This is the preview version of the Wisconsin State Legislature site.
Please see http://docs.legis.wisconsin.gov for the production version.
LRB-3933/1
ARG&EKL:ekg&cjs
2021 - 2022 LEGISLATURE
August 5, 2021 - Introduced by Senators Agard, Roys, Johnson, Larson and
Wirch, cosponsored by Representatives Pope, Vining, Hebl, Baldeh,
Snodgrass, Moore Omokunde, Conley, Andraca, Neubauer, Shelton,
Stubbs, Sinicki, Cabrera, Spreitzer, Subeck, Emerson, S. Rodriguez, Bowen
and Shankland. Referred to Committee on Financial Institutions and
Revenue.
SB497,1,5 1An Act to amend 20.144 (1) (g), 25.17 (3) (a) and 69.14 (1) (a); and to create
220.144 (5) (title), 20.144 (5) (a), 20.144 (5) (c), 20.144 (5) (j), 20.144 (5) (q), 25.14
3(1) (a) 20., 25.17 (1) (aL), 25.18 (1) (q), 25.32, 71.05 (6) (b) 57., 71.78 (4) (v) and
4224.58 of the statutes; relating to: creating a baby bond program and baby
5bond fund, granting rule-making authority, and making an appropriation.
Analysis by the Legislative Reference Bureau
This bill requires the Department of Financial Institutions to establish and
administer a baby bond program and creates a baby bond trust fund managed by the
State of Wisconsin Investment Board.
Under the bill, the State Registrar of Vital Records must provide to DFI a copy
of the record of birth for each child born in the state on or after the bill's effective date.
In consultation with the Department of Health Services and the Department of
Revenue, DFI must determine whether, on the day before the child was born, the
child's mother met the income requirements for the Medical Assistance program, and
if this criteria is satisfied, DFI must establish a baby bond account for the child, with
the child designated as the account beneficiary. DFI must then deposit $3,000 into
the baby bond trust fund and credit this amount to the child's baby bond account.
The amount in the account consists of the initial $3,000, investment income
generated through management of the baby bond trust fund by SWIB, and any
allocated donations, gifts, grants, bequests, or other contributions received by the
baby bond program. When the account beneficiary attains 18 years of age, if certain

conditions are satisfied, the account beneficiary may receive distribution of the full
account balance to pay expenses associated with postsecondary education of the
account beneficiary; child care or education of a minor dependent of the account
beneficiary; the purchase of a home by the account beneficiary; starting a business
by the account beneficiary; or contributing to a retirement savings account by the
account beneficiary. Upon application to DFI, an account beneficiary is eligible for
distribution of the account balance if all of the following requirements are satisfied:
1) the account beneficiary is at least 18 years of age; 2) with an exception, the account
beneficiary and at least one of the account beneficiary's parents is a Wisconsin
resident; 3) the account beneficiary has successfully completed a financial literacy
course developed by DFI; and 4) the account beneficiary certifies that the account
beneficiary will use the money distributed only to pay expenses described above. If
an account beneficiary or the account beneficiary's parents relocate from Wisconsin
prior to the account beneficiary's 18th birthday, the account beneficiary is eligible for
the distribution if the account beneficiary returns to Wisconsin and remains a
Wisconsin resident for at least one year thereafter. A distribution from an account
is not subject to state income tax. DFI may terminate an account beneficiary's
account if the account beneficiary dies, the account balance is $0, or the account
beneficiary is at least 30 years of age and has not requested a distribution or has
failed to satisfy the conditions for distribution. The balance of an account that is
terminated remains in the baby bond trust fund for further use for the baby bond
program.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
as an appendix to the bill.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB497,1 1Section 1 . 20.144 (1) (g) of the statutes is amended to read:
SB497,3,32 20.144 (1) (g) General program operations. The amounts in the schedule for
3the general program operations of the department of financial institutions. Except
4as provided in pars. (a), (h), (i), (j), and (u) and sub. subs. (3) and (5), all moneys
5received by the department, other than by the office of credit unions and the division
6of banking, and 88 percent of all moneys received by the office of credit unions and
7the department's division of banking shall be credited to this appropriation, but any

1balance at the close of a fiscal year under this appropriation shall lapse to the general
2fund. Annually, $150,000 of the amounts received under this appropriation account
3shall be transferred to the appropriation account under s. 20.575 (1) (g).
SB497,2 4Section 2 . 20.144 (5) (title) of the statutes is created to read:
SB497,3,55 20.144 (5) (title) Baby bond program.
SB497,3 6Section 3 . 20.144 (5) (a) of the statutes is created to read:
SB497,3,87 20.144 (5) (a) Administrative expenses. A sum sufficient for the administrative
8expenses of the baby bond program under s. 224.58.
SB497,4 9Section 4 . 20.144 (5) (c) of the statutes is created to read:
SB497,3,1110 20.144 (5) (c) Deposits into baby bond fund. A sum sufficient for deposits into
11the baby bond fund as provided in s. 224.58 (3) (b) 2.
SB497,5 12Section 5 . 20.144 (5) (j) of the statutes is created to read:
SB497,3,1613 20.144 (5) (j) Donations, gifts, and grants. All moneys received from donations,
14gifts, grants, bequests, or other contributions to the baby bond program under s.
15224.58, to carry out the purpose for which received, including deposit into the baby
16bond fund.
SB497,6 17Section 6 . 20.144 (5) (q) of the statutes is created to read:
SB497,3,2018 20.144 (5) (q) Payment of distributions; crediting accounts. From the baby bond
19fund, a sum sufficient for the payment of distributions under s. 224.58 (4) and to
20credit accounts under s. 224.58 (3) (b) 2.
SB497,7 21Section 7. 25.14 (1) (a) 20. of the statutes is created to read:
SB497,3,2222 25.14 (1) (a) 20. The baby bond fund.
SB497,8 23Section 8. 25.17 (1) (aL) of the statutes is created to read:
SB497,3,2424 25.17 (1) (aL) Baby bond fund (s. 25.32);
SB497,9 25Section 9. 25.17 (3) (a) of the statutes is amended to read:
SB497,4,8
125.17 (3) (a) Invest the core retirement investment trust, baby bond fund, state
2life fund, local government property insurance fund, veterans trust fund, and injured
3patients and families compensation fund in loans, securities, and any other
4investments authorized by s. 620.22, and in bonds or other evidences of indebtedness
5or preferred stock of companies engaged in the finance business whether as direct
6lenders or as holding companies owning subsidiaries engaged in the finance
7business. Investments permitted by sub. (4) are permitted investments under this
8subsection.
SB497,10 9Section 10. 25.18 (1) (q) of the statutes is created to read:
SB497,4,1210 25.18 (1) (q) Invest any of the assets of the baby bond fund in any investment
11that is an authorized investment for assets in the variable retirement investment
12trust under s. 25.17 (5).
SB497,11 13Section 11. 25.32 of the statutes is created to read:
SB497,4,15 1425.32 Baby bond fund. (1) There is established a separate nonlapsible trust
15fund designated as the baby bond fund. The fund shall consist of all of the following:
SB497,4,1616 (a) Money deposited into the fund under s. 224.58 (3) (b) 2.
SB497,4,1817 (b) All donations, gifts, grants, bequests, or other contributions deposited into
18the fund under s. 224.58 (6).
SB497,4,1919 (c) All earnings and other investment income of the fund.
SB497,4,22 20(2) Except as provided in s. 25.187, moneys in the baby bond fund may be
21expended only for the purpose of making distributions under s. 224.58 (4) and
22deposits under s. 224.58 (3) (b) 2.
SB497,12 23Section 12 . 69.14 (1) (a) of the statutes is amended to read:
SB497,5,224 69.14 (1) (a) Filing deadline. A record of birth for every birth that occurs in this
25state shall be filed within 5 days after the birth with the state registrar, who shall

1register the birth under this subchapter. The state registrar shall submit a copy of
2the record of birth to the department of financial institutions.
SB497,13 3Section 13. 71.05 (6) (b) 57. of the statutes is created to read:
SB497,5,54 71.05 (6) (b) 57. The amount of a distribution made to an account beneficiary,
5as defined in s. 224.58 (1) (b), under s. 224.58 (4).
SB497,14 6Section 14. 71.78 (4) (v) of the statutes is created to read:
SB497,5,87 71.78 (4) (v) The department of financial institutions and the department of
8health services for the purpose of determining eligibility under s. 224.58 (3) (a) 1.
SB497,15 9Section 15 . 224.58 of the statutes is created to read:
SB497,5,10 10224.58 Baby bond program. (1) Definitions. In this section:
SB497,5,1211 (a) “Account” means a baby bond account established by the department under
12sub. (3).
SB497,5,1413 (b) “Account beneficiary” means an individual for whom the department
14establishes an account.
SB497,5,1515 (c) “Domestic business entity” has the meaning given in s. 180.1100 (2).
SB497,5,1616 (d) “Eligible expense" means an expense associated with any of the following:
SB497,5,1717 1. Postsecondary education of an account beneficiary.
SB497,5,1818 2. Child care or education of a minor dependent of the account beneficiary.
SB497,5,1919 3. The purchase of a home by an account beneficiary.
SB497,5,2220 4. Starting a business by an account beneficiary if the business is a domestic
21business entity or is a foreign business entity registered or authorized to do business
22in this state under ch. 178, 179, 180, 181, or 183.
SB497,5,2523 5. Contributing to a traditional individual retirement account, a Roth IRA, an
24account associated with a 401 (k), 403 (b), 457, or Keogh plan, or a similar retirement
25savings account by an account beneficiary.
SB497,6,1
1(e) “Foreign business entity” has the meaning given in s. 180.1100 (3).
SB497,6,42 (f) “Last-known address” means the most recent contact information provided
3to the department according to the department's records, which may be either a
4physical address or an electronic mail address.
SB497,6,6 5(2) Baby bond program. The department shall establish and administer a baby
6bond program as described in this section.
SB497,6,8 7(3) Establishing accounts. (a) For each record of birth submitted to the
8department under s. 69.14 (1) (a), the department shall do all of the following:
SB497,6,119 1. In consultation with the department of health services and the department
10of revenue, determine whether, on the day before the child was born, the mother
11meets the income level described under s. 49.471 (4) (a) 1. or 2.
SB497,6,1312 2. If the criteria in subd. 1. is satisfied, establish a baby bond account for the
13child, with the child designated as the account beneficiary.
SB497,6,1514 (b) Upon establishing an account for a child under par. (a) 2., the department
15shall promptly do all of the following:
SB497,6,1716 1. Provide written notice of the account to the last-known address of the child's
17parents.
SB497,6,2118 2. From the appropriation account under s. 20.144 (5) (c) or (j), deposit $3,000
19into the baby bond fund and credit this amount to the child's account or, from the
20appropriation amount under s. 20.144 (5) (q), credit $3,000 to the child's account if
21such funds are available for this purpose as provided in s. 224.58 (5) (b).
SB497,6,2522 (c) An account established under this subsection shall include the amount
23specified in par. (b) 2., the account beneficiary's pro rata share of total net investment
24earnings of the baby bond fund, and any amount allocated to the account under sub.
25(5) (b) or (6) (b).
SB497,7,4
1(4) Distributions. (a) Not later than 30 days before an account beneficiary's
218th birthday, the department shall provide notice to the last-known address of the
3account beneficiary and the account beneficiary's parents that the account
4beneficiary may be eligible for distribution of the account balance.
SB497,7,75 (b) Upon application to the department by an account beneficiary, the
6department shall distribute to the account beneficiary the full balance of the account
7if all of the following requirements are satisfied:
SB497,7,88 1. The account beneficiary is at least 18 years of age.
SB497,7,109 2. Except as provided in par. (c), the account beneficiary and at least one of the
10account beneficiary's parents is a resident of this state.
SB497,7,1211 3. The account beneficiary has successfully completed the financial literacy
12course developed by the department under sub. (7) (a) 4.
SB497,7,1413 4. The account beneficiary certifies that the account beneficiary will use the
14money distributed only to pay eligible expenses.
SB497,7,1915 (c) If an account beneficiary or the account beneficiary's parents have relocated
16from this state as of the account beneficiary's 18th birthday, the account beneficiary
17is eligible for distribution of the account balance under par. (b) if the account
18beneficiary returns to this state and remains a resident of this state for at least one
19year thereafter.
SB497,7,2120 (d) An account beneficiary may use moneys distributed from the account only
21to pay for eligible expenses.
Loading...
Loading...