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SENATE BILL NO. 215
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FIRST LEGISLATURE - SECOND SESSION
BY SENATOR GIESSEL
Introduced: 2/21/20
Referred: Labor and Commerce, Finance
A BILL
FOR AN ACT ENTITLED
1 "An Act relating to the Alaska savings program for eligible individuals; relating to
2 education savings programs; relating to the Education Trust of Alaska; relating to the
3 Alaska advance college tuition savings fund; relating to the Alaska education savings
4 program for children; and relating to the Governor's Council on Disabilities and Special
5 Education."
6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
7 * Section 1. AS 06.65.020 is amended by adding a new subsection to read:
8 (b) When exercising its powers and duties under this chapter, the department
9 shall consult with the Governor's Council on Disabilities and Special Education
10 established under AS 47.80.030.
11 * Sec. 2. AS 06.65.100 is amended to read:
12 Sec. 06.65.100. Eligible individuals. To be eligible for a program account,
13 when an individual or the individual's representative establishes the program account
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1 or makes a distribution to another program account under AS 06.65.200, the individual
2 must [SHALL] be [AN INDIVIDUAL]
3 (1) [WHO IS] entitled to benefits based on blindness or disability
4 under 42 U.S.C. 401 - 434 or 42 U.S.C. 1381 - 1383f, and the blindness or disability
5 must have occurred before the date on which the individual reached the [26 YEARS
6 OF] age required by the federal authorizing law for this purpose; or
7 (2) an individual for whom a disability certification that satisfies the
8 secretary and the federal authorizing law is filed with the secretary for the calendar
9 year in which the eligible individual or the eligible individual's representative opens
10 the program account.
11 * Sec. 3. AS 06.65.160(a) is amended to read:
12 (a) As provided by the federal authorizing law, a person may make a
13 contribution to a program account for the designated beneficiary. A person may also
14 make a contribution to a program account under AS 14.40.802(f)(3).
15 * Sec. 4. AS 06.65.160(c) is amended to read:
16 (c) Any person may make a contribution to a program account, but the amount
17 that the person may contribute is subject to the limits set by the federal authorizing
18 law, [OR] the department, or AS 14.40.802(f)(3).
19 * Sec. 5. AS 06.65.200(a) is amended to read:
20 (a) Subject to the restrictions in the federal authorizing law for rollover
21 distributions, a designated beneficiary or the designated beneficiary's representative
22 may make a distribution of the money in a program account to another
23 (1) program account if the designated beneficiary of the program
24 account to which the distribution is being made is
25 (A) [(1)] the same eligible individual; or
26 (B) [(2)] an eligible individual who is a member of the family
27 of the designated beneficiary from whom the distribution is made; or
28 (2) account allowed by the federal authorizing law.
29 * Sec. 6. AS 06.65.390(1) is amended to read:
30 (1) "department" means the Department of Health and Social
31 Services [REVENUE];
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1 * Sec. 7. AS 09.38.015(a) is amended to read:
2 (a) An individual is entitled to exemption of the following property:
3 (1) a burial plot for the individual and the individual's family;
4 (2) health aids reasonably necessary to enable the individual or a
5 dependent to work or to sustain health;
6 (3) benefits paid or payable for medical, surgical, or hospital care to
7 the extent they are or will be used to pay for the care;
8 (4) an award under AS 18.67 (Violent Crimes Compensation Board) or
9 a crime victim's reparations act of another jurisdiction;
10 (5) benefits paid or payable as a longevity bonus under AS 47.45;
11 (6) compensation or benefits paid or payable and exempt under federal
12 law;
13 (7) liquor licenses granted under AS 04;
14 (8) tuition credit or savings accounts under an [A HIGHER] education
15 savings account established under AS 14.40.802 or an advance college tuition savings
16 contract authorized under AS 14.40.809(a);
17 (9) a permanent fund dividend to the extent allowed under
18 AS 43.23.140;
19 (10) [REPEALED]
20 (11) benefits paid or payable under AS 47.45.301 - 47.45.309.
21 * Sec. 8. AS 14.40.170(a) is amended to read:
22 (a) The Board of Regents shall
23 (1) appoint the president of the university by a majority vote of the
24 whole board, and the president may attend meetings of the board;
25 (2) fix the compensation of the president of the university, all heads of
26 departments, professors, teachers, instructors, and other officers;
27 (3) confer appropriate degrees as it may determine and prescribe;
28 (4) have the care, control, and management of
29 (A) all the real and personal property of the university; and
30 (B) land
31 (i) conveyed to the Board of Regents by the
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1 commissioner of natural resources in the settlement of the claim of the
2 University of Alaska to land granted to the state in accordance with the
3 Act of March 4, 1915 (38 Stat. 1214), as amended, and in accordance
4 with the Act of January 21, 1929 (45 Stat. 1091), as amended; and
5 (ii) conveyed to the Board of Regents in trust for the
6 University of Alaska by the commissioner of natural resources under
7 AS 14.40.365;
8 (5) keep a correct and easily understood record of the minutes of every
9 meeting and all acts done by it in pursuance of its duties;
10 (6) under procedures to be established by the commissioner of
11 administration, and in accordance with existing procedures for other state agencies,
12 have the care, control, and management of all money of the university and keep a
13 complete record of all money received and disbursed;
14 (7) adopt reasonable rules for the prudent trust management and the
15 long-term financial benefit to the university of the land of the university;
16 (8) provide public notice of sales, leases, exchanges, and transfers of
17 the land of the university or of interests in land of the university;
18 (9) administer, manage, market, and promote an [A
19 POSTSECONDARY] education savings program, including the [ALASKA HIGHER]
20 Education [SAVINGS] Trust of Alaska under AS 14.40.802 and the Alaska advance
21 college tuition savings fund under AS 14.40.803 - 14.40.817;
22 (10) designate buildings owned by the university as covered buildings
23 for purposes of paying the costs of use, management, operation, maintenance, and
24 depreciation from the fund established under AS 37.05.555.
25 * Sec. 9. AS 14.40.802(a) is amended to read:
26 (a) The [ALASKA HIGHER] Education [SAVINGS] Trust of Alaska is
27 established in the University of Alaska. The purpose of the [THIS] trust is to secure
28 obligations to participants and beneficiaries under an [A POSTSECONDARY]
29 education savings program operated by the University of Alaska and to provide
30 participants a convenient method of saving for [COLLEGE OR OTHER
31 POSTSECONDARY] education. The Board of Regents of the University of Alaska
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1 shall
2 (1) adopt policies that provide for the administration, management,
3 promotion, and marketing of the trust;
4 (2) maintain the trust in compliance with requirements of 26 U.S.C.
5 (Internal Revenue Code) for a qualified state tuition program as defined in 26 U.S.C.
6 529;
7 (3) coordinate savings options established under the trust and the
8 administration of the trust with the Alaska advance college tuition savings fund
9 (AS 14.40.803), including the creation of common administrative and record-keeping
10 systems, marketing programs, and operating reserves;
11 (4) establish participation agreements, including application, savings
12 options, and withdrawal procedures;
13 (5) enter into participation agreements with participants for the
14 (A) accumulation, investment, and distribution of funds;
15 (B) payment or reimbursement of qualified [HIGHER]
16 education expenses; and
17 (C) benefit of a beneficiary;
18 (6) enter into contracts with one or more contractors, including
19 investment managers; in determining the persons to act as investment managers,
20 consideration must be given to the qualifications of the contractor, including the
21 contractor's ability to
22 (A) administer financial programs with individual account
23 maintenance and reporting;
24 (B) develop, market, and administer investment options
25 appropriate for the trust; and
26 (C) augment the savings program with other beneficial
27 products and services;
28 (7) allow both residents and nonresidents to participate in the trust;
29 (8) allow the transfer or rollover of funds from the Alaska advance
30 college tuition savings fund and other qualified state tuition programs under 26 U.S.C.
31 529 and the participation agreement;
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1 (9) allow withdrawals from the trust to be used for qualified
2 [HIGHER] education expenses [, INCLUDING ROOM AND BOARD] as allowed by
3 26 U.S.C. 529;
4 (10) establish penalties for withdrawals from the trust for nonqualified
5 expenses and other distributions as required under 26 U.S.C. 529 or as provided in the
6 participation agreement;
7 (11) engage an independent firm of certified public accountants to
8 audit the financial position of the trust.
9 * Sec. 10. AS 14.40.802(f) is amended to read:
10 (f) A participant has the right, as provided in the participation agreement, to
11 (1) change the beneficiary of an account; [TO ANOTHER
12 INDIVIDUAL WHO IS A MEMBER OF THE FAMILY OF THE FORMER
13 BENEFICIARY; OR]
14 (2) direct that all or a portion of an account be transferred to an
15 account with a new beneficiary; or
16 (3) direct that all or a portion of an account be transferred to a
17 program account as a contribution under AS 06.65.160 if the contribution
18 (A) when added to any other contributions made to the
19 program account during the same federal tax year, does not exceed the
20 limit for a contribution under 26 U.S.C. 529A(b)(2)(B)(ii); and
21 (B) is for the beneficiary or for a [IF THE] new individual
22 who [BENEFICIARY] is a member of the family of the former beneficiary
23 and an eligible individual under AS 06.65.100; in this subparagraph,
24 "eligible individual" and "member of the family" have the meanings
25 given in AS 06.65.390.
26 * Sec. 11. AS 14.40.802(g) is amended to read:
27 (g) The right to change the beneficiary or to make transfers [TRANSFER
28 BETWEEN ACCOUNTS] described in (f) of this section may be denied or limited as
29 provided in the participation agreement, including transfers that would result in
30 contributions or account balances in excess of allowable limits under the participation
31 agreement, or, with regard to a change or transfer under (f)(3) of this section, the
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1 change or transfer does not satisfy the requirements of AS 06.65.
2 * Sec. 12. AS 14.40.802(j) is amended to read:
3 (j) A participant may, as provided in the participation agreement, designate a
4 person other than the participant as a successor participant. [THE DESIGNATION OF
5 A SUCCESSOR PARTICIPANT DOES NOT TAKE EFFECT UNTIL THE
6 PARTICIPANT DIES OR IS DECLARED LEGALLY INCOMPETENT. IF A
7 PARTICIPANT DIES OR IS DECLARED LEGALLY INCOMPETENT WITHOUT
8 HAVING EFFECTIVELY DESIGNATED A SUCCESSOR PARTICIPANT, THE
9 BENEFICIARY MAY DESIGNATE A SUCCESSOR PARTICIPANT IN THE
10 MANNER PRESCRIBED ABOVE IF THE BENEFICIARY IS NOT THE SAME
11 PERSON AS THE SUCCESSOR PARTICIPANT.]
12 * Sec. 13. AS 14.40.802(n)(2) is amended to read:
13 (2) "beneficiary" means a [ANY PERSON] designated beneficiary as
14 defined under 26 U.S.C. 529(e) [BY A PARTICIPATION AGREEMENT, OR BY
15 ANOTHER METHOD OF DESIGNATION AUTHORIZED IN THIS SECTION, TO
16 BENEFIT FROM PAYMENTS FOR QUALIFIED HIGHER EDUCATION
17 EXPENSES AT AN ELIGIBLE EDUCATIONAL INSTITUTION];
18 * Sec. 14. AS 14.40.802(n)(7) is amended to read:
19 (7) "qualified [HIGHER] education expenses" has the meaning given
20 to "qualified higher education expenses" in 26 U.S.C. 529(c) and (e) [26 U.S.C.
21 529(e)];
22 * Sec. 15. AS 14.40.802(n)(8) is amended to read:
23 (8) "trust" means the [ALASKA HIGHER] Education [SAVINGS]
24 Trust of Alaska.
25 * Sec. 16. AS 14.40.809(b) is amended to read:
26 (b) The board shall
27 (1) make appropriate arrangements as necessary to fulfill the board's
28 obligations under an advance college tuition savings contract;
29 (2) establish and adopt a formal plan for administration of the advance
30 college tuition savings program; the terms and conditions of the plan shall be
31 considered a part of an advance college tuition savings contract;
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1 (3) establish investment objectives, criteria, and asset allocation
2 guidelines for the fund based on prudent institutional investor guidelines and actuarial
3 analysis of the earnings requirements for the advance college tuition savings plan;
4 (4) enter into contracts or agreements considered necessary for the
5 investment of the fund, including contracts or agreements with investment managers,
6 consultants, and other custodians of the fund;
7