Chapter 3334 | College Savings Program; Variable College Savings Program

Section
Section 3334.01 \| College savings program - variable college savings program definitions. Effective: March 30, 2018 Latest Legislation: Senate Bill 22 - 132nd General Assembly PDF: Download Authenticated PDF As used in this chapter: (A) "Aggregate original principal amount" means the aggregate of the initial offering prices to the public of college savings bonds, exclusive of accrued interest, if any. "Aggregate original principal amount" does not mean the aggregate accreted amount payable at maturity or redemption of such bonds. (B) "Beneficiary" means: (1) An individual designated by the purchaser under a tuition payment contract or through a scholarship program as the individual on whose behalf tuition units purchased under the contract or awarded through the scholarship program will be applied toward the payment of undergraduate, graduate, or professional tuition; or (2) An individual designated by the contributor under a variable college savings program contract as the individual whose higher education expenses will be paid from a variable college savings program account. (C) "Capital appreciation bond" means a bond for which the following is true: (1) The principal amount is less than the amount payable at maturity or early redemption; and (2) No interest is payable on a current basis. (D) "Tuition unit" means a credit of the Ohio tuition trust authority purchased under section 3334.09 of the Revised Code. "Tuition unit" includes a tuition credit purchased prior to July 1, 1994. (E) "College savings bonds" means revenue and other obligations issued on behalf of the state or any agency or issuing authority thereof as a zero-coupon or capital appreciation bond, and designated as college savings bonds as provided in this chapter. "College savings bond issue" means any issue of bonds of which any part has been designated as college savings bonds. (F) "Institution of higher education" means a state institution of higher education, a private college, university, or other postsecondary institution located in this state that possesses a certificate of authorization issued pursuant to Chapter 1713. of the Revised Code or a certificate of registration issued by the state board of career colleges and schools under Chapter 3332. of the Revised Code, or an accredited college, university, or other postsecondary institution located outside this state that is accredited by an accrediting organization or professional association recognized by the authority. To be considered an institution of higher education, an institution shall meet the definition of an eligible educational institution under section 529 of the Internal Revenue Code. (G) "Issuing authority" means any authority, commission, body, agency, or individual empowered by the Ohio Constitution or the Revised Code to issue bonds or any other debt obligation of the state or any agency or department thereof. "Issuer" means the issuing authority or, if so designated under division (B) of section 3334.04 of the Revised Code, the treasurer of state. (H) "Tuition" means the charges imposed to attend an institution of higher education as an undergraduate, graduate, or professional student and all fees required as a condition of enrollment, as determined by the Ohio tuition trust authority. "Tuition" does not include laboratory fees, room and board, or other similar fees and charges. (I) "Weighted average tuition" means the tuition cost resulting from the following calculation: (1) Add the products of the annual undergraduate tuition charged to Ohio residents at each four-year state university multiplied by that institution's total number of undergraduate fiscal year equated students; and (2) Divide the gross total of the products from division (I)(1) of this section by the total number of undergraduate fiscal year equated students attending four-year state universities. When making this calculation, the "annual undergraduate tuition charged to Ohio residents" shall not incorporate any tuition reductions that vary in amount among individual recipients and that are awarded to Ohio residents based upon their particular circumstances, beyond any minimum amount awarded uniformly to all Ohio residents. In addition, any tuition reductions awarded uniformly to all Ohio residents shall be incorporated into this calculation. (J) "Zero-coupon bond" means a bond which has a stated interest rate of zero per cent and on which no interest is payable until the maturity or early redemption of the bond, and is offered at a substantial discount from its original stated principal amount. (K) "State institution of higher education" includes the state universities listed in section 3345.011 of the Revised Code, community colleges created pursuant to Chapter 3354. of the Revised Code, university branches created pursuant to Chapter 3355. of the Revised Code, technical colleges created pursuant to Chapter 3357. of the Revised Code, state community colleges created pursuant to Chapter 3358. of the Revised Code, and the northeast Ohio medical university. (L) "Four-year state university" means those state universities listed in section 3345.011 of the Revised Code. (M) "Principal amount" refers to the initial offering price to the public of an obligation, exclusive of the accrued interest, if any. "Principal amount" does not refer to the aggregate accreted amount payable at maturity or redemption of an obligation. (N) "Scholarship program" means a program registered with the Ohio tuition trust authority pursuant to section 3334.17 of the Revised Code. (O) "Higher education expenses" means expenses that meet the definition of "qualified higher education expenses" under section 529 of the Internal Revenue Code. (P) "Purchaser" means the person signing the tuition payment contract, who controls the account and acquires tuition units for an account under the terms and conditions of the contract. (Q) "Contributor" means a person who signs a variable college savings program contract with the Ohio tuition trust authority and contributes to and owns the account created under the contract. (R) "Contribution" means any payment directly allocated to an account for the benefit of the designated beneficiary of the account.
Section 3334.02 \| Establishment of college savings and variable college savings programs. Effective: March 30, 2018 Latest Legislation: Senate Bill 22 - 132nd General Assembly PDF: Download Authenticated PDF (A) In order to help make higher education affordable and accessible to all citizens of Ohio, to maintain state institutions of higher education by helping to provide a stable financial base to these institutions, to provide the citizens of Ohio with financing assistance for higher education and protection against rising tuition costs, to encourage saving to enhance the ability of citizens of Ohio to obtain financial access to institutions of higher education, to encourage elementary and secondary students in this state to achieve academic excellence, and to promote a well-educated and financially secure population to the ultimate benefit of all citizens of the state of Ohio, there is hereby created the Ohio college savings program. The program shall consist of the issuance of college savings bonds and the sale of tuition units. (B) The provisions of Chapter 1707. of the Revised Code shall not apply to tuition units or any agreement or transaction related thereto. (C) To provide the citizens of Ohio with a choice of tax-advantaged college savings programs and the opportunity to participate in more than one type of college savings program at a time, the Ohio tuition trust authority shall establish and administer a variable college savings program as a qualified state tuition program under section 529 of the Internal Revenue Code. The program shall allow contributors to make cash contributions to variable college savings program accounts created for the purpose of paying future higher education expenses and providing variable rates of return on contributions. (D) A person may participate simultaneously in both the Ohio college savings program and the variable college savings program.
Section 3334.03 \| Ohio tuition trust authority. Effective: December 19, 2016 Latest Legislation: House Bill 471 - 131st General Assembly PDF: Download Authenticated PDF (A)(1) There is hereby created the Ohio tuition trust authority within the office of the chancellor of the Ohio board of regents, which shall have the powers enumerated in this chapter and which shall operate as a qualified state tuition program within the meaning of section 529 of the Internal Revenue Code. The exercise by the authority of its powers shall be and is hereby declared an essential state governmental function. The authority is subject to all provisions of law generally applicable to state agencies which do not conflict with the provisions of this chapter. (2) Except for the duties and responsibilities under this chapter of the Ohio tuition trust authority investment board as specified in divisions (B)(2) and (3) of this section, the Ohio tuition trust authority shall perform all duties and responsibilities specified under this chapter. (B)(1)(a) There is hereby created the Ohio tuition trust authority investment board, which shall consist of eleven members, no more than six of whom shall be of the same political party. Six members shall be appointed by the governor, with the advice and consent of the senate, who have significant experience in finance, accounting, or investment management. Four members shall be appointed by the speaker of the house of representatives and the president of the senate as follows: the speaker of the house of representatives shall appoint one member of the house from each political party and the president of the senate shall appoint one member of the senate from each political party. The chancellor or the chancellor's designee shall be an ex officio voting member. Terms of office for gubernatorial appointees shall be staggered four-year terms. Legislative members shall serve two-year terms, provided that legislative members may continue to serve on the board only if they remain members of the general assembly. Any vacancy on the board shall be filled in the same manner as the original appointment, except that any person appointed to fill a vacancy shall be appointed to the remainder of the unexpired term. Any member is eligible for reappointment. (b) Any member may be removed by the appointing authority for misfeasance, malfeasance, or willful neglect of duty or for other cause after notice and a public hearing, unless the notice and hearing are waived in writing by the member. Members shall serve without compensation but shall receive their reasonable and necessary expenses incurred in the conduct of the board's business. (c) The speaker of the house of representatives and the president of the senate shall each designate a member of the board to serve as co-chairpersons. The six gubernatorial appointees and the chancellor or the chancellor's designee shall serve as the executive committee of the board, and shall elect an executive chairperson from among the executive committee members. The board and the executive committee may elect such other officers as determined by the board or the executive committee respectively. The authority shall meet at least annually at the call of either co-chairperson and at such other times as either co-chairperson or the board determines necessary. In the absence of both co-chairpersons, the executive chairperson shall serve as the presiding officer of the board. The executive committee shall meet at the call of the executive chairperson or as the executive committee determines necessary. The board may delegate to the executive committee such duties and responsibilities as the board determines appropriate, except that the board may not delegate to the executive committee the final designation of bonds as college savings bonds or providing of advice concerning and consent to the employment of an executive director of the Ohio tuition trust authority. Upon such delegation, the executive committee shall have the authority to act pursuant to such delegation without further approval or action by the board. A majority of the board shall constitute a quorum of the board, and the affirmative vote of a majority of the members present shall be necessary for any action taken by the board. A majority of the executive committee shall constitute a quorum of the executive committee, and the affirmative vote of a majority of the members present shall be necessary for any action taken by the executive committee. No vacancy in the membership of the board or the executive committee shall impair the rights of a quorum to exercise all rights and perform all duties of the board or the executive committee respectively. (2) The Ohio tuition trust authority investment board solely shall perform the duties and responsibilities specified in division (B)(3) of this section and in all of the following: (a) Section 3334.04 of the Revised Code, except for administration responsibilities that include, but are not limited to, marketing, promoting, and advertising; (b) Division (A)(11) of section 3334.08 of the Revised Code to provide advice and consent to the Ohio tuition trust authority on the hiring of the executive director, provided that the executive director shall not be hired unless a majority of the board votes in favor of the hiring; (c) Divisions (A) to (E), (G)(1), (K), (L), and (M) of section 3334.11 of the Revised Code, except that the board shall consult with the chancellor prior to any change in the order of expenditures under division (B) of that section, prior to entering into a contract under division (E) of that section, or prior to establishing an entity authorized under division (K)(2) of that section; (d) Section 3334.12 of the Revised Code; (e) Sections 3334.18 to 3334.21 of the Revised Code concerning investment and fiduciary duties that are required for the variable college savings program. In addition, prior to any change in the order of expenditures under division (F) of section 3334.19 of the Revised Code, the board shall consult with the chancellor. (3) Subject to the advice and consent of the chancellor, the Ohio tuition trust authority investment board may remove at any time the executive director of the Ohio tuition trust authority hired under division (A)(11) of section 3334.08 of the Revised Code.
Section 3334.04 \| College savings bonds. Effective: April 13, 1990 Latest Legislation: House Bill 434 - 118th General Assembly PDF: Download Authenticated PDF (A) Any bonds authorized for issuance by any issuing authority may, with the approval of the Ohio tuitition trust authority and at the option of the issuing authority, be designated as college savings bonds in accordance with this chapter. Bonds so designated shall be known as college savings bonds. The issuer shall sell as college savings bonds as many bonds from such an issue as is practical. (B) Issuing authorities designating bonds as a college savings bonds issue, with the approval of the authority, may delegate to the treasurer of state the powers and duties related to the issuance and retirement of the bonds as provided by law. The financing costs, including the expenses incurred by the treasurer of the state in performing the powers and duties, are payable as provided in the bond proceedings from the bond proceeds, special funds, or other moneys available. (C) In connection with the authority granted by division (B) of this section, the issuer, with the approval of the authority, may contract for services of financial consultants, accounting experts, marketing, remarketing, underwriter and administrative agents, and other consultants and independent contractors as the issuer determines necessary to carry out such powers and duties. (D) Notwithstanding any limitation to the contrary, college savings bonds may be sold at public or private sale in a manner which assures, to the extent practicable, the broadest retail distribution of the bonds to investors residing in the state. (E) Holders of college savings bonds have all of the rights and remedies accorded to such holders under the provisions of the law pursuant to which such bonds are issued, whether or not issuance of such bonds has been delegated to the treasurer of state pursuant to division (B) of this section. In addition, the bond proceedings or other documents pertaining to the bonds may contain such covenants of the issuer and other matters deemed advisable by the issuer in consultation with the authority, including the terms and conditions for creating and maintaining sinking funds, reserve funds, and any other special funds as may be created in the bond proceedings separate and apart from all other funds and accounts of the state or of the issuing authority. (F) In advertising or promoting the sale of college savings bonds, the issuer and the authority jointly may encourage purchasers to apply the value at maturity of college savings bonds toward the cost of tuition at an institution of higher education; however, neither the authority, the treasurer of state, nor the issuing authority or the issuer shall provide any guarantee, nor shall any guarantee be inferred, to the effect that the value at maturity of the bonds held by a person shall be an amount sufficient to pay for the cost of tuition at any institution of higher education attended by that person for such purposes as he determines.
Section 3334.06 \| Plan for sale of bonds - approval of sale - cooperation with issuing authorities. Effective: April 13, 1990 Latest Legislation: House Bill 434 - 118th General Assembly PDF: Download Authenticated PDF (A) The Ohio tuition trust authority shall, after consultation with the issuer, develop a plan for the sale of college savings bonds. The plan shall include: (1) An advertising program to inform the public about the availability of college savings bonds; (2) The estimated cost of financing and administering the plan; (3) A description of the ongoing administrative authority and responsibility for the plan. (B) The authority shall approve the sale of a college savings bond issue under division (A) of section 3334.04 of the Revised Code only after it has determined that the issuance would comply with section 3334.04 of the Revised Code. (C) The authority shall cooperate with all state issuing authorities in identifying potential bond issues which may be appropriate for designation as college savings bonds and shall encourage those issuing authorities to participate in the Ohio college savings program.
Section 3334.07 \| Plan for sale of tuition credits - price of credit - incentive programs. Effective: October 16, 2009 Latest Legislation: House Bill 1 - 128th General Assembly PDF: Download Authenticated PDF (A) The Ohio tuition trust authority shall develop a plan for the sale of tuition units. Not later than December 31, 2009, the authority shall conduct a study of guaranteed tuition program plans and submit a report that contains recommendations for a new guaranteed tuition plan to the speaker of the house of representatives, the president of the senate, and the governor. The authority shall include in the report consideration of a guaranteed tuition program plan in which the risks of the plan are shared equitably among institutions of higher education, the state, the Ohio tuition trust authority, and the investors in the program. (B) Annually, the authority shall determine the weighted average tuition of four-year state universities in the academic year that begins on or after the first day of August of the current calendar year, and shall establish the price of a tuition unit in the ensuing sales period. Such price shall be based on sound actuarial principles, and shall, to the extent actuarially possible, reasonably approximate one per cent of the weighted average tuition for that academic year plus the costs of administering the program that are in excess of general revenue fund appropriations for administrative costs. The sales period to which such price applies shall consist of twelve months, and the authority by rule shall establish the date on which the sales period begins. If circumstances arise during a sales period that the authority determines causes the price of tuition units to be insufficient to ensure the actuarial soundness of the Ohio tuition trust fund, the authority may adjust the price of tuition units purchased during the remainder of the sales period. To promote the purchase of tuition units and in accordance with actuarially sound principles, the authority may adjust the sales price as part of incentive programs, such as discounting for lump sum purchases and multi-year installment plans at a fixed rate of purchase. (C) The authority may establish and administer more than one plan for the sale of tuition units within the Ohio tuition trust fund using similar principles specified in division (B) of this section or modeled after a plan that was included in the study that was conducted under division (A) of this section. If the authority establishes and administers more than one plan for the sale of tuition units, the money received under each plan shall be segregated and identified within the Ohio tuition trust fund.
Section 3334.08 \| Trust authority powers. Effective: March 30, 2018 Latest Legislation: Senate Bill 22 - 132nd General Assembly PDF: Download Authenticated PDF (A) Subject to division (B) of this section, in addition to any other powers conferred by this chapter, the Ohio tuition trust authority may do any of the following: (1) Impose reasonable residency requirements for beneficiaries of tuition units; (2) Impose reasonable limits on the number of tuition unit participants; (3) Impose and collect administrative fees and charges in connection with any transaction under this chapter; (4) Purchase insurance from insurers licensed to do business in this state providing for coverage against any loss in connection with the authority's property, assets, or activities or to further ensure the value of tuition units; (5) Indemnify or purchase policies of insurance on behalf of members, officers, and employees of the authority from insurers licensed to do business in this state providing for coverage for any liability incurred in connection with any civil action, demand, or claim against a director, officer, or employee by reason of an act or omission by the director, officer, or employee that was not manifestly outside the scope of the employment or official duties of the director, officer, or employee or with malicious purpose, in bad faith, or in a wanton or reckless manner; (6) Make, execute, and deliver contracts, conveyances, and other instruments necessary to the exercise and discharge of the powers and duties of the authority; (7) Promote, advertise, and publicize the Ohio college savings program and the variable college savings program; (8) Adopt rules under section 111.15 of the Revised Code for the implementation of the Ohio college savings program; (9) Contract, for the provision of all or part of the services necessary for the management and operation of the Ohio college savings program and the variable college savings program, with a bank, trust company, savings and loan association, insurance company, or licensed dealer in securities if the bank, company, association, or dealer is authorized to do business in this state and information about the contract is filed with the controlling board pursuant to division (D)(6) of section 127.16 of the Revised Code; provided, however, that any funds of the Ohio college savings program and the variable college savings program that are not needed for immediate use shall be deposited by the treasurer of state in the same manner provided under Chapter 135. of the Revised Code for public moneys of the state. All interest earned on those deposits shall be credited to the Ohio college savings program or the variable college savings program, as applicable. (10) Contract for other services, or for goods, needed by the authority in the conduct of its business, including but not limited to credit card services; (11) Employ an executive director and other personnel as necessary to carry out its responsibilities under this chapter, and fix the compensation of these persons. All employees of the authority shall be in the unclassified civil service and shall be eligible for membership in the public employees retirement system. In the hiring of the executive director, the Ohio tuition trust authority shall obtain the advice and consent of the Ohio tuition trust investment board created in section 3334.03 of the Revised Code, provided that the executive director shall not be hired unless a majority of the board votes in favor of the hiring. In addition, the board may remove the executive director at any time subject to the advice and consent of the chancellor of higher education. (12) Contract with financial consultants, actuaries, auditors, and other consultants as necessary to carry out its responsibilities under this chapter; (13) Enter into agreements with any agency of the state or its political subdivisions or with private employers under which an employee may agree to have a designated amount deducted in each payroll period from the wages or salary due the employee for the purpose of purchasing tuition units pursuant to a tuition payment contract or making contributions pursuant to a variable college savings program contract; (14) Enter into an agreement with the treasurer of state under which the treasurer of state will receive, and credit to the Ohio tuition trust fund or variable college savings program fund, from any bank or savings and loan association authorized to do business in this state, amounts that a depositor of the bank or association authorizes the bank or association to withdraw periodically from the depositor's account for the purpose of purchasing tuition units pursuant to a tuition payment contract or making contributions pursuant to a variable college savings program contract; (15) Solicit and accept gifts, grants, and loans from any person or governmental agency and participate in any governmental program; (16) Impose limits on the number of units which may be purchased on behalf of or assigned or awarded to any beneficiary and on the total amount of contributions that may be made on behalf of a beneficiary; (17) Impose restrictions on the substitution of another individual for the original beneficiary under the Ohio college savings program; (18) Impose a limit on the age of a beneficiary, above which tuition units may not be purchased on behalf of that beneficiary; (19) Enter into a cooperative agreement with the treasurer of state to provide for the direct disbursement of payments under tuition payment or variable college savings program contracts; (20) Terminate any tuition payment or variable college savings program contract if no purchases or contributions are made for a period of three years or more and there are fewer than a total of five tuition units or less than a dollar amount set by rule on account, provided that notice of a possible termination shall be provided in advance, explaining any options to prevent termination, and a reasonable amount of time shall be provided within which to act to prevent a termination; (21) Maintain a separate account for each tuition payment or variable college savings program contract; (22) Perform all acts necessary and proper to carry out the duties and responsibilities of the authority pursuant to this chapter. (B) The authority shall adopt rules under section 111.15 of the Revised Code for the implementation and administration of the variable college savings program. The rules shall provide taxpayers with the maximum tax advantages and flexibility consistent with section 529 of the Internal Revenue Code and regulations adopted thereunder with regard to disposition of contributions and earnings, designation of beneficiaries, and rollover of account assets to other programs. (C) Except as otherwise specified in this chapter, the provisions of Chapters 123. and 4117. of the Revised Code shall not apply to the authority and Chapter 125. of the Revised Code shall not apply to contracts approved under the powers of the Ohio tuition trust authority investment board under section 3334.03 of the Revised Code.
Section 3334.09 \| Tuition payment contracts. Effective: March 30, 2018 Latest Legislation: Senate Bill 22 - 132nd General Assembly PDF: Download Authenticated PDF (A) Except in the case of a scholarship program established in accordance with section 3334.17 of the Revised Code, the Ohio tuition trust authority may enter into a tuition payment contract with any person for the purchase of tuition units if either the purchaser or the beneficiary is a resident of this state at the time the contract is entered into. A tuition payment contract shall allow any person to purchase tuition units at the price determined by the authority pursuant to section 3334.07 or 3334.12 of the Revised Code for the year in which the tuition unit is purchased. The purchaser shall name in the payment contract one specific individual as the beneficiary for the tuition units. In accordance with rules of the authority, units may be transferred to the credit of another beneficiary and a new beneficiary may be substituted for the beneficiary originally named in the contract. (B) Each tuition unit shall entitle the beneficiary to an amount equal to one per cent of the weighted average tuition. (C) Nothing in this chapter or in any tuition payment contract entered into pursuant to this chapter shall be construed as a guarantee by the state, the authority, or any institution of higher education that a beneficiary will be admitted to an institution of higher education, or, upon admission to an institution of higher education, will be permitted to continue to attend or will receive a degree from an institution of higher education. Nothing in this chapter or in any tuition payment contract entered into pursuant to this chapter shall be considered a guarantee that the beneficiary's cost of tuition at an institution of higher education other than a state institution of higher education will be covered in full by the proceeds of the beneficiary's tuition units. (D) The following information shall be disclosed in writing to each purchaser of tuition units and, where appropriate, to each entity establishing a scholarship program under section 3334.17 of the Revised Code: (1) The terms and conditions for the purchase and use of tuition units; (2) In the case of a contract described by division (A) of this section, any restrictions on the substitution of another individual for the original beneficiary and any restrictions on the transfer of ownership of units in the payment account; (3) The person or entity entitled to terminate the contract; (4) The terms and conditions under which the contract may be terminated and the amount of the refund, if any, to which the person or entity terminating the contract, or that person's or entity's designee, is entitled upon termination; (5) The obligation of the authority to make payments to a beneficiary, or an institution of higher education on behalf of a beneficiary, under division (B) of this section based upon the number of tuition units purchased on behalf of the beneficiary or awarded to the beneficiary pursuant to a scholarship program; (6) The method by which tuition units shall be applied toward payment of higher education expenses if in any academic term the beneficiary is a part-time student; (7) The period of time during which a beneficiary may receive benefits under the contract; (8) The terms and conditions under which money may be wholly or partially withdrawn from the program, including, but not limited to, any reasonable charges and fees that may be imposed for withdrawal; (9) All other rights and obligations of the purchaser and the authority, including the provisions of division (A) of section 3334.12 of the Revised Code, and any other terms, conditions, and provisions the authority considers necessary and appropriate. (E) A tuition payment contract may provide that the authority will pay directly to the institution of higher education in which a beneficiary is enrolled during a term the amount represented by the tuition units being used that term. (F) A tuition payment contract described by division (A) of this section may provide that if the contract has not been terminated or units purchased under the contract have not been applied toward the payment of higher education expenses within a specified period of time, the authority may, after making a reasonable effort to locate the purchaser of the tuition units, the beneficiary, and any person designated in the contract to act on behalf of the purchaser of the units or the beneficiary, terminate the contract and retain the amounts payable under the contract. (G) If, at any time after tuition units are purchased on behalf of a beneficiary or awarded to a beneficiary or pursuant to a scholarship program, the beneficiary becomes a nonresident of this state, or, if the beneficiary was not a resident of this state at the time the tuition payment contract was entered into, the purchaser becomes a nonresident of this state, units purchased or awarded while the beneficiary was a resident may be applied on behalf of the beneficiary toward the payment of higher education expenses in the manner specified in division (B) of this section, except that if the beneficiary enrolls in a state institution of higher education, the beneficiary shall be responsible for payment of all nonresident fees charged to out-of-state residents by the institution in which the beneficiary is enrolled.
Section 3334.10 \| Termination of contract - determination and payment of refunds. Effective: September 29, 2005 Latest Legislation: House Bill 66 - 126th General Assembly PDF: Download Authenticated PDF Divisions (A) and (B) of this section do not apply to scholarship programs established under section 3334.17 of the Revised Code. (A) Unless otherwise provided for in the tuition payment contract, the purchaser may rollover amounts to another qualified tuition program under section 529 of the Internal Revenue Code or terminate the contract for any reason by filing written notice with the Ohio tuition trust authority. (1) If the contract is terminated and the beneficiary is under eighteen years of age, the authority shall use actuarially sound principles to determine the amount of the refund. (2) If the contract is terminated because of the death or permanent disability of the beneficiary, the amount of the refund shall be equal to the greater of the following: (a) One per cent of the weighted average tuition in the academic year the refund is paid, multiplied by the number of tuition units purchased and not used; (b) The total purchase price of all tuition units purchased for the beneficiary and not used. (3) If all or part of the amount accrued under the contract is liquidated for a rollover to another qualified tuition program under section 529 of the Internal Revenue Code, the rollover amount shall be determined in an actuarially sound manner. (B) The contributor of a variable college savings program account may rollover amounts to another qualified tuition program under section 529 of the Internal Revenue Code or terminate the account for any reason by filing written notice with the Ohio tuition trust authority. The contributor may receive an amount equal to the account balance, less any applicable administrative fees. (C) A scholarship program may request a refund of tuition units in the program's account by filing a written request with the authority. The refund shall be paid to the entity that established the scholarship program or, with that entity's approval, to the authority if this is authorized by federal tax law. The amount of any refund shall be determined by the authority and shall meet the requirements for refunds made on account of scholarships under section 529 of the Internal Revenue Code. (D) The authority shall maintain a separate account for each variable college savings contract entered into pursuant to division (A) of section 3334.18 of the Revised Code for contributions made on behalf of a beneficiary, showing the name of the beneficiary of that contract and the amount of contributions made pursuant to that contract. Upon request of any beneficiary or contributor, the authority shall provide a statement indicating, in the case of a beneficiary, the amount of contributions made pursuant to that contract on behalf of the beneficiary, or, in the case of a contributor, contributions made, disbursed, or refunded pursuant to that contract.
Section 3334.11 \| Ohio tuition trust fund. Effective: October 16, 2009 Latest Legislation: House Bill 1 - 128th General Assembly PDF: Download Authenticated PDF (A) The assets of the Ohio tuition trust authority reserved for payment of the obligations of the authority pursuant to tuition payment contracts shall be placed in a fund, which is hereby created and shall be known as the Ohio tuition trust fund. The fund shall be in the custody of the treasurer of state, but shall not be part of the state treasury. That portion of payments received by the authority or the treasurer of state from persons purchasing tuition units under tuition payment contracts that the authority determines is actuarially necessary for the payment of obligations of the authority pursuant to tuition payment contracts, all interest and investment income earned by the fund, and all other receipts of the authority from any other source that the authority determines appropriate, shall be deposited in the fund. No purchaser or beneficiary of tuition units shall have any claim against the funds of any state institution of higher education. All investment fees and other costs incurred in connection with the exercise of the investment powers of the authority pursuant to divisions (D) and (E) of this section shall be paid from the assets of the fund. (B) Unless otherwise provided by the authority, the assets of the Ohio tuition trust fund shall be expended in the following order: (1) To make payments to beneficiaries, or institutions of higher education on behalf of beneficiaries, under division (B) of section 3334.09 of the Revised Code; (2) To make refunds as provided in divisions (A) and (C) of section 3334.10 of the Revised Code; (3) To pay the investment fees and other costs of administering the fund. (C)(1) Except as may be provided in an agreement under division (A)(19) of section 3334.08 of the Revised Code, all disbursements from the Ohio tuition trust fund shall be made by the treasurer of state on order of a designee of the authority. (2) The treasurer of state shall deposit any portion of the Ohio tuition trust fund not needed for immediate use in the same manner as state funds are deposited. (D) The authority is the trustee of the Ohio tuition trust fund. The authority shall have full power to invest the assets of the fund and in exercising this power shall be subject to the limitations and requirements contained in divisions (K) to (M) of this section and sections 145.112 and 145.113 of the Revised Code. The evidences of title of all investments shall be delivered to the treasurer of state or to a qualified trustee designated by the treasurer of state as provided in section 135.18 of the Revised Code. Assets of the fund shall be administered by the authority in a manner designed to be actuarially sound so that the assets of the fund will be sufficient to satisfy the obligations of the authority pursuant to tuition payment contracts and defray the reasonable expenses of administering the fund. (E) The authority may enter into an agreement with any business, entity, or governmental agency to perform the investment duties of the authority as set forth in division (D) of this section. The investment powers shall be exercised by the business, entity, or governmental agency that entered into an agreement with the authority in a manner agreed upon by the authority that maximizes the return on investment and minimizes the administrative expenses. (F)(1) The authority shall maintain a separate account for each tuition payment contract entered into pursuant to division (A) of section 3334.09 of the Revised Code for the purchase of tuition units on behalf of a beneficiary or beneficiaries showing the beneficiary or beneficiaries of that contract and the number of tuition units purchased pursuant to that contract. Upon request of any beneficiary or person who has entered into a tuition payment contract, the authority shall provide a statement indicating, in the case of a beneficiary, the number of tuition units purchased on behalf of the beneficiary, or in the case of a person who has entered into a tuition payment contract, the number of tuition units purchased, used, or refunded pursuant to that contract. A beneficiary and person that have entered into a tuition payment contract each may file only one request under this division in any year. (2) The authority shall maintain an account for each scholarship program showing the number of tuition units that have been purchased for or donated to the program and the number of tuition units that have been used. Upon the request of the entity that established the scholarship program, the authority shall provide a statement indicating these numbers. (G)(1) In addition to the Ohio tuition trust fund, there is hereby established a reserve fund that shall be in the custody of the treasurer of state but shall not be part of the state treasury, and shall be known as the Ohio tuition trust reserve fund, and an operating fund that shall be part of the state treasury, and shall be known as the Ohio tuition trust operating fund. That portion of payments received by the authority or the treasurer of state from persons purchasing tuition units under tuition payment contracts that the authority determines is not actuarially necessary for the payment of obligations of the authority pursuant to tuition payment contracts, any interest and investment income earned by the reserve fund, any administrative charges and fees imposed by the authority on transactions under this chapter or on purchasers or beneficiaries of tuition units, and all other receipts from any other source that the authority determines appropriate, shall be deposited in the reserve fund to pay the operating expenses of the authority and the costs of administering the program. The assets of the reserve fund may be invested in the same manner and subject to the same limitations set forth in divisions (D), (E), and (K) to (M) of this section and sections 145.112 and 145.113 of the Revised Code. All investment fees and other costs incurred in connection with the exercise of the investment powers shall be paid from the assets of the reserve fund. Except as otherwise provided for in this chapter, all operating expenses of the authority and costs of administering the program shall be paid from the operating fund. (2) The treasurer shall, upon request of the authority, transfer funds from the reserve fund to the operating fund as the authority determines appropriate to pay those current operating expenses of the authority and costs of administering the program as the authority designates. Any interest or investment income earned on the assets of the operating fund shall be deposited in the operating fund. (H) In January of each year the authority shall report to each person who received any payments or refunds from the authority during the preceding year information relative to the value of the payments or refunds to assist in determining that person's tax liability. (I) The authority shall report to the tax commissioner any information, and at the times, as the tax commissioner requires to determine any tax liability that a person may have incurred during the preceding year as a result of having received any payments or refunds from the authority. (J) All records of the authority indicating the identity of purchasers and beneficiaries of tuition units or college savings bonds, the number of tuition units purchased, used, or refunded under a tuition payment contract, and the number of college savings bonds purchased, held, or redeemed are not public records within the meaning of section 149.43 of the Revised Code. (K)(1) The authority and other fiduciaries shall discharge their duties with respect to the funds with care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; and by diversifying the investments of the assets of the funds so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so. (2) To facilitate investment of the funds, the authority may establish a partnership, trust, limited liability company, corporation, including a corporation exempt from taxation under the Internal Revenue Code, 100 Stat. 2085, 26 U.S.C. 1, as amended, or any other legal entity authorized to transact business in this state. (L) In exercising its fiduciary responsibility with respect to the investment of the assets of the funds, it shall be the intent of the authority to give consideration to investments that enhance the general welfare of the state and its citizens where the investments offer quality, return, and safety comparable to other investments currently available to the authority. In fulfilling this intent, equal consideration shall also be given to investments otherwise qualifying under this section that involve minority owned and controlled firms and firms owned and controlled by women, either alone or in joint venture with other firms. The authority shall adopt, in regular meeting, policies, objectives, or criteria for the operation of the investment program that include asset allocation targets and ranges, risk factors, asset class benchmarks, time horizons, total return objectives, and performance evaluation guidelines. In adopting policies and criteria for the selection of agents with whom the authority may contract for the administration of the assets of the funds, the authority shall give equal consideration to minority owned and controlled firms, firms owned and controlled by women, and ventures involving minority owned and controlled firms and firms owned and controlled by women that otherwise meet the policies and criteria established by the authority. Amendments and additions to the policies and criteria shall be adopted in regular meeting. The authority shall publish its policies, objectives, and criteria under this provision no less often than annually and shall make copies available to interested parties. When reporting on the performance of investments, the authority shall comply with the performance presentation standards established by the association for investment management and research. (M) All investments shall be purchased at current market prices and the evidences of title of the investments shall be placed in the hands of the treasurer of state, who is hereby designated as custodian thereof, or in the hands of the treasurer of state's authorized agent. The treasurer of state or the agent shall collect the principal, dividends, distributions, and interest thereon as they become due and payable and place them when so collected into the custodial funds. The treasurer of state shall pay for investments purchased by the authority on receipt of written or electronic instructions from the authority or the authority's designated agent authorizing the purchase and pending receipt of the evidence of title of the investment by the treasurer of state or the treasurer of state's authorized agent. The authority may sell investments held by the authority, and the treasurer of state or the treasurer of state's authorized agent shall accept payment from the purchaser and deliver evidence of title of the investment to the purchaser on receipt of written or electronic instructions from the authority or the authority's designated agent authorizing the sale, and pending receipt of the moneys for the investments. The amount received shall be placed in the custodial funds. The authority and the treasurer of state may enter into agreements to establish procedures for the purchase and sale of investments under this division and the custody of the investments. No purchase or sale of any investment shall be made under this section except as authorized by the authority. Any statement of financial position distributed by the authority shall include fair value, as of the statement date, of all investments held by the authority under this section.
Section 3334.12 \| Evaluation of actuarial soundness of tuition trust fund - termination - annual financial report. Effective: October 16, 2009 Latest Legislation: House Bill 1 - 128th General Assembly PDF: Download Authenticated PDF Notwithstanding anything to the contrary in sections 3334.07 and 3334.09 of the Revised Code: (A) Annually, the Ohio tuition trust authority shall have the actuarial soundness of the Ohio tuition trust fund evaluated by a nationally recognized actuary and shall determine whether additional assets are necessary to defray the obligations of the authority. If, after the authority sets the price for tuition units, circumstances arise that the executive director determines necessitate an additional evaluation of the actuarial soundness of the fund, the executive director shall have a nationally recognized actuary conduct the necessary evaluation. If the assets of the fund are insufficient to ensure the actuarial soundness of the fund, the authority shall adjust the price of subsequent purchases of tuition units to the extent necessary to help restore the actuarial soundness of the fund. If, at any time, the adjustment is likely, in the opinion of the authority, to diminish the marketability of tuition units to an extent that the continued sale of the units likely would not restore the actuarial soundness of the fund and external economic factors continue to negatively impact the soundness of the program, the authority may suspend sales, either permanently or temporarily, of tuition units. During any suspension, the authority shall continue to service existing college savings program accounts. (B) Upon termination of all programs or liquidation of the Ohio tuition trust fund, the Ohio tuition trust reserve fund, and the Ohio tuition trust operating fund, any remaining assets of the funds after all obligations of the funds have been satisfied pursuant to division (B) of section 3334.11 of the Revised Code shall be transferred to the general revenue fund of the state. (C) The authority shall prepare and cause to have audited an annual financial report on all financial activity of the Ohio tuition trust authority within ninety days of the end of the fiscal year. The authority shall transmit a copy of the audited financial report to the governor, the president of the senate, the speaker of the house of representatives, and the minority leaders of the senate and the house of representatives. Copies of the audited financial report also shall be made available, upon request, to the persons entering into contracts with the authority and to prospective purchasers of tuition units and prospective contributors to variable college savings program accounts.
Section 3334.15 \| Credit or payment exemptions - use as security or collateral for loan. Effective: September 29, 2005 Latest Legislation: House Bill 66 - 126th General Assembly PDF: Download Authenticated PDF (A) The right of a person to a tuition unit or a payment under section 3334.09 of the Revised Code pursuant to a tuition payment contract, a scholarship program, or a variable college savings program account shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or the insolvency laws, or other process of law. (B) The right of a person to a tuition unit or a payment under section 3334.09 of the Revised Code pursuant to a tuition payment contract, a scholarship program, or a variable college savings program account shall not be used as security or collateral for a loan.
Section 3334.16 \| Exemption from federal tax liability. Effective: September 29, 2005 Latest Legislation: House Bill 66 - 126th General Assembly PDF: Download Authenticated PDF The general assembly hereby finds that the prepaid tuition program providing for the sale of tuition credits units by the Ohio tuition trust authority is an official state function, offered through an agency of this state, which agency receives state appropriations. Therefore, the authority is directed by the state of Ohio to assume it is exempt from federal tax liability.
Section 3334.17 \| Scholarship programs to award scholarships consisting of tuition credits. Effective: September 29, 2005 Latest Legislation: House Bill 66 - 126th General Assembly PDF: Download Authenticated PDF (A) The state, any political subdivision of the state, and any organization that is exempt from federal income taxation under section 501 (a) and described in section 501 (c)(3) of the Internal Revenue Code, including the Ohio tuition trust authority if this is authorized under federal tax law, may establish a scholarship program to award scholarships consisting of contributions made to any college savings program for students. Any scholarship program established under this section shall be registered with the authority. The authority shall be notified of the name and address of each scholarship beneficiary under the program, the amounts awarded, and the institution of higher education in which the beneficiary is enrolled. Scholarship beneficiaries shall be selected by the entity establishing the scholarship program, in accordance with criteria established by the entity. (B) Any person or governmental entity may purchase tuition units on behalf of a scholarship program that is or is to be established in accordance with division (A) of this section at the same price as is established for the purchase of units for named beneficiaries pursuant to this chapter. Tuition units shall have the same value to the beneficiary of a scholarship awarded pursuant to this section as they would have to any other beneficiary pursuant to division (B) of section 3334.09 of the Revised Code. (C) The entity establishing and maintaining a scholarship program shall specify whether a scholarship beneficiary may receive a refund or payment for the amount awarded under the scholarship program directly from the authority, or whether the amount awarded shall be paid by the authority only to the institution of higher education in which the student is enrolled. (D) If a scholarship beneficiary does not use the amount awarded within a length of time specified under the scholarship program, the amount may be awarded to another beneficiary.
Section 3334.18 \| Variable college savings program contracts. Effective: March 30, 2018 Latest Legislation: Senate Bill 22 - 132nd General Assembly PDF: Download Authenticated PDF (A) A variable college savings program established by the Ohio tuition trust authority shall include provisions for a contract to be entered into between a contributor and the authority that will authorize the contributor to open an account for a beneficiary and authorize the contributor to substitute a new beneficiary for one originally named in the contract, to the extent permitted by section 529 of the Internal Revenue Code. (B) The authority shall provide adequate safeguards to prevent total contributions to a variable college savings program account or purchases of tuition units, either separately or combined, that are made on behalf of a beneficiary from exceeding the amount necessary to provide for the higher education expenses of the beneficiary, consistent with the maximum contributions permitted by section 529 of the Internal Revenue Code. However, in no event shall contributions or purchases exceed the allowable limit for a qualified tuition program under section 529 of the Internal Revenue Code. (C)(1) Participation in the variable college savings program does not guarantee that contributions and the investment return on contributions, if any, will be adequate to cover future higher education expenses or that a beneficiary will be admitted to or permitted to continue to attend an institution of higher education. (2) Returns on contributors' investments in the variable college savings program are not guaranteed by the state and the contributors to the variable college savings program assume all investment risk, including the potential loss of principal and liability for penalties such as those levied for noneducational withdrawals. (3) The state shall have no debt or obligation to any contributor, beneficiary, or any other person as a result of the establishment of the program, and the state assumes no risk or liability for funds invested in the variable college savings program. (4) Informational materials about the variable college savings program prepared by the authority or its agents and provided to prospective contributors shall state clearly the information set forth in division (C) of this section.
Section 3334.19 \| Adopting investment plan. Effective: March 30, 2018 Latest Legislation: Senate Bill 22 - 132nd General Assembly PDF: Download Authenticated PDF (A) The Ohio tuition trust authority shall adopt an investment plan that sets forth investment policies and guidelines to be utilized in administering the variable college savings program and investment options offered by the authority. The investment options shall include a default option to benefit contributors who are first-time investors or have low to moderate incomes. Except as provided in section 3334.20 of the Revised Code, the authority shall contract with one or more insurance companies, banks, or other financial institutions to act as its investment agents and to provide such services as the authority considers appropriate to the investment plan, including: (1) Purchase, control, and safekeeping of assets; (2) Record keeping and accounting for individual accounts and for the program as a whole; (3) Provision of consolidated statements of account. (B) The authority or its investment agents shall maintain a separate account for the beneficiary of each contract entered into under the variable college savings program. If a beneficiary has more than one such account, the authority or its agents shall track total contributions and earnings and provide a consolidated system of account distributions to public or nonpublic schools or institutions of higher education. (C) The authority or its investment agents may place assets of the program in savings accounts and may purchase fixed or variable life insurance or annuity contracts, securities, evidence of indebtedness, or other investment products pursuant to the investment plan. (D) Contributors shall not direct the investment of their contributions under the investment plan. The authority shall impose other limits on contributors' investment discretion to the extent required under section 529 of the Internal Revenue Code. (E) The investment agents with which the authority contracts shall discharge their duties with respect to program funds with the care and diligence that a prudent person familiar with such matters and with the character and aims of the program would use. (F) The assets of the program shall be preserved, invested, and expended solely for the purposes of this chapter and shall not be loaned or otherwise transferred or used by the state for any other purpose. This section shall not be construed to prohibit the investment agents of the authority from investing, by purchase or otherwise, in bonds, notes, or other obligations of the state or any agency or instrumentality of the state. Unless otherwise specified by the authority, assets of the program shall be expended in the following order of priority: (1) To make payments on behalf of beneficiaries; (2) To make refunds upon termination of variable college savings program contracts; (3) To pay the authority's costs of administering the program; (4) To pay or cover any other expenditure or disbursement the authority determines necessary or appropriate. (G) Fees, charges, and other costs imposed or collected by the authority in connection with the variable college savings program, including any fees or other payments that the authority requires an investment agent to pay to the authority, shall be credited to either the variable operating fund or the index operating fund at the discretion of the authority. These funds are hereby created in the state treasury. Expenses incurred in the administration of the variable college savings program, as well as other expenses, disbursements, or payments the authority considers appropriate for the benefit of any college savings programs administered by the authority, the state of Ohio and its citizens, shall be paid from the variable operating fund or the index operating fund at the discretion of the authority. (H) No records of the authority indicating the identity of purchasers, contributors, and beneficiaries under the program or amounts contributed to, earned by, or distributed from program accounts are public records within the meaning of section 149.43 of the Revised Code.
Section 3334.20 \| Interim investment periods. Effective: March 30, 2018 Latest Legislation: Senate Bill 22 - 132nd General Assembly PDF: Download Authenticated PDF (A) As used in this section, "state agency" means every department, bureau, board, commission, office, or other organized body established by the constitution or laws of this state for the exercise of state government. (B) If a condition arises concerning the investment of funds received under the variable college savings program and requiring an interim period for investment of program funds, which condition is determined pursuant to division (D) of this section, the Ohio tuition trust authority shall choose the treasurer of state, a state agency having investment authority, or an investment agent under contract with the authority to invest program funds pursuant to the investment plan established under division (A) of section 3334.19 of the Revised Code. The treasurer of state, state agency, or investment agent chosen by the authority pursuant to this division shall be subject to the requirements and conditions that apply to investment agents specified in section 3334.19 of the Revised Code. (C) The authority shall be the trustee of the program. During the interim period, the authority shall receive and hold all payments, deposits, and contributions, as well as gifts, bequests, endowments, and federal, state, or local grants and any funds from any other source, public or private, and all earnings, until disbursed to pay higher education expenses or refunds pursuant to college savings plans contracts. The authority shall keep such funds segregated from all other assets of the authority. (D) The authority shall adopt rules under section 111.15 of the Revised Code defining the conditions under which an interim investment period is required and this section applies. The rules shall include any condition requiring the termination of the interim period and the authority to contract with alternative investment agents pursuant to section 3334.19 of the Revised Code and any other requirements that apply during the interim investment period. (E) When the interim period for investment of program funds terminates, the investment agents selected pursuant to section 3334.19 of the Revised Code for the investment of program funds shall have the sole authority to invest program funds pursuant to the investment plan established under division (A) of that section and shall be subject to that section.
Section 3334.21 \| Termination of variable college savings program. Effective: June 8, 2000 Latest Legislation: Senate Bill 161 - 123rd General Assembly PDF: Download Authenticated PDF The variable college savings program may be terminated by statute or upon the determination of the Ohio tuition trust authority that the program is not financially feasible. Upon termination, all amounts held in program accounts shall be returned to account owners, to the extent possible, and any unclaimed assets in the program shall be transferred to the unclaimed funds trust fund and disposed of in accordance with section 169.05 of the Revised Code.