November 8, 2007, Introduced by Reps. Emmons, Nitz, Calley, Palsrok, Scott, Shaffer, Amos, Walker, Sheen, Caul, Pastor, Brandenburg, Rick Jones, Steil, Caswell, Nofs, Stakoe, Lemmons, Donigan, Meadows, Acciavatti, Pavlov, Hoogendyk, Meekhof, Opsommer, Alma Smith, Dean, Espinoza, Pearce, Huizenga and Garfield and referred to the Committee on Military and Veterans Affairs and Homeland Security.
A bill to amend 2000 PA 161, entitled
"Michigan education savings program act,"
by amending section 2 (MCL 390.1472), as amended by 2004 PA 387.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Account" or "education savings account" means an account
established under this act.
(b) "Account owner" means any of the following:
(i) The individual who enters into a Michigan education savings
program agreement and establishes an education savings account. The
account owner may also be the designated beneficiary of the
account.
(ii) An entity exempt from taxation under section 501(c)(3) of
the internal revenue code or an estate or trust that enters into a
Michigan education savings program agreement and establishes an
education savings account.
(c) "Board" means the board of directors of the Michigan
education trust described in section 10 of the Michigan education
trust act, 1986 PA 316, MCL 390.1430.
(d) "Department" means the department of treasury.
(e) "Designated beneficiary" means the individual designated
as the individual whose higher education expenses are expected to
be paid from the account.
(f)
"Eligible educational institution" means that term an
educational institution that meets both of the following:
(i) The institution is an eligible educational institution as
defined in section 529 of the internal revenue code or a college,
university, community college, or junior college described in
section 4, 5, or 6 of article VIII of the state constitution of
1963 or established under section 7 of article VIII of the state
constitution of 1963.
(ii) The institution considers a student enrolled in that
institution a resident of this state for determining his or her
tuition rates if the student is an active duty member, or the
spouse or dependent child of an active duty member, of the armed
forces of the United States, while that active duty member is
stationed in this state and during the student's continuous full-
time enrollment in the academic degree program in which he or she
is enrolled if that active duty member is transferred to active
duty outside of this state.
(g) "Internal revenue code" means the United States internal
revenue code of 1986 in effect on January 1, 2002 or at the option
of the taxpayer, in effect for the current year.
(h) "Management contract" means the contract executed between
the treasurer and the program manager.
(i) "Member of the family" means a family member as defined in
section 529 of the internal revenue code.
(j) "Michigan education savings program agreement" means the
agreement between the program and an account owner that establishes
an education savings account.
(k) "Program" means the Michigan education savings program
established pursuant to this act.
(l) "Program manager" means the entity selected by the
treasurer to act as the manager of the program.
(m) "Qualified higher education expenses" means qualified
higher education expenses as defined in section 529 of the internal
revenue code.
(n) "Qualified withdrawal" means a distribution that is not
subject to a penalty or an excise tax under section 529 of the
internal revenue code, a penalty under this act, or taxation under
the income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.532, and
that meets any of the following:
(i) A withdrawal from an account to pay the qualified higher
education expenses of the designated beneficiary incurred after the
account is established.
(ii) A withdrawal made as the result of the death or disability
of the designated beneficiary of an account.
(iii) A withdrawal made because a beneficiary received a
scholarship that paid for all or part of the qualified higher
education expenses of the beneficiary to the extent the amount of
the withdrawal does not exceed the amount of the scholarship.
(iv) A transfer of funds due to the termination of the
management contract as provided in section 5.
(v) A transfer of funds as provided in section 8.
(o) "Treasurer" means the state treasurer.