(1)The authority shall develop and
administer, in accordance with this part 2, the Colorado prepaid postsecondary
education expense program, which program is hereby created. Through the prepaid
expense program, all or part of tuition or other costs, as determined by the
authority, may be paid in advance of or accumulated toward enrollment at
institutions of higher education.
(2)(Deleted by amendment, L. 2000, p. 1278, � 8, effective May 26, 2000.)
(3)No purchaser or qualified beneficiary participating in the prepaid
expense program shall be classified as a resident for tuition purposes as a result of
such participation. Purchasers and qualified beneficiaries shall be required to
establish residency status based on the requirements of the state institution at
which the qualifi
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(1) The authority shall develop and
administer, in accordance with this part 2, the Colorado prepaid postsecondary
education expense program, which program is hereby created. Through the prepaid
expense program, all or part of tuition or other costs, as determined by the
authority, may be paid in advance of or accumulated toward enrollment at
institutions of higher education.
(2) (Deleted by amendment, L. 2000, p. 1278, � 8, effective May 26, 2000.)
(3) No purchaser or qualified beneficiary participating in the prepaid
expense program shall be classified as a resident for tuition purposes as a result of
such participation. Purchasers and qualified beneficiaries shall be required to
establish residency status based on the requirements of the state institution at
which the qualified beneficiary is seeking to enroll.
(4) The selection by a purchaser in an advance payment contract of a
particular state institution shall not in any way constitute a promise or guarantee
that a qualified beneficiary will be admitted to any particular state institution or
other institution of higher education or allowed to continue enrollment in or
graduate from any state institution or other institution of higher education.
(5) (a) The Colorado prepaid postsecondary education expense trust fund is
hereby created. The prepaid expense trust fund shall consist of moneys remitted by
purchasers, moneys acquired from governmental and private sources, and general
fund appropriations, if any. In addition, the prepaid expense trust fund may include
any moneys transferred or loaned thereto pursuant to section 23-3.1-205.4. All
income derived from the deposit and investment of moneys in the prepaid expense
trust fund shall be credited to the fund. At the end of any fiscal year, all
unexpended and unencumbered moneys in the prepaid expense trust fund shall
remain therein and shall not be credited or transferred to the general fund or any
other fund. On May 26, 2000, the prepaid expense trust fund, and all moneys in said
fund, including all interest and earnings in said fund shall be transferred with the
authority as provided in section 23-3.1-205.3. All moneys remitted by purchasers
and other moneys received by the authority in connection with the prepaid expense
program shall be transmitted by the authority to the state treasurer and credited to
the prepaid expense trust fund. The state treasurer shall invest moneys in the
prepaid expense trust fund based upon the direction of the authority and shall
make disbursements from the prepaid expense trust fund in connection with the
prepaid expense program based upon the direction of the authority and in a manner
appropriate to carry out the prepaid expense program. All income derived from the
deposit and investment of moneys in the prepaid expense trust fund shall be
credited to the fund. At the end of any fiscal year, all unexpended and
unencumbered moneys in the prepaid expense trust fund shall remain therein and
shall not be credited or transferred to the general fund or any other fund.
(b) (Deleted by amendment, L. 2000, p. 1278, � 8, effective May 26, 2000.)
(c) The state treasurer shall maintain on behalf of the authority the prepaid
expense trust fund as a separate fund. The state treasurer shall credit all moneys
remitted to the state treasurer by the authority as provided in paragraph (a) of this
subsection (5) to the prepaid expense trust fund.
(d) (I) The authority shall evaluate the actuarial soundness of the prepaid
expense trust fund if, on the last day of the fiscal year, the aggregate amount of
moneys of the prepaid expense trust fund invested in any of the following forms of
investment exceeds ten percent of the market value of investable assets of the
prepaid expense trust fund:
(A) Common or preferred stock; or
(B) Corporate bonds, notes, or debentures that are convertible into common
or preferred stock; or
(C) Investment trust shares.
(II) The authority may contract with a private consultant or consultants to
perform an actuarial evaluation of the prepaid expense trust fund and to provide
financial advice to the authority in connection with the prepaid expense trust fund.
Any actuarial report and written financial advice shall be provided by the authority
to the state treasurer. If, based upon an actuarial evaluation, the authority
determines that the prepaid expense trust fund is not actuarially sound, the
authority may direct the state treasurer to distribute the available assets of the
prepaid expense trust fund in a manner permitted by outstanding advance payment
contracts. In connection with the evaluation of the prepaid expense trust fund, a
calculation based on key assumptions approved by the board shall be made by or
on behalf of the authority to determine whether an excess amount exists in the
prepaid expense trust fund. If, based on this calculation, the authority determines
that an excess amount exists in the prepaid expense trust fund, the authority shall
calculate, by dividing such excess amount by the total number of expected tuition
units in the prepaid expense trust fund, the portion of such excess amount that
would be attributable on a pro rata basis to each such expected tuition unit. At the
time the value of any tuition units under an advance payment contract is disbursed
from the prepaid expense trust fund during the academic year immediately
following such calculation, the portion of the excess amount attributable to such
tuition units as a result of the calculation made pursuant to this paragraph (d) shall
be paid as part of such disbursement. The excess amount shall otherwise remain in
the prepaid expense trust fund as a part of the stabilization reserve.
(e) (I) All expenses of the authority incurred in developing and administering
the prepaid expense program shall be payable from the prepaid expense trust fund.
The authority may use moneys in the prepaid expense trust fund to reimburse the
expenses of the authority incurred in connection with the development and
administration of the prepaid expense program. In no event shall annual
administration expenses of the authority exceed one percent of the contract price.
Any recovery of development costs by the authority shall not include interest or
finance charges, but may include moneys transferred from the collegeinvest fund
to the prepaid expense trust fund under section 23-3.1-205.4 (4). Any moneys in the
prepaid expense trust fund that are not needed for immediate use by the authority
shall be invested by the state treasurer in accordance with paragraph (a) of this
subsection (5) and with the actuarial report provided by the authority and in
investments permitted by section 23-3.1-216 (1) and (3). The authority shall
determine the amount of moneys in the fund that shall be invested and shall notify
the state treasurer in writing of the amount.
(II) (Deleted by amendment, L. 2000, p. 1278, � 8, effective May 26, 2000.)
(6) and (7) (Deleted by amendment, L. 2000, p. 1278, � 8, effective May 26,
2000.)
(8) If, at any time, the authority determines that the prepaid expense
program, or any aspect thereof, is not financially sound, the authority may
discontinue permanently or for a period of time the prepaid expense program or
that particular aspect of the program and the execution of additional advance
payment contracts. The state treasurer shall continue to invest moneys in the
prepaid expense trust fund based upon the direction of the authority and shall
continue to make disbursements from the prepaid expense trust fund in connection
with the prepaid expense program based upon the direction of the authority for the
benefit of existing purchasers and qualified beneficiaries except as otherwise
authorized.