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

 

STATE BOARD OF ADMINISTRATION

Florida Prepaid College Board

RULE NOS.:RULE TITLES:

19B-5.002Contract Benefits

19B-5.003Contract Requirements

19B-5.004Contract Purchasers

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 purpose and effect of this rule development is to amend when a Dormitory Plan may be used to permit usage during the summer term; to allow for submission of a request to extend plan benefits and provide the factors the Board considers when a request to extend plan benefits is received; and to limit prospective purchaser and co-purchaser to natural persons.

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(4) 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, Director of Operations, 1801 Hermitage Blvd., Suite 210, Tallahassee, FL, [phone], [e-mail]. 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, Director of Operations, 1801 Hermitage Blvd., Suite 210, Tallahassee, FL, [phone], [e-mail]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

19B-5.002 Contract Benefits.

(1) A qualified beneficiary may begin to receive benefits during the Summer Semester of the scheduled matriculation year. The benefits of the purchaser’s advance payment contract shall be paid at the time a qualified beneficiary enrolls in a state postsecondary institution except in the event of legislative action pursuant to Section 1009.98(5), F.S. The credit hours purchased may be used during any semester of postsecondary enrollment. To receive benefits under this program, a qualified beneficiary whose advance payment contract is in good standing will be issued an identification card prior to each postsecondary Fall enrollment period. No identification card will be issued to a beneficiary unless the beneficiary submits a social security number. Benefits under each advance payment contract are available for use by the specified beneficiary for one (1) matriculation each semester, however, a beneficiary may matriculate more than once a semester if required by law or policy of the postsecondary institution.

(2) To be eligible to receive Dormitory Plan benefits, qualified beneficiaries must file a complete and timely residence application with the applicable postsecondary institution. Beneficiaries must comply with all housing authority rules and regulations. The housing prepayment fee will be waived for the first housing application. Subsequent applications to alternate housing authorities will require payment by the purchaser of the appropriate prepayment fee. The Dormitory Plan is not available for use during the summer term.

(3) Local Fee Plans and Tuition Differential Fee Plans are tied to the corresponding type of Tuition Plan purchased for the qualified beneficiary for matriculation purposes. Payment for the Local Fees and the Tuition Differential Fee will be remitted with the payment for Registration Fees, upon the receipt of an invoice for a qualified beneficiary whose advance payment contract includes those plans.

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-5.002, Amended 5-31-95, 6-20-96, 2-18-99, 1-1-07, 12-17-07, 11-30-09, 10-18-10, _________.

 

19B-5.003 Contract Requirements.

(1) Each applicaton submitted to the Board must specify the qualified beneficiary, provided however, that the board’s direct support organization and organizations operating scholarship programs pursuant to Rule 19B-5.007, F.A.C., shall be permitted to leave the qualified beneficiary’s name blank until April 1 of the anticipated enrollment year.

(2) Only one (1) qualified beneficiary is allowed per advanced payment contract, and a specific beneficiary can be named in only one (1) advance payment contract, provided however, a second advance payment contract may be purchased for a beneficiary by the direct support organization or an organization operating a scholarship program pursuant to Rule 19B-5.007, F.A.C. If a second advance payment contract is purchased for a beneficiary by the direct support organization or an organization operating a scholarship program pursuant to Rule 19B-5.007, F.A.C., the purchaser of the original prepaid contract may receive a refund pursuant to subsection 19B-11.001(2)(a), F.A.C. In the event duplicate advance payment contracts for the same beneficiary are processed and the second advance payment contract was not purchased by the direct support organization or an organization operating a scholarship program pursuant to Rule 19B-5.007, F.A.C., the advance payment contract processed first shall be deemed valid and the remaining advance payment contract shall be deemed terminated.

(3) The purchaser does not have to designate the postsecondary institution that the beneficiary will attend.

(4) The benefits of an advance payment contract may be used within three (3) years in advance of the selected matriculation date indicated in the application with no penalty or additional cost. However, to utilize the benefits prior to the selected matriculation date, the purchaser must pay the advance payment contract in full before changing such matriculation date.

(5)(a) The benefits of an advance payment contract may be received for up to a ten (10) year period after the matriculation date. The Account Owner or Benficiary may submit a written request for an extension to the Board within one year of the benefit period expiring; however the Board does not guarantee approval of an extension request. Factors the Board considers for granting an extension of benefits for up to two years are time spent by the Beneficiary as an active duty member of the U.S. Armed Services, prior extensions, prior Beneficiary changes, recent plan usage, available alternatives, and financial and medical hardships. This ten (10) year limitation will be extended upon application to the Board. Any time spent by the qualified beneficiary in the military service tolls the time for receiving contract benefits under all plans. The matriculation date is the projected college enrollment year of the qualified beneficiary, based on the information about the qualified beneficiary’s age or grade contained in the purchaser’s application, or similar information received subsequently by the Board from the purchaser. The right to use the benefits of an advance payment contract shall expire on December 31, ten (10) years after the matriculation date, or any extension thereof.

(b) When the benefits of an advance payment contract have not been used on December 31, nine (9) years after the matriculation date or one (1) year prior to the expiration of any extension of the expiration date for the use of the advance payment contract benefits, the Board shall mail a written notice to the purchaser which indicates:

1. The procedure to extend the time period for the use of advance payment contract benefits or to obtain a refund for the contract;

2. That the right to use the advance payment contract benefits will expire on December 31, ten (10) years after the matriculation date or any extension thereof; and

3. That such benefits and refund will escheat to the Florida Prepaid College Trust Fund on that date.

Such notice shall be mailed not later than 180 days prior to the expiration of the advance payment contract benefits. An alphabetical list of the names of purchasers of such advance payment contracts shall be posted on the Board’s website on the Internet.

(c) The benefits from and any refund associated with an advance payment contract for which the benefits have not been used by December 31, ten (10) years after the matriculation date, or any extension thereof, shall escheat to the Florida Prepaid College Trust Fund.

(6) Contract benefits associated with advance payment contracts that are composed of a Tuition Plan, a Local Fee Plan and a Tuition Differential Fee Plan will only be paid if the Tuition Plan, Local Fee Plan and Tuition Differential Fee Plan are in good standing. Payments for the contract benefits associated with Local Fee Plans and Tuition Differential Fee Plan shall not be remitted to pay the Registration Fees for any beneficiary attending a State University or Florida College. Payments for the contract benefits associated with Local Fee Plans and Tuition Differential Fee Plans may be remitted to pay tuition at private and out-of-state colleges for any qualified beneficiary.

Rulemaking Authority 1009.971(1), (4), (6) FS. Law Implemented 1009.98(4) FS. History–New 3-29-89, Amended 2-6-90, 3-19-92, Formerly 4G-5.003, Amended 5-31-95, 6-20-96, 2-18-99, 6-6-99, 11-6-01, 8-27-02, 12-17-07, 1-28-09, 10-18-10, ____________.

 

19B-5.004 Contract Purchasers.

(1) Any person, corporation, or organization may purchase an advance payment contract for a qualified beneficiary. Any natural person named as the purchaser or the co-purchaser must be 18 years of age or older and each must be either a United States citizen or a resident alien.

(2) For advance payment contracts that include a 4-Year Florida University Plan, 2 + 2 Florida Plan, 4-Year Florida College Plan or 2-Year Florida College Plan:

(a) Co-purchasers are permitted, but are not required. When a co-purchaser is designated on an advance payment contract, the purchaser and co-purchaser each will enjoy a right of survivorship.

(b) Changes to the purchaser, co-purchaser or beneficiary designated on the advance payment contract, requests for voluntary termination of the advance payment contract, and refund requests associated with the termination of an advance payment contract must be in writing and contain the notarized signature of the purchaser and co-purchaser. All other changes to the advance payment contract must be in writing and approved by the purchaser.

(3) For advance payment contracts that include a Tuition Plan purchased prior to February 1, 2009:

(a) Co-purchasers are permitted, and will enjoy only a right of survivorship. However, the purchaser may, without the consent or authorization of the co-purchaser, execute all contract changes, conversions, transfers, cancellations, and refund requests.

(b) Any requests to change the purchaser designated on the advance payment contract must be signed by the purchaser and notarized by a notary. Refunds shall be made payable to the purchaser only.

(c) If a purchaser terminates a contract pursuant to Rule 19B-10.002, F.A.C., the co-purchaser must be notified in writing.

(d) Purchasers may elect to change the rights of a co-purchaser to be the same as those for advance payment contracts purchased on or after February 1, 2009, by submitting a written request to the Board. The request must be signed by the purchaser and the co-purchaser and both signatures must be notarized by a notary. If a purchaser changes the rights enjoyed by the co-purchaser to those for advance payment contracts purchased on or after February 1, 2009, the change in the co-purchaser’s rights is irrevocable, the provisions of paragraphs 19B-5.004(3)(a), (b) and (c), F.A.C., shall not apply to the advance payment contract and the provisions of subsection 19B-5.004(4), F.A.C., shall apply to the advance payment contract.

(4) For advance payment contracts that include a Tuition Plan purchased on or after February 1, 2009:

(a) Co-purchasers are permitted, but are not required. When a co-purchaser is designated on an advance payment contract, the purchaser and co-purchaser each will enjoy a right of survivorship.

(b) Changes to the purchaser, co-purchaser or beneficiary designated on the advance payment contract, requests for voluntary termination of the advance payment contract, and refund requests associated with the termination of an advance payment contract must be in writing and contain the notarized signature of the purchaser and co-purchaser. All other changes to the advance payment contract must be in writing and approved by the purchaser.

(5) The provisions of subsection 19B-5.004(3), F.A.C., also apply to advance payment contracts for Dormitory Plan, Local Fee Plans and Tuition Differential Fee Plans, regardless of the date of their purchase, that are associated with Tuition Plans that were purchased prior to February 1, 2009. The provisions of subsection 19B-5.004(4), F.A.C., apply to advance payment contracts for Dormitory Plans, Local Fee Plans and Tuition Differential Fee Plans associated with Tuition Plans that were purchased on or after February 1, 2009.

Rulemaking Authority 1009.971(1), (4), (6) FS. Law Implemented 1009.98 FS. History–New 3-29-89, Amended 3-19-92, Formerly 4G-5.004, Amended 12-5-93, 6-20-96, 7-28-98, 11-27-02, 1-28-09, 10-18-10, __________.

 

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