Section 1700-05-03-.01 - IN GENERAL(1) Purpose. The purpose of these rules is to establish and implement the college savings incentive plan or plans for the benefit of low-income individuals using funds from the Small and Minority-Owned Business Assistance Program pursuant to Chapter 359 of the 2013 Public Acts. The public act authorizes the Board of Trustees of the Baccalaureate Education System Trust Fund Program to promulgate rules relative to the implementation and administration of incentive plan or plans.(2) Definitions. For purposes of these rules: (a) "Academic term" means the school segment consisting of a single semester, quarter, term or equivalent.(b) "Account" means the record that contains the amount of contributions maintained on behalf of a Beneficiary under a Contract, plus the earnings or losses incurred thereon, including any withdrawals made from the Account.(c) "Beneficiary" means an individual designated under a Contract as the individual entitled to apply contributions and earnings accrued under the Contract as well as Matching contributions to the payment of that individual's undergraduate, graduate and professional Qualified higher education expenses as defined in this chapter.(d) "Board" has the same meaning as given in T.C.A. § 49-7-802(2).(e) "Contract" means an Educational savings plan tuition contract entered into pursuant to T.C.A. § 49-7-808 by the Board and a Purchaser with an Eligible college savings program to provide for the payment of Qualified higher education expenses as defined in this chapter.(f) "Educational savings plan" means a plan which permits individuals, associations, contributions and trusts to make contributions to an account that is established by a Purchaser for a designated Beneficiary.(g) "Eligible college savings program" means any college savings program established pursuant to § 529 of the Internal Revenue Code with which the Board has contracted to provide similar benefits for Tennessee residents, or any § 529 college savings program established by the State of Tennessee, except for the educational services plan established in Chapter 1700-05-01 of the Official Compilation of the Rules and Regulations of the State of Tennessee.(h) "Eligible educational institution" means an institution of postsecondary education as defined in § 529 of the Internal Revenue Code.(i) "Fiscal year" means the period beginning on July 1 of each year and ending on June 30 of the next following year.(j) "Household" means a group of individuals who are related by birth, marriage, or adoption and who share a residence.(k) "Legally incompetent" means that an individual has been declared incompetent by a court of law. An individual shall not be considered to be Legally incompetent unless proof thereof is furnished in such form and manner as the Board may require. (I) "Matching contribution" means the amount that is deposited by the Board into the Board's account for each Beneficiary after all eligibility requirements for participation in the Matching grant incentive program have been satisfied pursuant to Rule1700-05-03-.02.(m) "Matching grant incentive program" means the educational incentive program established pursuant to T.C.A. § 49-7-808(d) in which matching funds are contributed by the Board to Purchasers on behalf of Beneficiaries based on income levels for the Purchaser's Household and the amount of the Purchaser's contributions for the payment of the Beneficiary's Qualified higher education expenses.(n) "Member of the family" means the mother, father or ancestor of either, stepmother, stepfather, siblings of either the mother or father of the Beneficiary, or such other person as may be defined as a "Member of the family" of the Beneficiary under the sections of the Internal Revenue Code that are applicable to the eligible college savings program.(o) "Minimum contribution" means the amount that must have been contributed to the Account of a Beneficiary during the Qualifying period as determined pursuant to Rule1700-05-03-.07 in order to be eligible for the Matching contribution.(p) "Permanent disability" means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or is anticipated to last for a continued or indefinite duration. An individual shall not be considered to have a Permanent disability unless proof is furnished of the existence of the disability from a health care professional in such form and manner as the Board may require. The Board must approve any finding of a Permanent disability.(q) "Purchaser" means an individual who enters into a Contract for the creation and deposit of contributions to a savings account on behalf of a Beneficiary, or in the case of the Purchaser's death or legal incompetence, the Purchaser's appointee.(r) "Purchaser's appointee" means the person who is named in the Contract by the Purchaser to exercise the rights of the Purchaser under the Contract if the Purchaser dies or becomes Legally incompetent.(s) "Qualified higher education expenses" has the same meaning as given under § 529 of the Internal Revenue Code and the regulations promulgated thereunder.(t) "Qualifying period" means the time period as set by the Board each year during which a Purchaser must meet the conditions set forth in these rules in order to be eligible for a Matching contribution, including the time period during which a Purchaser must file an application for the Matching contribution.(u) "Redemption value" means the current cash value of an Account attributable to the sum of the principal invested through Purchaser contributions and the earnings or losses incurred thereon.(v) "State" means the State of Tennessee.(w) "Tennessee resident" means a person who has a continuous physical presence and maintenance of a dwelling place within the State of Tennessee for at least twelve (12) months immediately prior to entering into a Contract, provided that absence from the State for short periods of time may not affect the establishment of a residence. The effect of absences from the State for short periods of time will be determined on a case-by-case basis. A minor child shall be deemed a Tennessee resident if the child's legal guardian or noncustodial parent is a resident of Tennessee. Military or diplomatic personnel whose home of record is Tennessee shall also be deemed Tennessee residents for purposes of these rules.(x) "Withdrawal" means a disbursement of funds from the Account that is directed by the Purchaser to be paid to the Purchaser or an Eligible educational institution.Tenn. Comp. R. & Regs. 1700-05-03-.01
Original rule filed October 1, 2010; effective March 31, 2011. Repeal and new rule filed April 11, 2014; effective 9/28/2014.Authority: Chapter 359 of the 2013 Public Acts codified in T.C.A. § 49-7-808(d), § 49-7-805 and § 65-5-113(c).