed the average number of credit hours required for the

 4  conference of the degree that corresponds to the plan

 5  purchased on behalf of the qualified beneficiary or to provide

 6  for a specified number of semesters of dormitory residence,

 7  not to exceed the number of semesters of full-time enrollment

 8  required for the conference of a baccalaureate degree.

 9         (k)  Other terms and conditions deemed by the board to

10  be necessary or proper.

11         (c)  In addition to the provisions of paragraph (a), an

12  advance payment contract for dormitory residence shall

13  include, but not be limited to, the following:

14         1.  The number of semesters of dormitory residence

15  contracted by the purchaser.

16         2.  The assumption of a contractual obligation by the

17  board to the qualified beneficiary to provide for a specified

18  number of semesters of dormitory residence at a state

19  university, not to exceed the maximum number of semesters of

20  full-time enrollment required for the conference of a

21  baccalaureate degree.

22         (12)(d)  DURATION OF BENEFITS; ADVANCE PAYMENT

23  CONTRACT.--An advance payment contract may provide that

24  contracts which have not been terminated or the benefits

25  exercised within a specified period of time shall be

26  considered terminated.  Time expended by a qualified

27  beneficiary as an active duty member of any of the armed

28  services of the United States shall be added to the period of

29  time specified pursuant to this subsection paragraph.  No

30  purchaser or qualified beneficiary whose advance payment

31  contract is terminated pursuant to this subsection paragraph

                                  24
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  shall be entitled to a refund.  The board shall retain any

 2  moneys paid by the purchaser for an advance payment contract

 3  that has been terminated in accordance with this subsection

 4  paragraph.  Such moneys retained by the board are exempt from

 5  chapter 717, and such retained moneys must be used by the

 6  board to further the purposes of this section.

 7         (13)  REFUNDS.--

 8         (a)(e)1.  Except as provided in paragraphs (b) and (c),

 9  no refund provided pursuant to subparagraph (a)7. shall exceed

10  the amount paid into the fund by the purchaser.  In the event

11  that an advance payment contract is converted from a

12  university to a community college registration plan, the

13  refund amount shall be reduced by the amount transferred to a

14  community college on behalf of the qualified beneficiary.

15  However, refunds may exceed the amount paid into the fund in

16  the following circumstances:

17         (b)a.  If the beneficiary is awarded a scholarship, the

18  terms of which cover the benefits included in the advance

19  payment contracts, moneys paid for the purchase of the advance

20  payment contracts shall be returned to the purchaser in

21  semester installments coinciding with the matriculation by the

22  beneficiary in amounts of either the original purchase price

23  plus 5 percent compounded interest, or the current rates at

24  state postsecondary institutions, whichever is less.

25         (c)b.  In the event of the death or total disability of

26  the beneficiary, moneys paid for the purchase of advance

27  payment contracts shall be returned to the purchaser together

28  with 5 percent compounded interest, or the current rates at

29  state postsecondary institutions, whichever is less.

30         (d)c.  If an advance payment contract is converted from

31  one registration plan to a plan of lesser value a university

                                  25
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  plan to a community college plan or a community college plus

 2  university plan, or is converted from a community college plus

 3  university plan to a community college plan, the amount

 4  refunded shall not exceed the difference between the amount

 5  paid for the original contract and the amount that would have

 6  been paid for the contract to which the plan is converted had

 7  the converted plan been purchased under the same payment plan

 8  at the time the original advance payment contract was

 9  executed.

10         (e)2.  No refund shall be authorized through an advance

11  payment contract for any school year partially attended but

12  not completed.  For purposes of this section, a school year

13  partially attended but not completed shall mean any one

14  semester whereby the student is still enrolled at the

15  conclusion of the official drop-add period, but withdraws

16  before the end of such semester. If a beneficiary does not

17  complete a community college plan or university plan for

18  reasons other than specified in paragraph (c) subparagraph 1.,

19  the purchaser shall receive a refund of the amount paid into

20  the fund for the remaining unattended years of the advance

21  payment contract pursuant to rules promulgated by the board.

22         (14)(f)  CONFIDENTIALITY OF ACCOUNT

23  INFORMATION.--Information that identifies the purchasers or

24  beneficiaries of any plan promulgated under this section and

25  their advance payment account activities is exempt from the

26  provisions of s. 119.07(1).  However, the board may authorize

27  the program's records administrator to release such

28  information to a community college, college, or university in

29  which a beneficiary may enroll or is enrolled.  Community

30  colleges, colleges, and universities shall maintain such

31  information as exempt from the provisions of s. 119.07(1).

                                  26
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1         (7)  At a minimum, the board shall make advance payment

 2  contracts available for two independent plans to be known as

 3  the community college plan and the university plan. The board

 4  may also make advance payment contracts available for a

 5  dormitory residence plan.

 6         (a)  Through the community college plan, the advance

 7  payment contract shall provide prepaid registration fees for a

 8  specified number of undergraduate semester credit hours not to

 9  exceed the average number of hours required for the conference

10  of an associate degree.  The cost of participation in the

11  community college plan shall be based primarily on the average

12  current and projected registration fees within the State

13  Community College System and the number of years expected to

14  elapse between the purchase of the plan on behalf of a

15  qualified beneficiary and the exercise of the benefits

16  provided in the plan by such beneficiary. Qualified

17  beneficiaries shall bear the cost of any laboratory fees

18  associated with enrollment in specific courses.  Each

19  qualified beneficiary shall be classified as a resident for

20  tuition purposes pursuant to s. 240.1201 regardless of his or

21  her actual legal residence.

22         (b)  Through the university plan, the advance payment

23  contract shall provide prepaid registration fees for a

24  specified number of undergraduate semester credit hours not to

25  exceed the average number of hours required for the conference

26  of a baccalaureate degree.  The cost of participation in the

27  university plan shall be based primarily on the current and

28  projected registration fees within the State University System

29  and the number of years expected to elapse between the

30  purchase of the plan on behalf of a qualified beneficiary and

31  the exercise of the benefits provided in the plan by such

                                  27
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  beneficiary.  Qualified beneficiaries shall bear the cost of

 2  any laboratory fees associated with enrollment in specific

 3  courses.  In the event that a qualified beneficiary fails to

 4  be admitted to a state university or chooses to attend a

 5  community college, the qualified beneficiary may convert the

 6  average number of semester credit hours required for the

 7  conference of an associate degree from a university plan to a

 8  community college plan and may retain the remaining semester

 9  credit hours in the university plan or may request a refund

10  for prepaid credit hours in excess of the average number of

11  semester credit hours required for the conference of an

12  associate degree pursuant to subparagraph (6)(a)7.  Each

13  qualified beneficiary shall be classified as a resident for

14  tuition purposes pursuant to s. 240.1201 regardless of his or

15  her actual legal residence.

16         (c)  Through the dormitory residence plan, the advance

17  payment contract may provide prepaid housing fees for a

18  maximum of 10 semesters of full-time undergraduate enrollment

19  in a state university. Dormitory residence plans shall be

20  purchased in increments of 2 semesters. The cost of

21  participation in the dormitory residence plan shall be based

22  primarily on the average current and projected housing fees

23  within the State University System and the number of years

24  expected to elapse between the purchase of the plan on behalf

25  of a qualified beneficiary and the exercise of the benefits

26  provided in the plan by such beneficiary.  Qualified

27  beneficiaries shall bear the cost of any additional elective

28  charges such as laundry service or long-distance telephone

29  service.  Each state university may specify the residence

30  halls or other university-held residences eligible for

31  inclusion in the plan. In addition, any state university may

                                  28
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  request immediate termination of a dormitory residence

 2  contract based on a violation or multiple violations of rules

 3  of the residence hall or other university-held residences.

 4  Qualified beneficiaries shall have the highest priority in the

 5  assignment of housing within university residence halls.  In

 6  the event that sufficient housing is not available for all

 7  qualified beneficiaries, the board shall refund the purchaser

 8  or qualified beneficiary an amount equal to the fees charged

 9  for dormitory residence during that semester.  If a qualified

10  beneficiary fails to be admitted to a state university or

11  chooses to attend a community college that operates one or

12  more dormitories or residency opportunities, or has one or

13  more dormitories or residency opportunities operated by the

14  community college direct-support organization, the qualified

15  beneficiary may transfer or cause to have transferred to the

16  community college, or community college direct-support

17  organization, the fees associated with dormitory residence.

18  Dormitory fees transferred to the community college or

19  community college direct-support organization may not exceed

20  the maximum fees charged for state university dormitory

21  residence for the purposes of this section, or the fees

22  charged for community college or community college

23  direct-support organization dormitories or residency

24  opportunities, whichever is less.

25         (d)  A qualified beneficiary may apply a community

26  college plan, university plan, or dormitory residence plan

27  toward any eligible independent college or university.  An

28  independent college or university which is located and

29  chartered in Florida, is not for profit, is accredited by the

30  Commission on Colleges of the Southern Association of Colleges

31  and Schools or the Accrediting Commission of the Association

                                  29
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  of Independent Colleges and Schools, and which confers degrees

 2  as defined in s. 246.021 shall be eligible for such

 3  application.  The board shall transfer or cause to have

 4  transferred to the eligible independent college or university

 5  designated by the qualified beneficiary an amount not to

 6  exceed the redemption value of the advance payment contract

 7  within a state postsecondary institution.  In the event that

 8  the cost of registration or housing fees at the independent

 9  college or university is less than the corresponding fees at a

10  state postsecondary institution, the amount transferred shall

11  not exceed the actual cost of registration or housing fees.

12  No transfer authorized pursuant to this paragraph shall exceed

13  the number of semester credit hours or semesters of dormitory

14  residence contracted on behalf of a qualified beneficiary.

15         (e)  A qualified beneficiary may apply the benefits of

16  an advance payment contract toward an eligible out-of-state

17  college or university. An out-of-state college or university

18  which is not for profit, is accredited by a regional

19  accrediting association, and which confers baccalaureate

20  degrees shall be eligible for such application.  The board

21  shall transfer, or cause to have transferred, an amount not to

22  exceed the redemption value of the advance payment contract or

23  the original purchase price plus 5 percent compounded

24  interest, whichever is less, after assessment of a reasonable

25  transfer fee. In the event that the cost of registration or

26  housing fees charged the qualified beneficiary at the eligible

27  out-of-state college or university is less than this

28  calculated amount, the amount transferred shall not exceed the

29  actual cost of registration or housing fees.  Any remaining

30  amount shall be transferred in subsequent semesters until the

31  transfer value is depleted.  No transfer authorized pursuant

                                  30
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  to this paragraph shall exceed the number of semester credit

 2  hours or semesters of dormitory residence contracted on behalf

 3  of a qualified beneficiary.

 4         (8)  The board shall solicit proposals for the

 5  operation of the Florida Prepaid Postsecondary Education

 6  Expense Program pursuant to s. 287.057, through which the

 7  board shall contract for the services of a records

 8  administrator, a trustee services firm, and one or more

 9  product providers.

10         (a)  The records administrator shall be the entity

11  designated by the board to conduct the daily operations of the

12  program on behalf of the board. The goals of the board in

13  selecting a records administrator shall be to provide all

14  purchasers with the most secure, well-diversified, and

15  beneficially administered postsecondary education expense plan

16  possible, to allow all qualified firms interested in providing

17  such services equal consideration, and to provide such

18  services to the state at no cost and to the purchasers at the

19  lowest cost possible. Evaluations of proposals submitted

20  pursuant to this paragraph shall include, but not be limited

21  to, the following criteria:

22         1.  Fees and other costs charged to purchasers that

23  affect account values or operational costs related to the

24  program.

25         2.  Past experience in records administration and

26  current ability to provide timely and accurate service in the

27  areas of records administration, audit and reconciliation,

28  plan communication, participant service, and complaint

29  resolution.

30         3.  Sufficient staff and computer capability for the

31  scope and level of service expected by the board.

                                  31
    9:19 AM   04/30/98                              s2100c1c-07j01




                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1         4.  Financial history and current financial strength

 2  and capital adequacy to provide administrative services

 3  required by the board.

 4         (b)  The trustee services firm shall be the entity

 5  designated by the board to select and supervise investment

 6  programs on behalf of the board. The goals of the board in

 7  selecting a trustee services firm shall be to obtain the

 8  highest standards of professional trustee services, to allow

 9  all qualified firms interested in providing such services

10  equal consideration, and to provide such services to the state

11  at no cost and to the purchasers at the lowest cost possible.

12  The trustee services firm shall agree to meet the obligations

13  of the board to qualified beneficiaries if moneys in the fund

14  fail to offset the obligations of the board as a result of

15  imprudent selection or supervision of investment programs by

16  such firm.  Evaluations of proposals submitted pursuant to

17  this paragraph shall include, but not be limited to, the

18  following criteria:

19         1.  Adequacy of trustee services for supervision and

20  management of the program, including current operations and

21  staff organization and commitment of management to the

22  proposal.

23         2.  Capability to execute program responsibilities

24  within time and regulatory constraints.

25         3.  Past experience in trustee services and current

26  ability to maintain regular and continuous interactions with

27  the board, records administrator, and product provider.

28         4.  The minimum purchaser participation assumed within

29  the proposal and any additional requirements of purchasers.

30         5.  Adequacy of technical assistance and services

31  proposed for staff.

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                                                  SENATE AMENDMENT

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 1         6.  Adequacy of a management system for evaluating and

 2  improving overall trustee services to the program.

 3         7.  Adequacy of facilities, equipment, and electronic

 4  data processing services.

 5         8.  Detailed projections of administrative costs,

 6  including the amount and type of insurance coverage, and

 7  detailed projections of total costs.

 8         (c)1.  The product providers shall be the entities

 9  designated by the board to develop investment portfolios on

10  behalf of the board to achieve the purposes of this section.

11  Product providers shall be limited to authorized insurers as

12  defined in s. 624.09, banks as defined in s. 658.12,

13  associations as defined in s. 665.012, authorized Securities

14  and Exchange Commission investment advisers, and investment

15  companies as defined in the Investment Company Act of 1940.

16  All product providers shall have their principal place of

17  business and corporate charter located and registered in the

18  United States. In addition, each product provider shall agree

19  to meet the obligations of the board to qualified

20  beneficiaries if moneys in the fund fail to offset the

21  obligations of the board as a result of imprudent investing by

22  such provider. Each authorized insurer shall evidence superior

23  performance overall on an acceptable level of surety in

24  meeting its obligations to its policyholders and other

25  contractual obligations.  Only qualified public depositories

26  approved by the State Insurance Commissioner and Treasurer

27  shall be eligible for board consideration.  Each investment

28  company shall provide investment plans as specified within the

29  request for proposals.

30         2.  The goals of the board in selecting a product

31  provider company shall be to provide all purchasers with the

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                                                  SENATE AMENDMENT

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    Amendment No.    





 1  most secure, well-diversified, and beneficially administered

 2  postsecondary education expense plan possible, to allow all

 3  qualified firms interested in providing such services equal

 4  consideration, and to provide such services to the state at no

 5  cost and to the purchasers at the lowest cost possible.

 6  Evaluations of proposals submitted pursuant to this paragraph

 7  shall include, but not be limited to, the following criteria:

 8         a.  Fees and other costs charged to purchasers that

 9  affect account values or operational costs related to the

10  program.

11         b.  Past and current investment performance, including

12  investment and interest rate history, guaranteed minimum rates

13  of interest, consistency of investment performance, and any

14  terms and conditions under which moneys are held.

15         c.  Past experience and ability to provide timely and

16  accurate service in the areas of records administration,

17  benefit payments, investment management, and complaint

18  resolution.

19         d.  Financial history and current financial strength

20  and capital adequacy to provide products, including operating

21  procedures and other methods of protecting program assets.

22         (15)(9)  OBLIGATIONS OF BOARD; PAYMENT.--The state

23  shall agree to meet the obligations of the board to qualified

24  beneficiaries if moneys in the fund fail to offset the

25  obligations of the board. The Legislature shall appropriate to

26  the Florida Prepaid College Postsecondary Education Expense

27  Trust Fund the amount necessary to meet the obligations of the

28  board to qualified beneficiaries.

29         (16)(10)  ASSETS OF THE FUND; EXPENDITURE

30  PRIORITY.--The assets of the fund shall be maintained,

31  invested, and expended solely for the purposes of this section

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1  and shall not be loaned, transferred, or otherwise used by the

 2  state for any purpose other than the purposes of this section.

 3  This subsection shall not be construed to prohibit the board

 4  from investing in, by purchase or otherwise, bonds, notes, or

 5  other obligations of the state or an agency or instrumentality

 6  of the state. Unless otherwise specified by the board, assets

 7  of the fund shall be expended in the following order of

 8  priority:

 9         (a)  To make payments to state postsecondary

10  institutions on behalf of qualified beneficiaries.

11         (b)  To make refunds upon termination of advance

12  payment contracts.

13         (c)  To pay the costs of program administration and

14  operations.

15         (17)(11)  EXEMPTION FROM CLAIMS OF CREDITORS.--Moneys

16  paid into or out of the fund by or on behalf of a purchaser or

17  qualified beneficiary of an advance payment contract made

18  under this section, which contract has not been terminated,

19  are exempt, as provided by s. 222.22, from all claims of

20  creditors of the purchaser or the beneficiary. Neither moneys

21  paid into the program nor benefits accrued through the program

22  may be pledged for the purpose of securing a loan.

23         (18)(12)  PAYROLL DEDUCTION AUTHORITY.--The state or

24  any state agency, county, municipality, or other political

25  subdivision may, by contract or collective bargaining

26  agreement, agree with any employee to remit payments toward

27  advance payment contracts through payroll deductions made by

28  the appropriate officer or officers of the state, state

29  agency, county, municipality, or political subdivision.  Such

30  payments shall be held and administered in accordance with

31  this section.

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

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 1         (19)(13)  DISCLAIMER.--Nothing in this section shall be

 2  construed as a promise or guarantee that a qualified

 3  beneficiary will be admitted to a state postsecondary

 4  institution or to a particular state postsecondary

 5  institution, will be allowed to continue enrollment at a state

 6  postsecondary institution after admission, or will be

 7  graduated from a state postsecondary institution.

 8         (20)(14)  PROGRAM TERMINATION.--In the event that the

 9  state determines the program to be financially infeasible, the

10  state may discontinue the provision of the program.  Any

11  qualified beneficiary who has been accepted by and is enrolled

12  or is within 5 years of enrollment in an eligible independent

13  college or university or state postsecondary institution shall

14  be entitled to exercise the complete benefits for which he or

15  she has contracted.  All other contract holders shall receive

16  a refund, pursuant to subparagraph (6)(a)7., of the amount

17  paid in and an additional amount in the nature of interest at

18  a rate that corresponds, at a minimum, to the prevailing

19  interest rates for savings accounts provided by banks and

20  savings and loan associations.

21         (21)  ANNUAL REPORT.--The board shall annually prepare

22  or cause to be prepared a report setting forth in appropriate

23  detail an accounting of the fund and a description of the

24  financial condition of the program at the close of each fiscal

25  year. Such report shall be submitted to the President of the

26  Senate, the Speaker of the House of Representatives, and

27  members of the State Board of Education on or before March 31

28  each year. In addition, the board shall make the report

29  available to purchasers of advance payment contracts. The

30  board shall provide to the Board of Regents and the State

31  Board of Community Colleges, by March 31 each year, complete

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                                                  SENATE AMENDMENT

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 1  advance payment contract sales information, including

 2  projected postsecondary enrollments of qualified

 3  beneficiaries. The accounts of the fund shall be subject to

 4  annual audits by the Auditor General or his or her designee.

 5         (22)  DIRECT-SUPPORT ORGANIZATION; AUTHORITY.--

 6         (a)  The board may establish a direct-support

 7  organization which is:

 8         1.  A Florida corporation, not for profit, incorporated

 9  under the provisions of chapter 617 and approved by the

10  Secretary of State.

11         2.  Organized and operated exclusively to receive,

12  hold, invest, and administer property and to make expenditures

13  to or for the benefit of the program.

14         3.  An organization which the board, after review, has

15  certified to be operating in a manner consistent with the

16  goals of the program and in the best interests of the state.

17  Unless so certified, the organization may not use the name of

18  the program.

19         4.  Subject to an annual postaudit by an independent

20  certified public accountant in accordance with rules

21  promulgated by the board. The annual audit shall be submitted

22  to the State Board of Administration and the Auditor General

23  for review. The State Board of Administration and Auditor

24  General shall have the authority to require and receive from

25  the organization or its independent auditor any detail or

26  supplemental data relative to the operation of the

27  organization. The identity of donors who desire to remain

28  anonymous shall be confidential and exempt from the provisions

29  of s. 119.07(1) and s. 24(a), Art. I of the State

30  Constitution, and such anonymity shall be maintained in the

31  auditor's report. Information received by the organization

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

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 1  that is otherwise confidential or exempt by law shall retain

 2  such status. Any sensitive, personal information regarding

 3  contract beneficiaries, including their identities, is exempt

 4  from the provisions of s. 119.07(1) and s. 24(a), Art. I of

 5  the State Constitution.

 6         (b)  The chair and the executive director of the board

 7  shall be directors of the direct-support organization and

 8  shall jointly name three other individuals to serve as

 9  directors of the organization.

10         Section 40.  Section 222.22, Florida Statutes, is

11  amended to read:

12         222.22  Exemption of moneys in the Prepaid

13  Postsecondary Education Expense Trust Fund from legal

14  process.--Moneys paid into or out of the Florida Prepaid

15  College Postsecondary Education Expense Trust Fund by or on

16  behalf of a purchaser or qualified beneficiary pursuant to an

17  advance payment contract made under s. 240.551, which contract

18  has not been terminated, are not liable to attachment,

19  garnishment, or legal process in the state in favor of any

20  creditor of the purchaser or beneficiary of such advance

21  payment contract.

22         Section 41.  Subsection (2) of section 732.402, Florida

23  Statutes, is amended to read:

24         732.402  Exempt property.--

25         (2)  Exempt property shall consist of:

26         (a)  Household furniture, furnishings, and appliances

27  in the decedent's usual place of abode up to a net value of

28  $10,000 as of the date of death.; and

29         (b)  All automobiles held in the decedent's name and

30  regularly used by the decedent or members of the decedent's

31  immediate family as their personal automobiles.

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1         (c)  Florida Prepaid College Program contracts

 2  purchased pursuant to s. 240.551.

 3         Section 42.  For the purpose of incorporating the

 4  amendment to s. 732.402, Florida Statutes, in references

 5  thereto, subsection (13) of section 731.201 and subsection (1)

 6  of section 735.301, Florida Statutes, are reenacted to read:

 7         731.201  General definitions.--Subject to additional

 8  definitions in subsequent chapters that are applicable to

 9  specific chapters or parts, and unless the context otherwise

10  requires, in this code and chapters 737, 738, and 744:

11         (13)  "Exempt property" means the property of a

12  decedent's estate which is described in s. 732.402.

13         735.301  Disposition without administration.--

14         (1)  No administration shall be required or formal

15  proceedings instituted upon the estate of a decedent leaving

16  only personal property exempt under the provisions of s.

17  732.402, personal property exempt from the claims of creditors

18  under the Constitution of Florida, and nonexempt personal

19  property the value of which does not exceed the sum of the

20  amount of preferred funeral expenses and reasonable and

21  necessary medical and hospital expenses of the last 60 days of

22  the last illness.

23

24  (Redesignate subsequent sections.)

25

26

27  ================ T I T L E   A M E N D M E N T ===============

28  And the title is amended as follows:

29         On page 2, line 22, after the semicolon,

30

31  insert:

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                                                  SENATE AMENDMENT

    Bill No. CS for SB 2100

    Amendment No.    





 1         amending s. 240.551, F.S.; renaming the Florida

 2         Prepaid Postsecondary Education Expense

 3         Program, Board, and Trust Fund the Florida

 4         Prepaid College Program, Board, and Trust Fund,

 5         respectively; reordering provisions and

 6         providing technical revisions; deleting

 7         obsolete provisions; conforming

 8         cross-references; permitting soliciting and

 9         contracting for records administration

10         services; providing for the inclusion of

11         certain fees within advance payment contracts

12         for tuition; amending s. 222.22, F.S.;

13         conforming provisions; amending s. 732.402,

14         F.S.; exempting Florida Prepaid College Program

15         contracts from the probate claims of creditors;

16         reenacting ss. 731.201(13) and 735.301(1),

17         F.S., relating to probate, to incorporate the

18         amendment to s. 732.402, F.S., in references;

19

20

21

22

23

24

25

26

27

28

29

30

31

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