Current Status Bill Number:105 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19970114 Primary Sponsor:Passailaigue All Sponsors:Passailaigue Drafted Document Number:s-res\passaila\res1174.elp Residing Body:Senate Current Committee:Education Committee 04 SED Subject:Higher Education Leadership Program, Prepaid Tuition Trust Fund, (HELP); Colleges and Universities
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
Senate 19970114 Introduced, read first time, 04 SED
referred to Committee
View additional legislative information at the LPITS web site.
TO AMEND TITLE 59, RELATING TO EDUCATION, BY ADDING CHAPTER 149, TO PROVIDE FOR THE HIGHER EDUCATION LEADERSHIP PROGRAM (HELP).
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 59 of the 1976 Code is amended by adding:
Section 59-149-10. There is established the Higher Education Leadership Program (HELP) Trust Fund to increase access to higher education for South Carolinians. The fund consists of payments received pursuant to contracts made pursuant to this chapter, bequests, endowments, or grants from the United States government, and any other available sources of funds, public or private. Money remaining in the fund at the end of each fiscal year remains in the fund.
Section 59-149-20. Unless the context requires otherwise, as used in this chapter:
(1) 'Board' means the HELP Trust Fund Board of Directors.
(2) 'Fund' means the HELP Trust Fund.
(3) 'Out-of-state institution' means a postsecondary educational institution, including a technical and comprehensive educational institution, and an accredited, independent eleemosynary junior or senior college in another State.
(4) 'Prepaid tuition contract' or 'contract' means the contract entered into by the board and a purchaser pursuant to this chapter for the advance payment of undergraduate tuition at a fixed, guaranteed level by the purchaser for a qualified beneficiary to attend any public institution in the State to which the beneficiary is admitted.
(5) 'Public institution' means any state-supported post-secondary educational institution, including a technical and comprehensive educational institution.
(6) 'Purchaser' means the person who makes or is obligated to make advance payments in accordance with a prepaid tuition contract.
(7) 'Qualified beneficiary' or 'beneficiary' means a resident of the State, as determined by the board, who may apply advance tuition payments to undergraduate tuition as set forth in this chapter.
(8) 'South Carolina private institution' means an independent eleemosynary junior or senior college in the State with its major campus and headquarters in this State and accredited by the Southern Association of Colleges and Secondary Schools.
(9) 'Tuition' means the quarter, semester, or term charges imposed by a public institution in this State and all mandatory fees required as a condition of enrollment of all students.
Section 59-149-30. The fund is administered by the HELP Trust Fund Board of Directors, which consists of:
(1) a chairperson, appointed by the Governor;
(2) the executive director of the State Commission on Higher Education, ex-officio, or his designee;
(3) the State Treasurer, ex-officio, or his designee;
(4) four private citizens with significant experience in finance, accounting, and investment management. The presiding officer of the Senate, the chairman of the Senate Education Committee, the speaker of the House of Representatives, and the Chairman of the House Education and Public Works Committee, each make one of these appointments for a four-year term.
The board elects from its membership a vice chairperson and a treasurer for each calendar year. A majority of the members is a quorum.
Members may not receive any mileage, subsistence, or per diem.
Section 59-149-40. Other than those outlined in this chapter, the board has the following duties and powers:
(1) to develop and implement a program for prepayment of undergraduate tuition consistent with the provisions of this chapter;
(2) to establish requirements, procedures, and guidelines regarding prepaid tuition contracts, including residency requirements; the number of participants in the fund; the termination, withdrawal, or transfer of payments under a prepaid tuition contract; time limitations for the use of tuition benefits; and payment schedules;
(3) to invest money in the fund in any instruments, obligations, securities, or property deemed appropriate by the board;
(4) to enter into contractual agreements, including contracts for legal, actuarial, financial, and consulting services;
(5) to arrange with public institutions to fulfill obligations under prepaid tuition contracts, including but not limited to, payments from the fund of then actual in state undergraduate tuition cost for a qualified beneficiary to the institution in which the beneficiary is admitted and enrolled:
(6) to apply for, accept, and expend gifts, grants, or donations from public or private sources to enable it to carry out the purposes of this chapter;
(7) to promulgate regulations and procedures consistent with the purposes of this chapter.
Section 59-149-50. An act or undertaking of the board does not constitute a debt of the State or any of its political subdivisions, or a pledge of the full faith and credit of the State, but is payable solely from the fund.
Section 59-149-60. The board employs an executive director, who is authorized to employ such staff as necessary to enable the board to perform its duties as set forth in this chapter. The board is authorized to determine the duties and to fix the salaries and compensation of the staff from such funds as may be appropriated or received, to the extent the law allows.
Section 59-149-70. (A) In acquiring, investing, reinvesting, exchanging, retaining, selling, and managing property for the benefit of the fund, the board must act as trustee and exercise the judgment of care under the circumstances then prevailing, which a person of prudence, discretion, and intelligence exercises in the management of his own affairs, not in regard to speculation but to the permanent disposition of funds, considering the probable income and the probable safety of his capital. If the annual accounting and audit required by Section 59-149-110 reveal that there are insufficient funds to ensure the actuarial soundness of the fund, the board is authorized to adjust the terms of the subsequent prepaid tuition contracts or arrange refunds for current purchasers to ensure actuarial soundness.
(B) The board must preserve, invest, and expend the assets of the fund solely pursuant to and for the purposes of this chapter. The State may not lend, otherwise transfer, or use for another purpose, the assets of the fund. Within the standard prescribed in subsection (A) of this section, the board is authorized to acquire and retain every kind of property and every kind of investment, specifically including, but not limited to:
(1) debentures and other corporate obligations of foreign or domestic corporations;
(2) common or preferred stocks traded on foreign or domestic stock exchanges, limited to sixty percent of total trust fund investments based on cost;
(3) not less than all of the stock of a corporation organized by the board under the laws of the State for the purposes of acquiring and retaining real property that the board is authorized under this chapter to acquire and retain; and
(4) securities of any open-end or closed-end management type investment company or investment trust registered under the federal Investment Company Act of 1940, as amended, including such investment companies or investments trusts that, in turn, invest in the securities of such investment companies or investment trusts, that a person of prudence, discretion, and intelligence acquires or retains for his own account.
(C) Within the limitations of this standard, the board may retain properly acquired property, without time limitation and without regard to its suitability for original purchase. This section may not be construed to prohibit the investment of the fund, by purchase or otherwise, in bonds, notes, or other obligations of the State or its agencies and subdivisions.
(D) The selection of services related to the management, purchase, or sale of authorized investments, including, but not limited to, actuarial services, is governed by the standard in this section and is not subject to the provisions of the South Carolina Procurement Code, Chapter 35 of Title 11 of the 1976 Code, as amended.
Section 59-149-80. (A) A prepaid tuition contract made pursuant to this chapter includes the following terms and provisions:
(1) the amount of payment or payments and the number of payments required from a purchaser on behalf of a qualified beneficiary;
(2) the terms and conditions under which purchasers must remit payments, including the dates of such payments;
(3) provisions for late payment charges, defaults, withdrawals, refunds, and penalties;
(4) the name and date of birth of the qualified beneficiary on whose behalf the contract is made;
(5) terms and conditions for a substitution for the qualified beneficiary originally named;
(6) terms and conditions for termination of the contract, including any refunds, withdrawals, or transfers of tuition prepayments, and the name of the person entitled to terminate the contract;
(7) the time period during which the qualified beneficiary must claim benefits from the fund;
(8) the number of credit hours or quarters, semesters, or terms contracted for by the purchasers;
(9) all other rights and obligations of the purchaser and the trust; and
(10) any other terms and conditions that the board deems necessary or appropriate to carry out the purposes of this chapter.
(B) In addition to the provisions required by subsection (A) of this section, each prepaid tuition contract must include provisions for the application of tuition prepayments at a South Carolina private institution and an out-of-state institution, including principal and reasonable return on such principal as determined by the board. Payments authorized for South Carolina private institutions may not exceed the projected highest payment made for tuition at a public institution in the same academic year, less a fee to be determined by the board. Payments authorized for out-of-state institutions may not exceed the projected average payment made for tuition at a public institution in the same academic years, less a fee to be determined by the board.
(C) All prepaid tuition contracts must specifically provide that, if after a specified period of time, the contract has not been terminated or the qualified beneficiary's rights exercised, the moneys are considered abandoned and their disposition is controlled by the Unclaimed Property Act, Chapter 18 of Title 27 of the 1976 Code, as amended.
Section 59-149-90. The assets of the fund and its income are exempt from state and local taxation.
Section 59-149-100. The board must submit an annual statement of the receipts, disbursements, and current investments of the fund for the preceding year to the Senate Finance Committee, the House Ways and Means Committee, and the Governor. The report must set forth a complete operating and financial statement covering the operation of the fund during the year and must include a statement of projected receipts, disbursements, investments, and costs for the further operation of the fund.
Section 59-149-110. The accounts and records of the board showing the receipt and disbursement of funds from whatever source derived must be in the form prescribed by the State Auditor, provided that such accounts must correspond as nearly as possible to the accounts and records for such matters maintained by corporate enterprises. The auditor, or his legally authorized representatives, must annually audit the accounts of the board, and the cost of such audit services must be carried by the board.
Section 59-149-120. This chapter and contracts made pursuant to this chapter do not constitute a promise by the State or guarantee any admission, continued enrollment, or graduation at any public institution. This chapter and contracts made pursuant to this chapter do not constitute a promise or guarantee that the beneficiary's cost of tuition at private institution or an out-of-state institution will be covered in full by the proceeds of the beneficiary's tuition credits.
Section 59-149-130. An employer in the State may agree, by contract or otherwise, to remit payments on behalf of an employee toward prepaid tuition contracts through payroll deductions."
SECTION 2. This act takes effect upon approval by the Governor.