1. (a) The provisions of this section are intended to meet the requirements of the Internal Revenue Code, §529.
2. (b) All payments of amounts due to the fund for a prepaid tuition contract must be made in cash. No person may make payments to the fund in excess of the amounts required to be paid under the prepaid tuition contract selected by the purchaser.
3. (c) A separate accounting shall be maintained for each beneficiary.
4. (d) The purchaser of a prepaid tuition contract and the beneficiary of the contract shall have no ability to directly or indirectly control or direct the investment of the payments made under the contract or any earnings of the fund.
5. (e) The purchaser of a prepaid tuition contract and the beneficiary of the contract cannot use any interest in the contract as security for a loan or other obligation.
6. (f) The board shall make such reports as the Secretary of the Treasury shall require.
7. (g) Required penalties shall be imposed on refunds and other payments under a prepaid tuition contract as provided in this chapter or in the prepaid tuition contract. The amount of any refund or other payment to which a person is otherwise entitled under a prepaid tuition contract shall be reduced by the amount of any required penalty thereon.

Source Note:The provisions of this §7.3 adopted to be effective November 15, 1996, 21 TexReg 10885; amended to be effective December 3, 1997, 22 TexReg 11716.