SB8 H GO AM #1 as amended
Schiffour 3289
The Committee on Government Organization moved to amend the bill on page 1, by striking everything after the enacting clause and substituting in lieu thereof the following:
“CHAPTER 12. PUBLIC MONEYS AND SECURITIES.
ARTICLE 9. SAVINGS AND INVESTMENT PROGRAM FULFILLMENT FUND.
§12-9-1. Special revenue account continued.
There is continued in the State Treasury the special revenue account, designated the West Virginia Savings and Investment Program Fulfillment Fund, previously authorized by §18‑30‑6a of this code. The fund shall be administered by the State Treasurer for the purposes described in this article.
§12-9-2. Receipts and expenditures.
(a) The West Virginia Savings and Investment Program Fulfillment Fund shall consist of all moneys in the fund on the effective date of this section, any moneys that may be appropriated to the fund by the Legislature, all interest or other return earned or received from investment of the fund; any moneys which the fund is authorized to receive under any provision of this code for the purposes of this article, and all gifts, grants, bequests, or transfers made to the fund from any source.
(b) The State Treasurer may expend moneys in the West Virginia Savings and Investment Program Fulfillment Fund for costs to implement or administer any savings or investment program with an initial date of operation occurring on or after July 1, 2021, including, but not limited to, the Hope Scholarship Program, established in §18‑31‑1 et seq. of this code, and Jumpstart Savings Program, established in §18‑30A‑1 et seq. of this code. Any balance, including accrued interest and other returns, remaining in the fund at the end of each fiscal year shall not revert to the General Revenue Fund but shall remain in the fund to be expended as authorized by this article.
§12-9-3. Investment of fund.
The State Treasurer is authorized to invest and reinvest moneys in the fund, and all interest and earnings of the fund shall accrue to the fund and be available for expenditure in accordance with this article.
ARTICLE 30. WEST VIRGINIA COLLEGE PREPAID TUITION
AND SAVINGS PROGRAM ACT.
§18-30-1. Title.
This article is known and cited as the "West Virginia
College Prepaid Tuition and Savings Program Act”.
§18-30-2. Legislative findings and purpose.
The Legislature finds and determines that enhancing the accessibility and affordability of education for all citizens of West Virginia will promote a well‑educated and financially secure population to the ultimate benefit of all citizens of West Virginia, and that assisting individuals and families in planning for future educational expenses by making the tax incentives in 26 U.S.C. § 529 available to West Virginians is one of the proper governmental functions and purposes of the state.
The Legislature also finds that continuation of the
prepaid tuition plan and creation of a savings plan will further those
governmental functions and purposes. It is, therefore, the legislative intent
of this article to continue the prepaid tuition plan and to enhance the plan by
authorizing the creation of a savings plan so that more students may attend
eligible educational institutions
§18-30-3. Definitions.
For the purposes of this article, the following terms have the meanings ascribed to them, unless the context clearly indicates otherwise or as otherwise provided in 26 U.S.C. §529:
“Account” means a prepaid tuition account or a
savings plan account established in accordance with this article.
“Account owner” means the individual, corporation,
association, partnership, trust, or other legal entity who enters into a
prepaid tuition contract and is obligated to make payments in accordance with
the prepaid tuition contract or who enters into a savings plan contract and
invests money in a savings plan account.
“Beneficiary” means the individual designated as a beneficiary at the time an account is established, the individual designated as the beneficiary when beneficiaries are changed, the individual entitled to receive distributions from an account, and any individual designated by the account owner, his or her agent, or his or her estate in the event the beneficiary is unable or unwilling to receive distributions under the terms of the contract.
“Board” means the Board of Trustees of the West
Virginia College Prepaid Tuition and Jumpstart Savings Program
Programs as provided in §18‑30‑4 of this code.
“Distribution” means any disbursement from an account in accordance with 26 U.S.C. §529.
“Eligible educational institution” means an institution of higher education or a private or religious primary, middle, or secondary school that qualifies under 26 U.S.C. §529 as an eligible educational institution.
“Jumpstart Savings Expense Fund”, for the purposes of this article, means the College and Jumpstart Savings Administrative Account, established in §18‑30‑8 of this Code.
“Outstanding obligations of the Prepaid Tuition Plan” means the outstanding contract obligations of the board to persons owning Prepaid Tuition Plan accounts. The term also includes any fees, charges, expenses, penalties, or any other obligation or liability of the Prepaid Tuition Trust Fund or plan.
“Prepaid tuition account” means an account established
by an account owner pursuant to this article, in order for the beneficiary to
apply distributions in accordance with the Prepaid Tuition Plan.
“Prepaid tuition contract” means a contract entered
into by the board and an account owner establishing a prepaid tuition account.
“Prepaid Tuition Plan” means the plan that
contractually guarantees payment of tuition at an eligible educational
institution
“Prepaid Tuition Program” means the Prepaid Higher Education Program and Plan, which was previously established and authorized by this article as reflected in Chapter 80, Acts of the Legislature, Regular Session, 1997, and which was closed in 2021.
“Program” means the West Virginia College Prepaid
Tuition and Savings Program established pursuant to this article and as
defined in §18‑30‑4(a) of this code.
“Qualified education expenses” means expenses treated as “qualified higher education expenses” under 26 U.S.C. §529.
“Savings plan” means the plan that allows account distributions for qualified higher educational expenses and tuition at private or religious primary, middle, and secondary schools.
“Savings plan account” means an account established by an account owner pursuant to this article, in order for the beneficiary to apply distributions toward qualified higher education expenses and tuition expenses at eligible educational institutions.
“Savings plan contract” means a contract entered into by the board or its agent, if any, and an account owner establishing a savings plan account.
“Treasurer” means the West Virginia State Treasurer.
“Tuition” means the quarter, semester, or term charges imposed by an eligible educational institution and all mandatory fees required as a condition of enrollment by all students for full‑time attendance.
§18-30-3a. 2022 Legislative findings; statutory construction.
(a) The Legislature makes the following findings regarding the amendments to this article adopted during the 2022 Regular Session of the Legislature:
(1) Whereas the Prepaid Tuition Program and Plan, administered by the board from 1998 until 2021, was statutorily closed to new accounts in 2001;
(2) Whereas the board initiated a statutorily authorized buyout of all remaining accounts in 2021 and terminated the Prepaid Tuition Program, Plan, and Trust Fund;
(3) Whereas the Jumpstart Savings Act, adopted during the 2021 Regular Session of the Legislature, created a new savings and investment program to become operational on July 1, 2022;
(4) Whereas the Jumpstart Savings Program is structurally similar to the College Savings Program, both programs share the objective of assisting West Virginians to obtain the education and skills that they need for productive and successful livelihoods, and the Jumpstart Savings Act allows state tax rollovers from a SMART529 account into a Jumpstart Savings Account;
(5) Whereas authorizing a single board to administer both the College Savings Program and Jumpstart Savings Program, rather than requiring each program to have a separate board, will significantly reduce management and administrative costs to the state;
(6) Therefore, the Board of Trustees of the College Prepaid Tuition and Savings Program should be continued and re‑designated as “the Board of Trustees of the West Virginia College and Jumpstart Savings Programs” and said board should be tasked with administering the College Savings Program, established by this article, and the Jumpstart Savings Program, established by §18‑30A‑1 et seq. of this code.
(b) The Legislature further finds that, whenever possible, this article should be read in pari materia and construed in harmony with the Jumpstart Savings Act, located in §18‑30A‑1 et seq. of this code.
(c) The Legislature further finds that interests in the College Savings Program Trust are intended:
(1) To qualify for relevant federal securities law exemptions for public instrumentalities of a State; and
(2) To be exempt from registration under Chapter 32 of the West Virginia Code, the "Uniform Securities Act".
§18-30-4. The Board of Trustees of the West Virginia
College and Jumpstart Savings Programs; Creation of program; board;
members; terms; compensation; proceedings generally.
(a) The West Virginia College Prepaid Tuition and
Savings Program is continued. The program consists of a savings plan and the
outstanding obligations of the Prepaid Tuition Plan. the savings plan
administered according to this article and the requirements of 26 U.S.C. §529.
(b) The Board of Trustees of the College Prepaid
Tuition and Savings Program is continued as a public instrumentality of the
State of West Virginia: Provided, That the Board shall hereafter
be known as the Board of Trustees of the West Virginia College and Jumpstart
Savings Programs. and all powers, rights, and responsibilities of the
Board of Trustees of the Prepaid Tuition Trust Fund are vested in the Board of
the College Prepaid Tuition and Savings Program
(c) The board consists of nine 11 members
and includes the following:
(1) The State Treasurer, or his or her designee;
(2) The State Superintendent of Schools, or his or her designee;
(3) A representative of the Higher Education Policy Commission, who may or may not be a member of the Higher Education Policy Commission, appointed by the commission who serves as a voting member of the board;
(4) A representative of the Council for Community and Technical College Education, who may or may not be a member of the Council for Community and Technical College Education, appointed by the council who serves as a voting member of the board; and
(5) Five Seven other members, appointed by
the Governor, with the advice and consent of the Senate, as follows:
(A) Three private citizens with knowledge, skill, and
experience in a financial field, who are not employed by, or an officer of, the
state or any political subdivision of the state: Provided, That
reasonable efforts shall be made to appoint one such citizen to the board who
holds a designation of Chartered Financial Analyst, offered by the CFA
Institute; and
(B) Two private citizens, appointed by the Governor, with knowledge, skill, and experience in trade occupations or businesses, to be appointed as follows:
(i) A member representing a labor organization that represents tradespersons in this state; and
(ii) A member representing a business or entity offering trade or skilled labor apprenticeships in this state; and
(B) (C) Two members representing the
interests of private institutions of higher education located in this state
appointed from one or more nominees of the West Virginia Independent Colleges
and Universities.
(d) Only state residents are eligible for appointment to the board.
(e) Members appointed by the Governor serve a term of five years and are eligible for reappointment at the expiration of their terms. If there is a vacancy among appointed members, the Governor shall appoint a person representing the same interests to fill the unexpired term.
(f) Members of the board serve until the later of the
expiration of the term for which the member was appointed or the appointment of
a successor. Members of the board serve without compensation. The Treasurer may
pay all expenses, including travel expenses, actually incurred by board members
in the conduct of their official duties. Expense payments are made from the
College Prepaid Tuition and Jumpstart Savings Program
Administrative Account and are made at the same rate paid to state employees.
(g) The Treasurer may provide support staff and office space for the board.
(h) The Treasurer is the chairperson and presiding officer of the board and may appoint the employees the board considers advisable or necessary. A majority of the members of the board constitutes a quorum for the transaction of the business of the board.
§18-30-5. Powers of the board to administer the College Savings Program.
In addition to the powers granted by any other
provision of this article, the board has the powers necessary or appropriate to
carry out the provisions and objectives of this article, other methods of
financing post‑secondary education as relate to the program, and the
powers delegated by any other law of the state or any executive order of the
state. The board may also:
(a) Adopt and amend bylaws;
(b) Sue and be sued;
(c) Execute contracts and other instruments for
necessary goods and services, employ necessary personnel and engage the
services of private consultants, actuaries, Auditors, counsel, managers,
trustees, and any other contractor or professional needed. Selection of these
services is not subject to the provisions of article three, chapter five‑a
of this code;
(d) Operate a prepaid tuition plan in accordance with
this article and 26 U.S.C. §529;
(e) Operate a savings plan in accordance with this
article and 26 U.S.C. §529;
(f) Develop and impose any requirements, policies,
procedures, and guidelines to implement and manage the program;
(g) Impose reasonable requirements for residency for
beneficiaries at the time of purchase of a prepaid tuition contract. However,
nothing in this subdivision establishes residency requirements for
matriculation at state eligible educational institutions;
(h) Assess, collect and expend administrative fees,
charges, and penalties;
(i) Authorize the assessment, collection, and retention
of fees and charges against the amounts paid into and the earnings on the trust
funds by a financial institution, investment manager, fund manager, West
Virginia Investment Management Board, or other professional managing or
investing the trust funds and accounts;
(j) Invest and reinvest any of the funds and accounts
under the board's control with a financial institution, an investment manager,
a fund manager, the West Virginia Investment Management Board or other
professional investing the funds and accounts. Investments made under this
article shall be made in accordance with the provisions of article six‑c,
chapter forty‑four of this code, the West Virginia uniform prudent
investor act. No board member, nor any person, financial institution,
investment manager, fund manager or the West Virginia Investment Management
Board to whom the board delegates any of its investment authority who acts
within the standard of care set forth in this section is personally liable for
losses suffered by the program on investments made pursuant to this article;
(k) Solicit and accept gifts, including bequests or
other testamentary gifts made by will, trust or other disposition, grants,
loans, aid, and property, real or personal of any nature and from any source,
or to participate in any other way in any federal, state or local governmental
programs in carrying out the purposes of this article. The board shall use the
property received to effectuate the desires of the donor, and shall convert the
property received into cash within ninety days of receipt;
(l) Propose legislative rules for promulgation in
accordance with the provisions of article three‑a, chapter twenty‑nine‑a
of this code;
(m) Make all necessary and appropriate arrangements
with eligible educational institutions in order to fulfill its obligations
under the prepaid tuition contracts and the savings plan contracts; and
(n) Establish a direct‑support
organization which is a West Virginia corporation, not for profit, organized
and operated to receive, hold, invest and administer property and make
expenditures to or for the benefit of the purposes of this article, if the
board determines a need for the organization exists. The board may authorize
the direct‑support organization to use program facilities and property,
except money. The board may invest funds of the direct‑support
organization.
(a) The board shall administer the College Savings Program in accordance with this article and 26 U.S.C. §529.
(b) The board shall offer and issue interests in the Savings Plan Trust to eligible members of the public.
(c) The board is authorized to take any lawful action necessary to effectuate the provisions of this article and successfully administer the program, subject to applicable state and federal law, including, but not limited to, the following:
(1) Adopt and amend bylaws;
(2) Execute contracts and other instruments for necessary goods and services, employ necessary personnel, and engage the services of private consultants, auditors, counsel, managers, trustees, and any other contractor or professional needed for rendering professional and technical assistance and advice: Provided, That selection of these services is not subject to the provisions of §5A‑3‑1 et seq. of this code: Provided, however, That all expenditures and monetary and financial transactions may be subject to periodic audits by the Legislative Auditor;
(3) Implement the program through use of financial organizations as account depositories and managers, as provided in §18‑30‑6 of this code;
(4) Develop and impose requirements, policies, procedures, and guidelines to implement and manage the program;
(5) Establish the method by which funds shall be allocated to pay for administrative costs and assess, collect, and expend administrative fees, charges, and penalties;
(6) Authorize the assessment, collection, and retention of fees and charges against the amounts paid into and the earnings on the trust funds by a financial institution, investment manager, fund manager, West Virginia Investment Management Board, the Board of Treasury Investments, or other professional managing or investing the trust funds and accounts;
(7) Invest and reinvest any of the funds and accounts under the board’s control with a financial institution, an investment manager, a fund manager, the West Virginia Investment Management Board, the Board of Treasury Investments, or other professional investing the funds and accounts: Provided, That investments made under this article shall be made in accordance with the provisions of §44‑6C‑1 et seq. of this code;
(8) Solicit and accept gifts, including bequests or other testamentary gifts made by will, trust, or other disposition; grants; loans; aid; and property, real or personal of any nature and from any source, or to participate in any other way in any federal, state, or local governmental programs in carrying out the purposes of this article: Provided, That the board shall use the property received to effectuate the desires of the donor, and shall convert the property received into cash within 90 days of receipt;
(9) Make all necessary and appropriate arrangements with eligible educational institutions in order to fulfill its obligations under the savings plan contracts; and
(10) Propose legislative rules for promulgation in accordance with §29A‑3‑1 et seq. of this code, including emergency rules when necessary.
(d) The power and duties of the board provided in this article are in addition to the powers and duties of the board provided in §18‑30A‑1 et seq. of this code.
§18-30-6. West Virginia prepaid tuition trust escrow
fund. Use of financial organizations as program depositories and
managers.
(a) The Prepaid Tuition Trust Fund is continued within
the accounts held by the State Treasurer for administration by the board until
such time as the moneys in the fund are depleted and the board elects to close
the fund.
(b) Upon the closure of the Prepaid Tuition Trust Fund,
the board is authorized to expend moneys from the Prepaid Tuition Trust Escrow
Fund for the purpose of satisfying outstanding obligations of the Prepaid
Tuition Trust Plan, according to the requirements of subsection (h) of this section.
(c) The corpus, assets, and earnings of the Prepaid
Tuition Trust Fund and the Prepaid Tuition Trust Escrow Fund do not constitute
public funds of the state and are available solely for carrying out the
purposes of this article. Any contract entered into by or any obligation of the
board on behalf of and for the benefit of the Prepaid Tuition Plan does not
constitute a debt of the state but is solely an obligation of the Prepaid
Tuition Trust Fund. The state has no obligation to any designated beneficiary
or any other person as a result of the Prepaid Tuition Plan. All amounts
payable from the Prepaid Tuition Trust Fund are limited to amounts available in
the Prepaid Tuition Trust Fund.
(d) Nothing in this article or in any prepaid tuition
contract is a promise or guarantee of admission to, continued enrollment in, or
graduation from an eligible educational institution.
(e) Effective March 8, 2003, the Prepaid Tuition Plan
is closed to new contracts. Closing the plan to new contracts does not affect
any Prepaid Tuition Plan contracts in effect on March 8, 2003. All contract
owners shall continue to pay any amounts due, including without limitation
monthly installments, penalties, and fees. Earnings derived from the investment
of moneys in the Prepaid Tuition Trust Fund shall continue to accrue to the
fund until the fund is closed in accordance with this section. Upon a
determination of the board that all outstanding contract obligations to persons
owning Prepaid Tuition Plan accounts have been satisfied as provided in
subsection (h) of this section, the plan shall be closed.
(f) The board shall continue to have the actuarial
soundness of the Prepaid Tuition Trust Fund evaluated annually until the fund’s
closure.
(g) On or before December 1, 2003, and each year until
the Prepaid Tuition Trust Fund’s closure, the chairperson of the board shall
submit to the Governor, the President of the Senate, the Speaker of the House
of Delegates, the Joint Committee on Government and Finance, and the unclaimed
property administrator a report certified by an actuary of the actuarial status
of the Prepaid Tuition Trust Fund at the end of the fiscal year immediately
preceding the date of the report.
(h) Escrow fund; expenditures. —
(1) The Prepaid Tuition Trust Escrow Fund is continued
in the State Treasury to guarantee payment of outstanding obligations of the
Prepaid Tuition Plan. The board shall invest the Prepaid Tuition Trust Escrow
Fund in accordance with the provisions of this article in fixed income
securities, and all earnings of the escrow fund shall accrue to the escrow fund
and be available for expenditure in accordance with this section.
(2) In the event the money in the Prepaid Tuition Trust
Fund is insufficient to cover the amount of money needed to meet the
outstanding obligations of the Prepaid Tuition Trust Plan, the board may
withdraw from the Prepaid Tuition Trust Escrow Fund the amount of money needed
to meet outstanding obligations of the Prepaid Tuition Trust Plan.
(3) To the extent possible, the board shall satisfy
outstanding contract obligations to persons owning Prepaid Tuition Plan
accounts, on a pro rata basis as their interests may appear. Any account owner
assets presumed abandoned shall be reported and remitted to the unclaimed
property administrator in accordance with the Uniform Unclaimed Property Act in
§36‑8‑1 et seq. of this code: Provided, That
notwithstanding the requirements of said article, account owner assets are
presumed abandoned 60 days after final payment checks for their remaining plan
units are issued and said checks have not been presented for payment.
(i) After all outstanding obligations of the Prepaid
Tuition Trust Plan have been satisfied in accordance with this section, any
moneys remaining in the Prepaid Tuition Trust Fund and the Prepaid Tuition
Trust Escrow Fund shall be allocated as follows:
(1) Five million dollars shall be transferred to the
West Virginia Savings and Investment Program Fulfillment Fund, as set forth in
§18‑30‑6a of this code.
(2) Up to $1,000,000 may be maintained in the Prepaid
Tuition Trust Escrow Fund, at the election of the board, for a period not to
exceed 10 years following the closure of the Fund for the purpose of satisfying
any claims against the Prepaid Tuition Trust Plan arising after the plan’s
closure: Provided, That upon the expiration of 10 years following the
date of closure of the Prepaid Tuition Trust Fund or when the balance of the
Prepaid Tuition Trust Escrow Fund is zero, whichever occurs first, the account shall
be closed and any moneys remaining in the Prepaid Tuition Trust Escrow Fund
upon said fund’s closure shall revert to the state’s General Revenue Fund.
(3) All moneys remaining, after the allocations
provided in subdivisions (1) and (2) of this subsection, shall revert to the
General Revenue Fund.
(j) To fulfill the charitable and public purpose of
this article, neither the earnings nor the corpus of the Prepaid Tuition Trust
Fund or the Prepaid Tuition Trust Escrow Fund is subject to taxation by the state
or any of its political subdivisions.
(k) Notwithstanding any provision of this code to the
contrary, money in the Prepaid Tuition Trust Fund and the Prepaid Tuition Trust
Escrow Fund is exempt from creditor process and not subject to attachment, garnishment,
or other process; is not available as security or collateral for any loan, or
otherwise subject to alienation, sale, transfer, assignment, pledge,
encumbrance, or charge; and is not subject to seizure, taking, appropriation,
or application by any legal or equitable process or operation of law to pay any
debt or liability of any account owner, beneficiary, or successor in interest.
The provisions of this section may not be construed to
interfere with the operation of the savings plan authorized under this article.
(a) The board may implement the program through use of financial organizations as account depositories and managers. The board may solicit proposals from financial organizations to act as depositories and managers of the program. Financial organizations submitting proposals shall describe the investment instruments which will be held in accounts. The board may select more than one financial organization and investment instrument for the program. The board shall select financial organizations to act as program depositories and managers, based on the following criteria:
(1) The financial stability and integrity of the financial organization;
(2) The safety of the investment instrument being offered;
(3) The ability of the financial organization to satisfy recordkeeping and reporting requirements;
(4) The financial organization’s plan for promoting the program and the investment the organization is willing to make to promote the program;
(5) The fees, if any, proposed to be charged to the account owners;
(6) The minimum initial deposit and minimum contributions that the financial organization will require;
(7) The ability of the financial organization to accept electronic deposits and withdrawals, including payroll deduction plans; and
(8) Other benefits to the state or its residents included in the proposal, including fees payable to the state to cover expenses of operation of the program.
(b) The board may enter into any contracts with a financial organization necessary to effectuate the provisions of this article. Any management contract shall include, at a minimum, terms requiring the financial organization to:
(1) Take any action required to keep the program in compliance with requirements of this article and any other applicable state or federal law;
(2) Keep adequate records of each account, keep each account segregated from each other account, and provide the board with the information necessary to prepare the statements required by this article and other applicable state and federal laws;
(3) Compile, summarize, and total information contained in statements required to be prepared under this article and applicable state and federal laws and provide such compilations to the board;
(4) Provide the board with access to the books and records of the program manager and with any other information needed to determine compliance with the contract, this article, and any other applicable state or federal law;
(5) Hold all accounts for the benefit of the account owner or owners;
(6) Be audited at least annually by a firm of certified public accountants selected by the program manager and provide the results of such audit to the board;
(7) Provide the board with copies of all regulatory filings and reports made by the financial organization during the term of the management contract or while the financial organization is holding any accounts, other than confidential filings or reports that will not become part of the program. The program manager shall make available for review by the board and the Treasurer the results of any periodic examination of such manager by any state or federal banking, insurance, or securities commission, except to the extent that such report or reports may not be disclosed under law; and
(8) Ensure that any description of the program, whether in writing or through the use of any medium, is consistent with the marketing plan developed pursuant to the provisions of this article.
(c) The board may:
(1) Enter into contracts it deems necessary for the implementation of the program, including but not limited to a contract with a financial institution, manager, consultant or other professional to provide services to both the College Savings Program and the Jumpstart Savings Program, established in §18‑30A‑1 et seq. of this code;
(2) Require that an audit be conducted of the operations and financial position of the program depository and manager at any time if the board has any reason to be concerned about the financial position, the record keeping practices, or the status of accounts of such program depository and manager; and
(3) Terminate or decline to renew a management agreement: Provided, That if the board terminates or does not renew a management agreement, the board shall seek to promptly transfer such accounts to another financial organization that is selected as a program manager or depository and into investment instruments as similar to the original instruments as possible.
§18-30-6a. Special revenue account created for fulfillment of savings and investment programs.
[Repealed].
§18-30-8. The College prepaid tuition and
Jumpstart Savings program Administrative Account.
(a) There is hereby created continued
a separate special revenue account within the State Treasurer’s
office Treasury titled the “college prepaid tuition and savings
program administrating account”, which shall hereafter be known as “the
College and Jumpstart Savings Administrative Account.” The board shall
administer and make expenditures from the account for the purposes of
implementing, operating, and maintaining the trust funds, and the
program created by this article, and the program created by §18-30A-1 et
seq of this code.
(b) The administrative account shall receive all
fees, charges, and penalties collected by the board. Expenditures from the fund
are authorized from collections subject to appropriations made by the
Legislature. Any balance, including accrued interest and other returns,
remaining in the fund at the end of each fiscal year shall not revert to the
General Revenue Fund but shall remain in the fund to be expended as authorized
by this section.
§18-30-10. Reports and account; annual audit.
(a) In addition to any other requirements of this article, the board shall:
(1) Provide annually summary information on the
financial condition of the prepaid tuition trust fund and annual
statements on the savings plan accounts to the respective account owners; and
(2) Prepare, or have prepared, a quarterly report on the
status of the program, including the trust funds and the administrative
account, and provide a copy of the report to the Joint Committee on Government
and Finance and the Legislative Oversight commission on education
accountability. and
(3) Prepare, or have prepared, an annual actuarial
report of the prepaid tuition trust fund and transmit a copy of the report to
the Governor, the President of the Senate, the Speaker of the House of
Delegates and the Legislative Oversight commission on education accountability.
(b) All accounts of the board, including the trust funds, are subject to an annual external audit by an accounting firm, selected by the board, of which all members or partners assigned to head the audit are members of the American institute of certified public accountants. The audit shall comply with the requirements of §5A‑2‑33 of this code.
§18-30-11. Financial aid eligibility.
The calculations of a beneficiary's eligibility for state
student financial aid for higher education may not include or consider the
value of distributions available in a prepaid tuition account or the value
of distributions available in a savings plan account.
§18-30-13. Board of Trustees; authorization of
rules. Remaining obligations of the Prepaid Tuition Program and Escrow
Fund.
The legislative rules filed in the state register on
September 30, 1997, modified by the board of trustees of the West Virginia
prepaid tuition trust fund to meet the objections of the Legislative Oversight
commission on education accountability and refiled in the state register on
January 30, 1998, relating to the West Virginia prepaid tuition trust fund
(rules for the West Virginia prepaid tuition trust fund), are authorized.
(a) The Prepaid Tuition Trust Escrow Fund, which was previously authorized by §18‑30‑6 of this code, is continued in the State Treasury to guarantee payment of outstanding obligations of the Prepaid Tuition Plan arising after the Plan’s closure. The board is authorized to take any action necessary to satisfy obligations of the Prepaid Tuition Plan arising after the Plan’s closure.
(b) The Prepaid Tuition Trust Escrow Fund shall consist of any moneys in the fund on the effective date of this section. Up to $1,000,000 may be maintained in the Prepaid Tuition Trust Escrow Fund for a period not to exceed 10 years following the closure of the Prepaid Tuition Fund for the purpose of satisfying any claims against the Prepaid Tuition Trust Plan arising after the plan’s closure: Provided, That upon the expiration of 10 years following the date of closure of the Prepaid Tuition Trust Fund or when the balance of the Prepaid Tuition Trust Escrow Fund is zero, whichever occurs first, the account shall be closed and any moneys remaining in the Prepaid Tuition Trust Escrow Fund upon said fund’s closure shall revert to the state’s General Revenue Fund.
(c) The board shall invest the Prepaid Tuition Trust Escrow Fund, in accordance with the provisions of this article, in fixed income securities, and all earnings of the fund shall accrue to the fund and be available for expenditure in accordance with this section.
ARTICLE 30A. WEST VIRGINIA JUMPSTART SAVINGS ACT.
§18-30A-2. Findings.
(a) The Legislature recognizes the importance of cultivating an environment in West Virginia where our tradespersons and entrepreneurs can be successful in their careers and remain in their home state. The Legislature finds that a savings and investment program to assist our citizens who wish to embark on a new trade or establish a new business within this state, is an investment in the future of West Virginia and its hardworking citizens.
(b) The Legislature further finds that, whenever possible, this article should be read in pari materia and construed in harmony with the West Virginia College Savings Program Act, §18‑30‑1 et seq. of this code.
(c) The Legislature further finds that interests in the Jumpstart Savings Program Trust are intended:
(1) To qualify for relevant federal securities law exemptions for public instrumentalities of a state; and
(2) To be exempt from registration under Chapter 32 of the West Virginia Code, titled the “Uniform Securities Act.”
§18-30A-3. Definitions.
For the purposes of this article, the following terms shall have the following meanings:
(1) “Account owner” means the person who opens and invests money into a Jumpstart Savings Account, as provided in this article.
(2) “Beneficiary” means the person designated as a beneficiary at the time an account is established, or the individual designated as the beneficiary when the beneficiary is changed.
(3) The “board” means the Board of Trustees of the West
Virginia College and Jumpstart Savings Board Programs created
in §18‑30A‑5 §18‑30‑4 of this code.
(4) “Contribution” means any amount of money deposited into a Jumpstart Savings Account according to the procedures established and required by the board or the Treasurer.
(5) “Deduction” as used in this article has the same meaning as when used in a comparable context in the laws of the United States relating to income taxes, unless a different meaning is clearly required. Deduction means and refers to a deduction allowable under the federal income tax code for the purpose of determining federal taxable income or federal adjusted gross income, unless text clearly indicates otherwise.
(6) “Distributee” has the same meaning provided in §11‑21‑12m of this code.
(7) “Distribution” means any disbursement from an account.
(8) The term “family member”, as used to describe a person’s relationship to a designated beneficiary, includes any of the following:
(A) The spouse of the beneficiary;
(B) A child of the beneficiary or a descendant of the beneficiary’s child;
(C) A brother, sister, stepbrother, or stepsister of the beneficiary;
(D) The father or mother of the beneficiary, or an ancestor of either;
(E) A first cousin of the beneficiary;
(F) A stepfather or stepmother of the beneficiary;
(G) A son or daughter of a brother or sister of the beneficiary;
(H) A brother or sister of the father or mother of the beneficiary;
(I) A son‑in‑law, daughter‑in‑law, father‑in‑law, mother‑in‑law, brother‑in‑law, or sister‑in‑law of the beneficiary; or
(J) The spouse of any person described in paragraphs (A)
(B) through (I) of this subdivision.
(K) Any term set forth in this subdivision means and includes such term as established through a lawful adoption, including, but not limited to, adoptions of a child or children, or other natural person, by a natural person or natural persons who are not the father, mother, or stepparent of the child or person.
(9) “Labor organization” means any organization, agency, association, union, or employee representation committee of any kind that exists, in whole or in part, to assist employees in negotiating with employers concerning grievances, labor disputes, wages, rates of pay, or other terms or conditions of employment.
(10) The “program” refers to the Jumpstart Savings Program established by this article.
(11) The “Treasurer” refers to the West Virginia State Treasurer or his or her designee.
§18-30A-5. The Board of Trustees of the West
Virginia College and Jumpstart Savings Programs Board;
members; terms; compensation, proceedings generally.
(a) The West Virginia Jumpstart Savings Program
shall be administered by the Board of Trustees of the West Virginia College
and Jumpstart Savings Board Programs. The board is created in
§18-30-4 of this code and is a public instrumentality of the State of West
Virginia.
(b) The board consists of seven members and includes
the following:
(1) The State Treasurer;
(2) The State Superintendent of Schools, or his or her
designee;
(3) The Chancellor of the West Virginia Community and
Technical College System, or his or her designee;
(4) Four members, appointed by the Governor, with
knowledge, skill, and experience in trade occupations or businesses, to be
appointed as follows:
(A) A member representing a labor organization that
represents tradespersons in this state;
(B) A member representing a business or entity offering
apprenticeships in this state; and
(C) Two private citizens not employed by, or an officer
of, the state or any political subdivision of the state.
(c) The members designated in this section to be
appointed by the Governor are so appointed with the advice and consent of the
Senate.
(d) Only state residents are eligible for appointment
to the board.
(e) Members appointed by the Governor serve a term of
five years and are eligible for reappointment at the expiration of their terms.
If there is a vacancy among appointed members, the Governor shall appoint a
person meeting the requirements of this section to fill the unexpired term.
Members of the board serve until the later of the expiration of the term for
which the member was appointed or the appointment of a successor.
(f) Members of the board serve without compensation.
The Treasurer may pay all reasonable expenses, including travel expenses,
actually incurred by board members in the conduct of their official duties.
Expense payments are made from the Jumpstart Savings Expense Account and are
made at the same rates and in the same manner as travel reimbursements are paid
to state employees.
(g) The Treasurer is the chairman and presiding officer
of the board and shall appoint the employees the board considers advisable or
necessary.
(h) The board shall adopt bylaws and rules of procedure
at its first official meeting. A majority of the members of the board
constitutes a quorum for the transaction of the business of the board.
§18-30A-6. Powers of the board to implement and administer the Jumpstart Savings Program.
(a) The board shall implement and administer the Jumpstart Savings Program in accordance with this article and all applicable laws and regulations.
(b) The board is authorized to take any lawful action necessary to effectuate the provisions of this article and successfully administer the program, subject to applicable state and federal law, including, but not limited to, the following:
(1) Adopt and amend bylaws;
(2) Execute contracts and other instruments for necessary
goods and services, employ necessary personnel, and engage the services of
private consultants, auditors, counsel, managers, trustees, and any other
contractor or professional needed for rendering professional and technical
assistance and advice: Provided, That selection of these services is not
subject to the provisions of §5A‑3‑1 et seq. of this code: Provided,
however, That all expenditures and monetary and financial transactions shall
may be subject to periodic audits by the Office of Chief Inspector,
or the Legislative
Auditor, or both;
(3) Implement the program through use of financial organizations as account depositories and managers, as provided in §18‑30A‑9 of this code;
(4) Develop and impose requirements, policies, procedures, and guidelines to implement and manage the program;
(5) Establish the method by which funds shall be allocated to pay for administrative costs and assess, collect, and expend administrative fees, charges, and penalties;
(6) Authorize the assessment, collection, and retention of fees and charges against the amounts paid into and the earnings on the trust funds by a financial institution, investment manager, fund manager, West Virginia Investment Management Board, the Board of Treasury Investments, or other professional managing or investing the trust funds and accounts;
(7) Invest and reinvest any of the funds and accounts under the board’s control with a financial institution, an investment manager, a fund manager, the West Virginia Investment Management Board, the Board of Treasury Investments, or other professional investing the funds and accounts: Provided, That investments made under this article shall be made in accordance with the provisions of §44‑6C‑1 et seq. of this code;
(8) Solicit and accept gifts, including bequests or other testamentary gifts made by will, trust, or other disposition; grants; loans; aid; and property, real or personal of any nature and from any source, or to participate in any other way in any federal, state, or local governmental programs in carrying out the purposes of this article: Provided, That the board shall use the property received to effectuate the desires of the donor, and shall convert the property received into cash within 90 days of receipt; and
(9) Propose legislative rules for promulgation in accordance with §29A‑3‑1 et seq. of this code, including emergency rules when necessary.
(c) The board may enter into agreements with other states or agencies of, subdivisions of, or residents of those states related to the program or a program that is substantially similar to the Jumpstart Savings Program established by another state.
(d) The power and duties of the board provided in this article are in addition to the powers and duties of the board provided in §18‑30‑1 et seq. of this code.
§18-30A-8. West Virginia Jumpstart Savings Program
Trust and Trust Fund; and Expense Fund created; administrative
account.
(a) The board shall establish There is hereby
established the Jumpstart Savings Program Trust, a public
instrumentality of the State of West Virginia. The Jumpstart Savings Program
Trust shall offer and issue interests in the trust to eligible members of the
public.
(b) There is hereby also established a Jumpstart Savings Program Trust Fund Account, titled the Jumpstart Savings Trust Fund, within the accounts held by the Treasurer or with a financial institution, an investment manager, a fund manager, the West Virginia Investment Management Board, the Board of Treasury Investments, or any other person for the purpose of managing and investing the trust fund. Assets of the Jumpstart Savings Program Trust are held in trust for account owners and beneficiaries.
(b) (c) The Jumpstart Savings Trust Fund
shall receive all moneys from account owners on behalf of beneficiaries or from
any other source, public or private. Earnings derived from the investment of
the moneys in the Jumpstart Savings Trust Fund shall remain in the fund, held
in trust in the same manner as contributions, except as refunded, applied for
purposes of the beneficiaries, and applied for purposes of maintaining and
administering the program.
(c) (d) The corpus, assets, and earnings of
the Jumpstart Savings Trust Fund do not constitute public funds of the state
and are available solely for carrying out the purposes of this article. Any
contract entered into by, or any obligation of the board on behalf of and for the
benefit of the program, does not constitute a debt or obligation of the state
but is solely an obligation of the Jumpstart Savings Trust Fund.
(d) (e) All interest derived from the
deposit and investment of moneys in the Jumpstart Savings Trust Fund shall be
credited to the fund. At the end of any fiscal year, all unexpended and
unencumbered moneys in the trust fund may not be credited or transferred to the
State General Fund or to any other fund.
(e) (f) In order to fulfill the charitable
and public purposes of this article, neither the earnings nor the corpus of the
Jumpstart Savings Trust Fund is subject to taxation by the state or any of its
political subdivisions.
(f) (g) Notwithstanding any provision of
this code to the contrary, money in the Jumpstart Savings Trust Fund is exempt
from creditor process and not subject to attachment, garnishment, or other
process; is not available as security or collateral for any loan, or otherwise
subject to alienation, sale, transfer, assignment, pledge, encumbrance, or
charge; and is not subject to seizure, taking, appropriation, or application by
any legal or equitable process or operation of law to pay any debt or liability
of any account owner, beneficiary, or successor in interest.
(g) (1) The Jumpstart Savings Program Expense Fund is
hereby established in the State Treasury.
(2) The Jumpstart Savings Expense Fund shall receive
all fees, charges, and penalties collected by the board. Expenditures from the
fund are authorized from collections subject to appropriations made by the
Legislature.
(3) All expenses incurred by the board or the Treasurer
in developing and administering the program shall be payable from the Jumpstart
Savings Expense Fund.
(h) The College and Jumpstart Savings Administrative Account, established in §18‑30‑8 of this Code, shall receive all fees, charges, and penalties collected by the board. All expenses incurred by the board or the Treasurer in developing and administering the program shall be payable from the College and Jumpstart Savings Administrative Account.
§18-30A-9. Use of financial organizations as program depositories and managers.
(a) The board may implement the program through use of
financial organizations as account depositories and managers. The board may
solicit proposals from financial organizations to act as depositories and
managers of the program. Financial organizations submitting proposals shall
describe the investment instruments which will be held in accounts. The board
may select more than one financial organization and investment instrument for
the program. The board shall select financial organizations to act as program
depositories and managers from among the bidding financial organizations
that demonstrate the most advantageous combination, both to potential program
participants and this state, based on the following criteria:
(1) The financial stability and integrity of the financial organization;
(2) The safety of the investment instrument being offered;
(3) The ability of the financial organization to satisfy recordkeeping and reporting requirements;
(4) The financial organization’s plan for promoting the program and the investment the organization is willing to make to promote the program;
(5) The fees, if any, proposed to be charged to the account owners;
(6) The minimum initial deposit and minimum contributions that the financial organization will require;
(7) The ability of the financial organization to accept electronic deposits and withdrawals, including payroll deduction plans; and
(8) Other benefits to the state or its residents included in the proposal, including fees payable to the state to cover expenses of operation of the program.
(b) The board may enter into any contracts with a financial organization necessary to effectuate the provisions of this article. Any management contract shall include, at a minimum, terms requiring the financial organization to:
(1) Take any action required to keep the program in compliance with requirements of this article and any other applicable state or federal law;
(2) Keep adequate records of each account, keep each account segregated from each other account, and provide the board with the information necessary to prepare the statements required by this article and other applicable state and federal laws;
(3) Compile, summarize, and total information contained in statements required to be prepared under this article and applicable state and federal laws and provide such compilations to the board;
(4) Provide the board with access to the books and records of the program manager and with any other information needed to determine compliance with the contract, this article, and any other applicable state or federal law;
(5) Hold all accounts for the benefit of the account owner or owners;
(6) Be audited at least annually by a firm of certified public accountants selected by the program manager and provide the results of such audit to the board;
(7) Provide the board with copies of all regulatory filings and reports made by the financial organization during the term of the management contract or while the financial organization is holding any accounts, other than confidential filings or reports that will not become part of the program. The program manager shall make available for review by the board and the Treasurer the results of any periodic examination of such manager by any state or federal banking, insurance, or securities commission, except to the extent that such report or reports may not be disclosed under law; and
(8) Ensure that any description of the program, whether in writing or through the use of any medium, is consistent with the marketing plan developed pursuant to the provisions of this article.
(c) The board may:
(1) Enter into contracts it deems necessary for the implementation of the program, including, but not limited to, a contract with a financial institution, manager, consultant or other professional to provide services to both the Jumpstart Savings Program, and the College Savings Program, established in §18‑30‑1 et seq. of this code;
(2) Require that an audit be conducted of the operations and financial position of the program depository and manager at any time if the board has any reason to be concerned about the financial position, the record keeping practices, or the status of accounts of such program depository and manager; and
(3) Terminate or decline to renew a management agreement.
If the board terminates or does not renew a management agreement, the board shall
take custody of accounts held by such program manager and shall seek to promptly
transfer such accounts to another financial organization that is selected as a
program manager or depository and into investment instruments as similar to the
original instruments as possible.”
Adopted
Rejected