A. 6826 2
696-R. REFUND.
696-S. PREPAID HIGHER EDUCATION TUITION SCHOLARSHIPS FOR NEEDY
STUDENTS.
696-T. STATEMENT REGARDING STATUS OF PREPAID TUITION CONTRACT.
696-U. REPORTS.
696-V. CONFIDENTIALITY.
S 696. LEGISLATIVE FINDINGS. AN EDUCATED POPULATION BEING NECESSARY TO
THE SOCIAL DEVELOPMENT AND ECONOMIC HEALTH OF THIS STATE, THE LEGISLA-
TURE FINDS AND DECLARES IT TO BE AN URGENT PUBLIC NECESSITY TO ASSIST
YOUNG NEW YORKERS IN OBTAINING A HIGHER EDUCATION. BECAUSE THE STATE'S
POPULATION IS RAPIDLY GROWING AND IS DIVERSE, THE STATE IS REQUIRED TO
USE ALL OF THE HIGHER EDUCATION FACILITIES AND RESOURCES WITHIN THE
STATE, BOTH PUBLIC AND PRIVATE, TO PROVIDE A WIDE VARIETY OF EDUCATIONAL
ENVIRONMENTS AND INSTRUCTIONAL OPTIONS AND TO PRESERVE THE PARTNERSHIP
BETWEEN THE STATE AND PRIVATE OR INDEPENDENT INSTITUTIONS OF HIGHER
EDUCATION. THEREFORE, THE PREPAID HIGHER EDUCATION TUITION PROGRAM IS
ESTABLISHED TO HELP NEW YORK STUDENTS ATTEND THE INSTITUTION THAT BEST
MEETS THEIR INDIVIDUAL NEEDS.
S 696-A. DEFINITIONS. AS USED IN THIS ARTICLE:
1. "BENEFICIARY" MEANS A PERSON WHO IS ENTITLED TO RECEIVE BENEFITS
UNDER A PREPAID TUITION CONTRACT.
2. "BOARD" MEANS THE PREPAID HIGHER EDUCATION TUITION BOARD.
3. "ESTIMATED AVERAGE PRIVATE TUITION AND REQUIRED FEES" MEANS AN
ESTIMATED AVERAGE OF TUITION AND REQUIRED FEES TO BE CHARGED BY PRIVATE
OR INDEPENDENT INSTITUTIONS OF HIGHER EDUCATION AS DETERMINED ANNUALLY
BY THE BOARD.
4. "FUND" MEANS THE NEW EMPIRE FUND ESTABLISHED IN SECTION
SEVENTY-EIGHT-A OF THE STATE FINANCE LAW.
5. "INSTITUTION OF HIGHER EDUCATION" MEANS AN INSTITUTION IN THE STATE
PROVIDING HIGHER EDUCATION.
6. "PREPAID TUITION CONTRACT" MEANS A CONTRACT ENTERED INTO PURSUANT
TO THIS ARTICLE BY THE BOARD AND A PURCHASER TO PROVIDE FOR THE PAYMENT
OF HIGHER EDUCATION TUITION AND REQUIRED FEES OF A BENEFICIARY.
7. "PRIVATE OR INDEPENDENT INSTITUTION OF HIGHER EDUCATION" SHALL MEAN
COLLEGES AND UNIVERSITIES OTHER THAN THOSE INCLUDED WITHIN SUBDIVISION
NINE OF THIS SECTION.
8. "PROGRAM" MEANS THE PREPAID HIGHER EDUCATION TUITION PROGRAM.
9. "PUBLIC COLLEGE" SHALL MEAN AND INCLUDE "STATE-OPERATED INSTI-
TUTIONS", "STATUTORY OR CONTRACT COLLEGES" AND "COMMUNITY COLLEGES" AS
DEFINED IN SECTION THREE HUNDRED FIFTY OF THIS CHAPTER.
10. "PURCHASER" MEANS A PERSON WHO IS OBLIGATED TO MAKE PAYMENTS UNDER
A PREPAID TUITION CONTRACT.
S 696-B. ESTABLISHMENT OF BOARD; FUNCTION. 1. THE PREPAID HIGHER
EDUCATION TUITION BOARD IS HEREBY ESTABLISHED IN THE DEPARTMENT OF AUDIT
AND CONTROL.
2. THE BOARD SHALL ADMINISTER THE PROGRAM.
3. THE BOARD SHALL CONSIST OF THE COMPTROLLER AND SIX MEMBERS
APPOINTED BY THE GOVERNOR AS FOLLOWS:
(A) TWO MEMBERS UPON RECOMMENDATION OF THE TEMPORARY PRESIDENT OF THE
SENATE;
(B) ONE MEMBER UPON RECOMMENDATION OF THE MINORITY LEADER OF THE
SENATE;
(C) TWO MEMBERS UPON RECOMMENDATION OF THE SPEAKER OF THE ASSEMBLY;
AND
(D) ONE MEMBER UPON RECOMMENDATION OF THE MINORITY LEADER OF THE
ASSEMBLY.
A. 6826 3
4. THE APPOINTED MEMBERS MUST POSSESS KNOWLEDGE, SKILL AND EXPERIENCE
IN HIGHER EDUCATION, BUSINESS OR FINANCE.
5. THE APPOINTED MEMBERS SHALL SERVE FOR STAGGERED SIX-YEAR TERMS. THE
TERMS OF ONE-THIRD OF THE APPOINTED MEMBERS SHALL EXPIRE FEBRUARY FIRST
OF EACH ODD-NUMBERED YEAR.
6. IN RECOMMENDING, MAKING OR CONFIRMING APPOINTMENTS TO THE BOARD,
THE GOVERNOR, SPEAKER OF THE ASSEMBLY AND TEMPORARY PRESIDENT OF THE
SENATE SHALL ENSURE THAT EACH APPOINTEE HAS THE BACKGROUND AND EXPERI-
ENCE SUITABLE FOR PERFORMING THE STATUTORY RESPONSIBILITIES OF A MEMBER
OF THE BOARD.
7. APPOINTMENTS TO THE BOARD SHALL BE MADE WITHOUT REGARD TO THE RACE,
COLOR, DISABILITY, SEX, RELIGION, AGE OR NATIONAL ORIGIN OF THE APPOINT-
EES.
8. A PERSON IS NOT ELIGIBLE FOR APPOINTMENT AS A MEMBER OF THE BOARD
IF THE PERSON OR THE PERSON'S SPOUSE:
(A) IS EMPLOYED BY OR PARTICIPATES IN THE MANAGEMENT OF A BUSINESS
ENTITY RECEIVING FUNDS FROM THE BOARD;
(B) OWNS OR CONTROLS, DIRECTLY OR INDIRECTLY, MORE THAN A TEN PERCENT
INTEREST IN A BUSINESS ENTITY RECEIVING FUNDS FROM THE BOARD; OR
(C) USES OR RECEIVES A SUBSTANTIAL AMOUNT OF TANGIBLE GOODS, SERVICES
OR FUNDS FROM THE BOARD, OTHER THAN COMPENSATION OR REIMBURSEMENT
AUTHORIZED BY LAW FOR BOARD MEMBERSHIP, ATTENDANCE OR EXPENSES.
9. IT IS A GROUND FOR REMOVAL FROM THE BOARD IF A MEMBER:
(A) VIOLATES A PROHIBITION ESTABLISHED BY SUBDIVISION EIGHT OF THIS
SECTION;
(B) CANNOT BECAUSE OF ILLNESS OR DISABILITY DISCHARGE THE MEMBER'S
DUTIES FOR A SUBSTANTIAL PART OF THE TERM FOR WHICH THE MEMBER IS
APPOINTED; OR
(C) IS ABSENT FROM MORE THAN HALF OF THE REGULARLY SCHEDULED BOARD
MEETINGS THAT THE MEMBER IS ELIGIBLE TO ATTEND DURING A CALENDAR YEAR
UNLESS THE ABSENCE IS EXCUSED BY MAJORITY VOTE OF THE BOARD.
10. THE VALIDITY OF AN ACTION OF THE BOARD SHALL NOT BE AFFECTED BY
THE FACT THAT THE ACTION WAS TAKEN WHEN A GROUND FOR REMOVAL OF A BOARD
MEMBER EXISTED.
11. BEFORE A MEMBER OF THE BOARD MAY ASSUME HIS OR HER DUTIES, THE
MEMBER MUST COMPLETE AT LEAST ONE COURSE OF THE TRAINING PROGRAM ESTAB-
LISHED UNDER SUBDIVISION TWELVE OF THIS SECTION.
12. A TRAINING PROGRAM SHALL BE ESTABLISHED TO PROVIDE INSTRUCTION TO
THE MEMBER REGARDING:
(A) THE ENABLING LEGISLATION THAT CREATED THE BOARD;
(B) THE PROGRAMS OPERATED BY THE BOARD;
(C) THE ROLE AND FUNCTIONS OF THE BOARD;
(D) THE RULES OF THE BOARD, WITH AN EMPHASIS ON THE RULES THAT RELATE
TO DISCIPLINARY AND INVESTIGATORY AUTHORITY;
(E) THE CURRENT BUDGET FOR THE BOARD; AND
(F) THE RESULTS OF THE MOST RECENT FORMAL AUDIT OF THE BOARD.
13. (A) THE COMPTROLLER SHALL SERVE AS THE CHAIRPERSON OF THE BOARD.
(B) THE BOARD SHALL APPOINT A SECRETARY OF THE BOARD WHOSE DUTIES MAY
BE PRESCRIBED BY LAW AND BY THE BOARD.
14. APPOINTED MEMBERS OF THE BOARD SHALL SERVE WITHOUT PAY BUT SHALL
BE REIMBURSED FOR THEIR ACTUAL EXPENSES INCURRED IN ATTENDING MEETINGS
OF THE BOARD AND IN PERFORMING OTHER WORK OF THE BOARD WHEN THAT WORK IS
APPROVED BY THE CHAIRPERSON OF THE BOARD.
S 696-C. MEETINGS. 1. THE BOARD SHALL HOLD REGULAR QUARTERLY MEETINGS
AT PLACES AND TIMES SCHEDULED BY THE BOARD IN FORMAL SESSIONS AND CALLED
BY THE CHAIRPERSON OF THE BOARD.
A. 6826 4
2. THE BOARD SHALL DEVELOP AND IMPLEMENT POLICIES THAT PROVIDE THE
PUBLIC WITH A REASONABLE OPPORTUNITY TO APPEAR BEFORE THE BOARD AND TO
SPEAK ON ANY ISSUE UNDER THE JURISDICTION OF THE BOARD.
3. MINUTES OF ALL MEETINGS SHALL BE AVAILABLE IN THE BOARD'S OFFICE
FOR PUBLIC INSPECTION.
S 696-D. EXECUTIVE DIRECTOR; STAFF. 1. THE COMPTROLLER SHALL SERVE AS
THE EXECUTIVE DIRECTOR OF THE PROGRAM.
2. THE EMPLOYEES OF THE DEPARTMENT OF AUDIT AND CONTROL SELECTED BY
THE COMPTROLLER FOR THAT PURPOSE SHALL SERVE AS THE STAFF OF THE
PROGRAM.
3. THE COMPTROLLER SHALL SELECT AND SUPERVISE THE STAFF OF THE PROGRAM
AND PERFORM OTHER DUTIES DELEGATED TO THE COMPTROLLER BY THE BOARD.
4. THE COMPTROLLER SHALL PROVIDE TO MEMBERS OF THE BOARD AND TO
PROGRAM STAFF, AS OFTEN AS NECESSARY, INFORMATION REGARDING THEIR QUALI-
FICATIONS FOR OFFICE OR EMPLOYMENT UNDER THIS ARTICLE AND THEIR RESPON-
SIBILITIES UNDER APPLICABLE LAWS RELATING TO STANDARDS OF CONDUCT FOR
STATE OFFICERS OR EMPLOYEES.
5. THE BOARD SHALL DEVELOP AND IMPLEMENT POLICIES THAT CLEARLY SEPA-
RATE THE POLICY-MAKING RESPONSIBILITIES OF THE BOARD AND THE MANAGEMENT
RESPONSIBILITIES OF THE COMPTROLLER AND THE STAFF OF THE PROGRAM.
S 696-E. PROGRAM AND FACILITY ACCESSIBILITY. 1. THE BOARD SHALL COMPLY
WITH FEDERAL AND STATE LAWS RELATED TO PROGRAM AND FACILITY ACCESSIBIL-
ITY.
2. THE BOARD SHALL PREPARE AND MAINTAIN A WRITTEN PLAN THAT DESCRIBES
HOW A PERSON WHO DOES NOT SPEAK ENGLISH CAN BE PROVIDED REASONABLE
ACCESS TO THE BOARD'S PROGRAMS AND SERVICES.
S 696-F. PUBLIC INTEREST INFORMATION AND COMPLAINTS. 1. THE BOARD
SHALL PREPARE INFORMATION OF PUBLIC INTEREST DESCRIBING THE FUNCTIONS OF
THE BOARD AND THE BOARD'S PROCEDURES BY WHICH COMPLAINTS ARE FILED WITH
AND RESOLVED BY THE BOARD. THE BOARD SHALL MAKE THE INFORMATION AVAIL-
ABLE TO THE PUBLIC AND APPROPRIATE STATE AGENCIES.
2. THE BOARD BY RULE SHALL ESTABLISH METHODS BY WHICH CONSUMERS AND
SERVICE RECIPIENTS ARE NOTIFIED OF THE NAME, MAILING ADDRESS, AND TELE-
PHONE NUMBER OF THE BOARD FOR THE PURPOSE OF DIRECTING COMPLAINTS TO THE
BOARD.
3. THE BOARD SHALL KEEP INFORMATION ABOUT EACH COMPLAINT FILED WITH
THE BOARD. THE INFORMATION SHALL INCLUDE:
(A) THE DATE THE COMPLAINT IS RECEIVED;
(B) THE NAME OF THE COMPLAINANT;
(C) THE SUBJECT MATTER OF THE COMPLAINT;
(D) A RECORD OF ALL PERSONS CONTACTED IN RELATION TO THE COMPLAINT;
(E) A SUMMARY OF THE RESULTS OF THE REVIEW OR INVESTIGATION OF THE
COMPLAINT; AND
(F) FOR COMPLAINTS FOR WHICH THE BOARD TOOK NO ACTION, AN EXPLANATION
OF THE REASON THE COMPLAINT WAS CLOSED WITHOUT ACTION.
4. THE BOARD SHALL KEEP A FILE FOR EACH WRITTEN COMPLAINT FILED WITH
THE BOARD THAT THE BOARD HAS AUTHORITY TO RESOLVE. THE BOARD SHALL
PROVIDE TO THE PERSON FILING THE COMPLAINT AND THE PERSONS OR ENTITIES
COMPLAINED ABOUT THE BOARD'S POLICIES AND PROCEDURES PERTAINING TO
COMPLAINT INVESTIGATION AND RESOLUTION. THE BOARD, AT LEAST QUARTERLY
AND UNTIL FINAL DISPOSITION OF THE COMPLAINT, SHALL NOTIFY THE PERSON
FILING THE COMPLAINT AND THE PERSONS OR ENTITIES COMPLAINED ABOUT OF THE
STATUS OF THE COMPLAINT UNLESS THE NOTICE WOULD JEOPARDIZE AN UNDERCOVER
INVESTIGATION.
S 696-G. POWERS OF BOARD. 1. THE BOARD HAS THE POWERS NECESSARY OR
PROPER TO CARRY OUT THE PROVISIONS OF THIS ARTICLE.
A. 6826 5
2. THE BOARD MAY:
(A) ADOPT AN OFFICIAL SEAL;
(B) ADOPT RULES TO IMPLEMENT THIS ARTICLE;
(C) SUE AND BE SUED;
(D) ENTER INTO CONTRACTS AND OTHER NECESSARY INSTRUMENTS;
(E) ENTER INTO AGREEMENTS OR OTHER TRANSACTIONS WITH THE UNITED
STATES, STATE AGENCIES, INCLUDING INSTITUTIONS OF HIGHER EDUCATION,
PRIVATE OR INDEPENDENT INSTITUTIONS OF HIGHER EDUCATION, AND LOCAL
GOVERNMENTS;
(F) APPEAR IN ITS OWN BEHALF BEFORE GOVERNMENTAL AGENCIES;
(G) CONTRACT FOR NECESSARY GOODS AND SERVICES AND ENGAGE THE SERVICES
OF PRIVATE CONSULTANTS, ACTUARIES, TRUSTEES, RECORDS ADMINISTRATORS,
MANAGERS, LEGAL COUNSEL AND AUDITORS FOR ADMINISTRATIVE OR TECHNICAL
ASSISTANCE;
(H) SOLICIT AND ACCEPT GIFTS, GRANTS, LOANS, AND OTHER AID FROM ANY
SOURCE OR PARTICIPATE IN ANY OTHER WAY IN ANY GOVERNMENT PROGRAM TO
CARRY OUT THIS ARTICLE;
(I) IMPOSE ADMINISTRATIVE FEES;
(J) CONTRACT WITH A PERSON TO MARKET THE PROGRAM;
(K) PURCHASE LIABILITY INSURANCE COVERING THE BOARD AND EMPLOYEES AND
AGENTS OF THE PROGRAM; AND
(L) ESTABLISH OTHER POLICIES, PROCEDURES AND ELIGIBILITY CRITERIA TO
IMPLEMENT THIS ARTICLE.
S 696-H. PREPAID HIGHER EDUCATION TUITION PROGRAM. 1. UNDER THE
PROGRAM, A PURCHASER MAY ENTER INTO A PREPAID TUITION CONTRACT WITH THE
BOARD UNDER WHICH THE PURCHASER AGREES TO PREPAY THE TUITION AND
REQUIRED FEES FOR A BENEFICIARY TO ATTEND AN INSTITUTION OF HIGHER
EDUCATION OR PRIVATE OR INDEPENDENT INSTITUTION OF HIGHER EDUCATION.
2. THE BOARD SHALL DEPOSIT THE MONEY PAID UNDER A PREPAID TUITION
CONTRACT IN THE FUND, INVEST THE MONEY AND CREDIT THE INCOME EARNED TO
THE FUND, AND APPLY MONEY IN THE FUND TO THE TUITION AND REQUIRED FEES
OF THE INSTITUTION OF HIGHER EDUCATION OR PRIVATE OR INDEPENDENT INSTI-
TUTION OF HIGHER EDUCATION IN WHICH THE BENEFICIARY ENROLLS AS PROVIDED
BY THE PREPAID TUITION CONTRACT.
3. IF THE BENEFICIARY OF A PLAN DESCRIBED IN SECTION SIX HUNDRED NINE-
TY-SIX-J OF THIS ARTICLE ENROLLS IN A PRIVATE OR INDEPENDENT INSTITUTION
OF HIGHER EDUCATION, THE BOARD SHALL PAY THE INSTITUTION THE TUITION AND
REQUIRED FEES THE BOARD WOULD HAVE PAID HAD THE BENEFICIARY ENROLLED IN
AN INSTITUTION OF HIGHER EDUCATION COVERED BY THE PLAN SELECTED IN THE
PREPAID TUITION CONTRACT. THE BENEFICIARY SHALL BE RESPONSIBLE FOR
PAYING THE PRIVATE OR INDEPENDENT INSTITUTION OF HIGHER EDUCATION THE
AMOUNT BY WHICH THE TUITION AND REQUIRED FEES OF THE INSTITUTION EXCEED
THE TUITION AND REQUIRED FEES PAID BY THE BOARD.
4. IF THERE IS NOT ENOUGH MONEY IN THE FUND TO PAY THE TUITION AND
REQUIRED FEES OF THE INSTITUTION OF HIGHER EDUCATION IN WHICH A BENEFI-
CIARY ENROLLS OR THE APPROPRIATE PORTION OF THE TUITION AND REQUIRED
FEES OF THE PRIVATE OR INDEPENDENT INSTITUTION OF HIGHER EDUCATION IN
WHICH THE BENEFICIARY ENROLLS AS PROVIDED BY THE PREPAID TUITION
CONTRACT, THE LEGISLATURE MAY APPROPRIATE TO THE FUND THE AMOUNT NECES-
SARY FOR THE BOARD TO PAY THE APPLICABLE AMOUNT OF TUITION AND REQUIRED
FEES OF THE INSTITUTION.
S 696-I. PREPAID TUITION CONTRACT. 1. THE BOARD MAY CONTRACT WITH A
PURCHASER FOR THE PURCHASER TO PREPAY THE TUITION AND REQUIRED FEES FOR
A BENEFICIARY TO ATTEND AN INSTITUTION OF HIGHER EDUCATION OR PRIVATE OR
INDEPENDENT INSTITUTION OF HIGHER EDUCATION TO WHICH THE BENEFICIARY IS
ADMITTED AS A STUDENT.
A. 6826 6
2. THE TERMS OF A PREPAID TUITION CONTRACT SHALL BE BASED ON AN ACTU-
ARIAL ANALYSIS OF:
(A) THE RATES OF INCREASE OF:
(I) TUITION AND REQUIRED FEES AT INSTITUTIONS OF HIGHER EDUCATION; OR
(II) ESTIMATED AVERAGE PRIVATE TUITION AND REQUIRED FEES;
(B) EXPECTED INVESTMENT RETURNS;
(C) ESTIMATED ADMINISTRATIVE COSTS; AND
(D) THE PERIOD BETWEEN THE DATE THE CONTRACT IS ENTERED INTO AND THE
DATE THE BENEFICIARY IS PROJECTED TO GRADUATE FROM HIGH SCHOOL.
3. THE BOARD SHALL ADOPT A FORM FOR PREPAID TUITION CONTRACTS TO BE
USED BY THE BOARD AND PURCHASERS.
4. A PREPAID TUITION CONTRACT SHALL:
(A) SPECIFY THE AMOUNT AND NUMBER OF PAYMENTS REQUIRED FROM THE
PURCHASER ON BEHALF OF THE BENEFICIARY;
(B) SPECIFY THE TERMS UNDER WHICH THE PURCHASER SHALL MAKE PAYMENTS,
INCLUDING THE DATE ON WHICH EACH PAYMENT IS DUE;
(C) SPECIFY THE CONSEQUENCES OF DEFAULT;
(D) SPECIFY THE NAME AND DATE OF BIRTH OF THE BENEFICIARY OF THE
CONTRACT AND THE TERMS UNDER WHICH ANOTHER PERSON MAY BE SUBSTITUTED AS
THE BENEFICIARY;
(E) SPECIFY THE NUMBER OF CREDIT HOURS CONTRACTED BY THE PURCHASER;
(F) SPECIFY THE TYPE OF PLAN TOWARD WHICH THE CONTRACTED CREDIT HOURS
SHALL BE APPLIED;
(G) CONTAIN AN ASSUMPTION OF A CONTRACTUAL OBLIGATION BY THE BOARD TO
THE BENEFICIARY TO PROVIDE FOR A SPECIFIED NUMBER OF CREDIT HOURS OF
UNDERGRADUATE INSTRUCTION AT AN INSTITUTION OF HIGHER EDUCATION OR
PRIVATE OR INDEPENDENT INSTITUTION OF HIGHER EDUCATION, NOT TO EXCEED
THE TYPICAL NUMBER OF CREDIT HOURS REQUIRED FOR THE DEGREE THAT CORRE-
SPONDS TO THE PLAN PURCHASED ON BEHALF OF THE BENEFICIARY;
(H) SPECIFY THE DATE THE BENEFICIARY IS PROJECTED TO GRADUATE FROM
HIGH SCHOOL; AND
(I) CONTAIN ANY OTHER PROVISIONS THE BOARD CONSIDERS NECESSARY OR
APPROPRIATE.
5. A PREPAID TUITION CONTRACT SHALL NOT COVER THE COST OF LABORATORY
FEES CHARGED FOR SPECIFIC COURSES.
S 696-J. BENEFICIARY. 1. THE BENEFICIARY OF A PREPAID TUITION CONTRACT
MUST BE YOUNGER THAN EIGHTEEN YEARS OF AGE AT THE TIME THE PURCHASER
ENTERS INTO THE CONTRACT AND MUST BE:
(A) A RESIDENT OF THIS STATE AT THE TIME THE PURCHASER ENTERS INTO THE
CONTRACT; OR
(B) A NONRESIDENT WHO IS THE CHILD OF A PARENT WHO IS A RESIDENT OF
THIS STATE AT THE TIME THAT PARENT ENTERS INTO THE CONTRACT.
2. THE BOARD MAY REQUIRE A REASONABLE PERIOD OF RESIDENCE IN THIS
STATE FOR A BENEFICIARY OR THE PARENT OF A BENEFICIARY.
3. A BENEFICIARY IS CONSIDERED A RESIDENT FOR PURPOSES OF TUITION
REGARDLESS OF THE BENEFICIARY'S RESIDENCE ON THE DATE OF ENROLLMENT.
S 696-K. TYPES OF PLANS. 1. THE BOARD SHALL MAKE PREPAID TUITION
CONTRACTS AVAILABLE FOR THE:
(A) PUBLIC COLLEGE PLAN; AND
(B) PRIVATE COLLEGE PLAN.
2. THROUGH THE PUBLIC COLLEGE PLAN, A PREPAID TUITION CONTRACT SHALL
PROVIDE PREPAID TUITION AND REQUIRED FEES FOR THE BENEFICIARY TO ATTEND
A PUBLIC COLLEGE FOR A SPECIFIED NUMBER OF UNDERGRADUATE CREDIT HOURS
NOT TO EXCEED THE TYPICAL NUMBER OF HOURS REQUIRED FOR A CERTIFICATE OR
AN ASSOCIATE DEGREE OR A BACHELORS DEGREE AWARDED BY A PUBLIC COLLEGE.
A. 6826 7
3. THROUGH THE PRIVATE COLLEGE PLAN, A PREPAID TUITION CONTRACT SHALL
PROVIDE PREPAID ESTIMATED AVERAGE PRIVATE TUITION AND REQUIRED FEES FOR
THE BENEFICIARY TO ATTEND A PRIVATE OR INDEPENDENT INSTITUTION OF HIGHER
EDUCATION FOR A SPECIFIED NUMBER OF UNDERGRADUATE CREDIT HOURS NOT TO
EXCEED THE TYPICAL NUMBER OF HOURS REQUIRED FOR A BACHELORS DEGREE
AWARDED BY A PRIVATE OR INDEPENDENT INSTITUTION OF HIGHER EDUCATION.
S 696-L. CONTRACT PAYMENT. 1. THE BOARD MAY PROVIDE FOR THE RECEIPT OF
PAYMENTS UNDER PREPAID TUITION CONTRACTS IN LUMP SUMS OR INSTALLMENT
PAYMENTS.
2. A PURCHASER MAY MAKE PAYMENTS UNDER A PREPAID TUITION CONTRACT BY
ELECTRONIC FUNDS TRANSFER.
3. AN EMPLOYEE OF THE STATE OR A POLITICAL SUBDIVISION OF THE STATE
MAY MAKE PAYMENTS UNDER A PREPAID TUITION CONTRACT BY PAYROLL DEDUCTIONS
MADE BY THE APPROPRIATE OFFICER OF THE STATE OR POLITICAL SUBDIVISION.
4. THE BOARD MAY IMPOSE A FEE FOR A LATE PAYMENT UNDER A PREPAID
TUITION CONTRACT.
S 696-M. CHANGE OF BENEFICIARY. 1. THE PURCHASER OF A PREPAID TUITION
CONTRACT MAY DESIGNATE A NEW BENEFICIARY INSTEAD OF THE ORIGINAL BENEFI-
CIARY IF THE NEW BENEFICIARY MEETS THE REQUIREMENTS OF A BENEFICIARY ON
THE DATE THE DESIGNATION IS CHANGED. IF THE PURCHASER IS AN INDIVIDUAL,
THE NEW BENEFICIARY MUST BE A SIBLING, STEP-SIBLING OR HALF-SIBLING OF
THE ORIGINAL BENEFICIARY.
2. THE BOARD MAY ADJUST THE TERMS OF A PREPAID TUITION CONTRACT SO
THAT THE PURCHASER IS REQUIRED TO PAY THE AMOUNT THE PURCHASER WOULD
HAVE BEEN REQUIRED TO PAY HAD THE PURCHASER ORIGINALLY DESIGNATED THE
NEW BENEFICIARY AS THE BENEFICIARY, TAKING INTO ACCOUNT ANY PAYMENTS
MADE BEFORE THE DATE THE DESIGNATION IS CHANGED.
3. THE PURCHASER OF A PREPAID TUITION CONTRACT SHALL NOT SELL THE
CONTRACT.
S 696-N. CONVERSION TO ANOTHER PLAN. 1. A PURCHASER MAY CONVERT A
PREPAID TUITION CONTRACT FROM ONE PLAN TO ANOTHER PLAN.
2. THE BOARD MAY ADJUST THE TERMS OF THE CONTRACT SO THAT THE PURCHAS-
ER IS REQUIRED TO PAY THE AMOUNT REQUIRED UNDER THE PLAN TO WHICH THE
CONTRACT IS CONVERTED, TAKING INTO ACCOUNT ANY PAYMENTS MADE BEFORE THE
DATE THE CONTRACT IS CONVERTED.
S 696-O. VERIFICATION UNDER OATH. THE BOARD MAY REQUIRE A PURCHASER TO
VERIFY UNDER OATH A REQUEST TO:
1. CHANGE A BENEFICIARY;
2. CONVERT A CONTRACT TO ANOTHER PLAN; OR
3. TERMINATE A CONTRACT.
S 696-P. PROMISE OR GUARANTEE OF ADMISSION. THIS ARTICLE SHALL NOT
CONSTITUTE A PROMISE OR GUARANTEE THAT A BENEFICIARY WILL BE:
1. ADMITTED TO ANY INSTITUTION OF HIGHER EDUCATION OR PRIVATE OR INDE-
PENDENT INSTITUTION OF HIGHER EDUCATION;
2. ADMITTED TO A PARTICULAR INSTITUTION OF HIGHER EDUCATION OR PRIVATE
OR INDEPENDENT INSTITUTION OF HIGHER EDUCATION;
3. ALLOWED TO CONTINUE ENROLLMENT AT AN INSTITUTION OF HIGHER EDUCA-
TION OR PRIVATE OR INDEPENDENT INSTITUTION OF HIGHER EDUCATION AFTER
ADMISSION; OR
4. GRADUATED FROM AN INSTITUTION OF HIGHER EDUCATION OR PRIVATE OR
INDEPENDENT INSTITUTION OF HIGHER EDUCATION.
S 696-Q. CONTRACT TERMINATION. 1. A PREPAID TUITION CONTRACT SHALL
SPECIFY:
(A) THE NAME OF ANY PERSON WHO MAY TERMINATE THE CONTRACT; AND
(B) THE TERMS UNDER WHICH THE CONTRACT MAY BE TERMINATED.
A. 6826 8
2. A PREPAID TUITION CONTRACT TERMINATES ON THE TENTH ANNIVERSARY OF
THE DATE THE BENEFICIARY IS PROJECTED TO GRADUATE FROM HIGH SCHOOL, NOT
COUNTING TIME SPENT BY THE BENEFICIARY AS AN ACTIVE DUTY MEMBER OF THE
ARMED FORCES OF THE UNITED STATES.
S 696-R. REFUND. 1. A PREPAID TUITION CONTRACT SHALL SPECIFY:
(A) THE NAME OF THE PERSON ENTITLED TO ANY REFUND IF THE CONTRACT IS
TERMINATED;
(B) THE TERMS UNDER WHICH A PERSON IS ENTITLED TO A REFUND; AND
(C) THE METHOD BY WHICH THE AMOUNT OF THE REFUND IS CALCULATED.
2. THE PERSON NAMED IN THE CONTRACT IS ENTITLED TO A REFUND FOLLOWING
TERMINATION OF A PREPAID TUITION CONTRACT.
3. THE BOARD SHALL DETERMINE THE METHOD BY WHICH THE AMOUNT OF THE
REFUND IS CALCULATED.
S 696-S. PREPAID HIGHER EDUCATION TUITION SCHOLARSHIPS FOR NEEDY
STUDENTS. 1. TO THE EXTENT MONEY IS AVAILABLE, THE BOARD MAY AWARD A
PREPAID HIGHER EDUCATION TUITION SCHOLARSHIP TO A STUDENT WHO MEETS
ECONOMIC AND ACADEMIC REQUIREMENTS ADOPTED BY THE BOARD BY RULE.
2. A SCHOLARSHIP AWARDED UNDER THIS SECTION TERMINATES IF THE STUDENT
TO WHOM THE SCHOLARSHIP IS AWARDED IS CONVICTED OF OR ADJUDICATED AS
HAVING ENGAGED IN DELINQUENT CONDUCT CONSTITUTING A FELONY OR CLASS A
MISDEMEANOR.
3. THE BOARD SHALL ENSURE THAT EACH REGION OF THE STATE IS EQUITABLY
REPRESENTED IN THE AWARDING OF SCHOLARSHIPS UNDER THIS SECTION.
4. SCHOLARSHIPS UNDER THIS SECTION SHALL BE FUNDED BY THE PRIVATE
SECTOR.
5. THE BOARD MAY ESTABLISH A DIRECT-SUPPORT ORGANIZATION TO:
(A) RECEIVE, HOLD, INVEST AND ADMINISTER MONEY, GIFTS, GRANTS, LOANS
AND OTHER PROPERTY FOR OR ON BEHALF OF THE PROGRAM; AND
(B) PURCHASE SCHOLARSHIPS UNDER THIS SECTION.
6. THE BOARD OF DIRECTORS OF THE DIRECT-SUPPORT ORGANIZATION CONSISTS
OF:
(A) THE COMPTROLLER;
(B) A MEMBER APPOINTED BY THE GOVERNOR WITH THE ADVICE AND CONSENT OF
THE TEMPORARY PRESIDENT OF THE SENATE; AND
(C) THREE MEMBERS APPOINTED JOINTLY BY THE COMPTROLLER AND THE MEMBER
APPOINTED BY THE GOVERNOR.
7. THE BOARD MUST CERTIFY THAT THE DIRECT-SUPPORT ORGANIZATION OPER-
ATES IN A MANNER CONSISTENT WITH THE GOALS OF THIS STATE AND IN THE BEST
INTERESTS OF THIS STATE.
8. THE BOARD MAY CONTRACT WITH AN INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT TO ANNUALLY AUDIT THE DIRECT-SUPPORT ORGANIZATION UNDER RULES
ADOPTED BY THE BOARD. THE BOARD SHALL SUBMIT THE AUDIT TO THE COMP-
TROLLER, GOVERNOR, TEMPORARY PRESIDENT OF THE SENATE, SPEAKER OF THE
ASSEMBLY, MINORITY LEADER OF THE SENATE AND MINORITY LEADER OF THE
ASSEMBLY. THE COMPTROLLER MAY REQUIRE THE DIRECT-SUPPORT ORGANIZATION OR
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT TO PROVIDE ADDITIONAL INFORMA-
TION RELATING TO THE OPERATION OF THE ORGANIZATION.
9. THE IDENTITY OF A DONOR UNDER THIS SECTION WHO DESIRES TO REMAIN
ANONYMOUS AND THE RECORDS OF THE DIRECT-SUPPORT ORGANIZATION, OTHER THAN
THE RECORDS DISCLOSED UNDER SUBDIVISION EIGHT OF THIS SECTION, SHALL BE
CONFIDENTIAL.
S 696-T. STATEMENT REGARDING STATUS OF PREPAID TUITION CONTRACT. 1.
NOT LATER THAN DECEMBER FIRST OF EACH YEAR, THE BOARD SHALL FURNISH
WITHOUT CHARGE TO EACH PURCHASER A STATEMENT OF:
(A) THE AMOUNT PAID BY THE PURCHASER UNDER THE PREPAID TUITION
CONTRACT;
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(B) THE NUMBER OF CREDIT HOURS ORIGINALLY COVERED BY THE CONTRACT;
(C) THE NUMBER OF CREDIT HOURS REMAINING UNDER THE CONTRACT; AND
(D) ANY OTHER INFORMATION THE BOARD DETERMINES BY RULE IS NECESSARY OR
APPROPRIATE.
2. THE BOARD SHALL FURNISH A STATEMENT COMPLYING WITH SUBDIVISION ONE
OF THIS SECTION TO A PURCHASER OR BENEFICIARY UPON WRITTEN REQUEST. THE
BOARD MAY CHARGE A REASONABLE FEE FOR EACH STATEMENT FURNISHED UNDER
THIS SUBDIVISION.
S 696-U. REPORTS. 1. NOT LATER THAN DECEMBER FIRST OF EACH YEAR, THE
BOARD SHALL SUBMIT TO THE GOVERNOR, LIEUTENANT GOVERNOR, TEMPORARY PRES-
IDENT OF THE SENATE, SPEAKER OF THE ASSEMBLY, MINORITY LEADER OF THE
SENATE AND THE MINORITY LEADER OF THE ASSEMBLY, A REPORT INCLUDING:
(A) THE BOARD'S FISCAL TRANSACTIONS DURING THE PRECEDING FISCAL YEAR;
(B) THE MARKET AND BOOK VALUE OF THE FUND AS OF THE END OF THE PRECED-
ING FISCAL YEAR;
(C) THE ASSET ALLOCATIONS OF THE FUND EXPRESSED IN PERCENTAGES OF
STOCKS, FIXED INCOME, CASH OR OTHER FINANCIAL INVESTMENTS;
(D) THE RATE OF RETURN ON THE INVESTMENT OF THE FUND'S ASSETS DURING
THE PRECEDING FISCAL YEAR; AND
(E) AN ACTUARIAL VALUATION OF THE ASSETS AND LIABILITIES OF THE
PROGRAM, INCLUDING THE EXTENT TO WHICH THE PROGRAM'S LIABILITIES ARE
UNFUNDED.
2. THE BOARD SHALL MAKE THE REPORT DESCRIBED BY SUBDIVISION ONE OF
THIS SECTION AVAILABLE TO PURCHASERS OF PREPAID TUITION CONTRACTS.
3. NOT LATER THAN DECEMBER FIRST OF EACH YEAR, THE BOARD SHALL PROVIDE
TO THE DEPARTMENT COMPLETE PREPAID TUITION CONTRACT SALES INFORMATION,
INCLUDING PROJECTED ENROLLMENTS OF BENEFICIARIES AT INSTITUTIONS OF
HIGHER EDUCATION.
S 696-V. CONFIDENTIALITY. 1. RECORDS IN THE CUSTODY OF THE BOARD
RELATING TO THE PARTICIPATION OF SPECIFIC PURCHASERS AND BENEFICIARIES
IN THE PROGRAM ARE CONFIDENTIAL.
2. NOTWITHSTANDING SUBDIVISION ONE OF THIS SECTION, THE BOARD MAY
RELEASE INFORMATION DESCRIBED BY SUCH SUBDIVISION TO AN INSTITUTION OF
HIGHER EDUCATION IN WHICH A BENEFICIARY MAY ENROLL OR IS ENROLLED. THE
INSTITUTION OF HIGHER EDUCATION SHALL KEEP THE INFORMATION CONFIDENTIAL.
S 3. The state finance law is amended by adding a new section 78-a to
read as follows:
S 78-A. NEW EMPIRE FUND. 1. THERE IS HEREBY ESTABLISHED IN THE SOLE
CUSTODY OF THE STATE COMPTROLLER A SPECIAL FUND TO BE KNOWN AS THE "NEW
EMPIRE FUND". ALL PAYMENTS FROM SUCH FUND SHALL BE MADE IN ACCORDANCE
WITH ARTICLE FOURTEEN-B OF THE EDUCATION LAW.
2. THE FUND SHALL CONSIST OF:
(A) STATE APPROPRIATIONS FOR PURPOSES OF THE FUND;
(B) MONEY ACQUIRED FROM OTHER GOVERNMENTAL OR PRIVATE SOURCES;
(C) MONEY PAID UNDER PREPAID TUITION CONTRACTS; AND
(D) THE INCOME FROM MONEY DEPOSITED IN THE FUND.
3. THE PREPAID HIGHER EDUCATION TUITION BOARD ESTABLISHED BY SECTION
SIX HUNDRED NINETY-SIX-B OF THE EDUCATION LAW, HEREINAFTER REFERRED TO
IN THIS SECTION AS THE "BOARD", SHALL ADMINISTER THE ASSETS OF THE FUND.
THE BOARD IS THE TRUSTEE OF THE FUND'S ASSETS.
4. THE BOARD MAY:
(A) SEGREGATE CONTRIBUTIONS AND PAYMENTS TO THE FUND INTO VARIOUS
ACCOUNTS; AND
(B) ACQUIRE, HOLD, MANAGE, PURCHASE, SELL, ASSIGN, TRADE, TRANSFER AND
DISPOSE OF ANY SECURITY, EVIDENCE OF INDEBTEDNESS OR OTHER INVESTMENT IN
WHICH THE FUND'S ASSETS MAY BE INVESTED.
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5. (A) THE COMPTROLLER SHALL INVEST THE ASSETS OF THE FUND IN INVEST-
MENTS AUTHORIZED BY ARTICLE FOUR-A OF THE RETIREMENT AND SOCIAL SECURITY
LAW, PROVIDED HOWEVER, THAT:
(I) THE PROVISIONS OF PARAGRAPH (A) OF SUBDIVISION TWO OF SECTION ONE
HUNDRED SEVENTY-SEVEN OF THE RETIREMENT AND SOCIAL SECURITY LAW SHALL
NOT APPLY EXCEPT FOR SUBPARAGRAPH (II) OF SUCH PARAGRAPH; AND
(II) NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION SEVEN OF SECTION
ONE HUNDRED SEVENTY-SEVEN OF THE RETIREMENT AND SOCIAL SECURITY LAW OR
ANY OTHER LAW TO THE CONTRARY, THE ASSETS OF THE TRUST FUND MAY BE
INVESTED IN ANY FUNDING AGREEMENT ISSUED IN ACCORDANCE WITH SECTION
THREE THOUSAND TWO HUNDRED TWENTY-TWO OF THE INSURANCE LAW BY A DOMESTIC
LIFE INSURANCE COMPANY OR A FOREIGN LIFE INSURANCE COMPANY DOING BUSI-
NESS IN THIS STATE, SUBJECT TO THE FOLLOWING:
(1) SUCH A FUNDING AGREEMENT MAY PROVIDE FOR A GUARANTEED MINIMUM RATE
OF RETURN;
(2) SUCH A FUNDING AGREEMENT MAY BE ALLOCATED AS EITHER A SEPARATE
ACCOUNT OR A GENERAL ACCOUNT OF THE ISSUER, AS THE COMPTROLLER MAY
DECIDE;
(3) TOTAL INVESTMENTS OF THE TRUST FUND PURSUANT TO THIS PARAGRAPH IN
ANY FUNDING AGREEMENTS ISSUED BY A SINGLE LIFE INSURANCE COMPANY WHICH
ARE ALLOCATED AS A GENERAL ACCOUNT OF THE ISSUER SHALL NOT, IN THE
AGGREGATE, EXCEED THREE HUNDRED FIFTY MILLION DOLLARS; AND
(4) NO ASSETS OF THE TRUST FUND SHALL BE INVESTED IN ANY SUCH FUNDING
AGREEMENT UNLESS, AT THE TIME OF SUCH INVESTMENT, THE GENERAL OBLI-
GATIONS OR FINANCIAL STRENGTH OF THE ISSUER HAVE RECEIVED EITHER THE
HIGHEST OR SECOND HIGHEST RATING BY TWO NATIONALLY RECOGNIZED RATING
SERVICES OR BY ONE NATIONALLY RECOGNIZED RATING SERVICE IN THE EVENT
THAT ONLY ONE SUCH SERVICE RATES SUCH OBLIGATIONS.
(B) TRUST FUND ASSETS SHALL BE KEPT SEPARATE AND SHALL NOT BE COMMIN-
GLED WITH OTHER ASSETS, EXCEPT AS PROVIDED IN THIS SECTION. THE COMP-
TROLLER MAY ENTER INTO CONTRACTS TO PROVIDE FOR INVESTMENT ADVICE AND
MANAGEMENT, CUSTODIAL SERVICES, AND OTHER PROFESSIONAL SERVICES FOR THE
ADMINISTRATION AND INVESTMENT OF THE PROGRAM. ADMINISTRATIVE FEES, COSTS
AND EXPENSES, INCLUDING INVESTMENT FEES AND EXPENSES, SHALL BE PAID FROM
THE ASSETS OF THE FUND.
S 4. (a) As soon as possible on or after the effective date of this
act, the governor shall appoint the members of the prepaid higher educa-
tion tuition board. In making the appointments, the governor shall
designate two members for terms expiring February 1, 2011, two members
for terms expiring February 1, 2013 and two members for terms expiring
February 1, 2015.
(b) Such board shall be prepared to enter into prepaid tuition
contracts not later than the ninetieth day after the date all the
members are appointed or January 1, 2010, whichever occurs later.
S 5. This act shall take effect on the first of September next
succeeding the date on which it shall have become a law.