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Bill 551

                    Current Status

Bill Number:                      551
Type of Legislation:              General Bill GB
Introducing Body:                 Senate
Introduced Date:                  20010405
Primary Sponsor:                  Moore
All Sponsors:                     Moore
Drafted Document Number:          l:\council\bills\nbd\11490ac01.doc
Residing Body:                    Senate
Current Committee:                Education Committee 04 SED
Subject:                          Tuition Prepayment Program, duties of 
                                  State Treasurer and types of securities to be 
                                  invested; Colleges and Universities


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
Senate  20010405  Introduced, read first time,           04 SED
                  referred to Committee


              Versions of This Bill

TO AMEND SECTION 59-4-30, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE CREATION OF THE SOUTH CAROLINA TUITION PREPAYMENT PROGRAM WITHIN THE OFFICE OF THE STATE TREASURER AND TO PROVIDE FOR THE DUTIES OF THE STATE TREASURER, INCLUDING PROMULGATING REGULATIONS, SO AS TO DELETE PROVISIONS RELATING TO THE DUTIES OF THE TREASURER AND THE PROMULGATION OF REGULATIONS; AND TO AMEND SECTION 59-4-40, AS AMENDED, RELATING TO SOURCES AND EXPENDITURE OF FUNDS IN THE TUITION PREPAYMENT PROGRAM FUND, SO AS TO SPECIFY THE TYPES OF SECURITIES THAT FUNDS MAY BE INVESTED AND REINVESTED IN AND TO PROVIDE THAT SUCH INVESTMENTS MUST BE IN ACCORDANCE WITH WRITTEN INVESTMENT POLICIES APPROVED BY THE TREASURER.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 59-4-30 of the 1976 Code, as amended by Act 410 of 2000, is further amended to read:

"Section 59-4-30. (A) The South Carolina Tuition Prepayment Program is created as a program within the Office of the State Treasurer. The chief administrative and operating official for the program is the director who must be appointed and supervised by the Treasurer. The director must be a state official or employee.

(B) The Treasurer is responsible for developing and adopting the investment policies, guidelines, and strategies for the fund and determining the costs, termination, and withdrawal options of the prepaid tuition contracts. The Treasurer shall promulgate regulations in accordance with the Administrative Procedures Act which:

(1) provide for the number and types of contract plans to be offered, to include both public and independent colleges and universities;

(2) prescribe the terms and conditions of the prepaid tuition contracts, including the terms and conditions under which funds may be withdrawn or refunds made from the fund;

(3) prescribe the requirements, procedures, and guidelines regarding advanced payment contracts;

(4) provide for the contract contents to include, at a minimum, tuition and credit hour guarantees, beneficiary substitutions, default, withdrawal, refund, termination and penalty information, and contributor payment amounts and conditions;

(5) provide for the receipt of advance payments;

(6) prescribe guidelines governing the program;

(7) provide for the charging and retention of fees for the cost of services and administration of the fund;

(8) prescribe the investment and management policies of the fund; and

(9) prescribe other policies, procedures, and criteria necessary to implement and administer the program.

These regulations must be developed in consultation with the chairmen or their designees of the Senate Finance Committee, the Senate Education Committee, the House Ways and Means Committee, and the House Education and Public Works Committee, and submitted in sufficient time for the General Assembly to begin its approval process by January 15, 1998. It is the intent of the General Assembly to have these regulations in force so that the program may begin to offer contracts by July 1, 1998."

SECTION 2. Section 59-4-40 of the 1976 Code, as amended by Act 410 of 2000, is further amended to read:

"Section 59-4-40. (A) The fund is a nonpublic special, revolving fund established and maintained by the State of South Carolina. The fund consists of monies received from contributors, other monies acquired from governmental and private sources, and proceeds from the investments of the fund. The fund may expend funds for the purposes of this chapter only and may not be considered public funds. There must be a separate accounting for each designated beneficiary.

(B) The fund must be invested as directed by the Treasurer. However, earnings in the fund or a portion of the fund may not be used as security for a loan. An attempt to use the fund, a contract, or a portion of either as security for a loan is void. The fund may be invested in a manner authorized by law. The funds may be invested and reinvested in any of the following:

(1) securities authorized pursuant to Article 7, Chapter 9, Title 11;

(2) equity securities of a corporation that is registered on a national securities exchange, as provided in the Securities Exchange Act, 1934, or a successor act, or quoted through the National Association of Securities Dealers Automatic Quotations System, or a similar service; and

(3) securities issued by an investment company registered under the Investment company Act of 1940, or a successor act.

(C) The custody and management of the fund is must be directed by the Treasurer and invested in accordance with the written investment policies approved by the Treasurer. The earnings from fund investments become a part of the fund and may be expended for the purposes of this chapter only."

SECTION 3. This act takes effect upon approval by the Governor.

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