{"data":{"id":"us-ky/krs-164a.701","jurisdiction":"us-ky","citation":"KRS 164A.701","heading":"Commonwealth postsecondary education prepaid tuition trust fund --","body":"Prepaid postsecondary tuition administrative account.\n(1) (a) There is hereby created an instrumentality of the Commonwealth to be known\nas the \"Commonwealth postsecondary education prepaid tuition trust fund\", to\nbe governed by the board and administered by the Tuition Account Program\nOffice. The fund shall be attached to the Kentucky Higher Education\nAssistance Authority for administrative and reporting purposes, and shall be\ngoverned, managed, and administered as a separate and distinct\ninstrumentality of the Commonwealth under the provisions of KRS 164A.700\nto 164A.709.\n(b) The fund shall consist of payments received from prepaid tuition contracts\nunder KRS 164A.700 to 164A.7 09. Payments received relating to contracts in\nexistence on April 25, 2006, and income earned from the investment of those\npayments shall be maintained separately from payments received relating to\ncontracts entered into after April 25, 2006, and income ea rned from the\ninvestment of those payments. Income earned from the investment of\npayments to the fund shall remain in the fund and be credited to it.\n(c) Notwithstanding any other statute to the contrary, all moneys received under\nthe authority of KRS 164A.700 to 164A.709 shall be deemed to be trust funds\nto be held and applied solely for payment to qualified beneficiaries and\npurchasers and to meet the expenses necessary for the administration and\nmaintenance of the fund as provided in KRS 164A.700 to 164A.709.\n(d) The fund shall not constitute an investment company as defined in KRS\n291.010.\n(e) Obligations under a prepaid tuition contract incurred in accordance with the\nprovisions of KRS 164A.700 to 164A.709 shall not be deemed to constitute a\ndebt, liabi lity, or obligation of the Kentucky Higher Education Assistance\nAuthority, but shall be payable solely from the fund. Each prepaid tuition\ncontract shall contain a statement that the obligation shall be payable solely\nfrom the fund.\n(2) The purposes of the fund are:\n(a) To provide affordable access to participating institutions for the qualified\nbeneficiaries; and\n(b) To provide students and their parents economic protection against rising\ntuition costs.\n(3) The Tuition Account Program Office and the facili ties of the Kentucky Higher\nEducation Assistance Authority shall be used and employed in the administration of\nthe fund including, but not limited to, the keeping of records, the employment of\nstaff to assist in the administration of the fund, the manageme nt of accounts and\nother investments, the transfer of funds, and the safekeeping of securities\nevidencing investments.\n(4) (a) Assets of the fund shall be invested in any of the following security types that\nare deemed appropriate by the board:\n1. Government and agency bonds;\n2. Investment grade asset-backed securities and corporate bonds;\n3. Mortgages, excluding interest -only (IO), principal -only (PO), and\ninverse floaters; and\n4. Equities.\n(b) Equities shall constitute no greater than sixty percent (60%) of the entire\nportfolio, including up to ten percent (10%) in equities from outside the\nUnited States.\n(c) The duration of the fixed -income portion of the portfolio shall reflect the\nfuture liability of the fund for tuition payments.\n(d) Assets may be pooled for investment purposes with any other investment of\nthe Commonwealth that is eligible for asset pooling.\n(e) Leveraging is strictly prohibited.\n(5) The board may receive and deposit into the fun d gifts made by any individual or\nagency as deemed acceptable by the board together with funds that are obtained\nfrom sources legally available and determined by the board to be applicable for the\npurposes of KRS 164A.700 to 164A.709.\n(6) There is created a separate account within the Kentucky Higher Education\nAssistance Authority to be known as the prepaid postsecondary tuition\nadministrative account for the purposes of implementing and maintaining the fund.\n(a) Moneys shall be transferred from the fund to  the administrative account to\nmeet the expenses necessary for the administration and maintenance of the\nfund. Expenses incurred by the board and the Tuition Account Program Office\nin carrying out the provisions of KRS 164A.700 to 164A.709 shall be made\npayable from the fund through the administrative account, and no\nadministrative expenses shall be incurred by the Kentucky Higher Education\nAssistance Authority beyond those for which moneys are provided by the\nfund.\n(b) The board may establish administrativ e fees for handling prepaid tuition\ncontracts and deposit the funds attributable to the fees in the administrative\naccount.","path":["KRS Chapter 164A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=48185","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:51:19Z","sha256":"40e446db151fb996abd0245f3208f5d434077ff993545c9ebf12f4d6295d921e","source_id":"us-ky","stale":false,"prev":"us-ky/krs-164a.700","next":"us-ky/krs-164a.703"},"notice":"GroundRules: Original legal text. Not legal advice."}