(b) Program participation.

1. (1) Opening an account.

   1. (A) An eligible participant must complete an Account Application Form and any other documents required by the committee, the program manager, this part, or applicable federal and state law, rule, or regulation and submit such documents to the program manager along with the initial minimum account contribution as set forth in the then current program description.
   2. (B) The acceptance by the program manager for processing an Account Application Form and an initial contribution does not constitute the agreement of the program manager to open an account.
   3. (C) The program manager has the right, but not the obligation, to reject an Account Application Form that does not contain all information requested on the Account Application Form.
   4. (D) There shall be no restrictions on the age of the designated beneficiary (except as may be deemed necessary to comply with applicable law) or any required relationship between the account owner and designated beneficiary.
2. (2) Entering into a participation agreement. Subsequent to or concurrently with opening an account, an eligible participant must provide the information required by and agree by virtue of opening an account to be bound by a participation agreement for each designated beneficiary on whose behalf the account owner intends to make contributions.

3. (3) Assigning accounts to portfolios and series.

   1. (A) The program manager will assign each account to a portfolio or portfolios based upon information submitted by the account owner.
   2. (B) The selection of an age-based option for each individual designated beneficiary may be based on the designated beneficiary’s age, and the selection of a custom portfolio option, an iShares year-of-enrollment portfolio, an iShares asset allocation portfolio, or a custom iShares portfolio for an individual designated beneficiary will be based on the investment option selection made by the account owner on the Account Application Form.

4. (4) Contributions to an account.

   1. (A) Form of contribution.

(i) Contributions must be made in cash only.

1. (ii) As used in this section, “cash” includes checks or electronic funds transfers.

   1. (iii) Contributions may be made by:

(b) (b) Electronic funds transfer from an existing account of the account owner pursuant to an automated investment plan;

1. (c) (c) Employer payroll deduction; or

   1. (d) (d) Such other method as set forth in the then current program description.

      1. (iv) The term does not include:

(b) (b) Travelers checks;

1. (c) (c) Foreign checks not in United States dollars;

   1. (d) (d) Checks dated over the number of days specified in the then current program description;

(h) (h) Noncash assets;

1. (i) (i) Charges on debit or credit cards; or

(j) (j) Any other payment method prohibited by the then current program description.

1. (v) In order for an account owner to make contributions by employer payroll deduction, the account owner’s employer must be able to meet the program manager’s operational and administrative requirements for qualified tuition program payroll contributions.

   1. (B) Amount of contribution.

      1. (i) The minimum initial and minimum subsequent contribution amount by cash is as set forth in the then current program description, and may, from time to time, be revised subject to the approval of the committee.
      2. (ii) The minimum initial and minimum subsequent contribution amount by automatic investment plan are as set forth in the then current program description.
      3. (iii) The contribution maximum for all accounts for a designated beneficiary is as set forth in the then current program description.

   2. (C) Crediting of contributions.

      1. (i) The program manager generally shall credit contributions to an account as of the same business day as received in good order as determined by the program manager, provided such contributions are delivered to and accepted by the program manager by 4:00 p.m. eastern time on such business day, or upon such other business day as may be set forth in the then current program description.
      2. (ii) The program manager generally shall credit contributions made by electronic fund transfer to an account generally the next business day after the transfer is received in good order as determined by the program manager, provided such contributions are delivered to and accepted by the program manager by 10:00 p.m. eastern time on such business day, or upon such other business day as may be set forth in the then current program description.

   3. (D) Accounting of contributions.

      1. (i) On the business day of the investment of a contribution by the program manager, units (or additional units) of the applicable portfolio or portfolios will generally be reflected in the records of the program for the applicable account.
      2. (ii) Contributions made by check, which are received in good order, will generally be considered received by the program in a given year if postmarked on or before December 31 of the same year, provided the checks are subsequently paid.
      3. (iii) Contributions made pursuant to an electronic funds transfer will generally be considered received by the program in a given year if initiated by the account owner on or before 10:00 p.m. eastern time on December 31 of such year, provided the funds are subsequently withdrawn from an account owner’s checking or savings account at another financial institution.
      4. (iv) Contributions made pursuant to an automatic investment plan will generally be considered received by the program in the year the automatic investment debit has been deducted from an account owner’s checking or savings account at another financial institution.
   4. (E) Investment of contributions. A contribution to an account is generally invested in units of the portfolio or portfolios designated by the account owner or assigned by the program manager and/or the committee on the same business day as the crediting of the contribution to an account, or upon such other business day as may be set forth in the then current program description.

   5. (F) Overfunding an account.

      1. (i) Any contribution made by an account owner will generally be rejected or returned to the account owner in the event the contribution exceeds the contribution maximum for the designated beneficiary.
      2. (ii) All accounts within the program for the same designated beneficiary will be aggregated for purposes of determining whether the contribution maximum has been exceeded.
      3. (iii) At the program manager’s discretion, a penalty may be imposed on contributions that exceed the contribution maximum.
      4. (iv) The program manager may refuse contributions that it determines, in its sole discretion, appear to constitute an abuse of the program.

   6. (G) Rollover contributions.

      1. (i) Rollover contributions to an account must be accompanied by an incoming rollover form (or such other form as approved by the committee) executed by the account owner and submitted in good order as determined by the program manager.
      2. (ii) An incoming rollover form (or other approved form) must include all information the program manager and/or committee may require in order to process the rollover contribution in accordance with all requirements of the program, including those specified in:

(b) (b) The program description; and

1. (c) (c) Applicable federal and state law, rule, or regulation.

   1. (iii) The program manager has the right, but not the obligation, to reject an applicable form that does not contain all information requested.

      1. (iv) The program manager may record the entire amount of the contribution as earnings unless the incoming rollover form (or other approved form) is accompanied by a statement from the administrator or manager of the Section 529 qualified tuition program from which the rollover contribution is made detailing the amount of the rollover contribution that constitutes principal and the amount of the rollover contribution that constitutes earnings, together with such other information as the committee and/or program manager may require.
      2. (v) Rollover contributions to an account may be subject to federal income tax and/or penalties as required by then current federal law or regulation.
      3. (vi) Reporting and payment of any such federal or state taxes or penalties shall be the obligation of the account owner.

2. (5) Changes to an account.

   1. (A) Change in designated beneficiary.

      1. (i) To change the designated beneficiary of an account, the account owner must complete a Designated Beneficiary Change Form or such other form as the committee shall approve (and any additional required documentation) and submit it in good order as determined by the program manager in accordance with all requirements of the program, including those specified in this part, the program description, and applicable federal or state law, rule, or regulation.
      2. (ii) The program manager has the right, but not the obligation, to reject an applicable form that does not contain all information requested.
      3. (iii) If the account owner’s request is in good order (as determined by the program manager), the designated beneficiary on the account will be changed to the new designated beneficiary on the records of the program.

   2. (B) Partial transfer of account assets to new designated beneficiary.

      1. (i) To transfer some, but not all, assets from one (1) account to another account, the account owner must provide such information as is necessary for the program manager to process such transaction in accordance with all requirements of the program, including those specified in:

(b) (b) The program description; and

1. (c) (c) Applicable federal law or regulation.

   1. (ii) If the account owner’s request is in good order as determined by the program manager the amount specified by the account owner for transfer from the account will be transferred on the records of the program to an account for the benefit of the new designated beneficiary.

   2. (C) Successor account owner.

      1. (i) An account owner may name a successor account owner if permitted by the applicable form, and to the extent permissible in accordance with the program description and applicable law.
      2. (ii) Upon notification to the program manager of the death of the account owner, accompanied by a death certificate or other proof of death recognized under applicable law and such other information as the program manager requires, including receipt in good order of an Account Application Form executed by the successor account owner, the program manager will change the account owner for the account on the records of the program.
      3. (iii) In the event a successor account owner is not named on the program records or the named successor account owner does not accept the account, and the account owner has not disposed of the account otherwise in a will, trust, or other testamentary disposition, the surviving spouse of the account owner will become the account owner for the account.
      4. (iv) In the event there is no surviving spouse and the designated beneficiary is not a minor, the designated beneficiary will become the account owner for the account.
      5. (v) If the designated beneficiary is a minor, the designated beneficiary's custodial parent will become the account owner for the account.
      6. (vi) If the designated beneficiary has more than one (1) custodial parent the custodial parent whose birthday is earlier in the calendar year will become the account owner for the account.
      7. (vii) If a court of competent jurisdiction declares an account owner legally incompetent and appoints a successor account owner, the program manager will change the account owner for the account on the records of the program.

   3. (D) Change in account owner.

      1. (i) The account owner may transfer ownership of an account to another eligible participant, if the transfer is irrevocable and transfers all rights, title, interest, and power over the account and is made without consideration.
      2. (ii) The account owner will be responsible for any adverse federal and state tax consequences arising from such a change.
      3. (iii) A change of account owner must be accompanied by an account information change form or such other form as approved by the committee and submitted in good order as determined by the program manager.

   4. (E) Account owner direction of the investment of contributions.

      1. (i) Account owners cannot direct the investment of contributions (or the earnings on contributions) once they have been used to purchase units of the designated portfolio or portfolios.
      2. (ii) Account owners may change how investments are allocated among the available portfolio options in accordance with:

(b) (b) Applicable law or regulation.

1. (F) General. The ability of account owners to effect changes in and the consequences to account owners may be affected by subsequent changes in federal and state legislation.

2. (6) Penalties for misrepresentations. In the event an account owner makes any material misrepresentation in any oral or written communication with the committee or the program manager, including, without limitation, on any plan forms, the program manager may:

   1. (A) Terminate an account owner’s account;
   2. (B) Charge a penalty of up to fifteen percent (15%) on the investment earnings of the account; and
   3. (C) Seek to recover any losses incurred by the program, the committee, or the program manager as a result of such misrepresentation.