HOUSE BILL NO. 6483

December 02, 2020, Introduced by Rep. Wittenberg and referred to the Committee on Education.

A bill to amend 2000 PA 161, entitled

"Michigan education savings program act,"

(MCL 390.1471 to 390.1486) by adding section 7a.

the people of the state of michigan enact:

Sec. 7a. (1) In connection with the treasurer's administration of the Michigan education savings program under this act, the treasurer shall establish and administer an education savings account project under which an education savings account is established for every child born or adopted after December 31, 2020 to a parent who resides in this state at the time of the birth or adoption.

(2) The establishment of an education savings account for an eligible child under this section does not prohibit the establishment of 1 or more other education savings accounts for that child under section 7.

(3) The treasurer shall begin establishing the education savings accounts described in subsection (1) in 2021, after receiving records of recent births, adoptions, and dependents from the department of treasury, the department of health and human services, the state registrar, or another state or local government agency designated by the treasurer. Notwithstanding any law or court order that would otherwise prevent the release of information, the department of health and human services and state registrar are authorized to release the information specified under this subsection to the treasurer for the purpose of establishing and administering the education savings account project under this section.

(4) On and after the effective date of the amendatory act that added this section, the department of treasury, the department of health and human services, and the state registrar shall provide the treasurer with information on recent Michigan births, adoptions, and dependents, including, but not limited to, the full name, residential address, and birth date of each child and each child's parent or legal guardian, for the purpose of establishing education savings accounts for eligible children. The department of treasury, the department of health and human services, and the state registrar shall provide this information to the treasurer on a quarterly basis by not later than 30 days after the end of each quarter.

(5) Information that the treasurer obtains under subsection (3) or (4) is not subject to disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246, and the treasurer shall ensure the security and confidentiality of that information.

(6) After receiving information on recent births, adoptions, and dependents as described in subsection (3) or (4), the treasurer shall, subject to appropriation, make a deposit of seed funds into an omnibus account of the fund on behalf of each eligible child. The treasurer will be the owner of the omnibus account.

(7) Except as otherwise provided in this subsection, the seed fund deposit for each eligible child under subsection (6) is $50.00. The treasurer may increase this amount by rule. The treasurer may use or deposit appropriated money together with money received as gifts, grants, or contributions into the fund. If insufficient money is available in the fund, the treasurer may reduce the deposit amount or forego deposits.

(8) Seed funds, including any interest, dividends, and other earnings accrued, may be used by a project beneficiary for qualified higher education expenses if the project beneficiary is currently a resident of this state and has completed secondary education or reached the age of 18.

(9) The treasurer shall make a good-faith effort to notify project beneficiaries and their parents or legal guardians of the seed funds' availability and the deadline to use the funds.

(10) Seed funds that remain unused by a project beneficiary's twenty-sixth birthday will be considered forfeited and must remain in the omnibus account for future eligible children.

(11) The education savings account project fund is created within the state treasury. All of the following apply to the fund:

(a) The treasurer may receive money or other assets from any source for deposit into the fund. The treasurer shall direct the investment of the fund. The treasurer shall credit to the fund interest and earnings from fund investments.

(b) Money in the fund at the close of the fiscal year must remain in the fund and not lapse to the general fund.

(c) The treasurer is the administrator of the fund for auditing purposes.

(d) The treasurer shall expend money from the fund, upon appropriation, only for the purposes described in this section.

(12) The treasurer shall annually prepare a report that includes a summary of the project operations for the preceding fiscal year, including the number of children enrolled in the project, the total amount of seed fund deposits, and any other information that is relevant to make a full disclosure of the operations of the project and fund. The report must be made available on the treasurer's website by January 31 each year, starting in January of 2022. The treasurer may include the project in other reports as warranted.

(13) The treasurer shall promulgate rules to implement this section pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(14) As used in this section:

(a) "Eligible child" means a child born or adopted after December 31, 2020 to a parent who resides in this state at the time of the birth or adoption, as described in subsection (1).

(b) "Fund" means the education savings account project fund created in subsection (11).

(c) "Omnibus account" means the pooled collection of seed funds owned and managed by the treasurer under this section.

(d) "Project" means the education savings account project described in subsection (1).

(e) "Seed funds" means the deposits made by the treasurer into the omnibus accounts for project beneficiaries.