Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB1143 Compare Versions

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

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 ASSEMBLY BILL 1143
5	5	March 6, 2024 - Introduced by Representatives VINING, CLANCY, SUBECK, C.
6	6	ANDERSON, EMERSON, CONLEY, SINICKI, MOORE OMOKUNDE, HONG, J. ANDERSON,
7	7	BARE and OHNSTAD, cosponsored by Senators AGARD, ROYS and L. JOHNSON.
8	8	Referred to Committee on Health, Aging and Long-Term Care.
9	9	*AUTHORS SUBJECT TO CHANGE*
10	10	AN ACT to amend 20.144 (1) (g), 25.17 (3) (a), 69.14 (1) (a) and 69.22 (6); and to
11	11	create 20.144 (5) (title), 20.144 (5) (a), 20.144 (5) (c), 20.144 (5) (j), 20.144 (5)
12	12	(q), 25.14 (1) (a) 20., 25.17 (1) (aL), 25.18 (1) (q), 25.32, 69.20 (3) (b) 6., 69.20 (3)
13	13	(i), 71.05 (6) (b) 57., 71.78 (4) (w) and 224.58 of the statutes; relating to:
14	14	creating a baby bond program and baby bond fund, granting rule-making
15	15	authority, and making an appropriation.
16	16	Analysis by the Legislative Reference Bureau
17	17	This bill requires the Department of Financial Institutions to establish and
18	18	administer a baby bond program and creates a baby bond trust fund managed by the
19	19	State of Wisconsin Investment Board.
20	20	Under the bill, the State Registrar of Vital Records must provide to DFI a copy
21	21	of the record of birth for each child born in the state on or after the bill's effective date.
22	22	In consultation with the Department of Health Services and the Department of
23	23	Revenue, DFI must determine whether, on the day before the child was born, the
24	24	child's mother met the income requirements for the Medical Assistance program, and
25	25	if this criteria is satisfied, DFI must establish a baby bond account for the child, with
26	26	the child designated as the account beneficiary. DFI must then deposit $3,000 into
27	27	the baby bond trust fund and credit this amount to the child's baby bond account.
28	28	The amount in the account consists of the initial $3,000, investment income
29	29	generated through management of the baby bond trust fund by SWIB, and any
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36	36	ARG:cdc
37	37	ASSEMBLY BILL 1143
38	38	allocated donations, gifts, grants, bequests, or other contributions received by the
39	39	baby bond program. When the account beneficiary attains 18 years of age, if certain
40	40	conditions are satisfied, the account beneficiary may receive distribution of the full
41	41	account balance to pay expenses associated with postsecondary education of the
42	42	account beneficiary; child care or education of a minor dependent of the account
43	43	beneficiary; the purchase of a home by the account beneficiary; starting a business
44	44	by the account beneficiary; or contributing to a retirement savings account by the
45	45	account beneficiary. Upon application to DFI, an account beneficiary is eligible for
46	46	distribution of the account balance if all of the following requirements are satisfied:
47	47	1) the account beneficiary is at least 18 years of age; 2) with an exception, the account
48	48	beneficiary and at least one of the account beneficiary's parents is a Wisconsin
49	49	resident; 3) the account beneficiary has successfully completed a financial literacy
50	50	course developed by DFI; and 4) the account beneficiary certifies that the account
51	51	beneficiary will use the money distributed only to pay expenses described above. If
52	52	an account beneficiary or the account beneficiary's parents relocate from Wisconsin
53	53	prior to the account beneficiary's 18th birthday, the account beneficiary is eligible for
54	54	the distribution if the account beneficiary returns to Wisconsin and remains a
55	55	Wisconsin resident for at least one year thereafter. A distribution from an account
56	56	is not subject to state income tax. DFI may terminate an account beneficiary's
57	57	account if the account beneficiary dies, the account balance is $0, or the account
58	58	beneficiary is at least 30 years of age and has not requested a distribution or has
59	59	failed to satisfy the conditions for distribution. The balance of an account that is
60	60	terminated remains in the baby bond trust fund for further use for the baby bond
61	61	program.
62	62	Because this bill relates to an exemption from state or local taxes, it may be
63	63	referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
64	64	as an appendix to the bill.
65	65	For further information see the state fiscal estimate, which will be printed as
66	66	an appendix to this bill.
67	67	The people of the state of Wisconsin, represented in senate and assembly, do
68	68	enact as follows:
69	69	SECTION 1. 20.144 (1) (g) of the statutes is amended to read:
70	70	20.144 (1) (g) General program operations. The amounts in the schedule for
71	71	the general program operations of the department of financial institutions. Except
72	72	as provided in pars. (a), (h), (i), (j), and (u) and sub. subs. (3) and (5), all moneys
73	73	received by the department, other than by the office of credit unions and the division
74	74	of banking, and 88 percent of all moneys received by the office of credit unions and
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83	83	SECTION 1
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85	85	the department's division of banking shall be credited to this appropriation, but any
86	86	balance at the close of a fiscal year under this appropriation shall lapse to the general
87	87	fund. Annually, $150,000 of the amounts received under this appropriation account
88	88	shall be transferred to the appropriation account under s. 20.575 (1) (g).
89	89	SECTION 2. 20.144 (5) (title) of the statutes is created to read:
90	90	20.144 (5) (title) BABY BOND PROGRAM.
91	91	SECTION 3. 20.144 (5) (a) of the statutes is created to read:
92	92	20.144 (5) (a) Administrative expenses. A sum sufficient for the administrative
93	93	expenses of the baby bond program under s. 224.58.
94	94	SECTION 4. 20.144 (5) (c) of the statutes is created to read:
95	95	20.144 (5) (c) Deposits into baby bond fund. A sum sufficient for deposits into
96	96	the baby bond fund as provided in s. 224.58 (3) (b) 2.
97	97	SECTION 5. 20.144 (5) (j) of the statutes is created to read:
98	98	20.144 (5) (j) Donations, gifts, and grants. All moneys received from donations,
99	99	gifts, grants, bequests, or other contributions to the baby bond program under s.
100	100	224.58, to carry out the purpose for which received, including deposit into the baby
101	101	bond fund.
102	102	SECTION 6. 20.144 (5) (q) of the statutes is created to read:
103	103	20.144 (5) (q) Payment of distributions; crediting accounts. From the baby bond
104	104	fund, a sum sufficient for the payment of distributions under s. 224.58 (4) and to
105	105	credit accounts under s. 224.58 (3) (b) 2.
106	106	SECTION 7. 25.14 (1) (a) 20. of the statutes is created to read:
107	107	25.14 (1) (a) 20. The baby bond fund.
108	108	SECTION 8. 25.17 (1) (aL) of the statutes is created to read:
109	109	25.17 (1) (aL) Baby bond fund (s. 25.32);
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136	136	SECTION 9 ASSEMBLY BILL 1143
137	137	SECTION 9. 25.17 (3) (a) of the statutes is amended to read:
138	138	25.17 (3) (a) Invest the core retirement investment trust, baby bond fund, state
139	139	life fund, local government property insurance fund, veterans trust fund, and injured
140	140	patients and families compensation fund in loans, securities, and any other
141	141	investments authorized by s. 620.22, and in bonds or other evidences of indebtedness
142	142	or preferred stock of companies engaged in the finance business whether as direct
143	143	lenders or as holding companies owning subsidiaries engaged in the finance
144	144	business. Investments permitted by sub. (4) are permitted investments under this
145	145	subsection.
146	146	SECTION 10. 25.18 (1) (q) of the statutes is created to read:
147	147	25.18 (1) (q) Invest any of the assets of the baby bond fund in any investment
148	148	that is an authorized investment for assets in the variable retirement investment
149	149	trust under s. 25.17 (5).
150	150	SECTION 11. 25.32 of the statutes is created to read:
151	151	25.32 Baby bond fund. (1) There is established a separate nonlapsible trust
152	152	fund designated as the baby bond fund. The fund shall consist of all of the following:
153	153	(a) Money deposited into the fund under s. 224.58 (3) (b) 2.
154	154	(b) All donations, gifts, grants, bequests, or other contributions deposited into
155	155	the fund under s. 224.58 (6).
156	156	(c) All earnings and other investment income of the fund.
157	157	(2) Except as provided in s. 25.187, moneys in the baby bond fund may be
158	158	expended only for the purpose of making distributions under s. 224.58 (4) and
159	159	deposits under s. 224.58 (3) (b) 2.
160	160	SECTION 12. 69.14 (1) (a) of the statutes is amended to read:
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187	187	SECTION 12
188	188	ASSEMBLY BILL 1143
189	189	69.14 (1) (a) Filing deadline. A record of birth for every birth that occurs in this
190	190	state shall be filed within 5 days after the birth with the state registrar, who shall
191	191	register the birth under this subchapter. The state registrar shall submit a copy of
192	192	the record of birth to the department of financial institutions, but shall redact from
193	193	the copy any parent's social security number.
194	194	SECTION 13. 69.20 (3) (b) 6. of the statutes is created to read:
195	195	69.20 (3) (b) 6. The information is submitted to the department of financial
196	196	institutions for the purpose of administering the baby bond program under s. 224.58.
197	197	SECTION 14. 69.20 (3) (i) of the statutes is created to read:
198	198	69.20 (3) (i) The state registrar shall disclose information on birth records,
199	199	other than a parent's social security number, to the department of financial
200	200	institutions for use in the administration of the baby bond program under s. 224.58.
201	201	SECTION 15. 69.22 (6) of the statutes is amended to read:
202	202	69.22 (6) The state registrar may charge a reasonable fee for providing
203	203	searches of vital records and for providing copies of vital records to state agencies for
204	204	program use, except that no fee may be charged for providing a copy of the record of
205	205	birth to the department of financial institutions under s. 69.14 (1) (a). The register
206	206	of deeds may provide free searches and free copies to agencies in his or her county
207	207	at the direction of the county board.
208	208	SECTION 16. 71.05 (6) (b) 57. of the statutes is created to read:
209	209	71.05 (6) (b) 57. The amount of a distribution made to an account beneficiary,
210	210	as defined in s. 224.58 (1) (b), under s. 224.58 (4).
211	211	SECTION 17. 71.78 (4) (w) of the statutes is created to read:
212	212	71.78 (4) (w) The department of financial institutions and the department of
213	213	health services for the purpose of determining eligibility under s. 224.58 (3) (a) 1.
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240	240	SECTION 18 ASSEMBLY BILL 1143
241	241	SECTION 18. 224.58 of the statutes is created to read:
242	242	224.58 Baby bond program. (1) DEFINITIONS. In this section:
243	243	(a) “Account” means a baby bond account established by the department under
244	244	sub. (3).
245	245	(b) “Account beneficiary” means an individual for whom the department
246	246	establishes an account.
247	247	(c) “Domestic business entity” has the meaning given in s. 180.1100 (2).
248	248	(d) “Eligible expense" means an expense associated with any of the following:
249	249	1. Postsecondary education of an account beneficiary.
250	250	2. Child care or education of a minor dependent of the account beneficiary.
251	251	3. The purchase of a home by an account beneficiary.
252	252	4. Starting a business by an account beneficiary if the business is a domestic
253	253	business entity or is a foreign business entity registered or authorized to do business
254	254	in this state under ch. 178, 179, 180, 181, or 183.
255	255	5. Contributing to a traditional individual retirement account, a Roth IRA, an
256	256	account associated with a 401 (k), 403 (b), 457, or Keogh plan, or a similar retirement
257	257	savings account by an account beneficiary.
258	258	(e) “Foreign business entity” has the meaning given in s. 180.1100 (3).
259	259	(f) “Last-known address” means the most recent contact information provided
260	260	to the department according to the department's records, which may be either a
261	261	physical address or an electronic mail address.
262	262	(2) BABY BOND PROGRAM. The department shall establish and administer a baby
263	263	bond program as described in this section.
264	264	(3) ESTABLISHING ACCOUNTS. (a) For each record of birth submitted to the
265	265	department under s. 69.14 (1) (a), the department shall do all of the following:
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293	293	SECTION 18
294	294	ASSEMBLY BILL 1143
295	295	1. In consultation with the department of health services and the department
296	296	of revenue, determine whether, on the day before the child was born, the mother
297	297	meets the income level described under s. 49.471 (4) (a) 1. or 2.
298	298	2. If the criteria in subd. 1. is satisfied, establish a baby bond account for the
299	299	child, with the child designated as the account beneficiary.
300	300	(b) Upon establishing an account for a child under par. (a) 2., the department
301	301	shall promptly do all of the following:
302	302	1. Provide written notice of the account to the last-known address of the child's
303	303	parents.
304	304	2. From the appropriation account under s. 20.144 (5) (c) or (j), deposit $3,000
305	305	into the baby bond fund and credit this amount to the child's account or, from the
306	306	appropriation amount under s. 20.144 (5) (q), credit $3,000 to the child's account if
307	307	such funds are available for this purpose as provided in s. 224.58 (5) (b).
308	308	(c) An account established under this subsection shall include the amount
309	309	specified in par. (b) 2., the account beneficiary's pro rata share of total net investment
310	310	earnings of the baby bond fund, and any amount allocated to the account under sub.
311	311	(5) (b) or (6) (b).
312	312	(4) DISTRIBUTIONS. (a) Not later than 30 days before an account beneficiary's
313	313	18th birthday, the department shall provide notice to the last-known address of the
314	314	account beneficiary and the account beneficiary's parents that the account
315	315	beneficiary may be eligible for distribution of the account balance.
316	316	(b) Upon application to the department by an account beneficiary, the
317	317	department shall distribute to the account beneficiary the full balance of the account
318	318	if all of the following requirements are satisfied:
319	319	1. The account beneficiary is at least 18 years of age.
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346	346	SECTION 18 ASSEMBLY BILL 1143
347	347	2. Except as provided in par. (c), the account beneficiary and at least one of the
348	348	account beneficiary's parents is a resident of this state.
349	349	3. The account beneficiary has successfully completed the financial literacy
350	350	course developed by the department under sub. (7) (a) 4.
351	351	4. The account beneficiary certifies that the account beneficiary will use the
352	352	money distributed only to pay eligible expenses.
353	353	(c) If an account beneficiary or the account beneficiary's parents have relocated
354	354	from this state as of the account beneficiary's 18th birthday, the account beneficiary
355	355	is eligible for distribution of the account balance under par. (b) if the account
356	356	beneficiary returns to this state and remains a resident of this state for at least one
357	357	year thereafter.
358	358	(d) An account beneficiary may use moneys distributed from the account only
359	359	to pay for eligible expenses.
360	360	(5) ACCOUNT TERMINATION. (a) The department may terminate an account
361	361	beneficiary's account if any of the following occurs:
362	362	1. The account beneficiary dies.
363	363	2. The account balance is $0.
364	364	3. The account beneficiary is at least 30 years of age and has not requested
365	365	distribution of the account balance or has failed to satisfy the conditions for
366	366	distribution of the account balance under sub. (4) (b) and (c).
367	367	(b) If an account is not distributed and is terminated under par. (a) with a
368	368	balance in the account, the balance shall remain in the baby bond fund and may be
369	369	used to fund new accounts or allocated in the manner described in sub. (6) (b).
370	370	(c) Not fewer than 90 days before terminating an account for the reason
371	371	provided in par. (a) 3., the department shall provide notice to the last-known address
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399	399	SECTION 18
400	400	ASSEMBLY BILL 1143
401	401	of the account beneficiary and the account beneficiary's parents of the department's
402	402	intent to terminate the account and the date on which the termination will occur if
403	403	the account beneficiary has not applied for distribution of the account balance by that
404	404	date.
405	405	(6) DONATIONS AND OTHER CONTRIBUTIONS TO PROGRAM. (a) The department may
406	406	receive donations, gifts, grants, bequests, or other contributions to the baby bond
407	407	program and use them for the purposes for which they are made.
408	408	(b) If no purpose is stated for a donation, gift, grant, bequest, or other
409	409	contribution received by the department, the department may deposit the amount
410	410	into the baby bond fund and use the amount to fund new accounts or to equitably
411	411	allocate the amount among existing accounts.
412	412	(c) The department may receive only monetary donations, gifts, grants,
413	413	bequests, or other contributions. The department may not accept property or other
414	414	in-kind donations, gifts, grants, bequests, or contributions.
415	415	(7) POWERS AND DUTIES OF THE DEPARTMENT. (a) The department shall do all of
416	416	the following:
417	417	1. Collaborate with the department of health services and the department of
418	418	revenue to determine eligibility under sub. (3) (a) 1.
419	419	2. From the pooled assets and investments of the baby bond fund, maintain an
420	420	accounting under which each account beneficiary's share of the total is identified as
421	421	a separate account.
422	422	3. Provide to each account beneficiary and the account beneficiary's parents,
423	423	at their last-known addresses, an annual statement of the account beneficiary's
424	424	account, including the account balance, the date the account beneficiary is eligible
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450	450	SECTION 18 ASSEMBLY BILL 1143
451	451	for distribution of the account balance, and the requirements the account beneficiary
452	452	must satisfy to receive the distribution.
453	453	4. Develop and maintain an online, interactive financial literacy course. The
454	454	course shall be organized into modules, with a test of knowledge at the conclusion
455	455	of each module. The course shall require the course participant to successfully
456	456	complete the test before continuing to the next module, but the course may not limit
457	457	the number of times the participant may retake the test to achieve successful
458	458	completion.
459	459	5. Maintain as confidential all personal and financial information pertaining
460	460	to an account beneficiary and the account beneficiary's parents.
461	461	(b) The department may do any of the following:
462	462	1. Enter into contracts for the services of accountants, actuaries, attorneys,
463	463	consultants, or other professionals to assist in the administration of the baby bond
464	464	program established under this section.
465	465	2. Conduct marketing, advertising, and fundraising for the baby bond program,
466	466	including through contracts with 3rd parties.
467	467	3. Promulgate rules to implement and administer this section.
468	468	(8) EXCLUSION FROM CONSIDERATION FOR NEED-BASED PROGRAMS OR BENEFITS.
469	469	Notwithstanding any other provision of law, neither the balance of an account
470	470	beneficiary's account nor distributions to the account beneficiary may be considered
471	471	for purposes of determining the account beneficiary's eligibility for any state or local
472	472	program or benefit in which the account beneficiary's income, assets, or financial
473	473	need is a criteria for eligibility.
474	474	SECTION 19.0Initial applicability.
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501	501	SECTION 19
502	502	ASSEMBLY BILL 1143
503	503	(1) The treatment of ss. 69.14 (1) (a), 69.20 (3) (b) 6. and (i), and 69.22 (6) first
504	504	applies to children born on the effective date of this subsection.
505	505	SECTION 20.0Effective date.
506	506	(1) This act takes effect on the first day of the 7th month beginning after
507	507	publication.
508	508	(END)
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