Missouri Statute | Act | Code |Education And Libraries| US Code - US Statute

A state public school fund is created which shall consist of all
moneys, bonds, lands and other properties belonging to or donated to any
state fund for public school purposes and the net proceeds of all sales
of lands and other property and effects that accrue to the state by
escheat. All such funds shall be paid into the state treasury and
securely invested by the state board of education, and sacredly preserved
as a public school fund, the annual income of which shall be faithfully
appropriated for establishing and maintaining free public schools and for
no other uses or purposes whatsoever. (L. 1963 p. 200 § 7-1)

(Source: RSMo 1959 § 161.180)

1. All funds accruing to the state public school fund, except
the interest on the fund, shall be invested by the state board of
education in registered bonds of the United States or the state, bonds of
school districts of the state, or bonds or other securities payment of
which is fully guaranteed by the United States, of not less than par
value.

2. Whenever the state board of education contracts with the seller of any
such bonds or securities, the board shall requisition and the
commissioner of administration shall approve and forthwith issue a
warrant upon the state treasurer for the purchase price agreed upon,
payable out of the state public school fund, in favor of the seller.

3. All bonds or securities so purchased shall be made payable to, or be
registered in the name of, the state treasurer as trustee of the state
public school fund and shall be deposited as part of the state public
school fund with the state treasurer who shall give his receipt therefor
to the board of education. (L. 1963 p. 200 § 7-2)

(Source: RSMo 1959 § 161.201)

CROSS REFERENCE: Multinational banks, securities and obligations of,
investment in, when, RSMo 409.950

1. The state treasurer is the custodian of all bonds and
securities in which the state public school fund is invested, and also of
all moneys belonging to the state public school fund, and he and his
sureties are responsible on his official bond for the performance of his
duties in the safekeeping, disbursement and investment of all money or
property of the fund in accordance with the provisions of sections
166.011 to 166.121.

2. The state treasurer shall keep an accurate account of all money, bonds
and securities in the state public school fund, the maturities thereof,
the rates of interest thereon and the dates when the interest is payable,
and shall certify to the board of education quarterly-yearly the accounts
and reports relating thereto that are required by the board.

3. The state treasurer and the director of revenue shall include in the
annual report required by section 32.060, RSMo, a full account of all
receipts and expenditures on account of the state public school fund and
the income therefrom and a report of all information in their possession
which relates to the fund and property. (L. 1963 p. 200 § 7-3)

(Source: RSMo 1959 § 161.211)

1. The state board of education shall keep a regular account
with the state treasurer and all other persons in relation to the state
public school fund.

2. The state board of education shall require all persons who receive any
money belonging to the fund or income to settle their accounts, and, in
that name, may sue for and recover all moneys due from any person on
account of the fund or income. (L. 1963 p. 200 § 7-4)

(Source: RSMo 1959 § 161.221)

All interest from the investment belonging to the state public
school fund shall be paid into the state treasury and credited to the
state school moneys fund, which is hereby created. All other funds for
the support of free public schools shall be credited to the state school
moneys fund and shall be paid out for such purposes on warrants as
directed by the state board of education. (L. 1963 p. 200 § 7-5)

(Source: RSMo 1959 § 161.225)

Any person may grant, give or devise to the public school fund
of the state any money, property, real or personal, choses in action of
every kind and description. The property shall be turned over and
delivered to the state director of revenue and the proceeds thereof shall
be deposited in the state treasury to be disposed of in the manner
provided in section 166.091. (L. 1963 p. 200 § 7-6)

(Source: RSMo 1959 § 161.230, A.L. 1961 p. 345)

For any money, property or choses in action delivered to the
director of revenue under sections 166.061 to 166.121 he shall give
duplicate receipts, one of which shall be filed in the office of the
commissioner of administration, who shall charge the director of revenue
therewith. (L. 1963 p. 200 § 7-7)

(Source: RSMo 1959 § 161.240, A.L. 1961 p. 345)

A certified copy of the instrument of writing, evidencing the
grant, gift or devise, shall also be delivered to the commissioner of
administration and duly recorded by him in his office in a book to be
kept specially for that purpose, and the original shall be recorded in
the recorder's office of the county where the grantor, donor or devisor
lives or resided at the time of his death. (L. 1963 p. 200 § 7-8)

(Source: RSMo 1959 § 161.250, A.L. 1961 p. 345)

The director of revenue shall, as early as practicable, dispose
of the property granted, given or devised, according to the terms
specified in the written instrument granting or giving the same to the
public school fund. If the property is money, or after the property is
converted into money, it shall be deposited in the state treasury and
securely invested and sacredly preserved as a part of the public school
fund, as provided by the constitution of this state. The annual income
from the grant, gift or devise shall be appropriated and disbursed and
paid over, as near as may be, according to the terms of the writing
making the grant, gift or devise, and for no other uses or purposes
whatsoever. (L. 1963 p. 200 § 7-9)

(Source: RSMo 1959 § 161.260, A.L. 1961 p. 345)

In all cases where a grant, devise or bequest or gift has been
made by any person for educational purposes, in aid of or connected with
the free public school system, and from any cause cannot be executed or
carried out according to its terms and conditions, the person having
charge thereof or holding the same in trust, or any person interested
therein, may file a petition in the circuit court of the county where the
grantor, donor or testator died, setting forth all the facts connected
therewith, and, in the discretion of the court in which the petition is
filed, an order may be made directing that the amount of the grant, gift,
devise or bequest shall be turned over to the director of revenue of the
state as a part of the public school fund, according to the terms and
conditions of sections 166.011 to 166.121. The annual income on the
proceeds of the grant, devise, gift or bequest shall be faithfully
appropriated, as near as may be, in meeting and carrying out the purposes
and wishes of the grantor, donor, devisor or testator, according to the
instrument of writing making the grant, gift, devise or bequest. (L. 1963
p. 200 § 7-10)

(Source: RSMo 1959 § 161.280, A.L. 1961 p. 345)

The director of revenue and his sureties shall be responsible on
his official bond for the safekeeping of the property or money received
under sections 166.061 to 166.121 while the property is in his possession
and for its disposition in conformity with section 166.091. (L. 1963 p.
200 § 7-11)

(Source: RSMo 1959 § 161.270, A.L. 1961 p. 345)

The state of Missouri is hereby constituted the custodian and
trustee under sections 166.061 to 166.121 of all such funds, and pledges
itself for the safekeeping, investment and due application of all funds,
with the interest thereon, which may be received by the director of
revenue or deposited in the treasury in pursuance of sections 166.061 to
166.121. (L. 1963 p. 200 § 7-12)

(Source: RSMo 1959 § 161.290, A.L. 1961 p. 345)

The county commission in each county shall administer the county
school fund of the county. In each county wherein the annual distribution
of the liquidated capital of the county school fund has not been ordered
by the voters pursuant to sections 166.151 to 166.161, the proceeds of
the fund shall be invested by the county commission in registered bonds
of the United States, or in bonds of the state or in approved bonds of
any city or school district thereof, or in bonds or other securities the
payment of which is fully guaranteed by the United States government and
shall be preserved as a county school fund. Annually, on or before
September thirtieth, in each county of the state all interest accruing
from the investment of the capital of the county school fund, if any, the
clear proceeds of all penalties and fines collected for any breach of the
penal laws of the state, the net proceeds from the sale of estrays, and
all other money lawfully coming into the fund, shall be collected and
distributed to the school districts of the county by the county clerk in
the same proportion that the September membership of a school district,
determined as provided in (1) of subdivision (8) of section 163.011,
RSMo, bears to the sum of the September membership of all the districts
in the county. He shall immediately after making the apportionments enter
them in a book to be kept for that purpose, and shall furnish each
district clerk a copy of the apportionment. The county treasurer shall
pay over to the treasurer of the school board of every district in the
county the amount due each respective district. The clear proceeds of all
forfeitures collected for any breach of the penal laws of the state
distributed for education shall be transferred to the school building
revolving fund. (L. 1963 p. 200 § 7-13 and p. 338 § 161.051, A.L. 1982
Adopted by Initiative, Proposition C, November 2, 1982, A.L. 1988 S.B.
789, A.L. 1998 H.B. 1265)

(Source: RSMo 1959 §§ 161.051, 171.010)

CROSS REFERENCE: Multinational banks, securities and obligations of,
investments in, when, RSMo 409.950

(1999) Section allocating forfeiture proceeds to school building
revolving fund was within article IX, section 7 prerogative of
distributing such proceeds "according to law". Ensor v. Director of
Revenue, 998 S.W.2d 782 (Mo.banc).

The county treasurer shall collect and deposit in the county
school fund all moneys payable to the fund and shall give the party
paying duplicate receipts therefor. The party shall file one of the
receipts with the county clerk, who shall charge the amount to the county
treasurer. Any person violating the provisions of this section shall be
deemed guilty of a misdemeanor and punished by a fine not to exceed five
hundred dollars. (L. 1963 p. 200 § 7-14)

(Source: RSMo 1959 § 171.070)

CROSS REFERENCES: Fines, penalties and forfeitures into school fund, RSMo
271.370 Theatrical performances, shows and circuses tax, proceeds, RSMo
316.030

Whenever there is presented to the body having in its charge the
capital of the county school fund of any county or the city of St. Louis
a petition, signed by qualified electors of the county or the city of St.
Louis equal in number to five percent of the voters casting a ballot in
the county or the city of St. Louis for the office of governor at the
last preceding general election at which the office was voted upon,
praying that the proposal be submitted to the qualified electors for
making annual distribution of the capital of the liquidated school fund,
the body shall cause an election to be held upon the proposal. (L. 1963
p. 200 § 7-15)

(Source: RSMo 1959 § 171.020)

1. The proposal shall be submitted to the voters of the county.

2. The question shall be submitted in substantially the following form:

Shall there be an annual distribution of the capital of the liquidated
county school fund?

3. If the proposal to distribute annually the capital of the liquidated
county school fund receives a majority of the votes cast, the body having
control of the county school fund shall proceed thereafter to distribute
annually the liquidated fund to the school districts. The accumulated
balance of the fund shall be apportioned on or before August
thirty-first, of each year, until the fund is liquidated and the
apportionment shall be made in the manner provided in section 166.131.
When the capital of the liquidated county school fund is distributed to
the school districts the fund shall not be counted as a deduction in
calculating the equalization quota as defined in section 163.031, RSMo.
(L. 1963 p. 200 § 7-16, A.L. 1978 H.B. 971, A.L. 1982 Adopted by
Initiative, Proposition C, November 2, 1982)

(Source: RSMo 1959 § 171.030)

Effective 1-1-83

Sections 166.200 to 166.242, sections 173.053 and 173.262, RSMo,
shall be known as the "Missouri Access to Higher Education Act". (L. 1988
H.B. 1456 § 1)

As used in sections 166.200 to 166.242, sections 173.053 and
173.262, RSMo, the following terms mean:

(1) "Advance tuition payment contract", a contract entered into by the
trust and a purchaser pursuant to the provisions of sections 166.200 to
166.242, sections 173.053 and 173.262, RSMo, to provide for the higher
education of a qualified beneficiary;

(2) "Board", the board of directors of the Missouri access to higher
education trust;

(3) "Fund", the Missouri access to higher education trust fund created in
section 166.207;

(4) "Pell grant", a federal grant for undergraduate students based on
financial need and, for the purposes of sections 166.200 to 166.242,
sections 173.053 and 173.262, RSMo, determines financial need;

(5) "Purchaser", a person who makes or is obligated to make advance
tuition payments pursuant to an advance tuition payment contract;

(6) "Qualified beneficiary", any resident of this state named as a
beneficiary in an advance tuition payment contract;

(7) "State institution of higher education", any college, university, or
community junior college supported in whole or in part out of state funds
specifically appropriated for operations;

(8) "Trust", the Missouri access to higher education trust created in
section 166.203;

(9) "Tuition", any tuition or other fees charged by a state institution
of higher education for attendance at that institution as a student by a
resident of this state;

(10) "Weighted average tuition cost of state institutions of higher
education", the tuition cost arrived at by adding the products of the
annual undergraduate tuition cost at each state institution of higher
education and its total number of undergraduate fiscal year equated
students, and then dividing the gross total of this cumulation by the
total number of undergraduate fiscal year equated students attending
state institutions of higher education. (L. 1988 H.B. 1456 § 2)

1. There is hereby created the "Missouri Access to Higher
Education Trust", which shall be a body corporate and politic. The trust
shall be located within the state office of administration, but shall
exercise its prescribed powers, duties, and functions independently. The
trust shall be governed by a board of directors which shall consist of
ten members with knowledge, skill, and experience in the academic,
business, or financial field appointed by the governor, by and with the
advice and consent of the senate. Not more than three members of the
board shall be, during their term of office on the board, either
officials, appointees, or employees of this state, except that at least
one member shall be appointed from a minority group. Of the remaining
seven members appointed by the governor, one shall be appointed from a
nominee of the speaker of the house of representatives, one shall be
appointed from a nominee of the president pro tem of the senate, one
shall be a president of a public four-year college or university, one
shall be a president or chancellor of a public community college, one
shall represent the interests of Missouri independent degree-granting
colleges and universities, and one shall be the commissioner of higher
education. Of these remaining seven members, at least one shall be a
member of a minority group. Members shall be appointed for a term of
three years; except that, of the members first appointed, three shall be
appointed for a term of one year, three shall be appointed for a term of
two years, and four shall be appointed for a term of three years. A
member shall serve until a successor is appointed and qualified, and a
vacancy shall be filled for the balance of the unexpired term in the same
manner as the original appointment. The governor shall designate one
member as chairperson. The governor shall also designate one member as
the president and chief executive officer of the trust and one member as
the vice president of the trust. Members of the board, other than the
president and vice president if they are not otherwise employees of the
state, shall receive no compensation, but shall be reimbursed for their
actual and necessary expenses incurred in the performance of their duties.

2. The board may delegate to its president, vice president, or other
member such functions and authority as the board considers necessary or
appropriate. These functions may include, but are not limited to, the
oversight and supervision of employees of the trust.

3. A majority of the members of the board serving shall constitute a
quorum for the transaction of business at a meeting of the board, or the
exercise of a power or function of the trust, notwithstanding the
existence of one or more vacancies. Voting upon action taken by the board
shall be conducted by majority vote of the members present at a meeting
of the board, and, if authorized by the bylaws of the board and when a
quorum is present in person at the meeting, by use of amplified
telephonic equipment. The board shall meet at the call of the chair and
as may be provided in the bylaws of the trust. Meetings of the board may
be held anywhere within the state. (L. 1988 H.B. 1456 § 3)

1. In addition to the powers granted by other provisions of
sections 166.200 to 166.242, sections 173.053 and 173.262, RSMo, the
board shall have the powers necessary to carry out and effectuate the
purposes, objectives, and provisions of sections 166.200 to 166.242,
sections 173.053 and 173.262, RSMo, the purposes and objectives of the
trust, including, but not limited to the power to:

(1) Pay money to state institutions of higher education from the trust;

(2) Impose reasonable limits on the number of participants in the trust;

(3) Contract for goods and services and engage personnel as is necessary
and engage the services of private consultants, actuaries, managers,
legal counsel, and auditors for rendering professional, management, and
technical assistance and advice;

(4) Solicit and accept gifts, grants, loans, and other aid from any
person, firm or corporation or the federal, state, or local government or
any agency of the federal, state, or a local government, or to
participate in any other way in any federal, state, or local government
program;

(5) Charge, impose, and collect administrative fees and charges in
connection with any transaction and provide for reasonable penalties,
including default, for delinquent payment of fees or charges or for fraud;

(6) Procure insurance against any loss in connection with the trust's
property, assets, or activities;

(7) Sue and be sued, to have a seal and alter the same at pleasure, to
have perpetual succession, and to make and amend bylaws;

(8) To make, execute, and deliver contracts, conveyances, and other
instruments necessary or convenient to the exercise of its powers;

(9) Enter into contracts on behalf of the state;

(10) Administer the funds of the trust;

(11) Indemnify or procure insurance indemnifying any member of the board
from personal loss or accountability from liability resulting from a
member's action or inaction as a member of the board, including but not
limited to, liability asserted on any bonds or notes of the authority;

(12) Impose reasonable time limits on use of the tuition benefits
provided by the trust, if the limits are made a part of the contract;

(13) Provide for receiving contributions in lump sums or periodic sums;

(14) Promulgate reasonable rules and regulations and establish policies,
procedures, and eligibility criteria to implement sections 166.200 to
166.242, sections 173.053 and 173.262, RSMo.

2. No rule or portion of a rule promulgated under the authority of
sections 166.200 to 166.242 and sections 173.053 and 173.262, RSMo, shall
become effective unless it has been promulgated pursuant to the
provisions of section 536.024, RSMo. (L. 1988 H.B. 1456 § 4, A.L. 1993
S.B. 52, A.L. 1995 S.B. 3)

There is hereby created in the state treasury a "Missouri Access
to Higher Education Trust Fund" into which shall be deposited all funds
accruing to the trust including payments received by the trust from
purchasers on behalf of qualified beneficiaries and from which, upon
appropriation, shall be paid all expenditures of the trust. The fund may
be divided into separate accounts. Moneys accruing to and deposited in
the trust fund shall not be a* part of "total state revenues" as defined
in sections 17 and 18 of article X of the Constitution of the state of
Missouri and the expenditure of such revenue shall not be an expense of
state government under section 20 of article X of the Constitution of the
state of Missouri. The provisions of section 33.080, RSMo, to the
contrary notwithstanding, any unexpended balance in the Missouri access
to higher education trust fund at the end of any biennium shall not be
transferred and placed to the credit of the state general revenue fund.
All interest or other increase earned from the investment of money in the
trust fund shall be credited to and deposited to that fund. Unless
otherwise provided by the board, money in the fund shall, upon
appropriation, be expended in the following order of priority:

(1) To make payments to state institutions of higher education on behalf
of qualified beneficiaries;

(2) To make refunds upon termination of an advance tuition payment
contract;

(3) To pay the costs of administration and organization of the trust and
the fund. (L. 1988 H.B. 1456 § 5)

*Words "shall not be a" do not appear in original rolls.

The board shall annually prepare or cause to be prepared an
accounting of the fund and shall transmit a copy of the accounting to the
governor, the president pro tem of the senate, and the speaker of the
house of representatives. The board shall also make available the
accounting of the fund to purchasers of the trust. The accounts of the
board shall be subject to annual audits by the state auditor. (L. 1988
H.B. 1456 § 6)

1. The fund shall be administered in a manner reasonably
designed to be actuarially sound such that the assets of the trust shall
be sufficient to defray the obligations of the trust.

2. In the accounting of the fund made pursuant to section 166.209, the
board shall annually evaluate or cause to be evaluated by a nationally
recognized actuary the actuarial soundness of the fund and determine the
additional assets needed, if any, to defray the obligations of the trust.
If there are not sufficient funds to ensure the actuarial soundness of
the fund, the trust shall adjust payments of subsequent purchases to
ensure its actuarial soundness.

3. If there are insufficient numbers of new purchasers to ensure the
actuarial soundness of a plan of the trust, the available assets of the
fund attributable to the plan shall be immediately prorated among the
then existing contracts, and these shares shall be applied, at the option
of the person to whom the refund is payable or would be payable under the
contract upon termination of the contract, either towards the purposes of
the contract for a qualified beneficiary or disbursed to the person to
whom the refund is payable or would be payable under the contract upon
termination of the contract. (L. 1988 H.B. 1456 § 7)

1. The trust on behalf of itself and the state, may contract
with a purchaser for the advance payment of tuition by the purchaser for
a qualified beneficiary to attend any of the state institutions of higher
education to which the qualified beneficiary is admitted, without further
tuition cost to the qualified beneficiary. In addition, an advance
tuition payment contract shall set forth all of the following:

(1) The amount of the payment or payments required from the purchaser on
behalf of the qualified beneficiary;

(2) The terms and conditions for making the payment, including, but not
limited to, the date or dates upon which the payment, or portions of the
payment, shall be due;

(3) Provisions for late payment charges and for default;

(4) The name and age of the qualified beneficiary under the contract. The
purchaser, with the approval of and on conditions determined by the
trust, may subsequently substitute another person for the qualified
beneficiary originally named;

(5) The number of credit hours or equivalent covered by the contract;

(6) The name of the person entitled to terminate the contract, which, as
provided by the contract, may be the purchaser, the qualified
beneficiary, or a person to act on behalf of the purchaser or qualified
beneficiary, or any combination of these persons;

(7) The terms and conditions under which the contract may be terminated
and the amount of the refund, if any, to which the person terminating the
contract, or specifically the purchaser or designated qualified
beneficiary if the contract so provides, shall be entitled upon
termination;

(8) The assumption of a contractual obligation by the trust to the
qualified beneficiary on its own behalf and on behalf of the state to
provide for credit hours of higher education, not to exceed the credit
hours required for the granting of a baccalaureate degree or the number
of credit hours provided by the contract, whichever is less, at any state
institution of higher education to which the qualified beneficiary is
admitted. The advance tuition payment contract shall provide for the
credit hours of higher education that a qualified beneficiary may receive
under the contract if the qualified beneficiary is not entitled to
in-state tuition rates;

(9) The period of time from the beginning to the end of which the
qualified beneficiary may receive the benefits under the contract;

(10) Other terms, conditions, and provisions as the trust considers in
its sole discretion to be necessary or appropriate.

2. The form of any advance tuition payment contract to be entered into by
the trust shall first be approved by the attorney general. (L. 1988 H.B.
1456 § 8)

The trust shall make any arrangements that are necessary or
appropriate with state institutions of higher education in order to
fulfill its obligations under advance tuition payment contracts, which
arrangements may include, but need not be limited to, the payment by the
trust of the then actual in-state tuition cost on behalf of a qualified
beneficiary to the state institution of higher education. (L. 1988 H.B.
1456 § 9)

An advance tuition payment contract shall provide that the trust
provide for the qualified beneficiary to attend a community junior
college in this state before entering another state institution of higher
education for the purpose of completing a baccalaureate degree if the
beneficiary so chooses and that the contract may be terminated pursuant
to the provisions of sections 166.200 to 166.242, sections 173.053 and
173.262, RSMo, after completing the requirements for a degree or
certificate at the community junior college in this state or before
entering the other state institution of higher education. (L. 1988 H.B.
1456 § 10)

An advance tuition payment contract may provide that, if after a
number of years specified in the contract the contract has not been
terminated or the qualified beneficiary's rights under the contract have
not been exercised, the trust shall retain the amounts otherwise payable
and the rights of the qualified beneficiary, the purchaser, or the agent
of either shall be considered terminated. (L. 1988 H.B. 1456 § 11)

1. The trust may offer contracts which provide for the refund of
investment income attributable to the fund upon cancellation by the
purchaser of the contract.

2. Contracts offered under this section may require that payment or
payments from a purchaser, on behalf of a qualified beneficiary who may
attend a state institution of higher education in less than four years
after the date the contract is entered into by the purchaser, be based
upon attendance at a certain state institution of higher education or at
that state institution of higher education with the highest prevailing
tuition cost for the number of credit hours covered by the contract. (L.
1988 H.B. 1456 § 12)

1. An advance tuition payment contract shall not authorize
termination of the contract except when one of the following occurs:

(1) The qualified beneficiary dies;

(2) The qualified beneficiary is not admitted to a state institution of
higher education after making proper application;

(3) The qualified beneficiary certifies to the trust, after attaining the
age of eighteen, that he or she has decided not to attend a state
institution of higher education and requests, in writing that the advance
tuition payment contract be terminated;

(4) Other circumstances, determined by the trust and set forth in the
advance tuition payment contract, occur.

2. An advance tuition payment contract may provide for a refund pursuant
to this section to a person to whom the refund is payable under the
contract upon termination of the contract. The refund may include all or
a portion of the payment or payments made by the purchaser under the
contract and all or a portion of the accrued investment income
attributable to the payment or payments. However, except as provided in
subsection 4 of this section, the amount of a refund shall not exceed the
prevailing tuition cost on the date of termination for the credit hours
covered by the state institution of higher education which charges the
lowest rate of tuition. The amount of a refund shall be reduced by the
amount transferred to a community junior college on behalf of a qualified
beneficiary when the contract is terminated and by the amount transferred
to a state institution of higher education on behalf of a qualified
beneficiary. Termination of a contract and the right to receive a refund
shall not be authorized under the contract if the qualified beneficiary
has completed more than one-half of the credit hours required by the
state institution of higher education for the awarding of a baccalaureate
degree. However, this provision shall not affect the termination and
refund rights of a graduate of a community junior college.

3. An advance tuition payment contract may authorize a person who is
entitled under the advance tuition payment contract to terminate the
contract, to direct payment of the refund to an independent
degree-granting college or university in this state. If directed to make
payments pursuant to this subsection, the trust shall transfer to the
designated institution an amount equal to the tuition due for the
qualified beneficiary, but the trust shall not transfer a cumulative
amount greater than the refund to which the person is entitled. If the
refund exceeds the total amount of transfers directed to the designated
institution, the excess shall be returned to the person to whom the
refund is otherwise payable.

4. The amount of a refund paid upon termination of the advance tuition
payment contract by a person who directs the trust pursuant to subsection
3 of this section to transfer the refund to an independent
degree-granting college or university located in this state shall not be
greater than the weighted average tuition cost of state institutions of
higher education for the number of credit hours covered by the contract
on the date of termination. (L. 1988 H.B. 1456 § 13)

An advance tuition payment contract shall not be entered by the
trust until the trust has solicited answers from the United States
Internal Revenue Service and the United States Securities and Exchange
Commission rulings regarding the status of the trust. The trust shall
inform purchasers of the rulings in question by these federal agencies
prior to entering any such contract. (L. 1988 H.B. 1456 § 14)

State institutions of higher education, purchasers, qualified
beneficiaries, holders of notes or bonds of the trust and others may
enforce the provisions of sections 166.200 to 166.242, sections 173.053
and 173.262, RSMo, and any contract, note or bond entered into pursuant
to the provisions of sections 166.200 to 166.242, sections 173.053 and
173.262, RSMo, by appropriate action brought in the circuit court of Cole
County. (L. 1988 H.B. 1456 § 15)

The trust, in its discretion, may contract with others, public
or private, for the provision of all or a portion of the services
necessary for the management and operation of the trust. (L. 1988 H.B.
1456 § 16)

Nothing in sections 166.200 to 166.242, sections 173.053 and
173.262, RSMo, or in any advance tuition payment contract entered into
pursuant to sections 166.200 to 166.242, sections 173.053 and 173.262,
RSMo, shall be construed as a promise or guarantee by the trust or the
state of Missouri that a person will be admitted to a state institution
of higher education or to a particular state institution of higher
education, will be allowed to continue to attend a state institution of
higher education after having been admitted, or will be graduated from a
state institution of higher education. (L. 1988 H.B. 1456 § 17)

An advance tuition payment contract is not a security subject to
regulation by the state as such under the provisions of chapter 409,
RSMo. An advance tuition contract may not be sold or otherwise
transferred by the purchaser or qualified beneficiary without the prior
approval of the trust, which consent shall not be unreasonably withheld.
(L. 1988 H.B. 1456 § 18)

The state or any state agency, county, municipality, or other
political subdivision may, by contract or collective bargaining
agreement, agree with any employee to remit payments toward advance
payment contracts through payroll deductions made by the appropriate
officer or officers of the state. Such payments shall be held and
administered in accordance with the provisions of sections 166.200 to
166.242, sections 173.053 and 173.262, RSMo. (L. 1988 H.B. 1456 § 19)

There is hereby created the "Children At-Risk in Education
Program" which shall be administered by the commissioner of education.
The program shall be funded by moneys provided to school districts
pursuant to line 14 of subsection 6 of section 163.031, RSMo, and used
solely as determined by local boards of education for: reductions of
class size in schools containing high concentrations of children who are
least advantaged or who have specially identified educational needs
according to rule and regulation of the state board of education; or the
following:

(1) The program of half-day instruction for developmentally delayed and
at-risk children established pursuant to section 167.260, RSMo;

(2) The program to provide teacher assistants in grades kindergarten
through three established pursuant to section 167.263, RSMo;

(3) The program of family literacy for children and families of children
at risk of dropping out of school pursuant to section 160.531, RSMo;

(4) The program to provide guidance counselors in grades kindergarten
through nine established pursuant to section 167.265, RSMo;

(5) The programs for pupils at risk of becoming high school dropouts
established pursuant to section 167.270, RSMo, including specialized
courses of instruction, alternative education programs for pregnant teens
and teen mothers and supplemental services for teen mothers;

(6) The program of support services to pupils identified as having a high
risk of dropping out of school established pursuant to section 167.280,
RSMo;

(7) The program of professional development committees for in-service
training on teaching children identified as at risk of failing in school
pursuant to section 168.400, RSMo;

(8) A program to contract for mental health services to meet the needs of
children who are identified as being at risk of failing school as a
result of emotional or environmental factors. Eligible contractors shall
be approved by the department of mental health;

(9) The program of special education and other special services for
at-risk and handicapped children in grades kindergarten through third
grade emphasizing prevention and early intervention, rather than
remediation, known as the "Success for All Program";

(10) Paying for building site operating costs in the proportion that the
free and reduced-price meal eligible student count is to the total
enrollment in that building; and

(11) Other programs as approved by the commissioner of education that are
exclusively targeted to provide educational services for students who are
least advantaged or who have specially identified educational needs. (L.
1990 S.B. 740 § 1, A.L. 1993 S.B. 380, A.L. 1998 S.B. 781, A.L. 2002 H.B.
1711)

*This section was repealed by S.B. 287, 2005, effective 7-1-06.

*Revisor's note: Invalidity of section 82.293 shall not affect the
validity of this section, RSMo 82.293.

1. Any amount of the difference by which the total amount
appropriated by the state to school districts, in accordance with a
judgment or order based on the equal protection clause of the fourteenth
amendment to the Constitution of the United States, for fiscal year 1999
is less than the amount appropriated for the same purpose in fiscal year
1994 in addition to any unexpended appropriation for the 1998 fiscal year
that results in additional unobligated resources for the state in fiscal
year 1999 shall be transferred to the state school moneys fund and
distributed in the manner provided in section 163.031, RSMo.

2. If the total amount appropriated by the state to school districts, in
accordance with a judgment or order based on the equal protection clause
of the fourteenth amendment to the Constitution of the United States, for
fiscal year 2000 or any subsequent fiscal year is less than the amount
appropriated for the same purpose in fiscal year 1999, any amount of the
difference in addition to any unexpended appropriation for the prior
fiscal year that results in additional unobligated resources for the
state beginning in fiscal year 2000 shall be distributed as follows:

(1) Up to the first seventy-five million dollars of such funds, or such
lesser amount determined by appropriation to be sufficient to fully fund
subsections 1 and 2 of section 163.031, RSMo, shall be transferred to the
state school moneys fund and distributed in the manner provided in
section 163.031, RSMo; and

(2) Beginning in fiscal year 2000, after distributing funds pursuant to
subdivision (1) of this subsection, the next twenty-five million dollars,
or such lesser amount determined by appropriation to be sufficient, of
the remaining funds shall be transferred to fully fund increases in
appropriations for transportation categorical aid provided pursuant to
section 163.031, RSMo, and any remainder of such twenty-five million
dollars shall be transferred to fund other categorical state aid provided
pursuant to section 163.031, RSMo; provided that, for school year
1999-2000 only, such increase in transportation funding may be placed by
districts in their capital projects fund and shall be placed as otherwise
provided by law in all other years; and

(3) After distributing funds pursuant to subdivisions (1) and (2) of this
subsection, any remaining funds, or such amount determined by
appropriation to be sufficient to fully fund subsections 1 and 2 of
section 163.031, RSMo, shall be transferred to the state school moneys
fund and distributed in the manner provided in section 163.031, RSMo. (L.
1993 S.B. 380 § 8 subsec. 2, A.L. 1995 S.B. 301, A.L. 1998 S.B. 781, A.L.
2005 S.B. 287)

*Effective 7-1-06

*Contingent expiration date. See section 143.107.

(1996) Contingent referendum provision was found to be an
unconstitutional delegation of legislative authority thereby making
section 143.107 void. Akin v. Director of Revenue, 934 S.W.2d 295
(Mo.banc).

1. Any amount of the difference by which the total amount
appropriated by the state to school districts, in accordance with a
judgment or order based on the equal protection clause of the fourteenth
amendment to the Constitution of the United States, for fiscal year 1999
is less than the amount appropriated for the same purpose in fiscal year
1994 in addition to any unexpended appropriation for the 1998 fiscal year
that results in additional unobligated resources for the state in fiscal
year 1999 shall be transferred to the state school moneys fund and
distributed in the manner provided in section 163.031, RSMo.

2. If the total amount appropriated by the state to school districts, in
accordance with a judgment or order based on the equal protection clause
of the fourteenth amendment to the Constitution of the United States, for
fiscal year 2000 or any subsequent fiscal year is less than the amount
appropriated for the same purpose in fiscal year 1999, any amount of the
difference, in addition to any unexpended appropriation for the prior
fiscal year that results in additional unobligated resources for the
state beginning in fiscal year 2000 shall be distributed as follows:

(1) Up to the first seventy-five million dollars, or such lesser amount
determined by appropriation to be sufficient to fully fund district
entitlements pursuant to section 163.031, RSMo, with a proration factor
no less than one, of such funds shall be transferred to the state school
moneys fund and distributed in the manner provided in section 163.031,
RSMo; and

(2) Beginning in fiscal year 2000, after distributing funds pursuant to
subdivision (1) of this subsection, the next twenty-five million dollars,
or such lesser amount determined by appropriation to be sufficient, of
the remaining funds shall be transferred to fully fund increases in
appropriations for transportation categorical aid provided pursuant to
line 11 of subsection 6 of section 163.031, RSMo, and any remainder of
such twenty-five million dollars shall be transferred to fund other
categorical state aid provided pursuant to section 163.031, RSMo;
provided that, for school year 1999-2000 only, such increase in
transportation funding may be placed by districts in their capital
projects fund and shall be** placed as otherwise provided by law in all
other years; and

(3) After distributing funds pursuant to subdivisions (1) and (2) of this
subsection, the next twenty-five million dollars, or such amount
determined by appropriation to be sufficient to fully fund district
entitlements pursuant to section 163.031, RSMo, with a proration factor
no less than one, of such funds shall be transferred to the state school
moneys fund and distributed in the manner provided in section 163.031,
RSMo; and

(4) After distributing funds pursuant to subdivisions (1), (2) and (3) of
this subsection, any remaining funds shall be transferred to fully fund
categorical state aid provided pursuant to section 163.031, RSMo, for
transportation, vocational education, special education, gifted
education, remedial reading and implementation costs of assessments
established pursuant to section 160.526, RSMo. (L. 1993 S.B. 380 § 8
subsec. 2, A.L. 1995 S.B. 301, A.L. 1998 S.B. 781)

*This section was amended by S.B. 287, 2005, effective 7-1-06. Consult
RSMo 2000 for existing section.

*Contingent expiration date. See section 143.107.

**Word "be" does not appear in original rolls.

(1996) Contingent referendum provision was found to be an
unconstitutional delegation of legislative authority thereby making
section 143.107 void. Akin v. Director of Revenue, 934 S.W.2d 295
(Mo.banc).

1. As used in this section, the following words and phrases
shall mean:

(1) "Capital improvement projects", expenditures for lands or existing
buildings, improvements of grounds, construction of buildings, additions
to buildings, remodeling of buildings and initial equipment purchases;

(2) "School facility", a structure dedicated primarily to housing
teachers and students in the instructional process, but shall not include
buildings dedicated primarily to administrative and support functions
within the school.

2. There is hereby created a revolving fund to be known as the "School
Building Revolving Fund". All forfeitures of assets transferred pursuant
to section 166.131, all gifts and bequests to such fund, and such moneys
as may be appropriated to the fund shall be deposited into the school
building revolving fund; except that no more than four hundred forty
million dollars, in the aggregate, shall be transferred to the fund.
After a fund balance has been established by prior years' deposits and
interest, school districts may submit applications for lease purchases
from the revolving fund for specific projects consistent with rules and
regulations of the state board of education and subsection 3 of this
section, except that no school district may be permitted to enter into a
lease purchase from the school building revolving fund without first
submitting a long-range capital improvements plan.

3. To be eligible for a lease purchase authorized by this section:

(1) A school district shall meet the minimum criteria for state aid and
for increases in state aid established pursuant to section 163.021, RSMo;

(2) A school district shall provide a program which is accredited by the
state board of education for grades kindergarten through twelve or for
grades kindergarten through eight; and

(3) A school district shall have an equalized, assessed valuation per
eligible pupil for the preceding year which is less than the statewide
average equalized, assessed valuation per eligible pupil for the
preceding year; and

(4) A school district shall have a bonded indebtedness which is no less
than ninety percent of the constitutional limitation on indebtedness
pursuant to section 26(b) of article VI of the Constitution of Missouri.

4. Lease purchase applications shall be funded, as funds allow, first for
all applications pursuant to subdivision (1) of this subsection and then
for applications pursuant to subdivision (2) of this subsection and then
for applications pursuant to subdivision (3) of this subsection, and for
funding of applications pursuant to a particular subdivision,
applications shall be funded in the order that the applications are
received by the department. If two or more applications are received on
the same day, the district with the lowest appraised valuation per pupil
shall be given priority. Ranking of the applications for offering of
lease purchases shall be done in the following order:

(1) Districts with capital replacement costs in excess of insurance
proceeds due to facility destruction caused by fire or natural disaster
shall be ranked on the basis of percentage of bonding capacity;

(2) Districts with a cumulative percentage growth in fall membership for
the third through the fifth preceding years in excess of twelve percent
and which have a bonded indebtedness which is no less than ninety percent
of the constitutional limitation on indebtedness pursuant to section
26(b) of article VI of the Constitution of Missouri; and

(3) Districts with an equalized assessed valuation per pupil which is
less than the statewide average equalized assessed valuation per pupil
and which have a bonded indebtedness which is no less than ninety percent
of the constitutional limitation on indebtedness pursuant to section
26(b) of article VI of the Constitution of Missouri.

5. When building replacement is caused by fire or natural disaster, the
requirement for a school district to have a long-range capital
improvements plan may be waived by the state board of education.

6. Each school district participating in a lease purchase from the school
building revolving fund shall repay such lease purchase in no more than
ten annual payments made on or before June thirtieth of each year. The
first such payment shall be due and payable on June thirtieth of the
first full fiscal year following receipt of lease purchase proceeds.
Lease purchase repayments shall be immediately deposited to the school
building revolving fund by the department. Interest charged to the school
district shall not exceed three percent.

7. Any school district which fails to obligate the full amount of a loan
from the school building revolving fund for the allowable lease purchase
must return the unobligated amount plus interest earned to the department
no later than June thirtieth of the second full fiscal year after receipt
of loan proceeds.

8. If a school district fails to make an annual payment to the school
building revolving fund after notice of nonpayment by the department,
members of the board of education and the school district's
superintendent shall have violated section 162.091, RSMo, and the
attorney general of the state of Missouri shall be notified by the state
board of education to begin prosecution procedures.

9. All property purchased pursuant to a lease purchase from the school
building revolving fund shall remain the property of the state until such
time as the lease purchase has been fully repaid pursuant to this
section. If a school district does not make an annual payment to the
school building revolving fund after notice of nonpayment by the
department, the state board of education may, if the delinquency exceeds
one hundred eighty days, take possession of the property. As a part of
the lease purchase agreement, the school district shall agree to assume
all costs, obligations and liabilities for or arising out of
establishment, operation and maintenance of the lease purchase property.
Other provisions of law to the contrary notwithstanding, neither the
state nor any state agency shall have any obligation for such costs,
obligations or liabilities unless and until the state board of education
takes possession of the property pursuant to this subsection upon a
school district's failure to make annual payments as required in the
lease purchase agreement.

10. Any unobligated cash balance in the school building revolving fund as
of the effective date of this act*, shall be transferred to aid the
public schools of this state pursuant to section 163.031, RSMo. Any and
all deposits made to the school building revolving fund after August 28,
2003, shall be immediately transferred to the state school moneys fund,
pursuant to section 166.051. (L. 1993 S.B. 380 § 12, A.L. 1995 S.B. 301,
A.L. 1998 H.B. 1265, A.L. 2003 S.B. 675)

*This act (S.B. 675, 2003) contained an effective date of 1-1-04 for §
339.105; remainder of act became effective 8-28-03.

(1996) Contingent referendum provision was found to be an
unconstitutional delegation of legislative authority thereby making
section 143.107, which contained a contingent expiration date for this
section, void. Akin v. Director of Revenue, 934 S.W.2d 295 (Mo.banc).

Sections 166.400 to 166.455 shall be known and may be cited as
the "Missouri Higher Education Savings Program". (L. 1998 H.B. 1694, A.L.
1999 S.B. 460)

As used in sections 166.400 to 166.455, except where the context
clearly requires another interpretation, the following terms mean:

(1) "Beneficiary", any individual designated by a participation agreement
to benefit from payments for qualified higher education expenses at an
eligible educational institution;

(2) "Benefits", the payment of qualified higher education expenses on
behalf of a beneficiary from a savings account during the beneficiary's
attendance at an eligible educational institution;

(3) "Board", the Missouri higher education savings program board
established in section 166.415;

(4) "Eligible educational institution", an institution of postsecondary
education as defined in Section 529(e)(5) of the Internal Revenue Code;

(5) "Financial institution", a bank, insurance company or registered
investment company;

(6) "Internal Revenue Code", the Internal Revenue Code of 1986, as
amended;

(7) "Missouri higher education savings program" or "savings program", the
program created pursuant to sections 166.400 to 166.455;

(8) "Participant", a person who has entered into a participation
agreement pursuant to sections 166.400 to 166.455 for the advance payment
of qualified higher education expenses on behalf of a beneficiary;

(9) "Participation agreement", an agreement between a participant and the
board pursuant to and conforming with the requirements of sections
166.400 to 166.455; and

(10) "Qualified higher education expenses", the qualified costs of
tuition and fees and other expenses for attendance at an eligible
educational institution, as defined in Section 529(e)(3) of the Internal
Revenue Code, as amended. (L. 1998 H.B. 1694, A.L. 1999 S.B. 460)

1. There is hereby created the "Missouri Higher Education
Savings Program". The program shall be administered by the Missouri
higher education savings program board which shall consist of the
Missouri state treasurer who shall serve as chairman, the commissioner of
the department of higher education, the commissioner of the office of
administration, the director of the department of economic development,
two persons having demonstrable experience and knowledge in the areas of
finance or the investment and management of public funds, one of whom is
selected by the president pro tem of the senate and one of whom is
selected by the speaker of the house of representatives, and one person
having demonstrable experience and knowledge in the area of banking or
deposit rate determination and placement of depository certificates of
deposit or other deposit investments. Such member shall be appointed by
the governor with the advice and consent of the senate. The three
appointed members shall be appointed to serve for terms of four years
from the date of appointment, or until their successors shall have been
appointed and shall have qualified. The members of the board shall be
subject to the conflict of interest provisions of section 105.452, RSMo.
Any member who violates the conflict of interest provisions shall be
removed from the board. In order to establish and administer the savings
program, the board, in addition to its other powers and authority, shall
have the power and authority to:

(1) Develop and implement the Missouri higher education savings program
and, notwithstanding any provision of sections 166.400 to 166.455 to the
contrary, the savings programs and services consistent with the purposes
and objectives of sections 166.400 to 166.455;

(2) Promulgate reasonable rules and regulations and establish policies
and procedures to implement sections 166.400 to 166.455, to permit the
savings program to qualify as a "qualified state tuition program"
pursuant to Section 529 of the Internal Revenue Code and to ensure the
savings program's compliance with all applicable laws;

(3) Develop and implement educational programs and related informational
materials for participants, either directly or through a contractual
arrangement with a financial institution for investment services, and
their families, including special programs and materials to inform
families with young children regarding methods for financing education
and training beyond high school;

(4) Enter into agreements with any financial institution, the state or
any federal or other agency or entity as required for the operation of
the savings program pursuant to sections 166.400 to 166.455;

(5) Enter into participation agreements with participants;

(6) Accept any grants, gifts, legislative appropriations, and other
moneys from the state, any unit of federal, state, or local government or
any other person, firm, partnership, or corporation for deposit to the
account of the savings program;

(7) Invest the funds received from participants in appropriate investment
instruments to achieve long-term total return through a combination of
capital appreciation and current income;

(8) Make appropriate payments and distributions on behalf of
beneficiaries pursuant to participation agreements;

(9) Make refunds to participants upon the termination of participation
agreements pursuant to the provisions, limitations, and restrictions set
forth in sections 166.400 to 166.455 and the rules adopted by the board;

(10) Make provision for the payment of costs of administration and
operation of the savings program;

(11) Effectuate and carry out all the powers granted by sections 166.400
to 166.455, and have all other powers necessary to carry out and
effectuate the purposes, objectives and provisions of sections 166.400 to
166.455 pertaining to the savings program; and

(12) Procure insurance, guarantees or other protections against any loss
in connection with the assets or activities of the savings program.

2. Any member of the board may designate a proxy for that member who will
enjoy the full voting privileges of that member for the one meeting so
specified by that member. No more than three proxies shall be considered
members of the board for the purpose of establishing a quorum.

3. Four members of the board shall constitute a quorum. No vacancy in the
membership of the board shall impair the right of a quorum to exercise
all the rights and perform all the duties of the board. No action shall
be taken by the board except upon the affirmative vote of a majority of
the members present.

4. The board shall meet within the state of Missouri at the time set at a
previously scheduled meeting or by the request of any four members of the
board. Notice of the meeting shall be delivered to all other trustees in
person or by depositing notice in a United States post office in a
properly stamped and addressed envelope not less than six days prior to
the date fixed for the meeting. The board may meet at any time by
unanimous mutual consent. There shall be at least one meeting in each
quarter.

5. The funds shall be invested only in those investments which a prudent
person acting in a like capacity and familiar with these matters would
use in the conduct of an enterprise of a like character and with like
aims, as provided in section 105.688, RSMo. The board may delegate to
duly appointed investment counselors authority to act in place of the
board in the investment and reinvestment of all or part of the moneys and
may also delegate to such counselors the authority to act in place of the
board in the holding, purchasing, selling, assigning, transferring or
disposing of any or all of the securities and investments in which such
moneys shall have been invested, as well as the proceeds of such
investments and such moneys. Such investment counselors shall be
registered as investment advisors with the United States Securities and
Exchange Commission. In exercising or delegating its investment powers
and authority, members of the board shall exercise ordinary business care
and prudence under the facts and circumstances prevailing at the time of
the action or decision. No member of the board shall be liable for any
action taken or omitted with respect to the exercise of, or delegation
of, these powers and authority if such member shall have discharged the
duties of his or her position in good faith and with that degree of
diligence, care and skill which a prudent person acting in a like
capacity and familiar with these matters would use in the conduct of an
enterprise of a like character and with like aims.

6. No investment transaction authorized by the board shall be handled by
any company or firm in which a member of the board has a substantial
interest, nor shall any member of the board profit directly or indirectly
from any such investment.

7. No trustee or employee of the savings program shall receive any gain
or profit from any funds or transaction of the savings program. Any
trustee, employee or agent of the savings program accepting any gratuity
or compensation for the purpose of influencing such trustee's, employee's
or agent's action with respect to the investment or management of the
funds of the savings program shall thereby forfeit the office and in
addition thereto be subject to the penalties prescribed for bribery. (L.
1998 H.B. 1694, A.L. 1999 S.B. 460, A.L. 2002 S.B. 776, A.L. 2004 H.B.
959)

1. The board may enter into savings program participation
agreements with participants on behalf of beneficiaries pursuant to the
provisions of sections 166.400 to 166.455, including the following terms
and conditions:

(1) A participation agreement shall stipulate the terms and conditions of
the savings program in which the participant makes contributions;

(2) A participation agreement shall specify the method for calculating
the return on the contribution made by the participant;

(3) The execution of a participation agreement by the board shall not
guarantee that the beneficiary named in any participation agreement will
be admitted to an eligible educational institution, be allowed to
continue to attend an eligible educational institution after having been
admitted or will graduate from an eligible educational institution;

(4) A participation agreement shall clearly and prominently disclose to
participants the risk associated with depositing moneys with the board;

(5) Participation agreements shall be organized and presented in a way
and with language that is easily understandable by the general public; and

(6) A participation agreement shall clearly and prominently disclose to
participants the existence of any load charge or similar charge assessed
against the accounts of the participants for administration or services.

2. The board shall establish the maximum amount which may be contributed
annually by a participant with respect to a beneficiary.

3. The board shall establish a total contribution limit for savings
accounts established under the savings program with respect to a
beneficiary to permit the savings program to qualify as a "qualified
state tuition program" pursuant to Section 529 of the Internal Revenue
Code. No contribution may be made to a savings account for a beneficiary
if it would cause the balance of all savings accounts of the beneficiary
to exceed the total contribution limit established by the board. The
board may establish other requirements that it deems appropriate to
provide adequate safeguards to prevent contributions on behalf of a
beneficiary from exceeding what is necessary to provide for the qualified
higher education expenses of the beneficiary.

4. The board shall establish the minimum length of time that
contributions and earnings must be held by the savings program to qualify
pursuant to section 166.435. Any contributions or earnings that are
withdrawn or distributed from a savings account prior to the expiration
of the minimum length of time, as established by the board, shall be
subject to a penalty pursuant to section 166.430. (L. 1998 H.B. 1694,
A.L. 1999 S.B. 460)

All money paid by a participant in connection with participation
agreements shall be deposited as received and shall be promptly invested
by the board. Contributions and earnings thereon accumulated on behalf of
participants in the savings program may be used, as provided in the
participation agreement, for qualified higher education expenses. (L.
1998 H.B. 1694, A.L. 1999 S.B. 460)

Any participant may cancel a participation agreement at will.
The board shall impose a penalty equal to or greater than ten percent of
the earnings of an account for any distribution that is not:

(1) Used exclusively for qualified higher education expenses of the
designated beneficiary;

(2) Made because of death or disability of the designated beneficiary;

(3) Made because of the receipt of scholarship by the designated
beneficiary;

(4) A rollover distribution, as defined in Section 529(c)(3)(C)(i) of the
Internal Revenue Code; or

(5) Held in the fund for the minimum length of time established by the
board. (L. 1998 H.B. 1694, A.L. 1999 S.B. 460)

1. Notwithstanding any law to the contrary, the assets of the
savings program held by the board and the assets of any deposit program
authorized in section 166.500 and qualified pursuant to Section 529 of
the Internal Revenue Code and any income therefrom shall be exempt from
all taxation by the state or any of its political subdivisions. Income
earned or received from the savings program or deposit program shall not
be subject to state income tax imposed pursuant to chapter 143, RSMo, and
shall be eligible for any benefits provided in accordance with Section
529 of the Internal Revenue Code. The exemption from taxation pursuant to
this section shall apply only to assets and income maintained, accrued,
or expended pursuant to the requirements of the savings program
established pursuant to sections 166.400 to 166.455, and the deposit
program established pursuant to sections 166.500 to 166.529, and Section
529 of the Internal Revenue Code, and no exemption shall apply to assets
and income expended for any other purposes. Annual contributions made to
the savings program held by the board and the deposit program up to and
including eight thousand dollars for the participant taxpayer shall be
subtracted in determining Missouri adjusted gross income pursuant to
section 143.121, RSMo.

2. If any deductible contributions to or earnings from any such program
referred to in this section are distributed and not used to pay qualified
higher education expenses or are not held for the minimum length of time
established by the appropriate Missouri state authority, the amount so
distributed shall be added to the Missouri adjusted gross income of the
participant, or, if the participant is not living, the beneficiary.

3. The provisions of this section shall apply to tax years beginning on
or after January 1, 1999, and the provisions of this section with regard
to sections 166.500 to 166.529 shall apply to tax years beginning on or
after January 1, 2004. (L. 1998 H.B. 1694, A.L. 1999 S.B. 460, A.L. 2004
H.B. 959)

The assets of the savings program shall at all times be
preserved, invested and expended only for the purposes set forth in this
section and in accordance with the participation agreements, and no
property rights therein shall exist in favor of the state. (L. 1998 H.B.
1694)

Any rule or portion of a rule, as that term is defined in
section 536.010, RSMo, that is promulgated under the authority delegated
in sections 166.400 to 166.455 shall become effective only if it has been
promulgated pursuant to the provisions of chapter 536, RSMo. All
rulemaking authority delegated prior to August 28, 1998, is of no force
and effect and repealed; however, nothing in this section shall be
interpreted to repeal or affect the validity of any rule filed or adopted
prior to August 28, 1998, if it fully complied with the provisions of
chapter 536, RSMo. Sections 166.400 to 166.455 and chapter 536, RSMo, are
nonseverable and if any of the powers vested with the general assembly
pursuant to chapter 536, RSMo, to review, to delay the effective date or
to disapprove and annul a rule are subsequently held unconstitutional,
then the grant of rulemaking authority and any rule proposed or adopted
after August 28, 1998, shall be invalid and void. (L. 1998 H.B. 1694)

The director of investment of the state treasurer's office
shall, on a semiannual basis, review the financial status and investment
policy of the program as well as the participation rate in the program.
The director of investment shall also review the continued viability of
the program and the administration of the program by the board. The
director of investment shall report the findings annually to the board,
which shall subsequently disclose such findings at a public meeting. (L.
1998 H.B. 1694)

Money accruing to and deposited in individual savings accounts
shall not be part of "total state revenues" as defined in sections 17 and
18 of article X of the Constitution of the state of Missouri and the
expenditure of such revenues shall not be an expense of state government
under section 20 of article X of the Constitution of the state of
Missouri. (L. 1998 H.B. 1694, A.L. 1999 S.B. 460)

All personally identifiable information concerning participants
and beneficiaries of accounts established within the Missouri higher
education savings program pursuant to sections 166.400 to 166.456 shall
be confidential, and any disclosure of such information shall be
restricted to purposes directly connected with the administration of the
program. (L. 2002 H.B. 1086 merged with S.B. 776)

Sections 166.500 to 166.529 shall be known and may be cited as
the "Missouri Higher Education Deposit Program". (L. 2004 H.B. 959)

Sunset and termination dates, see § 166.532

Notwithstanding the provisions of sections 166.400 to 166.456 to
the contrary, the higher education deposit program is established as a
nonexclusive alternative to the Missouri higher education savings
program, and any participant may elect to participate in both programs
subject to aggregate Missouri program limitations. (L. 2004 H.B. 959 §
166.505)

Sunset and termination dates, see § 166.532

As used in sections 166.500 to 166.529, except where the context
clearly requires another interpretation, the following terms mean:

(1) "Beneficiary", any individual designated by a participation agreement
to benefit from payments for qualified higher education expenses at an
eligible educational institution;

(2) "Benefits", the payment of qualified higher education expenses on
behalf of a beneficiary from a deposit account during the beneficiary's
attendance at an eligible educational institution;

(3) "Board", the Missouri higher education savings program board
established in section 166.415;

(4) "Eligible educational institution", an institution of postsecondary
education as defined in Section 529(e)(5) of the Internal Revenue Code;

(5) "Financial institution", a depository institution and any
intermediary that brokers certificates of deposits;

(6) "Internal Revenue Code", the Internal Revenue Code of 1986, as
amended;

(7) "Missouri higher education deposit program" or "deposit program", the
program created pursuant to sections 166.500 to 166.529;

(8) "Participant", a person who has entered into a participation
agreement pursuant to sections 166.500 to 166.529 for the advance payment
of qualified higher education expenses on behalf of a beneficiary;

(9) "Participation agreement", an agreement between a participant and the
board pursuant to and conforming with the requirements of sections
166.500 to 166.529;

(10) "Qualified higher education expenses", the qualified costs of
tuition and fees and other expenses for attendance at an eligible
educational institution, as defined in Section 529(e)(3) of the Internal
Revenue Code of 1986, as amended. (L. 2004 H.B. 959 § 166.510)

Sunset and termination dates, see § 166.532

1. There is hereby created the "Missouri Higher Education
Deposit Program". The program shall be administered by the Missouri
higher education savings program board.

2. In order to establish and administer the deposit program, the board,
in addition to its other powers and authority, shall have the power and
authority to:

(1) Develop and implement the Missouri higher education deposit program
and, notwithstanding any provision of sections 166.500 to 166.529 to the
contrary, the deposit programs and services consistent with the purposes
and objectives of sections 166.500 to 166.529;

(2) Promulgate reasonable rules and regulations and establish policies
and procedures to implement sections 166.500 to 166.529, to permit the
deposit program to qualify as a qualified state tuition program pursuant
to Section 529 of the Internal Revenue Code and to ensure the deposit
program's compliance with all applicable laws;

(3) Develop and implement educational programs and related informational
materials for participants, either directly or through a contractual
arrangement with a financial institution or other entities for deposit
educational services, and their families, including special programs and
materials to inform families with children of various ages regarding
methods for financing education and training beyond high school;

(4) Enter into an agreement with any financial institution, entity, or
business clearinghouse for the operation of the deposit program pursuant
to sections 166.500 to 166.529; providing however, that such institution,
entity, or clearinghouse shall be a private for-profit or not-for-profit
entity and not a government agency. No more than one board member may
have a direct interest in such institution, entity, or clearinghouse.
Such institution, entity, or clearinghouse shall implement the board's
policies and administer the program for the board and with electing
depository institutions and others;

(5) Enter into participation agreements with participants;

(6) Accept any grants, gifts, legislative appropriations, and other
moneys from the state, any unit of federal, state, or local government or
any other person, firm, partnership, or corporation for deposit to the
account of the deposit program;

(7) Invest the funds received from participants in appropriate investment
instruments to be held by depository institutions or directly deposit
such funds in depository institutions as provided by the board and
elected by the participants;

(8) Make appropriate payments and distributions on behalf of
beneficiaries pursuant to participation agreements;

(9) Make refunds to participants upon the termination of participation
agreements pursuant to the provisions, limitations, and restrictions set
forth in sections 166.500 to 166.529 and the rules adopted by the board;

(10) Make provision for the payment of costs of administration and
operation of the deposit program;

(11) Effectuate and carry out all the powers granted by sections 166.500
to 166.529, and have all other powers necessary to carry out and
effectuate the purposes, objectives, and provisions of sections 166.500
to 166.529 pertaining to the deposit program;

(12) Procure insurance, guarantees, or other protections against any loss
in connection with the assets or activities of the deposit program, as
the members in their best judgment deem necessary;

(13) To both adopt and implement various methods of transferring money by
electronic means to efficiently transfer funds to depository institutions
for deposit, and in addition or in the alternative, to allow funds to be
transferred by agent agreements, assignment, or otherwise, provided such
transfer occurs within two business days;

(14) To both adopt and implement methods and policies designed to obtain
the maximum insurance of such funds for each participant permitted and
provided for by the Federal Deposit Insurance Corporation, or any other
federal agency insuring deposits, and taking into consideration the law
and regulation promulgated by such federal agencies for deposit insurance.

3. The funds shall be invested only in those investments which a prudent
person acting in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character and with like aims,
as provided in section 105.688, RSMo, as a means to hold funds until they
are placed in a Missouri depository institution as a deposit. The board
may delegate to duly appointed representatives of financial institutions
authority to act in place of the board in the investment and reinvestment
of all or part of the moneys and may also delegate to such
representatives the authority to act in place of the board in the
holding, purchasing, selling, assigning, transferring, or disposing of
any or all of the investments in which such moneys shall have been
invested, as well as the proceeds of such investments and such moneys,
however, such investments shall be limited to certificates of deposit and
other deposits in federally insured depository institutions. Such
representatives shall be registered as "qualified student deposit
advisors on Section 529 plans" with the board and such board shall, by
rule, develop and administer qualification tests from time to time to
provide representatives the opportunity to qualify for this program. In
exercising or delegating its investment powers and authority, members of
the board shall exercise ordinary business care and prudence under the
facts and circumstances prevailing at the time of the action or decision.
No member of the board shall be liable for any action taken or omitted
with respect to the exercise of, or delegation of, these powers and
authority if such member shall have discharged the duties of his or her
position in good faith and with that degree of diligence, care, and skill
which a prudent person acting in a like capacity and familiar with these
matters would use in the conduct of an enterprise of a like character and
with like aims.

4. No board member or employee of the deposit program shall personally
receive any gain or profit from any funds or transaction of the deposit
program as a result of his or her membership on the board. Any board
member, employee, or agent of the deposit program accepting any gratuity
or compensation for the purpose of influencing such board member's,
employee's, or agent's action with respect to choice of intermediary,
including any financial institution, entity, or clearinghouse, for the
funds of the deposit program shall thereby forfeit the office and in
addition thereto be subject to the penalties prescribed for bribery.
However, a board member who is regularly employed directly or indirectly
by a financial institution may state that institution's interest and
absent himself or herself from voting.

5. Depository institutions originating the deposit program shall be the
agent of the board and offer terms for certificates of deposit and other
deposits in such program as permitted by the board, subject to a uniform
interest rate disclosure as defined in federal regulations of the Board
of Governors of the Federal Reserve System, specifically Federal Reserve
Regulation DD, as amended from time to time. The board shall establish
various deposit opportunities based on amounts deposited and length of
time held that are uniformly available to all depository institutions
that elect to participate in the program, and the various categories of
fixed or variable rates shall be the only interest rates available under
this program. A depository institution that originates the deposit as
agent for the board and participates in the program shall receive back
and continue to hold the certificate of deposit or other deposit,
provided such depository institution continues to comply with
requirements and regulations prescribed by the board. Such deposit and
certificate of deposit shall be titled in the name of the clearing entity
for the benefit of the participant, and shall be insured as permitted by
any agency of the federal government that insures deposits in depository
institutions. Any depository institution or intermediary that fails to
comply with these provisions shall forfeit its right to participate in
this program; provided however, the board shall be the sole and exclusive
judge of compliance except as otherwise provided by provisions in Section
529 of the Internal Revenue Code and the Internal Revenue Service
enforcement of such section. (L. 2004 H.B. 959 § 166.515)

Sunset and termination dates, see § 166.532

1. The board may enter into deposit program participation
agreements with participants on behalf of beneficiaries pursuant to the
provisions of sections 166.500 to 166.529, including the following terms
and conditions:

(1) A participation agreement shall stipulate the terms and conditions of
the deposit program in which the participant makes contributions;

(2) A participation agreement shall specify the method for calculating
the return on the contribution made by the participant as otherwise
provided in sections 166.500 to 166.529;

(3) The execution of a participation agreement by the board shall not
guarantee that the beneficiary named in any participation agreement will
be admitted to an eligible educational institution, be allowed to
continue to attend an eligible educational institution after having been
admitted or will graduate from an eligible educational institution;

(4) A participation agreement shall disclose to participants the risk
associated with depositing moneys with the board, including information
on federal insured deposit availability and coverage and penalties for
withdrawal before the deposit has matured;

(5) Participation agreements shall be organized and presented in a way
and with language that is easily understandable by the general public; and

(6) A participation agreement shall clearly and prominently disclose to
participants the existence of any fee or similar charge assessed against
the accounts of the participants for administration or services.

2. The board shall establish the maximum amount which may be contributed
annually by a participant with respect to a beneficiary.

3. The board shall establish a total contribution limit for deposit
accounts established under the deposit program with respect to a
beneficiary to permit the deposit program to qualify as a qualified state
tuition program pursuant to Section 529 of the Internal Revenue Code. No
contribution may be made to a deposit account for a beneficiary if it
would cause the balance of all deposit accounts of the beneficiary to
exceed the total contribution limit established by the board. The board
may establish other requirements that it deems appropriate to provide
adequate safeguards to prevent contributions on behalf of a beneficiary
from exceeding what is necessary to provide for the qualified higher
education expenses of the beneficiary.

4. The board shall establish the minimum length of time that
contributions and earnings must be held by the deposit program to qualify
pursuant to section 166.435. Any contributions or earnings that are
withdrawn or distributed from a deposit account prior to the expiration
of the minimum length of time, as established by the board, shall be
subject to a penalty pursuant to section 166.514. (L. 2004 H.B. 959 §
166.520)

Sunset and termination dates, see § 166.532

All money paid by a participant in connection with participation
agreements shall be deposited as received and shall be promptly invested
by the board or may be directly deposited by the board's agents.
Contributions and earnings thereon accumulated on behalf of participants
in the deposit program may be used, as provided in the participation
agreement, for qualified higher education expenses. (L. 2004 H.B. 959 §
166.525)

Sunset and termination dates, see § 166.532

Any participant may cancel a participation agreement at will.
The board shall impose a penalty equal to or greater than ten percent of
the earnings of an account for any distribution that is not:

(1) Used exclusively for qualified higher education expenses of the
designated beneficiary;

(2) Made because of death or disability of the designated beneficiary;

(3) Made because of the receipt of scholarship by the designated
beneficiary;

(4) A rollover distribution, as defined in Section 529(c)(3)(C)(i) of the
Internal Revenue Code; or

(5) Held in the fund for the minimum length of time established by the
board. (L. 2004 H.B. 959 § 166.530)

Sunset and termination dates, see § 166.532

The assets of the deposit program shall at all times be
preserved, invested, and expended only for the purposes set forth in this
section and in accordance with the participation agreements, and no
property rights therein shall exist in favor of the state. (L. 2004 H.B.
959 § 166.540)

Sunset and termination dates, see § 166.532

Any rule or portion of a rule, as that term is defined in
section 536.010, RSMo, that is promulgated pursuant to sections 166.500
to 166.529 shall become effective only if it has been promulgated
pursuant to the provisions of chapter 536, RSMo. All rulemaking authority
delegated prior to August 28, 2004, is of no force and effect and
repealed; however, nothing in this section shall be interpreted to repeal
or affect the validity of any rule filed or adopted prior to August 28,
2004, if it fully complied with the provisions of chapter 536, RSMo.
Sections 166.500 to 166.529 and chapter 536, RSMo, are nonseverable and
if any of the powers vested with the general assembly pursuant to chapter
536, RSMo, to review, to delay the effective date, or to disapprove and
annul a rule are subsequently held unconstitutional, then the grant of
rulemaking authority and any rule proposed or adopted after August 28,
2004, shall be invalid and void. (L. 2004 H.B. 959 § 166.545)

Sunset and termination dates, see § 166.532

The Missouri state auditor shall, on a semiannual basis, review
the financial status and investment policy of the program as well as the
participation rate in the program. The auditor shall also review the
continued viability of the program and the administration of the program
by the board. The auditor shall report the findings annually to the
board, which shall subsequently disclose such findings at a public
meeting. (L. 2004 H.B. 959 § 166.550)

Sunset and termination dates, see § 166.532

Money accruing to and deposited in individual deposit accounts
shall not be part of total state revenues as defined in sections 17 and
18, article X, Constitution of Missouri, and the expenditure of such
revenues shall not be an expense of state government under section 20,
article X, Constitution of Missouri. (L. 2004 H.B. 959 § 166.555)

Sunset and termination dates, see § 166.532

All personally identifiable information concerning participants
and beneficiaries of accounts established within the Missouri higher
education deposit program pursuant to sections 166.500 to 166.529 shall
be confidential, and any disclosure of such information shall be
restricted to purposes directly connected with the administration of the
program. (L. 2004 H.B. 959 § 166.556)

Sunset and termination dates, see § 166.532

Pursuant to section 23.253, RSMo, of the Missouri sunset act:

(1) The provisions of the new program authorized under sections 166.500
to 166.532 shall automatically sunset six years after August 28, 2004,
unless reauthorized by an act of the general assembly; and

(2) If such program is reauthorized, the program authorized under
sections 166.500 to 166.532 shall automatically sunset twelve years after
the effective date of the reauthorization of sections 166.500 to 166.532;
and

(3) Sections 166.500 to 166.532 shall terminate on September first of the
calendar year immediately following the calendar year in which the
program authorized under sections 166.500 to 166.532 is sunset. (L. 2004
H.B. 959 § 166.557)

Sunset date 8-28-10, unless reauthorized

Termination date 9-01-11, unless reauthorized

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