164A.700 Definitions for KRS 164A.700 to 164A.709

164A.700 Definitions for KRS 164A.700 to 164A.709.

As used in KRS 164A.700 to 164A.709, unless the context requires otherwise:

(1) "Academic year" means the time period specified by each eligible educational

institution;

(2) "Board" means the board of directors of the Kentucky Higher Education Assistance

Authority acting in the capacity of the board of directors of the Commonwealth

postsecondary education prepaid tuition trust fund;

(3) "Eligible educational institution" means an institution defined in the Internal

Revenue Code of 1986, as amended, 26 U.S.C. sec. 529(e)(5);

(4) "Fund" means the prepaid tuition payment fund created in KRS 164A.701 and

known as the "Commonwealth Postsecondary Education Prepaid Tuition Trust

Fund" or "Kentucky's Affordable Prepaid Tuition" (KAPT);

(5) "Prepaid tuition" means the amount of tuition estimated by the board for the tuition

plan under the prepaid tuition contract;

(6) "Prepaid tuition academic year conversion" means the difference between the

amount of prepaid tuition required in the original prepaid tuition contract and the

amount of prepaid tuition required in an amended prepaid tuition contract as the

result of the change in the academic year;

(7) "Prepaid tuition academic year conversion shortfall" means the amount by which

the prepaid tuition required in an amended prepaid tuition contract as the result of

the change in the academic year exceeds the amount of prepaid tuition required in

the original prepaid tuition contract;

(8) "Prepaid tuition account" means the account for a qualified beneficiary as specified

in the prepaid tuition contract;

(9) "Prepaid tuition contract" means the contract entered into by the board and the

purchaser for the purchase of prepaid tuition for a qualified beneficiary to attend any

eligible educational institution as provided in KRS 164A.700 to 164A.709;

(10) "Prepaid tuition conversion" means the difference between the value of a prepaid

tuition account and the tuition at an eligible educational institution;

(11) "Prepaid tuition conversion shortfall" means the amount by which the actual tuition

cost at an eligible educational institution exceeds the amount of the value of a

prepaid tuition account;

(12) "Purchaser" means a person, corporation, association, partnership, or other legal

entity who enters into a prepaid tuition contract;

(13) "Qualified beneficiary" means a designated beneficiary, as defined in 26 U.S.C. sec.

529(e)(1), who is:

(a) A Kentucky resident designated as beneficiary at the time a purchaser enters

into a prepaid tuition contract; or

(b) A nonresident designated at the time a purchaser enters into a prepaid tuition

contract who intends to attend an eligible institution in Kentucky; or

(c) A new beneficiary, in the case of a change of beneficiaries under provisions of

KRS 164A.707; or

(d) An individual receiving a scholarship in the case of a prepaid tuition contract

purchased by a state or local government or agency or instrumentality thereof

or an organization described in 26 U.S.C. sec. 501(c)(3), and exempt from

federal income taxation pursuant to 26 U.S.C. sec. 501(a) as part of a

scholarship program offered by the government entity or the organization;

(14) "Qualified postsecondary education expenses" means qualified higher education

expenses as defined in 26 U.S.C. sec. 529(e)(3);

(15) "Tuition" means the prevailing tuition and all mandatory fees charged as a condition

of full-time enrollment in an undergraduate program for an academic year for a

qualified beneficiary to attend an eligible educational institution;

(16) "Tuition Account Program Office" or "office" means the office in the Kentucky

Higher Education Assistance Authority that is responsible for administering the

prepaid tuition program and its accounts;

(17) "Tuition plan" means a tuition plan approved by the board and provided under a

prepaid tuition contract;

(18) "Utilization period" means:

to attend an eligible educational institution;

(16) "Tuition Account Program Office" or "office" means the office in the Kentucky

Higher Education Assistance Authority that is responsible for administering the

prepaid tuition program and its accounts;

(17) "Tuition plan" means a tuition plan approved by the board and provided under a

prepaid tuition contract;

(18) "Utilization period" means:

(a) For a prepaid tuition account depleted or terminated prior to June 27, 2019,

the period of time in which a prepaid tuition contract is to be used beginning

with the projected college entrance year and continuing for the number of

prepaid tuition years purchased; or

(b) For a prepaid tuition account not depleted or terminated as of June 27, 2019,

the period of time in which a prepaid tuition contract is to be used beginning

with the projected college entrance year and continuing for eight (8) years; and

(19) "Value of a prepaid tuition account" means the amount which the fund is obligated

to pay for a prepaid tuition contract, when a purchaser has paid it in full, that is

calculated by multiplying the plan tuition amount for the academic period by the

number of prepaid tuition years purchased, less any portion previously paid; except,

under a tuition plan for private colleges and universities, tuition shall be calculated

based on the same percentage that University of Kentucky tuition is increased from

the year the prepaid tuition contract is purchased to the year of payment.