2006 Utah Code - 53B-8a-107 — Program, endowment, and administrative funds -- Investment and payments from funds.

     53B-8a-107.   Program, endowment, and administrative funds -- Investment and payments from funds.
     (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 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) Transfers may be made from the program fund to the administrative fund to pay operating costs:
     (i) associated with administering the trust and as required under Sections 53B-8a-103 through 53B-8a-105; and
     (ii) as included in the budget approved by the board of directors of the Utah Educational Savings Plan Trust.
     (d) All moneys paid by account owners in connection with account agreements shall be deposited as received into separate accounts within the program fund which shall be promptly invested and accounted for separately.
     (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.
     (f) 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) Through March 31, 2005, each account owner under an account agreement may receive 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 as provided in Subsection (2)(c).
     (b) The 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 account owner under the account agreement and investment income earned to date under the agreement bears to the principal amount of all moneys, funds, and securities then held in the program fund during the year.
     (c) (i) Except as provided in Subsection (2)(c)(ii), at the time any payments or disbursements for higher education costs are made from the trust to any institution of higher education under an account agreement, the trust shall add to that payment from endowment fund income a pro rata portion of the amount calculated pursuant to Subsection (2)(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.
     (ii) Effective March 31, 2005, any interest income on the endowment fund accruing to a beneficiary that has not been transferred to an institution of higher education pursuant to Subsection (2)(c)(i) shall be transferred to the beneficiary's program fund account.

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     (3) Beginning on April 1, 2005:
     (a) interest income on the endowment fund may be used to enhance the savings of low income account owners investing in the trust, as provided by rules of the board; and
     (b) the original principal in the endowment fund may be transferred to the administrative fund upon approval by the board.
     (4) 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.
     (5) Moneys accrued by account owners in the program fund of the trust may be used for payments to any institution of higher education.
     (6) No rights to any moneys derived from the endowment fund shall exist if moneys payable under the account agreement are paid to an education institution which is not an institution of higher education as defined in Section 53B-8a-102.

Amended by Chapter 109, 2005 General Session