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
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
