College Savings Plans of Mississippi

Miss. Code Ann. tit. 37, ch. 155
in effect

Miss. Code Ann. § 37-155-1 Short title.

This article shall be known and may be cited as the “Mississippi Prepaid Affordable College Tuition Program.”

Miss. Code Ann. § 37-155-3 Declaration of policy.

The Legislature hereby finds and declares as follows: Tuition and required fees at institutions of higher education are difficult for many to afford and difficult to predict. As a result, the ability of individuals and families to plan for future educational expenses has been adversely affected. It is in the best interest of the citizens of this state to foster higher education in order to provide well-educated citizens. It is in the best interest of the citizens of this state to encourage state residents to enroll in institutions of higher education. Providing a mechanism to help assure the higher education of the citizens of this state is necessary and desirable for the public health, safety and welfare. The purposes of this article are to: Provide wide and affordable access to the public institutions of higher education for the residents of this state. Encourage attendance at institutions of higher education and help individuals plan for educational expenses. Provide a program for the advance purchase of tuition and required fees as both a means and an incentive for the citizens of this state to provide for future higher education expenses. Provide a program through which many of the costs associated with postsecondary attendance may be paid in advance and fixed at a guaranteed level for the duration of the undergraduate enrollment. Provide for the creation of a trust fund, as an agency and instrumentality of the State of Mississippi, to assist qualified students in financing a portion of the cost of attending institutions of higher education in the State of Mississippi. Encourage timely financial planning for higher education by the creation of prepaid tuition contracts.

Miss. Code Ann. § 37-155-5 Definitions.

As used in this article, the following terms have the meanings ascribed to them in this section, unless the context clearly indicates otherwise: Prepaid Tuition Contract.— A contract entered into between the Board of Directors of the College Savings Plans of Mississippi Trust Funds and a purchaser pursuant to this article. Trust fund.— There is created a special fund in the State of Mississippi Treasury Department to be designated as the “Mississippi Prepaid Affordable College Tuition Trust Fund” (hereinafter referred to as the trust fund or fund) and to be administered by the State of Mississippi Treasury Department. The fund shall consist of state appropriations, monies acquired from other governmental or private sources, and money remitted in accordance with prepaid tuition contracts. In the event that dividends, interest and gains exceed the amount necessary for program administration and disbursements, the board may designate a percentage of the fund to serve as a contingency fund. Purchaser.— A person, corporation, trust, charitable organization or other such entity that makes or is obligated to make advance payments in accordance with a prepaid tuition contract entered into pursuant to this article. However, no purchaser may request or accept any form of compensation, fee, commission, service charge or any other form of payment or remuneration for entering into a contract for the benefit of a nonresident beneficiary. Beneficiary.— (i) The beneficiary of a prepaid tuition contract must be eighteen (18) years of age or younger at the time the purchaser enters into the contract and must be: (A) a resident of this state at the time the purchaser enters into the contract; or (B) a nonresident if the purchaser is a resident of this state at the time that the contract is entered into. The board may require a reasonable period of residence in this state for a beneficiary or the purchaser. A beneficiary is considered a resident for purposes of tuition regardless of the beneficiary’s residence on the date of enrollment. However, for contracts entered into after July 1, 2003, this provision only applies to nonresident beneficiaries if (A) the original purchaser was the parent, grandparent or legal guardian of the beneficiary; or (B) the beneficiary was a resident of Mississippi at the time the contract was purchased. Institution of higher education.— Any public institution of higher learning or public community or junior college located in Mississippi. Tuition.— The quarter, semester or term charges and all required fees imposed by an institution of higher education as a condition of enrollment by all students. Board or board of directors.— The Board of Directors of the College Savings Plans of Mississippi Trust Funds as provided in Section 37-155-7. Legislature.— The Legislature of Mississippi.

Miss. Code Ann. § 37-155-7 Board of directors.

The board of directors shall consist of thirteen (13) members as follows: Nine (9) voting members as follows: the State Treasurer; the Commissioner of Higher Education, or his designee; the Executive Director of the Community and Junior College Board, or his designee; the Department of Finance and Administration Executive Director, or his designee; and one (1) member from each congressional district to be appointed by the Governor with the advice and consent of the Senate. One (1) member shall be appointed for an initial term of one (1) year; one (1) member shall be appointed for an initial term of two (2) years; one (1) member for an initial term of three (3) years; one (1) member for an initial term of four (4) years; and one (1) member for an initial term of five (5) years. On the expiration of any of the terms of office, the Governor shall appoint successors by and with the advice and consent of the Senate for terms of five (5) years in each case. Ex officio members of the board may be represented at official meetings by their deputy, or other designee, and such designees shall have full voting privileges and shall be included in the determination of a quorum for conducting board business. Two (2) nonvoting, advisory members of the board shall be appointed by each of the following officers: the Lieutenant Governor and the Speaker of the House of Representatives. Successors to the appointed members shall serve for the length of the term for each appointing official and shall be eligible for reappointment, and shall serve until a successor is appointed and qualified. Any person appointed to fill a vacancy on the board shall be appointed in a like manner and shall serve for only the unexpired term. Each member appointed shall possess knowledge, skill and experience in business or financial matters commensurate with the duties and responsibilities of the trust fund. Members of the board of directors shall serve without compensation, but shall be reimbursed for each day’s official duties of the board at the same per diem as established by Section 25-3-69 and actual travel and lodging expenses as established by Section 25-3-41. The board of directors shall annually elect one (1) member to serve as chairman of the board and one (1) member to serve as vice chairman. The vice chairman shall act as chairman in the absence of or upon the disability of the chairman or in the event of a vacancy of the office of chairman. A majority of the currently serving members of the board shall constitute a quorum for the purposes of conducting business and exercising its official powers and duties. Any action taken by the board shall be upon the vote of a majority of the members present.

Miss. Code Ann. § 37-155-9 Powers of the board of directors.

In addition to the powers granted by any other provision of this article, the board of directors shall have the powers necessary or convenient to carry out the purposes and provisions of this article, the purposes and objectives of the trust fund and the powers delegated by any other law of the state or any executive order thereof, including, but not limited to, the following express powers: To adopt and amend bylaws; To adopt such rules and regulations as are necessary to implement the provisions of this article; To invest any funds of the trust fund in any instrument, obligation, security or property that constitutes legal investments for public funds in the state and to name and use depositories for its investments and holdings; To execute contracts and other necessary instruments; To impose reasonable requirements for residency for beneficiaries at the time of purchase of the contract and to establish rules to govern purchase of contracts for beneficiaries who are nonresidents at the time the purchaser enters into the prepaid tuition contract; To impose reasonable limits on the number of contract participants in the trust fund at any given period of time; To contract for necessary goods and services, to employ necessary personnel, and to engage the services of consultants for administrative and technical assistance in carrying out the responsibilities of the trust fund; To solicit and accept gifts, including bequeathments or other testamentary gifts made by will, trust or other disposition, grants, loans and other aids from any personal source or to participate in any other way in any federal, state or local governmental programs in carrying out the purposes of this article. Any gifts made to the board under this subsection shall be deductible from taxable income of the state in the tax year; To define the terms and conditions under which payments may be withdrawn or refunded from the trust fund, including, but not limited to, the amount paid in and an additional amount in the nature of interest at a rate that corresponds, at a minimum, to the prevailing interest rates for savings accounts provided by banks and savings and loan associations and impose reasonable charges for such withdrawal or refund; To ensure applicability to private and out-of-state tuitions: Under the program, a state purchaser may enter into a prepaid tuition contract with the board under which the purchaser agrees to attend a public institution of higher education in Mississippi; If the beneficiary of a plan described by Section 37-155-11 enrolls in any in-state or out-of-state regionally accredited private four- or two-year college or an out-of-state regionally accredited, state-supported, nonprofit four- or two-year college or university, or any in-state or out-of-state regionally accredited graduate institution, the board shall pay to the institution an amount up to, but not greater than, the undergraduate tuition and required fees that the board would have paid had the beneficiary enrolled in an institution of higher education covered by the plan selected in the prepaid tuition contract. The beneficiary is responsible for paying a private undergraduate or graduate institution or an out-of-state public undergraduate or graduate institution the amount by which the tuition and required fees of the institution exceed the tuition and required fees paid by the board; To impose reasonable time limits on the use of the tuition benefits provided by the program; To provide for the receipt of contributions to the trust fund in lump sums or installment payments; To adopt an official seal and rules; To sue and be sued; To establish agreements or other transactions with federal, state and local agencies, including state universities and community colleges; To appear in its own behalf before boards, commissions or other governmental agencies; To segregate contributions and payments to the fund into various accounts and funds; To require and collect administrative fees and charges in connection with any transaction and impose reasonable penalties, including default, for delinquent payments or for entering into an advance payment contract on a fraudulent basis; To procure insurance against any loss in connection with the property, assets and activities of the fund or the board; To require that purchasers of advance payment contracts verify, under oath, any requests for contract conversions, substitutions, transfers, cancellations, refund requests or contract changes of any nature; To administer the fund in a manner that is sufficiently actuarially sound to meet the obligations of the program. The board shall annually evaluate or cause to be evaluated the actuarial soundness of the fund. If the board perceives a need for additional assets in order to preserve actuarial soundness, the board may adjust the terms of subsequent advance payment contracts to ensure such soundness; To establish a comprehensive investment plan for the purposes of this section. The comprehensive investment plan shall specify the investment policies to be utilized by the board in its administration of the fund. The board may authorize investments in: Bonds, notes, certificates and other valid general obligations of the State of Mississippi, or of any county, or of any city, or of any supervisors district of any county of the State of Mississippi, or of any school district bonds of the State of Mississippi; notes or certificates of indebtedness issued by the Veterans’ Home Purchase Board of Mississippi, provided such notes or certificates of indebtedness are secured by the pledge of collateral equal to two hundred percent (200%) of the amount of the loan, which collateral is also guaranteed at least for fifty percent (50%) of the face value by the United States government, and provided that not more than five percent (5%) of the total investment holdings of the system shall be in Veterans’ Home Purchase Board notes or certificates at any time; real estate mortgage loans one hundred percent (100%) insured by the Federal Housing Administration on single family homes located in the State of Mississippi, where monthly collections and all servicing matters are handled by Federal Housing Administration approved mortgagees authorized to make such loans in the State of Mississippi; State of Mississippi highway bonds; Funds may be deposited in federally insured institutions domiciled in the State of Mississippi or a custodial bank which appears on the State of Mississippi Treasury Department’s approved depository list and/or safekeeper list; Corporate bonds of investment grade as rated by Standard Poor’s or by Moody’s Investment Service, with bonds rated BAA/BBB not to exceed five percent (5%) of the book value of the total fixed income investments; or corporate short-term obligations of corporations or of wholly owned subsidiaries of corporations, whose short-term obligations are rated A-3 or better by Standard and Poor’s or rated P-3 or better by Moody’s Investment Service; Bonds of the Tennessee Valley Authority; Bonds, notes, certificates and other valid obligations of the United States, and other valid obligations of any federal instrumentality that issues securities under authority of an act of Congress and are exempt from registration with the Securities and Exchange Commission; Bonds, notes, debentures and other securities issued by any federal instrumentality and fully guaranteed by the United States. Direct obligations issued by the United States of America shall be deemed to include securities of, or other interests in, any open-end or closed-end management type investment company or investment trust registered under the provisions of 15 USCS Section 80(a)-1 et seq., provided that the portfolio of such investment company or investment trust is limited to direct obligations issued by the United States of America, United States government agencies, United States government instrumentalities or United States government sponsored enterprises, and to repurchase agreements fully collateralized by direct obligations of the United States of America, United States government agencies, United States government instrumentalities or United States government sponsored enterprises, and the investment company or investment trust takes delivery of such collateral for the repurchase agreement, either directly or through an authorized custodian. The State Treasurer and the Executive Director of the Department of Finance and Administration shall review and approve the investment companies and investment trusts in which funds may be invested; Interest-bearing bonds or notes which are general obligations of any other state in the United States or of any city or county therein, provided such city or county had a population as shown by the federal census next preceding such investment of not less than twenty-five thousand (25,000) inhabitants and provided that such state, city or county has not defaulted for a period longer than thirty (30) days in the payment of principal or interest on any of its general obligation indebtedness during a period of ten (10) calendar years immediately preceding such investment; Shares of stocks, common and/or preferred, of corporations created by or existing under the laws of the United States or any state, district or territory thereof; provided: The maximum investments in stocks shall not exceed fifty percent (50%) of the book value of the total investment fund of the system; The stock of such corporation shall: 1. Be listed on a national stock exchange; or 2. Be traded in the over-the-counter market, provided price quotations for such over-the-counter stocks are quoted by the National Association of Securities Dealers Automated Quotation System (NASDAQ); The outstanding shares of such corporation shall have a total market value of not less than Fifty Million Dollars ($50,000,000.00); The amount of investment in any one (1) corporation shall not exceed three percent (3%) of the book value of the assets of the system; and The shares of any one (1) corporation owned by the system shall not exceed five percent (5%) of that corporation’s outstanding stock; Bonds rated Single A or better, stocks and convertible securities of established non-United States companies, which companies are listed on only primary national stock exchanges of foreign nations; and in foreign government securities rated Single A or better by a recognized rating agency; provided that the total book value of investments under this paragraph shall at no time exceed twenty percent (20%) of the total book value of all investments of the system. The board may take requisite action to effectuate or hedge such transactions through foreign banks, including the purchase and sale, transfer, exchange or otherwise disposal of, and generally deal in foreign exchange through the use of foreign currency, interbank forward contracts, futures contracts, options contracts, swaps and other related derivative instruments, notwithstanding any other provisions of this article to the contrary; Covered call and put options on securities traded on one or more of the regulated exchanges; Institutional investment trusts managed by a corporate trustee or by a Securities and Exchange Commission registered investment advisory firm retained as an investment manager by the board of directors, and institutional class shares of investment companies and unit investment trusts registered under the Investment Company Act of 1940 where such funds or shares are comprised of common or preferred stocks, bonds, money market instruments or other investments authorized under this section. Any investment manager or managers approved by the board of directors shall invest such funds or shares as a fiduciary; Pooled or commingled real estate funds or real estate securities managed by a corporate trustee or by a Securities and Exchange Commission registered investment advisory firm retained as an investment manager by the board of directors. Such investment in commingled funds or shares shall be held in trust; provided that the total book value of investments under this paragraph shall at no time exceed five percent (5%) of the total book value of all investments of the system. Any investment manager approved by the board of directors shall invest such commingled funds or shares as a fiduciary; All investments shall be acquired by the board at prices not exceeding the prevailing market values for such securities; Any limitations herein set forth shall be applicable only at the time of purchase and shall not require the liquidation of any investment at any time. All investments shall be clearly marked to indicate ownership by the system and to the extent possible shall be registered in the name of the system; Subject to the above terms, conditions, limitations and restrictions, the board shall have power to sell, assign, transfer and dispose of any of the securities and investments of the system, provided that the sale, assignment or transfer has the majority approval of the entire board. The board may employ or contract with investment managers, evaluation services or other such services as determined by the board to be necessary for the effective and efficient operation of the system; Except as otherwise provided herein, no trustee and no employee of the board shall have any direct or indirect interest in the income, gains or profits of any investment made by the board, nor shall any such person receive any pay or emolument for his services in connection with any investment made by the board. No trustee or employee of the board shall become an endorser or surety, or in any manner an obligor for money loaned by or borrowed from the system; All interest derived from investments and any gains from the sale or exchange of investments shall be credited by the board to the account of the system; To delegate responsibility for administration of the comprehensive investment plan to a consultant the board determines to be qualified. Such consultant shall be compensated by the board. Directly or through such consultant, the board may contract to provide such services as may be a part of the comprehensive investment plan or as may be deemed necessary or proper by the board or such consultant, including, but not limited to, providing consolidated billing, individual and collective record keeping and accounting, and asset purchase, control and safekeeping; To annually prepare or cause to be prepared a report setting forth in appropriate detail an accounting of the fund and a description of the financial condition of the program at the close of each fiscal year. Such report shall be submitted to the Governor, the Lieutenant Governor, the President of the Senate, the Speaker of the House of Representatives, and members of the Board of Trustees of State Institutions of Higher Learning, the Mississippi Community College Board and the State Board of Education on or before March 31 each year. In addition, the board shall make the report available to purchasers of advance payment contracts. The board shall provide to the Board of Trustees of State Institutions of Higher Learning and the Mississippi Community College Board by March 31 each year complete advance payment contract sales information including projected postsecondary enrollments of beneficiaries. The accounts of the fund shall be subject to annual audits by the State Auditor or his designee; To solicit proposals for the marketing of the Mississippi Prepaid Affordable College Tuition Program. The entity designated pursuant to this paragraph shall serve as a centralized marketing agent for the program and shall solely be responsible for the marketing of the program. Any materials produced for the purpose of marketing the programs shall be submitted to the board for review. No such materials shall be made available to the public before the materials are approved by the board. Any educational institution may distribute marketing materials produced for the program; however, all such materials shall have been approved by the board prior to distribution. Neither the state nor the board shall be liable for misrepresentation of the program by a marketing agent; and To establish other policies, procedures and criteria necessary to implement and administer the provisions of this article. For efficient and effective administration of the program and trust fund, the board may authorize the State of Mississippi Treasury Department and/or the State Treasurer to carry out any or all of the powers and duties enumerated above.

Miss. Code Ann. § 37-155-11 Types of plans.

The board shall make prepaid tuition contracts available for the: (1) junior college plan; (2) senior college plan; and (3) junior-senior college plan. Junior College Plan. — Through the junior college plan, a prepaid tuition contract shall provide tuition and required fees for the beneficiary to attend a public community or junior college for a specified number of undergraduate credit hours not to exceed the typical full-time hourly course load as defined by the institution for tuition payment purposes or up to a maximum of two (2) years required for a certificate or an associate degree awarded by a public community or junior college. Senior College Plan. — Through the senior college plan, a prepaid tuition contract shall provide prepaid tuition and required fees for the beneficiary to attend a public senior college or university for a specified number of undergraduate credit hours not to exceed the typical full-time hourly course load as defined by the institution for tuition payment purposes or up to a maximum of five (5) years required for a baccalaureate degree awarded by a public senior college or university. Junior-Senior College Plan. — Through the junior-senior college plan, a prepaid tuition contract shall provide prepaid tuition and required fees for the beneficiary to attend: A public community or junior college for a specified number of undergraduate credit hours not to exceed the typical full-time hourly course load as defined by the institution for tuition payment purposes or up to a maximum of two (2) years required for a person to receive a certificate or associate degree awarded by a public community or junior college; and A public senior college or university for a specified number of credit hours not to exceed the typical full-time hourly course load as defined by the institution for tuition payment purposes or up to a maximum of five (5) years required for the person to receive a baccalaureate degree awarded by a public senior college or university.

Miss. Code Ann. § 37-155-13 Dormitory residence plan.

Through the dormitory residence plan, the advance payment contract shall provide prepaid housing fees for a maximum of eight (8) semesters of full-time undergraduate enrollment in an institution of higher education. Dormitory residence plans are optional and may be purchased only in conjunction with a prepaid tuition plan. Dormitory residence plans shall be purchased in increments of two (2) semesters. Beneficiaries shall bear the cost of any additional elective charges such as laundry service or long-distance telephone service. Each institution of higher education may specify the residence halls eligible for inclusion in the plan. In addition, any institution of higher education may request immediate termination of a dormitory contract based on a violation or multiple violations of rules of the residence hall. Beneficiaries shall have the highest priority in the assignment of housing with institutions of higher education residence halls. In the event that sufficient housing is not available for all beneficiaries, the board shall refund the purchaser or beneficiary an amount equal to the fees charged for dormitory residence during that semester.

Miss. Code Ann. § 37-155-15 Mississippi Prepaid Affordable College Tuition Program Trust Fund.

There is hereby created a Mississippi Prepaid Affordable College Tuition Program Trust Fund (hereinafter referred to as the trust fund or the fund) to be administered by the State of Mississippi Treasury Department until and unless the Legislature shall determine otherwise. The official location of the trust fund shall be the State of Mississippi Treasury Department, and the facilities of the State of Mississippi Treasury Department shall be used and employed in the administration of the fund, including, but without limitations thereto, the keeping of records, the management of bank accounts and other investments, the transfer of funds and the safekeeping of securities evidencing investments. Payments received by the board from purchasers on behalf of beneficiaries or from any other source, public or private, shall be placed in the trust fund, and the fund may be divided into separate accounts as may be determined by the board. The trust fund, through the Treasurer, is hereby specifically authorized to receive and deposit into the trust fund any gift of any nature, real or personal property, made by an individual by testamentary disposition, including, without limitation, any specific gift or bequeath made by will, trust or other disposition. The board shall obtain appropriate actuarial assistance to establish, maintain and certify a fund sufficient to meet the obligation of the trust fund, and shall annually evaluate or cause to be evaluated, the actuarial soundness of the trust fund. If the board perceives a need for additional assets in order to preserve actuarial soundness, it may adjust the terms of subsequent prepaid tuition contracts to ensure such soundness. The trust fund shall constitute a fund of an agency of the state, and its property and income shall be exempt from all taxation by the state and by all of its political subdivisions. In order to provide funds to enable the trust to pay all amounts that shall be due under prepaid tuition contracts, there is hereby irrevocably pledged to that purpose from the trust fund such monies as shall be necessary to pay all amounts that shall be due under prepaid tuition contracts at any time. In order to carry out the said pledge, in each fiscal year the board shall determine the amount of the future obligations of the trust fund under prepaid tuition contracts by any appropriate actuarial method. After that determination has been made, all monies on deposit in the trust fund up to and including the amount of such future obligations shall remain on deposit in the trust fund and shall be subject to the aforesaid pledge and appropriation by the Legislature. There is hereby created a separate account with the State of Mississippi Treasury Department to be known as the “Mississippi Prepaid Affordable College Tuition Administrative Account” for the purposes of implementing and maintaining prepaid college tuition accounts pursuant to this article.

Miss. Code Ann. § 37-155-17 Prepaid tuition contracts; tax exclusions and deductions.

Any interest, dividends or gains accruing on the payments made pursuant to a prepaid tuition contract under the terms of this article shall be excluded from the gross income of any such payor or beneficiary for purposes of the Mississippi Income Tax Law. The payor may deduct from taxable income the amount of any payments made under a prepaid tuition contract in the tax year.

Miss. Code Ann. § 37-155-19 Duties of the board.

In addition to any other requirements of this article the board of directors shall: Make available summary information on the financial condition of the trust fund to all purchasers of prepaid college tuition contracts; Prepare, or cause to be prepared, an annual accounting of the trust fund and transmit a copy of same to the Governor, the Lieutenant Governor and the Speaker of the House of Representatives; and Make all necessary and appropriate arrangements with state colleges and universities in order to fulfill its obligations under the prepaid tuition contracts, which arrangements shall include the payment by the trust fund of current applicable tuition and fee charges on behalf of a beneficiary to the college or university.

Miss. Code Ann. § 37-155-21 Statement regarding status of prepaid tuition contract.

The board shall furnish without charge to each purchaser an annual statement of: The amount paid by the purchaser under the prepaid tuition contract; The number of years originally covered by the contract; The number of years remaining under the contract; and Any other information the board determines by rule is necessary or appropriate. The board shall furnish a statement complying with subsection (1) to a purchaser or beneficiary on written request. The board may charge a reasonable fee for each statement furnished under this subsection.

Miss. Code Ann. § 37-155-23 No promise or guarantee of admission.

This article is not a promise or guarantee that the beneficiary will be: Admitted to any institution of higher education; Admitted to a particular institution of higher education after admission; Allowed to continue enrollment at an institution of higher education; or Graduated from an institution of higher education.

Miss. Code Ann. § 37-155-25 Full faith and credit.

The state shall agree to meet the obligations of the board to beneficiaries if monies in the fund fail to offset the obligations of the board. If there is not enough money in the fund to pay the tuition and required fees of the institution of higher education in which a beneficiary enrolls as provided by the prepaid tuition contract, the Legislature shall appropriate to the fund the amount necessary for the board to pay the applicable amount of tuition and required fees of the institution. In the event that the board determines the program to be financially infeasible, the board may discontinue the program. Any qualified beneficiary who has been accepted by and is enrolled or is within five (5) years of enrollment in an institution of higher learning or any in-state or out-of-state regionally accredited private four- or two-year college or an out-of-state regionally accredited, state-supported, nonprofit four- or two-year college or university shall be entitled to exercise the complete benefits for which he has contracted. All other contract holders shall receive a refund, pursuant to Section 37-155-9, of the amount paid in and an additional amount in the nature of interest at a rate that corresponds, at a minimum, to the prevailing interest rates for savings accounts provided by banks and savings and loan associations.

Miss. Code Ann. § 37-155-27 Severability.

The provisions of this article are severable. If any part of this article is declared invalid or unconstitutional, such declaration shall not affect the part which remains.

Miss. Code Ann. § 37-155-101 Short title.

This article shall be known and may be cited as the “Mississippi Affordable College Savings Program.”

Miss. Code Ann. § 37-155-103 Declaration of purpose.

The following are the purposes of this article: To provide a program of savings trust agreements to apply distributions toward qualified higher education expenses at eligible educational institutions, as defined in Section 529 of the Internal Revenue Code, as amended, or other applicable federal law. To provide for the creation of a trust fund, as an instrumentality of the State of Mississippi, to assist qualified students in financing costs of attending institutions of higher education. To encourage timely financial planning for higher education by the creation of savings trust accounts. To provide a choice of programs to persons who determine that the overall educational needs of their families are best suited to a prepaid tuition contract under the Mississippi Prepaid Affordable College Tuition (MPACT) Program, a savings trust agreement under this article, or both. To provide a savings program for those persons who wish to save to meet post secondary educational needs beyond the traditional baccalaureate curriculum.

Miss. Code Ann. § 37-155-105 Definitions.

As used in this article, the following words and phrases have the meanings ascribed in this section unless the context clearly indicates otherwise: “MACS Program” means the Mississippi Affordable College Savings Program established under this article. “MACS Trust Fund” means a special fund in the State Treasury established under Section 37-155-111, and administered by the Treasury Department. “Account owner” means a resident or nonresident person, corporation, trust, charitable organization or other entity which contributes to or invests money in a savings trust account under the MACS Program on behalf of a beneficiary and which is listed as the owner of the savings trust account. “Beneficiary” means a resident or nonresident beneficiary of a savings trust agreement who meets the requirements of Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law, and any regulations established by the board. “Institution of higher education” means an eligible educational institution as defined in Section 529 of the Internal Revenue Code of 1986, as amended, or any other applicable federal law. “Tuition” means the quarter, semester or term charges and all required fees imposed by an institution of higher education as a condition of enrollment by all students. “Board” means the Board of Directors of the College Savings Plans of Mississippi Trust Funds established under Section 37-155-7. “Payor” means a person, corporation, trust, charitable organization or other such entity which contributes money or makes a payment to either a savings trust account established pursuant to this article or a prepaid tuition account established under Sections 37-155-1 through 37-155-27 on behalf of a beneficiary. “Savings trust account” means an account established by an account owner pursuant to this article on behalf of a beneficiary in order to apply distributions from the account toward qualified higher education expenses at eligible educational institutions, as defined in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law. “Savings trust agreement” means the agreement entered into between the board and the account owner establishing a savings trust account. “Qualified higher education expense” means any higher education expense, as defined in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law. “Qualified withdrawal” means a withdrawal by an account owner or beneficiary for qualified higher education expenses or as otherwise permitted under Section 529 of the Internal Revenue Code of 1986, as amended, without a penalty required under the Internal Revenue Code.

Miss. Code Ann. § 37-155-107 Powers of the board of directors.

In addition to those powers granted to the board by Sections 37-155-1 through 37-155-27 and any other provisions of this article, the board shall have the powers necessary or convenient to carry out the purposes and provisions of this article, the purposes and objectives of the trust fund, and the powers delegated by any other law or executive order of this state, including, but not limited to, the following express powers: To adopt such rules and regulations as are necessary to implement this article, subject to applicable federal laws and regulations, including rules regarding transfers of funds between accounts established under prepaid tuition contracts and savings trust agreements; To impose reasonable requirements for residency for beneficiaries or account owners at the time of purchase of the savings trust agreement; To contract for necessary goods and services, to employ necessary personnel, and to engage the services of consultants and other qualified persons and entities for administrative and technical assistance in carrying out the responsibilities of the trust funds under terms and conditions that the board deems reasonable, including contract terms for periods up to ten (10) years at which time a contract may be terminated, extended or renewed for a term determined by the board, not to exceed a term of ten (10) years at any one time; To solicit and accept gifts, including bequests or other testamentary gifts made by will, trust or other disposition grants, loans and other aids from any personal source or to participate in any other way in any federal, state or local governmental programs in carrying out the purposes of this article; To define the terms and conditions under which payments may be withdrawn or refunded from the trust fund established under this article to impose reasonable charges for a withdrawal or refund; To impose reasonable time limits on the use of savings trust account distributions provided by the MACS Program; To regulate the receipt of contributions or payments to the MACS Trust Fund; To segregate contributions and payments to the MACS Trust Fund into various accounts and funds; To require and collect administrative fees and charges in connection with any transaction and to impose reasonable penalties for withdrawal of funds for nonqualified higher educational expenses or for entering into a savings trust agreement on a fraudulent basis; To procure insurance against any loss in connection with the property, assets and activities of the MACS Trust Fund or the board; To require that account owners of savings trust agreements or purchasers of Mississippi Prepaid Affordable College Tuition (MPACT) contracts under Sections 37-155-1 through 37-155-27 verify, under oath, any requests for contract conversions, substitutions, transfers, cancellations, refund requests or contract changes of any nature; To solicit proposals and to contract for the marketing of the MACS Program, provided that: (i) any materials produced by a marketing contractor for the purpose of marketing the program must be approved by the board before being made available to the public; and (ii) neither the state nor the board shall be liable for misrepresentation of the program by a marketing contractor; To delegate responsibility for administration of the comprehensive investment plan to a contractor or contractors or a consultant or consultants that the board determines is qualified; To make all necessary and appropriate arrangements with colleges and universities or other entities in order to fulfill its obligations under savings trust agreements; To establish other policies, procedures and criteria necessary to implement and administer this article; and To authorize the Treasury Department or the State Treasurer, or both, to carry out any or all of the powers and duties enumerated in this section for efficient and effective administration of the MACS Program and MACS Trust Fund.

Miss. Code Ann. § 37-155-109 Savings trust agreements.

The board shall make savings trust agreements available to the public, under which account owners or other payors may make contributions on behalf of qualified beneficiaries. Contributions and investment earnings on the contributions may be used for any qualified higher educational expenses of a designated beneficiary. The state does not guarantee that such contributions, together with the investment return on such contributions, if any, will be adequate to pay for qualified education expenses in full. Each savings trust agreement made pursuant to this article shall include the following terms and provisions: The maximum and minimum contribution allowed on behalf of each beneficiary for the payment of qualified higher education expenses at eligible institutions, both as defined in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law; Provisions for withdrawals, refunds, transfers and any penalties; The name, address and date of birth of the beneficiary on whose behalf the savings trust account is opened; Terms and conditions for a substitution of the beneficiary originally named; Terms and conditions for termination of the account, including any refunds, withdrawals or transfers, and applicable penalties, and the name of the person or persons entitled to terminate the account; The time period during which the beneficiary must use benefits from the savings trust account; All other rights and obligations of the account owner and the MACS Trust Fund; and Any other terms and conditions that the board deems necessary or appropriate, including those necessary to conform the savings trust account with the requirements of Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law or regulations.

Miss. Code Ann. § 37-155-111 Mississippi Affordable College Savings Trust Fund.

There is created a Mississippi Affordable College Savings Trust Fund as an instrumentality of the state to be administered by the Treasury Department. The MACS Trust Fund shall consist of state appropriations, monies acquired from other governmental or private sources and money remitted in accordance with savings trust agreements and shall receive and hold all payments, contributions and deposits intended for it as well as gifts, bequests, endowments or federal, state or local grants and any other public or private source of funds and all earnings on the fund until disbursed as provided under this section. The amounts on deposit in the trust fund shall not constitute property of the state. Amounts on deposit in the trust fund may not be commingled with state funds, and the state may have no claim to or interest in such funds. Savings trust agreements or any other contract entered into by or on behalf of the trust do not constitute a debt or obligation of the state, and no account owner is entitled to any amounts except for those amounts on deposit in or accrued to their account. The MACS Trust Fund shall continue in existence as long as it holds any funds belonging to an account owner or otherwise has any obligations to any person or entity until its existence is terminated by the Legislature and remaining assets on deposit in the fund are returned to account owners or transferred to the state in accordance with unclaimed property laws. There are created the following three (3) separate accounts within the MACS Trust Fund: (a) the administrative account; (b) the endowment account; and (c) the program account. The administrative account shall accept, deposit and disburse funds for the purpose of administering and marketing the program. The endowment account shall receive and deposit accounts received in connection with the sales of interests in the MACS Trust Fund other than amounts for the administrative account and other than amounts received pursuant to a savings trust agreement. Amounts on deposit in the endowment account may be applied as specified by the board for any purpose related to the program or to otherwise assist Mississippi residents to attain a postsecondary education. The program account shall receive, invest and disburse amounts pursuant to savings trust agreements. The official location of the trust fund shall be the State of Mississippi Treasury Department, and the facilities of the Treasury Department shall be used and employed in the administration of the fund, including, but without limitation to, the keeping of records, the management of bank accounts and other investments, the transfer of funds and the safekeeping of securities evidencing investments. These functions may be administered pursuant to a management agreement with a qualified entity or entities. Payments received by the board on behalf of beneficiaries from account owners, other payors or from any other source, public or private, shall be placed in the trust fund, and the board shall cause there to be maintained separate records and accounts for individual beneficiaries, as may be required under Section 529 of the Internal Revenue Code of 1986, as amended, and any other applicable federal law. Account owners and any other payors or contributors shall be permitted only to contribute cash or any other form of payment or contribution as is permitted under Section 529 of the Internal Revenue Code of 1986, as amended, and approved by the board. The board shall cause the program to maintain adequate safeguards against contributions in excess of what may be required for qualified higher education expenses. The MACS Trust Fund, through the Treasurer, may receive and deposit into the trust fund any gift of any nature, real or personal property, made by an individual by testamentary disposition, including, without limitation, any specific gift or bequeath made by will, trust or other disposition to the extent permitted under Section 529 of the Internal Revenue Code of 1986, as amended. The MACS Trust Fund may receive amounts transferred from an UGMA, UTMA or other account established for the benefit of a minor if the trust beneficiary of such an account is identified as the legal owner of the MACS Trust Fund account upon attaining majority age. The account owner retains ownership of all amounts on deposit in his or her account with the program up to the date of distribution on behalf of a designated beneficiary. Earnings derived from investment of the contributions shall be considered to be held in trust in the same manner as contributions, except as applied for purposes of the designated beneficiary and for purposes of maintaining and administrating the program as provided in this article. Amounts on deposit in an account owner’s account shall be available for expenses and penalties imposed by the board for the program as disclosed in the savings trust agreement. The MACS Trust Fund shall constitute a fund of an instrumentality of the state, and its property and income shall be exempt from all taxation by the state and by all of its political subdivisions. The assets of the MACS Trust Fund shall be preserved, invested and expended solely pursuant to and for the purposes of this article and shall not be loaned or otherwise transferred or used by the state for any other purpose.

Miss. Code Ann. § 37-155-113 Property in Trust Fund exempt from taxation; tax deduction for contributions to MACS accounts.

All property and income of the MACS Trust Fund, as an instrumentality of the state, is exempt from all taxation by the state and by its political subdivisions. Any contributor or payor to a MACS Program account may deduct from their Mississippi taxable income any contributions or payments to an account or accounts in the MACS Trust Fund up to a maximum annual amount of Twenty Thousand Dollars ($20,000.00) for joint filers and Ten Thousand Dollars ($10,000.00) for single and other filers. Contributions or payments for such tax years may be made after such calendar years but before the deadline for making contributions to an individual retirement account under federal law for such years. The earnings portion of any withdrawals from an account that are not qualified withdrawals, as well as any amounts included in such nonqualified withdrawals previously deducted from taxable income under this section, shall be included in the gross income of the resident recipient of the withdrawal for purposes of the Mississippi Income Tax Law in the year of such withdrawal.

Miss. Code Ann. § 37-155-115 Authority of board to invest funds in Trust Fund.

The board has authority to establish a comprehensive investment plan for the purposes of this article, to invest any funds of the MACS Trust Fund in any instrument, obligation, security or property that constitutes legal investments for public funds in the state, and to name and use depositories for its investments and holdings. The comprehensive investment plan shall specify the investment policies to be utilized by the board in its administration of the funds. The board may authorize investments in any investment vehicle authorized for the Mississippi Prepaid Affordable College Tuition (MPACT) Program under Section 37-155-9. However, the restrictions in Section 37-155-9 as to percentages of the total fund that may be invested in any category of authorized investment shall not apply to the MACS Trust Fund. The program account, in its discretion, may invest in obligations of the state or any political subdivision of the state or in any business entity in the state. Notwithstanding any state law to the contrary, the board shall invest or cause to be invested amounts on deposit in the MACS Trust Fund, including the program account, in a manner reasonable and appropriate to achieve the objectives of the program, exercising the discretion and care of a prudent investor in similar circumstances with similar objectives. The board shall give due consideration to the risk, expected rate of return, term or maturity, diversification of total investments, liquidity and anticipated investments in and withdrawals from the MACS Trust Fund. All investments shall be acquired by the board at prices not exceeding the prevailing market values for such securities. Any limitations set forth in this section shall be applicable only at the time of purchase and shall not require the liquidation of any investment at any time. All investments shall be marked clearly to indicate ownership by the system and, to the extent possible, shall be registered in the name of the system. Subject to the terms, conditions, limitations and restrictions set forth in this section, the board may sell, assign, transfer and dispose of any of the securities and investments of the system if the sale, assignment or transfer has the majority approval of the entire board. The board may employ or contract with investment managers, evaluation services, or other such services as determined by the board to be necessary for the effective and efficient operation of the system. Except as otherwise provided in this section, no trustee or employee of the board may have any direct or indirect interest in the income, gains or profits of any investment made by the board, and such person may not receive any pay or emolument for his services in connection with any investment made by the board. No trustee or employee of the board may become an endorser or surety or in any manner an obligor for money loaned by or borrowed from the system. Under the authority granted in Section 37-155-107, the board may establish criteria for investment managers, mutual funds or other such entities to act as contractors or consultants to the board. The board may contract, either directly or through such contractors or consultants, to provide such services as may be a part of the comprehensive investment plan or as may be deemed necessary or proper by the board, including, but not limited to, providing consolidated billing, individual and collective record keeping and accounting, and asset purchase, control and safekeeping. No account owner, contributor, payor or beneficiary may directly or indirectly direct the investment of any account except as may be permitted under Section 529 of the Internal Revenue Code of 1986, as amended. The board may approve different investment plans and options to be offered to participants to the extent permitted under Section 529 of the Internal Revenue Code of 1986, as amended, and consistent with the objectives of this article and may require the assistance of investment counseling before participation in different options. Interests or accounts in the MACS Trust Fund and transactions in such interests or accounts shall be exempt from Sections 75-71-113 and 75-71-401.

Miss. Code Ann. § 37-155-117 Board to provide annual accounting statements.

The board shall furnish, without charge, to each account owner an annual statement of the following: The amount contributed by the account owner under the savings trust agreement; The annual earnings and accumulated earnings on the savings trust account; and Any other terms and conditions that the board deems by rule is necessary or appropriate, including those necessary to conform the savings trust account with the requirements of Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law or regulations. The board shall furnish an additional statement complying with subsection (1) to an account owner or beneficiary on written request. The board may charge a reasonable fee for each statement furnished under this subsection. The board shall prepare or cause to be prepared an annual report setting forth in appropriate detail an accounting of the funds and a description of the financial condition of the program at the close of each fiscal year. Such report shall be submitted to the Governor, the Lieutenant Governor, the Speaker of the House of Representatives and members of the Board of Trustees of State Institutions of Higher Learning, the Mississippi Community College Board and the State Board of Education. In addition, the board shall make the report available to account owners of savings trust agreements. The accounts of the fund shall be subject to annual audits by the State Auditor or his designee.

Miss. Code Ann. § 37-155-119 No promise or guarantee of beneficiary’s admission.

This article is not a promise or guarantee that the beneficiary will be: Admitted to any institution of higher education; Admitted to a particular institution of higher education after admission; Allowed to continue enrollment at an institution of higher education; or Graduated from an institution of higher education.

Miss. Code Ann. § 37-155-121 No guarantee that higher education expenses will be covered in full.

Nothing in this article or in any savings trust agreement entered into pursuant to this article shall be construed as a promise or guarantee by the state or any agency or instrumentality of the state that either qualified higher education expenses in general or any specific qualified higher education expense shall be covered in full by contributions or earnings on any savings trust account. Savings trust accounts and agreements entered into pursuant to this article are not guaranteed by the full faith and credit of the State of Mississippi.

Miss. Code Ann. § 37-155-123 Monies in MACS or MPACT Programs not considered in determining eligibility for need-based financial aid.

Notwithstanding any state law to the contrary, no monies on deposit in either the MACS or MPACT Programs shall be considered an asset of the parent, guardian or student for purposes of determining an individual’s eligibility for a need-based grant, need-based scholarship or need-based work opportunity offered or administered by any state agency except as may be required by the funding source of such financial aid.

Miss. Code Ann. § 37-155-125 Severability.

The provisions of this article are severable. If any part of this article is declared invalid or unconstitutional, such declaration shall not affect the parts of this article which remain.

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