2023 Arizona Revised Statutes › Title 15 - Education › § 15-1875 - Plan requirements

15-1875.
Plan requirements
A. The plan shall be operated through the use of accounts in the fund established by account owners. Payments to the fund for participation in the plan shall be made by account owners pursuant to tuition savings agreements. An account may be opened by any person who desires to invest in the fund and to save to pay qualified higher education expenses by satisfying each of the following requirements:
1. Completing an application in the form prescribed by the treasurer. The application shall include the following information:
(a) The name,  address and social security number or employer identification number of the contributor.
(b) The name,  address and social security number of the account owner if the account owner is not the contributor.
(c) The name,  address and social security number of the designated beneficiary.
(d) The certification relating to no excess contributions required by subsection L of this section.
(e) Any other information that the treasurer may require.
2. Paying the onetime application fee established by the treasurer.
3. Making the minimum contribution required by the treasurer or by opening an account.
4. Designating the type of account to be opened if more than one type of account is offered.
B. Any person may make contributions to an account after the account is opened.
C. Contributions to accounts may be made only in cash.
D. An account owner may change the designated beneficiary of an account to an individual who is a member of the family of the former designated beneficiary in accordance with procedures established by the treasurer.
E. On the direction of an account owner,  all or a portion of an account may be transferred to another account of which the designated beneficiary is a member of the family of the designated beneficiary of the transferee account.
F. Changes in designated beneficiaries and rollovers under this section are not allowed if the changes or rollovers would violate either of the following:
1. Subsection L of this section,  relating to excess contributions.
2. Subsection I of this section,  relating to investment choice.
G. Each account shall be maintained separately from each other account under the plan.
H. Separate records and accounting shall be maintained for each account for each designated beneficiary.
I. A contributor to,  account owner of or designated beneficiary of any account may not direct the investment,  within the meaning of section 529 of the internal revenue code,  of any contributions to an account or the earnings from the account.
J. If the treasurer terminates the authority of a financial institution to hold accounts and accounts must be moved from that financial institution to another financial institution,  the treasurer shall select the financial institution and type of investment to which the balance of the account is moved unless the internal revenue service provides guidance stating that allowing the account owner to select among several financial institutions that are then contractors would not cause a plan to cease to be a qualified tuition plan.
K. Neither an account owner nor a designated beneficiary may use an interest in an account as security for a loan. Any pledge of an interest in an account is of no force and effect.
L. On the recommendation of the treasurer,  the board shall adopt rules to prevent contributions on behalf of a designated beneficiary in excess of those necessary to pay the qualified higher education expenses of the designated beneficiaries. The rules shall address the following:
1. Procedures for aggregating the total balances of multiple accounts established for a designated beneficiary.
2. The establishment of a maximum total balance for the purpose of prohibiting contributions to accounts established for a designated beneficiary if the contributions would cause the maximum total balance to be exceeded.
3. The board shall review the quarterly reports received from participating financial institutions and certify that the balance in all qualified tuition programs,  as defined in section 529 of the internal revenue code,  of which that person is the designated beneficiary does not exceed the lesser of:
(a) A maximum college savings amount established by the board from time to time.
(b) The cost in current dollars of qualified higher education expenses that the contributor reasonably anticipates the designated beneficiary will incur.
4. Requirements that any excess contributions with respect to a designated beneficiary be promptly withdrawn in a nonqualified withdrawal or rolled over to another account in accordance with this section.
M. If there is any distribution from an account to any person or for the benefit of any person during a calendar year,  the distribution shall be reported to the internal revenue service and the account owner or the designated beneficiary to the extent required by federal law.
N. The financial institution shall provide statements to each account owner at least once each year within thirty-one days after the twelve-month period to which they relate. The statement shall identify the contributions made during a preceding twelve-month period,  the total contributions made through the end of the period,  the value of the account as of the end of this period,  distributions made during this period and any other matters that the treasurer requires be reported to the account owner.
O. Statements and information returns relating to accounts shall be prepared and filed to the extent required by federal or state tax law.
P. A state or local government or organizations described in section 501(c)(3) of the internal revenue code may open and become the account owner of an account to fund scholarships for persons whose identity will be determined after an account is opened.
Q. In the case of any account described in subsection P of this section,  the requirement that a designated beneficiary be designated when an account is opened does not apply and each person who receives an interest in the account as a scholarship shall be treated as a designated beneficiary with respect to the interest.
R. Any social security numbers,  addresses or telephone numbers of individual account holders and designated beneficiaries that come into the possession of the treasurer are confidential,  are not public records and shall not be released by the treasurer.
S. An account owner may transfer ownership rights to another eligible account owner.
T. An account owner may designate successor account owners.
U. Through December 31,  2025,  on direction of an account owner,  up to $15, 000 of an account may roll over to an achieving a better life experience act account established pursuant to 26 United States Code section 529A.