Sec. 54.765. COMPTROLLER'S DUTIES; TRANSFERS TO INSTITUTIONS ON REDEMPTION OF TUITION UNITS. (a) Except as provided by Subsection (h), the comptroller is the custodian of the assets of the fund.

(b) The comptroller shall pay money from the fund supported only by a voucher signed by the comptroller or the comptroller's authorized representative. The comptroller may designate the plan manager as the comptroller's authorized representative to pay expenditures or transfer funds under this section and Sections 54.766 and 54.767.

(c) When a beneficiary enrolls at a general academic teaching institution or two-year institution of higher education, on written authorization from the purchaser of the tuition unit or units for that beneficiary, the comptroller or the comptroller's authorized representative shall transfer to the institution an amount equal to the lesser of:

(1) the sum of:

(A) the total purchase price of the tuition unit or units the beneficiary redeems for the semester or other academic term; and

(B) the amount determined under Subsection (d); or

(2) an amount equal to 101 percent of the amount of tuition and required fees covered by the tuition units being redeemed.

(d) The amount required to be transferred under Subsection (c)(1)(B) is the greater of:

(1) an amount equal to the portion of the actual total return on all investment assets of the fund attributable to the amount transferred under Subsection (c)(1)(A); or

(2) an amount equal to the portion of the total return on all investment assets of the fund attributable to the amount transferred under Subsection (c)(1)(A) that would result assuming an annual return on all investment assets of the fund of five percent, subject to the availability of money in the fund for that purpose.

(e) If the amount that would otherwise be transferred under Subsections (c)(1)(A) and (B) exceeds the amount that may be transferred under Subsection (c)(2), the excess amount shall be retained in the fund and used as necessary to provide sufficient money to meet the minimum transfer requirements under Subsection (c)(1)(B) as specified by Subsection (d).

(f) When a beneficiary enrolls at a private or independent institution of higher education, medical and dental unit, career school, or accredited out-of-state institution of higher education, on written authorization from the purchaser of the tuition unit or units for that beneficiary, the comptroller or the comptroller's authorized representative shall transfer to the institution the lesser of:

(1) an amount equal to the current cost of the tuition and required fees that would be covered by redemption of the number and type of tuition units the beneficiary is redeeming if the beneficiary were redeeming the unit or units at a general academic teaching institution or two-year institution of higher education as follows:

(A) for a Type I unit, at the general academic teaching institution that had the highest tuition and required fee cost;

(B) for a Type II unit, at a general academic teaching institution that had tuition and required fee cost at the weighted average; and

(C) for a Type III unit, at a two-year institution of higher education that had tuition and required fee cost at the weighted average; or

(2) an amount equal to the total purchase price of the tuition unit or units the beneficiary redeems for the semester or other academic term plus the portion of the total return on assets of the fund attributable to that amount.

(g) The comptroller annually shall provide to the board a sworn statement of the amount of the fund's assets in the comptroller's or plan manager's custody. The plan manager shall provide to the comptroller a quarterly report of all funds distributed during the previous quarter. The comptroller may require more frequent reports or may request that the plan manager provide any additional information at any time necessary to ensure that the fund's assets are adequately protected.

(h) The board may select one or more commercial banks, depository trust companies, or other entities to serve as custodian of all or part of the fund's assets.

Added by Acts 2007, 80th Leg., R.S., Ch. 1281 (H.B. 3900), Sec. 1, eff. June 15, 2007.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 87 (S.B. 1969), Sec. 7.010, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch. 560 (S.B. 1941), Sec. 6, eff. June 19, 2009.

Acts 2019, 86th Leg., R.S., Ch. 903 (H.B. 3655), Sec. 11, eff. June 10, 2019.