The purpose and effect of this rule development is to update rules to reflect modifications to the Florida Prepaid College Program.  

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    STATE BOARD OF ADMINISTRATION

    Florida Prepaid College Board

    RULE NOS.:RULE TITLES:

    19B-4.001Application

    19B-4.002Contract Prices

    19B-4.005Maximum Account Balance Limit

    PURPOSE AND EFFECT: The purpose and effect of this rule development is to update rules to reflect modifications to the Florida Prepaid College Program.

    SUMMARY: The proposed rules amend the Master Covenant to increase consistency between the Florida Prepaid College Program and the Florida College Savings Program; to add beneficiaries as survivors; to allow the Florida Prepaid College Board to reduce or eliminate application fees; to allow the use of dormitory plans during summer terms; to allow for prepaid college plans to be downgraded instead of terminated, when possible; and to allow plans to be restored to the original Plan within six months of a Plan downgrade. The proposed rules additionally update references; include information that may be solicited from applicants to allow for an on-line application process, versus use of a printed form; amend actuarial assumptions for the Prepaid College Program; and provide flexibility in timing for review of plan pricing.

    SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

    The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.

    The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: During a discussion of the economic impact of these rules at its Board meeting, the Board, based upon the expertise and experience of its members, determined that a SERC was not necessary and that the rules will not require ratification by the Legislature. No person or interested party submitted additional information regarding the economic impact.

    Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

    RULEMAKING AUTHORITY: 1009.971(1), (4), (6) FS.

    LAW IMPLEMENTED: 1009.98, 1009.98(2), 1009.981 FS.

    IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

    Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Michael Frick, (850)488-8514, michael.frick@myfloridaprepaid.com. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

    THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Michael Frick, (850)488-8514, michael.frick@myfloridaprepaid.com

     

    THE FULL TEXT OF THE PROPOSED RULE IS:

    19B-4.001 Application.

    (1)(a) Rule Chapters 19B-4 through 19B-13 and 19B-15, F.A.C., apply to advance payment contracts for the prepayment of postsecondary registration, local fees, tuition differential fees and/or dormitory residency fees under the Stanley G. Tate Florida Prepaid College Program, the “Program.” “Purchaser” means “Account Owner” and “Co-Purchaser” means “Survivor.” See the Master Contract for defined terms.

    (b) The application period shall commence and terminate on dates set annually by the Board and published in the Florida Administrative RegisterWeekly. Applications for advance payment contracts purchased through the Board’s direct support organization, The Florida Prepaid College Foundation, Inc., for purchasers participating in employer participation programs or by purchasers pursuant to a court order will be accepted by the Board at any time. Other applications for advance payment contracts submitted to the Board outside the annual application period will be processed for data collection and administrative purposes, but will not be accepted by the Board until the beginning of the next succeeding annual application period.

    (c) The contract prices associated with applications submitted to the Board during the annual application period shall be the contract prices applicable to advance payment contracts for the annual application period. The contract prices associated with applications submitted to the Board outside the annual application period, except for those purchased through the Board’s direct support organization, The Florida Prepaid College Foundation, Inc., for purchasers participating in employer participation programs or by purchasers pursuant to a court order, shall be the contract prices applicable to advance payment contracts for the next succeeding annual application period. After acceptance by the Board of the purchaser’s application, a participation and payment schedule shall be mailed to the purchaser.

    (d) The advance payment contract shall be comprised of the application, Mmaster Contractcovenant, and participation and payment schedule.

    (2) The Florida Prepaid College Plan and Florida 529 Savings Plan New Account Application, Form No. FPCB 2013-01, is http://www.flrules.org/Gateway/reference.asp?No=Ref-01857 is hereby incorporated by reference and may be obtained from the Board by calling (800)552-GRAD (4723) (prompt 1). The Florida Prepaid College Plan Master ContractCovenant, Form No. FPCB 20143-02, http://myfloridaprepaid.com/about-florida-prepaid-college-plans/rulemaking-information.aspx, http://www.flrules.org/Gateway/reference.asp?No=Ref-01859 is hereby incorporated by reference and may be obtained from the Board by calling (800)552-GRAD (4723) (prompt 1). The Florida Prepaid College Plan Add-a-Plan Application, Form No. FPCB 2013-03, http://www.flrules.org/Gateway/reference.asp?No=Ref-01860, http://www.flrules.org/Gateway/reference.asp?No=Ref-00769, http://www.flrules.org/Gateway/reference.asp?No=Ref-00770, are hereby incorporated by reference and may be obtained from the Board by calling (800)552-GRAD (4723) (prompt 1).

    (3) Applicants may be required to provide the following information to enroll in the Program:

    (a) For the Account Owner, Survivor, Parent and Beneficiary:

    (i) Full legal name and salutation

    (ii) Social Security Number

    (iii) Date of birth

    (iv) Full mailing address

    (v) Two telephone numbers

    (vi) Two e-mail addresses

    (b) Age, grade, and projected enrollment year of the Beneficiary

    (c) The plan type and payment option of Florida Prepaid College Plan(s) selected for enrollment

    (d) Proof of, or information used to verify proof of the Parent’s or Beneficiary’s Florida residency as defined in 19B-7.002

    (e) Marketing information:

    (i) How did you hear about the Program?

    (ii) Annual Family Income

    (iii) Purchaser’s relationship to the Beneficiary

    (iv) Beneficiary gender

    (v) Beneficiary race

    (f) A Florida 529 Savings Plan Account Number for the same Beneficiary to apply a discount on the Application Fee, if offered and applicable.

    (g) Information required for the processing of a one-time and recurring automatic withdrawal authorization.

    (4) The available method or methods for submitting an Application will be published on the Board’s website (www.MyFloridaPrepaid.com).

    Rulemaking Authority 1009.971(1), (4), (6) FS. Law Implemented 1009.98 FS. History–New 3-29-89, Amended 2-6-90, 3-19-92, Formerly 4G-4.001, Amended 12-5-93, 5-31-95, 6-20-96, 10-20-96, 12-16-97, 2-18-99, 6-6-99, 2-8-00, 5-21-00, 1-3-01, 10-9-01, 11-27-02, 10-1-03, 1-29-04, 12-28-04, 6-2-05, 12-20-05, 1-1-07, 11-27-07, 12-17-07, 11-18-08, 1-28-09, 4-5-09, 10-26-09, 10-18-10, 12-5-11, 11-5-12, ___________.

     

    19B-4.002 Contract Prices.

    (1) The Board will evaluate Plan the advance payment contract prices for revision periodicallyannually. The value of the projected fees included within the Florida College System or the State University System will be based primarily on empirical data for national and Florida postsecondary tuition, required fees, and housing costs. All Planadvance payment contract prices will be published periodicallyannually onin the Board’s website (www.MyFloridaPrepaid.com)Florida Administrative Weekly.

    (2) The advance payment contract prices for:

    (a) The 4-Year Florida University Plan are based on the actuarial assumptions that Registration Fees at State Universities will rise at an average of 6.5 percent per annum, Local Fees at State Universities will rise at an average of 6.5 percent per annum, and the Tuition Differential Fee will rise annually at the maximum increase permitted pursuant to Section 1009.24(16), F.S.

    (b) The 2 + 2 Florida Plan are based on the actuarial assumptions that Registration Fees at State Universities will rise at an average of 6.5 percent per annum, Local Fees at State Universities will rise at an average of 6.5 percent per annum, the Tuition Differential Fee will rise annually at the maximum increase permitted pursuant to Section 1009.24(16), F.S., the Registration Fees at Florida Colleges will rise at an average of 6 percent per annum and Local Fees at Florida Colleges will rise at an average of 6 percent per annum.

    (c) The 4-Year Florida College Plan are based on the actuarial assumptions that the Registration Fees at Florida Colleges will rise at an average of 6 percent per annum and Local Fees at Florida Colleges will rise at an average of 6 percent per annum.

    (d) The 2-Year Florida College Plan are based on the actuarial assumptions that Registration Fees at Florida Colleges will rise at an average of 6 percent per annum and Local Fees at Florida Colleges will rise at an average of 6 percent per annum.

    (e) The Dormitory Plan are based on the actuarial assumption that dormitory fees at State Universities will rise at an average of 6 percent per annum.

    (f) Local Fee Plans are based on the actuarial assumptions that the Local Fees at State Universities will rise at an average of 6.5 percent per annum and Local Fees at Florida Colleges will rise at an average of 6 percent per annum.

    (g) Tuition Differential Fee Plans are based on the actuarial assumption that the Tuition Differential Fee will rise annually at the maximum increase permitted pursuant to Section 1009.24(16), F.S.

    Rulemaking Authority 1009.971(1), (4), (6) FS. Law Implemented 1009.98(2) FS. History–New 3-29-89, Amended 2-6-90, 3-19-92, Formerly 4G-4.002, Amended 5-31-95, 2-18-99, 2-8-00, 12-28-03, 12-28-04, 12-20-05, 12-17-07, 11-30-09, 10-18-10, __________.

     

    19B-4.005 Maximum Account Balance Limit.

    (1) The maximum account balance limit shall be determined annually by the Board. The Mmaximum Aaccount Bbalance limit shall be calculated by multiplying the Qqualified Hhigher Eeducation Eexpenses, including tuition fees, room and board, and supplies, at the most expensive Eeligible Eeducational iInstitution, by seven (7), and rounding the resulting product downward to the nearest $1,000.00 increment. In determining the Qqualified Hh igher Eeducation Eexpenses at the most expensive Eeligible Eeducational Institution, the Board will consult the figures compiled by the College Board and published in the annual College Handbook which is found at the College Board’s website (www.CollegeBoard.com)at http://store.collegeboard.com. The Mmaximum Aaccount Bbalance limit shall not exceed the amount permitted pursuant to Section s.529 of the Internal Revenue Code. The Board will publish the amount of the maximum account balance limit annually in the Florida Administrative Register. The redemption value of an advance payment contract plus the account balance of an account in the Florida 529 Savings Plan, for the same beneficiary shall not exceed the maximum account balance limit.

    (2) For purposes of the maximum account balance limit, the redemption value of an advance payment contract for:

    (a) The 4-Year Florida University Plan shall be the most expensive lump-sum contract price for the 4-Year Florida University Plan, as determined annually by the Board’s actuary.

    (b) A 2 + 2 Florida Plan shall be the most expensive lump-sum contract price for the 2 + 2 Florida Plan, as determined annually by the Board’s actuary.

    (c) A 4-Year Florida College Plan shall be the most expensive lum-sum contract price for the 4-Year Florida College Plan, as determined annually by the Board’s actuary.

    (d) A 2-Year Florida College Plan shall be the most expensive lump-sum contract price for the 2-Year Florida College Plan, as determined annually by the Board’s actuary.

    (e) A Tuition Plan shall be the most expensive lump-sum price for a 4-Year University Tuition Plan, as determined by the Board’s actuary in the actuarial report prepared by the Board’s actuary dated August 19, 2009.

    (f) A Local Fee Plan shall be the most expensive lump-sum contract price for a 4-Year University Local Fee Plan, as determined annually by the Board’s actuary.

    (g) A Tuition Differential Fee Plan shall be the most expensive lump-sum contract price for a 4-Year University TDF Plan, as determined annually by the Board’s actuary.

    (h) A Dormitory Plan shall be the most expensive lump-sum four (4) year dormitory contract price (8 semesters) as determined annually by the Board’s actuary.

    (3) If the Board receives an application for an advance payment contract or an additional plan as an addendum to an advance payment contract for a beneficiary and the sum of the redemption value of that application’s benefit(s), the redemption value of any existing advance payment contract for that beneficiary and the account balance of a Florida 529 Savings Plan account for that beneficiary exceeds the maximum account balance limit, the Board will notify the purchaser that the Board cannot accept the application.

    Rulemaking Authority 1009.971(1), (4), (6) FS. Law Implemented 1009.98, 1009.981 FS. History–New 11-27-02, Amended 12-28-03, 7-13-06, 12-17-07, 7-9-08, 10-18-10, 11-5-12, _________.

     

    NAME OF PERSON ORIGINATING PROPOSED RULE: Florida Prepaid College Board

    NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Florida Prepaid College Board

    DATE PROPOSED RULE APPROVED BY AGENCY HEAD: June 20, 2013

    DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: June 4, 2013