December 13, 2019
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The Florida Statutes

The 2001 Florida Statutes

Title XVI
Education
Chapter 240
Postsecondary Education
View Entire Chapter
Section 240.551, Florida Statutes 2001

240.551  Florida Prepaid College Program.--

(1)  LEGISLATIVE INTENT.--The Legislature recognizes that educational opportunity at the postsecondary level is a critical state interest. It further recognizes that educational opportunity is best ensured through the provision of postsecondary institutions that are geographically and financially accessible. Accordingly, it is the intent of the Legislature that a 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. It is similarly the intent of the Legislature to provide a program that 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.

(2)  DEFINITIONS.--

(a)  "Advance payment contract" means a contract entered into by the board and a purchaser pursuant to this section.

(b)  "Board" means the Florida Prepaid College Board.

(c)  "Fund" means the Florida Prepaid College Trust Fund.

(d)  "Program" means the Florida Prepaid College Program.

(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 subsection (22), 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 matriculation fee, financial aid fee, building fee, and Capital Improvement Trust Fund fee.

(h)  "State postsecondary institution" means any community college identified in s. 240.3031 or university identified in s. 240.2011.

(3)  FLORIDA PREPAID COLLEGE PROGRAM; CREATION.--There is created a 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.

(4)  FLORIDA PREPAID COLLEGE TRUST FUND.--There is created within the State Board of Administration the Florida Prepaid College Trust Fund. The fund shall consist of state appropriations, moneys acquired from other governmental or private sources, and moneys remitted in accordance with advance payment contracts. All funds deposited into the trust fund may be invested pursuant to s. 215.47. Dividends, interest, and gains accruing to the trust fund shall increase the total funds available for the program. Notwithstanding the provisions of chapter 717, funds associated with terminated contracts pursuant to subsection (12) and canceled contracts for which no refunds have been claimed shall increase the total funds available for the program. However, the board shall establish procedures for notifying purchasers who subsequently cancel their 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. Any balance contained within the fund at the end of a fiscal year shall remain therein and shall be available for carrying out the purposes of the program. In the event that dividends, interest, and gains exceed the amount necessary for program administration and disbursements, the board may designate an additional percentage of the fund to serve as a contingency fund. Moneys contained within the fund shall be exempt from the investment requirements of s. 18.10. Any funds of a direct-support organization created pursuant to subsection (22) shall be exempt from the provisions of this subsection.

(5)  PROGRAM ADMINISTRATION.--

(a)  The Florida Prepaid College Program shall be administered by the Florida Prepaid College Board as an agency of the state. 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. 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 this section.

(b)  The board shall consist of seven members to be composed of the Insurance Commissioner and Treasurer, the Comptroller, the Chancellor of the Board of Regents, the Executive Director of the State Board 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 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.

(c)  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.

(6)  FLORIDA PREPAID COLLEGE BOARD; DUTIES.--The board shall:

(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)  Administer the fund in a manner that is sufficiently actuarially sound to defray the obligations of the program. The board shall annually evaluate or cause to be evaluated the actuarial soundness of the fund. If the board perceives a need for additional assets in order to preserve actuarial soundness, the board may adjust the terms of subsequent advance payment contracts to ensure such soundness.

(c)  Establish a comprehensive investment plan for the purposes of this section with the approval of the State Board of Administration. The comprehensive investment plan shall specify the investment policies to be utilized by the board in its administration of the fund. The board may place assets of the fund in savings accounts or use the same to purchase fixed or variable life insurance or annuity contracts, securities, evidence of indebtedness, or other investment products pursuant to the comprehensive investment plan and in such proportions as may be designated or approved under that plan. Such insurance, annuity, savings, or investment products shall be underwritten and offered in compliance with the applicable federal and state laws, regulations, and rules by persons who are duly authorized by applicable federal and state authorities. Within the comprehensive investment plan, the board may authorize investment vehicles, or products incident thereto, as may be available or offered by qualified companies or persons. A contract purchaser may not direct the investment of his or her contribution to the trust fund, and a contract beneficiary may not direct the contribution made on his or her behalf to the trust fund. Board members and employees of the board are not prohibited from purchasing advance payment contracts by virtue of their fiduciary responsibilities as members of the board or official duties as employees of the board.

(d)  Solicit proposals and contract, pursuant to s. 287.057, for the marketing of the Florida Prepaid College Program. The entity designated pursuant to this paragraph shall serve as a centralized marketing agent for the program and shall be solely responsible for the marketing of the program. Any materials produced for the purpose of marketing the 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 program; however, all such materials shall have been approved by the board prior to distribution. Neither the state nor the board shall be liable for misrepresentation of the program by a marketing agent.

(e)  Solicit proposals and contract, pursuant to s. 287.057, for a trustee services firm to select and supervise investment programs on behalf of the board. The goals of the board in selecting a trustee services firm shall be to obtain the highest standards of professional trustee services, 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 at the lowest cost possible. 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. Evaluations of proposals submitted pursuant to this paragraph shall include, but not be limited to, the following criteria:

1.  Adequacy of trustee services for supervision and management of the program, including current operations and staff organization and commitment of management to the proposal.

2.  Capability to execute program responsibilities within time and regulatory constraints.

3.  Past experience in trustee services and current ability to maintain regular and continuous interactions with the board, records administrator, and product provider.

4.  The minimum purchaser participation assumed within the proposal and any additional requirements of purchasers.

5.  Adequacy of technical assistance and services proposed for staff.

6.  Adequacy of a management system for evaluating and improving overall trustee services to the program.

7.  Adequacy of facilities, equipment, and electronic data processing services.

8.  Detailed projections of administrative costs, including the amount and type of insurance coverage, and detailed projections of total costs.

(f)  Solicit proposals and contract, pursuant to s. 287.057, for product providers to develop investment portfolios on behalf of the board to achieve the purposes of this section. Product providers 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 product providers shall have their principal place of business and corporate charter located and registered in the United States. In addition, each product provider 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 Insurance Commissioner and Treasurer 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 selecting a product provider company shall be to provide all purchasers with the most secure, well-diversified, and beneficially administered postsecondary education expense plan 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 at the lowest cost possible. Evaluations of proposals submitted pursuant to this paragraph shall include, but not be limited to, the following criteria:

1.  Fees and other costs charged to purchasers that affect account values or operational costs related to the program.

2.  Past and current investment performance, including investment and interest rate history, guaranteed minimum rates of interest, consistency of investment performance, and any terms and conditions under which moneys are held.

3.  Past experience and ability to provide timely and accurate service in the areas of records administration, benefit payments, investment management, and complaint resolution.

4.  Financial history and current financial strength and capital adequacy to provide products, including operating procedures and other methods of protecting program assets.

(7)  FLORIDA PREPAID COLLEGE BOARD; POWERS.--The board shall have the powers necessary or proper to carry out the provisions of this section, including, but not limited to, the power to:

(a)  Adopt an official seal and rules.

(b)  Sue and be sued.

(c)  Make and execute contracts and other necessary instruments.

(d)  Establish agreements or other transactions with federal, state, and local agencies, including state universities and community colleges.

(e)  Invest funds not required for immediate disbursement.

(f)  Appear in its own behalf before boards, commissions, or other governmental agencies.

(g)  Hold, buy, and sell any instruments, obligations, securities, and property determined appropriate by the board.

(h)  Require a reasonable length of state residence for qualified beneficiaries.

(i)  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.

(j)  Segregate contributions and payments to the fund into various accounts and funds.

(k)  Contract for necessary goods and services, employ necessary personnel, and engage the services of private consultants, actuaries, managers, legal counsel, and auditors for administrative or technical assistance.

(l)  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 this section.

(m)  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 on a fraudulent basis.

(n)  Procure insurance against any loss in connection with the property, assets, and activities of the fund or the board.

(o)  Impose reasonable time limits on use of the tuition benefits provided by the program. However, any such limitation shall be specified within the advance payment contract.

(p)  Delineate the terms and conditions under which payments may be withdrawn from the fund and impose reasonable fees and charges for such withdrawal. Such terms and conditions shall be specified within the advance payment contract.

(q)  Provide for the receipt of contributions in lump sums or installment payments.

(r)  Require that purchasers of advance payment contracts 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).

(s)  Delegate responsibility for administration of the comprehensive investment plan required in paragraph (6)(c) to a person the board determines to be qualified. Such person shall be compensated by the board. Directly or through such person, the board may contract with a private corporation or institution to provide such services as may be a part of the comprehensive investment plan or as may be deemed necessary or proper by the board or such person, including, but not limited to, providing consolidated billing, individual and collective recordkeeping and accountings, and asset purchase, control, and safekeeping.

(t)  Endorse insurance coverage written exclusively for the purpose of protecting advance payment contracts, and the purchasers and beneficiaries thereof, which may be issued in the form of a group life policy and which is exempt from the provisions of part V of chapter 627.

(u)  Solicit proposals and contract, pursuant to s. 287.057, for the services of a records administrator. The goals of the board in selecting a records administrator shall be to provide all purchasers with the most secure, well-diversified, and beneficially administered postsecondary education expense plan 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 at the lowest cost possible. Evaluations of proposals submitted pursuant to this paragraph shall include, but not be limited to, the following criteria:

1.  Fees and other costs charged to purchasers that affect account values or operational costs related to the program.

2.  Past experience in records administration and current ability to provide timely and accurate service in the areas of records administration, audit and reconciliation, plan communication, participant service, and complaint resolution.

3.  Sufficient staff and computer capability for the scope and level of service expected by the board.

4.  Financial history and current financial strength and capital adequacy to provide administrative services required by the board.

(v)  Establish other policies, procedures, and criteria to implement and administer the provisions of this section.

(w)  Adopt procedures to govern contract dispute proceedings between the board and its vendors.

(8)  QUALIFIED STATE TUITION PROGRAM STATUS.--Notwithstanding any other provision of this section, the board may adopt rules necessary to enable the program to retain its status as a "qualified state 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 of 1986, as defined in s. 220.03(1). The board shall inform purchasers of changes to the tax or securities status of contracts purchased through the program.

(9)  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.

(a)1.  Through the community college plan, the advance payment contract shall 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. The cost of participation in the community college plan shall be based primarily on the average current and projected registration fees within the Florida Community College 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 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. 240.1201, 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. 240.35, 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. The cost of purchasing such fees shall be based primarily on the average current and projected fees within the Florida Community College System and the number of years expected to elapse between the purchase of the plan on behalf of the beneficiary and the exercise of benefits provided in the plan by such beneficiary. Community college plan contracts purchased prior to July 1, 1998, shall be limited to the payment of registration fees as defined in subsection (2).

(b)1.  Through the university plan, the advance payment contract shall 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. The cost of participation in the university plan shall be based primarily on the current and projected registration 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 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. 240.1201, 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. 240.235(1), 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. The costs of purchasing such fees shall be based primarily on the average current and projected cost of these fees within the State University System and the number of years expected to elapse between the purchase of the plan on behalf of the qualified beneficiary and the exercise of the benefits provided in the plan by such beneficiary. University plan contracts purchased prior to July 1, 1998, shall be limited to the payment of registration fees as defined in subsection (2).

(c)  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.

(10)  TRANSFER OF BENEFITS TO PRIVATE AND OUT-OF-STATE COLLEGES AND UNIVERSITIES AND TO AREA TECHNICAL CENTERS.--A qualified beneficiary may apply the benefits of an advance payment contract toward:

(a)  Any eligible independent college or university. An independent college or university that is located and chartered in Florida, that is not for profit, that is accredited by the Commission on Colleges of the Southern Association of Colleges and Schools or the Accrediting Council for Independent Colleges and Schools, and that confers degrees as defined in s. 246.021, is eligible for such application. The board shall transfer, or cause to have transferred, to the eligible independent college or university 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 the independent college or university is less than the corresponding fees at a state postsecondary institution, the amount transferred shall not exceed the actual cost of registration or housing fees. A transfer authorized under this paragraph may not exceed the number of semester credit hours or semesters of dormitory residence contracted on behalf of a qualified beneficiary.

(b)  An eligible out-of-state college or university. An out-of-state college or university that is not for profit and is accredited by a regional accrediting association, and that confers degrees, is eligible for such application. The board shall transfer, or cause to have transferred, 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 charged the qualified beneficiary at the eligible out-of-state college or university is less than this calculated amount, the amount transferred shall not exceed the actual cost of registration or housing fees. Any remaining amount shall be transferred in subsequent semesters until the transfer value is depleted. A transfer authorized under this paragraph may not exceed the number of semester credit hours or semesters of dormitory residence contracted on behalf of a qualified beneficiary.

(c)  An applied technology diploma program or vocational certificate program conducted by a community college listed in s. 240.3031 or an area technical center operated by a district school board. The board shall transfer or cause to be transferred to the community college or area technical center 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 the fees charged by the college or center, as authorized in s. 239.117, is less than the corresponding fees at a state postsecondary institution, the amount transferred may not exceed the actual cost of the fees. A transfer authorized under this paragraph may not exceed the number of semester credit hours contracted on behalf of a qualified beneficiary.

Notwithstanding any other provision in this section, an institution must be an "eligible educational institution" under s. 529 of the Internal Revenue Code to be eligible for the transfer of advance payment contract benefits.

(11)  ADVANCE PAYMENT CONTRACTS; CONTENTS.--The board shall construct advance payment contracts for registration and may construct advance payment contracts for dormitory residence as provided in this section. Advance payment contracts constructed for the purposes of this section 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 (22) or subsection (23), 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)  Other terms and conditions deemed by the board to be necessary or proper.

(12)  DURATION OF BENEFITS; ADVANCE PAYMENT CONTRACT.--An advance payment contract may provide that contracts which have not been terminated or the benefits exercised within a specified period of time 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 pursuant to this subsection. No purchaser or qualified beneficiary whose advance payment contract is terminated pursuant to this subsection shall be entitled to a refund. The board shall retain any moneys paid by the purchaser for an advance payment contract that has been terminated in accordance with this subsection. Such moneys retained by the board are exempt from chapter 717, and such retained moneys must be used by the board to further the purposes of this section.

(13)  REFUNDS.--

(a)  Except as provided in paragraphs (b), (c), and 1(f), no refund shall exceed the amount paid into the fund by the purchaser.

(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 matriculation 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 shall 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)  No refund shall 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.

(14)  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).

(15)  OBLIGATIONS OF BOARD; PAYMENT.--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.

(16)  ASSETS OF THE FUND; EXPENDITURE PRIORITY.--The assets of the fund shall be maintained, invested, and expended solely for the purposes of this section and shall not be loaned, transferred, or otherwise used by the state for any purpose other than the purposes of this section. 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 fund shall be expended in the following order of priority:

(a)  To make payments to state postsecondary institutions on behalf of qualified beneficiaries.

(b)  To make refunds upon termination of advance payment contracts.

(c)  To pay the costs of program administration and operations.

(17)  EXEMPTION FROM CLAIMS OF CREDITORS.--Moneys paid into or out of the fund by or on behalf of a purchaser or qualified beneficiary of an advance payment contract made under this section, which contract has not been terminated, are exempt, as provided by s. 222.22, from all claims of creditors of the purchaser or the beneficiary. Neither moneys paid into the program nor benefits accrued through the program may be pledged for the purpose of securing a loan.

(18)  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 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 this section.

(19)  DISCLAIMER.--Nothing in this section shall be construed as a promise or guarantee that a qualified 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.

(20)  PROGRAM TERMINATION.--In the event that the state determines the 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.

(21)  ANNUAL REPORT.--The board shall annually prepare or cause to be prepared a report setting forth in appropriate detail an accounting of the fund and a description of the financial condition of the program at the close of each fiscal year. Such report shall be submitted to the President of the Senate, the Speaker of the House of Representatives, and members of the State Board of Education on or before March 31 each year. In addition, the board shall make the report available to purchasers of advance payment contracts. The board shall provide to the Board of Regents and the State Board of Community Colleges, by March 31 each year, complete advance payment contract sales information, including projected postsecondary enrollments of qualified beneficiaries. The accounts of the fund shall be subject to annual audits by the Auditor General or his or her designee.

(22)  DIRECT-SUPPORT ORGANIZATION; AUTHORITY.--

(a)  The board may establish a direct-support organization which is:

1.  A Florida corporation, not for profit, incorporated under the provisions of chapter 617 and approved by the Secretary of State.

2.  Organized and operated exclusively to receive, hold, invest, and administer property and to make expenditures to or for the benefit of the program.

3.  An organization which the board, after review, has certified to be operating in a manner consistent with the goals of the program and in the best interests of the state. Unless so certified, the organization may not use the name of the program.

(b)  The direct-support organization shall operate under written contract with the board. The contract must provide for:

1.  Approval of the articles of incorporation and bylaws of the direct-support organization by the board.

2.  Submission of an annual budget for the approval of the board. The budget must comply with rules adopted by the board.

3.  An annual financial audit of its financial accounts and records by an independent certified public accountant in accordance with s. 215.981.

4.  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.

5.  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 program if the direct-support organization is no longer approved to operate for the board or if the board ceases to exist.

6.  The fiscal year of the direct-support organization, which must begin July 1 of each year and end June 30 of the following year.

7.  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.

(c)  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.

(d)  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.

(e)  The board may authorize the direct-support organization established in this subsection to use program 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 subsection, 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.

(f)  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.

(23)  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.

History.--s. 1, ch. 87-132; s. 17, ch. 88-185; s. 2, ch. 88-303; s. 3, ch. 88-313; s. 1, ch. 89-316; s. 1, ch. 90-130; s. 32, ch. 90-268; s. 82, ch. 90-360; s. 18, ch. 91-55; s. 5, ch. 91-429; s. 1, ch. 92-124; s. 1, ch. 93-191; s. 1, ch. 94-200; s. 1, ch. 95-129; s. 831, ch. 95-148; s. 36, ch. 95-392; s. 1, ch. 96-262; s. 103, ch. 96-406; s. 1, ch. 97-282; s. 6, ch. 98-124; s. 49, ch. 98-421; s. 25, ch. 99-13; s. 1, ch. 2000-193; s. 3(7), ch. 2000-321; s. 43, ch. 2001-170; s. 83, ch. 2001-266.

1Note.--Section 240.551(13) does not include a paragraph (f).

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