A. The "education savings program" is created to allow interested persons to enter into education investment agreements with the board as a means to save money to pay a beneficiary's eligible expenses for an education. The education savings program may consist of one or more education savings plans. The board shall administer the education savings program through accounts established in the education trust fund pursuant to education investment agreements. Money in an account may be used by the beneficiary for qualified higher education expenses. B. The board shall develop and administer the education savings program in a manner that allows account owners and beneficiaries to obtain and maintain federal income tax benefits or treatment provided by the Internal Revenue Code for qualified tuition programs and exemptions under the federal securities laws. C. The "education trust fund" is created as a nonreverting fund in the state treasury. The fund shall be administered by the board to carry out the education savings program. The fund consists of separate trust accounts held in the name of account owners. Income from investment of the fund shall be credited to the separate accounts. D. The board may contract with one or more managers to invest the contributions deposited to the education trust fund. The board and the managers shall account for each contribution by an account owner. E. Amounts may be withdrawn or transferred from trust accounts in the education trust fund only as provided in the related education investment agreements. All money contributed to accounts established in the fund are held in trust by the board and the respective managers for the sole benefit of the respective account owners and beneficiaries. F. The "program administration fund" is created as a nonreverting fund in the state treasury. The fund consists of all administrative and other fees received by the board pursuant to education investment agreements and contracts with managers and any other money credited to the fund. The state treasurer shall invest the fund, and the investment income shall be credited to the fund. Money in the fund may be used to pay costs of establishing, marketing and otherwise administering the education savings program in accordance with the Education Trust Act. Disbursements from the fund shall be by warrants of the secretary of finance and administration on vouchers signed by the director of the board or the director's authorized representative. History: Laws 1997, ch. 259, § 3; 1999, ch. 221, § 2; 2001, ch. 270, § 2; repealed and reenacted by Laws 2014, ch. 76, § 3; 2023, ch. 17, § 4. Repeals and reenactments. — Laws 2014, ch. 76, § 3 repealed former 21-21K-3 NMSA 1978, and enacted a new section, effective May 21, 2014. Cross references. — For the federal Internal Revenue Code, see 26 U.S.C.S. § 1 et seq. The 2023 amendment, effective June 16, 2023, changed the name of the "college savings program" to the "education savings program", and updated certain language related to allowable uses of money in education savings accounts; substituted "education" for "college" throughout the section; in Subsection A, after "used by the beneficiary", deleted "at any eligible institution of higher education in New Mexico or any other state" and added "for qualified higher education expenses"; and in Subsection B, after "qualified", deleted "state". The 2001 amendment, effective June 15, 2001, added Subsection D. The 1999 amendment, effective June 18, 1999, in Subsection A, inserted "The board shall provide that" and "either", deleted "and regulations" following "state investment officer according to rules", and substituted "or by a private investment advisor, approved by the council, pursuant to a contract between the board and the investment advisor" for "for the investment of funds pursuant to the Education Trust Act" in the seventh sentence; deleted former Subsection C and redesignated former Subsection D as present Subsection C; and, in Subsection C, added the last sentence. Sovereign immunity. — Subsection C of Section 21-21K-3 NMSA 1978 does not include an express or an implied grant of sovereign immunity. Lu v. Education Trust Bd. of N.M. , 2013-NMCA-010, 293 P.3d 186. Where investors, who had entered into contracts with the defendants to participate in the state's qualified higher education tuition programs, sued defendants, including the state, for breach of contract for mismanaging the investors' investments; and the state argued that the provision of Subsection C of Section 21-21K-3 NMSA 1978 which limits the source of recovery to the education trust fund overrides Subsection A of Section 37-1-23 NMSA 1978 which waives governmental immunity for written contracts, the state was not immune from suit because Subsection C of Section 21-21K-3 NMSA 1978 places limits on liability and identifies sources of recovery, but does not expressly or impliedly grant sovereign immunity. Lu v. Education Trust Bd. of N.M. , 2013-NMCA-010, 293 P.3d 186.
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