Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB950 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 SENATE BILL 950
5	5	January 26, 2024 - Introduced by Senators W IMBERGER, HESSELBEIN, ROYS,
6	6	SPREITZER and LARSON, cosponsored by Representatives MACCO, GOYKE, C.
7	7	ANDERSON, J. ANDERSON, ANDRACA, BALDEH, BARE, BEHNKE, CLANCY, CONLEY,
8	8	CONSIDINE, DRAKE, EMERSON, HONG, JOERS, S. JOHNSON, KRUG, MADISON,
9	9	MOORE OMOKUNDE, MURSAU, MYERS, NEUBAUER, O'CONNOR, OHNSTAD, PALMERI,
10	10	RATCLIFF, SHANKLAND, SINICKI, SNODGRASS, SPIROS and SUBECK. Referred to
11	11	Committee on Financial Institutions and Sporting Heritage.
12	12	AN ACT to amend 224.50 (2) (a) and 224.50 (3) (bm); and to create 20.144 (3) (ti),
13	13	69.20 (3) (b) 6. and 7., 224.50 (1) (d) and 224.50 (3m) of the statutes; relating
14	14	to: creating a WisKids savings account program within the college savings
15	15	program and making an appropriation.
16	16	Analysis by the Legislative Reference Bureau
17	17	This bill creates a WisKids savings accounts program under which the
18	18	Department of Financial Institutions establishes a master college savings account
19	19	from which money may be distributed to pay for qualified higher education expenses
20	20	of children born or adopted in this state. The bill also requires the Department of
21	21	Health Services to provide information to DFI related to the WisKids savings account
22	22	program and better aligns with federal law the purposes for which college savings
23	23	account expenditures may be made.
24	24	Under current law, the College Savings Program Board, which is attached to
25	25	DFI, administers the state's college savings program, commonly referred to by its two
26	26	program options “Edvest” and “Tomorrow's Scholar.” The state's college savings
27	27	program is a qualified tuition program authorized under federal law, more generally
28	28	known as a 529 plan. Under the program, a person may establish a college savings
29	29	account to cover, consistent with federal law, a beneficiary's 1) tuition, fees, room and
30	30	board, and other costs required to attend an eligible educational institution; and 2)
31	31	tuition expenses at an elementary or secondary school.
32	32	Current law requires DFI to select a vendor for the college savings program
33	33	through a competitive bidding process, based on factors determined by DFI. The
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40	40	contract between DFI and the vendor must contain certain requirements, including
41	41	that the vendor reimburse the state for administrative program costs.
42	42	The bill creates a WisKids savings account program under which DFI
43	43	establishes a master college savings account that holds money that may be
44	44	distributed to pay for qualified higher education expenses of children born or adopted
45	45	in this state. Under the bill, DHS is granted an exception to existing disclosure
46	46	prohibitions allowing the state registrar of vital records to provide DFI with
47	47	information related to the birth or adoption of a child in this state and requiring that
48	48	the state registrar provide DFI with at least the name of the child and, as applicable,
49	49	the name and address of the child's birth parent or, to the extent available, the name
50	50	and address of each adoptive parent. In the case of adoption, if the state registrar
51	51	has prepared a new birth record for the subject of the adoption, the information
52	52	provided to DFI may not include a copy of the original birth record registered for the
53	53	subject of the adoption. The state registrar is also not required to disclose adoption
54	54	information the disclosure of which is prohibited by federal law or other state law.
55	55	Upon receiving the information from DHS, DFI must deposit at least $25 on
56	56	behalf of the child into the master college savings account or a sub-account, except
57	57	that DFI must first provide a notice to the child's parents and allow the child to opt
58	58	out of the program. If DFI makes a deposit on behalf of a child, DFI must maintain
59	59	an accounting that includes the name of the child, the names of the child's parents,
60	60	and the principal and earnings in the account attributable to the child. The deposit
61	61	for the child (the “program participant”) is made from an appropriation from the
62	62	college savings program's segregated fund or is made from program contributions
63	63	(described further below). Under the bill, DFI must suspend deposits if the balance
64	64	of the segregated fund falls below a specified level.
65	65	Under the bill, DFI makes distributions to third parties to pay program
66	66	participants' qualified higher education expenses that have been charged to the
67	67	program participant by the third party. These expenses may not include elementary
68	68	or secondary school tuition. The bill allows DFI to remove a program participant
69	69	from the program and make the funds that had been attributable to the program
70	70	participant available for use by other program participants if 1) DFI has not made
71	71	any distribution for the program participant before the program participant reaches
72	72	28 years of age; 2) DFI has not distributed all funds attributable to the program
73	73	participant within five years of the first distribution to the program participant; 3)
74	74	the program participant dies; or 4) the program participant withdraws from the
75	75	program.
76	76	The bill allows DFI to accept contributions to the program from any person on
77	77	behalf of program participants. As part of DFI's administration of the program, DFI
78	78	may collect data and conduct research related to the program's operation and results.
79	79	Any person may share data with DFI to assist in this research or in program
80	80	fundraising.
81	81	The bill also aligns the allowable purposes of an account under the college
82	82	savings program to match the allowable purposes under federal law. In addition to
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87	87	above in 1) and 2), federal law allows the use of account funds to pay certain
88	88	apprenticeship expenses and to make payments on a qualified education loan.
89	89	For further information see the state fiscal estimate, which will be printed as
90	90	an appendix to this bill.
91	91	The people of the state of Wisconsin, represented in senate and assembly, do
92	92	enact as follows:
93	93	SECTION 1. 20.144 (3) (ti) of the statutes is created to read:
94	94	20.144 (3) (ti) WisKids savings accounts; college savings program trust fund.
95	95	From the college savings program trust fund, a sum sufficient for the payment of
96	96	WisKids savings account deposits under s. 224.50 (3m).
97	97	SECTION 2. 69.20 (3) (b) 6. and 7. of the statutes are created to read:
98	98	69.20 (3) (b) 6. The information is from a birth record of a registrant born in
99	99	this state and is submitted to the department of financial institutions for the purpose
100	100	of administering s. 224.50 (3m). At a minimum, the state registrar shall disclose to
101	101	the department of financial institutions the name of the child and the name and
102	102	address of the parent who gave birth to the child.
103	103	7. The information is from a copy of an order granting an adoption as provided
104	104	in s. 69.15 (2), the individual adopted is a minor, and the information is submitted
105	105	to the department of financial institutions for the purpose of administering s. 224.50
106	106	(3m). If the state registrar has prepared a new birth record under s. 69.15 (2), the
107	107	information provided to the department of financial institutions may not include a
108	108	copy of the original birth record registered for the subject of the adoption. At a
109	109	minimum, the state registrar shall disclose to the department of financial
110	110	institutions the name of the child and, to the extent available, the name and address
111	111	of each adoptive parent of the child, except that this subdivision does not require the
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132	132	SECTION 2 SENATE BILL 950
133	133	state registrar to disclose any information the disclosure of which is prohibited by
134	134	federal law or by state law other than this chapter.
135	135	SECTION 3. 224.50 (1) (d) of the statutes is created to read:
136	136	224.50 (1) (d) “Record” has the meaning given in s. 137.11 (12).
137	137	SECTION 4. 224.50 (2) (a) of the statutes is amended to read:
138	138	224.50 (2) (a) Except as provided in s. 224.51, and subject to sub. (3m), establish
139	139	and administer a college savings program that allows an individual, trust, legal
140	140	guardian, or entity described under 26 USC 529 (e) (1) (C) to establish a college
141	141	savings account to cover tuition, fees, and the costs of room and board, books,
142	142	supplies, and equipment required for the enrollment or attendance of a beneficiary
143	143	at an eligible educational institution, as defined under 26 USC 529, and to cover
144	144	tuition expenses in connection with enrollment or attendance at an elementary or
145	145	secondary public, private, or religious school, as described in section 11032 of P.L.
146	146	115-97, related to qualified tuition programs under for the purposes set forth in 26
147	147	USC 529.
148	148	SECTION 5. 224.50 (3) (bm) of the statutes is amended to read:
149	149	224.50 (3) (bm) Beginning on August 1, 2015, no contribution may be made to
150	150	an account if the contribution would cause the account balance of a beneficiary's
151	151	account, or the combined balance of all accounts of a beneficiary, to exceed $425,000.
152	152	This contribution limitation applies to all accounts that are established on and after
153	153	that date, and to all accounts that are in existence on that date that have not yet
154	154	reached the balance limit specified in this paragraph, subject to the annual increase
155	155	described in sub. (2) (i), except that this paragraph does not apply to an account
156	156	established under sub. (3m) (b).
157	157	SECTION 6. 224.50 (3m) of the statutes is created to read:
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185	185	SECTION 6
186	186	SENATE BILL 950
187	187	224.50 (3m) WISKIDS SAVINGS ACCOUNT PROGRAM. (a) In this subsection:
188	188	1. “Parent” means a child's parent as identified or updated in the child's record
189	189	of birth or a court's adoption order relating to the child or as subsequently updated
190	190	in the records of the department or in the system of vital records, as defined in s. 69.01
191	191	(25) (a).
192	192	2. “Program participant” means a child for whom the department has made a
193	193	deposit under par. (c) and maintains an accounting under par. (d).
194	194	3. “Qualified higher education expenses” has the meaning given in 26 USC 529
195	195	(e) (3) and includes the meaning under 26 USC 529 (c) (8) and (9) but excludes the
196	196	meaning under 26 USC 529 (c) (7).
197	197	(b) The department shall establish a master holding account, and may
198	198	establish additional accounts, under this section.
199	199	(c) 1. Subject to pars. (e) and (L) 2., whenever the department receives
200	200	information from a birth record as provided in s. 69.20 (3) (b) 6., the department shall
201	201	deposit at least $25 into an account established under par. (b) for the identified child.
202	202	2. Subject to pars. (e) and (L) 2., whenever the department receives adoption
203	203	information as provided in s. 69.20 (3) (b) 7., the department shall deposit at least
204	204	$25 into an account established under par. (b) for the identified child if the
205	205	department has not already made a deposit for the child under subd. 1.
206	206	3. Deposits under this paragraph shall be made from the appropriations under
207	207	s. 20.144 (3) (th) and (ti) and, as applicable, from the appropriation under s. 20.144
208	208	(1) (h).
209	209	(d) For each account established under par. (b), the department shall maintain
210	210	an accounting that includes the following information:
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236	236	SECTION 6 SENATE BILL 950
237	237	1. The name of each child for whom the department made a deposit under par.
238	238	(c).
239	239	2. The name of each parent of the child under subd. 1.
240	240	3. The principal and earnings in the account attributable to the child under
241	241	subd. 1.
242	242	(e) 1. Before depositing money into an account established under par. (b) on
243	243	behalf of a child described in par. (c), the department shall provide notice in a record
244	244	to each parent of the child. The notice shall contain all of the following information:
245	245	a. A description of the program under this subsection, including the amount the
246	246	department will deposit into the account for the child.
247	247	b. That the parent may elect not to participate in the program under this
248	248	subsection and forgo the department's deposit of money into the account.
249	249	c. That the department will consider the child to participate in the program
250	250	under this subsection and will deposit money into the account on behalf of the child
251	251	unless a parent of the child notifies the department within 30 days of the date of the
252	252	notice that the child opts out of the program.
253	253	2. If a parent informs the department within 30 days of the date of the notice
254	254	under subd. 1. that the child opts out of the program, the department may not include
255	255	the child in the program under this subsection.
256	256	3. If the department determines, based on available information, that neither
257	257	the child, nor any parent of the child, was a resident of this state at the time of the
258	258	birth or adoption, the department shall not include the child in the program under
259	259	this subsection.
260	260	(f) If the department receives adoption information regarding a child for whom
261	261	the department has already deposited money under par. (c) 1., the department shall
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291	291	update its records to designate each adoptive parent, and to remove each parent
292	292	identified in the birth records, as the child's parent for purposes of this subsection.
293	293	(g) Upon request of a program participant, the department shall direct that a
294	294	distribution from an account established under par. (b) be made on behalf of the
295	295	program participant to a 3rd party if all of the following apply:
296	296	1. The distribution is made to pay, in whole or in part, the program participant's
297	297	qualified higher education expenses.
298	298	2. The 3rd party has charged the program participant for these qualified higher
299	299	education expenses.
300	300	3. There are funds in the account attributable to the program participant
301	301	available to pay the distribution under subd. 1.
302	302	(h) 1. The department may remove a program participant from the program
303	303	and make the funds that had been attributable to the program participant available
304	304	for use by other program participants if any of the following applies:
305	305	a. The department has not made any distribution under par. (g) for the program
306	306	participant before the program participant reaches 28 years of age or has not
307	307	distributed all funds attributable to the program participant within 5 years of the
308	308	department's first distribution to the program participant.
309	309	b. The program participant dies.
310	310	c. The program participant, or a parent of the program participant, notifies the
311	311	department in a record that the program participant is discontinuing participation
312	312	in the program.
313	313	(i) The department may accept contributions to the program from any person
314	314	on behalf of program participants. These contributions to the program are subject
315	315	to par. (k) and are not amounts paid into a college savings account for purposes of s.
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342	342	SECTION 6 SENATE BILL 950
343	343	71.05 (6) (b) 32. These contributions are irrevocable after the department deposits
344	344	the contributed funds into an account established under par. (b).
345	345	(j) As part of the department's administration of the program under this
346	346	subsection, the department may collect data and conduct research related to the
347	347	program's operation and results. Any person may share data with the department
348	348	to assist the department in its efforts to conduct program research or secure program
349	349	contributions under par. (i).
350	350	(k) A program participant has no property interest in an account established
351	351	under par. (b), and all money in an account under par. (b) remains solely the property
352	352	of the state, until the money is distributed for the program participant as provided
353	353	in par. (g).
354	354	(L) 1. No later than December 31, 2024, the department shall determine the
355	355	minimum balance of the college savings program trust fund that must be maintained
356	356	to meet current and reasonably anticipated future obligations under this section.
357	357	The board shall review the determination at least once every 2 years and make any
358	358	necessary modifications. The board shall engage, and may rely on the opinions of,
359	359	one or more actuaries or other professionals retained under sub. (4) to assist in
360	360	meeting the requirements of this subdivision.
361	361	2. If the balance of the college savings program trust fund falls below the
362	362	amount established under subd. 1., the department shall suspend making deposits
363	363	under par. (d) until the balance is at least the amount established under subd. 1.
364	364	When the department resumes making deposits under par. (d), it shall first make
365	365	deposits on behalf of children for whom deposits would have been made, in the order
366	366	in which the deposits would have been made, had deposits not been suspended, and
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393	393	SECTION 6
394	394	SENATE BILL 950
395	395	shall thereafter make deposits based on birth or adoption information received after
396	396	deposits resumed.
397	397	(END)
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