(a) Under the program, a purchaser may prepay the costs of all or a portion of a beneficiary‘s undergraduate tuition and required fees at a general academic teaching institution, two-year institution of higher education, private or independent institution of higher education, medical and dental unit, career school, accredited out-of-state institution of higher education, or registered apprenticeship program by entering into a prepaid tuition contract with the board to purchase one or more tuition units of a type described by this section at the applicable price established by the board for that type of unit for the year in which the unit is purchased. The portion of the beneficiary’s undergraduate tuition and required fees for which a tuition unit may be redeemed at a particular general academic teaching institution or two-year institution of higher education is assigned to the tuition unit at the time of purchase, and the tuition unit may be redeemed to pay that portion of the tuition and fees at the general academic teaching institution or two-year institution of higher education in any academic year in which the unit is redeemed in accordance with this subchapter. The purchaser may purchase one type of unit or a combination of two or three types of units.
(b) The assigned value of a tuition unit, purchased as provided by this section, when used to pay the cost of tuition and required fees at a general academic teaching institution or two-year institution of higher education, is equal to one percent of the amount necessary for the academic year in which the unit is redeemed to cover the applicable cost of undergraduate resident tuition and required fees for one academic year consisting of 30 semester credit hours as follows:
(1) for a Type I tuition unit, the cost of undergraduate resident tuition and required fees charged by the general academic teaching institution with the highest such tuition and fee costs, determined as provided by Subsection (d);
(2) for a Type II tuition unit, the weighted average undergraduate resident tuition and required fees charged by general academic teaching institutions, determined as provided by Subsection (e); and
(3) for a Type III tuition unit, the weighted average undergraduate resident tuition and required fees of two-year institutions of higher education, determined as provided by Subsection (f).

(c) Each year, the board shall establish the price at which each type of tuition unit may be purchased during the next sales period and the percentage of the total cost of undergraduate resident tuition and required fees for one academic year consisting of 30 semester credit hours for which each type of tuition unit may be redeemed at each general academic teaching institution and two-year institution. The percentage shall be based on the total cost of required tuition and fees at a particular general academic teaching institution or two-year institution of higher education in relation to the amount determined for the institution with the highest cost or weighted average cost, as applicable. The purchase price established for each type of unit must be equal to the applicable cost of tuition and required fees as determined under this section for the most recent academic year that began before the beginning of the sales period. The sales period to which those prices apply expires on the first anniversary of the date the units become available for purchase at the prices established for that year.
(c-1) On or before June 1, each general academic teaching institution and each two-year institution of higher education shall annually provide information for the next fall semester to the board in a format requested by the board, to assist the board in determining tuition unit sales prices for the next sales period and redemption values for the next academic year.
(d) The board shall base the purchase price of a Type I tuition unit on one percent of the cost of the undergraduate resident tuition and required fees for the applicable academic year at the general academic teaching institution with the highest such tuition and fee cost for that academic year.
(e) The board shall base the purchase price of a Type II tuition unit on one percent of the cost of the weighted average general academic teaching institution undergraduate resident tuition and required fees for the applicable academic year. That cost is determined by:
(1) for each general academic teaching institution, multiplying the average amount of the institution’s undergraduate resident tuition and required fees for an academic year consisting of 30 semester credit hours by the number of full-time equivalent undergraduate resident students at that institution;
(2) adding together the products computed under Subdivision (1) for each institution; and
(3) dividing the sum determined under Subdivision (2) by the total number of full-time equivalent undergraduate resident students at all general academic teaching institutions.
(f) The board shall base the purchase price of a Type III tuition unit on one percent of the cost of the weighted average two-year institution of higher education undergraduate resident tuition and required fees for the applicable academic year, disregarding any portion of the tuition charged by a public junior college to a resident of this state who does not reside within the taxing jurisdiction of the junior college. That cost is determined by:
(1) for each two-year institution of higher education, multiplying the average amount of the institution’s undergraduate resident tuition and required fees for an academic year consisting of 30 semester credit hours by the number of full-time equivalent undergraduate resident students at that institution;
(2) adding together the products computed under Subdivision (1) for each institution; and
(3) dividing the sum determined under Subdivision (2) by the total number of full-time equivalent undergraduate resident students at all two-year institutions of higher education.
(g) The total amount paid under a prepaid tuition contract on behalf of a single beneficiary may not exceed any limit established on the amount by Section 529, Internal Revenue Code of 1986. The board shall establish, in compliance with Section 529, Internal Revenue Code of 1986, the minimum amount that the purchaser is required to pay under the contract on behalf of a single beneficiary.
(h) At the time of the establishment of the account to which a purchaser’s prepaid tuition contract money is assigned, the board may impose an administrative fee not to exceed $25. Money from that fee must be used directly in maintaining the actuarial soundness of the fund as required by § 54.770. The board may not impose any other fee or charge in connection with the sale of a tuition unit.