173.2660.  Award to legal dependent, agreement, contents. — 1.  Each legal dependent who is a tuition award recipient pursuant to the provisions of section 173.2655 shall execute an agreement as provided in this section.  Such agreement shall include the following terms, as appropriate:

  (1)  The tuition award recipient agrees to reside within the state of Missouri for a period of five years following the use of the tuition award;

  (2)  Each year during the five-year period following use of the tuition award, the tuition award recipient agrees to file a state income tax return and provide a copy of such tax return to the department to document that such recipient still resides in the state of Missouri;

  (3)  If the tuition award recipient fails to annually file a tax return to prove residency in the state of Missouri for the five-year period following the use of the tuition award or fails to remain a resident of Missouri for the five-year period following the use of the tuition award, the tuition award recipient agrees that the tuition award shall be treated as a loan to such recipient, subject to the following conditions:

  (a)  Interest shall be charged on the unpaid balance of the amount received from the date the recipient ceases to reside in Missouri until the amount received is paid back to the state.  The interest rate shall be adjusted annually and shall be equal to one percentage point over the prevailing United States prime rate in effect on January first of such year; and

  (b)  The servicer of such loans shall be the higher education loan authority of the state of Missouri created pursuant to sections 173.350 to 173.445; and

  (4)  Any residency, filing, or payment obligation incurred by the tuition award recipient under section 173.2655 is canceled in the event of the tuition award recipient's total and permanent disability or death.

  2.  The five-year residency requirement begins once the legal dependent applies for and receives the tuition award for the first time and continues until the tuition award recipient's:

  (1)  Completion of the five-year tuition award eligibility period;

  (2)  Completion of a baccalaureate degree at an institution of higher education;

  (3)  Completion of an associate degree at a public community college and notification to the department that such recipient does not intend to pursue a baccalaureate degree or additional associate degree using tuition awards pursuant to the public safety recruitment and retention act; or

  (4)  Notification to the department that such recipient does not plan to use additional tuition awards pursuant to the public safety recruitment and retention act.