1. a. The treasurer of state shall segregate moneys received by the trust into three funds: the program fund, the endowment fund, and the administrative fund.
b. All moneys paid by participants in connection with participation agreements shall be deposited as received into separate accounts within the program fund.
c. All moneys received by the trust from the proceeds of gifts and other endowments for the purposes of the trust shall be deposited as received into the endowment fund.
d. The program fund and the endowment fund shall be separately administered.
e. Any gifts, grants, or donations made by any governmental entity or any person, firm, partnership, or corporation to the trust for deposit to the endowment fund shall be a grant, gift, or donation to the state for the accomplishment of a valid public eleemosynary, charitable, and educational purpose and shall not be included in the income of the donor for Iowa tax purposes.
f. Contributions to the trust made by participants or received in the form of gifts, grants, or donations may only be made in the form of cash.
g. A participant or beneficiary shall not provide investment direction regarding program contributions or earnings held by the trust.
2. a. Each beneficiary under a participation agreement shall receive a pro rata interest in the investment income derived by the endowment fund each year after any transfers to the administrative fund have been made.
b. The amount of interest received from the endowment fund shall be in the ratio that the principal amount paid by the participant under the participation agreement and investment income earned to date under the agreement bears to the principal amount of all moneys, funds, and securities then held in the program fund, but not to exceed the amount which, in combination with the current payment due from the program fund, equals the beneficiary's higher education costs for the current period of enrollment.
c. Moneys accrued by participants in the program fund of the trust may be used for payments to any institution of higher education.
d. No rights to any moneys derived from the endowment fund shall exist if moneys payable under the participation agreement are paid to an educational institution which is not an institution of higher education.
98 Acts, ch 1172, §4
Referred to in §12D.1, 12D.9
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