49-7-824 - Effect of termination of plan on contract.
49-7-824. Effect of termination of plan on contract.
(a) A tuition contract terminates when the plan is terminated if the contract does not remain in effect under subsection (b). In that event, the purchaser must make a written request to the board to roll the tuition account over to another qualified tuition program established under § 529 of the Internal Revenue Code, codified in 26 U.S.C. § 529. If the purchaser does not make the request by the final plan termination date, a refund shall be made to the person designated in the contract to receive the refund. The board shall determine the amount payable pursuant to a rollover request and the amount of any refund upon termination of the plan. Any rollover under this section shall be administered in accordance with the applicable rollover provisions of the Internal Revenue Code.
(b) Unless otherwise provided by the board, an educational services plan tuition contract remains in effect after the plan is terminated if, when the plan is terminated, the beneficiary:
(1) Has been accepted by or is enrolled in an institution of higher education; or
(2) Is projected to graduate from high school no later than the third anniversary of the date the plan is terminated.
(c) Any assets remaining after all obligations of this section and the costs of administering the plan have been satisfied shall be transferred to the state general fund.
[Acts 1996, ch. 991, § 1; T.C.A., § 49-7-822; Acts 1999, ch. 233, § 35; 2007, ch. 21, § 2.]