WES MOORE, Governor Ch. 113
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Chapter 113
(Senate Bill 959)
AN ACT concerning
Higher Education – Maryland 529 Program – Reform
FOR the purpose of abolishing and repealing the Maryland 529 Board; specifying that the
State Treasurer is the successor to the Maryland 529 Board; transferring to the
Office of the State Treasurer the responsibility for administering the Maryland 529
Program, including the Maryland Prepaid College Trust, the Maryland College
Investment Plan, the Maryland Broker–Dealer College Investment Plan, and the
Maryland ABLE Program; authorizing the State Treasurer to take certain actions in
administering the Maryland 529 Program; requiring the State Treasurer to take
certain actions in administering the Maryland 529 Program; prohibiting the State
Treasurer from taking certain actions in administering the Maryland Prepaid
College Trust; establishing the Workgroup on the Maryland 529 Prepaid College
Trust Program; requiring the Workgroup to identify certain policies, procedures, and
practices and to develop recommendations relating to administering the Maryland
529 Program; establishing a process for making certain claims against the Maryland
Prepaid College Trust; providing for the transfer of certain services, appropriations,
funding, grants, property, records, fixtures, credits, assets, liabilities, obligations,
rights, and privileges to the Office of the State Treasurer; providing that employees
transferred to the Office of the State Treasurer as a result of this Act shall be
transferred without diminution of certain rights, benefits, or employment or
retirement status; providing for the continuity of certain transactions affected by or
flowing from this Act; providing for the continuity of certain laws, rules and
regulations, standards and guidelines, policies, orders, and other directives, permits
and license applications, forms, plans, memberships, contracts, agreements,
property, investigations, and administrative and judicial responsibilities; providing
for the appropriate transitional provisions relating to the continuity of certain boards
and other units; and generally relating to Maryland 529 Program reform.
BY repealing and reenacting, with amendments,
Article – Education
Section 18–1901, 18–1902.1, 18–1903 through 18–1905, 18–1905.1, 18–1906,
18–1906.1, 18–1907 through 18–1911, 18–1914, 18–1916, 18–19A–01 through
18–19A–03, 18–19A–04.1, 18–19A–05, 18–19A–05.1, 18–19A–07, 18–19B–01
through 18–19B–06, 18–19B–08, 18–19C–01 through 18–19C–03, 18–19C–05,
18–19C–06, 18–19C–08, and 18–19C–09
Annotated Code of Maryland
(2022 Replacement Volume)
BY repealing and reenacting, without amendments,
Article – Education Ch. 113 2023 LAWS OF MARYLAND
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Section 18–1902, 18–1912, 18–1913, 18–1915, 18–19A–04, 18–19A–06,
18–19A–06.1, 18–19B–07, 18–19C–04, 18–19C–07, and 18–19C–10
Annotated Code of Maryland
(2022 Replacement Volume)
BY adding to
Article – Education
Section 18–1917
Annotated Code of Maryland
(2022 Replacement Volume)
BY repealing and reenacting, with amendments,
Article – State Finance and Procurement
Section 11–203(f)
Annotated Code of Maryland
(2021 Replacement Volume and 2022 Supplement)
BY repealing and reenacting, with without amendments,
Article – State Government
Section 9–803(a)(10) and (11)
Annotated Code of Maryland
(2021 Replacement Volume and 2022 Supplement)
BY adding to
Article – State Government
Section 9–803(a)(11)
Annotated Code of Maryland
(2021 Replacement Volume and 2022 Supplement)
BY repealing and reenacting, with amendments,
Article – State Government
Section 9–803(a)(11) 9–803(a)(10) and (11)
Annotated Code of Maryland
(2021 Replacement Volume and 2022 Supplement)
BY adding to
Article – State Government
Section 9–803(a)(11)
Annotated Code of Maryland
(2021 Replacement Volume and 2022 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Education
WES MOORE, Governor Ch. 113
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18–1901.
(a) In this subtitle the following words have the meanings indicated.
(b) “ABLE account holder” means an individual who has established an account
described under § 529A(e) of the Internal Revenue Code and is the designated beneficiary
of the account.
(c) “Account holder” means an individual who:
(1) Makes or undertakes the obligation to make advance payments of
qualified higher education expenses as provided under a prepaid contract; and
(2) Except as provided in § 18–1909(b) of this subtitle, is a resident of
Maryland or of the District of Columbia at the time that the account holder enters into a
prepaid contract.
(d) [“Board” means the Maryland 529 Board.
(e)] “Broker–Dealer Plan” means the Maryland Broker –Dealer College
Investment Plan established under Subtitle 19B of this title.
[(f)] (E) “Current prepaid contract obligations” means the scheduled payments
due for the next fiscal year under existing prepaid contracts.
[(g)] (F) “Eligible institution of higher education” means an institution of higher
education that:
(1) Offers an associate, bachelor, or graduate degree program; and
(2) Is eligible to participate in federal financial aid programs.
[(h)] (G) “Market value of program assets” means the amount of cash and cash
equivalents held by the Trust plus the fair market value of other assets of the Trust.
[(i)] (H) “Maryland ABLE Program” means the Maryland Achieving a Better
Life Experience Program established under Subtitle 19C of this title.
[(j)] (I) “Plan” means the Maryland Senator Edward J. Kasemeyer College
Investment Plan established under Subtitle 19A of this title.
[(k)] (J) “Prepaid contract” means a contract between the [Board] STATE
TREASURER and an account holder under the provisions of this subtitle for the advance
payment of qualified higher education expenses by the account holder for a qualified
beneficiary to attend an eligible institution of higher education, if the qualified beneficiary
is admitted to the institution. Ch. 113 2023 LAWS OF MARYLAND
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[(l)] (K) “Program” means Maryland 529.
[(m)] (L) “Qualified beneficiary” means an individual who:
(1) Is eligible to apply advance payments of qualified higher education
expenses to undergraduate or graduate qualified higher education expenses at an eligible
institution of higher education under the provisions of this subtitle; and
(2) Except as provided in § 18–1909(b) of this subtitle, is a resident of the
State or of the District of Columbia at the time that the account holder enters into a prepaid
contract.
[(n)] (M) “Qualified higher education expenses” has the meaning stated in § 529
of the Internal Revenue Code.
[(o)] (N) “Qualified state tuition program” has the meaning stated in § 529 of the
Internal Revenue Code.
[(p)] (O) “Trust” means the Maryland Senator Edward J. Kasemeyer Prepaid
College Trust established under this subtitle.
[(q)] (P) (1) “Tuition” means the actual tuition and mandatory fees assessed
to all students by an eligible institution of higher education as a condition of enrollment at
the institution.
(2) “Tuition” does not include any fee that is assessed by the institution for
a particular course taken, year of enrollment, academic status, course of study, residency
status, or any other distinguishing factor used by the institution to determine a specific fee.
18–1902.
It is the intent of the General Assembly to enhance the accessibility and affordability
of higher education for all citizens of the State and for all citizens of the District of Columbia
by establishing a method to provide for the prepayment of tuition at eligible institutions of
higher education.
18–1902.1.
(a) There is a Program entitled Maryland 529.
(b) The purpose of the Program is to provide for the administration by the [Board]
STATE TREASURER of the Maryland Senator Edward J. Kasemeyer Prepaid College
Trust, the Maryland Senator Edward J. Kasemeyer College Investment Plan, the Maryland
Broker–Dealer College Investment Plan, and the Maryland ABLE Program. WES MOORE, Governor Ch. 113
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18–1903.
(a) There is a Maryland Senator Edward J. Kasemeyer Prepaid College Trust.
(b) The purpose of the Trust is to provide:
(1) A means for payment of the cost of tuition in advance of enrollment at
an eligible institution of higher education; and
(2) An assurance to a beneficiary who enrolls at an eligible institution of
higher education that the [Board] STATE TREASURER shall make every effort to invest
the advance payments so that the prepaid contract will cover the average in–State tuition
costs at public institutions of higher education in the State at the time that the benefits are
exercised.
(c) The [Board] STATE TREASURER shall administer the Trust in compliance
with Internal Revenue Service standards for qualified State STATE tuition programs.
(d) The funds of the Trust consist of:
(1) Payments received from prepaid contracts made under the provisions
of this subtitle;
(2) Bequests, endowments, or funds from any other available private
source;
(3) Interest and income earned from the investments of the Trust; and
(4) Federal, State, or local funds, or funds from any other available public
source.
(e) Money remaining in the Trust at the end of the fiscal year shall remain in the
Trust and may not revert to the General Fund of the State.
(f) Money of the Trust may not be considered money of the State and may not be
deposited into the Treasury.
(g) Money of the Trust may not be considered money of the Maryland Senator
Edward J. Kasemeyer College Investment Plan and may not be commingled with the Plan.
(h) Money of the Trust may not be considered money of or be commingled with
the Maryland Broker–Dealer College Investment Plan.
(i) Money of the Trust may not be considered money of or be commingled with
the Maryland ABLE Program. Ch. 113 2023 LAWS OF MARYLAND
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(j) (1) The debts, contracts, and obligations of the Trust are not the contracts,
debts, or obligations of the State and neither the faith and credit nor taxing power of the
State is pledged directly or indirectly or contingently, morally or otherwise, to the payment
of the debts, contracts, and obligations.
(2) The [Board] STATE TREASURER cannot directly or indirectly or
contingently obligate, morally or otherwise, the State to levy or pledge any form of taxation
whatsoever for the debts and obligations of the Trust or to make any appropriation for the
payment of the debts and obligations of the Trust.
(k) Neither the State nor any eligible institution of higher education shall be
liable for any losses or shortage of funds in the event that the Maryland Senator Edward
J. Kasemeyer Prepaid College Trust is insufficient to meet the tuition requirements of an
institution attended by the qualified beneficiary.
18–1904.
[(a) There is a Maryland 529 Board.
(b)] The [Board] STATE TREASURER shall administer:
(1) The Maryland Senator Edward J. Kasemeyer Prepaid College Trust
established under this subtitle;
(2) The Maryland Senator Edward J. Kasemeyer College Investment Plan
established under Subtitle 19A of this title;
(3) The Maryland Broker–Dealer College Investment Plan established
under Subtitle 19B of this title; and
(4) The Maryland ABLE Program established under Subtitle 19C of this
title.
[(c) The Board consists of the following members:
(1) The Secretary of the Maryland Higher Education Commission;
(2) The State Superintendent of Schools;
(3) The State Treasurer;
(4) The State Comptroller;
(5) The Chancellor of the University System of Maryland;
WES MOORE, Governor Ch. 113
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(6) The Secretary of Disabilities; and
(7) Five members of the public who shall be appointed by the Governor and
shall have significant experience in finance, accounting, investment management, or other
areas that can be of assistance to the Board.
(d) A member of the Board designated under subsection (c)(1) through (6) of this
section may designate an employee from the member’s staff to represent the member of the
Board, with the full voting rights, powers, and duties of the member.
(e) Before taking office, each appointee to the Board shall take the oath required
by Article I, § 9 of the Maryland Constitution.
(f) (1) Except for the terms of the initial members of the Board, the term of a
public member of the Board is 4 years.
(2) The terms of the public members of the Board are staggered as required
by the terms of the members of the Board on October 1, 1998.
(3) At the end of a term, a public member continues to serve until a
successor is appointed and qualifies.
(4) A public member who is appointed after a term has begun serves only
for the remainder of the term and until a successor is appointed and qualifies.
(5) A public member is eligible for reappointment.
(g) The Governor may remove a public member for incompetence or misconduct.]
18–1905.
(a) [The Board, from among the members of the Board, shall elect a chairman
and may elect additional officers that the Board considers necessary.
(b) The Board shall determine the times and places of meetings.
(c) A member of the Board:
(1) May not receive compensation;
(2) Is entitled to reimbursement for expenses under the Standard State
Travel Regulations; and
(3) Shall file a public disclosure of financial interests as required under the
Maryland Public Ethics Law.
Ch. 113 2023 LAWS OF MARYLAND
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(d)] (1) The [Board] STATE TREASURER:
(i) Shall appoint a DEPUTY TREASURER TO ADMINISTER THE
Program executive director who is in the executive service of the State Personnel
Management System; and
(ii) May employ additional PROGRAM staff in accordance with the
budget.
(2) (i) Except for employees described in subparagraph (ii) or (iii) of this
paragraph, the employees shall be skilled service employees subject to the provisions of the
State Personnel and Pensions Article that govern skilled service employees.
(ii) An employee is in the professional service and subject to the
provisions of the State Personnel and Pensions Article that govern professional service
employees if the position:
1. Requires knowledge of an advanced type in a field of
science or learning customarily acquired by a course of specialized intellectual instruction
and study; and
2. Normally requires a professional license, an advanced
degree, or both.
(iii) An employee is in the management service and subject to the
provisions of the State Personnel and Pensions Article that govern management service
employees if the position:
1. Primarily involves direct responsibility for the oversight
and management of personnel and financial resources;
2. Requires the exercise of discretion and independent
judgment; and
3. Is not in the executive service.
(3) The [Board] STATE TREASURER may retain the services of
consultants, administrators, and other personnel, as necessary, to administer the Trust,
the Plan, the Broker–Dealer Plan, or the Maryland ABLE Program.
(4) The budget for the Program[, the Board,] and [its] staff [is] RETAINED
BY THE STATE TREASURER TO ADMINIST ER THE PROGRAM ARE subject to review by
the General Assembly for information purposes only.
WES MOORE, Governor Ch. 113
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[(e)] (B) The [Board] STATE TREASURER may adopt any regulations that the
[Board] STATE TREASURER considers necessary to carry out the provisions of this subtitle
or Subtitle 19A, Subtitle 19B, or Subtitle 19C of this title.
[(f)] (C) In [addition] ADMINISTERING THE PROGRAM, the [Board] STATE
TREASURER may:
(1) [Adopt an official seal] ADMINISTER OATHS , TAKE TESTIMONY , AND
SUBPOENA WITNESSES A ND BOOKS, RECORDS, AND OTHER DOCUMENTS ;
(2) Sue and be sued FOR CAUSES OF ACTION RELATED TO THE
ADMINISTRATION OF TH E PROGRAM;
(3) Execute contracts and other necessary instruments;
(4) (2) Hold, buy, and sell instruments, obligations, securities, and other
investments consistent with its comprehensive investment plan;
(5) (3) Enter into agreements with eligible institutions of higher
education and other public or private entities for the promotion, administration, or
marketing of the Program, the Trust, the Plan, the Broker–Dealer Plan, or the Maryland
ABLE Program;
(6) (4) Invest funds not required for immediate disbursement;
(7) (5) Solicit and accept gifts, grants, loans, or other aid from any
source or participate in any government program for purposes consistent with this subtitle
and Subtitles 19A, 19B, and 19C of this title;
(8) (6) Subject to the review of the General Assembly, impose, collect,
and distribute across Maryland 529 programs reasonable administrative fees for any
transactions under the Trust, the Plan, the Broker–Dealer Plan, or the Maryland ABLE
Program or involving prepaid contracts or transactions affecting the Program, the Trust,
the Plan, the Broker–Dealer Plan, or the Maryland ABLE Program;
(9) (7) Procure insurance against any loss of assets of the Program, the
Trust, the Plan, the Broker–Dealer Plan, or the Maryland ABLE Program;
(10) (8) Endorse insurance coverage written exclusively for the purpose
of protecting:
(i) A prepaid contract under the Trust and the account holder and
the qualified beneficiary of the contract;
Ch. 113 2023 LAWS OF MARYLAND
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(ii) An investment account under the Plan, or the Broker–Dealer
Plan, and the account holder and qualified designated beneficiary of the investment
account; or
(iii) An ABLE account under the Maryland ABLE Program and the
ABLE account holder;
(11) (9) Designate terms under which money may be withdrawn from the
Program, the Trust, the Plan, the Broker–Dealer Plan, or the Maryland ABLE Program;
(12) (10) Establish additional procedural and substantive requirements
for participation in and the administration or marketing of the Program, the Trust, the
Plan, the Broker–Dealer Plan, or the Maryland ABLE Program;
(13) (11) Appear on the [Board’s] STATE TREASURER’S own behalf
before [other] boards, commissions, or other governmental agencies; and
(14) (12) Take any other action that the [Board] STATE TREASURER
considers appropriate to implement and administer the Program, the Trust, the Plan, the
Broker–Dealer Plan, or the Maryland ABLE Program.
(D) THE STATE TREASURER MAY :
(1) DELEGATE, WHOLLY OR PARTLY , THE EXERCISE OF FIDU CIARY
DUTIES RELATED TO TH E TRUST; AND
(2) CONTRACT FOR SUPPORT SERVICES NECESSARY T O CARRY OUT
THE STATE TREASURER’S FIDUCIARY DUTIES R ELATED TO THE TRUST.
18–1905.1.
(a) (1) The [Board] STATE TREASURER shall develop and implement a
marketing plan to increase participation in Maryland 529.
(2) (i) The marketing plan shall identify methods to increase general
participation in Maryland 529.
(ii) The [Board] STATE TREASURER shall coordinate with the
Board of Trustees of the Maryland Teachers and State Employees Supplemental
Retirement Plans and local school systems, respectively, to identify methods to increase
participation in Maryland 529 among:
1. State employees that participate in other State tax
savings programs; and
WES MOORE, Governor Ch. 113
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2. Families of students in local school systems with lower
rates of participation in Maryland 529 than the State population.
(b) On or before December 1, 2016 2025, and every 3 years thereafter, the
[Board] STATE TREASURER shall submit the marketing plan required under subsection
(a) of this section to the Governor and, in accordance with § 2–1257 of the State Government
Article, the Senate Budget and Taxation Committee, the Senate [Education, Health, and
Environmental Affairs] Committee ON EDUCATION, ENERGY, AND THE
ENVIRONMENT , the House Committee on Ways and Means, and the House Appropriations
Committee.
18–1906.
(a) The [Board] STATE TREASURER shall adopt a comprehensive investment
plan for the administration of the Trust.
(b) The plan shall specify the investment policies used by the [Board] STATE
TREASURER in the administration of the Trust.
(c) Assets of the Trust shall be invested in accordance with the comprehensive
investment plan.
(d) The comprehensive investment plan must indicate the percentage of assets
that shall be held in each class of investment, the amount of funds held in any cash pool,
the amount of funds held in fixed assets investments, the amount of funds held in equity
investments, and the percentage and dollar value of assets placed with outside managers.
(e) (1) Notwithstanding any law restricting the deposit or investment of State
money, the [Board] STATE TREASURER may place assets of the Trust in savings accounts
or may use the assets to purchase fixed or variable life insurance or annuity contracts,
securities, evidence of indebtedness, or other investment products pursuant to the
comprehensive investment plan.
(2) Any insurance, annuity contracts, savings, or other investment
products procured by the [Board] STATE TREASURER shall be underwritten and offered
in compliance with applicable federal and State laws.
(f) The [Board] STATE TREASURER shall make every effort to invest the assets
of the Trust in a manner that earns, at a minimum, sufficient earnings to generate the
difference between the prepaid amount under prepaid contracts and the average in–State
tuition costs at public institutions of higher education in the State at the time that the
benefits are exercised.
Ch. 113 2023 LAWS OF MARYLAND
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(g) The comprehensive investment plan shall provide for the Trust to be
administered in an actuarially sound manner to assure that the [Board] STATE
TREASURER may defray obligations of the Trust.
(h) The [Board] STATE TREASURER shall review the comprehensive investment
plan at least annually to assure that the Trust remains actuarially sound.
(i) The [Board] STATE TREASURER may contract with an investment advisory
or management company for the investment and management of the Trust as long as the
Trust is administered in accordance with the comprehensive investment plan.
(j) The [Board] STATE TREASURER:
(1) Shall preserve, invest, and expend the assets of the Trust solely for the
purposes of this subtitle; and
(2) May not loan, transfer, or use the assets for any other purpose of the
State.
(k) The Trust is not subject to § 7–302 of the State Finance and Procurement
Article.
(l) Unless the [Board] STATE TREASURER provides otherwise by regulation,
the [Board] STATE TREASURER shall use the proceeds in the Trust in the following order:
(1) To pay eligible institutions of higher education in accordance with the
[Board’s] STATE TREASURER’S obligations under prepaid contracts;
(2) To refund money on the termination of prepaid contracts; and
(3) To pay the operating expenses of the [Board] STATE TREASURER IN
ADMINISTERING THE PROGRAM; AND
(4) TO MAKE PAYMENTS TO R ESOLVE CLAIMS BROUGH T AGAINST THE
TRUST IN ACCO RDANCE WITH § 18–1917 OF THIS SUBTITLE .
(m) (1) Except as provided in paragraph (2) of this subsection, if the [Board]
STATE TREASURER determines after an annual review that the market value of Trust
assets exceeds the amount necessary to satisfy all scheduled payments currently due or
scheduled to become due under all prepaid contracts by 30% or more, the [Board] STATE
TREASURER may provide for a rebate from the excess to account holders of existing
prepaid contracts in an amount to be determined by the [Board] STATE TREASURER.
(2) The [Board] STATE TREASURER may not rebate any amount to
account holders if, within the 5 years immediately preceding the proposed rebate: WES MOORE, Governor Ch. 113
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(i) The [Board] STATE TREASURER has requested an
appropriation under § 18–1906.1 of this subtitle; or
(ii) The Trust has failed to repay to the State any appropriation
under § 18–1906.1 of this subtitle.
18–1906.1.
(a) If the current prepaid contract obligations of the Trust exceed the market
value of Trust assets, at the request of the [Board] STATE TREASURER, the Governor
shall include in the annual budget bill submitted to the General Assembly an appropriation
in the amount determined under subsection (b) of this section.
(b) The appropriation to be included in the budget bill under subsection (a) of this
section shall equal the difference between the current prepaid contract obligations and the
market value of Trust assets.
(c) For purposes of this section, the current prepaid contract obligations and the
market value of Trust assets:
(1) Shall be determined as of June 30 of the calendar year that ended before
the beginning of the fiscal year for which the appropriation is requested; and
(2) Shall be verified by the report of the independent outside auditor
required under § 18–1916 of this subtitle.
(d) (1) The amount appropriated under this section shall be deposited into the
Trust.
(2) All amounts paid into the Trust under this section shall constitute and
be accounted for as advances to the Trust.
(3) Subject to the rights of the Trust’s contract holders, amounts
appropriated under this section shall be repaid to the State without interest in equal
amounts in each of the next 2 fiscal years succeeding the one for which the appropriation
was made.
(4) If the appropriation in the State budget as enacted by the General
Assembly is less than the amount specified under subsection (b) of this section, the [Board]
STATE TREASURER may adjust the terms of subsequent or current prepaid contracts to
ensure continued actuarial soundness of the Trust.
18–1907.
(a) In this section, “fiduciary” means: Ch. 113 2023 LAWS OF MARYLAND
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(1) [A member of the Board] THE STATE TREASURER; or
(2) An employee of the Program or the Trust who exercises any
discretionary authority or control over:
(i) The management or administration of the Trust; or
(ii) The management or disposition of the assets of the Trust; OR
(3) AN INDIVIDUAL TO WHOM THE TREASURER HAS DELEGAT ED
FIDUCIARY DUTIES IN ACCORDANCE WITH § 18–1905 OF THIS SUBTITLE .
(b) A fiduciary shall discharge the fiduciary’s duties with respect to the Trust:
(1) Solely in the interest of the participants;
(2) For the exclusive purposes of providing benefits to the participants and
providing reasonable expenses of administering the Trust;
(3) With the care, skill, prudence, and diligence under the circumstances
then prevailing, that a prudent person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character with like aims;
(4) By diversifying the investments of the Trust so as to minimize the risk
of large losses, unless under the circumstances it is clearly prudent not to do so;
(5) In accordance with the laws governing the Trust; and
(6) In accordance with the documents and instruments governing the Trust
to the extent that the documents and instruments are consistent with this subtitle.
(c) In exercising authority, control, or discretion with respect to the Trust, a
fiduciary may not:
(1) Use the assets of the Trust for the fiduciary’s own interest or account;
(2) Act in a transaction involving the Trust on behalf of a person, or
represent a person, if the interests of the person are adverse to the interests of the Trust or
the interests of participants;
(3) Receive any consideration for the fiduciary’s own account from a person
dealing with the Trust in connection with a transaction involving the assets of the Trust;
or
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(4) Become an endorser or surety or, in any manner, an obligor, for money
lent to or borrowed from the [Board] STATE TREASURER.
18–1908.
(a) The [Board] STATE TREASURER shall purchase a bond for each fiduciary in
accordance with Title 9, Subtitle 17 of the State Government Article.
(b) Unless a fiduciary is bonded, the fiduciary may not exercise custody or control
of any assets of the Trust.
(c) A fiduciary may not allow another fiduciary to act in violation of this section.
18–1909.
(a) (1) [The Board shall] ON OR AFTER JUNE 1, 2023, THE STATE
TREASURER MAY NOT establish ANY NEW PREPAID CONT RACTS OR EXTEND OR
UPGRADE ANY EXISTING prepaid contracts under the Trust to provide for the advance
payment of tuition at:
[(1)] (I) A community college;
[(2)] (II) A 4–year college;
[(3)] (III) A university; or
[(4)] (IV) Any combination of a community college, college, or university.
(2) ON OR AFTER JUNE 1, 2023, AN ACCOUNT HOLDER MA Y NOT
ENTER INTO ANY NEW PREPAID CONTRACTS OR EXTEND OR UPGRADE ANY EXISTING
PREPAID CONTRACTS UNDER THE TRUST TO PROVIDE FOR THE ADVANCE PAYMENT
OF TUITION AT:
(I) A COMMUNITY COLLEGE ;
(II) A 4–YEAR COLLEGE ;
(III) A UNIVERSITY; OR
(IV) ANY COMBINATION OF A COMMUNITY COLLEGE , COLLEGE,
OR UNIVERSITY.
(b) (1) For the purpose of entering into a prepaid contract, either the account
holder or the qualified beneficiary must be a resident of Maryland or of the District of
Columbia at the time that the account holder enters into the prepaid contract. Ch. 113 2023 LAWS OF MARYLAND
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(2) For the purposes of determining residency for the purchase of a prepaid
contract:
(i) For residency in Maryland, “resident” has the meaning stated in
§ 10–101 of the Tax – General Article; and
(ii) For residency in the District of Columbia, “resident” has the
meaning stated in § 47–1801.04 of the District of Columbia Code Annotated.
(c) The cost of a prepaid contract shall be based on:
(1) The average current in–State tuition costs at the time the prepaid
contract is purchased at public institutions of higher education in the State;
(2) The number of years expected to elapse between the purchase of a
prepaid contract and the use of the benefits of the prepaid contract; and
(3) The projected tuition costs at the time that the benefits will be
exercised.
(d) Each prepaid contract made under the provisions of this subtitle shall include
the following provisions:
(1) The amount of each payment and the number of payments required
from an account holder;
(2) The terms and conditions under which account holders shall remit
payments, including the dates of the payments;
(3) Provisions for late payment charges and defaults;
(4) Penalties for early withdrawal from the Trust;
(5) The amount and terms of any administrative fees that must be paid by
the account holder or the beneficiary;
(6) The name and date of birth of the qualified beneficiary on whose behalf
the contract is made;
(7) Terms and conditions for a substitution for the qualified beneficiary
originally named;
(8) Terms and conditions for the termination of the prepaid contract;
WES MOORE, Governor Ch. 113
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(9) The time period during which the qualified beneficiary may claim
benefits from the Trust;
(10) The maximum number of undergraduate semester hours that are
prepaid under the prepaid contract, based on in–State tuition at a public institution of
higher education in the State;
(11) All other rights and obligations of the account holder and the Trust; and
(12) Any other terms and conditions that the [Board] STATE TREASURER
considers necessary or appropriate.
(e) The SUBJECT TO SUBSECTION (A) OF THIS SECTION, THE [Board] STATE
TREASURER shall allow the conversion of a prepaid contract from one tuition plan or
payment option to a different tuition plan or payment option.
(f) The [Board] STATE TREASURER shall allow excess prepaid contract benefits
due to receipt of a scholarship, tuition remission, or early graduation from college to be used
toward the payment of other qualified higher education expenses, as specified by the
[Board] STATE TREASURER, at an eligible institution of higher education.
(g) (1) ON OR AFTER JUNE 1, 2023, THE STATE TREASURER MAY NOT
ONLY ALLOW THE TRANSFER O F FUNDS FROM ANY OTH ER QUALIFIED STATE STATE
TUITION PROGRAM TO T HE TRUST, IN ACCORDANCE WITH F EDERAL LAW, FOR THE
PURPOSE OF CONTRIBUTIN G FUNDS TOWARDS AN E XISTING CONTRACTUAL
OBLIGATION.
(2) (I) [The Board] ON OR BEFORE DECEMBER 31, 2024, THE THE
STATE TREASURER shall allow the transfer of funds from the Trust to any other qualified
State STATE tuition program [or from any other qualified State tuition program to the
Trust], in accordance with federal law.
(II) SUBJECT TO SUBPARAGRA PH (III) OF THIS PARAGRAPH ,
THE STATE TREASURER SHALL GRANT AN INTEREST PAYMENT TO AN ACCOUNT
HOLDER WHO , IN ACCORDANCE WITH S UBPARAGRAPH (I) OF THIS PARAGRAPH ,
TRANSFERS FUNDS FROM THE TRUST TO THE PLAN.
(III) THE STATE TREASURER SHALL ADOPT REGULATIONS TO
DETERMINE THE INTERE ST RATE FOR PAYMENTS REQUIRED UNDER
SUBPARAGRAPH (II) OF THIS PARAGRAPH .
(3) ON OR AFTER JANUARY 1, 2025, THE STATE TREASURER MAY NOT
ALLOW THE TRANSFER O F FUNDS FROM THE TRUST TO ANY OTHER QU ALIFIED
STATE TUITION PROGRAM , IN ACCORDANCE WITH F EDERAL LAW. Ch. 113 2023 LAWS OF MARYLAND
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(h) The NOTWITHSTANDING ANY O THER PROVISION OF LA W, THE [Board]
STATE TREASURER shall allow the transfer of funds from the Trust to any qualified ABLE
program established in accordance with § 529A of the Internal Revenue Code.
(i) The [Board] STATE TREASURER shall set procedures to ensure that
contributions to the Trust plus contributions or payments to other qualified State STATE
tuition programs do not exceed a total maximum amount determined by § 529 of the
Internal Revenue Code for contributions to multiple qualified State STATE tuition
programs.
(j) The Maryland prepaid contract plan shall be referred to as the Senator
Edward J. Kasemeyer prepaid contract plan.
18–1910.
(a) (1) The [Board] STATE TREASURER shall issue refunds as specified in
this section.
(2) Unless authorized by the [Board] STATE TREASURER or under
subsection (b) of this section, a refund may not exceed the amount paid into the Trust by
the account holder.
(b) A refund equal to the same benefits as provided by the prepaid contract, minus
any amount paid out of the funds of the Trust on behalf of the qualified beneficiary and for
reasonable administrative charges, shall be made if the beneficiary:
(1) Is awarded a scholarship or tuition remission that covers benefits
provided under the prepaid contract; or
(2) Dies or suffers from a disability which prevents the beneficiary from
attending an institution of higher education within the time allowed by this subtitle.
(c) (1) A reduced refund of the contributions made to the Trust, as determined
by the [Board] STATE TREASURER, shall be made if:
(i) The beneficiary does not attend an institution of higher
education;
(ii) Benefits are not exercised under the contract within a time
specified in the contract; or
(iii) The prepaid contract is canceled by the account holder.
WES MOORE, Governor Ch. 113
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(2) The time that a qualified beneficiary spends in active duty as a member
of the United States armed forces shall be added to the time period allowed to exercise the
benefits under a prepaid contract before a termination under paragraph (1) of this
subsection.
18–1911.
The [Board] PROGRAM, Trust, and prepaid contracts issued under this subtitle are
not subject to the provisions of the Insurance Article.
18–1912.
The assets and income of the Trust are exempt from State and local taxation.
18–1913.
(a) In this section, “person” does not include the State.
(b) A person may not attach, execute, garnish, or otherwise seize any current or
future benefit under a prepaid contract or any asset of the Trust.
18–1914.
(a) Nothing in this subtitle or in any prepaid contract may be construed as a
promise or guarantee by the [Board] STATE TREASURER of admission to, continued
enrollment at, or graduation from an institution of higher education.
(b) The actual tuition rate charged to a qualified beneficiary shall be determined
at the time of enrollment in accordance with the residency policy adopted by the governing
board of the institution of higher education at which the qualified beneficiary enrolls.
18–1915.
The State and its agencies or any local government in the State may agree, by
contract or otherwise, to remit payments on behalf of an employee toward a prepaid
contract through payroll deductions.
18–1916.
(a) (1) The Legislative Auditor shall audit the Trust as provided under Title 2,
Subtitle 12 of the State Government Article.
(2) The [Board] STATE TREASURER shall cause an audit of the Trust to
be made by an outside independent auditor annually.
Ch. 113 2023 LAWS OF MARYLAND
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(3) The [Board] STATE TREASURER shall pay for the audit required
under paragraph (2) of this subsection.
(b) (1) Within 120 days after the close of each fiscal year, the [Board] STATE
TREASURER shall submit to the Governor and, subject to § 2–1257 of the State
Government Article, to the General Assembly a report including:
(i) The audit of the outside independent auditor;
(ii) A financial accounting of the Trust, including:
1. The annual review of the comprehensive investment plan
which shall include:
A. The status of the investment program, including
investment income matched to projected enrollment costs under the existing prepaid
contracts;
B. The assets held in each class of investment, the amount of
funds held in any cash pool, the amount of funds held in fixed assets investments, and the
amount of funds held in equity investments;
C. The percentage and dollar value of assets placed with
outside managers;
D. The income produced by each class of investment; and
E. The income produced by each investment manager; and
2. A detailed account of the operating and administrative
budget for the Trust, which shall include a complete list of revenue sources and
expenditures detailing the line item expenditures for:
A. Salaries, wages, and fringe benefits;
B. Technical and special fees;
C. Communication;
D. Travel;
E. Contractual services;
F. Supplies and materials;
G. Equipment; WES MOORE, Governor Ch. 113
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H. Fixed charges; and
I. Other expenses;
(iii) The number of prepaid contracts entered into during the
previous fiscal year;
(iv) Efforts by the [Board] STATE TREASURER in marketing the
prepaid contracts under the Trust; and
(v) Any recommendations of the [Board] STATE TREASURER
concerning the operation of the Trust.
(2) The [Board] STATE TREASURER shall make available to each account
holder a copy of a summary of the report and the option to purchase the full report at a
nominal charge.
(c) The audit required by subsection (a)(2) of this section and the report required
by subsection (b) of this section may be combined with any other audit or report for the
same fiscal year required to be submitted by the [Board] STATE TREASURER to the
Governor and the General Assembly.
18–1917.
(A) (1) EXCEPT AS PROVIDED IN PARAGRAPHS (2), (3), AND (4) (2) AND
(3) OF THIS SUBSECTION A ND NOTWITHSTANDING A NY OTHER PROVISION O F LAW,
AN ACCOUNT HOLDER OR A QUALIFIED BENEFICI ARY MAY FILE A CLAIM ARISING
FROM THE ADMINISTRATION OF TH E TRUST WITH THE STATE TREASURER, AS
FIDUCIARY OF THE TRUST.
(2) SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION , A A CLAIM
MAY BE FILED ONLY BY AN ACCOUNT HOLDER OR A QUALIFIED BENEFICI ARY FOR AN
ACCOUNT THAT WAS OPE N AND EXISTING ON O R AFTER NOVEMBER 1, 2021.
(3) BY:
(I) AN ACCOUNT HOLDER ; OR
(II) A QUALIFIED BENEFICIAR Y MAY ONLY FILE A CLAI M
RELATED TO FOR A DISTRIBUTION THAT WAS MADE TO THE QUAL IFIED
BENEFICIARY OR TO AN ELIGIBLE EDUCATIONAL INSTITUTION ON THE
BENEFICIARY’S BEHALF.
Ch. 113 2023 LAWS OF MARYLAND
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(4) (3) ANY CLAIM BROUGHT UND ER THIS SECTION SHAL L BE
SUBJECT TO THE EXCLU SIONS AND LIMITATION S SET FORTH IN THIS SUBTITLE.
(B) A CLAIM FILED IN ACCOR DANCE WITH SUBSECTIO N (A) OF THIS
SECTION SHALL BE FIL ED:
(1) FOR A CLAIM RE LATING TO THE UPDATE D TERMS INCLUDED IN
THE DISCLOSURE STATE MENT FOR THE TRUST THAT WENT INTO EFFECT
NOVEMBER 1, 2021:
(I) NOT SOONER THAN THE D ATE OF THE NOTICE TO ACCOUNT
HOLDERS REQUIRED BY SUBSECTION (J)(2)(I) OF THIS SECTION; AND
(II) NOT LATER THAN DECEMBER 31, 2023; OR
(2) FOR ALL OTHER CLAIMS , 1 YEAR AFTER THE DATE THE CLAIM
ARISES.
(C) A CLAIM UNDER THIS SEC TION SHALL:
(1) CONTAIN A CONCISE STA TEMENT OF FACTS THAT SETS FORTH
THE NATURE OF THE CL AIM;
(2) STATE THE NAME , ADDRESS, TELEPHONE NUMBER , AND E–MAIL
ADDRESS, IF ANY, OF THE CLAIMANT ;
(3) STATE THE PREPAID TRUST ACCOUNT NUMBER TO WHICH THE
CLAIM RELATES ;
(4) CONTAIN ANY OTHER INF ORMATION REQUIRED TO BE SET FORTH
IN A CLAIM BY ANY PR OCEDURES OR REGULATI ONS ADOP TED BY THE STATE
TREASURER IN ACCORDAN CE WITH SUBSECTION (J) OF THIS SECTION;
(5) STATE THE NAME , ADDRESS, TELEPHONE NUMBER , AND E–MAIL
ADDRESS OF THE LEGAL REPRESENTATIVE OR CO UNSEL FOR THE CLAIMA NT, IF
ANY; AND
(6) BE SIGNED BY THE CLAI MANT, OR THE LEGAL REPRESENTATIVE
OR COUNSEL FOR THE C LAIMANT.
(D) (1) SUBJECT TO PARAGRAPHS (2) AND (3) OF THIS SUBSECTION , THE
STATE TREASURER SHALL :
(I) INVESTIGATE THE CLAIM ; WES MOORE, Governor Ch. 113
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(II) APPROVE OR DENY THE C LAIM IN WHOLE OR IN PART; AND
(III) NOTIFY THE CLAIMANT, OR THE LEGAL REPRESE NTATIVE
OR COUNSEL FOR THE C LAIMANT, IF ANY, IN WRITING OF THE FI NAL
DETERMINATION .
(2) IN THE EXERCISE OF TH E STATE TREASURER’S FIDUCIARY
DUTIES, THE STATE TREASURER MAY :
(I) DELEGATE, WHOLLY OR PARTLY , THIS RESPONSIBILITY ,
PROVIDED THAT ANY DE LEGATE SHALL BE A FI DUCIARY WITH RESPECT TO MAKING
A FINAL DETERMINATIO N OF A CLAIM; AND
(II) CONTRACT FOR ANY SUPP ORT SERVICES THAT AR E NEEDED
TO CARRY OUT THIS RE SPONSIBILITY.
(3) FOR CLAIMS RELATING T O THE UPDATED TERMS INCLUD ED IN
THE DISCLOSURE STATE MENT FOR THE TRUST THAT WENT INTO EFFECT
NOVEMBER 1, 2021, TO THE EXTENT PRACTI CABLE, THE STATE TREASURER SHALL
PRIORITIZE THE PROCE SSING OF CLAIMS OF A CCOUNT HOLDERS WHO :
(I) HAVE SOUGHT DISBURSEMENTS DISTRIBUTIONS FOR
QUALIFIED HIGHER EDU CATION EXPENSES BEFO RE JUNE 1, 2023; OR
(II) WILL BE SEEKING DISBURSEMENTS DISTRIBUTIONS FOR
QUALIFIED HIGHER EDU CATION EXPENSES FOR THE FALL OF CALENDAR YEAR 2023.
(E) EACH FINAL DETERMINAT ION MADE BY THE STATE TREASURER IN
ACCORDANCE WITH THIS SECTION, SHALL BE MADE :
(1) INDEPENDENTLY AND IN THE STATE TREASURER’S ROLE AS
FIDUCIARY TO THE TRUST; AND
(2) SOLELY CONSIDERING TH E INTERESTS OF ALL O F THE ACCOUNT
HOLDERS AND QUALIFIE D BENEFICIARIES UNDE R THE TRUST.
(F) ACCEPTANCE OF A SETTL EMENT BY A CLAIMANT :
(1) WITH RESPECT TO A CLA IM BROUGHT IN ACCORD ANCE WITH
SUBSECTION (B)(1) OF THIS SECTION, SHALL BE CONDITIONED ON AN AGREEMENT
OF THE ACCOUNT HOLDE R TO TRANSFER ALL FU NDS IN THE ACCOUNT T O ANY
OTHER QUALI FIED STATE TUITION P ROGRAM; AND
Ch. 113 2023 LAWS OF MARYLAND
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(2) IS, AS TO THAT CLAIMANT AND ANY QUALIFIED BE NEFICIARY OF
THE ACCOUNT TO WHICH THE CLAIM RELATES :
(I) FINAL; AND
(II) A COMPLETE RELEASE OF EACH CLAIM ARISING F ROM THE
ADMINISTRATION OF TH E TRUST AGAINST:
1. THE STATE;
2. EACH OF ITS UNITS;
3. ALL STATE PERSONNEL ; AND
4. THE TRUST.
(G) THE STATE TREASURER, AS FIDUCIARY OF THE TRUST:
(1) MAKES THE FINAL DETER MINATION WITH RESPEC T TO CLAIMS
SUBMITTED IN ACCORDA NCE WITH THIS SECTIO N; AND
(2) IS EXEMPT FROM THE PR OVISIONS OF TITLE 10, SUBTITLES 2 AND
3 OF THE STATE GOVERNMENT ARTICLE.
(H) ANY CLAIM BY AN ACCOU NT HOLDER OR A QUALI FIED BENEFICIARY
ARISING FROM THE ADM INISTRATION OF THE TRUST SHALL BE MADE S OLELY
AGAINST THE ASSETS O F THE TRUST.
(I) NOTWITHSTANDING ANY O THER PROVISION OF LA W, THIS SECTION
PROVIDES THE EXCLUSI VE REMEDY FOR A CLAI M AGAINST THE ASSETS OF THE
TRUST.
(J) (1) THE STATE TREASURER SHALL :
(I) FOR CLAIMS BROUGHT IN ACCORDANCE WITH SUBS ECTION
(B)(1) OF THIS SECTION, ESTABLISH PROCEDURES TO IMPLEMENT THE CLA IM
PROCESS ESTABLISHED IN THIS SECTION FOR THOSE CLAIMS; AND
(II) FOR ALL OTHER CLAIMS , ADOPT REGULATIONS FO R THE
CLAIM PROCESS ESTABL ISHED IN THIS SECTIO N.
(2) THE STATE TREASURER SHALL PROVI DE NOTICE TO ACCOUNT
HOLDERS WITHIN 10 BUSINESS DAYS OF :
WES MOORE, Governor Ch. 113
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(I) THE ESTABLISHMENT OF THE PROCEDURES DESCR IBED IN
THIS SUBSECTION ; AND
(II) THE ADOPTION OF REGUL ATIONS IN ACCORDANCE WITH
THIS SUBSECTION .
18–19A–01.
(a) In this subtitle the following words have the meanings indicated.
(b) “Account holder” means the person who established an investment account on
behalf of a qualified designated beneficiary.
(c) [“Board” means the Maryland 529 Board established under § 18–1904 of this
title.
(d)] “Eligible educational institution” has the meaning stated in § 529(e) of the
Internal Revenue Code.
[(e)] (D) “Investment account” means an account established by an account
holder under this subtitle on behalf of a qualified designated beneficiary for the purpose of
applying distributions toward qualified higher education expenses at eligible educational
institutions.
[(f)] (E) “Plan” means the Maryland Senator Edward J. Kasemeyer College
Investment Plan established under this subtitle.
[(g)] (F) “Qualified designated beneficiary” has the meaning stated in § 529 of
the Internal Revenue Code.
[(h)] (G) “Qualified higher education expenses” has the meaning stated in § 529
of the Internal Revenue Code.
[(i)] (H) “Qualified state tuition program” has the meaning stated in § 529 of the
Internal Revenue Code.
18–19A–02.
(a) There is a Maryland Senator Edward J. Kasemeyer College Investment Plan.
(b) The purpose of the Plan is to allow contributions to an investment account
established for the purposes of meeting the qualified higher education expenses of the
qualified designated beneficiary of the account.
Ch. 113 2023 LAWS OF MARYLAND
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(c) (1) The [Board] STATE TREASURER shall administer, manage, promote,
and market the Plan.
(2) The [Board] STATE TREASURER shall administer the Plan in
compliance with Internal Revenue Service standards for qualified State STATE tuition
programs.
(d) The [Board] STATE TREASURER shall adopt procedures that the [Board]
STATE TREASURER considers necessary to carry out the provisions of this subtitle.
(e) The [Board] STATE TREASURER shall adopt procedures relating to:
(1) Application procedures for participation in the Plan;
(2) Start–up costs incurred by the State for the development of the Plan
with these costs to be reimbursed to the State by the Plan;
(3) Early withdrawals, so that there will be no major detriment to the
remaining account holders in the Plan;
(4) The State contribution program;
(5) Transfer of funds from the Plan to other qualified State STATE tuition
programs and from other qualified State STATE tuition programs to the Plan in accordance
with federal law; and
(6) Transfer of funds from the Plan to a qualified ABLE program
established in accordance with § 529A of the Internal Revenue Code.
(f) At least annually, the [Board] STATE TREASURER shall issue to each
account holder a statement that provides a separate accounting for each qualified
designated beneficiary providing the following information with respect to each account:
(1) The beginning balance;
(2) Contributions to the account, including any State contribution;
(3) Withdrawals from the account during the previous year; and
(4) Ending investment account value.
18–19A–03.
WES MOORE, Governor Ch. 113
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(a) (1) The [Board] STATE TREASURER may issue requests for proposals to
evaluate and determine the means for the administration, management, promotion, or
marketing of the Plan.
(2) The [Board] STATE TREASURER shall consider proposals that meet
the following criteria:
(i) Ability to develop and administer an investment program of a
nature similar to the objectives of the Plan;
(ii) Ability to administer financial programs with individual account
records and reporting;
(iii) Ability to market the Plan to Maryland residents;
(iv) Ability to market the Plan to nonresidents of Maryland; and
(v) Ability to coordinate the Plan with other programs or
informational services considered beneficial by the [Board] STATE TREASURER, including
the Maryland Senator Edward J. Kasemeyer Prepaid College Trust established under
Subtitle 19 of this title.
(b) (1) Except for applications made under § 18–19A–04.1 of this subtitle, the
[Board] STATE TREASURER may require an initial application fee to be used for
administrative costs of the Plan.
(2) The [Board] STATE TREASURER may require additional fees
associated with the expenses of the Plan.
(c) (1) Contributions to the Plan on behalf of a qualified designated beneficiary
may not exceed the maximum amount determined by the [Board] STATE TREASURER to
be in accordance with § 529 of the Internal Revenue Code.
(2) Contributions to the Plan may be made only in cash or cash equivalent.
(3) The Plan shall include provisions for automatic contributions.
(d) The [Board] STATE TREASURER shall adopt procedures to ensure that
contributions to the Plan plus contributions or payments to other qualified State STATE
tuition programs do not exceed a total maximum amount determined under § 529 of the
Internal Revenue Code for contributions to multiple qualified State STATE tuition
programs.
(e) (1) The Plan:
Ch. 113 2023 LAWS OF MARYLAND
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(i) Shall be established in the form determined by the [Board]
STATE TREASURER; and
(ii) May be established as a trust to be declared by the [Board]
STATE TREASURER.
(2) The Plan may be divided into multiple investment portfolios.
(3) If the Plan is divided into multiple portfolios as provided in paragraph
(2) of this subsection, the debts, liabilities, obligations, and expenses incurred, contracted
for, or otherwise existing with respect to a particular portfolio shall be enforceable against
the assets of that portfolio only and not against the assets of the Plan generally, if:
(i) Distinct records are maintained for each portfolio; and
(ii) The assets associated with each portfolio are accounted for
separately from the other assets of the Plan.
(f) The Maryland College Investment Plan shall be referred to as the Senator
Edward J. Kasemeyer College Investment Plan.
18–19A–04.
(a) A Maryland resident or a nonresident of Maryland may participate in and
benefit from the Plan.
(b) Distributions shall be requested by the account holder.
18–19A–04.1.
(a) (1) Subject to paragraph (2) of this subsection, for investment accounts
established after December 31, 2016, a State contribution may be made to not more than
two investment accounts for each qualified beneficiary as provided in this section if:
(i) The qualified beneficiary of the investment account and the
account holder are Maryland residents;
(ii) The account holder is at least 18 years old for applications filed
on or after January 1, 2022;
(iii) The account holder submits an application to the [Board] STATE
TREASURER or [its] THE STATE TREASURER’S designee between January 1 and June 1
of each year;
WES MOORE, Governor Ch. 113
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(iv) The account holder has Maryland adjusted gross income in the
previous taxable year no greater than $112,500 for an individual or $175,000 for a married
couple filing a joint return;
(v) The account holder files income taxes on or before July 15 of each
year; and
(vi) The qualified beneficiary is under the age of 26 years in the
calendar year before the account holder submits an application.
(2) For State contribution application periods after December 31, 2020, a
qualified beneficiary may not receive more than two State contributions for each year the
qualified beneficiary is eligible for the State contribution under this section.
(b) (1) An application may be made in person, online, or by mail.
(2) The [Board] STATE TREASURER shall develop:
(i) An application form that:
1. Includes permission for confirming Maryland taxable
income with the Comptroller; and
2. Allows for certification of Maryland residency;
(ii) A procedure to certify the date and time of receipt of an
application; and
(iii) Any other necessary procedures for the submittal of applications.
(c) (1) For an account holder with Maryland adjusted gross income of less than
$50,000 for an individual or $75,000 for a married couple filing a joint return who
contributes at least $25 per beneficiary during the contribution period in subsection (e) of
this section, the State shall provide an additional $500 per beneficiary.
(2) For an account holder with Maryland adjusted gross income of at least
$50,000 but less than $87,500 for an individual or at least $75,000 but less than $125,000
for a married couple filing a joint return who contributes at least $100 per beneficiary
during the contribution period in subsection (e) of this section, the State shall provide an
additional $500 per beneficiary.
(3) For an account holder with Maryland adjusted gross income of at least
$87,500 but no greater than $112,500 for an individual or at least $125,000 but no greater
than $175,000 for a married couple filing a joint return who contributes at least $250 per
beneficiary during the contribution period in subsection (e) of this section, the State shall
provide an additional $250 per beneficiary. Ch. 113 2023 LAWS OF MARYLAND
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(d) (1) The Governor shall include in the annual budget bill an appropriation
of at least the following amounts for State contributions:
(i) $5,000,000 in fiscal year 2018; and
(ii) $3,000,000 in fiscal year 2019 and each fiscal year thereafter.
(2) If the funding provided in a fiscal year is not sufficient to fully fund all
State contributions authorized under this section, the [Board] STATE TREASURER shall:
(i) Provide contributions in the order in which applications are
received; and
(ii) Give priority to applications of account holders who have not
received a contribution.
(e) (1) An account holder shall contribute at least the amount specified under
subsection (c) of this section on or before November 1 of each year in order to qualify for the
State contribution.
(2) A State contribution shall be made by December 31 of the calendar year
in which the account holder made the contribution.
(f) (1) An account holder is not eligible for the subtraction modification under
§ 10–208 of the Tax – General Article for any taxable year in which the account holder
receives a State contribution.
(2) An account holder may qualify for not more than $9,000 in State
contributions through the lifetime of the account holder.
(g) (1) The [Board] STATE TREASURER shall develop and implement by
September 1, 2018, UTILIZE an outreach and marketing plan to provide notification to
individuals about the availability of a State contribution.
(2) The outreach and marketing plan shall:
(i) Make use of a variety of marketing media, including billboards,
brochures, and electronic resources; and
(ii) Provide a centralized contact point for individuals to obtain
information about opening an account and the availability of a State contribution.
[(3) By December 1, 2018, the Board shall submit a report in accordance
with § 2–1257 of the State Government Article to the General Assembly on the details of
the outreach and marketing plan.] WES MOORE, Governor Ch. 113
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(h) The [Board] STATE TREASURER may adopt any regulations that the [Board]
STATE TREASURER considers necessary to carry out the provisions of this section.
18–19A–05.
(a) (1) The debts, contracts, and obligations of the Plan are not the contracts,
debts, or obligations of the State and neither the faith and credit nor taxing power of the
State is pledged directly or indirectly or contingently, morally or otherwise, to the payment
of the debts, contracts, and obligations.
(2) The [Board] STATE TREASURER cannot directly or indirectly or
contingently obligate, morally or otherwise, the State to levy or pledge any form of taxation
whatsoever for the debts and obligations of the Plan or to make any appropriation for the
payment of the debts and obligations of the Plan.
(b) Neither the State nor any eligible educational institution shall be liable for
any losses or shortage of funds in the event that the account holder’s investment account
balance is insufficient to meet the tuition requirements of an institution attended by the
qualified designated beneficiary.
(c) Money of the Plan may not be considered money of the State or deposited in
the State Treasury.
(d) Money of the Plan may not be considered money of or commingled with the
Maryland Senator Edward J. Kasemeyer Prepaid College Trust.
(e) Money of the Plan may not be considered money of or commingled with the
Maryland Broker–Dealer College Investment Plan.
(f) Money of the Plan may not be considered money of or commingled with the
Maryland ABLE Program.
18–19A–05.1.
The [Board] MARYLAND 529 PROGRAM, Plan, and investment accounts issued
under this subtitle are not subject to the provisions of the Insurance Article.
18–19A–06.
The assets and income of the Maryland Senator Edward J. Kasemeyer College
Investment Plan are exempt from State and local taxation.
18–19A–06.1.
(a) In this section, “person” does not include the State. Ch. 113 2023 LAWS OF MARYLAND
– 32 –
(b) A person may not attach, execute, garnish, or otherwise seize any current or
future benefit under an investment account or any asset of the Plan.
18–19A–07.
(a) (1) The Legislative Auditor shall audit the Plan as provided under Title 2,
Subtitle 12 of the State Government Article.
(2) The [Board] STATE TREASURER shall obtain an annual audit report
from service providers.
(b) (1) Within 120 days after the close of each fiscal year, the [Board] STATE
TREASURER shall submit to the Governor and, subject to § 2–1257 of the State
Government Article, to the General Assembly a report including:
(i) A financial accounting of the Plan, including:
1. An annual review of the Plan which shall include:
A. The status of the investment program;
B. The assets held in each class of investment;
C. The percentage and dollar value of assets placed with
outside managers;
D. The income produced by each class of investment;
E. The income produced by each investment manager;
F. The total deposits into the Plan for the past year; and
G. The total withdrawals from the Plan for the past year; and
2. A detailed account of the operating and administrative
budget for the Plan, which shall include a complete list of revenue sources and expenditures
detailing the line item expenditures for:
A. Salaries, wages, and fringe benefits;
B. Technical and special fees;
C. Communication;
D. Travel; WES MOORE, Governor Ch. 113
– 33 –
E. Contractual services;
F. Supplies and materials;
G. Equipment;
H. Fixed charges; and
I. Other expenses;
(ii) The number of new account holders during the previous fiscal
year;
(iii) Efforts in marketing the Plan; and
(iv) Any recommendations of the [Board] STATE TREASURER
concerning the operation of the Plan.
(2) The [Board] STATE TREASURER shall make available to each account
holder a copy of a summary of the report and the option to purchase the full report at a
nominal charge.
[(c) The audit required by subsection (a)(2) of this section and the report required
by subsection (b) of this section, at the Board’s STATE TREASURER’S discretion, may be
combined with any other audit or report for the same fiscal year required to be submitted
by the Board STATE TREASURER to the Governor and the General Assembly.]
18–19B–01.
(a) In this subtitle the following words have the meanings indicated.
(b) “Account holder” means the person who established an investment account on
behalf of a qualified designated beneficiary.
(c) [“Board” means the Maryland 529 Board established under § 18–1904 of this
title.
(d)] “Broker–Dealer Plan” means the Maryland Broker –Dealer College
Investment Plan established under this subtitle.
[(e)] (D) “Eligible educational institution” has the meaning stated in § 529(e) of
the Internal Revenue Code.
[(f)] (E) “Investment account” means an account established by an account
holder under this subtitle on behalf of a qualified designated beneficiary for the purpose of Ch. 113 2023 LAWS OF MARYLAND
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applying distributions toward qualified higher education expenses at eligible educational
institutions.
[(g)] (F) “Qualified designated beneficiary” has the meaning stated in § 529(e)
of the Internal Revenue Code.
[(h)] (G) “Qualified higher education expenses” has the meaning stated in §
529(e) of the Internal Revenue Code.
[(i)] (H) “Qualified State tuition program” has the meaning stated in § 529 of
the Internal Revenue Code.
18–19B–02.
(a) The [Board] STATE TREASURER may establish a Maryland Broker–Dealer
College Investment Plan.
(b) The purpose of the Broker–Dealer Plan is to provide for a broker–dealer
distributed vehicle that would allow contributions to an investment account established for
the purposes of meeting the qualified higher education expenses of the qualified designated
beneficiary of the account.
(c) (1) The [Board] STATE TREASURER shall administer, manage, and
promote the Broker–Dealer Plan.
(2) The [Board] STATE TREASURER shall administer the Broker–Dealer
Plan in compliance with Internal Revenue Service standards for qualified State STATE
tuition programs.
(d) (1) The [Board] STATE TREASURER shall adopt procedures relating to:
(i) Enrollment procedures for participation in the Broker–Dealer
Plan;
(ii) Start–up costs incurred by the State for the development of the
Broker–Dealer Plan with these costs to be reimbursed to the State by the Broker–Dealer
Plan;
(iii) Early withdrawals so that there will be no major detriment to
the remaining account holders in the Broker–Dealer Plan;
(iv) Transfer of funds from the Broker–Dealer Plan to other qualified
State tuition programs and from other qualified State tuition programs to the
Broker–Dealer Plan in accordance with federal law; and
WES MOORE, Governor Ch. 113
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(v) Transfer of funds from the Broker–Dealer Plan to a qualified
ABLE program established in accordance with § 529A of the Internal Revenue Code.
(2) The [Board] STATE TREASURER shall adopt any other procedures
that the [Board] STATE TREASURER considers necessary to carry out the provisions of
this subtitle.
(e) At least annually, the [Board] STATE TREASURER shall issue to each
account holder a statement that provides a separate accounting for each qualified
designated beneficiary providing the following information with respect to each account:
(1) The beginning balance;
(2) Contributions to the account;
(3) Withdrawals from the account during the previous year; and
(4) Ending investment account value.
18–19B–03.
(a) (1) The [Board] STATE TREASURER may issue requests for proposals to
evaluate and determine the means for the administration, management, promotion, or
marketing of the Broker–Dealer Plan.
(2) The [Board] STATE TREASURER shall consider proposals that meet
the following criteria:
(i) Ability to develop and administer an investment program of a
nature similar to the objectives of the Broker–Dealer Plan;
(ii) Ability to administer financial programs with individual account
records and reporting; and
(iii) Ability to market the Broker–Dealer Plan to Maryland residents
and, at the [Board’s] STATE TREASURER’S discretion, nonresidents of Maryland.
(b) (1) The [Board] STATE TREASURER may require an initial enrollment fee
to be used for administrative costs of the Broker–Dealer Plan.
(2) The [Board] STATE TREASURER may require additional fees
associated with the expenses of the Broker–Dealer Plan.
(c) (1) Contributions to the Broker–Dealer Plan on behalf of a qualified
designated beneficiary may not exceed the maximum amount determined by the [Board]
STATE TREASURER to be in accordance with § 529 of the Internal Revenue Code. Ch. 113 2023 LAWS OF MARYLAND
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(2) Contributions to the Broker–Dealer Plan may be made only in cash or
cash equivalents.
(3) The Broker–Dealer Plan shall include provisions for automatic
contributions.
(d) (1) The Broker–Dealer Plan:
(i) May be established as one or more separate plans as determined
by the [Board] STATE TREASURER;
(ii) If established by the [Board] STATE TREASURER, shall be
established in the form determined by the [Board] STATE TREASURER;
(iii) Shall be marketed and promoted under the name or names
determined by the [Board] STATE TREASURER; and
(iv) May be established as one or more trusts to be declared by the
[Board] STATE TREASURER.
(2) The Broker–Dealer Plan may be divided into multiple investment
options.
18–19B–04.
(a) A Maryland resident or, at the [Board’s] STATE TREASURER’S discretion, a
nonresident of Maryland may participate in and benefit from the Broker–Dealer Plan.
(b) Distributions shall be requested by the account holder.
18–19B–05.
(a) (1) The debts, contracts, and obligations of the Broker–Dealer Plan are not
the contracts, debts, or obligations of the State, and neither the faith and credit nor taxing
power of the State is pledged directly or indirectly or contingently, morally or otherwise, to
the payment of the debts, contracts, and obligations.
(2) The [Board] STATE TREASURER cannot directly or indirectly or
contingently obligate, morally or otherwise, the State to levy or pledge any form of taxation
whatsoever for the debts and obligations of the Broker–Dealer Plan or to make any
appropriation for the payment of the debts and obligations of the Broker–Dealer Plan.
(b) Neither the State nor any eligible educational institution shall be liable for
any losses or shortage of funds in the event that the account holder’s investment account WES MOORE, Governor Ch. 113
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balance is insufficient to meet the tuition requirements of an institution attended by the
qualified designated beneficiary.
(c) Money of the Broker–Dealer Plan may not be considered money of the State
or deposited in the State Treasury.
(d) Money of the Broker–Dealer Plan may not be considered money of or
commingled with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust.
(e) Money of the Broker–Dealer Plan may not be considered money of or
commingled with the Maryland Senator Edward J. Kasemeyer College Investment Plan.
(f) Money of the Broker–Dealer Plan may not be considered money of or
commingled with the Maryland ABLE Program.
18–19B–06.
(a) The [Board] MARYLAND 529 PROGRAM, the Broker–Dealer Plan, and the
investment accounts issued under this subtitle are not subject to the provisions of the
Insurance Article.
(b) The assets and income of the Maryland Broker–Dealer College Investment
Plan are exempt from State and local taxation.
18–19B–07.
(a) In this section, “person” does not include the State.
(b) A person may not attach, execute, garnish, or otherwise seize any current or
future benefit under an investment account or any asset of the Broker–Dealer Plan.
18–19B–08.
(a) The Legislative Auditor shall audit the Broker–Dealer Plan as provided under
Title 2, Subtitle 12 of the State Government Article.
(b) The [Board] STATE TREASURER shall obtain an annual audit report from
service provider(s) within six months of the end of such service provider’s reporting period.
18–19C–01.
(a) In this subtitle the following words have the meanings indicated.
(b) “ABLE account” means an account described under § 529A(e) of the Internal
Revenue Code.
Ch. 113 2023 LAWS OF MARYLAND
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(c) “ABLE account contributor” means an individual who contributes money to
an ABLE account described under § 529A(e) of the Internal Revenue Code.
(d) “ABLE account holder” means an individual who has established an account
described under § 529A(e) of the Internal Revenue Code and is the designated beneficiary
of the AN account DESCRIBED UNDER § 529A(E) OF THE INTERNAL REVENUE CODE.
(e) [“Board” means the Maryland 529 Board established under § 18–1904 of this
title.
(f)] “Designated beneficiary” means an individual described in § 529A(e) of the
Internal Revenue Code.
[(g)] (F) “Maryland ABLE Program” means a qualified ABLE program described
in § 529A(b) of the Internal Revenue Code.
[(h)] (G) “Qualified disability expenses” means expenses described in § 529A(e)
of the Internal Revenue Code.
18–19C–02.
(a) (1) The [Board] STATE TREASURER shall establish a Maryland ABLE
Program that shall be subject to the provisions of § 529A of the Internal Revenue Code.
(2) It is the goal of the State that the Maryland ABLE Program be fully
operational by October 1, 2017.
(b) The purpose of the Maryland ABLE Program is to:
(1) Encourage and assist individuals and families in saving private funds
to support individuals with disabilities to maintain health, independence, and quality of
life; and
(2) Provide secure funding for disability–related expenses on behalf of
designated beneficiaries with disabilities that will supplement, not supplant, benefits
provided through private insurance, the Medicaid program under Title XIX of the Social
Security Act, the Supplemental Security Income program under Title XVI of the Social
Security Act, the beneficiary’s employment, and any other source.
(c) (1) The [Board] STATE TREASURER shall develop, establish, administer,
manage, and promote the Maryland ABLE Program.
(2) The [Board] STATE TREASURER shall administer the Maryland
ABLE Program in compliance with Internal Revenue Service standards for qualified ABLE
programs. WES MOORE, Governor Ch. 113
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(3) The [Board] STATE TREASURER shall work in consultation with the
Department of Disabilities to develop, administer, manage, and promote the Maryland
ABLE Program.
(4) The [Board] STATE TREASURER may collaborate and participate with
other states or entities to develop, administer, manage, and promote the Maryland ABLE
Program, including participating with a consortium of states that are implementing ABLE
programs in those states or as a consortium of states.
(d) (1) The [Board] STATE TREASURER shall adopt procedures relating to:
(i) Enrollment ENROLLMENT for participation in the Maryland
ABLE Program; and
(ii) Start–up costs incurred by the State for the development of the
Maryland ABLE Program with these costs to be reimbursed to the State by the Maryland
ABLE Program.
(2) The [Board] STATE TREASURER shall adopt AND any other
procedures that the [Board] STATE TREASURER considers necessary to carry out the
provisions of this subtitle.
(e) At least annually, the [Board] STATE TREASURER shall issue to each ABLE
account holder a statement that provides a separate accounting for each designated
beneficiary providing the following information with respect to each account:
(1) The beginning balance;
(2) Contributions to the account;
(3) Distributions from the account during the previous year; and
(4) Ending ABLE account value.
18–19C–03.
(a) (1) The [Board] STATE TREASURER may issue requests for proposals to
evaluate and determine the means for the administration, management, promotion, or
marketing of the Maryland ABLE Program.
(2) The [Board] STATE TREASURER shall consider proposals that meet
the following criteria:
(i) Ability to develop and administer an investment program of a
nature similar to the objectives of the Maryland ABLE Program; Ch. 113 2023 LAWS OF MARYLAND
– 40 –
(ii) Ability to administer financial programs with individual account
records and reporting; and
(iii) Ability to market the Maryland ABLE Program to eligible
individuals.
(b) (1) The [Board] STATE TREASURER may require an initial enrollment fee
to be used for administrative costs of the Maryland ABLE Program.
(2) The [Board] STATE TREASURER may require additional reasonable
fees associated with the expenses of the Maryland ABLE Program.
(c) (1) The Maryland ABLE Program is subject to the provisions of § 529A of
the Internal Revenue Code.
(2) The Maryland ABLE Program shall include provisions for automatic
contributions.
(3) Money and assets in the accounts established under the Maryland
ABLE Program or an ABLE program in any other state may not be considered for the
purpose of determining eligibility to receive, or the amount of, any assistance or benefits
from local or State means–tested programs.
(4) Money and assets contributed in each calendar year to the account of
each ABLE account holder may not exceed the amount specified in § 529A(b)(2) of the
Internal Revenue Code for each calendar year in which the taxable year begins.
(5) Contributions to the account of each ABLE account holder may not
exceed the maximum amount determined by the [Board] STATE TREASURER to be in
accordance with § 529A(b)(6) of the Internal Revenue Code.
(d) The Maryland ABLE Program may receive money from:
(1) Appropriations in the State budget;
(2) Reasonable fees assessed to beneficiaries;
(3) Grants or other assistance from federal, State, or local government; and
(4) Any other money from any public or private source.
(e) (1) The Maryland ABLE Program:
(i) May be established as one or more separate plans as determined
by the [Board] STATE TREASURER; WES MOORE, Governor Ch. 113
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(ii) Shall be established in the form determined by the [Board]
STATE TREASURER;
(iii) Shall be marketed and promoted under the name or names
determined by the [Board] STATE TREASURER; and
(iv) May be established as one or more trusts to be declared by the
[Board] STATE TREASURER.
(2) The Maryland ABLE Program may be divided into multiple investment
options.
18–19C–04.
(a) An eligible individual, as defined in § 529A(e) of the Internal Revenue Code,
may participate in and benefit from the Maryland ABLE Program.
(b) Distributions shall be requested by the designated beneficiary subject to the
provisions of § 529A of the Internal Revenue Code.
18–19C–05.
(a) (1) The debts, contracts, and obligations of the Maryland ABLE Program
are not the contracts, debts, or obligations of the State, and neither the faith and credit nor
taxing power of the State is pledged directly or indirectly or contingently, morally or
otherwise, to the payment of the debts, contracts, and obligations.
(2) The [Board] STATE TREASURER may not directly or indirectly or
contingently obligate, morally or otherwise, the State to levy or pledge any form of taxation
whatsoever for the debts and obligations of the Maryland ABLE Program or to make any
appropriation for the payment of the debts and obligations of the Maryland ABLE Program.
(b) The State may not be liable for any losses or shortage of funds in the event
that the designated beneficiary’s ABLE account balance is insufficient to meet the
designated beneficiary’s qualified disability expenses.
(c) Money of the Maryland ABLE Program may not be considered money of the
State or deposited in the State Treasury.
(d) Money of the Maryland ABLE Program may not be considered money of or
commingled with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust.
(e) Money of the Maryland ABLE Program may not be considered money of or
commingled with the Maryland Senator Edward J. Kasemeyer College Investment Plan.
Ch. 113 2023 LAWS OF MARYLAND
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(f) Money of the Maryland ABLE Program may not be considered money of or
commingled with the Maryland Broker–Dealer College Investment Plan.
18–19C–06.
(a) The [Board] MARYLAND 529 PROGRAM, the Maryland ABLE Program, and
the ABLE accounts issued under this subtitle are not subject to the provisions of the
Insurance Article.
(b) The assets and income of the Maryland ABLE Program are exempt from State
and local taxation.
18–19C–07.
(a) In this section, “person” does not include the State.
(b) A person may not attach, execute, garnish, or otherwise seize any current or
future benefit under an ABLE account or any asset of the Maryland ABLE Program.
18–19C–08.
(a) The Legislative Auditor shall audit the Maryland ABLE Program as provided
under Title 2, Subtitle 12 of the State Government Article.
(b) The [Board] STATE TREASURER shall obtain an annual audit report from a
service provider within 6 months of the end of the reporting period of the service provider.
18–19C–09.
(a) The [Board] STATE TREASURER shall issue refunds as specified in this
section.
(b) If the contribution of an ABLE account contributor under the Maryland ABLE
Program would result in aggregate contributions from all contributors to the ABLE account
for the taxable year exceeding the amount specified in § 529A(b)(2) of the Internal Revenue
Code for each calendar year in which the taxable year begins, the [Board] STATE
TREASURER shall issue a refund to the ABLE account contributor.
(c) The [Board] STATE TREASURER shall adopt procedures to ensure that
contributions to the account of each ABLE account holder do not exceed the total maximum
amount determined under § 529A(b)(6) of the Internal Revenue Code.
18–19C–10.
(a) Unless prohibited by federal law, on the death of a designated beneficiary,
money and assets in an ABLE account may be transferred to: WES MOORE, Governor Ch. 113
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(1) The estate of the designated beneficiary; or
(2) An ABLE account for another eligible individual specified by the
designated beneficiary or the estate of the designated beneficiary.
(b) Unless required by federal law, an agency or instrumentality of the State may
not seek payment under § 529A(f) of the Internal Revenue Code from an ABLE account or
its proceeds for any amount of medical assistance paid for the designated beneficiary.
Article – State Finance and Procurement
11–203.
(f) Except as provided in Title 12, Subtitle 4 and Title 14, Subtitle 3 of this article,
this Division II does not apply to Maryland 529 for:
(1) services of managers to invest the assets of the Maryland Senator
Edward J. Kasemeyer Prepaid College Trust in accordance with the comprehensi ve
investment plan adopted by the [Maryland 529 Board] STATE TREASURER under §
18–1906 of the Education Article; and
(2) expenditures to manage, maintain, and enhance the value of the assets
of the Maryland Senator Edward J. Kasemeyer Prepaid College Trust in accordance with
the comprehensive investment plan adopted by the [Maryland 529 Board] STATE
TREASURER under § 18–1906 of the Education Article.
Article – State Government
9–803.
(a) The Commission consists of the following members:
(10) the Secretary of Higher Education, or the Secretary’s designee; [and]
(11) THE EXECUTIVE DIRECTOR OF THE MARYLAND 529 PROGRAM,
OR THE EXECUTIVE DIRECTOR’S DESIGNEE; AND
(11) THE SECRETARY OF DISABILITIES, OR THE SECRETARY’S
DESIGNEE; AND
[(11)] (12) the following members, appointed by the Governor:
[(11)] (12) the following members, appointed by the Governor:
Ch. 113 2023 LAWS OF MARYLAND
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(i) one member of the Board of Trustees of the Maryland Teachers
and State Employees Supplemental Retirement Plans;
(ii) [one member of the Maryland 529 Board;
(iii)] one member of the Maryland State Education Association who
teaches a course involving principles of financial education;
[(iv)] (III) one representative of the Maryland CASH Campaign;
[(v)] (IV) one representative of a community–focused nonprofit
organization that provides free financial education in the State;
[(vi)] (V) one representative of a philanthropic organization that
provides funding for financial education in the State;
[(vii)] (VI) one representative of the Maryland Council on Economic
Education or the Maryland Coalition for Financial Literacy;
[(viii)] (VII) one representative of a bank, whether or not
State–chartered, that has a branch in the State;
[(ix)] (VIII) one representative of a credit union, whether or not
State–chartered, that has a branch in the State;
[(x)] (IX) one licensed mortgage broker holding the Maryland
Association of Mortgage Brokers’ “Lending Seal of Integrity”;
[(xi)] (X) one member of the Maryland Association of CPAs; and
[(xii)] (XI) one representative of a nonprofit organization in the State
that provides financial assistance and free financial education to State residents for
postsecondary education.
SECTION 2. AND BE IT FURTHER ENACTED, That:
(a) There is a Workgroup on the Maryland 529 Prepaid College Trust Program.
(b) The Workgroup consists of the following members:
(1) the State Treasurer;
(2) two Maryland 529 account holders who have experienced issues
accessing their funds, appointed by the Governor;
WES MOORE, Governor Ch. 113
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(3) two members of the Senate of Maryland, appointed by the President of
the Senate; and
(4) two members of the House of Delegates, appointed by the Speaker of
the House.
(c) The State Treasurer shall provide staff for the Workgroup.
(d) The Workgroup shall elect a chair of the Workgroup by a majority vote at the
first meeting.
(e) A member of the Workgroup:
(1) may not receive compensation as a member of the Workgroup; but
(2) is entitled to reimbursement for expenses under the Standard State
Travel Regulations, as provided in the State budget.
(f) The Workgroup shall:
(1) identify policies, procedures, and practices that led to issues relating to
the earnings calculation formula and Maryland 529 account holders’ inability to access
their prepaid college trust benefits to pay for college expenses; and
(2) develop and make recommendations for improvement in:
(i) the Maryland 529 policies, procedures, and practices to ensure
the prevention of similar issues in the future;
(ii) communication and transparency for Maryland 529 account
holders; and
(iii) accountability for the individuals responsible for properly
exercising Maryland 529’s fiduciary responsibility and managing the prepaid college trust
to meet its contractual obligations.
(g) On or before June 1, 2024, the Workgroup shall report its findings and
recommendations to the Governor and, in accordance with § 2 –1257 of the State
Government Article, the General Assembly.
SECTION 3. 2. AND BE IT FURTHER ENACTED, That, on June 1, 2023, the
Maryland 529 Board is hereby abolished and the State Treasurer shall be the successor of
the Maryland 529 Board.
SECTION 4. 3. AND BE IT FURTHER ENACTED, That:
Ch. 113 2023 LAWS OF MARYLAND
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(a) The responsibility for administering the Maryland 529 Program shall be
transferred to the Office of the State Treasurer on June 1, 2023.
(b) (1) All appropriations, including State and federal funds, held by the
agencies and units of the State to carry out the functions, programs, and services
transferred under this Act shall be transferred to the Office of the State Treasurer on June
1, 2023.
(2) Funding for the services and programs under the Maryland 529
Program shall be provided for the Office of the State Treasurer beginning in the fiscal year
2025 State budget.
(3) Federal fund grants directed to the State through other State agencies
shall be transferred to the Office of the State Treasurer on June 1, 2023.
(c) Before June 1, 2023:
(1) the Maryland 529 Board and its staff shall cooperate fully and in a
timely manner with all requests from the State Treasurer related to the transition of the
Maryland 529 Program to the Office of the State Treasurer, including any requests to:
(i) inspect records and documents related to the Program; and
(ii) receive information or services from outside service providers
engaged by the Board; and
(2) the State Treasurer may take any action deemed necessary or
appropriate to prepare for the transfer of the administration of the Maryland 529 Program
to the Office of the State Treasurer on June 1, 2023.
(c) (d) On June 1, 2023, all of the functions, powers, duties, books and records
(including electronic records), real and personal property, equipment, fixtures, assets,
liabilities, obligations, credits, rights, and privileges of the agencies, units, and entities that
are transferred under this Act shall be transferred to the Office of the State Treasurer.
SECTION 5. 4. AND BE IT FURTHER ENACTED, That all employees who are
transferred to the Office of the State Treasurer as a result of this Act shall be transferred
without diminution of their rights, benefits, employment, or retirement status.
SECTION 6. 5. AND BE IT FURTHER ENACTED, That, except as expressly
provided to the contrary in this Act, any transaction affected by or flowing from any statute
added, amended, repealed, or transferred under this Act and validly entered into before the
effective date of this Act, and every right, duty, or interest flowing from it remains valid
after the effective date of this Act and may be terminated, completed, consummated, or
enforced under the law.
WES MOORE, Governor Ch. 113
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SECTION 7. 6. AND BE IT FURTHER ENACTED, That, except as otherwise
provided by law, all existing laws, regulations, proposed regulations, standards and
guidelines, policies, orders and other directives, forms, plans, memberships, contracts,
property, investigations, administrative and judicial responsibilities, rights to sue and be
sued, and all other duties and responsibilities associated with the functions of the agencies
and units that are subjects of this Act prior to the effective date of this Act shall continue
in effect under and, as appropriate, are legal and binding on the State Treasurer until
completed, withdrawn, canceled, modified, or otherwise changed.
SECTION 8. 7. AND BE IT FURTHER ENACTED, That the regul ations regarding
the Maryland 529 Program that were adopted before June 1, 2023, by the Maryland 529
Board that do not conflict with the provisions of this Act continue to be in force and effect
unless otherwise altered by the State Treasurer.
SECTION 9. 8. AND BE IT FURTHER ENACTED, That, as provided in this Act:
(a) The State Treasurer is the successor of the Maryland 529 Board.
(b) In every law, executive order, rule, regulation, policy, or document created by
an official, an employee, or a unit of this State, the names and titles of those agencies and
officials mean the names and titles of the successor agency or official.
SECTION 10. 9. AND BE IT FURTHER ENACTED, That any transaction or
employment status affected by or flowing from any change of nomenclature or any statute
amended by this Act and validly entered into or existing before the effective date of this Act
and every right, duty, or interest flowing from a statute amended by this Act remains valid
after the effective date of this Act and may be terminated, completed, consummated, or
enforced as required or allowed by any statute amended by this Act as though the
amendment had not occurred. If a change in nomenclature involves a change in name or
designation of any State unit, the successor unit shall be considered in all respects as
having the powers and obligations granted to the former unit.
SECTION 11. 10. AND BE IT FURTHER ENACTED, That:
(a) The continuity of every commission, office, department, agency, or other unit
is retained.
(b) The personnel, records, files, furniture, fixtures, and other properties and all
appropriations, credits, assets, liabilities, and obligations of each retained unit are
continued as the personnel, records, files, furniture, fixtures, properties, appropriations,
credits, assets, liabilities, and obligations of the unit under the laws enacted by this Act.
SECTION 12. 11. AND BE IT FURTHER ENACTED, That :
Ch. 113 2023 LAWS OF MARYLAND
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(a) The balance of a Maryland Senator Edward J. Kasemeyer Prepaid College
Trust account, following the distribution in accordance with Section 1 of this Act, is an
accurate allocation of principal and earnings of that account.
(b) The distribution to the account in accordance with Section 1 of this Act a
settlement as a result of the final determination of any claim submitted in accordance with
§ 18–1917 of the Education Article, as enacted by Section 1 of this Act:
(1) may not be considered a contribution to the account for purposes of
provisions of law governing the Maryland income tax; and
(2) is exempt from State and local taxes.
SECTION 13. 12. AND BE IT FURTHER ENACTED, That the publisher of the
Annotated Code of Maryland, in consultation with and subject to the approval of the
Department of Legislative Services, shall correct, with no further action required by the
General Assembly, cross–references and terminology rendered incorrect by this Act. The
publisher shall adequately describe any correction that is made in an editor’s note following
the section affected.
SECTION 13. AND BE IT FURTHER ENACTED, That Section 1 of this Act shall
take effect June 1, 2023.
SECTION 14. AND BE IT FURTHER ENACTED, That this Act is an emergency
measure, is necessary for the immediate preservation of the public health or safety, has
been passed by a yea and nay vote supported by three–fifths of all the members elected to
each of the two Houses of the General Assembly, and, except as provided in Section 13 of
this Act, shall take effect from the date it is enacted.
Approved by the Governor, April 24, 2023.