Florida Statutes

Chapter 1009, Part IV - PREPAID COLLEGE BOARD PROGRAMS, Florida Statutes (2008)

1009.97 General Provisions

   (1) Legislative Finding

   (2) Legislative Intent

   (3) Definitions

1009.971 Florida Prepaid College Board

   (1) Creation

   (2) Membership

   (3) Elections; Meetings

   (4) Powers and Duties

   (5) Contractual Services

   (6) Qualified Tuition Program Status

1009.972 Florida Prepaid College Trust Fund

1009.973 Comprehensive Investment Plans

1009.974 Exemption from Claims of Creditors

1009.975 Payroll Deduction Authority

1009.976 Annual Report

1009.98 Florida Prepaid College Program (The “Florida Prepaid College Plan”)

(2) Prepaid College Plans

(3) Transfer of Benefits to Private, Out-of-State Colleges and Area Technical Centers

(4) Advance Payment Contracts

(6) Confidentiality of Account Information

(7) Obligations of Board

(8) Program Termination

(9) Scholarships

(10) Payments On Behalf of Qualified Beneficiaries

1009.981 Florida College Savings Program (The “Florida College Investment Plan”)

(1) Florida College Savings Program

(2) Participation Agreements

(3) Distributions for Qualified Higher Education Expenses

(5) Material Misrepresentation; Penalty

(6) Confidentiality of Account Information

(7) Obligations of Board

(8) Program Termination

(9) State Pledge

1009.982 Disclaimer

1009.983 Direct-Support Organization; Authority

1009.984 Florida Prepaid Tuition Scholarship Program

1009.97General Provisions.--

(1) LEGISLATIVE FINDING; EDUCATIONAL OPPORTUNITY.-- The Legislature recognizes that educational opportunity at the postsecondary level is a critical state interest and is best ensured through the provision of postsecondary institutions that are geographically and financially accessible, that affordability and accessibility of higher education are essential to the welfare and well-being of the residents of the state and are a critical state interest, and that promoting and enhancing financial access to postsecondary institutions serve a legitimate public purpose.

(2) LEGISLATIVE INTENT.-- It is the intent of the Legislature that a prepaid program be established through which many of the costs associated with postsecondary attendance may be paid in advance and fixed at a guaranteed level for the duration of undergraduate enrollment and that this program fosters timely financial planning for postsecondary attendance and to encourage employer participation in such planning through program contributions on behalf of employees and the dependents of employees. It is further the intent of the Legislature that a savings program be established as a supplement and alternative to the prepaid program to allow persons to make contributions to a trust account to meet some or all of the qualified higher education expenses of a designated beneficiary, consistent with federal law authorizing such programs, but without a guarantee by the state that such contributions, together with the investment return on such contributions, if any, will be adequate to pay for qualified higher education expenses, to enable participants to save for qualified higher education expenses, and to provide a choice to persons who determine that the overall educational needs of their families are best suited to a savings program or who wish to save to meet postsecondary educational needs beyond the traditional 4-year curriculum. Finally, the Legislature intends that the prepaid program and the savings program be conducted in a manner to maximize program efficiency and effectiveness.

(3) DEFINITIONS.-- As used in ss. 1009.97-1009.984, the term:
(a) "Advance payment contract" means a contract entered into by the board and a purchaser pursuant to s. 1009.98.
(b) "Board" means the Florida Prepaid College Board.
(c) "Trust fund" means the Florida Prepaid College Trust Fund.
(d) "Prepaid program" means the Stanley G. Tate Florida Prepaid College Program established pursuant to s. 1009.98.
(e) "Purchaser" means a person who makes or is obligated to make advance registration or dormitory residence payments in accordance with an advance payment contract.
(f) "Qualified beneficiary" means:
1. A resident of this state at the time a purchaser enters into an advance payment contract on behalf of the resident;
2. A nonresident who is the child of a noncustodial parent who is a resident of this state at the time that such parent enters into an advance payment contract on behalf of the child; or
3. For purposes of advance payment contracts entered into pursuant to s. 1009.983, a graduate of an accredited high school in this state who is a resident of this state at the time he or she is designated to receive the benefits of the advance payment contract.
(g) "Registration fee" means tuition fee, financial aid fee, building fee, and Capital Improvement Trust Fund fee.
(h) "State postsecondary institution" means any public community college or state university.
(i) "Benefactor" means any person making a deposit, payment, contribution, gift, or other expenditure into the savings program.
(j) "Designated beneficiary" means:
1. Any individual designated in the participation agreement;
2. Any individual defined in s. 152(a)(1)-(8) of the Internal Revenue Code; or
3. Any individual receiving a scholarship from interests in the program purchased by a state or local government or an organization described in s. 501(c)(3) of the Internal Revenue Code.
(k) "Eligible educational institution" means an institution of higher education that qualifies under s. 529 of the Internal Revenue Code as an eligible educational institution.
(l) "Internal Revenue Code" means the Internal Revenue Code of 1986, as defined in s. 220.03(1), and regulations adopted pursuant thereto.
(m) "Participation agreement" means an agreement between the board and a benefactor for participation in the savings program for a designated beneficiary.
(n) "Savings program" means the Florida College Savings Program established pursuant to s. 1009.981.
(o) "Qualified higher education expenses" means higher education expenses permitted under s. 529 of the Internal Revenue Code and required for the enrollment or attendance of a designated beneficiary at an eligible educational institution, including undergraduate and graduate schools, and any other higher education expenses that are permitted under s. 529 of the Internal Revenue Code.
(p) "Prepaid fund" means the fund within the trust fund into which moneys belonging to the prepaid program are deposited and held.
(q) "Savings fund" means the fund within the trust fund into which moneys belonging to the savings program are deposited and held.

History.--s. 481, ch. 2002-387; s. 1, ch. 2006-303.

1009.971 Florida Prepaid College Board.--

(1) FLORIDA PREPAID COLLEGE BOARD; CREATION.--The Florida Prepaid College Board is hereby created as a body corporate with all the powers of a body corporate for the purposes delineated in this section. The board shall administer the prepaid program and the savings program, and shall perform essential governmental functions as provided in ss. 1009.97-1009.984. For the purposes of s. 6, Art. IV of the State Constitution, the board shall be assigned to and administratively housed within the State Board of Administration, but it shall independently exercise the powers and duties specified in ss. 1009.97-1009.984.

(2) FLORIDA PREPAID COLLEGE BOARD; MEMBERSHIP.--The board shall consist of seven members to be composed of the Attorney General, the Chief Financial Officer, the Chancellor of the State University System, the Deputy Commissioner of Community Colleges, and three members appointed by the Governor and subject to confirmation by the Senate. Each member appointed by the Governor shall possess knowledge, skill, and experience in the areas of accounting, actuary, risk management, or investment management. Each member of the board not appointed by the Governor may name a designee to serve on the board on behalf of the member; however, any designee so named shall meet the qualifications required of gubernatorial appointees to the board. Members appointed by the Governor shall serve terms of 3 years. Any person appointed to fill a vacancy on the board shall be appointed in a like manner and shall serve for only the unexpired term. Any member shall be eligible for reappointment and shall serve until a successor qualifies. Members of the board shall serve without compensation but shall be reimbursed for per diem and travel in accordance with s. 112.061. Each member of the board shall file a full and public disclosure of his or her financial interests pursuant to s. 8, Art. II of the State Constitution and corresponding statute.

(3) FLORIDA PREPAID COLLEGE BOARD; ELECTIONS; MEETINGS.--The board shall annually elect a board member to serve as chair and a board member to serve as vice chair and shall designate a secretary-treasurer who need not be a member of the board. The secretary-treasurer shall keep a record of the proceedings of the board and shall be the custodian of all printed material filed with or by the board and of its official seal. Notwithstanding the existence of vacancies on the board, a majority of the members shall constitute a quorum. The board shall take no official action in the absence of a quorum. The board shall meet, at a minimum, on a quarterly basis at the call of the chair.

(4) FLORIDA PREPAID COLLEGE BOARD; POWERS AND DUTIES.--The board shall have the powers and duties necessary or proper to carry out the provisions of ss. 1009.97-1009.984, including, but not limited to, the power and duty to:
(a) Appoint an executive director to serve as the chief administrative and operational officer of the board and to perform other duties assigned to him or her by the board.
(b) Adopt an official seal and rules.
(c) Sue and be sued.
(d) Make and execute contracts and other necessary instruments.
(e) Establish agreements or other transactions with federal, state, and local agencies, including state universities and community colleges.
(f) Administer the trust fund in a manner that is sufficiently actuarially sound to defray the obligations of the prepaid program and the savings program, considering the separate purposes and objectives of each program. The board shall annually evaluate or cause to be evaluated the actuarial soundness of the prepaid fund. If the board perceives a need for additional assets in order to preserve actuarial soundness of the prepaid program, the board may adjust the terms of subsequent advance payment contracts to ensure such soundness.
(g) Invest funds not required for immediate disbursement.
(h) Appear in its own behalf before boards, commissions, or other governmental agencies.
(i) Hold, buy, and sell any instruments, obligations, securities, and property determined appropriate by the board.
(j) Require a reasonable length of state residence for qualified beneficiaries.
(k) Segregate contributions and payments to the trust fund into the appropriate fund.
(l) Procure and contract for goods and services, employ personnel, and engage the services of private consultants, actuaries, managers, legal counsel, and auditors in a manner determined to be necessary and appropriate by the board.
(m) Solicit and accept gifts, grants, loans, and other aids from any source or participate in any other way in any government program to carry out the purposes of ss. 1009.97-1009.984.
(n) Require and collect administrative fees and charges in connection with any transaction and impose reasonable penalties, including default, for delinquent payments or for entering into an advance payment contract or a participation agreement on a fraudulent basis.
(o) Procure insurance against any loss in connection with the property, assets, and activities of the trust fund or the board.
(p) Impose reasonable time limits on use of the benefits provided by the prepaid program or savings program. However, any such limitations shall be specified within the advance payment contract or the participation agreement, respectively.
(q) Delineate the terms and conditions under which payments may be withdrawn from the trust fund and impose reasonable fees and charges for such withdrawal. Such terms and conditions shall be specified within the advance payment contract or the participation agreement.
(r) Provide for the receipt of contributions in lump sums or installment payments.
(s) Require that purchasers of advance payment contracts or benefactors of participation agreements verify, under oath, any requests for contract conversions, substitutions, transfers, cancellations, refund requests, or contract changes of any nature. Verification shall be accomplished as authorized and provided for in s. 92.525(1)(a).
(t) Delegate responsibility for administration of one or both of the comprehensive investment plans required in s. 1009.973 to persons the board determines to be qualified. Such persons shall be compensated by the board.
(u) Endorse insurance coverage written exclusively for the purpose of protecting advance payment contracts, and participation agreements, and the purchasers, benefactors, and beneficiaries thereof, including group life policies and group disability policies, which are exempt from the provisions of part V of chapter 627.
(v) Form strategic alliances with public and private entities to provide benefits to the prepaid program, savings program, and participants of either or both programs.
(w) Solicit proposals and contract, pursuant to s. 287.057, for the marketing of the prepaid program or the savings program, or both together. Any materials produced for the purpose of marketing the prepaid program or the savings program shall be submitted to the board for review. No such materials shall be made available to the public before the materials are approved by the board. Any educational institution may distribute marketing materials produced for the prepaid program or the savings program; however, all such materials shall be approved by the board prior to distribution. Neither the state nor the board shall be liable for misrepresentation of the prepaid program or the savings program by a marketing agent.
(x) Establish other policies, procedures, and criteria to implement and administer the provisions of ss. 1009.97-1009.984.
(y) Adopt procedures to govern contract dispute proceedings between the board and its vendors.

(5) FLORIDA PREPAID COLLEGE BOARD; CONTRACTUAL SERVICES.--The board shall solicit proposals and contract, pursuant to s. 287.057, for:
(a) The services of records administrators.
(b) Investment consultants to review the performance of the board's investment managers and advise the board on investment management and performance and investment policy, including the contents of the comprehensive investment plans.
(c) Trustee services firms to provide trustee and related services to the board. The trustee services firm shall agree to meet the obligations of the board to qualified beneficiaries if moneys in the fund fail to offset the obligations of the board as a result of imprudent selection or supervision of investment programs by such firm.
(d) Investment managers to provide investment portfolios for the prepaid program or the savings program. Investment managers shall be limited to authorized insurers as defined in s. 624.09, banks as defined in s. 658.12, associations as defined in s. 665.012, authorized Securities and Exchange Commission investment advisers, and investment companies as defined in the Investment Company Act of 1940. All investment managers shall have their principal place of business and corporate charter located and registered in the United States. In addition, each investment manager shall agree to meet the obligations of the board to qualified beneficiaries if moneys in the fund fail to offset the obligations of the board as a result of imprudent investing by such provider. Each authorized insurer shall evidence superior performance overall on an acceptable level of surety in meeting its obligations to its policyholders and other contractual obligations. Only qualified public depositories approved by the Chief Financial Officer shall be eligible for board consideration. Each investment company shall provide investment plans as specified within the request for proposals.

The goals of the board in procuring such services shall be to provide all purchasers and benefactors with the most secure, well-diversified, and beneficially administered prepaid program or savings program possible, to allow all qualified firms interested in providing such services equal consideration, and to provide such services to the state at no cost and to the purchasers and benefactors at the lowest cost possible. Evaluations of proposals submitted pursuant to this subsection shall include, but not be limited to, fees and other costs that are charged to purchasers or benefactors that affect account values, or that impact the operational costs of the prepaid program or the savings program; past experience and past performance in providing the required services; financial history and current financial strength and capital adequacy to provide the required services; and capabilities and experience of the proposed personnel that will provide the required services.

(6) QUALIFIED TUITION PROGRAM STATUS.--Notwithstanding any other provision of ss. 1009.97-1009.984, the board may adopt rules necessary for the prepaid program and the savings program each to retain its status as a "qualified tuition program" in order to maintain its tax-exempt status or other similar status of the program, purchasers, and qualified beneficiaries under the Internal Revenue Code. The board shall inform participants in the prepaid program and the savings program of changes to the tax or securities status of advance purchase contracts and participation agreements.

History.--s. 482, ch. 2002-387; s. 1964, ch. 2003-261; s. 141, ch. 2007-217.

1009.972 Florida Prepaid College Trust Fund.--

(1) There is created within the State Board of Administration the Florida Prepaid College Trust Fund. The trust fund shall be segregated into two separate funds, the prepaid fund and the savings fund.
(2) The prepaid fund shall consist of state appropriations, moneys acquired from other governmental or private sources for the prepaid program, and moneys remitted in accordance with advance payment contracts. Dividends, interest, and gains accruing to the prepaid fund shall increase the total funds available for the prepaid program. If dividends, interest, and gains for the prepaid fund exceed the amount necessary for program administration and disbursements, the board may designate an additional percentage of the prepaid fund to serve as a contingency fund.
(3) The savings fund shall consist of appropriations, moneys acquired from other governmental or private sources for the savings program, and moneys remitted in accordance with participation agreements. The amounts on deposit in the savings fund shall remain therein and shall be available solely for carrying out the purposes of the savings program.
(4) Any balance contained within the trust fund, and within each fund in the trust fund, at the end of a fiscal year shall remain therein and shall be available for carrying out the purposes of each respective program and the direct-support organization established pursuant to s. 1009.983. Moneys contained within the trust fund shall be exempt from the investment requirements of s. 17.57. All funds deposited in the prepaid fund may be invested pursuant to s. 215.47. Any funds of a direct-support organization created pursuant to s. 1009.983 shall be exempt from the provisions of this section.
(5) Notwithstanding chapter 717, funds associated with terminated advance payment contracts pursuant to s. 1009.98(4)(k) and canceled contracts for which no refunds have been claimed shall be retained by the board. The board shall establish procedures for notifying purchasers who subsequently cancel their advance payment contracts of any unclaimed refund and shall establish a time period after which no refund may be claimed by a purchaser who canceled a contract. The board may transfer funds retained from such terminated advance payment contracts and canceled contracts to the Florida Prepaid Tuition Scholarship Program to provide matching funds for prepaid tuition scholarships for economically disadvantaged youth who remain drug free and crime free. In addition, such funds may be used for any other scholarship programs approved by the board under s. 1009.983(8)(b), provided that any matching funds are obtained solely from the private sector.
((6) The assets of the prepaid fund and the savings fund shall be maintained, invested, and expended solely for the purposes of the prepaid program and the savings program, respectively, and shall not be loaned, transferred, or otherwise used by the state for any purpose other than the purposes of ss. 1009.97-1009.984. This subsection shall not be construed to prohibit the board from investing in, by purchase or otherwise, bonds, notes, or other obligations of the state or an agency or instrumentality of the state. Unless otherwise specified by the board, assets of the prepaid fund and the savings fund shall be expended in the following order of priority:
(a) To make payments to state postsecondary institutions on behalf of qualified beneficiaries or designated beneficiaries.
(b) To make refunds upon termination of advance payment contracts or participation agreements.
(c) To pay the costs of administration and operations for the prepaid program and the savings program.

History.--s. 483, ch. 2002-387; s. 1965, ch. 2003-261; s. 2, ch. 2006-303.

1009.973 Comprehensive investment plans.--
The Florida Prepaid College Board shall establish separate comprehensive investment plans for the prepaid program and for the savings program, each subject to the approval of the State Board of Administration. Each comprehensive investment plan shall specify the investment policies to be utilized by the board in its administration of each respective program. The board may place assets of each program in investment products pursuant to the comprehensive investment plan for each respective program and in such proportions as may be designated or approved under the plan for each respective program. Such products shall be underwritten and offered in compliance with the applicable federal and state laws, regulations, and rules by persons authorized by applicable federal and state authorities. A purchaser may not direct the investment of his or her contribution to the prepaid program. A benefactor or designated beneficiary may not direct the investment of any contributions to the savings program other than the specific fund options provided by the board, if any. Board members and employees of the board are not prohibited from purchasing advance payment contracts or entering into participation agreements by virtue of their fiduciary responsibilities as members of the board or official duties as employees of the board.

History.--s. 484, ch. 2002-387.

1009.974 Exemption from claims of creditors.--
Moneys paid into or out of the trust fund by or on behalf of a purchaser or qualified beneficiary of an advance payment contract or benefactor or designated beneficiary of a participation agreement are exempt, as provided by s. 222.22, from all claims of creditors of the purchaser or the qualified beneficiary of an advance payment contract or the benefactor or designated beneficiary of a participation agreement, respectively, provided that the advance payment contract or participation agreement has not been terminated. Neither moneys paid into the prepaid program or savings program nor benefits accrued through the prepaid program or savings program may be pledged for the purpose of securing a loan.

History.--s. 485, ch. 2002-387.

1009.975 Payroll deduction authority.--
The state or any state agency, county, municipality, or other political subdivision may, by contract or collective bargaining agreement, agree with any employee to remit payments toward advance payment contracts or participation agreements through payroll deductions made by the appropriate officer or officers of the state, state agency, county, municipality, or political subdivision. Such payments shall be held and administered in accordance with ss. 1009.97-1009.984.

History.--s. 486, ch. 2002-387.

1009.976 Annual report.--
On or before March 31 of each year, the Florida Prepaid College Board shall prepare or cause to be prepared separate reports setting forth in appropriate detail an accounting of the prepaid program and the savings program which include a description of the financial condition of each respective program at the close of the fiscal year. The board shall submit copies of the reports to the Governor, the President of the Senate, the Speaker of the House of Representatives, and the minority leaders of the House and Senate and shall make the report for the prepaid program available to each purchaser and the report for the savings program available to each benefactor and designated beneficiary. The accounts of the fund for the prepaid program and the savings program shall be subject to annual audits by the Auditor General.

History.-- s. 487, ch. 2002-387.

1009.98 Stanley G. Tate Florida Prepaid College Program.--

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

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

(a)1. Through the community college plan, the advance payment contract may provide prepaid registration fees for a specified number of undergraduate semester credit hours not to exceed the average number of hours required for the conference of an associate degree. Qualified beneficiaries shall bear the cost of any laboratory fees associated with enrollment in specific courses. Each qualified beneficiary shall be classified as a resident for tuition purposes, pursuant to s. 1009.21, regardless of his or her actual legal residence.
2. Effective July 1, 1998, the board may provide advance payment contracts for additional fees delineated in s. 1009.23, not to exceed the average number of hours required for the conference of an associate degree, in conjunction with advance payment contracts for registration fees. Community college plan contracts purchased prior to July 1, 1998, shall be limited to the payment of registration fees as defined in s. 1009.97.
3. Effective July 1, 2009, the board may offer an advance payment contract for the community college plan covering prepaid registration fees and the fees authorized in s.1009.23. Such a contract may be offered in specific increments for use toward an associate degree. The total number of hours purchased for a qualified beneficiary may not exceed the average number of hours required for the conference of an associate degree.

(b)1. Through the university plan, the advance payment contract may provide prepaid registration fees for a specified number of undergraduate semester credit hours not to exceed the average number of hours required for the conference of a baccalaureate degree. Qualified beneficiaries shall bear the cost of any laboratory fees associated with enrollment in specific courses. Each qualified beneficiary shall be classified as a resident for tuition purposes pursuant to s. 1009.21, regardless of his or her actual legal residence.
2. Effective July 1, 1998, the board may provide advance payment contracts for additional fees delineated in s. 1009.24(9)-(12), for a specified number of undergraduate semester credit hours not to exceed the average number of hours required for the conference of a baccalaureate degree, in conjunction with advance payment contracts for registration fees. Such contracts shall provide prepaid coverage for the sum of such fees, to a maximum of 45 percent of the cost of registration fees. University plan contracts purchased prior to July 1, 1998, shall be limited to the payment of registration fees as defined in s. 1009.97.
3. Effective July 1, 2007, the board may provide advance payment contracts for the tuition differential authorized in s. 1009.24(16) for a specified number of undergraduate semester credit hours, which may not exceed the average number of hours required for the conference of a baccalaureate degree, in conjunction with advance payment contracts for registration fees.
4. Effective July 1, 2009, the board may offer an advance payment contract for the university plan covering prepaid registration fees, the fees authorized in s. 1009.24(9)-(12), and the tuition differential authorized in s. 1009.24(16). Such a contract may be offered in specific increments for use toward a baccalaureate degree. The total number of hours purchased for a qualified beneficiary may not exceed the average number of hours required for the conference of a baccalaureate degree.

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

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

(3) TRANSFER OF BENEFITS TO PRIVATE AND OUT-OF-STATE COLLEGES AND UNIVERSITIES AND TO CAREER CENTERS.--

A qualified beneficiary may apply the benefits of an advance payment contract toward any eligible educational institution as defined in s. 529 of the Internal Revenue Code. The board shall transfer or cause to be transferred to the institution designated by the qualified beneficiary an amount not to exceed the redemption value of the advance payment contract at a state postsecondary institution. If the cost of registration or housing fees at such institution is less than the corresponding fees at a state postsecondary institution, the amount transferred may not exceed the actual cost of registration and housing fees. A transfer authorized under this subsection may not exceed the number of semester credit hours or semesters of dormitory residence contracted on behalf of a qualified beneficiary. Any advertisement disseminated by a for-profit educational institution which references the Stanley G. Tate Florida Prepaid College Program shall clearly state the following: "While the benefits of the Florida Prepaid College contract may be used at this institution, the Florida Prepaid College Board does not endorse any particular educational institution."

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

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

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

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

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

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

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

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

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

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

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

(k) The period of time after which advance payment contracts that have not been terminated or the benefits used shall be considered terminated. Time expended by a qualified beneficiary as an active duty member of any of the armed services of the United States shall be added to the period of time specified by the board. A purchaser or qualified beneficiary whose advance payment contract is terminated pursuant to this paragraph is not entitled to a refund. Notwithstanding chapter 717, the board shall retain any moneys paid by the purchaser for an advance payment contract that has been terminated in accordance with this paragraph. Such moneys may be transferred to the Florida Prepaid Tuition Scholarship Program to provide matching funds for prepaid tuition scholarships for economically disadvantaged youths who remain drug free and crime free. In addition, such funds may be used for any other scholarship programs approved by the board under s. 1009.983(8)(b), provided that any matching funds are obtained solely from the private sector.

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

(5) REFUNDS.--

(a) A refund may not exceed the amount paid into the fund by the purchaser except as provided in paragraphs (b), (c), and (f).

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

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

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

(e) A refund may not be authorized through an advance payment contract for any school year partially attended but not completed. For purposes of this section, a school year partially attended but not completed shall mean any one semester whereby the student is still enrolled at the conclusion of the official drop-add period but withdraws before the end of such semester. If a beneficiary does not complete a community college plan or university plan for reasons other than specified in paragraph (c), the purchaser shall receive a refund of the amount paid into the fund for the remaining unattended years of the advance payment contract pursuant to rules promulgated by the board.

(f) A purchaser of an advance payment contract entered into pursuant to subsection (9) or s. 1009.983 may receive a refund equal to the redemption value of the unused portion of the advance payment contract at a state postsecondary institution if the refund is used exclusively to fund additional scholarships purchased pursuant to subsection (9) or s. 1009.983.

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

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

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

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

(10) PAYMENTS ON BEHALF OF QUALIFIED BENEFICIARIES.--

(a) As used in this subsection, the term:
1. "Actuarial reserve" means the amount by which the expected value of the assets exceed the expected value of the liabilities of the trust fund.
2. "Dormitory fees" means the fees included under advance payment contracts pursuant to paragraph (2)(d).
3. "Fiscal year" means the fiscal year of the state pursuant to s. 215.01.
4. "Local fees" means the fees covered by an advance payment contract provided pursuant to subparagraph (2)(b)2.
5. "Tuition differential" means the fee covered by advance payment contracts sold pursuant to subparagraph (2)(b)3. The base rate for the tuition differential fee for the 2012-2013 fiscal year is established at $37.03 per credit hour. The base rate for the tuition differential in subsequent years is the amount paid by the board for the tuition differential for the preceding year adjusted pursuant to subparagraph (b)2.

(b) Effective with the 2009-2010 academic year and thereafter, and notwithstanding the provisions of s. 1009.24, the amount paid by the board to any state university on behalf of a qualified beneficiary of an advance payment contract whose contract was purchased before July 1, 2009, shall be:
1. As to registration fees, if the actuarial reserve is less than 5 percent of the expected liabilities of the trust fund, the board shall pay the state universities 5.5 percent above the amount assessed for registration fees in the preceding fiscal year. If the actuarial reserve is between 5 percent and 6 percent of the expected liabilities of the trust fund, the board shall pay the state universities 6 percent above the amount assessed for registration fees in the preceding fiscal year. If the actuarial reserve is between 6 percent and 7.5 percent of the expected liabilities of the trust fund, the board shall pay the state universities 6.5 percent above the amount assessed for registration fees in the preceding fiscal year. If the actuarial reserve is equal to or greater than 7.5 percent of the expected liabilities of the trust fund, the board shall pay the state universities 7 percent above the amount assessed for registration fees in the preceding fiscal year, whichever is greater.
2. As to the tuition differential, if the actuarial reserve is less than 5 percent of the expected liabilities of the trust fund, the board shall pay the state universities 5.5 percent above the base rate for the tuition differential fee in the preceding fiscal year. If the actuarial reserve is between 5 percent and 6 percent of the expected liabilities of the trust fund, the board shall pay the state universities 6 percent above the base rate for the tuition differential fee in the preceding fiscal year. If the actuarial reserve is between 6 percent and 7.5 percent of the expected liabilities of the trust fund, the board shall pay the state universities 6.5 percent above the base rate for the tuition differential fee in the preceding fiscal year. If the actuarial reserve is equal to or greater than 7.5 percent of the expected liabilities of the trust fund, the board shall pay the state universities 7 percent above the base rate for the tuition differential fee in the preceding fiscal year.
3. As to local fees, the board shall pay the state universities 5 percent above the amount assessed for local fees in the preceding fiscal year.
4. As to dormitory fees, the board shall pay the state universities 6 percent above the amount assessed for dormitory fees in the preceding fiscal year.
5. Qualified beneficiaries of advance payment contracts purchased before July 1, 2007, are exempt from paying any tuition differential fee.

(c) The board shall pay state universities the actual amount assessed in accordance with law for registration fees, the tuition differential, local fees, and dormitory fees for advance payment contracts purchased on or after July 1, 2009.

(d) The board shall annually evaluate or cause to be evaluated the actuarial soundness of the trust fund.

History.--s. 488, ch. 2002-387; s. 126, ch. 2004-357; s. 3, ch. 2006-303; s. 3, ch. 2007-225; s. 190, ch. 2008-4; s. 28, ch. 2009-60; s. 1, ch. 2009-136; s. 1, ch. 2009-175.

1009.981 Florida College Savings Program.--

(1)(a) The Florida Prepaid College Board is authorized to create, establish, and administer the Florida College Savings Program to promote and enhance the affordability of higher education in the state and to enable persons to contribute funds that are combined and invested to pay the subsequent higher education expenses of a designated beneficiary. The board may not implement the savings program until it has obtained:
1. A written opinion from counsel specializing in federal tax matters indicating that the savings program constitutes a qualified tuition program under s. 529 of the Internal Revenue Code;
2. A written opinion from a qualified member of the United States Patent Bar indicating that the implementation of the savings program or the operation of the savings program will not knowingly infringe upon any patent or copyright specifically related to the financing of higher education expenses;
3. A written opinion of qualified counsel specializing in federal securities law that the savings program and the offering of participation in the savings program does not violate federal securities law; and
4. A written opinion from the board's litigation counsel indicating that the implementation or operation of the savings program will not adversely impact any pending litigation against the board.
(b) The benefactor retains ownership of all amounts on deposit in his or her account with the savings program up to the date of distribution on behalf of a designated beneficiary. Earnings derived from investment of the contributions shall be considered to be held in trust in the same manner as contributions, except as applied for purposes of the designated beneficiary and for purposes of maintaining and administering the program as provided in this section.
(c) All amounts attributable to penalties shall be used for purposes of the savings program or as required by the Internal Revenue Code, and other amounts received other than contributions shall be properties of the savings program. Proceeds from penalties shall remain with the program and may be used for any costs or purposes of the savings program or used as required by the Internal Revenue Code.
(d) Deposits and contributions to the program, the property of the board, and the earnings on the college savings accounts are exempt from taxation.
(e) The assets of the savings program shall be continuously invested and reinvested in a manner consistent with the purposes of the program, expended on expenses incurred by the operation and management of the savings program, or refunded to the benefactor or designated beneficiary under the conditions provided in the participation agreement. The board is not required to invest directly in obligations of the state or any political subdivision of the state or in any investment or other fund administered by the state.

(2) PARTICIPATION AGREEMENTS.--

(a) The board may establish plans to permit benefactors to prepay the qualified higher education expenses associated with enrollment in an eligible educational institution and may permit benefactors to select from among alternative investment plans designed to provide funds to pay qualified education expenses of a designated beneficiary. The board shall not accept contributions in excess of the amount allowed pursuant to s. 529 of the Internal Revenue Code and shall prescribe by rule the methodology and information sources that shall be used to determine the projected costs of qualified higher education expenses for designated beneficiaries of prescribed ages.
(b) The board shall develop a participation agreement which shall be the agreement between the board and each benefactor, which may include, but is not limited to:
1. The name, date of birth, and social security number of the designated beneficiary.
2. The amount of the contribution or contributions and number of contributions required from a benefactor on behalf of a designated beneficiary.
3. The terms and conditions under which benefactors shall remit contributions, including, but not limited to, the date or dates upon which each contribution is due. Deposits to the savings program by benefactors may only be in cash. Benefactors may contribute in a lump sum, periodically, in installments, or through electronic funds transfer or employer payroll deductions.
4. Provisions for late contribution charges and for default.
5. Provisions for penalty fees for withdrawals from the program.
6. The name of the person who may terminate participation in the program. The participation agreement must specify whether the account may be terminated by the benefactor, the designated beneficiary, a specific designated person, or any combination of these persons.
7. The terms and conditions under which an account may be terminated, modified, or converted, the name of the person entitled to any refund due as a result of termination of the account pursuant to such terms and conditions, and the amount of refund, if any, due to the person so named.
8. Penalties for distributions not used or made in accordance with s. 529 of the Internal Revenue Code.
9. Any charges or fees in connection with the administration of the savings fund.
10. The period of time after which each participation agreement shall be considered to be terminated. Time expended by a designated beneficiary as an active duty member of any of the armed services of the United States shall be added to the period specified pursuant to this subparagraph. Should a participation agreement be terminated, the balance of the account, after notice to the benefactor, shall be declared unclaimed and abandoned property. The board shall retain any moneys paid by the benefactor for a participation agreement that has been terminated in accordance with this subparagraph. Such moneys may be transferred to the Florida Prepaid Tuition Scholarship Program to provide matching funds for prepaid tuition scholarships for economically disadvantaged youths who remain drug free and crime free.
11. Other terms and conditions deemed by the board to be necessary or proper.
(c) The participation agreement shall clearly state that:
1. The contract is only a debt or obligation of the savings program and the savings fund, and is not otherwise a debt or obligation of the state.
2. Participation in the program does not guarantee that sufficient funds will be available to cover all qualified higher education expenses for any designated beneficiary and does not guarantee admission to or continued enrollment at an eligible educational institution of any designated beneficiary.
(d) The participation agreement may be freely amended throughout its term for purposes including, but not limited to, allowing to enable the benefactor to increase or decrease the level of participation, change designated beneficiaries, and carry out similar matters permitted by this section and the Internal Revenue Code.

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(3) DISTRIBUTIONS FOR QUALIFIED HIGHER EDUCATION EXPENSES.-- The board shall establish requirements and procedures for beneficiaries to realize the benefits of participation agreements. In establishing such requirements and procedures, the board shall make distributions in as efficient and expeditious manner as is prudent and possible, consistent with the Internal Revenue Code.

(4) REFUNDS.--
(a) A benefactor may request a refund of the principal amount of his or her contributions, plus actual investment earnings or minus actual investment losses on the contributions, less any applicable penalty, and less any amounts used to provide benefits to the designated beneficiary.
(b) Notwithstanding paragraph (a), a penalty may not be levied if a benefactor requests a refund from the program due to:
1. Death of the beneficiary.
2. Total disability of the beneficiary.
3. Scholarship, allowance, or payment received by the beneficiary to the extent that the amount of the refund does not exceed the amount of the scholarship, allowance, or payment in accordance with federal law.
(c) If a benefactor requests a refund of funds contributed to the program for any cause other than those listed in paragraph (b), there shall be imposed a penalty of 10 percent of the earnings of the account and any applicable taxes, or the amount required by the Internal Revenue Code. Earnings shall be calculated as the total value of the participation agreement, less the aggregate contributions, or in the manner prescribed in the Internal Revenue Code.

(5) MATERIAL MISREPRESENTATION; PENALTY.--If the benefactor or the designated beneficiary makes any material misrepresentation in the application for a participation agreement or in any communication with the board regarding the program, especially regarding the withdrawal or distribution of funds therefrom, the account may be involuntarily liquidated by the board. If the account is so liquidated, the benefactor is entitled to a refund, subject to a 10-percent penalty or the amount required by the Internal Revenue Code.

(6) CONFIDENTIALITY OF ACCOUNT INFORMATION.--Information that identifies the benefactors or the designated beneficiary of any account initiated under this section is confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution. However, the board may authorize the release of such information to a community college, college, or university in which a designated beneficiary may enroll or is enrolled. Community colleges, colleges, and universities shall maintain the confidentiality of such information.

(7) OBLIGATIONS OF BOARD.--Any contract or participation agreement entered into by or any obligation of the board on behalf of and for the benefit of the savings program does not constitute a debt or obligation of the state but is an obligation of the savings program. The state has no obligation to any designated beneficiary or any other person as a result of the savings program. The obligation of the savings program is limited solely to those amounts deposited in the savings fund. All amounts obligated to be paid from the savings fund are limited to amounts available for such obligation. The amounts on deposit in the savings program may only be disbursed in accordance with the provisions of this section.

(8) PROGRAM TERMINATION.--The savings program shall continue in existence until its existence is terminated by law. If the state determines that the savings program is financially infeasible, the state may discontinue the savings program. Upon termination of the savings program, all deposits shall be returned to benefactors, to the extent possible, and any unclaimed assets in the savings program may be transferred to the Florida Prepaid Tuition Scholarship Program to provide matching funds for prepaid tuition scholarships for economically disadvantaged youths who remain drug free and crime free.

(9) STATE PLEDGE.--The state pledges to benefactors and designated beneficiaries of the savings program that the state will not limit or alter the rights under this section which are vested in the program until such obligations are met and discharged. However, this subsection does not preclude such limitation if adequate provision is made by law for the protection of the benefactors and designated beneficiaries pursuant to the obligations of the board, and, if the state or the board determines that the savings program is not financially feasible, the state or the board may discontinue the program. If the program is discontinued, the board shall refund to benefactors their contributions to the program, plus any investment earnings or minus any investment losses. The board, on behalf of the state, may include this pledge and undertaking by the state in participation agreements.

History.--s. 489, ch. 2002-387; s. 1, ch. 2005-130.

1009.982 Disclaimer.--Nothing in ss. 1009.97-1009.984 shall be construed as a promise or guarantee that a qualified beneficiary or a designated beneficiary will be admitted to a state postsecondary institution or to a particular state postsecondary institution, will be allowed to continue enrollment at a state postsecondary institution after admission, or will be graduated from a state postsecondary institution.

History.--s. 490, ch. 2002-387.

1009.983 Direct-support organization; authority.--
(1) The Florida Prepaid College Board may establish a direct-support organization which is:
(a) A Florida corporation, not for profit, incorporated under the provisions of chapter 617 and approved by the Secretary of State.
(b) Organized and operated exclusively to receive, hold, invest, and administer property and to make expenditures to or for the benefit of the board.
(c) An organization which the board, after review, has certified to be operating in a manner consistent with the goals of the board and in the best interests of the state. Unless so certified, the organization may not use the name of the prepaid program or savings program.
(2) The direct-support organization shall operate under written contract with the board. The contract must provide for:
(a) Approval of the articles of incorporation and bylaws of the direct-support organization by the board.
(b) Submission of an annual budget for the approval of the board. The budget must comply with rules adopted by the board.
(c) Certification by the board that the direct-support organization is complying with the terms of the contract and in a manner consistent with the goals and purposes of the board and in the best interest of the state. Such certification must be made annually and reported in the official minutes of a meeting of the board.
(d) The reversion to the board, or to the state if the board ceases to exist, of moneys and property held in trust by the direct-support organization for the benefit of the board or prepaid program if the direct-support organization is no longer approved to operate for the board or if the board ceases to exist.
(e) The fiscal year of the direct-support organization, which must begin July 1 of each year and end June 30 of the following year.
(f) The disclosure of material provisions of the contract and of the distinction between the board and the direct-support organization to donors of gifts, contributions, or bequests, and such disclosure on all promotional and fundraising publications.
(3) The direct-support organization shall provide for an annual financial audit in accordance with s. 215.981. The board and Auditor General may require and receive from the organization or its independent auditor any detail or supplemental data relative to the operation of the organization.
(4) The identity of donors who desire to remain anonymous shall be confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution, and such anonymity shall be maintained in the auditor's report. Information received by the organization that is otherwise confidential or exempt by law shall retain such status. Any sensitive, personal information regarding contract beneficiaries, including their identities, is exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
(5) The chair and the executive director of the board shall be directors of the direct-support organization and shall jointly name, at a minimum, three other individuals to serve as directors of the organization.
(6) The board may authorize the direct-support organization established in this section to use board property, except money, and use facilities and personal services subject to the provisions of this section. If the direct-support organization does not provide equal employment opportunities to all persons regardless of race, color, religion, sex, age, or national origin, it may not use the property, facilities, or personal services of the board. For the purposes of this section, the term "personal services" includes full-time personnel and part-time personnel as well as payroll processing as prescribed by rule of the board. The board shall adopt rules prescribing the procedures by which the direct-support organization is governed and any conditions with which such a direct-support organization must comply to use property, facilities, or personal services of the board.
(7) The board may invest funds of the direct-support organization which have been allocated for the purchase of advance payment contracts for scholarships with receipts for advance payment contracts.
(8)(a) The direct-support organization shall administer the Florida Prepaid Tuition Scholarship Program pursuant to the provisions of s. 1009.984.
(b) The board may establish and administer additional scholarship programs supported from escheated funds retained by the board pursuant to s. 1009.972(5) provided that any matching funds for such scholarships are obtained solely from the private sector. The board shall develop criteria for approval of additional scholarship programs supported from escheated funds. The direct-support organization's annual report shall include a list of any additional scholarship programs approved by the board pursuant to this subsection, including a description of the programs and the amount of escheated funds utilized to fund the programs.

History.--s. 491, ch. 2002-387; s. 4, ch. 2006-303.

1009.984 Florida Prepaid Tuition Scholarship Program.--The Florida Prepaid Tuition Scholarship Program is established to provide economically disadvantaged youth with prepaid postsecondary tuition scholarships. The direct-support organization established pursuant to s. 1009.983 shall administer the program with the assistance and cooperation of the Department of Education to:
(1) Provide an incentive for economically disadvantaged youth to improve school attendance and academic performance in order to graduate and pursue a postsecondary education.
(2) Obtain the commitment and involvement of private sector entities by virtue of funding matches with a ratio of 50 percent provided by the private sector and 50 percent provided by the state.
(3) Purchase prepaid tuition scholarships for students certified by the Department of Education to the direct-support organization who meet minimum economic and school requirements and remain drug free and crime free.
(a) For the purpose of this subsection, "drug free" means not being convicted of, or adjudicated delinquent for, any violation of chapter 893 after being designated a recipient of a Florida prepaid tuition scholarship.
(b) For the purpose of this subsection, "crime free" means not being convicted of, or adjudicated delinquent for, any felony or first degree misdemeanor as defined in ss. 775.08 and 775.081 after being designated a recipient of a Florida prepaid tuition scholarship.

History.--s. 492, ch. 2002-387.

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