Louisiana Revised Statutes 17:3098 – Termination of depositor’s agreements; refund; conversion of the account to money
Terms Used In Louisiana Revised Statutes 17:3098
- 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 a person designated in an education savings account owner's agreement, or by the authority when authorized by an account owner meeting the classification requirements of Louisiana Revised Statutes 17:3092
- Education savings account: is a savings account established by an individual, a group of individuals, or an organization pursuant to the program created by this Chapter for a beneficiary. See Louisiana Revised Statutes 17:3092
- Fixed earnings: means the placement of all the deposits in an education savings account and the interest earned thereon in investments with fixed earnings. See Louisiana Revised Statutes 17:3092
- Institution of postsecondary education: means a state college, university, or technical college or institute or an independent college or university located in this state that is approved by the United States Secretary of Education; a public or independent college or a university located outside this state that is approved by the United States Secretary of Education; a proprietary school licensed pursuant to Chapter 24-A of this Title; or a proprietary school located outside this state that is licensed by an out-of-state public postsecondary education board, accredited by a recognized national or regional accrediting body, and eligible to participate in a program under Title IV of the Higher Education Act of 1965, as amended. See Louisiana Revised Statutes 17:3092
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
- Redemption value: means the cash value of the education savings account attributable to the sum of the principal invested, the interest earned on principal and authorized to be credited to the account by the authority, any earnings enhancements appropriated by the legislature and authorized by the authority to be credited to the account and the interest earned on earnings enhancements, less any earnings enhancements or interest thereon restricted from expenditure, and any fees due and imposed by rule of the authority. See Louisiana Revised Statutes 17:3092
- Tuition: means the mandatory educational charges imposed by an institution of postsecondary education and all fees required as a condition of enrollment, as delineated by the Louisiana Tuition Trust Authority. See Louisiana Revised Statutes 17:3092
- Variable earnings: means that portion of funds in an education savings account invested in equities. See Louisiana Revised Statutes 17:3092
A.(1) Unless otherwise provided for in the agreement, an education savings account owner’s agreement may be terminated by the person entering into the agreement, the beneficiary, or by any person or combination of persons designated in the agreement as provided in this Section.
(2) An education savings account owner’s agreement may be terminated under any of the following circumstances:
(a) Upon the death of the beneficiary.
(b) Upon notification to the Louisiana Tuition Trust Authority in writing that the beneficiary has decided not to attend an institution of higher education and requests that the education savings account be terminated.
(c) Upon completion of the requirements for a degree, diploma, or other affirmation of program completion at an institution of postsecondary education.
(d) Upon the occurrence of other circumstances determined by the authority to be grounds for termination.
B.(1) The authority shall determine the method and schedule for payment of refunds upon termination of an education savings account.
(2) The amount of the refund to which the person designated in the account owner’s agreement is entitled shall be equal to the following:
(a) The actual amount of the deposits or the current value of the deposits, whichever is less, if the account has been open for less than twelve months.
(b) The redemption value of the education savings account invested in fixed earnings at the time of the refund, minus any earnings enhancements, and interest earned thereon, previously credited but not expended from the account, if the account has been open for twelve or more months.
(c) The value of the education savings account invested in variable earnings at the time of the refund, minus any earnings enhancements and interest earned thereon previously credited but not expended from the account, if the account has been open for twelve or more months.
(3) Monies in accounts opened by juridical persons or classified under La. Rev. Stat. 17:3096(A)(1)(e) of this Chapter may not be refunded; however, the account owner or the authority, if the account owner has authorized the authority to designate the beneficiary, may designate a new beneficiary:
(a) Upon the death of the beneficiary.
(b) If the beneficiary has decided not to attend an institution of higher education.
(c) Upon the beneficiary’s completion of the requirements for a degree, diploma, or other affirmation of program completion at an institution of postsecondary education.
C. If the beneficiary is the recipient of a scholarship, waiver of tuition, or similar subvention that the authority determines cannot be converted into money by the beneficiary, the authority shall, during each academic term that the beneficiary furnishes the authority such information about the scholarship, waiver, or similar subvention as the authority requires, refund to the person designated in the owner’s agreement an amount from the owner’s education savings account equal to the value of the scholarship, waiver, or similar subvention awarded to the beneficiary. The authority may, at its sole option, designate the institution of postsecondary education at which the beneficiary is enrolled as the agent of the authority for purposes of refunds pursuant to this Subsection.
D. If, in any academic term for which withdrawals from the education savings account have been used to pay all or part of a beneficiary’s qualified higher education expenses, the beneficiary withdraws from the institution of postsecondary education at which the beneficiary is enrolled prior to the end of the academic term, a pro rata share of any refund of the qualified higher education expenses resulting from the beneficiary’s withdrawal from the institution, equal to that portion of the qualified higher education expenses paid by disbursements from the education savings account, shall be made to the authority, unless the authority designates a different procedure. The authority shall credit any refund to the appropriate education savings account.
E. Amounts of money deposited which were exempt from state income taxation pursuant to La. Rev. Stat. 17:3095(A)(1)(b) and La. Rev. Stat. 47:293(6)(a)(vi) which are refunded to the account owner upon termination of an account or conversion of the amount as otherwise provided in this Section shall be declared as income for the purposes of state income taxation.
Acts 1995, No. 547, §1, eff. June 18, 1995; Acts 1997, No. 1416, §1, eff. July 15, 1997; Acts 2000, No. 45, §1, eff. July 1, 2000; Acts 2001, No. 332, §1, eff. June 6, 2001; Acts 2003, No. 221, §2, eff. June 5, 2003; Acts 2004, No. 329, §1, eff. June 18, 2004.