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2001 SESSION

015876852
HOUSE BILL NO. 2480
Offered January 10, 2001
Prefiled January 10, 2001
A BILL to amend and reenact §§ 23-38.75 and 23-38.76 of the Code of Virginia, relating to prepaid college scholarships for children of VIEW participants.
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Patron-- Moran
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Referred to Committee on Health, Welfare and Institutions
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Be it enacted by the General Assembly of Virginia:

1. That §§ 23-38.75 and 23-38.76 of the Code of Virginia are amended and reenacted as follows:

§ 23-38.75. Definitions.

As used in this chapter, unless the context requires a different meaning:

"Board" means the Board of the Virginia College Savings Plan.

"Contributor" means a person who contributes money to a savings trust account established pursuant to this chapter on behalf of a qualified beneficiary and who is listed as the owner of the savings trust account.

" Plan" means the Virginia College Savings Plan.

"Prepaid tuition contract" means the contract entered into by the Board and a purchaser pursuant to this chapter for the advance payment of tuition at a fixed, guaranteed level by the purchaser for a qualified beneficiary to attend any two-year or four-year public institution of higher education in the Commonwealth to which the qualified beneficiary is admitted.

"Purchaser" means a person who makes or is obligated to make advance payments in accordance with a prepaid tuition contract and who is listed as the owner of the prepaid tuition contract.

"Qualified beneficiary" or "beneficiary" means (i) a resident of the Commonwealth, as determined by the Board, who is the beneficiary of a contract and who may apply advance tuition payments to tuition as set forth in this chapter; (ii) a beneficiary of a contract purchased by a resident of the Commonwealth, as determined by the Board, who may apply advance tuition payments to tuition as set forth in this chapter; or (iii) a beneficiary of a savings trust account established pursuant to this chapter; or (iv) a beneficiary of a VIEW scholarship account established pursuant to this chapter.

"Savings trust account" means an account established by a contributor pursuant to this chapter on behalf of a qualified beneficiary in order to apply distributions from the account toward qualified higher education expenses at eligible educational institutions, both as defined in § 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law.

"Savings trust agreement" means the agreement entered into by the Board and a contributor establishing a savings trust account.

"Tuition" means the quarter, semester, or term charges imposed for undergraduate tuition by any two-year or four-year public institution of higher education in the Commonwealth and all mandatory fees required as a condition of enrollment of all students. A beneficiary may apply benefits under a prepaid tuition contract and distributions from a savings trust account toward graduate-level tuition and toward tuition costs at such eligible educational institutions, as that term is defined in 26 U.S.C. § 529 or any other applicable section of the Internal Revenue Code of 1986, as amended, as determined by the Board in its sole discretion.

"Virginia Initiative for Employment not Welfare (VIEW) scholarship account" means a scholarship account, established on behalf of a qualified beneficiary who is a child of a VIEW participant, purchased by the Department of Social Services. Ownership of the scholarship account shall be retained by the Department of Social Services until such time as the student and the student's family complete any activities or actions prescribed by regulation of the State Board of Social Services, in consultation with the Board, as conditions for receipt of a VIEW scholarship account. Such accounts shall be an incentive for previously unemployed parents to gain long-term employment and to redirect their children's lives by providing them with an opportunity for a college education. Neither the qualified beneficiary nor the family of such a qualified beneficiary may cancel a scholarship or receive any refund of the amount paid for a scholarship, in lieu of the use of the scholarship for the payment of a qualified beneficiary's tuition.

§ 23-38.76. Virginia College Savings Plan established; governing board; terms.

A. To enhance the accessibility and affordability of higher education for all citizens of the Commonwealth, there is hereby established as an independent agency of the Commonwealth, the Virginia College Savings Plan (the Plan). Moneys of the Plan shall be held in the state treasury in a special nonreverting fund (the Fund), which shall consist of payments received pursuant to prepaid tuition contracts or , contributions to savings trust accounts made pursuant to this chapter, contributions to VIEW scholarship accounts made pursuant to this chapter, bequests, endowments or grants from the United States government, its agencies and instrumentalities, and any other available sources of funds, public or private. Any moneys remaining in the Fund at the end of a biennium shall not revert to the general fund but shall remain in the Fund. Interest and income earned from the investment of such funds shall remain in the Fund and be credited to it.

B. The Plan shall be administered by an eight-member Board, as follows: the Director of the State Council of Higher Education for Virginia or his designee; the Chancellor of the Virginia Community College System or his designee; the State Treasurer or his designee; the State Comptroller or his designee; and four citizens, to be appointed by the Governor, with significant experience in finance, accounting, and investment management. No person holding a full-time position of employment with the Commonwealth, any county or municipality, any institution of higher education, or any agency, instrumentality, or subdivision of the foregoing shall be eligible for appointment to the Board.

Of the citizen members to be appointed initially, two shall be appointed for four-year terms, and two shall be appointed for two-year and three-year terms, respectively. Thereafter, all appointments shall be for terms of four years, except that appointments to fill vacancies shall be for the unexpired terms. No person shall be appointed to serve for or during more than two successive four-year terms, but after the expiration of a term of three years or less, or after the expiration of the remainder of a term to which appointed to fill a vacancy, two additional terms may be served by such member if appointed thereto. Should a noncitizen member cease to hold his public office, the vacancy shall be filled for the remainder of the term by his successor.

C. Members of the Board shall receive no compensation, but shall be reimbursed for actual expenses incurred in the performance of their duties. The Board shall elect from its membership a chairman, vice-chairman, and a treasurer for each calendar year. A majority of the members of the Board shall constitute a quorum.