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HB 993 Virginia Higher Education Tuition Trust Fund.

Introduced by: William C. Mims | all patrons    ...    notes | add to my profiles


Virginia Higher Education Tuition Trust Fund. Establishes the Virginia Higher Education Tuition Trust Fund, administered by an eight-member board consisting of state education and financial officials and citizens. The Board is authorized to develop and enter into contracts with purchasers for advance payments of undergraduate tuition at two- and four-year public institutions of higher education in Virginia. The Fund would be established in the state treasury, invested in a variety of properties and obligations and would permit the purchase of tuition at a fixed, guaranteed level potentially lower than actual cost at the time of ultimate enrollment. Income earned on Fund investments would cover the difference between prepaid and actual tuition costs.

As trustee of the Fund, the Board is directed to serve as a prudent investor and is authorized to appoint an executive director and to employ an actuary. The Board is to develop guidelines and regulations for prepaid tuition contracts, including provisions for residency, withdrawal, transfer, termination, refunds, application of funds to out-of-state and private institutions, and any fees or penalties. Purchase of a prepaid tuition contract would not guarantee admission or continued enrollment in any institution. The Board would also be required to obtain favorable rulings from the Internal Revenue Service regarding the deferral of income earned on tuition prepayments and the exemption of Fund assets and earnings from federal taxation.

The measure has a delayed effective date of July 1, 1996; however, in the interim, the Secretary of Finance and the Director of the State Council of Higher Education are required to seek the required federal approvals and responses. The Board may be constituted prior to July 1, 1996 upon receipt of favorable IRS rulings.