0001|                               AN ACT
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0002| TO DETERMINE THE FEASIBILITY OF CREATING A PREPAID COLLEGE TUITION
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0003| PROGRAM.
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0004| 
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0005| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0006|      Section 1.  PREPAID HIGHER EDUCATION TUITION PROGRAM--FEASIBILITY
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0007| STUDY--GUIDELINES.--
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0008|           A.  The commission on higher education shall conduct a
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0009| thorough study to determine the feasibility of creating a prepaid
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0010| higher education tuition program, which shall include requirements
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0011| that:
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0012|                (1)  prepaid tuition contracts, once paid, will cover
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0013| all tuition and required fees of the institution of higher education;
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0014|                (2)  payments for prepaid tuition contracts may be
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0015| made either in a lump sum or in installments;
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0016|                (3)  the prepaid tuition contracts shall:
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0017|                     (a)  allow purchasers to choose from payment
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0018| plans that pay the tuition and required fees for either a community
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0019| college, four-year or in-state, private post-secondary educational
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0020| institution;
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0021|                     (b)  allow for rollover of prepaid higher
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0022| education tuition benefits from one plan to another, and that provide
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0023| that benefits may be used at any community college, four-year or in-
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0024| state, private post-secondary educational institution;
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0025|                     (c)  include penalties for termination of the
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0001| contract or default on any of the contract's terms or conditions; and
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0002|                     (d)  include provisions that allow purchasers to
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0003| change or switch beneficiaries;
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0004|                (4)  beneficiaries meet certain minimum eligibility
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0005| requirements;
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0006|                (5)  when setting contract prices, the commission
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0007| consider:
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0008|                     (a)  the amount and estimated rate of increase of
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0009| tuition and fees at institutions of higher education;
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0010|                     (b)  expected investment returns;
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0011|                     (c)  estimated administrative costs; and
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0012|                     (d)  the period between the date the contract is
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0013| entered into and the date the beneficiary is projected to graduate
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0014| from high school;
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0015|                (6)  allow for gifts or bequests either on behalf of a
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0016| beneficiary or to the fund generally;
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0017|                (7)  institutions of higher education are either
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0018| required to participate or that the commission may specify how and
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0019| when institutions of higher education become eligible to participate
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0020| in the program;
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0021|                (8)  benefits under a prepaid tuition contract are
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0022| excluded from any calculation of a beneficiary's state student-aid
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0023| eligibility; and
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0024|                (9)  a program established pursuant to the
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0025| requirements set forth in this section shall not obligate or encumber
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0001| any money deposited in the state permanent fund, the severance tax
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0002| bond fund or any money that is a part of a state-funded financial aid
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0003| program.
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0004|           B.  The commission shall report its findings to the
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0005| appropriate interim legislative committee no later than October
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0006| 15, 1997.  The report shall include a recommendation from the
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0007| commission regarding the feasibility of implementing a prepaid
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0008| higher education tuition program based on the requirements set
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0009| forth in Subsection A of this section.         
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