13-55E-1      Definition of terms.
13-55E-2      Advance payment contract--Time limitations of benefits.
13-55E-3      Reduction of time limitations of benefits.
13-55E-4      Specification of payment options.
13-55E-5      Limitation on tuition benefits in excess of resident tuition costs.
13-55E-6      Obligations under contract--No guarantee of admission, resident status, or graduation.
13-55E-7      Nontransferability--Substitution of beneficiary.
13-55E-8      Deposits of payments--State fund.
13-55E-9      Expenditures from fund--Administration costs and fees.
13-55E-10      Schedule for payment to institutions of higher education.
13-55E-11      Nonutilization of advance payment contract--Refunds.
13-55E-12      Direct payment of costs to beneficiary.
13-55E-13      Promulgation of rules.

13-55E-1. Definition of terms.

Terms used in this chapter mean:

(1)    "Advance payment contract," a contract entered into by the executive director and a purchaser pursuant to this chapter to provide for the higher education of a beneficiary;

(2)    "Beneficiary," the person designated within the advance payment contract to receive tuition, room and board, or tuition only at a state-supported institution of higher education;

(3)    "Executive director," the executive director of the Board of Regents;

(4)    "Institution of higher education," any state-supported university;

(5)    "Purchaser," any person obligated to make an advance payment of tuition, room and board, or tuition only costs on behalf of a beneficiary pursuant to an advance payment contract;

(6)    "Room and board costs," the amount assessed for lodging and regularly scheduled meals provided to students pursuant to a contract for room and board with an institution of higher education;

(7)    "Tuition costs," the amount assessed for full-time enrollment at an institution of higher education including mandatory fees imposed upon all full-time students as a condition of enrollment.

Source: SL 1994, ch 145, § 1.

13-55E-2. Advance payment contract--Time limitations of benefits.

In accordance with rules promulgated pursuant to chapter 1-26, the executive director may enter into a contract with a purchaser for the advance payment of tuition, room and board, or tuition only costs on behalf of a beneficiary for attendance at one, or a combination of institutions of higher education, without further tuition, room and board, or tuition only costs to the beneficiary, subject to determination of residency status by the appropriate institution of higher education. Except as provided in § 13-55E-3, benefits provided under contract shall begin not less than seventeen years from the beginning date of the first fall academic semester following the date of payment.

Source: SL 1994, ch 145, § 2.

13-55E-3. Reduction of time limitations of benefits.

Notwithstanding § 13-55E-2, benefits provided under contract may commence within a period less than seventeen years but not less than ten years from the beginning date of the first fall academic semester following the date of payment. The one-time advance payment required under a contract providing for a reduced time limitation on the use of contract benefits pursuant to this section shall be subject to interest compounded annually at the rate of ten percent for the period of time the contract is reduced below seventeen years, payable at the time of advance payment. The amount of the one-time advance payment together with interest paid under this section shall be refunded upon termination or modification of the contract pursuant to § 13-55E-10. Any investment earnings accruing to a contract under this section are not refundable.

Source: SL 1994, ch 145, § 3.

13-55E-4. Specification of payment options.

The advance payment contract shall specify one of the payment options specified under this section to be required from the purchaser on behalf of the beneficiary. The one-time advance payment shall be made in cash or cash equivalents at the time the contract is signed. The executive director shall annually determine the amount of the one-time advance payment for each of the following payment options:

(1)    Not to exceed four academic semesters of resident tuition, room and board at any state-supported university;

(2)    Not to exceed four academic semesters of nonresident tuition, room and board at any state-supported university;

(3)    Not to exceed four academic semesters of resident tuition at any state-supported university; or

(4)    Not to exceed four academic semesters of nonresident tuition at any state-supported university.

Source: SL 1994, ch 145, § 4.

13-55E-5. Limitation on tuition benefits in excess of resident tuition costs.

The advance payment contract shall prohibit payment of and the executive director may not pay tuition benefit in excess of resident tuition costs if the:

(1)    Purchaser entered into the advance payment contract under an option specified by subdivision 13-55E-4(2); or

(2)    Beneficiary is determined a resident for tuition purposes by the appropriate institution of higher education at the time of enrollment and the purchaser entered into the advance payment contract under an option specified by subdivision 13-55E-4(2).

Source: SL 1994, ch 145, § 5.

13-55E-6. Obligations under contract--No guarantee of admission, resident status, or graduation.

The executive director shall make necessary arrangements with the appropriate institution of higher education to fulfill the obligation under the advance payment contract. An institution of higher education shall admit the beneficiary of the contract if the beneficiary otherwise qualifies for admission. This section and any advance payment contract entered into pursuant to this article may not guarantee that the beneficiary will:

(1)    Be admitted to an institution of higher education;

(2)    If admitted, be determined a resident for tuition purposes by the appropriate institution of higher education;

(3)    Be allowed to continue attendance at an institution of higher education following admission; or

(4)    Graduate from an institution of higher education.

Source: SL 1994, ch 145, § 6.

13-55E-7. Nontransferability--Substitution of beneficiary.

An advance payment contract may not be sold or otherwise transferred by the purchaser or beneficiary. Subject to rules promulgated pursuant to chapter 1-26, the purchaser may substitute another individual for the beneficiary originally named in the contract.

Source: SL 1994, ch 145, § 7.

13-55E-8. Deposits of payments--State fund.

The executive director shall deposit payments received under this chapter into a fund in the state treasury and shall account for each payment required from a purchaser on behalf of a beneficiary pursuant to the advance payment contract. The fund is a participating fund pursuant to § 4-5-30.

Source: SL 1994, ch 145, § 8.

13-55E-9. Expenditures from fund--Administration costs and fees.

Expenditures from the fund established under § 13-55E-8 shall be for payments to institutions of higher education on behalf of beneficiaries, payments of refunds and direct payment of benefits in accordance with § 13-55E-10 and for costs of administering this chapter. Administration fees shall be specified by contract and may not exceed two percent of investment earnings accruing to the fund.

Source: SL 1994, ch 145, § 9.

13-55E-10. Schedule for payment to institutions of higher education.

The executive director shall establish a schedule for payment to institutions of higher education of the tuition, room and board, or tuition only costs on behalf of beneficiaries. Payment under this section may not begin until the beneficiary applies to and is accepted by the institution of higher education. Upon completion or termination of an advance payment contract, the remaining balance of principal and investment earnings accruing to the contract shall be credited to the account established under § 13-55E-8.

Source: SL 1994, ch 145, § 10.

13-55E-11. Nonutilization of advance payment contract--Refunds.

If the beneficiary dies, is not admitted to an institution of higher education following proper application, elects to not attend an institution of higher education or if attending, elects to discontinue higher education or for any other circumstance approved by the executive director does not utilize the advance payment contract, the executive director shall terminate or modify the contract and except as provided under § 13-55E-3, refund to the purchaser, to any person designated by the purchaser by contract or to the legal representative of the purchaser, the amount of the one-time advance payment together with interest compounded annually at a rate of four percent. A purchaser or other qualified person may request a refund in accordance with this section at any time following the one-time advance payment. The amount of refund payable under this section shall be proportionately reduced for each academic semester the beneficiary attends an institution of higher education.

Source: SL 1994, ch 145, § 11.

13-55E-12. Direct payment of costs to beneficiary.

If the beneficiary qualifies for benefit entitlement under provisions of the advance payment contract, is admitted to an institution of higher education and receives additional financial or other assistance for tuition, room or board costs, or elects not to contract for room and board with the institution of higher education, the parties to the contract may provide for the direct payment of tuition, room and board, or tuition only costs to the beneficiary. The manner and amount of direct payment under this section shall be determined in accordance with rules promulgated pursuant to chapter 1-26.

Source: SL 1994, ch 145, § 12.

13-55E-13. Promulgation of rules.

Rules necessary to administer this chapter shall be promulgated jointly by the executive director and the state treasurer pursuant to chapter 1-26. Rules adopted pursuant to this section shall include policies and procedures governing the:

(1)    Receipt of payments from purchasers on behalf of beneficiaries;

(2)    Accounting and reporting to purchasers of payments deposited and invested in accordance with this chapter;

(3)    Period of time during which the beneficiary may receive benefits under the contract;

(4)    Terms and conditions under which contracts may be terminated or modified, refunds may be granted and direct payment of benefits may be made pursuant to § 13-55E-11;

(5)    Provisions of contract benefits at institutions of higher education;

(6)    Payment to institutions of higher education on behalf of beneficiaries;

(7)    Imposition of fees to cover costs incurred for the administration of this chapter not to exceed the limitation imposed under § 13-55E-9; and

(8)    Other terms, conditions, and provisions determined necessary for advanced payment contracts and benefits provided under contracts.

Source: SL 1994, ch 145, § 13.