Creating a WisKids savings account program within the college savings program and making an appropriation. (FE)

Current law requires DFI to select a vendor for the college savings program through a competitive bidding process, based on factors determined by DFI. The contract between DFI and the vendor must contain certain requirements, including that the vendor reimburse the state for administrative program costs.

The bill creates a WisKids savings account program under which DFI establishes a master college savings account that holds money that may be distributed to pay for qualified higher education expenses of children born or adopted in this state. Under the bill, DHS is granted an exception to existing disclosure prohibitions allowing the state registrar of vital records to provide DFI with information related to the birth or adoption of a child in this state and requiring that the state registrar provide DFI with at least the name of the child and, as applicable, the name and address of the child's birth parent or, to the extent available, the name and address of each adoptive parent. In the case of adoption, if the state registrar has prepared a new birth record for the subject of the adoption, the information provided to DFI may not include a copy of the original birth record registered for the subject of the adoption. The state registrar is also not required to disclose adoption information the disclosure of which is prohibited by federal law or other state law.

Upon receiving the information from DHS, DFI must deposit at least $25 on behalf of the child into the master college savings account or a sub-account, except that DFI must first provide a notice to the child's parents and allow the child to opt out of the program. If DFI makes a deposit on behalf of a child, DFI must maintain an accounting that includes the name of the child, the names of the child's parents, and the principal and earnings in the account attributable to the child. The deposit for the child (the “program participant”) is made from an appropriation from the college savings program's segregated fund or is made from program contributions (described further below). Under the bill, DFI must suspend deposits if the balance of the segregated fund falls below a specified level.

Under the bill, DFI makes distributions to third parties to pay program participants' qualified higher education expenses that have been charged to the program participant by the third party. These expenses may not include elementary or secondary school tuition. The bill allows DFI to remove a program participant from the program and make the funds that had been attributable to the program participant available for use by other program participants if 1) DFI has not made any distribution for the program participant before the program participant reaches 28 years of age; 2) DFI has not distributed all funds attributable to the program participant within five years of the first distribution to the program participant; 3) the program participant dies; or 4) the program participant withdraws from the program.

The bill allows DFI to accept contributions to the program from any person on behalf of program participants. As part of DFI's administration of the program, DFI may collect data and conduct research related to the program's operation and results.

Any person may share data with DFI to assist in this research or in program fundraising.

The bill also aligns the allowable purposes of an account under the college savings program to match the allowable purposes under federal law. In addition to allowing the use of account funds to cover tuition and related expenses as described above in 1) and 2), federal law allows the use of account funds to pay certain apprenticeship expenses and to make payments on a qualified education loan.