Current Status Introducing Body:House Bill Number:3692 Primary Sponsor:T.C. Alexander Committee Number:30 Type of Legislation:GB Subject:Prepaid College Tuition Trust Fund Residing Body:House Current Committee:Ways and Means Date Tabled:Mar 04, 1992 Computer Document Number:BR1/1266.AC Introduced Date:Mar 14, 1991 Last History Body:House Last History Date:Mar 04, 1992 Last History Type:Tabled in Committee Scope of Legislation:Statewide All Sponsors:T.C. Alexander Type of Legislation:General Bill
Bill Body Date Action Description CMN
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3692 House Mar 04, 1992 Tabled in Committee 30
3692 House Mar 14, 1991 Introduced, read first time, 30
referred to Committee
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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:
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.