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Chapter 1 Golden State Scholarshare Trust Program Qualified Scholarship Accounts   

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(a) Opening Qualified Scholarship Accounts. A qualified scholarship account may be opened by any of the following entities

(1) a state or local government agency or an entity described in Section 501(c)(3) of the Internal Revenue Code that has opened the qualified scholarship account as part of a scholarship program for the benefit of beneficiaries to be named when the scholarships are awarded; or

(2) any entity identified in Section 30951(b) that has opened the qualified scholarship account for the benefit of a named beneficiary.

(b) Participation Agreement. To open a qualified scholarship account, an entity account owner must submit a completed and signed participation agreement with either an initial contribution or a selection of electronic funds transfer, automatic contribution plan, or rollover distribution as the method of initial contribution to the program administrator's designee.

(c) Change of Beneficiary for Qualified Scholarship Account. An entity identified in paragraph (a)(2) of this Section, except a state or local government agency or an entity described in Section 501(c)(3) of the Internal Revenue Code, is not permitted to change the beneficiary of the qualified scholarship account. A state or local government agency or an entity described in Section 501(c)(3) of the Internal Revenue Code and identified in Section 30959(a)(2) may change the beneficiary of a qualified scholarship account at any time by submitting a written request to the program administrator's designee.

(d) Rollover Distributions for Qualified Scholarship Account. An entity identified in paragraph (a)(2) of this Section, except for a state or local government agency or an entity described in Section 501(c)(3) of the Internal Revenue Code, is not permitted to make a rollover distribution. A state or local government agency or an entity described in Section 501(c)(3) of the Internal Revenue Code and identified in Section 30959(a)(2) may make any rollover distribution set forth in Section 30958 at any time by submitting a written request to the program administrator's designee with substantiation that the rollover distribution is authorized by the entity account owner and that the signer of the request is authorized to conduct the transaction, and by complying with applicable federal and state law. The written request for a rollover distribution must contain a certification that the newly designated beneficiary is not a member of the family of the previous beneficiary.

(e) Qualified Scholarship Account Distribution. A qualified scholarship account distribution may be taken at any time by an entity identified in paragraph (a) of this Section by submitting a written request to the program administrator's designee with substantiation that the qualified scholarship account distribution is authorized by the entity account owner and that the signer of the request is authorized to conduct the transaction. A qualified scholarship account distribution must be paid directly to an eligible educational institution.

Authority cited:

Education Code 69981(d)

Education Code 69982(h)

Reference:

Education Code 69982(j)(1)

Education Code 69983(f)

Education Code 69986(h)

Internal Revenue Code 117(b)

Internal Revenue Code 529

(Amended by Register 2003, No. 49)