Florida Prepaid College Board.

(1) FLORIDA PREPAID COLLEGE BOARD; CREATION.—The Florida Prepaid College Board is hereby created as a body corporate with all the powers of a body corporate for the purposes delineated in this section. The board shall administer the prepaid program and the savings program, and shall perform essential governmental functions as provided in ss. 1009.97-1009.988. For the purposes of s. 6, Art. IV of the State Constitution, the board shall be assigned to and administratively housed within the State Board of Administration, but it shall independently exercise the powers and duties specified in ss. 1009.97-1009.988.

(2) FLORIDA PREPAID COLLEGE BOARD; MEMBERSHIP.—The board shall consist of seven members to be composed of the Attorney General, the Chief Financial Officer, the Chancellor of the State University System, the Chancellor of the Division of Florida Colleges, and three members appointed by the Governor and subject to confirmation by the Senate. Each member appointed by the Governor shall possess knowledge, skill, and experience in the areas of accounting, actuary, risk management, or investment management. Each member of the board not appointed by the Governor may name a designee to serve on the board on behalf of the member; however, any designee so named shall meet the qualifications required of gubernatorial appointees to the board. Members appointed by the Governor shall serve terms of 3 years. Any person appointed to fill a vacancy on the board shall be appointed in a like manner and shall serve for only the unexpired term. Any member shall be eligible for reappointment and shall serve until a successor qualifies. Members of the board shall serve without compensation but shall be reimbursed for per diem and travel in accordance with s. 112.061. Each member of the board who is not otherwise required to file a full and public disclosure of financial interests pursuant to s. 8, Art. II of the State Constitution or s. 112.3144 shall file a statement of financial interests pursuant to s. 112.3145.

(3) FLORIDA PREPAID COLLEGE BOARD; ELECTIONS; MEETINGS.—The board shall annually elect a board member to serve as chair and a board member to serve as vice chair and shall designate a secretary-treasurer who need not be a member of the board. The secretary-treasurer shall keep a record of the proceedings of the board and shall be the custodian of all printed material filed with or by the board and of its official seal. Notwithstanding the existence of vacancies on the board, a majority of the members shall constitute a quorum. The board shall take no official action in the absence of a quorum. The board shall meet, at a minimum, on a quarterly basis at the call of the chair.

(4) FLORIDA PREPAID COLLEGE BOARD; POWERS AND DUTIES.—The board shall have the powers and duties necessary or proper to carry out the provisions of ss. 1009.97-1009.988, including, but not limited to, the power and duty to:

(a) Appoint an executive director to serve as the chief administrative and operational officer of the board and to perform other duties assigned to him or her by the board.

(b) Adopt an official seal and rules.

(c) Sue and be sued.

(d) Make and execute contracts and other necessary instruments.

(e) Establish agreements or other transactions with federal, state, and local agencies, including state universities and Florida College System institutions.

(f) Administer the trust fund in a manner that is sufficiently actuarially sound to defray the obligations of the prepaid program and the savings program, considering the separate purposes and objectives of each program. The board shall annually evaluate or cause to be evaluated the actuarial soundness of the prepaid fund. If the board perceives a need for additional assets in order to preserve actuarial soundness of the prepaid program, the board may adjust the terms of subsequent advance payment contracts to ensure such soundness.

(g) Invest funds not required for immediate disbursement.

(h) Appear in its own behalf before boards, commissions, or other governmental agencies.

(i) Hold, buy, and sell any instruments, obligations, securities, and property determined appropriate by the board.

(j) Require a reasonable length of state residence for qualified beneficiaries.

(k) Segregate contributions and payments to the trust fund into the appropriate fund.

(l) Procure and contract for goods and services, employ personnel, and engage the services of private consultants, actuaries, managers, legal counsel, and auditors in a manner determined to be necessary and appropriate by the board.

(m) Solicit and accept gifts, grants, loans, and other aids from any source or participate in any other way in any government program to carry out the purposes of ss. 1009.97-1009.988.

(n) Require and collect administrative fees and charges in connection with any transaction and impose reasonable penalties, including default, for delinquent payments or for entering into an advance payment contract or a participation agreement on a fraudulent basis.

(o) Procure insurance against any loss in connection with the property, assets, and activities of the trust fund or the board.

(p) Impose reasonable time limits on use of the benefits provided by the prepaid program or savings program. However, any such limitations shall be specified within the advance payment contract or the participation agreement, respectively.

(q) Delineate the terms and conditions under which payments may be withdrawn from the trust fund and impose reasonable fees and charges for such withdrawal. Such terms and conditions shall be specified within the advance payment contract or the participation agreement.

(r) Provide for the receipt of contributions in lump sums or installment payments.

(s) Require that purchasers of advance payment contracts or benefactors of participation agreements verify, under oath, any requests for contract conversions, substitutions, transfers, cancellations, refund requests, or contract changes of any nature. Verification shall be accomplished as authorized and provided for in s. 92.525(1)(a).

(t) Delegate responsibility for administration of one or both of the comprehensive investment plans required in s. 1009.973 to persons the board determines to be qualified. Such persons shall be compensated by the board.

(u) Endorse insurance coverage written exclusively for the purpose of protecting advance payment contracts, and participation agreements, and the purchasers, benefactors, and beneficiaries thereof, including group life policies and group disability policies, which are exempt from the provisions of part V of chapter 627.

(v) Form strategic alliances with public and private entities to provide benefits to the prepaid program, savings program, and participants of either or both programs.

(w) Solicit proposals and contract, pursuant to s. 287.057, for the marketing of the prepaid program or the savings program, or both together. Any materials produced for the purpose of marketing the prepaid program or the savings program shall be submitted to the board for review. No such materials shall be made available to the public before the materials are approved by the board. Any educational institution may distribute marketing materials produced for the prepaid program or the savings program; however, all such materials shall be approved by the board prior to distribution. Neither the state nor the board shall be liable for misrepresentation of the prepaid program or the savings program by a marketing agent.

(x) Establish other policies, procedures, and criteria to implement and administer the provisions of ss. 1009.97-1009.988.

(y) Adopt procedures to govern contract dispute proceedings between the board and its vendors.

(z) Amend board contracts to provide Florida ABLE, Inc., or the Florida ABLE program with contractual services.

(aa) Adopt rules relating to the purchase and use of a prepaid college plan authorized under s. 1009.98 or a college savings plan authorized under s. 1009.981 for the Family Empowerment Scholarship Program pursuant to s. 1002.394, which may include, but need not be limited to:

1. The use of such funds for postsecondary education programs for students with disabilities;

2. Effective procedures that allow program funds to be used in conjunction with other funds used by a parent in the purchase of a prepaid college plan or a college savings plan;

3. The tracking and accounting of program funds separately from other funds contributed to a prepaid college plan or a college savings plan;

4. The reversion of program funds, including, but not limited to, earnings from contributions to the Florida College Savings Plan;

5. The use of program funds only after private payments have been used for prepaid college plan or college savings plan expenditures;

6. Contracting with each eligible nonprofit scholarship-funding organization to establish mechanisms to implement s. 1002.394, including, but not limited to, identifying the source of funds being deposited in the plans; and

7. The development of a written agreement that defines the owner and beneficiary of an account and outlines responsibilities for the use of the advance payment contract funds or savings program funds.

(5) FLORIDA PREPAID COLLEGE BOARD; CONTRACTUAL SERVICES.—The board shall solicit proposals and contract, pursuant to s. 287.057, for:

(a) The services of records administrators.

(b) Investment consultants to review the performance of the board’s investment managers and advise the board on investment management and performance and investment policy, including the contents of the comprehensive investment plans.

(c) Trustee services firms to provide trustee and related services to the board. The trustee services firm shall agree to meet the obligations of the board to qualified beneficiaries if moneys in the fund fail to offset the obligations of the board as a result of imprudent selection or supervision of investment programs by such firm.

(d) Investment managers to provide investment portfolios for the prepaid program or the savings program. Investment managers shall be limited to authorized insurers as defined in s. 624.09, banks as defined in s. 658.12, associations as defined in s. 665.012, authorized Securities and Exchange Commission investment advisers, and investment companies as defined in the Investment Company Act of 1940. All investment managers shall have their principal place of business and corporate charter located and registered in the United States. In addition, each investment manager shall agree to meet the obligations of the board to qualified beneficiaries if moneys in the fund fail to offset the obligations of the board as a result of imprudent investing by such provider. Each authorized insurer shall evidence superior performance overall on an acceptable level of surety in meeting its obligations to its policyholders and other contractual obligations. Only qualified public depositories approved by the Chief Financial Officer shall be eligible for board consideration. Each investment company shall provide investment plans as specified within the request for proposals.

The goals of the board in procuring such services shall be to provide all purchasers and benefactors with the most secure, well-diversified, and beneficially administered prepaid program or savings program possible, to allow all qualified firms interested in providing such services equal consideration, and to provide such services to the state at no cost and to the purchasers and benefactors at the lowest cost possible. Evaluations of proposals submitted pursuant to this subsection shall include, but not be limited to, fees and other costs that are charged to purchasers or benefactors that affect account values, or that impact the operational costs of the prepaid program or the savings program; past experience and past performance in providing the required services; financial history and current financial strength and capital adequacy to provide the required services; and capabilities and experience of the proposed personnel that will provide the required services.

(6) QUALIFIED TUITION PROGRAM STATUS.—Notwithstanding any other provision of ss. 1009.97-1009.984, the board may adopt rules necessary for the prepaid program and the savings program each to retain its status as a “qualified tuition program” in order to maintain its tax-exempt status or other similar status of the program, purchasers, and qualified beneficiaries under the Internal Revenue Code. The board shall inform participants in the prepaid program and the savings program of changes to the tax or securities status of advance purchase contracts and participation agreements.