AB1011: Bill Text

LRB-5353/3

PG:kmg:ks

1995 - 1996 LEGISLATURE

1995 Assembly BILL 1011

March 13, 1996 - Introduced by Representatives Kreibich, Skindrud, Prosser, Jensen, Klusman, Brancel, Freese, Green, Underheim, Notestein, Boyle, Wasserman, Brandemuehl, Silbaugh, Kelso, Krusick, Handrick, Albers, Springer, Seratti, Harsdorf, Gunderson, Huebsch, Hahn, Hutchison, Olsen, Gard, Plombon, F. Lasee, Vrakas, Ainsworth, Ward, Nass, Ladwig, Lehman, Zukowski, Porter, Lorge, Musser, Meyer, Powers and Hoven, cosponsored by Senators Darling, Rude, Schultz, Panzer, Buettner, Drzewiecki, Zien, Fitzgerald and Farrow. Referred to Committee on Colleges and Universities.

AB1011,1,4 An Act to amend 25.14 (1); and to create 16.24, 20.505 (9), 25.17 (1) (vm), 25.80 and 815.18 (3) (o) of the statutes; relating to: establishing a college tuition prepayment program, granting rule-making authority and making an appropriation.

Analysis by the Legislative Reference Bureau

This bill creates a college tuition prepayment program, to be administered by the department of administration (DOA). Under the bill, upon the payment of a $50 enrollment fee, an individual may contract with DOA to purchase tuition units from DOA on behalf of a beneficiary named in the contract. Either the individual or the beneficiary must be a Wisconsin resident, and the beneficiary must be the child or grandchild of the individual. The cost of each tuition unit is determined by DOA, set so as to ensure the ability of DOA to meet its obligations under the program. To the extent possible, however, the cost must be an amount that, in the academic year in which the beneficiary intends to enroll in an accredited institution of higher education, is equal to 1% of the weighted average tuition of bachelor's degree-granting institutions within the University of Wisconsin (UW) System. When the beneficiary enrolls in an accredited institution of higher education in the United States, each tuition unit purchased on his or her behalf entitles the beneficiary to apply toward tuition at the institution an amount equal to 1% of the weighted average tuition of bachelor's degree-granting institutions within the UW System in that academic year. DOA must pay that amount or the amount of tuition, whichever is less, to the institution.

The bill specifies circumstances under which a contract may be terminated and provides for refunds to the individual who purchased the tuition units if the contract is terminated or if less than 100% of the tuition units purchased on behalf of a beneficiary are used by that beneficiary. The bill prohibits DOA from entering into more than one contract on behalf of the same beneficiary. The bill directs DOA to actively promote the college tuition prepayment program and authorizes DOA to contract with any person for the management and operation of the program or any part of the program.

Finally, the bill creates a segregated fund, called the tuition trust fund, consisting of all revenue from the sale of tuition units and from enrollment fees.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB1011, s. 1 Section 1. 16.24 of the statutes is created to read:

AB1011,2,6 16.24 College tuition prepayment program. (1) Definition. In this section, "institution of higher education" means a public or private institution of higher education that is accredited by an accrediting association recognized by the department, and a proprietary school approved by the department of education under s. 38.51.

AB1011,2,8 (2) Weighted average tuition; tuition unit cost. Annually, the department shall determine all of the following:

AB1011,2,12 (a) The weighted average tuition of bachelor's degree-granting institutions within the University of Wisconsin System for the academic year that begins on or after the first day of August of the current year. The amount shall be calculated as follows:

AB1011,2,15 1. For each such institution, multiply the tuition charged a full-time undergraduate who is a resident of this state by the number of full-time equivalent resident undergraduates attending the institution.

AB1011,2,16 2. Add the products under subd. 1.

AB1011,2,18 3. Divide the sum under subd. 2. by the total number of full-time equivalent resident undergraduates attending such institutions.

AB1011,3,6 (b) The price of a tuition unit, which shall be valid for a period determined by the department. The price shall be sufficient to ensure the ability of the department to meet its obligations under this section. To the extent possible, the price shall be an amount that in the anticipated academic year of its use will be equal to 1% of the weighted average tuition determined under par. (a) for that academic year plus the costs of administering the program under this section attributable to the unit.

AB1011,3,9 (3) Tuition prepayment contracts. (a) Except as provided under par. (c), the department shall contract with an individual for the sale of tuition units to that individual if all of the following apply:

AB1011,3,10 1. The individual pays a $50 nonrefundable enrollment fee.

AB1011,3,12 2. The individual is purchasing the tuition units on behalf of a beneficiary named in the contract.

AB1011,3,14 3. The individual or the beneficiary is a resident of this state when the contract is executed.

AB1011,3,15 4. The beneficiary is the child or grandchild of the individual.

AB1011,3,17 (b) The contract shall specify the anticipated academic year of the beneficiary's initial enrollment in an institution of higher education.

AB1011,3,19 (c) The department may not enter into more than one contract on behalf of the same beneficiary.

AB1011,4,2 (4) Number of tuition units purchased. An individual who enters into a contract under sub. (3) may purchase tuition units at any time and in any number, except that the total number of tuition units purchased on behalf of a single beneficiary may not exceed the number necessary to pay for 4 years of full-time attendance as a resident undergraduate at the institution within the University of Wisconsin System that has the highest resident undergraduate tuition, as determined by the department in the anticipated academic years of their use.

AB1011,4,8 (5) Payment of tuition. (a) If an individual named as beneficiary in a contract under sub. (3) attends an institution of higher education in the United States, each tuition unit purchased on his or her behalf entitles that beneficiary to apply toward the payment of tuition at the institution an amount equal to 1% of the weighted average tuition of bachelor's degree-granting institutions within the University of Wisconsin System for the year of attendance, as determined under sub. (2) (a).

AB1011,4,10 (b) Upon request by the beneficiary, the department shall pay to the institution in each semester of attendance the lesser of the following:

AB1011,4,13 1. An amount equal to the value of each tuition unit, as determined under par. (a), multiplied by the number of tuition units purchased on behalf of the beneficiary and not used.

AB1011,4,14 2. An amount equal to the institution's tuition for that semester.

AB1011,4,16 (6) Termination of contract. (a) A contract under sub. (3) may be terminated by the individual entering into the contract if any of the following occurs:

AB1011,4,17 1. The beneficiary dies or is permanently disabled.

AB1011,4,19 2. The beneficiary graduates from high school but is unable to gain admission to an institution of higher education after a good faith effort.

AB1011,4,21 3. The beneficiary attended an institution of higher education but involuntarily failed to complete the program in which he or she was enrolled.

AB1011,4,22 4. The beneficiary is at least 18 years old and one of the following applies:

AB1011,4,23 a. The beneficiary has not graduated from high school.

AB1011,4,24 b. The beneficiary has decided not to attend an institution of higher education.

AB1011,5,2 c. The beneficiary attended an institution of higher education but voluntarily withdrew without completing the program in which he or she was enrolled.

AB1011,5,4 5. Other circumstances determined by the department to be grounds for termination.

AB1011,5,8 (b) The department shall terminate a contract under sub. (3) if any of the tuition units purchased under the contract remain unused 10 years after the anticipated academic year of the beneficiary's initial enrollment in an institution of higher education, as specified in the contract.

AB1011,5,15 (7) Refunds. (a) When a beneficiary completes the program in which he or she is enrolled, if the beneficiary has not used all of the tuition units purchased on his or her behalf, the department shall refund to the individual who entered into the contract an amount equal to 1% of the weighted average tuition in the academic year in which the beneficiary completed the program, as determined under sub. (2) (a), multiplied by the number of tuition units purchased by the individual and not used by the beneficiary.

AB1011,5,20 (b) If a contract is terminated under sub. (6) (a) 1., 2. or 3., the department shall refund to the individual who entered into the contract an amount equal to 1% of the weighted average tuition in the academic year in which the contract is terminated, as determined under sub. (2) (a), multiplied by the number of tuition units purchased by the individual and not used by the beneficiary.

AB1011,5,25 (c) If a contract is terminated under sub. (6) (a) 4. or (b), the department shall refund to the individual who entered into the contract an amount equal to 99% of the amount determined under par. (b). If a contract is terminated under sub. (6) (a) 4., the department may not issue a refund for one year following receipt of the notice of termination and may not issue a refund of more than 100 tuition units in any year.

AB1011,6,3 (d) If a contract is terminated under sub. (6) (a) 5., the department shall refund to the individual who entered into the contract the amount under par. (b) or under par. (c), as determined by the department.

AB1011,6,10 (e) If the beneficiary is awarded a scholarship, tuition waiver or similar subsidy that cannot be converted into cash by the beneficiary, the department shall refund to the individual who entered into the contract, upon his or her request, an amount equal to the value of the tuition units that are not needed because of the scholarship, waiver or similar subsidy and that would otherwise have been paid by the department on behalf of the beneficiary during the semester in which the beneficiary is enrolled.

AB1011,6,12 (f) Except as provided under par. (c), the department shall determine the method and schedule for the payment of refunds under this subsection.

AB1011,6,16 (8) Exemption from garnishment, attachment and execution. Moneys deposited in the tuition trust fund and a beneficiary's right to the payment of tuition under this section are not subject to garnishment, attachment, execution or any other process of law.