2001 Minnesota Statutes

     136G.03 Definitions. 

    Subdivision 1.    General.  For purposes of sections 
 136G.01 to 136G.13, the following terms have the meanings given. 

    Subd. 2.    Account.  "Account" means the formal record 
 of transactions relating to a Minnesota college savings plan 
 beneficiary. 

    Subd. 3.    Account owner.  "Account owner" means a 
 person who enters into a participation agreement and is entitled 
 to select or change the beneficiary of an account or to receive 
 distributions from the account for other than payment of 
 qualified higher education expenses. 

    Subd. 4.    Adjusted gross income.  "Adjusted gross 
 income" means adjusted gross income as defined in section 62 of 
 the Internal Revenue Code. 

    Subd. 5.    Beneficiary.  "Beneficiary" means the 
 designated beneficiary for the account, as defined in section 
 529(e)(1) of the Internal Revenue Code. 

    Subd. 6.    Board.  "Board" means the state board of 
 investment. 

    Subd. 7.    Contingent account owner.  "Contingent 
 account owner" means the individual designated as the account 
 owner, either in the participation agreement or pursuant to a 
 separate Minnesota college savings plan form, in the event of 
 the death of the account owner. 

    Subd. 8.    Contribution.  "Contribution" means a 
 payment directly allocated to an account for the benefit of a 
 beneficiary.  For a rollover distribution, only the portion of 
 the rollover amount that constitutes investment in the account 
 is treated as a contribution to the account. 

    Subd. 9.    Director.  "Director" means the director of 
 the higher education services office. 

    Subd. 10.    Distribution.  "Distribution" means a 
 disbursement from an account to the account owner, the 
 beneficiary, or the beneficiary's estate or to an eligible 
 educational institution.  Distribution does not include a change 
 of beneficiary to a member of the family of the prior 
 beneficiary or a rollover distribution. 

    Subd. 11.    Dormant account.  "Dormant account" means 
 an account that has not received contributions for at least 
 three consecutive years and the account statements mailed to the 
 account owner have been returned as undeliverable. 

    Subd. 12.    Earnings.  "Earnings" means the total 
 account balance minus the investment in the account. 

    Subd. 13.    Eligible educational institution.  
 "Eligible educational institution" means an institution as 
 defined in section 529(e)(5) of the Internal Revenue Code. 

    Subd. 14.    Inactive account with a matching grant 
 account.  "Inactive account with a matching grant account" 
 means an account in which the beneficiary: 

    (1) is not the account owner, the beneficiary has reached 
 28 years of age, and the beneficiary has not informed the plan 
 administrator that the beneficiary is enrolled in an eligible 
 educational institution; 

    (2) is the account owner, the beneficiary was over the age 
 of 18 when the account was opened, and the beneficiary has not 
 informed the program administrator that the beneficiary is 
 enrolled in an eligible educational institution within ten years 
 of the date of opening the account; or 

    (3) is the account owner, the beneficiary was a minor when 
 the account was opened, the account becomes inactive when the 
 beneficiary turns 28 years of age, and the beneficiary has not 
 informed the program administrator that the beneficiary is 
 enrolled in an eligible educational institution. 

    Subd. 15.    Executive director.  "Executive director" 
 means the executive director of the state board of investment. 

    Subd. 16.    Internal Revenue Code.  "Internal Revenue 
 Code" means the Internal Revenue Code of 1986, as amended. 

    Subd. 17.    Investment in the account.  "Investment in 
 the account" means the sum of all contributions made to an 
 account by a particular date minus the aggregate amount of 
 contributions included in distributions or rollover 
 distributions, if any, made from the account as of that date. 

    Subd. 18.    Matching grant.  "Matching grant" means an 
 amount added to a matching grant account under section 136G.11. 

    Subd. 19.    Matching grant account.  "Matching grant 
 account" means an account owned by the state that contains 
 matching grants and earnings. 

    Subd. 20.    Maximum account balance limit.  "Maximum 
 account balance limit" means the amount established by the 
 office under section 136.2441, subdivision 8, paragraph (d).  

    Subd. 21.    Member of the family.  "Member of the 
 family" means an individual who is related to the beneficiary as 
 defined in section 529(e)(2) of the Internal Revenue Code. 

    Subd. 22.    Nonqualified distribution.  "Nonqualified 
 distribution" means a distribution made from an account other 
 than (1) a qualified distribution; or (2) a distribution due to 
 the death or disability of, or scholarship to, a beneficiary. 

    Subd. 23.    Office.  "Office" means the higher 
 education services office. 

    Subd. 24.    Participation agreement.  "Participation 
 agreement" means an agreement to participate in the Minnesota 
 college savings plan between an account owner and the state, 
 through its agencies, the office, and the board. 

    Subd. 25.    Penalty.  "Penalty" means the amount 
 established by the office that is applied against the earnings 
 portion of a nonqualified distribution.  The amount established 
 by the office must be the minimum required to be de minimis 
 under section 529 of the Internal Revenue Code.  The office must 
 impose, collect, and apply penalties consistent with section 529 
 of the Internal Revenue Code.  

    Subd. 26.    Person.  "Person" means an individual, 
 trust, estate, partnership, association, company, corporation, 
 or the state.  

    Subd. 27.    Plan.  "Plan" refers to the plan 
 established under sections 136G.01 to 136G.13. 

    Subd. 28.    Plan administrator.  "Plan administrator" 
 means the person selected by the office and the board to 
 administer the daily operations of the Minnesota college savings 
 plan and to provide marketing, recordkeeping, investment 
 management, and other services for the program. 

    Subd. 29.    Qualified distribution.  "Qualified 
 distribution" means a distribution made from an account for 
 qualified higher education expenses of the beneficiary. 

    Subd. 30.    Qualified higher education expenses.  
 "Qualified higher education expenses" means expenses as defined 
 in section 529(e)(3) of the Internal Revenue Code. 

    Subd. 31.    Rollover distribution.  "Rollover 
 distribution" means a transfer of funds made: 

    (1) from one account to another account within 60 days of a 
 distribution; 

    (2) from another qualified state tuition program to an 
 account within 60 days of the distribution; or 

    (3) to another qualified state tuition program from an 
 account within 60 days of a distribution. 

    Each transfer of funds must be made for the benefit of a 
 new beneficiary who is a member of the family of the prior 
 beneficiary. 

    Subd. 32.    Scholarship.  "Scholarship" means a 
 scholarship, allowance, or payment under section 529(b)(3)(C) of 
 the Internal Revenue Code. 

    Subd. 33.    State.  "State" means the state of 
 Minnesota and any Minnesota agency or political subdivision of 
 Minnesota. 

    Subd. 34.    Total account balance.  "Total account 
 balance" means the amount in an account on a particular date or 
 the fair market value of an account on a particular date. 

    HIST: 1997 c 183 art 2 s 13; 1Sp2001 c 1 art 3 s 3,23