H. B. 2772

(By Delegates Hall and Calvert)
[Introduced February 24, 1995; referred to the
Committee on Education then Finance.]

A BILL to amend chapter eighteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article thirty-a, relating to creating a college tuition trust fund from personal income tax revenue from taxpayers with children aged sixteen years or younger.

Be it enacted by the Legislature of West Virginia:
That chapter eighteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article thirty-a to read as follows:

ARTICLE 30A. WEST VIRGINIA HIGHER EDUCATION TUITION TRUST FUND ACT.

§18-30A-1. Title.

This article shall be known and may be cited as the "West Virginia Higher Education Tuition Trust Fund Act."

§18-30A-2. Legislative findings and purpose.

The Legislature hereby finds and declares that it is in the best interests of the state to encourage its citizens to obtain a higher education. The Legislature further finds that tuition costs at institutions of higher education are difficult for many to either afford or to predict so they can plan for a higher education.
In light of these findings, the Legislature declares the purpose of this article and the West Virginia higher education tuition trust fund created by this article is to encourage parents and children to plan for attendance at an institution of higher education, to enable them to finance at least one-half of the cost of tuition for a higher education in this state by providing economic protection against rising tuition costs at state institutions of higher education and economic assistance for attendance at other institutions of higher education in this state, and to enhance access to all institutions of higher education to benefit the state of West Virginia and its people.

§18-30A-3. Definitions.

As used in this article, except where the context clearly requires otherwise:
(a) "Average tuition cost" means the weighted average cost per semester for full-time, resident, undergraduate attendance at any state institution of higher education, such weighted average cost to be arrived at by adding the products of the cost of tuition at each state institution of higher education for full- time attendance per semester times its total number of full-time- equivalent undergraduate students during a fiscal year, and then dividing that sum by the total number of full-time-equivalent undergraduate students attending all state institutions of higher education in that fiscal year;
(b) "Fund" means the West Virginia higher education tuition trust fund created in section seven of this article;
(c) "Institution of higher education" means any public or private, nonprofit, accredited, degree-granting college or university;
(d) "Parent" means a person who is a resident taxpayer of this state who has a dependent child or children who are residents of this state who are sixteen years of age or younger and from whose state income taxes are appropriated to the tuition trust fund account in an annual amount of fifty dollars for each such child of that parent;
(e) "Qualified beneficiary" means any dependent resident of this state age seventeen years or older who is named as such in the tuition trust fund account;
(f) "Standard tuition unit" means the weighted average tuition cost divided by the minimum number of credits per semester required for full-time enrollment to reflect a cost per credit;
(g) "State institution of higher education" means state colleges, state universities and any community college as those terms are defined in section two, article one, chapter eighteen-b of this code;
(h) "Trust" means the West Virginia higher education tuition trust fund created in section four of this article;
(i) "Tuition" means the cost of tuition and all mandatory fees required of resident, undergraduate students per semester at state institutions of higher education including, but not limited to, fees required pursuant to article ten, chapter eighteen-b of this code.

§18-30A-4. West Virginia higher education tuition trust fund created.

(a) There is created the West Virginia higher education tuition trust fund. The trust shall be within the office of the state treasurer and may utilize the services, personnel and equipment of such office.
(b) The purposes, powers and duties of the West Virginia higher education tuition trust fund are vested in and shall be exercised by the treasurer.
§18-30A-5. Powers generally.
In addition to the powers granted by other provisions of this code, the state treasurer has the powers necessary or convenient to carry out and effectuate the purposes, objectives and provisions of this article, the purposes and objectives of the trust and the powers delegated by other laws or executive orders, including, but not limited to, the power to:
(1) Invest any money of the trust, at the treasurer's discretion, with the West Virginia state board of investments, or in any instruments, obligations, securities or property authorized under article six, chapter twelve of this code for the investment of state moneys;
(2) Name and use depositories for its money in such manner as is prescribed for the deposit of state moneys;
(3) Pay money to institutions of higher education on account of a qualified beneficiary as provided in this article and to enter into contractual or other arrangements that are necessary or appropriate with institutions of higher education in order to fulfill the trust's obligations;
(4) Administer the higher education tuition trust fund pursuant to section six and other provisions of this article;
(5) Utilize the services, personnel and equipment of the treasurer's office for the provision of all or a portion of the services necessary for the management and operation of the trust;
(6) Contract with others, public or private, for goods and any services necessary for the management and operation of the trust, including the office of the attorney general and engage the services of private consultants, actuaries, managers, legal counsel and auditors for rendering professional, management and technical assistance and advice, all payable out of any money of the trust from management and administrative withholding fees in excess of that needed to ensure actuarial soundness of the trust funds;
(7) Solicit and accept gifts, grants, loans and other aids from any person or the federal, state or a local government or any agency of the federal, state or a local government, and to participate in any other way in any federal, state or local government program;
(8) Charge, impose and collect administrative fees, charges and penalties in connection with any refund or transfer to an institution of higher education outside this state and provide for reasonable penalties for fraud;
(9) Procure insurance against any loss in connection with the trust's property, assets or activities;
(10) Establish policies, procedures and any other criteria necessary or convenient to implement this article.

§18-30A-6. Higher education tuition trust fund created; assets generally; expenditures; exemption from taxation; excess funds.

(a) The higher education tuition trust fund is hereby created, to be under the jurisdiction and control of the state treasurer. Payments received by the trust from the state tax commissioner derived from personal income tax revenues paid by resident taxpayers credited in the amount of fifty dollars for each resident dependent child sixteen years of age or younger for each such taxpayer or from any other source, public or private, shall be placed in the fund. The fund may be divided into separate accounts.
(b) Assets of the trust shall not be considered state money. The assets of the trust shall be preserved, invested and expended solely pursuant to and for the purposes set forth in this article and shall not be loaned or otherwise transferred or used by the state for any purpose other than the purposes of this article: Provided, That this section shall not be construed to prohibit the trust from investing in, by purchase or otherwise, bonds, notes or other obligations of the state, an agency of the state or an instrumentality of the state.
(c) Unless otherwise provided by resolution of the board, assets of the trust shall be expended in the following order of priority:
(1) To make payments to institutions of higher education on account of qualified beneficiaries in an amount equal to one-half of the tuition for that qualified beneficiary;
(2) To pay the costs of administration, management and organization of the trust and the fund not to exceed three fourths of the amount of any management and administrative withholding fees per year collected by the trust;
(d) Assets of the trust may be invested in such manner as is prescribed under article six, chapter twelve of this code for the investment of state funds in any instrument, obligation, security or property considered appropriate by the trust and may be pooled for investment purposes with investments of the state, including, but not limited to, state pension funds.
(e) The property of the trust and its income and operation shall be exempt from all taxation by this state or any of its political subdivisions.
§18-30A-7. Report of account; annual audit.
The state treasurer shall annually prepare or cause to be prepared an accounting of the trust, including all administrative costs and the actuarial soundness of the trust, and shall transmit a copy of the accounting to the governor, the president of the Senate, the speaker of the House of Delegates and the respective minority leaders of the Senate and House of Delegates. The treasurer shall also make available the accounting of the trust to the purchasers of the trust. The accounts of the treasurer shall be subject to annual audits by the legislative auditor or a certified public accountant appointed by the legislative auditor.
§18-30A-8. Administration of trust.
(a) The trust shall be administered in a manner reasonably designed to be actuarially sound such that the assets of the trust will be sufficient to defray the obligations of the trust.
(b) The treasurer shall annually evaluate and cause to be evaluated by a nationally recognized actuary the actuarial soundness of the trust and determine the additional assets needed, if any, to defray the obligations of the trust. When this program begins, the treasurer shall immediately prorate among all of the qualified beneficiaries who are not yet sixteen years of age, a share of money collected based upon the number of years they participate compared against the normal sixteen year anticipated length of participation.

NOTE: The purpose of this bill is to provide a method of financing one-half of the tuition cost of state residents who attend colleges or universities in this state. It creates a tuition trust fund administered by the state treasurer from moneys collected from personal income taxes paid by parents residing in West Virginia who have dependant children 16 years of age or younger. $50.00 for each such child is paid by the tax commissioner to the treasurer for this trust.

Article 30A is new; therefore, strike-throughs and underscoring have been omitted.