Assigned to ED                                                                                                                       FOR COMMITTEE

 


 

 

 


ARIZONA STATE SENATE

Fifty-Fifth Legislature, First Regular Session

 

FACT SHEET FOR S.B. 1236

 

college savings program; name change

Purpose

Updates the name of the Family College Savings Program to AZ529, Arizona's Education Savings Plan.

Background

            Arizona's 529 Plan was established by Laws 1997, Chapter 171, as the Family College Savings Program (Program), which offers tax advantaged investment products to save for higher education expenses.

The State Treasurer manages the Program and is responsible for: 1) adopting rules, guidelines and procedures; 2) retaining professional services; 3) seeking rulings and other guidance from the U.S. Department of the Treasury and the Internal Revenue Service; 4) making Program changes required for the participants to obtain federal income tax benefits; 5) interpreting purpose and objectives; 6) collecting administrative and service fees; 7) selecting the financial institution to act as the depository and program manager; 8) maintaining the Program on behalf of Arizona; and 9) entering into tuition savings agreements with account owners (A.R.S. § 15-1873).

The Program is operated through trust fund accounts established by account owners. Payments are made by account owners pursuant to tuition savings agreements. Accounts may be opened by any person who would like to invest in the fund and save to pay qualified higher education expenses (A.R.S. § 15-1875).

The State Board of Investment serves as the trustee of the Program and approves financial institutions to act as the depositories and managers of the program account (A.R.S. § 15-1872).

There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1.   Changes the name of the Family College Savings Program to AZ529, Arizona's Education Savings Plan.

2.   Makes technical and conforming changes.

3.   Becomes effective on the general effective date.

Prepared by Senate Research

February 12, 2021

JO/JS/gs