AB683: Bill Text

AB683, s. 1 Section 1. 14.64 (2) (e) of the statutes is amended to read:

AB683,2,8 14.64 (2) (e) Promulgate rules to implement and administer this section, including rules that determine whether a withdrawal from a college savings account is a qualified or nonqualified withdrawal, as defined under 26 USC 529, and rules that impose more than a de minimis penalty, as defined under 26 USC 529, for nonqualified withdrawals, and rules to prevent contributions on behalf of a beneficiary that are in excess of those necessary to pay the qualified higher education expenses, as defined in 26 USC 529 (e) (3), of the beneficiary.

AB683, s. 2 Section 2. 14.64 (2) (g) of the statutes is amended to read:

AB683,3,6 14.64 (2) (g) Ensure that, if the department of administration changes vendors terminates the authority of a vendor, as defined in s. 16.255 (1d) (d), the balances of the college savings accounts held by that vendor are promptly transferred to another vendor that has been selected by the department of administration under s. 16.255 (2) and are transferred into investment instruments that are as similar to the original investment instruments as possible.

AB683, s. 3 Section 3. 16.255 (title) of the statutes is amended to read:

AB683,3,8 16.255 (title) College savings program vendor vendors.

AB683, s. 4 Section 4. 16.255 (1) of the statutes is renumbered 16.255 (1m) and amended to read:

AB683,3,13 16.255 (1m) The department shall determine the factors to be considered in selecting a vendor of the program under s. 14.64 vendors under sub. (2), which shall include:

AB683,3,15 (a) The person's ability of the vendor to satisfy record-keeping and reporting requirements.

AB683,3,16 (b) The fees, if any, that the person vendor proposes to charge account owners.

AB683,3,19 (c) The person's plan of the vendor for promoting the college savings program and the investment that the person vendor is willing to make to promote the college savings program.

AB683,3,21 (d) The minimum initial contribution or minimum contributions that the person vendor will require.

AB683,3,24 (e) The ability and willingness of the person vendor to accept electronic contributions electronically, through payroll deduction plans, and through other deposit plans.

AB683,4,2 (f) The ability of the person vendor to augment the college savings program with additional, beneficial services related to the college savings program.

AB683, s. 5 Section 5. 16.255 (1d) of the statutes is created to read:

AB683,4,4 16.255 (1d) In this section:

AB683,4,5 (a) "Board" means the college savings program board.

AB683,4,7 (b) "College savings program" means the college savings program under s. 14.64.

AB683,4,11 (c) "Financial institution" means a bank, savings bank, savings and loan association, credit union, insurance company, trust company, investment company, investment adviser, or any other similar entity that is authorized to do business in this state.

AB683,4,14 (d) "Vendor" means a financial institution that provides or proposes to provide administrative, investment management, and sales, marketing, and distribution services for the college savings program.

AB683, s. 6 Section 6. 16.255 (1g) of the statutes is created to read:

AB683,4,21 16.255 (1g) The board shall implement the college savings program through the use of one or more vendors selected by the department under sub. (2). Under the college savings program, an individual, trust, legal guardian, or entity described under 26 USC 529 (e) (1) (C) may establish a college savings account through any vendor selected by the department and may invest that account in one or more investment instruments approved by the board.

AB683, s. 7 Section 7. 16.255 (1m) (g) of the statutes is created to read:

AB683,4,23 16.255 (1m) (g) The financial stability and integrity of the vendor.

AB683, s. 8 Section 8. 16.255 (1m) (h) of the statutes is created to read:

AB683,5,3 16.255 (1m) (h) The safety of the investment instruments being offered by the vendor, taking into account any insurance provided with respect to those investment instruments.

AB683, s. 9 Section 9. 16.255 (1m) (i) of the statutes is created to read:

AB683,5,6 16.255 (1m) (i) The ability of the investment instruments being offered by the vendor to track future higher education costs as estimated by the board.

AB683, s. 10 Section 10. 16.255 (1m) (j) of the statutes is created to read:

AB683,5,9 16.255 (1m) (j) Any other benefits to account owners, beneficiaries, and this state offered by the vendor.

AB683, s. 11 Section 11. 16.255 (2) of the statutes is renumbered 16.255 (2) (intro.) and amended to read:

AB683,5,21 16.255 (2) (intro.) The department shall solicit competitive sealed proposals under s. 16.75 (2m) from nongovernmental persons to serve as vendor of the college savings program. The department vendors and, from those proposals, shall select the vendor based upon as vendors the vendor or vendors that demonstrate the most advantageous combination, to account owners, beneficiaries, and this state, of the factors determined by the department under sub. (1). (1m). The department may select more than one vendor, and the board may approve more than one kind of investment instrument to be offered through the college savings program. Any decision on the use of multiple vendors or multiple investment instruments shall take into account all of the following:

AB683, s. 12 Section 12. 16.255 (2) (a) of the statutes is created to read:

AB683,5,24 16.255 (2) (a) The requirements for qualifying as a qualified tuition program under 26 USC 529.

AB683, s. 13 Section 13. 16.255 (2) (b) of the statutes is created to read:

AB683,6,2 16.255 (2) (b) Differing needs of account owners regarding the risk and potential return of different investment instruments.

AB683, s. 14 Section 14. 16.255 (2) (c) of the statutes is created to read:

AB683,6,5 16.255 (2) (c) The administrative costs and burdens that may result from the decision.

AB683, s. 15 Section 15. 16.255 (3) (intro.) of the statutes is amended to read:

AB683,6,8 16.255 (3) (intro.) The A contract between the department and the a vendor shall ensure all of the following:

AB683, s. 16 Section 16. 16.255 (3) (e) of the statutes is created to read:

AB683,6,13 16.255 (3) (e) That, if more than one vendor is selected under sub. (2), the vendor provide the board with information to assist the board in determining compliance with the rules promulgated by the board under s. 14.64 (2) (e) relating to excess contributions on behalf of a beneficiary.

AB683, s. 17 Section 17. 25.85 of the statutes is amended to read:

AB683,6,19 25.85 College savings program trust fund. There is established a separate nonlapsible trust fund designated as the college savings program trust fund, consisting of all revenue from enrollment fees for and contributions to college savings accounts under s. 14.64 and from distributions and fees paid by the a vendor under s. 16.255 (3).

AB683, s. 18 Section 18. Nonstatutory provisions.

AB683,7,2 (1) If a vendor, as defined in section 16.255 (1d) (d) of the statutes, as created by this act, is subject to a contract that is in effect on the effective date of this subsection and that contains provisions that are inconsistent with section 16.255 of the statutes, as affected by this act, then, notwithstanding section 16.255 of the statutes, as affected by this act, the vendor may perform its obligations, and exercise its rights, under that contract until the contract expires, or is extended, modified, or renewed, whichever occurs first.

AB683,7,3 (End)