53B-8a-106.   Account agreements.
     The Utah Educational Savings Plan Trust may enter into account agreements with account owners on behalf of beneficiaries under the following terms and agreements:
     (1) (a) An account agreement may require an account owner to agree to invest a specific amount of money in the Utah Educational Savings Plan Trust for a specific period of time for the benefit of a specific beneficiary, not to exceed an amount determined by the program administrator.
     (b) Account agreements may be amended to provide for adjusted levels of payments based upon changed circumstances or changes in educational plans.
     (c) An account owner may make additional optional payments as long as the total payments for a specific beneficiary do not exceed the total estimated higher education costs as determined by the program administrator.
     (d) Subject to Subsection (1)(f), the maximum amount of a qualified investment that a corporation that is an account owner may subtract from unadjusted income for a taxable year in accordance with Title 59, Chapter 7, Corporate Franchise and Income Taxes, is $1,650 for each individual beneficiary for the taxable year beginning on or after January 1, 2008, but beginning on or before December 31, 2008.
     (e) Subject to Subsection (1)(f), the maximum amount of a qualified investment that may be used as the basis for claiming a tax credit in accordance with Section 59-10-1017, is:
     (i) for a resident or nonresident estate or trust that is an account owner, $1,650 for each individual beneficiary for the taxable year beginning on or after January 1, 2008, but beginning on or before December 31, 2008;
     (ii) for a resident or nonresident individual that is an account owner, other than a husband and wife who are account owners and file a single return jointly under Title 59, Chapter 10, Individual Income Tax Act, $1,650 for each individual beneficiary for the taxable year beginning on or after January 1, 2008, but beginning on or before December 31, 2008; or
     (iii) for a husband and wife who are account owners and file a single return jointly under Title 59, Chapter 10, Individual Income Tax Act, $3,300 for each individual beneficiary:
     (A) for the taxable year beginning on or after January 1, 2008, but beginning on or before December 31, 2008; and
     (B) regardless of whether the Utah Educational Savings Plan Trust has entered into:
     (I) a separate account agreement with each spouse; or
     (II) a single account agreement with both spouses jointly.
     (f) (i) For taxable years beginning on or after January 1, 2009, the program administrator shall increase or decrease the maximum amount of a qualified investment described in Subsections (1)(d) and (1)(e)(i) and (ii), by a percentage equal to the percentage difference between the consumer price index for the preceding calendar year and the consumer price index for the calendar year 2007.
     (ii) After making an increase or decrease required by Subsection (1)(f)(i), the program administrator shall:
     (A) round the maximum amount of the qualified investments described in Subsections (1)(d) and (1)(e)(i) and (ii) increased or decreased under Subsection (1)(f)(i) to the nearest ten dollar increment; and
     (B) increase or decrease the maximum amount of the qualified investment described in Subsection (1)(e)(iii) so that the maximum amount of the qualified investment described in

Subsection (1)(e)(iii) is equal to the product of:
     (I) the maximum amount of the qualified investment described in Subsection (1)(e)(ii) as rounded under Subsection (1)(f)(ii)(A); and
     (II) two.
     (iii) For purposes of Subsections (1)(f)(i) and (ii), the program administrator shall calculate the consumer price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
     (2) (a) Beneficiaries designated in account agreements must be designated after birth and before age 19 for an account owner to:
     (i) subtract a qualified investment from income under Title 59, Chapter 7, Corporate Franchise and Income Taxes; or
     (ii) use a qualified investment as the basis for claiming a tax credit in accordance with Section 59-10-1017.
     (b) Account owners may designate a beneficiary age 19 or older, but investments for that beneficiary are not eligible to be:
     (i) subtracted from income under Title 59, Chapter 7, Corporate Franchise and Income Taxes; or
     (ii) used as the basis for claiming a tax credit in accordance with Section 59-10-1017.
     (3) Each account agreement shall state clearly that there are no guarantees regarding moneys in the Utah Educational Savings Plan Trust as to the return of principal and that losses could occur.
     (4) Each account agreement shall provide that:
     (a) a contributor to, or designated beneficiary under, an account agreement may not direct the investment of any contributions or earnings on contributions;
     (b) any part of the money in any account may not be used as security for a loan; and
     (c) an account owner may not borrow from the Utah Educational Savings Plan Trust.
     (5) The execution of an account agreement by the trust may not guarantee in any way that higher education costs will be equal to projections and estimates provided by the Utah Educational Savings Plan Trust or that the beneficiary named in any account agreement will:
     (a) be admitted to an institution of higher education;
     (b) if admitted, be determined a resident for tuition purposes by the institution of higher education;
     (c) be allowed to continue attendance at the institution of higher education following admission; or
     (d) graduate from the institution of higher education.
     (6) A beneficiary may be changed as permitted by the rules and regulations of the board upon written request of the account owner prior to the date of admission of any beneficiary under an account agreement by an institution of higher education so long as the substitute beneficiary is eligible for participation.
     (7) An account agreement may be freely amended throughout the term of the account agreement in order to enable an account owner to increase or decrease the level of participation, change the designation of beneficiaries, and carry out similar matters as authorized by rule.
     (8) Each account agreement shall provide that:
     (a) the account agreement may be canceled upon the terms and conditions, and upon payment of the fees and costs set forth and contained in the board's rules and regulations; and

     (b) the program administrator may amend the agreement unilaterally and retroactively, if necessary, to maintain the Utah Educational Savings Plan Trust as a qualified tuition program under Section 529, Internal Revenue Code.

Amended by Chapter 196, 2008 General Session
Amended by Chapter 389, 2008 General Session
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Last revised: Wednesday, July 23, 2008