§ 16-57-6.1. Tuition savings program.
(a) The general treasurer, in conjunction with the state investment commission, executive
director of the Rhode Island student loan authority, and the commissioner of postsecondary
education, shall establish, in any form as the general treasurer deems appropriate,
a tuition savings program to allow persons to save money for the sole purpose of meeting
qualified higher education expenses.
(b) All money received in connection with the tuition savings program shall be segregated
from all other funds into two (2) funds, a program fund and an administrative fund.
No more than two percent (2%) of money in the program fund may be transferred annually
to the administrative fund for the purpose of paying operating costs of administering
the tuition savings program. Money accrued by participants in the program fund may
be used for payments to an eligible institution. All proceeds from the tuition savings
program shall be directed to the administrative fund, and to the extent they exceed
the operating costs of administering the tuition savings program, said excess shall
be used for financial aid-related activities in Rhode Island pursuant to § 16-56-6.
(c) The state investment commission shall invest money within the program fund in any
investments that are authorized by the general laws, including equities and fixed-income
securities. The composition of investments shall be determined by the state investment
commission.
(d) A participant may at any time withdraw funds from the participant's account in the
tuition savings program in an amount up to the value of the account at the time the
withdrawal is implemented, less such administrative fee as may be levied by the treasurer
in connection with the withdrawal.
(e) Notwithstanding any of the foregoing provisions, no administrative fee may be levied
by the treasurer in the event that a participant requests withdrawal of funds from
the participant's account in the tuition savings program on account of, and within
the meanings of § 529 of the Internal Revenue Code [26 U.S.C. § 529]:
(1) The death of the beneficiary of the account;
(2) The disability of the beneficiary; or
(3) A scholarship, allowance, or payment received by the beneficiary to the extent that
the amount of the refund does not exceed the amount of the scholarship, allowance,
or payment.
(f) In the event that a participant requests a withdrawal from an account in the tuition
savings program other than: (1) A withdrawal used for qualified higher education expenses
of the beneficiary of the account or (2): For a reason referred to in subdivision
(e)(1), (e)(2), or (e)(3) of this section, the treasurer shall impose a more than
de minimis penalty on the earnings portion of the withdrawal in accordance with § 529 of the Internal Revenue Code [26 U.S.C. § 529]; provided that no penalty shall be imposed with respect to any such withdrawal,
or any other withdrawal, from any account in the tuition savings plan to which the
tax made applicable by § 529 of the Internal Revenue Code [26 U.S.C. § 529] is effective.
(g) [Deleted by P.L. 2015, ch. 141, art. 7, § 6.]