EDUCATION SAVINGS ACCOUNTS - S.B. 599 (S-2) & 600 (S-2): FLOOR ANALYSIS
Senate Bill 599 (Substitute S-2 as reported)
Senate Bill 600 (Substitute S-2 as reported)
Sponsor: Senator Mike Rogers
Committee: Finance
CONTENT
Senate Bill 599 (S-2) would create the "Michigan Education Savings Program Act" to establish the Michigan Education Savings Program within the Department of Treasury; allow individuals, beginning October 1, 2000, to open an education savings account to save money for the qualified higher education expenses of a designated beneficiary; provide that contributions to and interest earned on an education savings account would be exempt from taxation as provided under the Income Tax Act; set a maximum of $125,000 on the total contributions that could be made to all of the accounts naming any one individual as the designated beneficiary; specify requirements for contributions to and withdrawals from education savings accounts; require the State Treasurer to select an entity to be the program manager to manage the program; and require that the program be managed so as to qualify as a qualified State tuition program under the Internal Revenue Code.
Senate Bill 600 (S-2) would amend the Income Tax Act to allow a taxpayer to deduct from taxable income contributions up to $5,000 per year ($10,000 for a joint return) to an education savings account, and the interest earned on the contributions.
The bills are tie-barred.
MCL 206.30 - Legislative Analyst: G. Towne
FISCAL IMPACT
These bills would reduce income tax revenue an estimated $4.6 million in FY 2000-01, and $5.4 million in FY 2001-02. This loss in revenue would reduce General Fund/General Purpose revenue an estimated $4.4 million in FY 2000-01 and $5.1 million in FY 2001-02, and School Aid Fund revenue would be reduced $0.2 million in FY 2000-01 and $0.3 million in FY 2001-02.
Date Completed: 4-19-00 - Fiscal Analyst: J. WortleyFloor\sb599 - Bill Analysis @ http://www.state.mi.us/sfa
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.