(a) There are created two (2) Tennessee college savings trust funds, the educational investment trust fund and the educational services trust fund. The board, or if designated by the board, the state treasurer shall serve as trustee. These funds shall be held and maintained as separate accounts as provided in subdivisions (a)(1) and (2):
Terms Used In Tennessee Code 49-7-812
Account owner: means an individual, association, corporation, trust, charitable organization, or other such entity that establishes an educational investment trust account pursuant to this part or that is otherwise listed as the owner of an education investment trust account. See Tennessee Code 49-7-802
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
beneficiary: means an individual designated under a tuition contract as the individual entitled to apply tuition units purchased under the contract to the payment of that individual's undergraduate, graduate and professional tuition, and other educational costs. See Tennessee Code 49-7-802
Bequeath: To gift property by will.
Board: means the board of trustees of the college savings trust fund program described in this part. See Tennessee Code 49-7-802
Contract: A legal written agreement that becomes binding when signed.
Contributor: means one (1) or more individuals, associations, corporations, trusts, charitable organizations, or other such entities that contributes money or makes a payment to an educational investment trust account established pursuant to this part. See Tennessee Code 49-7-802
Educational services plan: means a plan that permits individuals, associations, corporations, trusts or other organized entities to purchase a tuition unit or units under a tuition contract entered into between a purchaser and the board on behalf of a designated beneficiary that entitles the beneficiary to apply such units to the payment of that beneficiary's undergraduate, graduate and professional tuition, and other educational costs. See Tennessee Code 49-7-802
Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
Program: means the college savings trust fund program created in this part. See Tennessee Code 49-7-802
Purchaser: means an individual, association, corporation, trust, charitable organization or other such entity that enters into a tuition contract under this part for the purchase of a tuition unit or units on behalf of a beneficiary relative to the educational services plan. See Tennessee Code 49-7-802
State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
Trust fund: means the educational investment trust fund or the educational services trust fund established pursuant to §. See Tennessee Code 49-7-802
Trustee: A person or institution holding and administering property in trust.
Tuition: means the charges imposed to attend an institution of higher education as an undergraduate, graduate or professional student and all fees required as a condition of enrollment as determined by the board. See Tennessee Code 49-7-802
(1) The educational investment trust fund shall consist solely of:
(A) Contributions received by the board from account owners or contributors on behalf of beneficiaries for a particular educational investment trust account or from any other source public or private;(B) All interest and investment income earned by such fund;(C) Any monetary gift of any nature made by any individual by testamentary disposition, including, but not limited to, any specific monetary gift or bequeath made by will, trust or other disposition; and(D) All other receipts of the board from any other source that the board determines appropriate;(2) The educational services trust fund shall consist solely of:
(A) Payments received by the board from purchasers on behalf of beneficiaries pursuant to educational services plan contracts or from any other source, public or private;(B) All interest and investment income earned by the fund;(C) Any monetary gift of any nature made by any individual by testamentary disposition, including, but not limited to, any specific monetary gift or bequeath made by will, trust or other disposition; and(D) All other receipts of the board from any other source that the board determines appropriate.(b) The board shall maintain an account for each tuitioncontract showing the beneficiary of that educational services plan contract. The account shall also show the number of tuition units purchased pursuant to that contract if the contract involves the educational services plan.(c) The assets of the educational services trust fund shall be preserved, invested and expended solely pursuant to and for the purposes of this part and shall not be loaned or otherwise transferred or used for any other purpose. The assets of the funds shall be expended solely to:
(1) Make payments to, or on behalf of, beneficiaries pursuant to §§ 49-7-807(a) and 49-7-808(a);(2) Make refunds as provided in § 49-7-811; and(3) Pay the investment fees and other costs of administering the funds.(d) The amounts on deposit in the program shall not constitute property of the state. The assets of each of the educational investment trust fund and the educational services trust fund shall be preserved, invested and expended pursuant to and for the purposes set forth in this part, and the trust funds’ moneys shall be held in trust for account owners, beneficiaries and purchasers, as applicable. Neither trust fund shall be construed to be a department, institution or agency of the state. Amounts on deposit in such trust funds shall not be commingled with state funds and the state shall have no claim to or against, or interest in, such funds. Any agreement entered into by or any obligation of such trust funds shall not constitute a debt or obligation of the state and the state shall have no obligation to any account owner, purchaser, contributor, beneficiary or any other person on account of such trusts and all amounts obligated to be paid from the trust funds shall be limited to amounts available for such obligation on deposit in such trusts. The amounts on deposit in any trust fund account may only be disbursed at the direction of the purchaser or account owner or otherwise in accordance with § 49-7-808. A trust fund shall continue in existence as long as they hold any contributions or has any obligations and until its existence is terminated by law, and upon termination any unclaimed assets shall return to the state.(e) All revenues collected by the program shall not revert to the general fund but shall remain in the program and shall be used to fund the program or the Tennessee financial literacy commission, compiled in chapter 6, part 17 of this title.
