The following words, terms, and phrases, when used in this
subchapter, shall have the following meanings.
(1) Beneficiary--The designated individual whose qualified
higher education expenses are expected to be paid from a savings trust
account.
(2) Financial institution--A bank, trust company, savings
and loan association, credit union, broker-dealer, mutual fund, insurance
company, or other similar financial institution that is authorized
to transact business in this state.
(3) Nonqualified withdrawal--A withdrawal from a savings
trust account other than:
(A) a qualified withdrawal;
(B) a withdrawal that is made as the result of the
death or disability of the beneficiary of the account; or
(C) a withdrawal that is made as a result of the receipt
of a scholarship or an allowance or payment that is described in Internal
Revenue Code of 1986, §135(d)(1)(B) or (C), as amended, and that
the beneficiary has received, to the extent that the amount of the
withdrawal does not exceed the amount of the scholarship, allowance,
or payment, in accordance with federal law.
(4) Owner--The individual, trust, estate, Uniform Gift
to Minors Act (UGMA) custodian or Uniform Transfer to Minors Act (UTMA)
custodian, guardian, corporation, non-profit entity, or other legal
entity, or any combination thereof that results from transfers by
operation of law, that owns a savings trust account under a savings
trust agreement between the board and that individual, trust, estate,
UGMA or UTMA custodian, guardian, corporation, non-profit entity,
or other legal entity, or any combination thereof.
(5) Plan manager--A financial institution that is under
contract with the board to serve as a plan administrator.
(6) Promotional material, or savings plan information--Any
material published or used in any written, electronic, or other public
media. For the purpose of §7.102(e)(2) and (3), of this title
(relating to General Provisions) the term does not include:
(A) internet banner ads that link directly to a web
page that contains a link to the savings plan description;
(B) time-limited broadcast advertisements;
(C) press releases distributed only to members of the
media;
(D) materials and information that is not distributed
to account owners, beneficiaries, or the public; or
(E) objects, advertisements or social media posts that
include no more than the name and logo of the plan and a short slogan
that does not constitute a call to invest.
(7) Qualified higher education expenses--Has the meaning
assigned by Internal Revenue Code of 1986, §529, as amended,
and includes tuition, fees, books, supplies, and equipment that are
required for the enrollment or attendance of a beneficiary at an eligible
educational institution as defined by Internal Revenue Code of 1986, §529,
as amended, and including in certain instances the following:
(A) In the case of a special needs beneficiary, "qualified
higher education expenses" include expenses for special needs services
that are incurred in connection with enrollment or attendance of the
beneficiary at an eligible educational institution; and
(B) To the extent permitted by Internal Revenue Code
of 1986, §529, as amended, beneficiaries who live off-campus
and not at home may include in "qualified higher education expenses"
a reasonable room and board allowance as determined by the eligible
educational institution, and beneficiaries who live on campus may
include in "qualified higher education expenses" the actual invoice
amount that is charged for room and board, if that amount is greater
than the allowance.
(8) Qualified withdrawal--A withdrawal from a savings
trust account to pay the qualified higher education expenses of the
beneficiary of the account.
(9) Savings trust account--An account that an owner
establishes through the savings plan under this subchapter and Education
Code, Chapter 54, Subchapter G, on behalf of a beneficiary for the
purpose of applying distributions from the account toward qualified
higher education expenses at eligible educational institutions.
(10) Savings trust agreement--The agreement between
the owner that establishes a savings trust account and the board,
which may be amended over time.
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