34 Tex. Admin. Code § 7.169 - Limitations Applicable to All Participants

(a) A match account is owned by the board or program entity until the funds or tuition units are distributed to an eligible educational institution.

(b) Funds or tuition units that are awarded or allocated to a match account, including any net earnings or losses related to that account if applicable, are forfeited and revert to the board or program entity on the occurrence of any of the following:

(1) the 10th anniversary of the date the beneficiary is projected to graduate from high school, except that time spent by the beneficiary as an active duty member of the United States armed services tolls this period;

(2) a change of beneficiary by the participant;

(3) the closing of participant's savings trust account or prepaid tuition contract resulting from a nonqualified withdrawal;

(4) a nonqualified withdrawal from participant's prepaid tuition contract that results in the sum of the participant's tuition unit balance plus all prior tuition units redeemed from participant's contract being less than the amount that had been matched;

(5) a nonqualified withdrawal from participant's savings trust account that results in the sum of the participant's savings account balance plus all prior qualified distributions from participant's savings trust account being less than the match account balance as adjusted for earnings;

(6) the successful completion by the beneficiary of an associate or bachelor's degree program;

(7) transfer of funds from the participant's account to another qualified tuition program of any state that meets the requirements of Internal Revenue Code of 1986, §529;

(8) fraud or misrepresentation by the participant;

(9) the death or permanent disability of the beneficiary (unable to attend eligible educational institution); or

(10) any other event the board or program entity determines would be inconsistent with the program's purposes.

(c) A participant or beneficiary whose match account is forfeited after the completion of an associate degree and who subsequently enrolls in a bachelor's degree program, may request in writing that the board not forfeit the match account and must provide evidence in a form acceptable to the board.

(d) If a participant makes a misrepresentation in an application for a savings trust account or prepaid tuition contract, or in a match account application, the match account associated with the misrepresentation is forfeited. Misrepresentations by participants may be reported to the Comptroller's Office of Criminal Investigation and the Attorney General's Office for prosecution and to recover any distributions.

(e) Unless otherwise provided by this subchapter, use of a match account that is linked to a savings trust agreement is governed by the applicable Plan Description and Savings Trust Agreement. Unless otherwise provided by this subchapter, use of a match account that is linked to a prepaid tuition contract is governed by the applicable Plan Description and Master Agreement.

Notes

34 Tex. Admin. Code § 7.169

The provisions of this §7.169 adopted to be effective July 1, 2012, 37 TexReg 4599