Code of Maine Rules › 94 - INDEPENDENT AGENCIES › 457 - FINANCE AUTHORITY OF MAINE (FAME) › Chapter 611 - MAINE EDUCATION SAVINGS PROGRAM (Amendment 18) › Section 457-611-11 - FEES AND PENALTIES

Current through 2024-29, July 17, 2024
A. Each
				participation agreement may provide for an annual administrative fee based on
				amounts in the program fund accrued daily at an annualized rate not to exceed
				1%. Such fees may be used only for program purposes including administrative
				expenses, the refunding of fees paid by participants or any class of
				participants, the matching of contributions made by participants or any class
				of participants, the use of funds to provide scholarships to beneficiaries
				attending institutions of higher education, or any other purpose allowed under
				the Act or the Program Act. Customary and usual investment costs may be
				deducted from the program fund in connection with the investment thereof and
				are not included in the administrative fees. Customary and usual account
				maintenance fees may be deducted from an individual account opened by a
				participant who is not a Maine resident, unless it is opened on behalf of a
				beneficiary who is a Maine resident.
B. Except upon the occurrence of an early
				termination event, if the participant makes a withdrawal for any purpose other
				than the payment of qualified higher education expenses, the participant must
				pay an additional tax or other penalty as provided in federal requirements.
				Notwithstanding the foregoing, payment of the additional tax does not apply to
				withdrawals or portions thereof used to pay for qualified higher education
				expenses that are subsequently refunded to a beneficiary by an institution of
				higher education and timely recontributed to an account in accordance with
				federal requirements.
C.
[Repealed effective December 3, 2001]
D. If the Authority determines that the
				participant or the beneficiary has made any material misrepresentations on the
				application form, in requests for disbursements or in any other communications
				with the Authority or with the Authority's designated agents or contractors in
				their capacities on behalf of the program, the account may be involuntarily
				liquidated by the Authority and any such misrepresentations shall be deemed to
				constitute unsworn falsification within the meaning of
				17-A MRSA
				§453. If the Authority liquidates any
				account pursuant to this provision, the participant will be entitled to a
				disbursement subject to a penalty of 15% of the portion of the disbursement
				attributable to investment earnings on amounts contributed to the
				account.
E. Any additional tax
				payable shall be payable directly to the United States Department of Treasury
				in accordance with federal requirements.
F. When a penalty is assessed the chief
				executive officer may (i) require that the amount of the penalty be set off
				from any funds remaining in the account; (ii) collect penalties by retaining a
				sufficient balance in an account to pay the amount of the penalty; or (iii)
				collect any unpaid penalties through a set off against Maine income tax refunds
				pursuant to
				36 MRSA
				§5276-A. This provision will only be
				applicable to penalties assessed under section 11. D.
G. All penalties are in addition to all State
				and federal taxes that may be due on the distribution.