Notice of Development of Rulemaking

STATE BOARD OF ADMINISTRATION
Florida Prepaid Postsecondary Education Expense Board
RULE NO: RULE TITLE
19B-5.004: Contract Purchasers
PURPOSE AND EFFECT: Requires that a co-purchaser satisfy the same requirements that a purchaser must meet.
Revises requirements for Tuition Plans purchased on or after February 1, 2009, to: a) Require the co-purchaser’s approval for changes of the purchaser, co-purchaser and beneficiary for an account; b) Provide that the purchaser and co-purchaser each enjoy a survivorship right; c) Require the co-purchaser’s authorization for requests to terminate a Prepaid Plan and refund requests associated with the termination of Prepaid Plans. Allows purchasers and co-purchasers to revise the requirements for Prepaid Plans purchased prior to February 1, 2009, to include those requirements.
The changes are made applicable to Tuition Plans purchased on or after February 1, 2009, because the 2008-2009 Open Enrollment Period ends January 31, 2009; the Board has been receiving applications under the existing rules for the 2008-2009 Open Enrollment since February 1, 2008. Annually, the Board begins receiving new applications for the next succeeding open enrollment period on the day following the conclusion of prior Open Enrollment Period. February 1, 2009, is the first day the Board will begin receiving applications for the 2009-2010 Open Enrollment. By making the change effective on February 1, 2009, the Board can apply the requirements to all Prepaid Tuition Plan applications received for the 2009-2010 Open Enrollment Period.
SUBJECT AREA TO BE ADDRESSED: The rights and responsibilities of the Florida Prepaid College Plan’s advance payment contract’s purchaser and co-purchaser.
SPECIFIC AUTHORITY: 1009.971(1), (4), (6) FS.
LAW IMPLEMENTED: 1009.98 FS.
IF REQUESTED IN WRITING AND NOT DEEMED UNNECESSARY BY THE AGENCY HEAD, A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
TIME AND DATE: September 29, 2008, 2:00 p.m.
PLACE: Suite 210, Hermitage Building, 1801 Hermitage Boulevard, Tallahassee, Florida
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Thomas J. Wallace, Executive Director, 1801 Hermitage Boulevard, Suite 210, Tallahassee, Florida 32308, telephone (850)488-8514

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:

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 for tuition plans 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, 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. Any natural person named as the purchaser and co-purchaser must be 18 years of age or older and must be either a United States citizen or a resident alien.

(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(2)(a), (b) and (c), F.A.C., shall not apply to the advance payment contract and the provisions of subsection 19B-5.004(3), F.A.C., shall apply to the advance payment contract.

(3) For advance payment contracts for tuition plans 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.

(4) The provisions of subsection 19B-5.004(2), F.A.C., also apply to advance payment contracts for dormitory, local fee 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(3), F.A.C., apply to advance payment contracts for dormitory, local fee and tuition differential fee plans associated with tuition plans that are purchased on or after February 1, 2009.

Specific 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,________.