This section modifies existing section 28B.95.020. Here is the modified chapter for context.
The definitions in this section apply throughout this chapter, unless the context clearly requires otherwise.
"Academic year" means the regular nine-month, three-quarter, or two-semester period annually occurring between August 1st and July 31st.
"Account" means the Washington advanced college tuition payment program account established for the deposit of all money received by the office from eligible purchasers and interest earnings on investments of funds in the account, as well as for all expenditures on behalf of eligible beneficiaries for the redemption of tuition units and for the development of any authorized college savings program pursuant to RCW 28B.95.150.
"Advisor sold" means a channel through which a broker dealer, investment advisor, or other financial intermediary recommends the Washington college savings program established pursuant to RCW 28B.95.010 to eligible investors and assists with the opening and servicing of individual college savings program accounts.
"College savings program account" means the Washington college savings program account established pursuant to RCW 28B.95.085.
"Committee on advanced tuition payment and college savings" or "committee" means a committee of the following members: The state treasurer, the director of the office of financial management, the director of the office, or their designees, and two members to be appointed by the governor, one representing program participants and one private business representative with marketing, public relations, or financial expertise.
"Contractual obligation" means a legally binding contract of the state with the purchaser and the beneficiary establishing that purchases of tuition units in the advanced college tuition payment program will be worth the same number of tuition units at the time of redemption as they were worth at the time of the purchase.
"Dual credit fees" means any fees charged to a student for participation in college in the high school under RCW 28A.600.290 or running start under RCW 28A.600.310.
"Eligible beneficiary" means the person designated as the individual whose education expenses are to be paid from the advanced college tuition payment program or the college savings program. Qualified organizations, as allowed under section 529 of the federal internal revenue code, purchasing tuition unit contracts as future scholarships need not designate a beneficiary at the time of purchase.
"Eligible contributor" means an individual or organization that contributes money for the purchase of tuition units, and for an individual college savings program account established pursuant to this chapter for an eligible beneficiary.
"Eligible purchaser" means an individual or organization that has entered into a tuition unit contract with the governing body for the purchase of tuition units in the advanced college tuition payment program for an eligible beneficiary, or that has entered into a participant college savings program account contract for an eligible beneficiary. The state of Washington may be an eligible purchaser for purposes of purchasing tuition units to be held for granting Washington college bound scholarships.
"Full-time tuition charges" means resident tuition charges at a state institution of higher education for enrollments between ten credits and eighteen credit hours per academic term.
"Governing body" means the committee empowered by the legislature to administer the Washington advanced college tuition payment program and the Washington college savings program.
"Individual college savings program account" means the formal record of transactions relating to a Washington college savings program beneficiary.
"Institution of higher education" means an institution that offers education beyond the secondary level and is recognized by the internal revenue service under chapter 529 of the internal revenue code.
"Investment board" means the state investment board as defined in chapter 43.33A RCW.
"Investment manager" means the state investment board, another state, or any other entity as selected by the governing body, including another college savings plan established pursuant to section 529 of the internal revenue code.
"Office" means the office of student financial assistance as defined in chapter 28B.76 RCW.
"Owner" means the eligible purchaser or the purchaser's successor in interest who shall have the exclusive authority to make decisions with respect to the tuition unit contract or the individual college savings program contract. The owner has exclusive authority and responsibility to establish and change the asset investment options for a beneficiaries' individual college savings program account.
"Participant college savings program account contract" means a contract to participate in the Washington college savings program between an eligible purchaser and the office.
"State institution of higher education" means institutions of higher education as defined in RCW 28B.10.016.
"Tuition and fees" means undergraduate tuition and services and activities fees as defined in RCW 28B.15.020 and 28B.15.041 rounded to the nearest whole dollar. For purposes of this chapter, services and activities fees do not include fees charged for the payment of bonds heretofore or hereafter issued for, or other indebtedness incurred to pay, all or part of the cost of acquiring, constructing, or installing any lands, buildings, or facilities.
"Tuition unit contract" means a contract between an eligible purchaser and the governing body, or a successor agency appointed for administration of this chapter, for the purchase of tuition units in the advanced college tuition payment program for a specified beneficiary that may be redeemed at a later date for an equal number of tuition units.
23.
"Unit purchase price" means the minimum cost to purchase one tuition unit in the advanced college tuition payment program for an eligible beneficiary. Generally, the minimum purchase price is one percent of the undergraduate tuition and fees for the current year, rounded to the nearest whole dollar, adjusted for the costs of administration and adjusted to ensure the actuarial soundness of the account. The analysis for price setting shall also include, but not be limited to consideration of past and projected patterns of tuition increases, program liability, past and projected investment returns, and the need for a prudent stabilization reserve.
"Actual accumulated value" means an individual advanced college tuition payment program account's averaged accumulated value of all tuition units purchased using actual program investment returns from the time of purchase to the time of redemption, excluding expense and reserve components of a tuition unit's purchase price and if applicable, any finance charges or amortization fees.
"Adjusted accumulated value" is determined for an individual advanced college tuition payment program account by taking the lesser of its actual accumulated value or its assumed accumulated value.
"Assumed accumulated value" means an individual advanced college tuition payment program account's averaged accumulated value of all tuition units purchased using the assumed investment returns that were used to determine a tuition unit's purchase price from the time of purchase to the time of redemption, excluding expense and reserve components of a tuition unit's purchase price and if applicable, any finance charges or amortization fees.
"Individual advanced college tuition payment program account" means the formal record of transactions relating to an advanced college tuition payment program account beneficiary.
This section modifies existing section 28B.95.030. Here is the modified chapter for context.
The Washington advanced college tuition payment program shall be administered by the committee on advanced tuition payment which shall be chaired by the director of the office. The committee shall be supported by staff of the office.
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The Washington advanced college tuition payment program shall consist of the sale of tuition units, which may be redeemed by the beneficiary at a future date for an equal number of tuition units regardless of any increase in the price of tuition, that may have occurred in the interval.
Each purchase shall be worth a specific number of or fraction of tuition units at each state institution of higher education as determined by the governing body.
The number of tuition units necessary to pay for a full year's, full-time undergraduate tuition and fee charges at a state institution of higher education shall be set by the governing body at the time a purchaser enters into a tuition unit contract.
The governing body may limit the number of tuition units purchased by any one purchaser or on behalf of any one beneficiary, however, no limit may be imposed that is less than that necessary to achieve four years of full-time, undergraduate tuition charges at a state institution of higher education. The governing body also may, at its discretion, limit the number of participants, if needed, to ensure the actuarial soundness and integrity of the program.
While the Washington advanced college tuition payment program is designed to help all citizens of the state of Washington, the governing body may determine residency requirements for eligible purchasers and eligible beneficiaries to ensure the actuarial soundness and integrity of the program.
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No tuition unit may be redeemed until two years after the purchase of the unit.
Units may be redeemed for enrollment at any institution of higher education that is recognized by the internal revenue service under chapter 529 of the internal revenue code. Units may also be redeemed to pay for dual credit fees.
Units redeemed at a nonstate institution of higher education or for graduate enrollment shall be redeemed at the rate for state public institutions in effect at the time of redemption.
The governing body shall determine the conditions under which the tuition benefit may be transferred to another family member. In permitting such transfers, the governing body may not allow the tuition benefit to be bought, sold, bartered, or otherwise exchanged for goods and services by either the beneficiary or the purchaser.
The governing body shall administer the Washington advanced college tuition payment program in a manner reasonably designed to be actuarially sound, such that the assets of the trust will be sufficient to defray the obligations of the trust including the costs of administration. The governing body may, at its discretion, discount the minimum purchase price for certain kinds of purchases such as those from families with young children, as long as the actuarial soundness of the account is not jeopardized.
The governing body shall annually determine current value of a tuition unit.
7.
Beginning with academic year 2022-23, the first time a beneficiary redeems tuition units for a qualified higher education expense, the governing body shall set the total original number of qualifying tuition units for the beneficiary's individual advanced college tuition payment program account for purposes of calculating a dividend.
a. **The governing body shall calculate a possible dividend for the individual advanced college tuition payment program account each time the beneficiary redeems tuition units based on the total original number of qualifying tuition units.**
b. **The governing body shall determine the possible dividend by calculating the following for the individual advanced college tuition payment program account:**
i. **The actual accumulated value;**
ii. **The assumed accumulated value; and**
iii. **The adjusted accumulated value.**
c. **If the adjusted accumulated value exceeds the unit payout value at the time of redemption, the individual advanced college tuition payment program account is eligible for a dividend. The dividend is the difference between the adjusted accumulated value and the unit payout value. The beneficiary shall receive a proportion of the dividend equal to the proportion of tuition units redeemed compared to the total original number of qualifying tuition units. The beneficiary has two options for receiving the dividend:**
i. **In addition to the tuition units requested for redemption; or**
ii. **In place of an equal number of tuition units requested for redemption.**
d. **The remaining unused portion of the dividend must not be held in a beneficiary's individual advanced college tuition payment program account for future use, and the unused dividend expires upon the beneficiary's receipt of requested tuition units.**
e. **The legislature reserves the right to amend or repeal the dividend at any time in the future, and no individual advanced college tuition payment program account holder or beneficiary has a contractual right to receive a dividend not granted prior to that time.**
The governing body shall collect an amortization fee as a component of each future unit sold whenever the governing body determines amortization fees are necessary to increase the best-estimate funded status of the program.
The governing body shall promote, advertise, and publicize the Washington advanced college tuition payment program. Materials and online publications advertising the Washington advanced college tuition payment program shall include a disclaimer that the Washington advanced college tuition payment program's guarantee is that one hundred tuition units will equal one year of full-time, resident, undergraduate tuition at the most expensive state institution of higher education, and that if resident, undergraduate tuition is reduced, a tuition unit may lose monetary value.
In addition to any other powers conferred by this chapter, the governing body may:
Impose reasonable limits on the number of tuition units or units that may be used in any one year;
Determine and set any time limits, if necessary, for the use of benefits under this chapter;
Impose and collect administrative fees and charges in connection with any transaction under this chapter;
Appoint and use advisory committees and the state actuary as needed to provide program direction and guidance;
Formulate and adopt all other policies and rules necessary for the efficient administration of the program;
Consider the addition of an advanced payment program for room and board contracts and also consider a college savings program;
Purchase insurance from insurers licensed to do business in the state, to provide for coverage against any loss in connection with the account's property, assets, or activities or to further insure the value of the tuition units;
Make, execute, and deliver contracts, conveyances, and other instruments necessary to the exercise and discharge of its powers and duties under this chapter;
Contract for the provision for all or part of the services necessary for the management and operation of the program with other state or nonstate entities authorized to do business in the state;
Contract for other services or for goods needed by the governing body in the conduct of its business under this chapter;
Contract with financial consultants, actuaries, auditors, and other consultants as necessary to carry out its responsibilities under this chapter;
Solicit and accept cash donations and grants from any person, governmental agency, private business, or organization; and
Perform all acts necessary and proper to carry out the duties and responsibilities of this program under this chapter.