Wisconsin Statutes 224.50 – College savings program
Current as of: 2023 | Check for updates
|
Other versions
Terms Used In Wisconsin Statutes 224.50
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Contract: A legal written agreement that becomes binding when signed.
- Following: when used by way of reference to any statute section, means the section next following that in which the reference is made. See Wisconsin Statutes 990.01
- Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
- Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Person: includes all partnerships, associations and bodies politic or corporate. See Wisconsin Statutes 990.01
- Promulgate: when used in connection with a rule, as defined under…. See Wisconsin Statutes 990.01
- Public law: A public bill or joint resolution that has passed both chambers and been enacted into law. Public laws have general applicability nationwide.
- Qualified: when applied to any person elected or appointed to office, means that such person has done those things which the person was by law required to do before entering upon the duties of the person's office. See Wisconsin Statutes 990.01
- State: when applied to states of the United States, includes the District of Columbia, the commonwealth of Puerto Rico and the several territories organized by Congress. See Wisconsin Statutes 990.01
- Year: means a calendar year, unless otherwise expressed; "year" alone means "year of our Lord". See Wisconsin Statutes 990.01
(1) Definitions. In this section:
(a) “Account owner” means a person who establishes a college savings account under this section.
(b) “Board” means the college savings program board.
(c) “Department” means the department of financial institutions.
(2) Duties of the board. The board shall do all of the following:
(a) Except as provided in s. 224.51, establish and administer a college savings program that allows an individual, trust, legal guardian, or entity described under 26 U.S. Code § 529 (e) (1) (C) to establish a college savings account to cover tuition, fees, and the costs of room and board, books, supplies, and equipment required for the enrollment or attendance of a beneficiary at an eligible educational institution, as defined under 26 U.S. Code § 529, and to cover tuition expenses in connection with enrollment or attendance at an elementary or secondary public, private, or religious school, as described in section 11032 of P.L. Public Law 115-97″>115-97, related to qualified tuition programs under 26 U.S. Code § 529.
(b) Ensure that the college savings program meets the requirements of a qualified state tuition plan under 26 U.S. Code § 529.
(c) Establish investment guidelines for contributions to college savings accounts and pay distributions to beneficiaries and eligible educational institutions.
(d) Provide to each account owner, and to persons who are interested in establishing a college savings account, information about current and estimated future higher education costs, levels of participation in the college savings program that will help achieve educational funding objectives and availability of and access to financial aid.
(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 U.S. Code § 529, and that impose more than a de minimis penalty, as defined under 26 U.S. Code § 529, for nonqualified withdrawals.
(f) Seek rulings and guidance from the U.S. department of the treasury, the internal revenue service and the securities and exchange commission to ensure the proper implementation and administration of the college savings program.
(g) Ensure that if the department changes vendors, the balances of college savings accounts are promptly transferred into investment instruments as similar to the original investment instruments as possible.
(h) Keep personal and financial information pertaining to an account owner or a beneficiary closed to the public, except that the board may release to the appropriate state agency information necessary in determining a beneficiary’s eligibility for state financial aid for higher education.
(i) Before December 31 of each year, beginning in 2015, ensure that the account balance limitation under sub. (3) (bm) is increased for the subsequent year. The annual increase shall be equal to a percentage that is not less than the most recently published national average tuition and fees percentage increase at private, nonprofit 4-year institutions, as determined by the College Board, or such other nationally reputable entity, and shall be subject to the requirements under 26 U.S. Code § 529 that pertain to the prohibition on excess contributions.
(3) Account owners; beneficiaries; contributions; termination of savings accounts.
224.50(3)(a) (a) An account owner may do all of the following:
1. Contribute to a college savings account or authorize any other person to contribute to the account.
2. Select a beneficiary of a college savings account.
3. Change the beneficiary of a college savings account to a family member, as defined under 26 U.S. Code § 529, of the previous beneficiary.
4. Transfer all or a portion of a college savings account to another college savings account whose beneficiary is a member of the family.
5. Designate a person other than the beneficiary as a person to whom funds may be paid from a college savings account.
6. Receive distributions from a college savings account if no other person is designated.
(b) An individual may be the beneficiary of more than one college savings account, and an account owner may be the beneficiary of a college savings account that the account owner has established.
(bm) Beginning on August 1, 2015, no contribution may be made to an account if the contribution would cause the account balance of a beneficiary’s account, or the combined balance of all accounts of a beneficiary, to exceed $425,000. This contribution limitation applies to all accounts that are established on and after that date, and to all accounts that are in existence on that date that have not yet reached the balance limit specified in this paragraph, subject to the annual increase described in sub. (2) (i).
(c) The board shall establish a minimum initial contribution to a college savings account that may be waived if the account owner agrees to contribute to a college savings account through a payroll deduction or automatic deposit plan. The board shall ensure that any such plan permits the adjustment of scheduled deposits because of a change in the account owner’s economic circumstances or a beneficiary’s educational plans.
(d) An account owner under this section may terminate his or her college savings account if any of the following occurs:
1. The beneficiary dies or is permanently disabled.
2. The beneficiary graduates from high school but is unable to gain admission to an institution of higher education after a good faith effort.
3. The beneficiary attended an institution of higher education but involuntarily failed to complete the program in which he or she was enrolled.
4. The beneficiary is at least 18 years old and one of the following applies:
a. The beneficiary has not graduated from high school.
b. The beneficiary has decided not to attend an institution of higher education.
c. The beneficiary attended an institution of higher education but voluntarily withdrew without completing the program in which he or she was enrolled.
5. Other circumstances determined by the board to be grounds for termination.
(e) The board may terminate a college savings account if any portion of the college savings account balance remains unused 10 years after the anticipated academic year of the beneficiary’s initial enrollment in an eligible educational institution.
(4) Contracts with professionals. The board may enter into a contract for the services of accountants, attorneys, consultants and other professionals to assist in the administration and evaluation of the college savings program.
(5) Report. Annually, the board shall submit a report to the governor, and to the appropriate standing committees of the legislature under s. 13.172 (3), on the performance of the college savings program, including any recommended changes to the program.
(6) Construction. Nothing in this section guarantees an individual’s admission to, retention by or graduation from any institution of higher education; a rate of interest or return on a college savings account; or the payment of principal, interest or return on a college savings account.
(7) Exemption from garnishment, lien, levy, attachment and execution; security for loan.
224.50(7)(a) (a) An account established under this section is not subject to garnishment, lien, levy, attachment, execution or other process of law.
(b) No interest in a college savings account may be pledged as security for a loan.
(8) Financial aid calculations. The balance of a college savings account shall not be included in the calculation of a beneficiary’s eligibility for state financial aid for higher education if the beneficiary notifies the higher educational aids board and the eligible educational institution that the beneficiary is planning to attend that he or she is a beneficiary of a college savings account and if the account owner agrees to release to the higher educational aids board and the eligible educational institution information necessary for the calculation under this subsection.