{"data":{"id":"us-ok/okla.-stat.-tit.-70-70-3970.7","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 70, § 70-3970.7","heading":"Program accounts","body":"\n\nA. The program shall be operated through the use of accounts.\n\nAn account may be opened by any person who desires to save to pay\n\nthe qualified higher education expenses of a person by:\n\n1. Completing an application in the form prescribed by the\n\nBoard;\n\n2. Paying the one-time application fee established by the\n\nBoard;\n\n3. Making the minimum contribution required by the Board or by\n\nopening an account; and\n\n4. Designating the type of account to be opened if more than\n\none type of account is offered.\n\nB. Any person may make contributions to an account after the\n\naccount is opened.\n\nC. Contributions to accounts may be made only in cash.\n\nD. Account owners may withdraw all or part of the balance from\n\nan account on sixty (60) days' notice, or a shorter period as may be\n\nauthorized by the Board, under rules prescribed by the Board. These\n\nrules shall include provisions that will generally enable the Board\n\nor program manager to determine if a withdrawal is a nonqualified\n\nwithdrawal or a qualified withdrawal. The rules may, but need not,\n\nrequire one or more of the following:\n\n1. Account owners seeking to make a qualified withdrawal or\n\nother withdrawal that is not a nonqualified withdrawal shall provide\n\ncertifications, copies of bills for qualified higher education\n\nexpenses or other supporting material;\n\n2. Qualified withdrawals from an account shall be made only by\n\na check payable jointly to the designated beneficiary and a higher\n\neducation institution; or\n\n3. Withdrawals not meeting certain requirements shall be\n\ntreated as nonqualified withdrawals by the program manager.\n\nE. An account owner may change the designated beneficiary of an\n\naccount to an individual who is a member of the family of the former\n\ndesignated beneficiary in accordance with procedures established by\n\nthe Board.\n\nF. An account owner may make the following changes and\n\ntransfers relating to the account:\n\n1. Change the beneficiary of the account;\n\n2. Transfer funds between accounts; and\n\n3. Transfer funds between an account and an account in a\n\nqualified tuition program in another state or make a deposit to a\n\nnew or existing account or to an account in a qualified tuition\n\nprogram in another state.\n\nThe account owner shall be informed that certain tax\n\nconsequences may apply to these changes.\n\nG. An account owner may make the changes, transfers, and\n\nwithdrawals described in subsection F of this section to an account\n\nthat is owned by the account owner. The account owner may also make\n\ntransfers to an account that is owned by another person. If a\n\nchange of beneficiary or transfer causes the total account balance\n\nfor all accounts under the program for the new beneficiary to exceed\n\nthe maximum account balance limit, the excess amount shall be\n\nrejected and returned to the account owner.\n\nH. In the case of any nonqualified withdrawal from an account,\n\nan amount of not more than five percent (5%) of the proposed\n\nwithdrawal may be withheld as a penalty and paid to the Board for\n\nuse in operating and marketing the program and for state student\n\nfinancial aid.\n\nI. The Board may set the percentage of the penalty prescribed\n\nin subsection H of this section or change the basis of this penalty\n\nif the Board determines that establishing a penalty or raising an\n\nexisting penalty is needed to discourage nonqualified withdrawals.\n\nJ. If an account owner makes a nonqualified withdrawal and no\n\npenalty amount is withheld pursuant to subsection H of this section\n\nor the amount withheld was less than the amount required to be\n\nwithheld under that subsection for nonqualified withdrawals, the\n\naccount owner shall pay the unpaid portion of the penalty to the\n\nBoard on or before April 15 of the following tax year.\n\nK. Each account for each designated beneficiary shall be\n\nmaintained separately from each other account under the program.\nection H of this section\n\nor the amount withheld was less than the amount required to be\n\nwithheld under that subsection for nonqualified withdrawals, the\n\naccount owner shall pay the unpaid portion of the penalty to the\n\nBoard on or before April 15 of the following tax year.\n\nK. Each account for each designated beneficiary shall be\n\nmaintained separately from each other account under the program.\n\nL. Separate records and accounting shall be maintained for each\n\naccount for each designated beneficiary.\n\nM. Except as permitted by Section 529 of the Internal Revenue\n\nCode, no contributor to, account owner of, or designated beneficiary\n\nof any account may directly or indirectly direct the investment of\n\nany contributions to an account or the earnings from the account.\n\nN. If the Board terminates the authority of a financial\n\ninstitution to hold accounts and accounts must be moved from that\n\nfinancial institution to another financial institution, the Board\n\nshall select the financial institution and type of investment to\n\nwhich the balance of the account is moved unless the Internal\n\nRevenue Service provides guidance stating that allowing the account\n\nowner to select among several financial institutions that are then\n\ncontractors would not cause a plan to cease to be a qualified state\n\ntuition plan.\n\nO. Neither an account owner nor a designated beneficiary may\n\nuse an interest in an account as security for a loan. Any pledge of\n\nan interest in an account is of no force and effect.\n\nP. The Board shall adopt guidelines and procedures to prevent\n\ncontributions on behalf of a designated beneficiary in excess of\n\nthose necessary to pay the qualified higher education expenses of\n\nthe designated beneficiaries. The guidelines may address the\n\nfollowing:\n\n1. Procedures for aggregating the total balances of multiple\n\naccounts in qualified state tuition programs established for a\n\ndesignated beneficiary;\n\n2. The establishment of a maximum total balance that may be\n\nheld in accounts for a designated beneficiary;\n\n3. Requirements that persons who contribute to an account\n\ncertify that to the best of their knowledge the balance in all\n\nqualified state tuition programs, as defined in Section 529 of the\n\nInternal Revenue Code, of which the designated beneficiary is the\n\ndesignated beneficiary does not exceed the lesser of:\n\na. a maximum college savings amount established by the\n\nBoard from time to time, and\n\nb. the cost in current dollars of qualified higher\n\neducation expenses that the contributor reasonably\n\nanticipates the designated beneficiary will incur;\n\n4. Requirements that any excess balances with respect to a\n\ndesignated beneficiary be promptly withdrawn in a nonqualified\n\nwithdrawal or transferred to another account of a family member or\n\nrolled over to another family member beneficiary in accordance with\n\nthis section.\n\nQ. The financial institution(s) shall make all reports and\n\ninformational returns as required by the Internal Revenue Service,\n\nthe Oklahoma Tax Commission, and other pertinent federal and state\n\nlaws and regulations.\n\nR. The program manager shall make such reports with respect to\n\ncontributions, distributions and other matters that the Board may\n\nrequire pursuant to federal and state law reporting requirements.\n\nThe statement shall identify the contributions made during a\n\npreceding twelve-month period, the total contributions made through\n\nthe end of the period, the value of the account as of the end of\n\nthis period, distributions made during this period and any other\n\nmatters that the Board requires be reported to the account owner.\n\nS. The State of Oklahoma, a local government of this state or\n\norganizations described in Section 501(c)(3) of the Internal Revenue\n\nCode may open and become the account owner of an account to fund\n\nscholarships for persons whose identity will be determined after an\n\naccount is opened. Accounts established pursuant to this section\nmatters that the Board requires be reported to the account owner.\n\nS. The State of Oklahoma, a local government of this state or\n\norganizations described in Section 501(c)(3) of the Internal Revenue\n\nCode may open and become the account owner of an account to fund\n\nscholarships for persons whose identity will be determined after an\n\naccount is opened. Accounts established pursuant to this section\n\nshall be exempt from the requirement that a beneficiary be\n\ndesignated when an account is opened. Each person who receives an\n\ninterest in the account established pursuant to this section in the\n\nform of a scholarship shall be considered a designated beneficiary\n\nfor the purposes of this act.","path":["OK Code","Title 70"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os70.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"20d7998ff6dfc6a4db2c0fd69d8395c278dcb9fdd1d79d032e9113b6d8ffbbbd","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-70-70-3970.6","next":"us-ok/okla.-stat.-tit.-70-70-3970.9"},"notice":"GroundRules: Original legal text. Not legal advice."}