Types of advance tuition payment contracts; alternative provisions

(a) At a minimum, the trust shall offer contracts of the two types set forth in paragraphs (1) and (2) of this subsection, to be known as Plan A and Plan B, respectively. (1) Under Plan A: (A) A payment or series of installment payments of not less than $50.00 per month shall be required from the purchaser on behalf of a qualified beneficiary. (B) If an advance tuition payment contract is terminated before a qualified beneficiary earns a high school diploma or reaches the age of majority, or pursuant to paragraph (4) of subsection (a) of Code Section 20-3-607, the trust shall refund the face amount of the payment or payments in accordance with the terms of the contract, less any administrative fee specified in the contract, but shall not refund any investment income attributable to the payments. (C) Except as provided in subparagraph (D) of this paragraph, the trust shall provide for the qualified beneficiary to attend a state institution of higher education at which the qualified beneficiary attends for the number of credit hours required by the institution for the awarding of a baccalaureate degree, without further tuition cost to the qualified beneficiary, except as provided in subsection (a) of Code Section 20-3-605 for a qualified beneficiary who is not entitled to in-state tuition rates. 330 20-3-606 (D) As an alternative to subparagraph (C) of this paragraph, the trust shall provide for the qualified beneficiary to attend a state institution of higher education at which the qualified beneficiary attends for a fixed number of credit hours, as permitted by the trust, less than the total number of credit hours required by the institution for the awarding of a baccalaureate degree, without further tuition cost to the qualified beneficiary for that fixed number of credit hours, except as provided in subsection (a) of Code Section 20-3-605 for a qualified beneficiary who is not entitled to in-state tuition rates. (2) Under Plan B: (A) A payment or series of installment payments of not less than $50.00 per month shall be required on behalf of a qualified beneficiary. (B) If an advance tuition payment contract is terminated before a qualified beneficiary earns a high school diploma or reaches the age of majority, or pursuant to paragraph (4) of subsection (a) of Code Section 20-3-607, the trust shall refund the face amount of the payment or payments in accordance with the terms of the contract, less any administrative fee specified in the contract, together with all or a specified portion of accrued investment income attributable to the payment or payments as may be agreed to in the contract. (C) Except as provided in subparagraph (D) of this paragraph, the trust shall provide for the qualified beneficiary to attend a state institution of higher education at which the qualified beneficiary attends for the number of credit hours required by the institution for the awarding of a baccalaureate degree, without further tuition cost to the qualified beneficiary, except as provided in subsection (a) of Code Section 20-3-605 for a qualified beneficiary who is not entitled to in-state tuition rates. (D) As an alternative to subparagraph (C) of this paragraph, the trust shall provide for the qualified beneficiary to attend a state institution of higher education at which the qualified beneficiary attends for a fixed number of credit hours, as permitted by the trust, less than the total number of credit hours required by the institution for the awarding of a baccalaureate degree, without further tuition cost to the qualified beneficiary for that fixed number of credit hours, except as provided in subsection (a) of Code Section 20-3-605 for a qualified beneficiary who is not entitled to in-state tuition rates. (b) Contracts required to be offered by this Code section may require that payment or payments from a purchaser, on behalf of a qualified beneficiary who may attend a state institution of higher education in 331 20-3-607 less than four years after the date the contract is entered into by the purchaser, be based upon attendance at a certain state institution of higher education or at that state institution of higher education with the highest prevailing tuition cost for the number of credit hours covered by the contract. (c) Contracts required to be offered by this Code section shall be offered with two alternatives. One alternative shall offer advance tuition payment contracts that provide the credit hours of higher education necessary for the granting of a baccalaureate degree at any of the state institutions of higher education. The second alternative shall provide that the number of credit hours of higher education a qualified beneficiary may receive under the contract will be reduced to a percentage of the credit hours required for the granting of a baccalaureate degree at a state institution of higher education, as specified in the contract, if the qualified beneficiary enrolls in a state institution of higher education imposing at the time the qualified beneficiary enrolls an annual tuition rate that is greater than 105 percent of the weighted average annual tuition rate of all state institutions of higher education. This subsection shall not preclude a state institution of higher education at which a qualified beneficiary is entitled to receive less than the minimum number of credit hours required for the granting of a baccalaureate degree from providing that qualified beneficiary, without further tuition charges, the additional credit hours necessary to receive a baccalaureate degree. (d) If a beneficiary of an advance tuition payment contract with either an alternative one or alternative two designation, as described in subsection (c) of this Code section, attends a community or junior college for two years at the in-state tuition rate, that beneficiary then may attend any state institution of higher education at no additional tuition cost and receive the number of credit hours necessary for the awarding of a baccalaureate degree. (Code 1981, § 20-3-606, enacted by Ga. L. 1990, p. 1448, § 1.) 20-3-607. Termination of advance tuition payment contracts; refunds. (a) An advance tuition payment contract shall authorize a termination of the contract when any one of the following occurs: (1) The qualified beneficiary dies; (2) The qualified beneficiary is not admitted to a state institution of higher education after making proper application; (3) The qualified beneficiary certifies to the trust that he or she has decided to attend and has been accepted by a Georgia independent, 332 20-3-607 degree-granting institution of postsecondary education recognized by the board of regents or, after he or she has a high school diploma or has reached the age of majority, he or she has decided not to attend a state institution of higher education and requests, in writing, before July 15 of the year in which the qualified beneficiary desires to terminate the contract, that the advance tuition payment contract be terminated; or (4) Other circumstances, determined by the trust and set forth in the advance tuition payment contract, occur. (b) Except as provided in subparagraphs (a)(1)(B) and (a)(2)(B) of Code Section 20-3-606, an advance tuition payment contract shall provide for a refund pursuant to this Code section to a person to whom the refund is payable under the contract upon termination of the contract. If the qualified beneficiary has a high school diploma or has reached the age of majority, and attends an institution of higher education, the amount of a refund, except as provided in subsection (d) of this Code section, shall be the lesser of the average tuition cost of all state institutions of higher education on the date of termination of the contract, or the face amount of the payment or payments and any accrued investment income attributable to the payment or payments, if he or she is covered by alternative one, as described in subsection (c) of Code Section 20-3-606, or the lowest tuition cost of all state institutions of higher education on the date of termination of the contract if he or she is covered by alternative two or does not attend an institution of higher education. The amount of a refund shall be reduced by an appropriate percentage if the purchaser entered into an advance tuition payment contract that provided for a fixed number of credit hours less than the total number of credit hours required by a state institution of higher education for the awarding of a baccalaureate degree, by the amount transferred to a community or junior college on behalf of a qualified beneficiary when the contract is terminated as provided in subsection (d) of Code Section 20-3-605, and by the amount transferred to a state institution of higher education on behalf of a qualified beneficiary. Termination of a contract and the right to receive a refund shall not be authorized under the contract if the qualified beneficiary has completed more than one-half of the credit hours required by the state institution of higher education for the awarding of a baccalaureate degree. However, this provision shall not affect the termination and refund rights of a graduate of a community or junior college. Pursuant to this subsection and except as provided by subsection (c) of this Code section, the trust shall make refund payments in equal installments over four years and not later than August 15 of the year due. (c) An advance tuition payment contract shall authorize a person, who is entitled under the advance tuition payment contract to termi333 20-3-608 nate the contract, to direct payment of the refund to an independent degree-granting college or university in this state or to a community or junior college located in this state. If directed to make payments pursuant to this subsection, the trust shall transfer to the designated institution an amount equal to the tuition due for the qualified beneficiary, but the trust shall not transfer a cumulative amount greater than the refund to which the person is entitled. If the refund exceeds the total amount of transfers directed to the designated institution, the excess shall be returned to the person to whom the refund is otherwise payable. (d) Notwithstanding any other provision of this article, the amount of a refund paid upon termination of the advance tuition payment contract by a person who directs the trust pursuant to subsection (c) of this Code section to transfer the refund to an independent degree-granting college or university located in this state shall not be less than the prevailing weighted average tuition cost of state institutions of higher education for the number of credit hours covered by the contract on the date of termination. In calculating the amount of a refund for an advance payment contract containing the restrictions provided by subsection (c) of Code Section 20-3-606, the prevailing weighted average tuition cost shall be based upon only those state institutions of higher education at which the qualified beneficiary could have received sufficient credit hours for a baccalaureate degree. (Code 1981, § 20-3-607, enacted by Ga. L. 1990, p. 1448, § 1.) 20-3-608. Advance tuition payment fund; expenditure of trust assets. (a) There is created under the jurisdiction and control of the board and within the trust an advance tuition payment fund. Payments received by the trust from purchasers on behalf of qualified beneficiaries or from any other source, public or private, shall be placed in the fund. The fund may be divided into separate accounts. (b) Assets of the trust, including the fund, shall not be considered state moneys or revenues of the state and shall not be governed by Article III, Section IX or Article VII, Section III of the Constitution. (c) Unless otherwise provided by resolution of the board, assets of the trust shall be expended in the following order of priority: (1) To make payments to state institutions of higher education on behalf of qualified beneficiaries; (2) To make refunds upon termination of an advance tuition payment contract; and 334 20-3-610 (3) To pay the costs of organization, administration, and operation of the trust and the fund. (Code 1981, § 20-3-608, enacted by Ga. L. 1990, p. 1448, § 1.) 20-3-609. Public meetings; writings and performance of official duties. (a) The business which the board may perform shall be conducted at a public meeting of the board held in compliance with Chapter 14 of Title 50. Public notice of the time, date, and place of the meeting shall be given in the manner required by subsection (e) of Code Section 50-14-1. (b) A writing prepared, owned, used, in the possession of, or retained by the board in the performance of an official function shall be made available to the public if required by Article 4 of Chapter 18 of Title 50. (Code 1981, § 20-3-609, enacted by Ga. L. 1990, p. 1448, § 1; Ga. L. 2001, p. 873, § 8; Ga. L. 2002, p. 415, § 20.) 20-3-610. Powers of board.