In General

(1) Purpose. T.C.A. Title 49, Chapter 7, Part 8 created the Tennessee College Savings Trust Act. The Act creates a trust program, as an agency and instrumentality of the State of Tennessee, under which families and other interested persons may save and invest for the qualified higher education expenses of attending an eligible educational institution. The Program may be comprised of two (2) types of qualified tuition plans as defined in the Code, including one (1) or more educational investment plan or plans, which may consist of several different investment offerings or one (1) or more educational services plan or plans. The purpose of these rules is to establish requirements for participation, and administration of an educational investment plan as required by and consistent with the Act. (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” has the same meaning as set forth in T.C.A. § 49-7-802(7). (c) “Account Owner” has the same meaning as set forth in T.C.A. § 49-7-802(1). (d) “Beneficiary” means an individual designated by the Account Owner and who meets the requirements of the Code. (e) “Board” has the same meaning as given in T.C.A. § 49-7-802(3), which is comprised of the members described in T.C.A. § 49-7-804(a). (f) “Code” has the same meaning as set forth in T.C.A. § 49-7-802(4). (g) “Contract” means an Educational Investment Plan entered into under T.C.A. § 49-7- 808 by the Board and an Account Owner to provide for the payment of Qualified Higher Education Expenses. (h) “Contributor” has the same meaning as set forth in T.C.A. § 49-7-802(5). (i) “Custodial Guardian” means the person with whom the child resides a majority of the time where there is an order of joint custody or where there exist parenting plans pursuant to Title 36, Chapter 6, Part 4 that address issues of custody. “Custodial Guardian” also includes, in addition to a biological or legal parent having legal custody of a child, an individual to whom legal custody of the child has been given by a court of competent jurisdiction. EDUCATIONAL INVESTMENT PLAN CHAPTER 1700-05-04 (j) “Educational Investment Plan” has the same meaning as set forth in T.C.A. § 49-7- 802(6). (k) “Eligible Educational Institution” has the same meaning as set forth in T.C.A. § 49-7- 802(9). (l) “Legal Guardian” means a person or entity that has the legal authority to provide for the care, supervision or control of a minor child as established by law or court order. (m) “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. (n) “Member of the Family” has the same meaning as “member of the family” under the sections of the Internal Revenue Code which are applicable to the Program. (o) “New Beneficiary” means an individual to whom rights under the Contract have been transferred pursuant to Rule 1700-05-04-.05. (p) “Permanent Disability” means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. An individual shall not be considered to have a Permanent Disability unless proof is furnished of the existence thereof 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) “Person” shall mean an individual, partnership, corporation, association, organization, government or governmental subdivision or agency, estate, trust or any other legal or commercial entity. (r) “Program” has the same meaning as set forth in T.C.A. § 49-7-802(11). (s) “Qualified Higher Education Expenses” shall have the same meaning as set forth in T.C.A. § 49-7-802(13). (t) “Redemption Value” has the same meaning as set forth in T.C.A. § 49-7-802(14). (u) “Refund Recipient” has the same meaning as set forth in T.C.A. § 49-7-802(15). The Refund Recipient may only be the Account Owner. (v) “Successor Account Owner” means the person named in the Contract by the Account Owner to exercise the rights of the Account Owner under the Contract if the Account Owner dies or becomes Legally Incompetent. The Successor Account Owner may be the Beneficiary. The Account Owner may change the designation at any time in writing to the Board. If the Account Owner dies or becomes Legally Incompetent, the Successor Account Owner shall automatically become the Account Owner for purposes of these Rules and the Contract, including, but not limited to constituting the Refund Recipient. In the event the Account Owner dies or becomes Legally Incompetent and no surviving Successor Account Owner exists, the surviving Successor Account Owner is Legally Incompetent or declines to serve, or the Account Owner did not designate a Successor Account Owner, the Beneficiary shall automatically become the Account Owner for purposes of these Rules and the Contract, including, but not limited to constituting the Refund Recipient. If the Beneficiary is a minor, the following shall apply: EDUCATIONAL INVESTMENT PLAN CHAPTER 1700-05-04 1. The Beneficiary’s Legal Guardian shall exercise the rights under these Rules and the Contract on behalf of the Beneficiary until the Beneficiary reaches majority. 2. If the Beneficiary has more than one Legal Guardian, the Beneficiary’s Custodial Guardian shall exercise the rights on behalf of the Beneficiary until the Beneficiary reaches majority. 3. If the Beneficiary has more than one Custodial Guardian, the Custodial Guardians shall elect from among themselves the person who will exercise the rights on behalf of the Beneficiary until the Beneficiary reaches majority. In the event the Custodial Guardians cannot agree, the Custodial Guardian whose birthday is earlier in the calendar year shall exercise the rights on behalf of the Beneficiary until the Beneficiary reaches majority. 4. The Beneficiary’s Legal Guardian shall promptly report to the Board any changes in the legal guardianship of the Beneficiary. (w) “Termination” means a discontinuance of the right to receive tuition payments or other benefits under a Contract. (x) “Withdrawal” means a disbursement of funds from the Account that is directed by the Account Owner to be paid to the Account Owner, an Eligible Educational Institution, or the Beneficiary.