Okla. Stat. tit. 70, § 70-3970.7

Oklahoma Statutes - Title 70. Schools Page 1591

A. The program shall be operated through the use of accounts.

An account may be opened by any person who desires to save to pay

the qualified higher education expenses of a person by:

1. Completing an application in the form prescribed by the

Board;

2. Paying the one-time application fee established by the

Board;

3. Making the minimum contribution required by the Board or by

opening an account; and

4. Designating the type of account to be opened if more than

one type of account is offered.

B. Any person may make contributions to an account after the

account is opened.

C. Contributions to accounts may be made only in cash.

D. Account owners may withdraw all or part of the balance from

an account on sixty (60) days' notice, or a shorter period as may be

authorized by the Board, under rules prescribed by the Board. These

rules shall include provisions that will generally enable the Board

or program manager to determine if a withdrawal is a nonqualified

withdrawal or a qualified withdrawal. The rules may, but need not,

require one or more of the following:

1. Account owners seeking to make a qualified withdrawal or

other withdrawal that is not a nonqualified withdrawal shall provide

certifications, copies of bills for qualified higher education

expenses or other supporting material;

2. Qualified withdrawals from an account shall be made only by

a check payable jointly to the designated beneficiary and a higher

education institution; or

3. Withdrawals not meeting certain requirements shall be

treated as nonqualified withdrawals by the program manager.

E. An account owner may change the designated beneficiary of an

account to an individual who is a member of the family of the former

designated beneficiary in accordance with procedures established by

the Board.

F. An account owner may make the following changes and

transfers relating to the account:

1. Change the beneficiary of the account;

2. Transfer funds between accounts; and

3. Transfer funds between an account and an account in a

qualified tuition program in another state or make a deposit to a

new or existing account or to an account in a qualified tuition

program in another state.

The account owner shall be informed that certain tax

consequences may apply to these changes.

G. An account owner may make the changes, transfers, and

withdrawals described in subsection F of this section to an account

that is owned by the account owner. The account owner may also make

Oklahoma Statutes - Title 70. Schools Page 1592

transfers to an account that is owned by another person. If a

change of beneficiary or transfer causes the total account balance

for all accounts under the program for the new beneficiary to exceed

the maximum account balance limit, the excess amount shall be

rejected and returned to the account owner.

H. In the case of any nonqualified withdrawal from an account,

an amount of not more than five percent (5%) of the proposed

withdrawal may be withheld as a penalty and paid to the Board for

use in operating and marketing the program and for state student

financial aid.

I. The Board may set the percentage of the penalty prescribed

in subsection H of this section or change the basis of this penalty

if the Board determines that establishing a penalty or raising an

existing penalty is needed to discourage nonqualified withdrawals.

J. If an account owner makes a nonqualified withdrawal and no

penalty amount is withheld pursuant to subsection H of this section

or the amount withheld was less than the amount required to be

withheld under that subsection for nonqualified withdrawals, the

account owner shall pay the unpaid portion of the penalty to the

Board on or before April 15 of the following tax year.

K. Each account for each designated beneficiary shall be

maintained separately from each other account under the program.
ection H of this section

or the amount withheld was less than the amount required to be

withheld under that subsection for nonqualified withdrawals, the

account owner shall pay the unpaid portion of the penalty to the

Board on or before April 15 of the following tax year.

K. Each account for each designated beneficiary shall be

maintained separately from each other account under the program.

L. Separate records and accounting shall be maintained for each

account for each designated beneficiary.

M. Except as permitted by Section 529 of the Internal Revenue

Code, no contributor to, account owner of, or designated beneficiary

of any account may directly or indirectly direct the investment of

any contributions to an account or the earnings from the account.

N. If the Board terminates the authority of a financial

institution to hold accounts and accounts must be moved from that

financial institution to another financial institution, the Board

shall select the financial institution and type of investment to

which the balance of the account is moved unless the Internal

Revenue Service provides guidance stating that allowing the account

owner to select among several financial institutions that are then

contractors would not cause a plan to cease to be a qualified state

tuition plan.

O. Neither an account owner nor a designated beneficiary may

use an interest in an account as security for a loan. Any pledge of

an interest in an account is of no force and effect.

P. The Board shall adopt guidelines and procedures to prevent

contributions on behalf of a designated beneficiary in excess of

those necessary to pay the qualified higher education expenses of

the designated beneficiaries. The guidelines may address the

following:

Oklahoma Statutes - Title 70. Schools Page 1593

1. Procedures for aggregating the total balances of multiple

accounts in qualified state tuition programs established for a

designated beneficiary;

2. The establishment of a maximum total balance that may be

held in accounts for a designated beneficiary;

3. Requirements that persons who contribute to an account

certify that to the best of their knowledge the balance in all

qualified state tuition programs, as defined in Section 529 of the

Internal Revenue Code, of which the designated beneficiary is the

designated beneficiary does not exceed the lesser of:

a. a maximum college savings amount established by the

Board from time to time, and

b. the cost in current dollars of qualified higher

education expenses that the contributor reasonably

anticipates the designated beneficiary will incur;

4. Requirements that any excess balances with respect to a

designated beneficiary be promptly withdrawn in a nonqualified

withdrawal or transferred to another account of a family member or

rolled over to another family member beneficiary in accordance with

this section.

Q. The financial institution(s) shall make all reports and

informational returns as required by the Internal Revenue Service,

the Oklahoma Tax Commission, and other pertinent federal and state

laws and regulations.

R. The program manager shall make such reports with respect to

contributions, distributions and other matters that the Board may

require pursuant to federal and state law reporting requirements.

The statement shall identify the contributions made during a

preceding twelve-month period, the total contributions made through

the end of the period, the value of the account as of the end of

this period, distributions made during this period and any other

matters that the Board requires be reported to the account owner.

S. The State of Oklahoma, a local government of this state or

organizations described in Section 501(c)(3) of the Internal Revenue

Code may open and become the account owner of an account to fund

scholarships for persons whose identity will be determined after an

account is opened. Accounts established pursuant to this section
matters that the Board requires be reported to the account owner.

S. The State of Oklahoma, a local government of this state or

organizations described in Section 501(c)(3) of the Internal Revenue

Code may open and become the account owner of an account to fund

scholarships for persons whose identity will be determined after an

account is opened. Accounts established pursuant to this section

shall be exempt from the requirement that a beneficiary be

designated when an account is opened. Each person who receives an

interest in the account established pursuant to this section in the

form of a scholarship shall be considered a designated beneficiary

for the purposes of this act.