(a) The state or any department, division or agency of the state may establish a scholarship program to award scholarships to students that consist of contributions and earnings accrued in a savings account created through the educational investment plan established pursuant to § 49-7-808. Any scholarship program established under this section shall be registered with the board.

(b) Notwithstanding any provision of this part to the contrary, the entity establishing and maintaining a scholarship program under this section shall not be required to select the scholarship beneficiary at the time the scholarship program is established. The entity establishing the scholarship program shall select the scholarship beneficiary and notify the board of the beneficiary by no later than thirty (30) calendar days prior to the start of the academic term in which the tuition benefits under the program are to be applied. The notification shall be in writing and shall include the name, address and social security number of the scholarship beneficiary, the amount of the redemption value of the account awarded and a statement specifying whether the scholarship beneficiary may receive a refund under this part. The entity establishing the scholarship program shall select the scholarship beneficiaries in accordance with criteria established by the entity.

(c) If a scholarship beneficiary does not use tuition benefits awarded under this section within a length of time specified under the scholarship program, the entity may select and award the benefits to a new beneficiary.

(d) The board may, through the promulgation of rules and regulations, authorize political subdivisions of the state and organizations that are exempt from federal income taxation under § 501(a) of the Internal Revenue Code and described in 26 U.S.C. § 501 (c)(3), to establish scholarship programs pursuant to this section.