H.B. 200 Enrolled

EDUCATIONAL SAVINGS PLAN
TRUST AMENDMENTS
1997 GENERAL SESSION
STATE OF UTAH
Sponsor: Keele Johnson
AN ACT RELATING TO POSTSECONDARY EDUCATION; MODIFYING THE
DEFINITION OF HIGHER EDUCATION COSTS IN RELATION TO THE UTAH
EDUCATIONAL SAVINGS PLAN TRUST; MODIFYING PROVISIONS ON THE
PAYMENT OF OPERATION COSTS ASSOCIATED WITH ADMINISTERING THE
TRUST; AND CLARIFYING THE METHOD BY WHICH INTEREST FROM THE
TRUST'S ENDOWMENT FUND ACCRUES TO AND IS PAID OUT FOR
BENEFICIARIES.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
53B-8a-102, as enacted by Chapter 4, Laws of Utah 1996, Second Special Session
53B-8a-107, as enacted by Chapter 4, Laws of Utah 1996, Second Special Session
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 53B-8a-102 is amended to read:
53B-8a-102. Definitions.
As used in this chapter:
(1) "Administrative fund" means the moneys used to administer the Utah Educational
Savings Plan Trust.
(2) "Beneficiary" means the individual designated by a participation agreement to benefit
from payments for higher education costs at an institution of higher education.
(3) "Benefits" means the payment of higher education costs on behalf of a beneficiary by
the trust during the beneficiary's attendance at an institution of higher education.
(4) "Board" means the board of directors of the Utah Educational Savings Plan Trust
which is the state Board of Regents acting in its capacity as the Utah Higher Education Assistance
Authority under Title 53B, Chapter 12.

(5) "Endowment fund" means the endowment fund established under Section 53B-8a-107
which is held as a separate fund within the trust.
(6) "Higher education costs" means the certified costs of tuition, fees, [and room and board
for attendance at an institution of higher education, and other direct education costs as defined by
the board] books, supplies, and equipment required for the enrollment or attendance of a designated
beneficiary at an institution of higher education.
(7) "Institution of higher education" means a two-year or four-year public or regionally
accredited private nonprofit college or university or a Utah applied technology center, with regard
to students enrolled in postsecondary training or education programs.
(8) "Participant" means an individual, firm, corporation, or its legal representative who has
entered into a participation agreement under this chapter for the advance payment of higher
education costs on behalf of a beneficiary.
(9) "Participation agreement" means an agreement between a participant and the trust
entered into under this chapter.
(10) "Program administrator" means the administrator of the trust appointed by the board
to administer and manage the trust.
(11) "Program fund" means the program fund created under Section 53B-8a-107, which is
held as a separate fund within the trust.
(12) "Tuition and fees" means the quarterly or semester charges imposed to attend an
institution of higher education and required as a condition of enrollment.
(13) "Utah Educational Savings Plan Trust" or "trust" means the trust created under Section
53B-8a-103.
(14) "Vested participation agreement" means a participation agreement which has been in
full force and effect during eight continuous years of residency of the beneficiary in the state while
participating in the trust.
Section 2. Section 53B-8a-107 is amended to read:
53B-8a-107. Program, endowment, and administrative funds -- Investment and
payments from funds.

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(1) (a) The board shall segregate moneys received by the trust into three funds, the program
fund, the endowment fund, and the administrative fund.
(b) No more than [2% of moneys received into the program fund and] two percentage points
of the interest earned annually in the endowment fund may be transferred to the administrative fund
for the purpose of paying operating costs associated with administering the trust and as required
under Sections 53B-8a-103 through 53B-8a-105.
(c) No more than .5 percentage points of the interest earned annually in the program fund
may be transferred to the administrative fund to pay operating costs associated with administering
the trust and as required under Sections 53B-8a-103 through 53B-8a-105.
(d) All moneys paid by participants in connection with participation agreements shall be
deposited as received into separate accounts within the program fund which shall be promptly
invested and accounted for separately.
[(d)] (e) All moneys received by the trust from the proceeds of gifts and other endowments
for the purposes of the trust shall be deposited as received into the endowment fund, which shall be
promptly invested and accounted for separately.
[(e)] (f) The program fund and the endowment fund shall be separately administered.
[(f)] (g) Any gifts, grants, or donations made by any governmental unit or any person, firm,
partnership, or corporation to the trust for deposit to the endowment fund shall be a grant, gift, or
donation to the state for the accomplishment of a valid public eleemosynary, charitable, and
educational purpose and shall not be included in the income of the donor for Utah tax purposes.
(2) (a) Each beneficiary under a participation agreement shall receive [a pro rata] an interest
in a portion, as determined by policy, of the investment income derived by the endowment fund in
any year during which funds are invested in the program fund on behalf of the beneficiary, to be
payable each year in which moneys are paid under the participation agreement to institutions of
higher education for higher education costs, not to exceed the cost of attendance at the institution.
(b) The [amount received] interest in the investment income derived by the endowment fund
that accrues to a beneficiary in any year shall be in the ratio that the principal amount paid by the
participant under the participation agreement and investment income earned to date under the

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agreement bears to the principal amount of all moneys, funds, and securities then held in the
program fund[, but not to exceed the amount which, in combination with the current payment due
from the program fund, equals the beneficiary's higher education costs for the current period of
enrollment] during the year.
(c) At the time any payments or disbursements for higher education costs are due from the
trust to any institution of higher education under a participation agreement, the trust shall add to that
payment from endowment fund income a pro rata portion of the amount calculated pursuant to
Subsection (b), which shall be transferred directly to the institution of higher education
simultaneously with the payment made from the program fund and shall be used for payment of the
higher education costs of the beneficiary, but not to exceed the amount which, in combination with
the current payment due from the program fund, equals the beneficiary's higher education costs for
the current period of enrollment.
(d) Endowment fund earnings not accruing to a beneficiary under a participation agreement
or not transferred to the administrative fund shall be reinvested in the endowment fund.
[(d)] (e) Moneys accrued by participants in the program fund of the trust may be used for
payments to any institution of higher education.
[(e)] (f) No rights to any moneys derived from the endowment fund shall exist if moneys
payable under the participation agreement are paid to an education institution which is not an
institution of higher education as defined in Section 53B-8a-102.

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