SB497: Bill Text

SB497,4,8 25.17 (3) (a) Invest the core retirement investment trust, baby bond fund, state life fund, local government property insurance fund, veterans trust fund, and injured patients and families compensation fund in loans, securities, and any other investments authorized by s. 620.22, and in bonds or other evidences of indebtedness or preferred stock of companies engaged in the finance business whether as direct lenders or as holding companies owning subsidiaries engaged in the finance business. Investments permitted by sub. (4) are permitted investments under this subsection.

SB497,10 Section 10. 25.18 (1) (q) of the statutes is created to read:

SB497,4,12 25.18 (1) (q) Invest any of the assets of the baby bond fund in any investment that is an authorized investment for assets in the variable retirement investment trust under s. 25.17 (5).

SB497,11 Section 11. 25.32 of the statutes is created to read:

SB497,4,15 25.32 Baby bond fund. (1) There is established a separate nonlapsible trust fund designated as the baby bond fund. The fund shall consist of all of the following:

SB497,4,16 (a) Money deposited into the fund under s. 224.58 (3) (b) 2.

SB497,4,18 (b) All donations, gifts, grants, bequests, or other contributions deposited into the fund under s. 224.58 (6).

SB497,4,19 (c) All earnings and other investment income of the fund.

SB497,4,22 (2) Except as provided in s. 25.187, moneys in the baby bond fund may be expended only for the purpose of making distributions under s. 224.58 (4) and deposits under s. 224.58 (3) (b) 2.

SB497,12 Section 12 . 69.14 (1) (a) of the statutes is amended to read:

SB497,5,2 69.14 (1) (a) Filing deadline. A record of birth for every birth that occurs in this state shall be filed within 5 days after the birth with the state registrar, who shall register the birth under this subchapter. The state registrar shall submit a copy of the record of birth to the department of financial institutions.

SB497,13 Section 13. 71.05 (6) (b) 57. of the statutes is created to read:

SB497,5,5 71.05 (6) (b) 57. The amount of a distribution made to an account beneficiary, as defined in s. 224.58 (1) (b), under s. 224.58 (4).

SB497,14 Section 14. 71.78 (4) (v) of the statutes is created to read:

SB497,5,8 71.78 (4) (v) The department of financial institutions and the department of health services for the purpose of determining eligibility under s. 224.58 (3) (a) 1.

SB497,15 Section 15 . 224.58 of the statutes is created to read:

SB497,5,10 224.58 Baby bond program. (1) Definitions. In this section:

SB497,5,12 (a) “Account” means a baby bond account established by the department under sub. (3).

SB497,5,14 (b) “Account beneficiary” means an individual for whom the department establishes an account.

SB497,5,15 (c) “Domestic business entity” has the meaning given in s. 180.1100 (2).

SB497,5,16 (d) “Eligible expense" means an expense associated with any of the following:

SB497,5,17 1. Postsecondary education of an account beneficiary.

SB497,5,18 2. Child care or education of a minor dependent of the account beneficiary.

SB497,5,19 3. The purchase of a home by an account beneficiary.

SB497,5,22 4. Starting a business by an account beneficiary if the business is a domestic business entity or is a foreign business entity registered or authorized to do business in this state under ch. 178, 179, 180, 181, or 183.

SB497,5,25 5. Contributing to a traditional individual retirement account, a Roth IRA, an account associated with a 401 (k), 403 (b), 457, or Keogh plan, or a similar retirement savings account by an account beneficiary.

SB497,6,1 (e) “Foreign business entity” has the meaning given in s. 180.1100 (3).

SB497,6,4 (f) “Last-known address” means the most recent contact information provided to the department according to the department's records, which may be either a physical address or an electronic mail address.

SB497,6,6 (2) Baby bond program. The department shall establish and administer a baby bond program as described in this section.

SB497,6,8 (3) Establishing accounts. (a) For each record of birth submitted to the department under s. 69.14 (1) (a), the department shall do all of the following:

SB497,6,11 1. In consultation with the department of health services and the department of revenue, determine whether, on the day before the child was born, the mother meets the income level described under s. 49.471 (4) (a) 1. or 2.

SB497,6,13 2. If the criteria in subd. 1. is satisfied, establish a baby bond account for the child, with the child designated as the account beneficiary.

SB497,6,15 (b) Upon establishing an account for a child under par. (a) 2., the department shall promptly do all of the following:

SB497,6,17 1. Provide written notice of the account to the last-known address of the child's parents.

SB497,6,21 2. From the appropriation account under s. 20.144 (5) (c) or (j), deposit $3,000 into the baby bond fund and credit this amount to the child's account or, from the appropriation amount under s. 20.144 (5) (q), credit $3,000 to the child's account if such funds are available for this purpose as provided in s. 224.58 (5) (b).

SB497,6,25 (c) An account established under this subsection shall include the amount specified in par. (b) 2., the account beneficiary's pro rata share of total net investment earnings of the baby bond fund, and any amount allocated to the account under sub. (5) (b) or (6) (b).

SB497,7,4 (4) Distributions. (a) Not later than 30 days before an account beneficiary's 18th birthday, the department shall provide notice to the last-known address of the account beneficiary and the account beneficiary's parents that the account beneficiary may be eligible for distribution of the account balance.

SB497,7,7 (b) Upon application to the department by an account beneficiary, the department shall distribute to the account beneficiary the full balance of the account if all of the following requirements are satisfied:

SB497,7,8 1. The account beneficiary is at least 18 years of age.

SB497,7,10 2. Except as provided in par. (c), the account beneficiary and at least one of the account beneficiary's parents is a resident of this state.

SB497,7,12 3. The account beneficiary has successfully completed the financial literacy course developed by the department under sub. (7) (a) 4.

SB497,7,14 4. The account beneficiary certifies that the account beneficiary will use the money distributed only to pay eligible expenses.

SB497,7,19 (c) If an account beneficiary or the account beneficiary's parents have relocated from this state as of the account beneficiary's 18th birthday, the account beneficiary is eligible for distribution of the account balance under par. (b) if the account beneficiary returns to this state and remains a resident of this state for at least one year thereafter.

SB497,7,21 (d) An account beneficiary may use moneys distributed from the account only to pay for eligible expenses.

SB497,7,23 (5) Account termination. (a) The department may terminate an account beneficiary's account if any of the following occurs:

SB497,7,24 1. The account beneficiary dies.

SB497,7,25 2. The account balance is $0.

SB497,8,3 3. The account beneficiary is at least 30 years of age and has not requested distribution of the account balance or has failed to satisfy the conditions for distribution of the account balance under sub. (4) (b) and (c).

SB497,8,6 (b) If an account is not distributed and is terminated under par. (a) with a balance in the account, the balance shall remain in the baby bond fund and may be used to fund new accounts or allocated in the manner described in sub. (6) (b).

SB497,8,12 (c) Not fewer than 90 days before terminating an account for the reason provided in par. (a) 3., the department shall provide notice to the last-known address of the account beneficiary and the account beneficiary's parents of the department's intent to terminate the account and the date on which the termination will occur if the account beneficiary has not applied for distribution of the account balance by that date.

SB497,8,15 (6) Donations and other contributions to program. (a) The department may receive donations, gifts, grants, bequests, or other contributions to the baby bond program and use them for the purposes for which they are made.

SB497,8,19 (b) If no purpose is stated for a donation, gift, grant, bequest, or other contribution received by the department, the department may deposit the amount into the baby bond fund and use the amount to fund new accounts or to equitably allocate the amount among existing accounts.

SB497,8,22 (c) The department may receive only monetary donations, gifts, grants, bequests, or other contributions. The department may not accept property or other in-kind donations, gifts, grants, bequests, or contributions.

SB497,8,24 (7) Powers and duties of the department. (a) The department shall do all of the following:

SB497,9,2 1. Collaborate with the department of health services and the department of revenue to determine eligibility under sub. (3) (a) 1.

SB497,9,5 2. From the pooled assets and investments of the baby bond fund, maintain an accounting under which each account beneficiary's share of the total is identified as a separate account.

SB497,9,10 3. Provide to each account beneficiary and the account beneficiary's parents, at their last-known addresses, an annual statement of the account beneficiary's account, including the account balance, the date the account beneficiary is eligible for distribution of the account balance, and the requirements the account beneficiary must satisfy to receive the distribution.

SB497,9,16 4. Develop and maintain an online, interactive financial literacy course. The course shall be organized into modules, with a test of knowledge at the conclusion of each module. The course shall require the course participant to successfully complete the test before continuing to the next module, but the course may not limit the number of times the participant may retake the test to achieve successful completion.

SB497,9,18 5. Maintain as confidential all personal and financial information pertaining to an account beneficiary and the account beneficiary's parents.

SB497,9,19 (b) The department may do any of the following:

SB497,9,22 1. Enter into contracts for the services of accountants, actuaries, attorneys, consultants, or other professionals to assist in the administration of the baby bond program established under this section.

SB497,9,24 2. Conduct marketing, advertising, and fundraising for the baby bond program, including through contracts with 3rd parties.

SB497,9,25 3. Promulgate rules to implement and administer this section.

SB497,10,6 (8) Exclusion from consideration for need-based programs or benefits. Notwithstanding any other provision of law, neither the balance of an account beneficiary's account nor distributions to the account beneficiary may be considered for purposes of determining the account beneficiary's eligibility for any state or local program or benefit in which the account beneficiary's income, assets, or financial need is a criteria for eligibility.

SB497,16 Section 16. Initial applicability.

SB497,10,9 (1) The treatment of s. 69.14 (1) (a) first applies to children born on the effective date of this subsection.

SB497,17 Section 17. Effective date.

SB497,10,12 (1) This act takes effect on the first day of the 7th month beginning after publication.

SB497,10,13 (End)