North Dakota Administrative Code › Title 12.5 - Bank of North Dakota › Article 12.5-02 - College SAVE › Chapter 12.5-02-01 - College SAVE › Section 12.5-02-01-02 - Definitions

Current through Supplement No. 393, July, 2024
As used in this chapter, unless the context requires
				  otherwise:
1. "Account" means an account within the trust established
				  for a participant pursuant to a participation agreement. More than one account
				  may be established for the same designated beneficiary.
2. "Act" means North Dakota Century Code section   6-09-38,
				  which provides that the Bank shall adopt rules to administer, manage, promote,
				  and market a higher education savings plan in compliance with section 529 of
				  the Code.
3. "Bank" means the state doing business as the Bank of North
				  Dakota and also includes the executive committee of the Bank acting on behalf
				  of the Bank. The Bank is the administrator of the plan and the trustee of the
				  trust.
4. "Business day" means each day on which the New York Stock
				  Exchange is open for trading.
5. "Code" means the Internal Revenue Code of 1986,
				  interpreted in accordance with the regulations promulgated thereunder, as
				  amended from time to time.
6. "Contribution" means any payment to an account for the
				  benefit of a designated beneficiary, including amounts used to pay fees or
				  expenses associated with the account.
7. "Declaration of trust" means the declaration of trust for
				  the College SAVE Trust, as amended from time to time.
8. "Designated beneficiary" means:
a. The individual designated as the beneficiary of the
				  account at the time the account is established;
b. The individual who is designated as the new designated
				  beneficiary when the designated beneficiary of an account is changed; and
c. The individual receiving the benefits from an account
				  established by any state or local government or an organization described in
				  section 501(c)(3) of the Code, as part of a scholarship program operated by
				  such government or organization.
9. "Distribution" means any disbursement, other than for the
				  payment of fees or expenses, from an account. Distributions include a payment
				  to the participant, to the designated beneficiary, or to such other person or
				  entity as the participant or designated beneficiary properly directs in
				  accordance with these rules.
10. "Distribution request form" means the form approved by
				  the Bank for use in requesting a distribution from an account.
11. "Eligible educational institution" means an institution
				  as defined by section 529 of the Code.
12. "Enrollment form" means the College SAVE enrollment form
				  that is to be completed and signed by a participant and submitted to the
				  manager to open an account. By completing and signing an enrollment form, the
				  participant agrees to be bound by the terms and conditions of the participation
				  agreement, the declaration of trust, and the rules. A separate enrollment form
				  is required for each account.
13. "Investment fund" means the assets of the trust that are
				  divided into portfolios.
14. "Manager" means the third-party contractor appointed by
				  the Bank to act as its agent in administering the plan, or, if none is
				  appointed, the Bank.
15. "Matching grant" means the grant of funds awarded by the
				  Bank to eligible participants on behalf of a designated beneficiary.
16. "Maximum contribution amount" means the amount
				  established for each calendar year equal to the amount that is necessary to pay
				  tuition, required fees, and room and board expenses of the designated
				  beneficiary for five years of undergraduate enrollment at the highest cost
				  eligible educational institution, as defined by section 529 of the Code, and
				  for two years of graduate enrollment at the highest cost eligible educational
				  institution rounded down to the nearest one thousand dollars. Only amounts of
				  tuition, required fees, and room and board expenses that constitute qualified
				  higher education expenses shall be taken into account for these purposes. The
				  Bank shall announce the maximum contribution amount for a year as soon as
				  practicable by including the amount in plan communications and enrollment
				  materials.
17. "Member of the family" means an individual who is related
				  to the designated beneficiary as described in this subsection. Member of the
				  family means:
a. A son or daughter, or a descendant of either;
b. A stepson or stepdaughter;
c. A brother, sister, stepbrother, or stepsister;
d. The father or mother, or an ancestor of either;
e. A stepfather or stepmother;
f. A son or daughter of a brother or sister;
g. A brother or sister of the father or mother;
h. A son-in-law, daughter-in-law, father-in-law,
				  mother-in-law, brother-in-law, or sister-in-law;
i. The spouse of the designated beneficiary or the spouse of
				  any individual described in subdivisions a through h;
j. A first cousin; or
k. Any other individual defined as a member of the designated
				  beneficiary's family for purposes of section 529 of the Code.
For purposes of determining who is a member of the family, a
				  legally adopted child of an individual shall be treated as the child of such
				  individual by blood. The terms brother and sister include a brother or sister
				  by the half-blood.
18. "Participant" means the person, organization or
				  governmental entity, as defined in section 529 of the Code, that establishes an
				  account on behalf of a designated beneficiary and any person, organization or
				  governmental entity who is the successor in interest to such person or entity
				  in accordance with these rules.
19. "Participation agreement" means the written agreement
				  between a participant and the Bank, substantially in the form approved by the
				  Bank. A participant agrees to the terms and conditions of the participation
				  agreement by completing and signing an enrollment form.
20. "Plan" means the College SAVE program established by the
				  Act and implemented by these rules.
21. "Plan disclosure statement" means the College SAVE plan
				  disclosure statement and any applicable supplement thereto, as amended and
				  supplemented from time to time.
22. "Plan start date" means the date the Bank designates as
				  the date on which it will be prepared to enter into participation agreements
				  with participants and to accept contributions to accounts.
23. "Portfolio" means the set of mutual funds, separate
				  accounts or other investment vehicles in which assets in the investment fund
				  are invested in accordance with the asset allocation adopted by the Bank. An
				  account is invested in a portfolio based upon the selections properly made by
				  the participant.
24. "Portfolio unit value" for a portfolio means the
				  aggregate value of the assets in a portfolio as of the market close of that
				  business day, plus receivables and less any liabilities of such portfolio
				  received each business day, divided by the number of units reflected in
				  accounts invested in that portfolio.
25. "Qualified higher education expenses" means the expenses
				  for higher education as defined by section 529 of the Code.
26. "Qualified tuition program" means a higher education
				  savings program or prepaid tuition program that qualifies for treatment under
				  section 529 of the Code.
27. "Rules" means this chapter, as amended and supplemented
				  from time to time.
28. "State" means the State of North Dakota, acting through
				  its executive, legislative, and judicial branches.
29. "Tax-free rollover" means a transfer to a qualified
				  tuition program of the redemption proceeds of a qualified United States savings
				  bond, or the distribution proceeds from a Coverdell education savings account
				  or a qualified tuition program, which is not subject to federal income tax.
30. "Trust" means the College SAVE Trust, a public
				  instrumentality of the state.
31. "Units" refers to the unit of measurement used for
				  determining the value of a portfolio. The value of a unit is based upon the net
				  asset value of the applicable underlying funds, separate accounts or other
				  investment vehicles for the portfolio to which an account is invested and any
				  fees and expenses charged to such portfolio. A unit of the portfolio is a
				  municipal fund security.
General Authority: NDCC 6-09-38
Law Implemented: NDCC 6-09-38