CODING: Words stricken are deletions; words underlined are additions.
SENATE AMENDMENT
Bill No. HB 4259, 1st Eng.
Amendment No.
CHAMBER ACTION
Senate House
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11 Senator Clary moved the following amendment to amendment
12 (640144):
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14 Senate Amendment (with title amendment)
15 On page 66, between lines 6 and 7,
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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
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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.
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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
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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.
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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
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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
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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.
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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.
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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.
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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;
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