34 Tex. Admin. Code § 7.101

Current through Reg. 49, No. 45; November 8, 2024

Section 7.101 - Definitions

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.

34 Tex. Admin. Code § 7.101

The provisions of this §7.101 adopted to be effective July 14, 2002, 27 TexReg 6044; amended to be effective June 27, 2012, 37 TexReg 4597; Amended by Texas Register, Volume 43, Number 39, September 28, 2018, TexReg 6454, eff. 10/4/2018; Amended by Texas Register, Volume 45, Number 14, April 3, 2020, TexReg 2316, eff. 4/5/2020