HF 3258

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; establishing a working students' 
  1.3             educational savings program; proposing coding for new 
  1.4             law in Minnesota Statutes, chapter 290. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [290.924] [WORKING STUDENTS' EDUCATIONAL 
  1.7   SAVINGS PROGRAM.] 
  1.8      Subdivision 1.  [DESIGNATION OF TAX LIABILITY AS 
  1.9   EDUCATIONAL SAVINGS.] A resident student in grades 7 to 12 who 
  1.10  has earned at least $....... in wages during a taxable year on 
  1.11  which state income taxes have been withheld under section 
  1.12  290.92, may designate up to 100 percent of the student's tax 
  1.13  liability for that taxable year as educational savings to be 
  1.14  placed in the educational savings fund administered by the 
  1.15  department of revenue under this section, but the amount 
  1.16  designated may not exceed 25 percent of the amount withheld from 
  1.17  the person's wages under section 290.92.  The commissioner shall 
  1.18  provide space on tax return forms for designation of educational 
  1.19  savings and affirmation by the taxpayer that the taxpayer is an 
  1.20  eligible student and had at least the required amount of 
  1.21  qualifying wages. 
  1.22     Subd. 2.  [EDUCATIONAL SAVINGS FUND.] There is a fund in 
  1.23  the state treasury known as the educational savings fund.  Money 
  1.24  designated under subdivision 1 must be placed in the educational 
  1.25  savings fund.  Amounts necessary for payments to persons for 
  2.1   educational purposes under subdivision 3 are appropriated from 
  2.2   the educational savings fund to the commissioner of revenue to 
  2.3   make those payments.  Interest earned on the educational savings 
  2.4   funds is appropriated to the commissioner of revenue to the 
  2.5   extent it is needed to administer this section; any excess must 
  2.6   be placed in the general fund. 
  2.7      Subd. 3.  [USE OF EDUCATIONAL SAVINGS.] A person who has 
  2.8   designated money as educational savings under subdivision 1 may 
  2.9   withdraw that money to pay tuition for a program or course of 
  2.10  study that applies to an accredited degree, diploma, or 
  2.11  certificate at a public or private post-secondary institution.  
  2.12  The person must begin the course of study or program within 28 
  2.13  months of the time the person graduates from high school.  If 
  2.14  the person fails to begin a post-secondary educational program 
  2.15  or course of study within that time or at any later time allows 
  2.16  28 months to go by without being enrolled in such a program or 
  2.17  course of study, the person's remaining designated educational 
  2.18  savings revert to the general fund.  The commissioner shall 
  2.19  provide forms necessary for a person to request the withdrawal 
  2.20  of money from the educational savings fund under this section.  
  2.21  Money withdrawn under this section and used for eligible 
  2.22  educational purposes is not taxable income. 
  2.23     Subd. 4.  [RULES.] The commissioner shall adopt rules 
  2.24  necessary for the administration and enforcement of this section.
  2.25     Sec. 2.  [REPORT.] 
  2.26     By January 1, 1998, the commissioner of revenue shall 
  2.27  report to the chairs of the committees in each house of the 
  2.28  legislature with jurisdiction over tax and education policy on 
  2.29  the operation of the educational savings program in section 1.  
  2.30  The report must include any suggestions for changes in the law 
  2.31  to clarify or facilitate administration and enforcement of the 
  2.32  program. 
  2.33     Sec. 3.  [EFFECTIVE DATE.] 
  2.34     Section 1 is effective for taxable years beginning after 
  2.35  December 31, 1996.