2005 Nevada Revised Statutes - Chapter 353B — College Savings Plans of Nevada
CHAPTER 353B - COLLEGE SAVINGS PLANS OFNEVADA
GENERAL PROVISIONS
NRS 353B.001 Definitions.
NRS 353B.002 Boarddefined.
NRS 353B.004 Systemdefined.
NRS 353B.005 Boardof Trustees: Creation; membership; terms; Chairman; compensation.
NRS 353B.007 Insurancecoverage to protect prepaid tuition contracts and savings trust accounts.
NRS 353B.009 Moneyon deposit in prepaid tuition contract or savings trust account not consideredasset of parent, guardian or student for purposes of determining certaineligibility.
NEVADA HIGHER EDUCATION PREPAID TUITION PROGRAM
General Provisions
NRS 353B.010 Definitions.
NRS 353B.030 Prepaidtuition contract defined.
NRS 353B.040 Purchaserdefined.
NRS 353B.050 Qualifiedbeneficiary defined.
NRS 353B.070 TrustFund defined.
NRS 353B.075 Limitationson construction of provisions.
Administration
NRS 353B.090 Developmentof Program by Board; regulations.
NRS 353B.100 Prepaidtuition contracts: Authority of Board to enter; required provisions.
NRS 353B.105 Agreementto payroll deductions for prepaid tuition contract authorized.
NRS 353B.110 Generalduties and powers of Board.
NRS 353B.130 Limitationon effect of action by Board.
Nevada Higher Education Prepaid Tuition Trust Fund
NRS 353B.140 Creation.
NRS 353B.150 Administrationby State Treasurer; duties and powers of State Treasurer.
NRS 353B.155 Dutiesand powers of Board; authority to limit qualified beneficiaries.
NRS 353B.160 Investment.
NRS 353B.170 Annualreport.
NRS 353B.180 Annualaudit.
NRS 353B.190 Annualactuarial study.
NEVADA COLLEGE SAVINGS PROGRAM
General Provisions
NRS 353B.300 TrustFund defined.
Administration
NRS 353B.310 Regulations.
NRS 353B.320 Delegationby Board of administrative powers and duties to State Treasurer.
NRS 353B.330 Savingstrust accounts and agreements not guaranteed by full faith and credit.
Nevada College Savings Trust Fund
NRS 353B.340 Creation;sources; limitations on use of money.
NRS 353B.350 Administrationby State Treasurer; establishment of Program, Administrative and EndowmentAccounts.
NRS 353B.360 Acceptanceand expenditure of money provided by private entities for direct expenses andmarketing of Fund.
NRS 353B.370 Dutiesand powers of Board; contracts for services.
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GENERAL PROVISIONS
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1. There is hereby created a Board of Trustees of theCollege Savings Plans of Nevada.
2. The Board consists of five members composed of:
(a) The State Treasurer, who may name a designee toserve on the Board on his behalf.
(b) The Director of the Department of Administration,who may name a designee to serve on the Board on his behalf.
(c) The Chancellor of the System, who may name adesignee to serve on the Board on his behalf.
(d) Two members appointed by the Governor. A member whois appointed by the Governor must possess knowledge, skill and experience inthe field of:
(1) Accounting;
(2) Finance;
(3) Investment management; or
(4) Marketing.
3. A member of the Board who is appointed by theGovernor:
(a) Serves for a term of 4 years;
(b) Except as otherwise provided in paragraph (c), maybe reappointed by the Governor; and
(c) Except as otherwise provided in this paragraph, mayserve for only two terms. A member who is appointed to fill a vacancy in anunexpired term that is not longer than 3 years may serve two terms in additionto the unexpired term.
4. The State Treasurer or his designee shall serve asthe Chairman of the Board.
5. Each member of the Board serves withoutcompensation, except that each member is entitled to receive:
(a) The per diem allowance and travel expenses providedfor state officers and employees generally; and
(b) Reimbursement for any other actual and reasonableexpense incurred while performing his duties.
6. As used in this section, the term College SavingsPlans of Nevada includes the Nevada Higher Education Prepaid Tuition Programset forth in NRS 353B.010 to
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NEVADA HIGHER EDUCATION PREPAID TUITION PROGRAM
General Provisions
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1. Will be admitted to, allowed to continue enrollmentat or graduated from a community college or university; or
2. Will have the full cost of his tuition paid at acommunity college, college or university that is not a member of the system.
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Administration
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1. The Board shall developthe Nevada Higher Education Prepaid Tuition Program for the prepayment oftuition at a guaranteed rate which is established based on the annual actuarialstudy required pursuant to NRS 353B.190for undergraduate studies at a university, state college or community collegethat is a member of the System.
2. The Board shall adopt regulations for the implementationof the Program, including, without limitation, regulations setting forthrequirements for residency, a limit on the number of qualified beneficiaries,the termination, withdrawal and transfer of money paid into the Trust Fund, thetime within which the money paid into the Trust Fund must be used, and paymentschedules.
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1. The Board may enter into a prepaid tuition contractwith a purchaser.
2. The Board shall create a prepaid tuition contractin accordance with the provisions of this section.
3. The prepaid tuition contract must include, withoutlimitation:
(a) The terms and conditions under which the purchasershall remit payment, including, without limitation:
(1) The amount and number of payments that arerequired from the purchaser on behalf of the qualified beneficiary;
(2) The date upon which each payment is due; and
(3) A provision for a reasonable penalty for adelinquent payment or default.
(b) The name and date of birth of the qualifiedbeneficiary on whose behalf the prepaid tuition contract is drawn.
(c) The terms and conditions under which another personmay be substituted as the qualified beneficiary.
(d) The terms and conditions under which the purchaser,or another person designated by the purchaser, may terminate the prepaidtuition contract, receive a refund of money that he has paid into the TrustFund or withdraw money that he has paid into the Trust Fund, including, withoutlimitation, a provision allowing the Board to impose a fee that amounts to morethan a de minimis penalty.
(e) A provision that the Board shall, after making areasonable effort to contact the purchaser, report any money that has beendeposited under a prepaid tuition contract that has not been terminated and hasnot been used within a specified period to the State Treasurer for properdisposition.
(f) The number of semesters for which the purchaser iscontracting.
(g) A provision that money paid into the Trust Fundunder a prepaid tuition contract may be applied toward tuition at:
(1) A university, state college or communitycollege that is a member of the System;
(2) An accredited college or university in thisState that is not a member of the System; or
(3) An accredited community college, college oruniversity in another state.
Paymentsauthorized pursuant to subparagraph (2) or (3) must not exceed the projectedhighest payment for tuition for the current academic year at a university thatis a member of the System.
(h) Any other term or condition that the Boardconsiders necessary or proper.
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1. May modify the regulations for the implementationof the Program adopted pursuant to subsection 2 of
2. May establish agreements to fulfill its obligationsunder the prepaid tuition contracts.
3. May contract for any necessary good or service,including, without limitation, the power to engage financial consultants,actuaries or legal counsel.
4. May procure insurance against any loss inconnection with the property, assets or activities of the Trust Fund, the StateTreasurer or the Board.
5. May solicit and accept a gift, including, withoutlimitation, a bequeathment or other testamentary gift, grant, loan or aid fromany source.
6. Shall solicit answers to requests for rulings fromthe Internal Revenue Service regarding the tax status of fees paid to or onbehalf of a purchaser or a qualified beneficiary pursuant to a prepaid tuitioncontract.
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Nevada Higher Education Prepaid Tuition Trust Fund
1. The Nevada Higher Education Prepaid Tuition TrustFund is hereby created within the State Treasury to allow the cost of tuitionto be paid in advance of enrollment at an institution of higher education.
2. The Trust Fund consists of payments receivedpursuant to:
(a) A prepaid tuition contract;
(b) A bequest, endowment or grant from the FederalGovernment; or
(c) Any other public or private source of money.
3. Money in the Trust Fund that is not expended duringany biennium does not revert to the State General Fund at any time.
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1. The State Treasurer shall administer the trustfund.
2. As Administrator of the Trust Fund, the StateTreasurer:
(a) Shall maintain the financial records of the TrustFund;
(b) Shall invest the property in the Trust Fundpursuant to the policies for investment established by the Board pursuant to
(c) Shall manage any account associated with the TrustFund;
(d) Shall maintain any instruments that evidenceinvestments made with property from the Trust Fund;
(e) May contract with vendors for any good or servicethat is necessary to carry out the provisions of
(f) May hire such employees as are necessary to carryout the provisions of NRS 353B.010 to
(g) May perform any other duties necessary toadminister the Trust Fund.
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1. The Board shall actively promote and market use ofthe Trust Fund.
2. The Board shall, before it enters into a prepaidtuition contract with a purchaser, solicit the opinion of:
(a) The Securities and Exchange Commission regardingthe application of federal law regarding securities to the Trust Fund; or
(b) An independent legal counsel to ensure that themethod of structuring and offering the Trust Fund is in compliance with federallaw regarding securities.
3. The Board may:
(a) Require a reasonable length of residence in theState to become a qualified beneficiary.
(b) Restrict the number of qualified beneficiaries.
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1. The Board shall create a comprehensive plan thatspecifies the policies for investment which the State Treasurer shall follow inhis administration of the Trust Fund.
2. The Board may authorize the State Treasurer toinvest the property of the Trust Fund in:
(a) A bond, note, certificate or other generalobligation of the State of Nevada, or of a county, city, general improvementdistrict or school district of the State of Nevada.
(b) A corporate bond of a corporation created by orexisting under the laws of the United States or of a state, district orterritory of the United States with a rating not lower than A or itsequivalent by a nationally recognized rating service. The total amount investedin such bonds must not exceed 50 percent of the book value of the total fixedincome investments of the Trust Fund.
(c) Commercial paper of a corporation created by orexisting under the laws of the United States or of a state, district orterritory of the United States or of a wholly owned subsidiary of such acorporation with a rating not lower than A-3 or P-3 by a nationallyrecognized rating service.
(d) A bond, note, debenture or other valid obligationthat is issued by the Treasury of the United States.
(e) A bond, note, debenture or other security that isissued by an agency or instrumentality of the United States or that is fullyguaranteed by the United States in:
(1) The Federal Farm Credit Bank;
(2) The Federal National Mortgage Association;
(3) The Federal Home Loan Bank;
(4) The Federal Home Loan Mortgage Corporation;or
(5) The Government National MortgageAssociation.
(f) A bond, note, debenture or other security in theStudent Loan Marketing Association, regardless of whether it is guaranteed bythe United States.
(g) Collateralized mortgage obligations that are ratedAAA or its equivalent by a nationally recognized rating service.
(h) Asset-backed securities that are rated AAA or itsequivalent by a nationally recognized rating service.
(i) Money market mutual funds that:
(1) Are registered with the Securities andExchange Commission;
(2) Are rated by a nationally recognized ratingservice as A or its equivalent, or better; and
(3) Invest only in securities issued by theFederal Government or agencies of the Federal Government or in repurchaseagreements fully collateralized by such securities.
The totaldollar amount invested in such mutual funds must not exceed 20 percent of thetotal dollar amount of the Trust Fund that is invested.
(j) Common or preferred stock of a corporation createdby or existing under the laws of the United States or of a state, district orterritory of the United States, if:
(1) The stock of the corporation is:
(I) Listed on a national stock exchange;or
(II) Traded in the over-the-countermarket, if the price quotations for the over-the-counter stock are quoted bythe National Association of Securities Dealers Automated Quotations System,NASDAQ;
(2) The outstanding shares of the corporationhave a total market value of not less than $50,000,000;
(3) The maximum investment in stock is notgreater than 60 percent of the book value of the total investments of the TrustFund;
(4) Except for investments made pursuant toparagraph (m), the amount of an investment in a single corporation is notgreater than 3 percent of the book value of the assets of the Trust Fund; and
(5) Except for investments made pursuant toparagraph (m), the total amount of shares owned by the Trust Fund is notgreater than 5 percent of the outstanding stock of a single corporation.
(k) A covered call or put option on securities that aretraded on one or more of the regulated exchanges in the United States.
(l) A pooled or commingled real estate fund or a realestate security that is managed by a corporate trustee or by an investmentadvisory firm that is registered with the Securities and Exchange Commission,either of which may be retained by the Board as an investment manager. Theshares and the pooled or commingled fund must be held in trust. The total bookvalue of an investment made under this paragraph must not at any time begreater than 5 percent of the total book value of all investments of the TrustFund.
(m) Mutual funds or common trust funds that consist ofany combination of the investments listed in paragraphs (a) to (l), inclusive.
3. The State Treasurer shall exercise the standard ofcare in investing the property of the fund that a person of prudence,discretion and intelligence would exercise in the management of his ownaffairs, given the prevailing circumstances, not in regard to speculation butrather to the permanent disposition of the property, considering the potentialincome from and the probable safety of his capital.
4. Subject to the terms, conditions, limitations andrestrictions set forth in this section, the State Treasurer may sell, assign,transfer or dispose of the property and investments of the Trust Fund upon theapproval of a majority of the Board.
5. The assets of the Trust Fund:
(a) Must be maintained, invested and expended solelyfor the purposes of NRS 353B.010 to
(b) Must not be loaned, transferred or otherwise usedfor a purpose other than the purposes of NRS353B.010 to 353B.190, inclusive.
6. The State Treasurer shall credit any income derivedfrom an investment or a gain from a sale or exchange of an investment to theTrust Fund.
7. The State Treasurer shall acquire each investmentfor the Trust Fund at a price not to exceed the prevailing market value forsuch an investment.
8. Each investment in the Trust Fund must be clearlymarked to indicate ownership by the Trust Fund.
9. The State Treasurer, an employee of the StateTreasurer, or a member or employee of the Board shall not:
(a) Have a direct or indirect interest in the income,gain or profit of an investment that the State Treasurer makes;
(b) Receive pay or emolument for his services inconnection with an investment that the State Treasurer makes; or
(c) Become an endorser, surety or obligor for moneythat is borrowed from the Trust Fund.
10. If the annual actuarial study performed pursuantto NRS 353B.190 reveals that there isinsufficient money to ensure the actuarial soundness of the Trust Fund, theBoard shall modify the terms of subsequent prepaid tuition contracts.
11. The terms, conditions, limitations andrestrictions regarding investments of the Trust Fund listed in this sectionapply only at the time an investment is originally acquired and must not beconstrued to require the liquidation of an investment at any time.
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1. Prepare an annual report setting forth inappropriate detail an accounting of the Trust Fund and a description of thefinancial condition of the Trust Fund at the close of each fiscal year,including, without limitation, a statement of projected receipts, disbursementsand operating costs of the Trust Fund.
2. Submit the report prepared pursuant to subsection 1on or before March 31 of each year:
(a) In odd-numbered years, to the Governor, the SenateStanding Committee on Finance and the Assembly Standing Committee on Ways andMeans.
(b) In even-numbered years, to the Governor and theInterim Finance Committee.
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NEVADA COLLEGE SAVINGS PROGRAM
General Provisions
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Administration
1. The State Treasurer shall adopt regulations toestablish and carry out the Nevada College Savings Program, which must complywith the requirements of a qualified state tuition program pursuant to 26U.S.C. 529.
2. The regulations must be consistent with theprovisions of the Internal Revenue Code set forth in Title 26 of the UnitedStates Code, and the regulations adopted pursuant thereto, to ensure that theNevada College Savings Program meets all criteria for federal tax-deferred ortax-exempt benefits, or both.
3. The regulations must provide for the use of savingstrust agreements and savings trust accounts to apply distributions towardqualified higher education expenses at eligible educational institutions inaccordance with 26 U.S.C. 529.
4. The regulations may include any other provisionsnot inconsistent with federal law that the State Treasurer determines arenecessary for the efficient and effective administration of the Nevada CollegeSavings Program and the Trust Fund.
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Nevada College Savings Trust Fund
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1. The Nevada College Savings Trust Fund is herebycreated.
2. The Trust Fund is an instrumentality of this state,and its property and income are exempt from all taxation by this state and anypolitical subdivision thereof.
3. The Trust Fund consists of:
(a) All legislative appropriations made thereto;
(b) All money acquired by or for the use of the TrustFund from:
(1) Any other governmental source, including,without limitation, any grant from the Federal Government, or a state or localgovernment; or
(2) Any private source, including, withoutlimitation, any gift, bequest, devise or endowment;
(c) All money deposited in accordance with savingstrust agreements; and
(d) All earnings on the money in the Trust Fund.
4. All money deposited in accordance with savingstrust agreements and all earnings on such money:
(a) Are not the property of this state, and this statehas no claim to or interest in such money; and
(b) Must not be commingled with money of this state.
5. A savings trust agreement or any other contractentered into by or on behalf of the Trust Fund does not constitute a debt orobligation of this state, and no account owner is entitled to any money in theTrust Fund except for that money on deposit in or accrued to his account.
6. The money in the Trust Fund must be preserved,invested and expended solely pursuant to and for the purposes authorized by
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1. The Trust Fund must be administered by the StateTreasurer.
2. The State Treasurer shall establish such accountswithin the Trust Fund as he determines necessary, including, withoutlimitation, a Program Account, an Administrative Account and an EndowmentAccount.
3. The Program Account must be used for the receipt,investment and disbursement of money pursuant to savings trust agreements.
4. The Administrative Account must be used for thedeposit and disbursement of money to administer and market the Nevada CollegeSavings Program and to supplement the administration and marketing of theNevada Higher Education Prepaid Tuition Program set forth in
5. The Endowment Account must be used for the depositof any money received by the Trust Fund that is not received pursuant to asavings trust agreement and, in the determination of the State Treasurer, isnot necessary for the use of the Administrative Account. The money in theEndowment Account may be expended for any purpose related to the Nevada CollegeSavings Program or otherwise to assist the residents of this state to attainpostsecondary education.
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1. The Board shall establish a comprehensiveinvestment plan for the money in the Trust Fund.
2. Notwithstanding the provisions of any specificstatute to the contrary, the Board may invest or cause to be invested any moneyin the Trust Fund, including, without limitation, the money in the ProgramAccount, in any manner reasonable and appropriate to achieve the objectives ofthe Nevada College Savings Program, exercising the discretion and care of aprudent person in similar circumstances with similar objectives. The Boardshall consider the risk, expected rate of return, term or maturity,diversification of total investments, liquidity and anticipated investments inand withdrawals from the Trust Fund.
3. The Board may establish criteria and selectinvestment managers, mutual funds or other such entities to act as investmentmanagers for the Nevada College Savings Program.
4. The Board may employ or contract with investmentmanagers, evaluation services or other services as determined by the Board tobe necessary for the effective and efficient operation of the Nevada CollegeSavings Program.
5. The Board may employ personnel and contract forgoods and services necessary for the effective and efficient operation of theNevada College Savings Program.
6. The marketing plan and materials for the NevadaCollege Savings Program must be approved by the Board.
7. The Board may prescribe terms and conditions ofsavings trust agreements.
8. The Board may contract with one or more qualifiedentities for the day-to-day operations of the Nevada College Savings Program asthe Program Administrator for the management of the marketing of the Program,the administration of the comprehensive investment plan and Trust Fund, theselection of investment managers for the Nevada College Savings Program and theperformance of similar activities.
9. All contracts authorized by this section aresubject to the requirements of chapter 333 ofNRS, except that:
(a) Notwithstanding the provisions of subsection 1 of
(b) Notwithstanding the provisions of
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