H 3692 Session 109 (1991-1992)
H 3692 General Bill, By Alexander
A Bill to amend Title 59, Code of Laws of South Carolina, 1976, relating to
education, by adding Chapter 110 so as to establish the South Carolina Prepaid
College Tuition Trust Fund, to provide for a board of trustees, its
composition, powers, and duties in administering this Fund
03/14/91 House Introduced and read first time HJ-4
03/14/91 House Referred to Committee on Ways and Means HJ-5
03/04/92 House Tabled in committee
A BILL
TO AMEND TITLE 59, CODE OF LAWS OF SOUTH CAROLINA,
1976, RELATING TO EDUCATION, BY ADDING CHAPTER 110 SO
AS TO ESTABLISH THE SOUTH CAROLINA PREPAID COLLEGE
TUITION TRUST FUND, TO PROVIDE FOR A BOARD OF
TRUSTEES, ITS COMPOSITION, POWERS, AND DUTIES IN
ADMINISTERING THIS FUND.
Whereas, the General Assembly finds that the advancement and
improvement of higher education in this State is a proper governmental
purpose and function; and
Whereas, the General Assembly finds that the creation of a trust fund as
an agency and instrumentality of the State to assist qualified students
and their families in financing a portion of the costs of attending state
colleges and universities in South Carolina will increase the number of
qualified students who will seek to attend these institutions; and
Whereas, increased enrollment at our colleges and universities will
benefit these institutions and will advance and improve higher education
in this State; and
Whereas, it is the intent of the General Assembly to establish an
educational trust fund as an agency and instrumentality of this State to
assist qualified students to pay in advance the tuition costs of attending
state colleges and universities in South Carolina and to encourage these
students to attend state institutions; and
Whereas, by establishing this trust fund, it is the intent of the General
Assembly to encourage timely financial planning for higher education
by the creation of prepaid tuition contracts and to encourage employer
participation in such planning, and to provide assistance and incentives
for the purchase of prepaid tuition contracts for the benefit of the
children and families of this State. Now, therefore,
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"CHAPTER 110
South Carolina Prepaid College Tuition Trust Fund
Section 59-110-10. As used in this chapter, unless the context
clearly indicates otherwise:
(1) `Board' means the board of trustees of the trust fund as
provided in Section 59-110-30.
(2) `Out-of-state tuition' means the amount of tuition payable to
an out-of-state college or university or an independent institution which
a beneficiary has elected to attend, not to exceed cost of the average
tuition for South Carolina state colleges or universities unless otherwise
permitted by the board.
(3) `Prepaid tuition contract' means a contract entered into by the
board of trustees of the trust fund and a purchaser in accordance with
provisions of this chapter.
(4) `Purchaser' means a person who makes or is obligated to make
advance payments in accordance with a prepaid tuition contract entered
into pursuant to this chapter.
(5) `Qualified beneficiary' means a resident of this State at the
time a purchaser enters into a prepaid tuition contract on behalf of the
resident or the minor child of a noncustodial parent who is a resident of
this State.
(6) `State college' or `state university' means a state-supported
public two or four year college or university in South Carolina.
(7) `Trust fund' means the South Carolina Prepaid College Tuition
Trust Fund created as an agency and instrumentality of this State
pursuant to Section 59-110-20.
(8) `Tuition' means the quarterly, semester, or term charges
imposed by a state college or university and all mandatory fees required
as a condition of enrollment for all students.
Section 59-110-20. There is created the South Carolina Prepaid
College Tuition Trust Fund as an agency and instrumentality of the State
to assist students and their families with financial planning for higher
education by creating prepaid tuition contracts for state colleges and
universities.
Section 59-110-30. (A) The trust fund must be administered by
a board of trustees consisting of ten members. The President of the
Senate, the Speaker of the House of Representatives, the Commissioner
of the Commission on Higher Education, a representative of the Council
of Presidents, and the State Treasurer shall serve as ex officio members
of the board. Each of the following shall appoint one trustee to serve on
the board: the Speaker of the House of Representatives, the President
of the Senate, and the State Treasurer. The Governor shall appoint two
trustees. Trustees shall serve for terms of four years and until their
successors are appointed and qualify. Vacancies must be filled in the
same manner as original appointments for the unexpired term only.
(B) Each trustee must have knowledge, skill, and experience in
business or financial matters commensurate with the duties and
responsibilities of the board. No person holding a full-time office or
position of employment with the State, a county, or municipality in the
State, an educational institution, or an instrumentality, agency, or
subdivision of them, is eligible for appointment to the board.
(C) Members of the board serve without compensation but must
be reimbursed for mileage and per diem for official duties of the board
as authorized by law for boards and commissions.
(D) The State Treasurer shall serve as the chairman and presiding
officer of the board and may appoint other officers as the board may
consider advisable or necessary. A majority of the members of the board
constitutes a quorum for the transaction of the business of the trust fund.
Section 59-110-40. The board of trustees has the powers necessary
or convenient to carry out the purposes and provisions of this chapter
and the purposes and objectives of the trust fund including, but not
limited to, the following powers to:
(1) adopt and amend bylaws;
(2) adopt regulations pursuant to the Administrative Procedures
Act as necessary to implement the provisions of this chapter;
(3) invest funds of the trust fund in an instrument, obligation,
security, or property that constitutes legal investments for state funds
and to name and use depositories for its investments and holdings;
(4) execute contracts and other necessary instruments;
(5) impose reasonable residency requirements for qualified
beneficiaries at the time of purchase of the contract, but each state
college or university shall establish its own residency requirements for
matriculation;
(6) impose and modify, as needed, reasonable limits on the
number of contract participants in the trust fund;
(7) contract for necessary goods and services, to employ
necessary personnel, and to engage the services of individuals for
administrative and technical assistance in carrying out the
responsibilities of the trust fund;
(8) solicit and accept gifts, including bequests or other
testamentary gifts made by will, trust, or other disposition, grants, loans,
and assistance from other sources;
(9) participate in federal, state, or local governmental programs;
(10) define the terms and conditions under which payments may be
withdrawn from the trust fund and impose reasonable charges for
withdrawal;
(11) impose reasonable time limits on the use of the tuition benefits
provided by the program;
(12) provide for the receipt of contributions to the trust fund in lump
sums or installment payments;
(13) establish other policies, procedures, and criteria necessary to
implement and administer the provisions of this chapter.
Section 59-110-50. (A) The office and the facilities of the State
Treasurer must be used in the administration of the fund including, but
not limited to, recordkeeping, managing bank accounts and other
investments, transferring funds, and safekeeping of investment
securities.
(B) A separate account must be created within the State
Treasurer's office to be known as the Prepaid Affordable College Tuition
Administrative Account for the purposes of implementing and
maintaining prepaid college tuition accounts pursuant to this chapter.
Section 59-110-60. (A) Payments received by the board from
purchasers on behalf of qualified beneficiaries or from any other source,
public or private, must be placed in the trust fund, and the fund may be
divided into separate accounts as the board determines necessary.
(B) Assets of the trust fund may be invested in any instrument,
obligation, security, or property that constitutes legal investments of
state funds including asset pooling with other state trust funds.
(C) The trust fund, through the State Treasurer, may receive and
deposit into the trust fund gifts of any nature, real or personal property,
made by an individual by testamentary disposition, including, but not
limited to, a specific gift or bequest made by will, trust, or other
disposition.
(D) The board shall obtain appropriate actuarial assistance to
establish, maintain, and certify a fund sufficient to defray the obligation
of the trust fund and shall evaluate annually, or cause to be evaluated,
the actuarial soundness of the trust fund. If the board determines that
additional assets are needed to preserve actuarial soundness, it may
adjust the terms of subsequent prepaid tuition contracts.
(E) The trust fund must pay all amounts due under prepaid tuition
contracts. In each fiscal year the board shall determine the amount of
the future obligations of the trust fund under prepaid tuition contracts by
an appropriate actuarial method. After that determination has been
made, all monies on deposit in the trust fund up to and including the
amount of future obligations must remain on deposit in the trust fund
and are subject to meeting the prepaid tuition contract obligations of the
fund.
(F) If, at any time, the deposit in the trust fund monies is in excess
of the actuarially determined obligations of the trust fund as determined
by the board, then the excess funds must be deposited into the general
fund of the State.
Section 59-110-70. The property and income of the trust fund are
exempt from taxation by the State and political subdivisions of the State.
Section 59-110-80. In addition to other requirements of this chapter
the board shall:
(1) make available summary information on the financial
condition of the trust fund to the purchasers of prepaid tuition contracts;
(2) prepare, or cause to be prepared, an annual accounting of the
trust fund and transmit a copy of the accounting to the Governor, the
Lieutenant Governor, and the Speaker of the House of Representatives;
(3) make all necessary and appropriate arrangements with state
colleges and universities in order to fulfill its obligations under the
prepaid tuition contracts."
SECTION 2. Terms for initial appointments to the board must be
staggered with one trustee serving a two-year term, two trustees serving
three-year terms, and two trustees serving four-year terms. Trustees may
be reappointed following their initial appointments.
SECTION 3. This act takes effect upon approval by the Governor.
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