(a) Nothing in this chapter shall be construed to:

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Terms Used In Hawaii Revised Statutes 256-5

  • Account owner: means the individual who enters into a tuition savings agreement pursuant to this chapter and as defined under the proposed income tax regulations, sections 1. See Hawaii Revised Statutes 256-1
  • 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
  • Contract: A legal written agreement that becomes binding when signed.
  • Designated beneficiary: means a designated beneficiary as defined in section 529 of the Internal Revenue Code of 1986, as amended, or successor legislation. See Hawaii Revised Statutes 256-1
  • 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.
  • Program: means the college savings program. See Hawaii Revised Statutes 256-1
  • Qualified higher education expenses: means any qualified higher education expense defined in section 529 of the Internal Revenue Code of 1986, as amended, or successor legislation. See Hawaii Revised Statutes 256-1
  • Tuition savings agreement: means an agreement between the director of finance or a financial organization and the account owner. See Hawaii Revised Statutes 256-1
(1) Give any designated beneficiary any rights or legal interest with respect to an account;
(2) Guarantee that a designated beneficiary:

(A) Will be admitted to an institution of higher education; or
(B) Upon admission to an institution of higher education, will be permitted to continue to attend or will receive a degree from the institution;
(3) Create state residency for an individual merely because the individual is a designated beneficiary; or
(4) Guarantee that amounts saved pursuant to the program will be sufficient to cover the qualified higher education expenses of a designated beneficiary.
(b) Nothing in this chapter shall create or be construed to create any obligation of the director of finance, the State, or any agency or instrumentality of the State to guarantee for the benefit of any account owner or designated beneficiary with respect to:

(1) The rate of interest or other return on any account;
(2) The payment of interest or other return on any account; or
(3) The repayment of the principal of any account.

The director of finance shall provide by rule that every tuition savings agreement, contract, application, deposit slip, or other similar document that may be used in connection with a contribution to an account clearly indicate that the account is not insured by the State and neither the principal deposited nor the investment return is guaranteed by the State.

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