                                 CODE OF VIRGINIA

PREPAID TUITION CONTRACTS AND COLLEGE AND ABLE SAVINGS TRUST AGREEMENTS (§
23.1-707)

A. Each prepaid tuition contract made pursuant to this chapter shall include the
following terms and provisions:

   1. The amount of payment or payments and the number of payments required from
   a purchaser on behalf of a qualified beneficiary;

   2. The terms and conditions under which purchasers shall remit payments,
   including the dates of such payments;

   3. Provisions for late payment charges, defaults, withdrawals, refunds, and
   any penalties;

   4. The name and date of birth of the qualified beneficiary on whose behalf the
   contract is made;

   5. Terms and conditions for a substitution for the qualified beneficiary
   originally named;

   6. Terms and conditions for termination of the contract, including any
   refunds, withdrawals, or transfers of tuition prepayments, and the name of the
   person entitled to terminate the contract;

   7. The time period during which the qualified beneficiary is required to claim
   benefits from the Plan;

   8. The number of credit hours or quarters, semesters, terms, or units
   contracted for by the purchaser, as applicable;

   9. All other rights and obligations of the purchaser and the trust; and

   10. Any other terms and conditions that the board deems necessary or
   appropriate, including those necessary to conform the contract with the
   requirements of &#xA7; 529 of the Internal Revenue Code of 1986, as amended,
   which specifies the requirements for qualified state tuition programs.

B. Each college savings trust agreement made pursuant to this chapter shall
include the following terms and provisions:

   1. The maximum and minimum contribution allowed on behalf of each qualified
   beneficiary for the payment of qualified higher education expenses, as that
   term is defined in &#xA7; 529 of the Internal Revenue Code of 1986, as
   amended, or other applicable federal law;

   2. Provisions for withdrawals, refunds, transfers, and any penalties;

   3. The name, address, and date of birth of the qualified beneficiary on whose
   behalf the savings trust account is opened;

   4. Terms and conditions for a substitution for the qualified beneficiary
   originally named;

   5. Terms and conditions for termination of the account, including any refunds,
   withdrawals, or transfers, and applicable penalties, and the name of the
   person entitled to terminate the account;

   6. The time period during which the qualified beneficiary is required to use
   benefits from the savings trust account;

   7. All other rights and obligations of the contributor and the Plan; and

   8. 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 &#xA7; 529 of the Internal Revenue Code of 1986, as
   amended, or other applicable federal law.

C. Each ABLE savings trust agreement made pursuant to this chapter shall include
the following terms and provisions:

   1. The maximum and minimum annual contribution and maximum account balance
   allowed on behalf of each qualified beneficiary for the payment of qualified
   disability expenses, as defined in &#xA7; 529A of the Internal Revenue Code of
   1986, as amended, or other applicable federal law;

   2. Provisions for withdrawals, refunds, transfers, return of excess
   contributions, and any penalties;

   3. The name, address, and date of birth of the qualified beneficiary on whose
   behalf the savings trust account is opened;

   4. Terms and conditions for a substitution for the qualified beneficiary
   originally named;

   5. Terms and conditions for termination of the account, including any
   transfers to the state upon the death of the qualified beneficiary, refunds,
   withdrawals, transfers, applicable penalties, and the name of the person
   entitled to terminate the account;

   6. The time period during which the qualified beneficiary is required to use
   benefits from the savings trust account;

   7. All other rights and obligations of the contributor and the Plan; and

   8. 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 &#xA7; 529A of the Internal Revenue Code of 1986, as
   amended, or other applicable federal law.

D. In addition to the provisions required by subsection A, each prepaid tuition
contract entered into prior to July 1, 2019, shall include provisions for the
application of tuition prepayments (i) at accredited nonprofit independent or
private institutions of higher education, including actual interest and income
earned on such prepayments, and (ii) at non-Virginia public and accredited
nonprofit independent or private institutions of higher education, including
principal and reasonable return on such principal as determined by the board.
Payments authorized for accredited nonprofit independent or private institutions
of higher education shall not exceed the projected highest payment made for
tuition at a public institution of higher education in the same academic year,
less a fee to be determined by the board. Payments authorized for non-Virginia
public and accredited nonprofit independent or private institutions of higher
education shall not exceed the projected average payment made for tuition at a
public institution of higher education in the same academic year, less a fee to
be determined by the board. In no event, however, shall the benefit paid on any
prepaid tuition contract entered into prior to July 1, 2019, be less than the
sum of tuition prepayments made and a reasonable return on such prepayments to
be determined by the board, less any fees determined by the board.

E. In addition to the provisions required by subsection A, each prepaid tuition
contract entered into on or after July 1, 2019, shall include provisions for the
application of tuition prepayments, at a rate equal to the percentage of
enrollment-weighted average tuition at public institutions of higher education
to be determined by the board, at (i) public institutions of higher education,
(ii) accredited nonprofit independent or private institutions of higher
education, and (iii) non-Virginia public and accredited nonprofit independent or
private institutions of higher education. In no event, however, shall the
benefit paid on any prepaid tuition contract entered into on or after July 1,
2019, be less than tuition prepayments made, less any fees as determined by the
board.

F. All prepaid tuition contracts and savings trust agreements shall specifically
provide that if after a specified period of time the contract or savings trust
agreement has not been terminated and the qualified beneficiary&#8217;s rights
have not been exercised, the board, after making a reasonable effort to contact
the purchaser or contributor and the qualified beneficiary or their agents,
shall report such unclaimed moneys to the State Treasurer pursuant to &#xA7;
55.1-2524.

G. 1. Notwithstanding any provision of law to the contrary, money in the Plan is
exempt from creditor process, is not liable to attachment, garnishment, or other
process, and shall not be seized, taken, appropriated, or applied by any legal
or equitable process or operation of law to pay any debt or liability of any
purchaser, contributor, or beneficiary. Unless required by federal law, the
Commonwealth, its agencies, and its instrumentalities shall not seek payment
pursuant to 26 U.S.C. § 529A from any ABLE savings trust account or its
proceeds for benefits provided to the beneficiary of the account and shall not
undertake estate recovery from any ABLE savings trust account pursuant to 26
U.S.C. § 529A.

   2. Unless prohibited by federal law, the beneficiary of an ABLE savings trust
   account may appoint a survivor. In the event of the beneficiary&#8217;s death,
   if the survivor is (i) an eligible individual, as defined in 26 U.S.C. &#xA7;
   529A(e), then such survivor shall become the beneficiary of the ABLE savings
   trust account or (ii) not an eligible individual, as defined in 26 U.S.C.
   &#xA7; 529A(e), then any proceeds remaining after final distributions have
   been made on behalf of the deceased beneficiary shall be distributed to the
   survivor and the account shall be closed.

H. Notwithstanding any other provision of state law that requires consideration
of one or more financial circumstances of an individual for the purpose of
determining (i) the individual&#8217;s eligibility to receive any assistance or
benefit pursuant to such provision of state law or (ii) the amount of any such
assistance or benefit that such individual is eligible to receive pursuant to
such provision of state law, any (a) moneys in an ABLE savings trust account for
which such individual is the beneficiary, including any interest on such moneys,
(b) contributions to an ABLE savings trust account for which such individual is
the beneficiary, and (c) distribution for qualified disability expenses for such
individual from an ABLE savings trust account for which such individual is the
beneficiary shall be disregarded for such purpose with respect to any period
during which such individual remains the beneficiary of, makes contributions to,
or receives distributions for qualified disability expenses from such ABLE
savings trust account.

I. No prepaid tuition contract or savings trust account shall be assigned for
the benefit of creditors, used as security or collateral for any loan, or
otherwise subject to alienation, sale, transfer, assignment, pledge,
encumbrance, or charge.

J. The board&#8217;s decision on any dispute, claim, or action arising out of or
relating to a prepaid tuition contract or savings trust agreement made or
entered into pursuant to this chapter or benefits under such prepaid tuition
contract or savings trust agreement shall be considered a case decision as
defined in &#xA7; 2.2-4001 and all proceedings related to such dispute, claim,
or action shall be conducted pursuant to Article 3 (&#xA7; 2.2-4018 et seq.) of
the Administrative Process Act. Judicial review shall be provided exclusively
pursuant to Article 5 (&#xA7; 2.2-4025 et seq.) of the Administrative Process
Act.

HISTORY: 1994, c. 661, § 23-38.81; 1995, c. 315; 1997, cc. 785, 861; 1999, cc.
485, 518; 2000, cc. 382, 400; 2015, cc. 227, 311; 2016, cc. 588, 639; 2019, cc.
803, 804; 2020, c. 923.