Senate Bill sb1162e1

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    SB 1162                                        First Engrossed



  1                      A bill to be entitled

  2         An act relating to the Florida Prepaid College

  3         Program; amending s. 240.551, F.S.; revising

  4         the accreditation requirements for independent

  5         college or university eligibility purposes;

  6         clarifying that the amount of benefits

  7         transferred to an eligible independent college

  8         or university, an eligible out-of-state college

  9         or university, an applied technology diploma

10         program or vocational certificate program, or

11         refunded to a purchaser shall not exceed the

12         redemption value of the advance payment

13         contract at a state postsecondary institution;

14         authorizing the purchase of advance payment

15         contracts for scholarships by nonprofit

16         organizations; providing for the appointment of

17         additional members as directors of the

18         direct-support organization; providing an

19         effective date.

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21  Be It Enacted by the Legislature of the State of Florida:

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23         Section 1.  Subsection (10), paragraph (e) of

24  subsection (11), paragraphs (b) and (c) of subsection (13),

25  and paragraph (e) of subsection (22) of section 240.551,

26  Florida Statutes, are amended, and subsection (23) is added to

27  that section, to read:

28         240.551  Florida Prepaid College Program.--

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

30  COLLEGES AND UNIVERSITIES AND TO AREA TECHNICAL CENTERS.--A

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    SB 1162                                        First Engrossed



  1  qualified beneficiary may apply the benefits of an advance

  2  payment contract toward:

  3         (a)  Any eligible independent college or university. An

  4  independent college or university that is located and

  5  chartered in Florida, that is not for profit, that is

  6  accredited by the Commission on Colleges of the Southern

  7  Association of Colleges and Schools or the Accrediting Council

  8  for Commission of the Association of Independent Colleges and

  9  Schools, and that confers degrees as defined in s. 246.021, is

10  eligible for such application. The board shall transfer, or

11  cause to have transferred, to the eligible independent college

12  or university designated by the qualified beneficiary an

13  amount not to exceed the redemption value of the advance

14  payment contract at within a state postsecondary institution.

15  If the cost of registration or housing fees at the independent

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

17  state postsecondary institution, the amount transferred shall

18  not exceed the actual cost of registration or housing fees. A

19  transfer authorized under this paragraph may not exceed the

20  number of semester credit hours or semesters of dormitory

21  residence contracted on behalf of a qualified beneficiary.

22         (b)  An eligible out-of-state college or university. An

23  out-of-state college or university that is not for profit and

24  is accredited by a regional accrediting association, and that

25  confers degrees, is eligible for such application. The board

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

27  exceed the redemption value of the advance payment contract at

28  a state postsecondary institution or the original purchase

29  price plus 5 percent compounded interest, whichever is less,

30  after assessment of a reasonable transfer fee. If the cost of

31  registration or housing fees charged the qualified beneficiary


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    SB 1162                                        First Engrossed



  1  at the eligible out-of-state college or university is less

  2  than this calculated amount, the amount transferred shall not

  3  exceed the actual cost of registration or housing fees. Any

  4  remaining amount shall be transferred in subsequent semesters

  5  until the transfer value is depleted. A transfer authorized

  6  under this paragraph may not exceed the number of semester

  7  credit hours or semesters of dormitory residence contracted on

  8  behalf of a qualified beneficiary.

  9         (c)  An applied technology diploma program or

10  vocational certificate program conducted by a community

11  college listed in s. 240.3031 or an area technical center

12  operated by a district school board. The board shall transfer

13  or cause to be transferred to the community college or area

14  technical center designated by the qualified beneficiary an

15  amount not to exceed the redemption value of the advance

16  payment contract at within a state postsecondary institution.

17  If the cost of the fees charged by the college or center, as

18  authorized in s. 239.117, is less than the corresponding fees

19  at a state postsecondary institution, the amount transferred

20  may not exceed the actual cost of the fees. A transfer

21  authorized under this paragraph may not exceed the number of

22  semester credit hours contracted on behalf of a qualified

23  beneficiary.

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25  Notwithstanding any other provision in this section, an

26  institution must be an "eligible educational institution"

27  under s. 529 of the Internal Revenue Code to be eligible for

28  the transfer of advance payment contract benefits.

29         (11)  ADVANCE PAYMENT CONTRACTS; CONTENTS.--The board

30  shall construct advance payment contracts for registration and

31  may construct advance payment contracts for dormitory


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    SB 1162                                        First Engrossed



  1  residence as provided in this section. Advance payment

  2  contracts constructed for the purposes of this section shall

  3  be exempt from chapter 517 and the Florida Insurance Code.

  4  Such contracts shall include, but not be limited to, the

  5  following:

  6         (e)  Except for an advance payment contract entered

  7  into pursuant to subsection (22) or subsection (23), the name

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

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

10  another person may be substituted as the qualified

11  beneficiary.

12         (13)  REFUNDS.--

13         (b)  If the beneficiary is awarded a scholarship, the

14  terms of which cover the benefits included in the advance

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

16  payment contracts shall be refunded returned to the purchaser

17  in semester installments coinciding with the matriculation by

18  the beneficiary in an amount which, in total, does not exceed

19  the redemption value of the advance payment contract at a

20  state postsecondary institution amounts of either the original

21  purchase price plus 5 percent compounded interest, or the

22  current rates at state postsecondary institutions, whichever

23  is less.

24         (c)  In the event of the death or total disability of

25  the beneficiary, moneys paid for the purchase of advance

26  payment contracts shall be refunded returned to the purchaser

27  in an amount not to exceed the redemption value of the advance

28  payment contract at a state postsecondary institution together

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

30  state postsecondary institutions, whichever is less.

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


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    SB 1162                                        First Engrossed



  1         (e)  The chair and the executive director of the board

  2  shall be directors of the direct-support organization and

  3  shall jointly name, at a minimum, three other individuals to

  4  serve as directors of the organization.

  5         (23)  SCHOLARSHIPS.--A nonprofit organization described

  6  in s. 501 (c)(3) of the United States Internal Revenue Code

  7  and exempt from taxation under s. 501(a) of the United States

  8  Internal Revenue Code may purchase advance payment contracts

  9  for a scholarship program that has been approved by the board

10  and is operated by the purchasing organization.

11         Section 2.  This act shall take effect July 1, 2001.

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