Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB1012 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	LRB-5121/1
2	2	ARG&SWB:cdc
3	3	2023 - 2024 LEGISLATURE
4	4	2023 ASSEMBLY BILL 1012
5	5	January 25, 2024 - Introduced by Representatives MACCO, GOYKE, C. ANDERSON, J.
6	6	ANDERSON, ANDRACA, BALDEH, BARE, BEHNKE, CLANCY, CONLEY, CONSIDINE,
7	7	DRAKE, EMERSON, HONG, JOERS, S. JOHNSON, KRUG, MADISON, MOORE
8	8	OMOKUNDE, MURSAU, MYERS, NEUBAUER, O'CONNOR, OHNSTAD, PALMERI,
9	9	RATCLIFF, SHANKLAND, SINICKI, SNODGRASS, SPIROS, SUBECK and TRANEL,
10	10	cosponsored by Senators WIMBERGER, HESSELBEIN, ROYS, SPREITZER and
11	11	LARSON. Referred to Committee on Financial Institutions.
12	12	*AUTHORS SUBJECT TO CHANGE*
13	13	AN ACT to amend 224.50 (2) (a) and 224.50 (3) (bm); and to create 20.144 (3) (ti),
14	14	69.20 (3) (b) 6. and 7., 224.50 (1) (d) and 224.50 (3m) of the statutes; relating
15	15	to: creating a WisKids savings account program within the college savings
16	16	program and making an appropriation.
17	17	Analysis by the Legislative Reference Bureau
18	18	This bill creates a WisKids savings accounts program under which the
19	19	Department of Financial Institutions establishes a master college savings account
20	20	from which money may be distributed to pay for qualified higher education expenses
21	21	of children born or adopted in this state. The bill also requires the Department of
22	22	Health Services to provide information to DFI related to the WisKids savings account
23	23	program and better aligns with federal law the purposes for which college savings
24	24	account expenditures may be made.
25	25	Under current law, the College Savings Program Board, which is attached to
26	26	DFI, administers the state's college savings program, commonly referred to by its two
27	27	program options “Edvest” and “Tomorrow's Scholar.” The state's college savings
28	28	program is a qualified tuition program authorized under federal law, more generally
29	29	known as a 529 plan. Under the program, a person may establish a college savings
30	30	account to cover, consistent with federal law, a beneficiary's 1) tuition, fees, room and
31	31	board, and other costs required to attend an eligible educational institution; and 2)
32	32	tuition expenses at an elementary or secondary school.
33	33	Current law requires DFI to select a vendor for the college savings program
34	34	through a competitive bidding process, based on factors determined by DFI. The
35	35	1
36	36	2
37	37	3
38	38	4 - 2 -2023 - 2024 Legislature LRB-5121/1
39	39	ARG&SWB:cdc
40	40	ASSEMBLY BILL 1012
41	41	contract between DFI and the vendor must contain certain requirements, including
42	42	that the vendor reimburse the state for administrative program costs.
43	43	The bill creates a WisKids savings account program under which DFI
44	44	establishes a master college savings account that holds money that may be
45	45	distributed to pay for qualified higher education expenses of children born or adopted
46	46	in this state. Under the bill, DHS is granted an exception to existing disclosure
47	47	prohibitions allowing the state registrar of vital records to provide DFI with
48	48	information related to the birth or adoption of a child in this state and requiring that
49	49	the state registrar provide DFI with at least the name of the child and, as applicable,
50	50	the name and address of the child's birth parent or, to the extent available, the name
51	51	and address of each adoptive parent. In the case of adoption, if the state registrar
52	52	has prepared a new birth record for the subject of the adoption, the information
53	53	provided to DFI may not include a copy of the original birth record registered for the
54	54	subject of the adoption. The state registrar is also not required to disclose adoption
55	55	information the disclosure of which is prohibited by federal law or other state law.
56	56	Upon receiving the information from DHS, DFI must deposit at least $25 on
57	57	behalf of the child into the master college savings account or a sub-account, except
58	58	that DFI must first provide a notice to the child's parents and allow the child to opt
59	59	out of the program. If DFI makes a deposit on behalf of a child, DFI must maintain
60	60	an accounting that includes the name of the child, the names of the child's parents,
61	61	and the principal and earnings in the account attributable to the child. The deposit
62	62	for the child (the “program participant”) is made from an appropriation from the
63	63	college savings program's segregated fund or is made from program contributions
64	64	(described further below). Under the bill, DFI must suspend deposits if the balance
65	65	of the segregated fund falls below a specified level.
66	66	Under the bill, DFI makes distributions to third parties to pay program
67	67	participants' qualified higher education expenses that have been charged to the
68	68	program participant by the third party. These expenses may not include elementary
69	69	or secondary school tuition. The bill allows DFI to remove a program participant
70	70	from the program and make the funds that had been attributable to the program
71	71	participant available for use by other program participants if 1) DFI has not made
72	72	any distribution for the program participant before the program participant reaches
73	73	28 years of age; 2) DFI has not distributed all funds attributable to the program
74	74	participant within five years of the first distribution to the program participant; 3)
75	75	the program participant dies; or 4) the program participant withdraws from the
76	76	program.
77	77	The bill allows DFI to accept contributions to the program from any person on
78	78	behalf of program participants. As part of DFI's administration of the program, DFI
79	79	may collect data and conduct research related to the program's operation and results.
80	80	Any person may share data with DFI to assist in this research or in program
81	81	fundraising.
82	82	The bill also aligns the allowable purposes of an account under the college
83	83	savings program to match the allowable purposes under federal law. In addition to
84	84	allowing the use of account funds to cover tuition and related expenses as described - 3 -2023 - 2024 Legislature
85	85	LRB-5121/1
86	86	ARG&SWB:cdc
87	87	ASSEMBLY BILL 1012
88	88	above in 1) and 2), federal law allows the use of account funds to pay certain
89	89	apprenticeship expenses and to make payments on a qualified education loan.
90	90	For further information see the state fiscal estimate, which will be printed as
91	91	an appendix to this bill.
92	92	The people of the state of Wisconsin, represented in senate and assembly, do
93	93	enact as follows:
94	94	SECTION 1. 20.144 (3) (ti) of the statutes is created to read:
95	95	20.144 (3) (ti) WisKids savings accounts; college savings program trust fund.
96	96	From the college savings program trust fund, a sum sufficient for the payment of
97	97	WisKids savings account deposits under s. 224.50 (3m).
98	98	SECTION 2. 69.20 (3) (b) 6. and 7. of the statutes are created to read:
99	99	69.20 (3) (b) 6. The information is from a birth record of a registrant born in
100	100	this state and is submitted to the department of financial institutions for the purpose
101	101	of administering s. 224.50 (3m). At a minimum, the state registrar shall disclose to
102	102	the department of financial institutions the name of the child and the name and
103	103	address of the parent who gave birth to the child.
104	104	7. The information is from a copy of an order granting an adoption as provided
105	105	in s. 69.15 (2), the individual adopted is a minor, and the information is submitted
106	106	to the department of financial institutions for the purpose of administering s. 224.50
107	107	(3m). If the state registrar has prepared a new birth record under s. 69.15 (2), the
108	108	information provided to the department of financial institutions may not include a
109	109	copy of the original birth record registered for the subject of the adoption. At a
110	110	minimum, the state registrar shall disclose to the department of financial
111	111	institutions the name of the child and, to the extent available, the name and address
112	112	of each adoptive parent of the child, except that this subdivision does not require the
113	113	1
114	114	2
115	115	3
116	116	4
117	117	5
118	118	6
119	119	7
120	120	8
121	121	9
122	122	10
123	123	11
124	124	12
125	125	13
126	126	14
127	127	15
128	128	16
129	129	17
130	130	18
131	131	19 - 4 -2023 - 2024 Legislature LRB-5121/1
132	132	ARG&SWB:cdc
133	133	SECTION 2 ASSEMBLY BILL 1012
134	134	state registrar to disclose any information the disclosure of which is prohibited by
135	135	federal law or by state law other than this chapter.
136	136	SECTION 3. 224.50 (1) (d) of the statutes is created to read:
137	137	224.50 (1) (d) “Record” has the meaning given in s. 137.11 (12).
138	138	SECTION 4. 224.50 (2) (a) of the statutes is amended to read:
139	139	224.50 (2) (a) Except as provided in s. 224.51, and subject to sub. (3m), establish
140	140	and administer a college savings program that allows an individual, trust, legal
141	141	guardian, or entity described under 26 USC 529 (e) (1) (C) to establish a college
142	142	savings account to cover tuition, fees, and the costs of room and board, books,
143	143	supplies, and equipment required for the enrollment or attendance of a beneficiary
144	144	at an eligible educational institution, as defined under 26 USC 529, and to cover
145	145	tuition expenses in connection with enrollment or attendance at an elementary or
146	146	secondary public, private, or religious school, as described in section 11032 of P.L.
147	147	115-97, related to qualified tuition programs under for the purposes set forth in 26
148	148	USC 529.
149	149	SECTION 5. 224.50 (3) (bm) of the statutes is amended to read:
150	150	224.50 (3) (bm) Beginning on August 1, 2015, no contribution may be made to
151	151	an account if the contribution would cause the account balance of a beneficiary's
152	152	account, or the combined balance of all accounts of a beneficiary, to exceed $425,000.
153	153	This contribution limitation applies to all accounts that are established on and after
154	154	that date, and to all accounts that are in existence on that date that have not yet
155	155	reached the balance limit specified in this paragraph, subject to the annual increase
156	156	described in sub. (2) (i), except that this paragraph does not apply to an account
157	157	established under sub. (3m) (b).
158	158	SECTION 6. 224.50 (3m) of the statutes is created to read:
159	159	1
160	160	2
161	161	3
162	162	4
163	163	5
164	164	6
165	165	7
166	166	8
167	167	9
168	168	10
169	169	11
170	170	12
171	171	13
172	172	14
173	173	15
174	174	16
175	175	17
176	176	18
177	177	19
178	178	20
179	179	21
180	180	22
181	181	23
182	182	24
183	183	25 - 5 -2023 - 2024 Legislature
184	184	LRB-5121/1
185	185	ARG&SWB:cdc
186	186	SECTION 6
187	187	ASSEMBLY BILL 1012
188	188	224.50 (3m) WISKIDS SAVINGS ACCOUNT PROGRAM. (a) In this subsection:
189	189	1. “Parent” means a child's parent as identified or updated in the child's record
190	190	of birth or a court's adoption order relating to the child or as subsequently updated
191	191	in the records of the department or in the system of vital records, as defined in s. 69.01
192	192	(25) (a).
193	193	2. “Program participant” means a child for whom the department has made a
194	194	deposit under par. (c) and maintains an accounting under par. (d).
195	195	3. “Qualified higher education expenses” has the meaning given in 26 USC 529
196	196	(e) (3) and includes the meaning under 26 USC 529 (c) (8) and (9) but excludes the
197	197	meaning under 26 USC 529 (c) (7).
198	198	(b) The department shall establish a master holding account, and may
199	199	establish additional accounts, under this section.
200	200	(c) 1. Subject to pars. (e) and (L) 2., whenever the department receives
201	201	information from a birth record as provided in s. 69.20 (3) (b) 6., the department shall
202	202	deposit at least $25 into an account established under par. (b) for the identified child.
203	203	2. Subject to pars. (e) and (L) 2., whenever the department receives adoption
204	204	information as provided in s. 69.20 (3) (b) 7., the department shall deposit at least
205	205	$25 into an account established under par. (b) for the identified child if the
206	206	department has not already made a deposit for the child under subd. 1.
207	207	3. Deposits under this paragraph shall be made from the appropriations under
208	208	s. 20.144 (3) (th) and (ti) and, as applicable, from the appropriation under s. 20.144
209	209	(1) (h).
210	210	(d) For each account established under par. (b), the department shall maintain
211	211	an accounting that includes the following information:
212	212	1
213	213	2
214	214	3
215	215	4
216	216	5
217	217	6
218	218	7
219	219	8
220	220	9
221	221	10
222	222	11
223	223	12
224	224	13
225	225	14
226	226	15
227	227	16
228	228	17
229	229	18
230	230	19
231	231	20
232	232	21
233	233	22
234	234	23
235	235	24 - 6 -2023 - 2024 Legislature LRB-5121/1
236	236	ARG&SWB:cdc
237	237	SECTION 6 ASSEMBLY BILL 1012
238	238	1. The name of each child for whom the department made a deposit under par.
239	239	(c).
240	240	2. The name of each parent of the child under subd. 1.
241	241	3. The principal and earnings in the account attributable to the child under
242	242	subd. 1.
243	243	(e) 1. Before depositing money into an account established under par. (b) on
244	244	behalf of a child described in par. (c), the department shall provide notice in a record
245	245	to each parent of the child. The notice shall contain all of the following information:
246	246	a. A description of the program under this subsection, including the amount the
247	247	department will deposit into the account for the child.
248	248	b. That the parent may elect not to participate in the program under this
249	249	subsection and forgo the department's deposit of money into the account.
250	250	c. That the department will consider the child to participate in the program
251	251	under this subsection and will deposit money into the account on behalf of the child
252	252	unless a parent of the child notifies the department within 30 days of the date of the
253	253	notice that the child opts out of the program.
254	254	2. If a parent informs the department within 30 days of the date of the notice
255	255	under subd. 1. that the child opts out of the program, the department may not include
256	256	the child in the program under this subsection.
257	257	3. If the department determines, based on available information, that neither
258	258	the child, nor any parent of the child, was a resident of this state at the time of the
259	259	birth or adoption, the department shall not include the child in the program under
260	260	this subsection.
261	261	(f) If the department receives adoption information regarding a child for whom
262	262	the department has already deposited money under par. (c) 1., the department shall
263	263	1
264	264	2
265	265	3
266	266	4
267	267	5
268	268	6
269	269	7
270	270	8
271	271	9
272	272	10
273	273	11
274	274	12
275	275	13
276	276	14
277	277	15
278	278	16
279	279	17
280	280	18
281	281	19
282	282	20
283	283	21
284	284	22
285	285	23
286	286	24
287	287	25 - 7 -2023 - 2024 Legislature
288	288	LRB-5121/1
289	289	ARG&SWB:cdc
290	290	SECTION 6
291	291	ASSEMBLY BILL 1012
292	292	update its records to designate each adoptive parent, and to remove each parent
293	293	identified in the birth records, as the child's parent for purposes of this subsection.
294	294	(g) Upon request of a program participant, the department shall direct that a
295	295	distribution from an account established under par. (b) be made on behalf of the
296	296	program participant to a 3rd party if all of the following apply:
297	297	1. The distribution is made to pay, in whole or in part, the program participant's
298	298	qualified higher education expenses.
299	299	2. The 3rd party has charged the program participant for these qualified higher
300	300	education expenses.
301	301	3. There are funds in the account attributable to the program participant
302	302	available to pay the distribution under subd. 1.
303	303	(h) 1. The department may remove a program participant from the program
304	304	and make the funds that had been attributable to the program participant available
305	305	for use by other program participants if any of the following applies:
306	306	a. The department has not made any distribution under par. (g) for the program
307	307	participant before the program participant reaches 28 years of age or has not
308	308	distributed all funds attributable to the program participant within 5 years of the
309	309	department's first distribution to the program participant.
310	310	b. The program participant dies.
311	311	c. The program participant, or a parent of the program participant, notifies the
312	312	department in a record that the program participant is discontinuing participation
313	313	in the program.
314	314	(i) The department may accept contributions to the program from any person
315	315	on behalf of program participants. These contributions to the program are subject
316	316	to par. (k) and are not amounts paid into a college savings account for purposes of s.
317	317	1
318	318	2
319	319	3
320	320	4
321	321	5
322	322	6
323	323	7
324	324	8
325	325	9
326	326	10
327	327	11
328	328	12
329	329	13
330	330	14
331	331	15
332	332	16
333	333	17
334	334	18
335	335	19
336	336	20
337	337	21
338	338	22
339	339	23
340	340	24
341	341	25 - 8 -2023 - 2024 Legislature LRB-5121/1
342	342	ARG&SWB:cdc
343	343	SECTION 6 ASSEMBLY BILL 1012
344	344	71.05 (6) (b) 32. These contributions are irrevocable after the department deposits
345	345	the contributed funds into an account established under par. (b).
346	346	(j) As part of the department's administration of the program under this
347	347	subsection, the department may collect data and conduct research related to the
348	348	program's operation and results. Any person may share data with the department
349	349	to assist the department in its efforts to conduct program research or secure program
350	350	contributions under par. (i).
351	351	(k) A program participant has no property interest in an account established
352	352	under par. (b), and all money in an account under par. (b) remains solely the property
353	353	of the state, until the money is distributed for the program participant as provided
354	354	in par. (g).
355	355	(L) 1. No later than December 31, 2024, the department shall determine the
356	356	minimum balance of the college savings program trust fund that must be maintained
357	357	to meet current and reasonably anticipated future obligations under this section.
358	358	The board shall review the determination at least once every 2 years and make any
359	359	necessary modifications. The board shall engage, and may rely on the opinions of,
360	360	one or more actuaries or other professionals retained under sub. (4) to assist in
361	361	meeting the requirements of this subdivision.
362	362	2. If the balance of the college savings program trust fund falls below the
363	363	amount established under subd. 1., the department shall suspend making deposits
364	364	under par. (d) until the balance is at least the amount established under subd. 1.
365	365	When the department resumes making deposits under par. (d), it shall first make
366	366	deposits on behalf of children for whom deposits would have been made, in the order
367	367	in which the deposits would have been made, had deposits not been suspended, and
368	368	1
369	369	2
370	370	3
371	371	4
372	372	5
373	373	6
374	374	7
375	375	8
376	376	9
377	377	10
378	378	11
379	379	12
380	380	13
381	381	14
382	382	15
383	383	16
384	384	17
385	385	18
386	386	19
387	387	20
388	388	21
389	389	22
390	390	23
391	391	24 - 9 -2023 - 2024 Legislature
392	392	LRB-5121/1
393	393	ARG&SWB:cdc
394	394	SECTION 6
395	395	ASSEMBLY BILL 1012
396	396	shall thereafter make deposits based on birth or adoption information received after
397	397	deposits resumed.
398	398	(END)
399	399	1
400	400	2
401	401	3