Section 12.5-02-01-05 - Establishment of an accountAn account may be established for a participant if each of the following requirements is satisfied:
1.Eligibility requirements for participants. The participant must satisfy the following eligibility requirements: a. Type of entity/residency requirements. The participant must be an individual who is a United States citizen or United States resident, any state or local government within the United States, an organization validly existing under the laws of any state or the District of Columbia that is exempt from federal income tax under section 501(c)(3) of the Code, or a trust that is validly existing under the laws of any state or the District of Columbia. Except as provided under subsection 6, the participant is not required to be a resident of North Dakota. b. Age requirements. If the participant is an individual, the participant must be at least eighteen years old. There is no maximum age restriction. 2.Eligibility requirements for designated beneficiaries. The designated beneficiary of an account must satisfy the following eligibility requirements: a. Residency requirements. The designated beneficiary must be a United States citizen or United States resident, as certified in the enrollment form. The designated beneficiary is not required to be a resident of North Dakota. b. Age requirements. Beginning at birth with no maximum age restriction. c. School requirements. The plan may be used to fund qualified higher education expenses of a designated beneficiary with respect to any eligible educational institution. d. Relationship requirements. There are no relationship requirements between the participant and the designated beneficiary. If the account of a current designated beneficiary is transferred to a new designated beneficiary, however, the new designated beneficiary must be a member of the family of the current designated beneficiary or the transfer will be treated where required for tax reporting purposes as a distribution to the participant and a contribution to a new account on behalf of the new designated beneficiary. 3.Documentation requirements. The participant is required to complete an enrollment form that will confirm the participant's acceptance of the terms and conditions of the participation agreement and the participant's agreement to be bound by the terms of these rules and the declaration of trust. The enrollment form will provide basic information such as name, address, citizenship or residency status, social security number, date of birth, and other information regarding the participant and the designated beneficiary and such other information as the Bank may require from time to time. If the source of any contribution to the account is a custodial account established under any state's Uniform Transfers or Uniform Gifts to Minors Act (a "UT/UGMA account"), the custodian must execute the enrollment form as a UT/UGMA custodian and establish the account separate from any account the custodian may hold in the custodian's individual capacity before contributing funds from the UT/UGMA account to the account. A participant maintaining accounts as custodian must notify the manager when the custodianship terminates. 4.Initial contribution or payment schedule. At the time the account is established, the participant is required to make a contribution or to authorize a schedule for automatic periodic payments to be made to the account. 5.Identification of designated beneficiary. Except as set forth below, the participant is required to name the designated beneficiary of the account at the time the account is established. The participant may name himself or herself as the designated beneficiary. If the source of any contribution to the account is a UT/UGMA account, at the time the account is established the participant must designate the minor for whom the UT/UGMA account was established as the designated beneficiary. In the case of an account that is established as part of a scholarship program operated by any state or local government, or by an organization described in section 501(c)(3) of the Code, the designated beneficiary need not be identified at the time the account is established. Such government or organization shall provide the identification of the designated beneficiary prior to any distribution to or on behalf of a designated beneficiary from such account.
6. Matching grant. A matching grant account may be established, and subsequent awards granted, if a participant who has completed and signed the appropriate form, meets the requirements set forth in the then current matching grant instructions established by the Bank at the time the award is granted. A participant may be eligible for a matching grant if the participant filed a North Dakota state income tax return as a state resident. N.D. Admin Code 12.5-02-01-05
Effective September 15, 2000; amended effective August 23, 2001; June 1, 2002; July 16, 2008.General Authority: NDCC 6-09-38
Law Implemented: NDCC 6-09-38