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





                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    

                            CHAMBER ACTION
              Senate                               House
                                   .
                                   .
 1                                 .
                                   .
 2                                 .
                                   .
 3                                 .
                                   .
 4                                                                

 5

 6

 7

 8

 9

10                                                                

11  Senator Clary moved the following amendment to amendment

12  (640144):

13

14         Senate Amendment (with title amendment) 

15         On page 66, between lines 6 and 7,

16

17  insert:

18         Section 48.  Section 240.551, Florida Statutes, is

19  amended to read:

20         240.551  Florida Prepaid College Postsecondary

21  Education Expense Program.--

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

23  that educational opportunity at the postsecondary level is a

24  critical state interest.  It further recognizes that

25  educational opportunity is best ensured through the provision

26  of postsecondary institutions that are geographically and

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

28  Legislature that a program be established through which many

29  of the costs associated with postsecondary attendance may be

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

31  duration of undergraduate enrollment.  It is similarly the

                                  1
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  intent of the Legislature to provide a program that fosters

 2  timely financial planning for postsecondary attendance and to

 3  encourage employer participation in such planning through

 4  program contributions on behalf of employees and the

 5  dependents of employees.

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

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

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

 9  section.

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

11  Postsecondary Education Expense Board.

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

13  Postsecondary Education Expense Trust Fund.

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

15  Postsecondary Education Expense Program.

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

17  obligated to make advance registration or dormitory residence

18  payments in accordance with an advance payment contract.

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

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

21  enters into an advance payment contract on behalf of the

22  resident;

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

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

25  parent enters into an advance payment contract on behalf of

26  the child; or

27         3.  For purposes of advance payment contracts entered

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

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

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

31  the benefits of the advance payment contract.

                                  2
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

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

 3  Fund fee.

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

 5  community college identified in s. 240.3031 or university

 6  identified in s. 240.2011.

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

 8  is created a Florida Prepaid College Postsecondary Education

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

10  registration and dormitory residence may be paid in advance of

11  enrollment in a state postsecondary institution at a rate

12  lower than the projected corresponding cost at the time of

13  actual enrollment.  Such payments shall be combined and

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

15  interest to generate the difference between the prepaid amount

16  and the cost of registration and dormitory residence at the

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

18  postsecondary institution pursuant to this section shall be

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

20  advance payment contract.

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

22  created within the State Board of Administration the Florida

23  Prepaid College Postsecondary Education Expense Trust Fund.

24  The fund shall consist of state appropriations, moneys

25  acquired from other governmental or private sources, and

26  moneys remitted in accordance with advance payment contracts.

27  All funds deposited into the trust fund may be invested

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

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

30  trust fund shall increase the total funds available for the

31  program. Notwithstanding the provisions of chapter 717, funds

                                  3
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  associated with terminated contracts terminated pursuant to

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

 3  which no refunds have been claimed shall increase the total

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

 5  establish procedures for notifying purchasers who subsequently

 6  cancel their contracts of any unclaimed refund and shall

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

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

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

10  therein and shall be available for carrying out the purposes

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

12  gains exceed exceeds the amount necessary for program

13  administration and disbursements, the board may designate an

14  additional percentage of the fund to serve as a contingency

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

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

17  direct-support organization created pursuant to subsection

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

19  this subsection paragraph.

20         (5)  PROGRAM ADMINISTRATION.--

21         (a)  The Florida Prepaid College Postsecondary

22  Education Expense Program shall be administered by the Florida

23  Prepaid College Postsecondary Education Expense Board as an

24  agency of the state.  The Florida Prepaid College

25  Postsecondary Education Expense Board is hereby created as a

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

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

28  6, Art. IV of the State Constitution, the board shall be

29  assigned to and administratively housed within the State Board

30  of Administration, but it shall independently exercise the

31  powers and duties specified in this section.

                                  4
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

 2  composed of the Insurance Commissioner and Treasurer, the

 3  Comptroller, the Chancellor of the Board of Regents, the

 4  Executive Director of the State Board of Community Colleges,

 5  and three members appointed by the Governor and subject to

 6  confirmation by the Senate.  Each member appointed by the

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

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

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

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

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

12  qualifications required of gubernatorial appointees to the

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

14  3 years except that, in making the initial appointments, the

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

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

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

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

19  the unexpired term.  Any member shall be eligible for

20  reappointment and shall serve until a successor qualifies.

21  Members of the board shall serve without compensation but

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

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

24  public disclosure of his or her financial interests pursuant

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

26  statute.

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

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

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

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

31  member to serve as vice chair and shall designate a

                                  5
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

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

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

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

 5  Notwithstanding the existence of vacancies on the board, a

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

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

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

 9  call of the chair.

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

11  shall:

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

13  to serve as the chief administrative and operational officer

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

15  her by the board.

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

17  sufficiently actuarially sound to defray the obligations of

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

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

20  perceives a need for additional assets in order to preserve

21  actuarial soundness, the board may adjust the terms of

22  subsequent advance payment contracts to ensure such soundness.

23         (c)  Establish a comprehensive investment plan for the

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

25  of Administration. The comprehensive investment plan shall

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

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

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

29  or variable life insurance or annuity contracts, securities,

30  evidence of indebtedness, or other investment products

31  pursuant to the comprehensive investment plan and in such

                                  6
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

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

 3  be underwritten and offered in compliance with the applicable

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

 5  are duly authorized by applicable federal and state

 6  authorities. Within the comprehensive investment plan, the

 7  board may authorize investment vehicles, or products incident

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

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

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

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

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

13  board are not prohibited from purchasing advance payment

14  contracts by virtue of their fiduciary responsibilities as

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

16  board.

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

18  287.057, for the marketing of the Florida Prepaid College

19  Program. The entity designated pursuant to this paragraph

20  shall serve as a centralized marketing agent for the program

21  and shall be solely responsible for the marketing of the

22  program. Any materials produced for the purpose of marketing

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

24  such materials shall be made available to the public before

25  the materials are approved by the board. Any educational

26  institution may distribute marketing materials produced for

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

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

29  nor the board shall be liable for misrepresentation of the

30  program by a marketing agent.

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

                                  7
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  287.057, for a trustee services firm to select and supervise

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

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

 4  the highest standards of professional trustee services, to

 5  allow all qualified firms interested in providing such

 6  services equal consideration, and to provide such services to

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

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

 9  obligations of the board to qualified beneficiaries if moneys

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

11  result of imprudent selection or supervision of investment

12  programs by such firm. Evaluations of proposals submitted

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

14  to, the following criteria:

15         1.  Adequacy of trustee services for supervision and

16  management of the program, including current operations and

17  staff organization and commitment of management to the

18  proposal.

19         2.  Capability to execute program responsibilities

20  within time and regulatory constraints.

21         3.  Past experience in trustee services and current

22  ability to maintain regular and continuous interactions with

23  the board, records administrator, and product provider.

24         4.  The minimum purchaser participation assumed within

25  the proposal and any additional requirements of purchasers.

26         5.  Adequacy of technical assistance and services

27  proposed for staff.

28         6.  Adequacy of a management system for evaluating and

29  improving overall trustee services to the program.

30         7.  Adequacy of facilities, equipment, and electronic

31  data processing services.

                                  8
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1         8.  Detailed projections of administrative costs,

 2  including the amount and type of insurance coverage, and

 3  detailed projections of total costs.

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

 5  287.057, for product providers to develop investment

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

 7  this section. Product providers shall be limited to authorized

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

 9  658.12, associations as defined in s. 665.012, authorized

10  Securities and Exchange Commission investment advisers, and

11  investment companies as defined in the Investment Company Act

12  of 1940. All product providers shall have their principal

13  place of business and corporate charter located and registered

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

15  agree to meet the obligations of the board to qualified

16  beneficiaries if moneys in the fund fail to offset the

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

18  such provider. Each authorized insurer shall evidence superior

19  performance overall on an acceptable level of surety in

20  meeting its obligations to its policyholders and other

21  contractual obligations. Only qualified public depositories

22  approved by the Insurance Commissioner and Treasurer shall be

23  eligible for board consideration. Each investment company

24  shall provide investment plans as specified within the request

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

26  provider company shall be to provide all purchasers with the

27  most secure, well-diversified, and beneficially administered

28  postsecondary education expense plan possible, to allow all

29  qualified firms interested in providing such services equal

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

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

                                  9
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  Evaluations of proposals submitted pursuant to this paragraph

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

 3         1.  Fees and other costs charged to purchasers that

 4  affect account values or operational costs related to the

 5  program.

 6         2.  Past and current investment performance, including

 7  investment and interest rate history, guaranteed minimum rates

 8  of interest, consistency of investment performance, and any

 9  terms and conditions under which moneys are held.

10         3.  Past experience and ability to provide timely and

11  accurate service in the areas of records administration,

12  benefit payments, investment management, and complaint

13  resolution.

14         4.  Financial history and current financial strength

15  and capital adequacy to provide products, including operating

16  procedures and other methods of protecting program assets.

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

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

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

20  the power to:

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

22         (b)2.  Sue and be sued.

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

24  instruments.

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

26  federal, state, and local agencies, including state

27  universities and community colleges.

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

29  disbursement.

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

31  commissions, or other governmental agencies.

                                  10
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

 2  obligations, securities, and property determined appropriate

 3  by the board.

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

 5  for qualified beneficiaries.

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

 7  community college plan, university plan, and dormitory

 8  residence plan, respectively. However, any person denied

 9  participation solely on the basis of such restriction shall be

10  granted priority for participation during the succeeding year.

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

12  fund into various accounts and funds.

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

14  employ necessary personnel, and engage the services of private

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

16  for administrative or technical assistance.

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

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

19  any government program to carry out the purposes of this

20  section.

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

22  charges in connection with any transaction and impose

23  reasonable penalties, including default, for delinquent

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

25  fraudulent basis.

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

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

28  fund or the board.

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

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

31  limitation shall be specified within the advance payment

                                  11
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  contract.

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

 3  payments may be withdrawn from the fund and impose reasonable

 4  fees and charges for such withdrawal. Such terms and

 5  conditions shall be specified within the advance payment

 6  contract.

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

 8  lump sums or installment payments.

 9         18.  Establish other policies, procedures, and criteria

10  to implement and administer the provisions of this section.

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

12  contracts verify, under oath, any requests for contract

13  conversions, substitutions, transfers, cancellations, refund

14  requests, or contract changes of any nature. Verification

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

16  92.525(1)(a).

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

18  that is sufficiently actuarially sound to defray the

19  obligations of the program.  The board shall annually evaluate

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

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

22  to preserve actuarial soundness, the board may adjust the

23  terms of subsequent advance payment contracts to ensure such

24  soundness.

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

26  Board of Administration, shall establish a comprehensive

27  investment plan for the purposes of this section.  The

28  comprehensive investment plan shall specify the investment

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

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

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

                                  12
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  insurance or annuity contracts, securities, evidence of

 2  indebtedness, or other investment products pursuant to the

 3  comprehensive investment plan and in such proportions as may

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

 5  annuity, savings, or investment products shall be underwritten

 6  and offered in compliance with the applicable federal and

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

 8  authorized by applicable federal and state authorities.

 9  Within the comprehensive investment plan, the board may

10  authorize investment vehicles, or products incident thereto,

11  as may be available or offered by qualified companies or

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

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

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

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

16  board are not prohibited from purchasing advance payment

17  contracts by virtue of their fiduciary responsibilities as

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

19  board.

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

21  administration of the comprehensive investment plan required

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

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

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

25  private corporation or institution to provide such services as

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

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

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

29  individual and collective recordkeeping and accountings, and

30  asset purchase, control, and safekeeping.

31         (t)  Endorse insurance coverage written exclusively for

                                  13
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  the purpose of protecting advance payment contracts, and the

 2  purchasers and beneficiaries thereof, which may be issued in

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

 4  provisions of part V of chapter 627.

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

 6  287.057, for the services of a records administrator. The

 7  goals of the board in selecting a records administrator shall

 8  be to provide all purchasers with the most secure,

 9  well-diversified, and beneficially administered postsecondary

10  education expense plan possible, to allow all qualified firms

11  interested in providing such services equal consideration, and

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

13  purchasers at the lowest cost possible. Evaluations of

14  proposals submitted pursuant to this paragraph shall include,

15  but not be limited to, the following criteria:

16         1.  Fees and other costs charged to purchasers that

17  affect account values or operational costs related to the

18  program.

19         2.  Past experience in records administration and

20  current ability to provide timely and accurate service in the

21  areas of records administration, audit and reconciliation,

22  plan communication, participant service, and complaint

23  resolution.

24         3.  Sufficient staff and computer capability for the

25  scope and level of service expected by the board.

26         4.  Financial history and current financial strength

27  and capital adequacy to provide administrative services

28  required by the board.

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

30  to implement and administer the provisions of this section.

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

                                  14
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  prepared a report setting forth in appropriate detail an

 2  accounting of the fund and a description of the financial

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

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

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

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

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

 8  purchasers of advance payment contracts.  The board shall

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

10  Community Colleges by March 31 each year complete advance

11  payment contract sales information including projected

12  postsecondary enrollments of qualified beneficiaries.  The

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

14  Auditor General or his or her designee.

15         (8)(h)  QUALIFIED STATE TUITION PROGRAM

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

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

18  retain its status as a "qualified state tuition prepaid

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

20  similar status of the program, purchasers, and qualified

21  beneficiaries under the Internal Revenue Code of 1986, as

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

23  changes to the tax or securities status of contracts purchased

24  through the program.

25         (i)  The board shall solicit proposals for the

26  marketing of the Florida Prepaid Postsecondary Education

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

28  pursuant to this paragraph shall serve as a centralized

29  marketing agent for the program and shall be solely

30  responsible for the marketing of the program.  Any materials

31  produced for the purpose of marketing the program shall be

                                  15
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

 2  made available to the public before the materials are approved

 3  by the board.  Any educational institution may distribute

 4  marketing materials produced for the program; however, all

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

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

 7  for misrepresentation of the program by a marketing agent.

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

 9  organization which is:

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

11  under the provisions of chapter 617 and approved by the

12  Secretary of State.

13         2.  Organized and operated exclusively to receive,

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

15  to or for the benefit of the program.

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

17  certified to be operating in a manner consistent with the

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

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

20  the program.

21         4.  Subject to an annual postaudit by an independent

22  certified public accountant in accordance with rules

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

24  to the State Board of Administration and the Auditor General

25  for review.  The State Board of Administration and Auditor

26  General shall have the authority to require and receive from

27  the organization or its independent auditor any detail or

28  supplemental data relative to the operation of the

29  organization.  The identity of donors who desire to remain

30  anonymous shall be confidential and exempt from the provisions

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

                                  16
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  Constitution, and such anonymity shall be maintained in the

 2  auditor's report. Information received by the organization

 3  that is otherwise confidential or exempt by law shall retain

 4  such status.  Any sensitive, personal information regarding

 5  contract beneficiaries, including their identities, is exempt

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

 7  the State Constitution.

 8

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

10  directors of the direct-support organization and shall jointly

11  name three other individuals to serve as directors of the

12  organization.

13         (k)  The board may endorse insurance coverage written

14  exclusively for the purpose of protecting advance payment

15  contracts, and the purchasers or beneficiaries thereof, which

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

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

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

19  shall make advance payment contracts available for two

20  independent plans to be known as the community college plan

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

22  payment contracts available for a dormitory residence plan.

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

24  payment contract shall provide prepaid registration fees for a

25  specified number of undergraduate semester credit hours not to

26  exceed the average number of hours required for the conference

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

28  community college plan shall be based primarily on the average

29  current and projected registration fees within the State

30  Community College System and the number of years expected to

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

                                  17
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  qualified beneficiary and the exercise of the benefits

 2  provided in the plan by such beneficiary. Qualified

 3  beneficiaries shall bear the cost of any laboratory fees

 4  associated with enrollment in specific courses. Each qualified

 5  beneficiary shall be classified as a resident for tuition

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

 7  actual legal residence.

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

 9  advance payment contracts for additional fees delineated in s.

10  240.35, not to exceed the average number of hours required for

11  the conference of an associate degree, in conjunction with

12  advance payment contracts for registration fees. The cost of

13  purchasing such fees shall be based primarily on the average

14  current and projected fees within the State Community College

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

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

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

18  Community college plan contracts purchased prior to July 1,

19  1998, shall be limited to the payment of registration fees as

20  defined in subsection (2).

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

22  contract shall provide prepaid registration fees for a

23  specified number of undergraduate semester credit hours not to

24  exceed the average number of hours required for the conference

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

26  university plan shall be based primarily on the current and

27  projected registration fees within the State University System

28  and the number of years expected to elapse between the

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

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

31  beneficiary. Qualified beneficiaries shall bear the cost of

                                  18
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  any laboratory fees associated with enrollment in specific

 2  courses. Each qualified beneficiary shall be classified as a

 3  resident for tuition purposes pursuant to s. 240.1201,

 4  regardless of his or her actual legal residence.

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

 6  advance payment contracts for additional fees delineated in s.

 7  240.235(1), for a specified number of undergraduate semester

 8  credit hours not to exceed the average number of hours

 9  required for the conference of a baccalaureate degree, in

10  conjunction with advance payment contracts for registration

11  fees. Such contracts shall provide prepaid coverage for the

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

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

14  based primarily on the average current and projected cost of

15  these fees within the State University System and the number

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

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

18  benefits provided in the plan by such beneficiary. University

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

20  limited to the payment of registration fees as defined in

21  subsection (2).

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

23  payment contract may provide prepaid housing fees for a

24  maximum of 10 semesters of full-time undergraduate enrollment

25  in a state university. Dormitory residence plans shall be

26  purchased in increments of 2 semesters. The cost of

27  participation in the dormitory residence plan shall be based

28  primarily on the average current and projected housing fees

29  within the State University System and the number of years

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

31  of a qualified beneficiary and the exercise of the benefits

                                  19
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  provided in the plan by such beneficiary. Qualified

 2  beneficiaries shall have the highest priority in the

 3  assignment of housing within university residence halls.

 4  Qualified beneficiaries shall bear the cost of any additional

 5  elective charges such as laundry service or long-distance

 6  telephone service. Each state university may specify the

 7  residence halls or other university-held residences eligible

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

 9  may request immediate termination of a dormitory residence

10  contract based on a violation or multiple violations of rules

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

12  the event that sufficient housing is not available for all

13  qualified beneficiaries, the board shall refund the purchaser

14  or qualified beneficiary an amount equal to the fees charged

15  for dormitory residence during that semester. If a qualified

16  beneficiary fails to be admitted to a state university or

17  chooses to attend a community college that operates one or

18  more dormitories or residency opportunities, or has one or

19  more dormitories or residency opportunities operated by the

20  community college direct-support organization, the qualified

21  beneficiary may transfer or cause to have transferred to the

22  community college, or community college direct-support

23  organization, the fees associated with dormitory residence.

24  Dormitory fees transferred to the community college or

25  community college direct-support organization may not exceed

26  the maximum fees charged for state university dormitory

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

28  charged for community college or community college

29  direct-support organization dormitories or residency

30  opportunities, whichever is less.

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

                                  20
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  COLLEGES AND UNIVERSITIES.--

 2         (a)  A qualified beneficiary may apply a community

 3  college plan, university plan, or dormitory residence plan

 4  toward any eligible independent college or university. An

 5  independent college or university which is located and

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

 7  Commission on Colleges of the Southern Association of Colleges

 8  and Schools or the Accrediting Commission of the Association

 9  of Independent Colleges and Schools, and which confers degrees

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

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

12  transferred, to the eligible independent college or university

13  designated by the qualified beneficiary an amount not to

14  exceed the redemption value of the advance payment contract

15  within a state postsecondary institution. In the event that

16  the cost of registration or housing fees at the independent

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

18  state postsecondary institution, the amount transferred shall

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

20  transfer authorized pursuant to this paragraph shall exceed

21  the number of semester credit hours or semesters of dormitory

22  residence contracted on behalf of a qualified beneficiary.

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

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

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

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

27  accrediting association, and which confers baccalaureate

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

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

30  exceed the redemption value of the advance payment contract or

31  the original purchase price plus 5 percent compounded

                                  21
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

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

 3  housing fees charged the qualified beneficiary at the eligible

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

 5  calculated amount, the amount transferred shall not exceed the

 6  actual cost of registration or housing fees. Any remaining

 7  amount shall be transferred in subsequent semesters until the

 8  transfer value is depleted. No transfer authorized pursuant to

 9  this paragraph shall exceed the number of semester credit

10  hours or semesters of dormitory residence contracted on behalf

11  of a qualified beneficiary.

12         (11)(6)(a)  ADVANCE PAYMENT CONTRACTS; CONTENTS.--The

13  board shall construct advance payment contracts for

14  registration and may construct advance payment contracts for

15  dormitory residence as provided in accordance with the

16  provisions of this section. Advance payment contracts

17  constructed for the purposes of this section shall be exempt

18  from the provisions of chapter 517 and the Florida Insurance

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

20  Legal Affairs in the development of the advance payment

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

22  but not be limited to, the following:

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

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

25  qualified beneficiary.

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

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

28  or dates upon which each payment shall be due.

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

30  default.

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

                                  22
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  the fund.

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

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

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

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

 6  another person may be substituted as the qualified

 7  beneficiary.

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

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

10  contract may be terminated by the purchaser, the qualified

11  beneficiary, a specific designated person, or any combination

12  of these persons.

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

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

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

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

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

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

19  qualified beneficiary must claim his or her benefits through

20  the program.

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

22  be necessary or proper.

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

24  advance payment contract for registration shall include, but

25  not be limited to, the following:

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

27  of dormitory residence contracted by the purchaser.

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

29  contracted credit hours or semesters of dormitory residence

30  will be applied.

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

                                  23
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  the board to the qualified beneficiary to provide for a

 2  specified number of semester credit hours of undergraduate

 3  instruction at a state postsecondary institution, not to

 4  exceed the average number of credit hours required for the

 5  conference of the degree that corresponds to the plan

 6  purchased on behalf of the qualified beneficiary or to provide

 7  for a specified number of semesters of dormitory residence,

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

 9  required for the conference of a baccalaureate degree.

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

11  be necessary or proper.

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

13  advance payment contract for dormitory residence shall

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

15         1.  The number of semesters of dormitory residence

16  contracted by the purchaser.

17         2.  The assumption of a contractual obligation by the

18  board to the qualified beneficiary to provide for a specified

19  number of semesters of dormitory residence at a state

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

21  full-time enrollment required for the conference of a

22  baccalaureate degree.

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

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

25  contracts which have not been terminated or the benefits

26  exercised within a specified period of time shall be

27  considered terminated.  Time expended by a qualified

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

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

30  time specified pursuant to this subsection paragraph.  No

31  purchaser or qualified beneficiary whose advance payment

                                  24
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  contract is terminated pursuant to this subsection paragraph

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

 3  moneys paid by the purchaser for an advance payment contract

 4  that has been terminated in accordance with this subsection

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

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

 7  board to further the purposes of this section.

 8         (13)  REFUNDS.--

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

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

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

12  that an advance payment contract is converted from a

13  university to a community college registration plan, the

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

15  community college on behalf of the qualified beneficiary.

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

17  the following circumstances:

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

19  terms of which cover the benefits included in the advance

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

21  payment contracts shall be returned to the purchaser in

22  semester installments coinciding with the matriculation by the

23  beneficiary in amounts of either the original purchase price

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

25  state postsecondary institutions, whichever is less.

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

27  the beneficiary, moneys paid for the purchase of advance

28  payment contracts shall be returned to the purchaser together

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

30  state postsecondary institutions, whichever is less.

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

                                  25
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

 2  plan to a community college plan or a community college plus

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

 4  university plan to a community college plan, the amount

 5  refunded shall not exceed the difference between the amount

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

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

 8  the converted plan been purchased under the same payment plan

 9  at the time the original advance payment contract was

10  executed.

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

12  payment contract for any school year partially attended but

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

14  partially attended but not completed shall mean any one

15  semester whereby the student is still enrolled at the

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

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

18  complete a community college plan or university plan for

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

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

21  the fund for the remaining unattended years of the advance

22  payment contract pursuant to rules promulgated by the board.

23         (14)(f)  CONFIDENTIALITY OF ACCOUNT

24  INFORMATION.--Information that identifies the purchasers or

25  beneficiaries of any plan promulgated under this section and

26  their advance payment account activities is exempt from the

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

28  the program's records administrator to release such

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

30  which a beneficiary may enroll or is enrolled.  Community

31  colleges, colleges, and universities shall maintain such

                                  26
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

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

 3  contracts available for two independent plans to be known as

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

 5  may also make advance payment contracts available for a

 6  dormitory residence plan.

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

 8  payment contract shall provide prepaid registration fees for a

 9  specified number of undergraduate semester credit hours not to

10  exceed the average number of hours required for the conference

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

12  community college plan shall be based primarily on the average

13  current and projected registration fees within the State

14  Community College System and the number of years expected to

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

16  qualified beneficiary and the exercise of the benefits

17  provided in the plan by such beneficiary. Qualified

18  beneficiaries shall bear the cost of any laboratory fees

19  associated with enrollment in specific courses.  Each

20  qualified beneficiary shall be classified as a resident for

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

22  her actual legal residence.

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

24  contract shall provide prepaid registration fees for a

25  specified number of undergraduate semester credit hours not to

26  exceed the average number of hours required for the conference

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

28  university plan shall be based primarily on the current and

29  projected registration fees within the State University System

30  and the number of years expected to elapse between the

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

                                  27
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

 2  beneficiary.  Qualified beneficiaries shall bear the cost of

 3  any laboratory fees associated with enrollment in specific

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

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

 6  community college, the qualified beneficiary may convert the

 7  average number of semester credit hours required for the

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

 9  community college plan and may retain the remaining semester

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

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

12  semester credit hours required for the conference of an

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

14  qualified beneficiary shall be classified as a resident for

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

16  her actual legal residence.

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

18  payment contract may provide prepaid housing fees for a

19  maximum of 10 semesters of full-time undergraduate enrollment

20  in a state university. Dormitory residence plans shall be

21  purchased in increments of 2 semesters. The cost of

22  participation in the dormitory residence plan shall be based

23  primarily on the average current and projected housing fees

24  within the State University System and the number of years

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

26  of a qualified beneficiary and the exercise of the benefits

27  provided in the plan by such beneficiary.  Qualified

28  beneficiaries shall bear the cost of any additional elective

29  charges such as laundry service or long-distance telephone

30  service.  Each state university may specify the residence

31  halls or other university-held residences eligible for

                                  28
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

 2  request immediate termination of a dormitory residence

 3  contract based on a violation or multiple violations of rules

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

 5  Qualified beneficiaries shall have the highest priority in the

 6  assignment of housing within university residence halls.  In

 7  the event that sufficient housing is not available for all

 8  qualified beneficiaries, the board shall refund the purchaser

 9  or qualified beneficiary an amount equal to the fees charged

10  for dormitory residence during that semester.  If a qualified

11  beneficiary fails to be admitted to a state university or

12  chooses to attend a community college that operates one or

13  more dormitories or residency opportunities, or has one or

14  more dormitories or residency opportunities operated by the

15  community college direct-support organization, the qualified

16  beneficiary may transfer or cause to have transferred to the

17  community college, or community college direct-support

18  organization, the fees associated with dormitory residence.

19  Dormitory fees transferred to the community college or

20  community college direct-support organization may not exceed

21  the maximum fees charged for state university dormitory

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

23  charged for community college or community college

24  direct-support organization dormitories or residency

25  opportunities, whichever is less.

26         (d)  A qualified beneficiary may apply a community

27  college plan, university plan, or dormitory residence plan

28  toward any eligible independent college or university.  An

29  independent college or university which is located and

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

31  Commission on Colleges of the Southern Association of Colleges

                                  29
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  and Schools or the Accrediting Commission of the Association

 2  of Independent Colleges and Schools, and which confers degrees

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

 4  application.  The board shall transfer or cause to have

 5  transferred to the eligible independent college or university

 6  designated by the qualified beneficiary an amount not to

 7  exceed the redemption value of the advance payment contract

 8  within a state postsecondary institution.  In the event that

 9  the cost of registration or housing fees at the independent

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

11  state postsecondary institution, the amount transferred shall

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

13  No transfer authorized pursuant to this paragraph shall exceed

14  the number of semester credit hours or semesters of dormitory

15  residence contracted on behalf of a qualified beneficiary.

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

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

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

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

20  accrediting association, and which confers baccalaureate

21  degrees shall be eligible for such application.  The board

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

23  exceed the redemption value of the advance payment contract or

24  the original purchase price plus 5 percent compounded

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

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

27  housing fees charged the qualified beneficiary at the eligible

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

29  calculated amount, the amount transferred shall not exceed the

30  actual cost of registration or housing fees.  Any remaining

31  amount shall be transferred in subsequent semesters until the

                                  30
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  transfer value is depleted.  No transfer authorized pursuant

 2  to this paragraph shall exceed the number of semester credit

 3  hours or semesters of dormitory residence contracted on behalf

 4  of a qualified beneficiary.

 5         (8)  The board shall solicit proposals for the

 6  operation of the Florida Prepaid Postsecondary Education

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

 8  board shall contract for the services of a records

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

10  product providers.

11         (a)  The records administrator shall be the entity

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

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

14  selecting a records administrator shall be to provide all

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

16  beneficially administered postsecondary education expense plan

17  possible, to allow all qualified firms interested in providing

18  such services equal consideration, and to provide such

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

20  lowest cost possible. Evaluations of proposals submitted

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

22  to, the following criteria:

23         1.  Fees and other costs charged to purchasers that

24  affect account values or operational costs related to the

25  program.

26         2.  Past experience in records administration and

27  current ability to provide timely and accurate service in the

28  areas of records administration, audit and reconciliation,

29  plan communication, participant service, and complaint

30  resolution.

31         3.  Sufficient staff and computer capability for the

                                  31
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  scope and level of service expected by the board.

 2         4.  Financial history and current financial strength

 3  and capital adequacy to provide administrative services

 4  required by the board.

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

 6  designated by the board to select and supervise investment

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

 8  selecting a trustee services firm shall be to obtain the

 9  highest standards of professional trustee services, to allow

10  all qualified firms interested in providing such services

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

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

13  The trustee services firm shall agree to meet the obligations

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

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

16  imprudent selection or supervision of investment programs by

17  such firm.  Evaluations of proposals submitted pursuant to

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

19  following criteria:

20         1.  Adequacy of trustee services for supervision and

21  management of the program, including current operations and

22  staff organization and commitment of management to the

23  proposal.

24         2.  Capability to execute program responsibilities

25  within time and regulatory constraints.

26         3.  Past experience in trustee services and current

27  ability to maintain regular and continuous interactions with

28  the board, records administrator, and product provider.

29         4.  The minimum purchaser participation assumed within

30  the proposal and any additional requirements of purchasers.

31         5.  Adequacy of technical assistance and services

                                  32
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  proposed for staff.

 2         6.  Adequacy of a management system for evaluating and

 3  improving overall trustee services to the program.

 4         7.  Adequacy of facilities, equipment, and electronic

 5  data processing services.

 6         8.  Detailed projections of administrative costs,

 7  including the amount and type of insurance coverage, and

 8  detailed projections of total costs.

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

10  designated by the board to develop investment portfolios on

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

12  Product providers shall be limited to authorized insurers as

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

14  associations as defined in s. 665.012, authorized Securities

15  and Exchange Commission investment advisers, and investment

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

17  All product providers shall have their principal place of

18  business and corporate charter located and registered in the

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

20  to meet the obligations of the board to qualified

21  beneficiaries if moneys in the fund fail to offset the

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

23  such provider. Each authorized insurer shall evidence superior

24  performance overall on an acceptable level of surety in

25  meeting its obligations to its policyholders and other

26  contractual obligations.  Only qualified public depositories

27  approved by the State Insurance Commissioner and Treasurer

28  shall be eligible for board consideration.  Each investment

29  company shall provide investment plans as specified within the

30  request for proposals.

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

                                  33
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  provider company shall be to provide all purchasers with the

 2  most secure, well-diversified, and beneficially administered

 3  postsecondary education expense plan possible, to allow all

 4  qualified firms interested in providing such services equal

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

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

 7  Evaluations of proposals submitted pursuant to this paragraph

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

 9         a.  Fees and other costs charged to purchasers that

10  affect account values or operational costs related to the

11  program.

12         b.  Past and current investment performance, including

13  investment and interest rate history, guaranteed minimum rates

14  of interest, consistency of investment performance, and any

15  terms and conditions under which moneys are held.

16         c.  Past experience and ability to provide timely and

17  accurate service in the areas of records administration,

18  benefit payments, investment management, and complaint

19  resolution.

20         d.  Financial history and current financial strength

21  and capital adequacy to provide products, including operating

22  procedures and other methods of protecting program assets.

23         (15)(9)  OBLIGATIONS OF BOARD; PAYMENT.--The state

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

25  beneficiaries if moneys in the fund fail to offset the

26  obligations of the board. The Legislature shall appropriate to

27  the Florida Prepaid College Postsecondary Education Expense

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

29  board to qualified beneficiaries.

30         (16)(10)  ASSETS OF THE FUND; EXPENDITURE

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

                                  34
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

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

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

 4  This subsection shall not be construed to prohibit the board

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

 6  other obligations of the state or an agency or instrumentality

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

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

 9  priority:

10         (a)  To make payments to state postsecondary

11  institutions on behalf of qualified beneficiaries.

12         (b)  To make refunds upon termination of advance

13  payment contracts.

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

15  operations.

16         (17)(11)  EXEMPTION FROM CLAIMS OF CREDITORS.--Moneys

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

18  qualified beneficiary of an advance payment contract made

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

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

21  creditors of the purchaser or the beneficiary. Neither moneys

22  paid into the program nor benefits accrued through the program

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

24         (18)(12)  PAYROLL DEDUCTION AUTHORITY.--The state or

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

26  subdivision may, by contract or collective bargaining

27  agreement, agree with any employee to remit payments toward

28  advance payment contracts through payroll deductions made by

29  the appropriate officer or officers of the state, state

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

31  payments shall be held and administered in accordance with

                                  35
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  this section.

 2         (19)(13)  DISCLAIMER.--Nothing in this section shall be

 3  construed as a promise or guarantee that a qualified

 4  beneficiary will be admitted to a state postsecondary

 5  institution or to a particular state postsecondary

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

 7  postsecondary institution after admission, or will be

 8  graduated from a state postsecondary institution.

 9         (20)(14)  PROGRAM TERMINATION.--In the event that the

10  state determines the program to be financially infeasible, the

11  state may discontinue the provision of the program.  Any

12  qualified beneficiary who has been accepted by and is enrolled

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

14  college or university or state postsecondary institution shall

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

16  she has contracted.  All other contract holders shall receive

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

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

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

20  interest rates for savings accounts provided by banks and

21  savings and loan associations.

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

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

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

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

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

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

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

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

30  available to purchasers of advance payment contracts. The

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

                                  36
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





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

 2  advance payment contract sales information, including

 3  projected postsecondary enrollments of qualified

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

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

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

 7         (a)  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

                                  37
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

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

 8  shall be directors of the direct-support organization and

 9  shall jointly name three other individuals to serve as

10  directors of the organization.

11         Section 49.  Section 222.22, Florida Statutes, is

12  amended to read:

13         222.22  Exemption of moneys in the Prepaid

14  Postsecondary Education Expense Trust Fund from legal

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

16  College Postsecondary Education Expense Trust Fund by or on

17  behalf of a purchaser or qualified beneficiary pursuant to an

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

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

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

21  creditor of the purchaser or beneficiary of such advance

22  payment contract.

23         Section 50.  Subsection (2) of section 732.402, Florida

24  Statutes, is amended to read:

25         732.402  Exempt property.--

26         (2)  Exempt property shall consist of:

27         (a)  Household furniture, furnishings, and appliances

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

29  $10,000 as of the date of death.; and

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

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

                                  38
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  immediate family as their personal automobiles.

 2         (c)  Florida Prepaid College Program contracts

 3  purchased pursuant to s. 240.551.

 4         Section 51.  For the purpose of incorporating the

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

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

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

 8         731.201  General definitions.--Subject to additional

 9  definitions in subsequent chapters that are applicable to

10  specific chapters or parts, and unless the context otherwise

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

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

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

14         735.301  Disposition without administration.--

15         (1)  No administration shall be required or formal

16  proceedings instituted upon the estate of a decedent leaving

17  only personal property exempt under the provisions of s.

18  732.402, personal property exempt from the claims of creditors

19  under the Constitution of Florida, and nonexempt personal

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

21  amount of preferred funeral expenses and reasonable and

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

23  the last illness.

24

25  (Redesignate subsequent sections.)

26

27

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

29  And the title is amended as follows:

30         On page 69, line 24, after the semicolon,

31

                                  39
    11:48 AM   04/30/98                               h4259c-07j01




                                                  SENATE AMENDMENT

    Bill No. HB 4259, 1st Eng.

    Amendment No.    





 1  insert:

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

 3         Prepaid Postsecondary Education Expense

 4         Program, Board, and Trust Fund the Florida

 5         Prepaid College Program, Board, and Trust Fund,

 6         respectively; reordering provisions and

 7         providing technical revisions; deleting

 8         obsolete provisions; conforming

 9         cross-references; permitting soliciting and

10         contracting for records administration

11         services; providing for the inclusion of

12         certain fees within advance payment contracts

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

14         conforming provisions; amending s. 732.402,

15         F.S.; exempting Florida Prepaid College Program

16         contracts from the probate claims of creditors;

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

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

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

20

21

22

23

24

25

26

27

28

29

30

31

                                  40
    11:48 AM   04/30/98                               h4259c-07j01