For the purposes of this chapter, the term:
(1) "Account" means a college savings account established under § 47-4503.
(2) "Account owner" means the individual or organization who enters into a college savings agreement under this chapter establishing an account. The account owner may also be the designated beneficiary of the account.
(3) "Advisory Board" means the District of Columbia College Savings Program Advisory Board.
(4) "Designated beneficiary" shall have the same meaning as in section 529(e)(1) of the Internal Revenue Code.
(5) "Eligible institution" shall have the same meaning as "eligible educational institution" in section 529(e)(5) of the Internal Revenue Code.
(6) "Internal Revenue Code" means the Internal Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2085; 26 U.S.C. § 1 et seq.).
(7) "Member of the family" shall have the same meaning as in section 529(e)(2) of the Internal Revenue Code.
(8) "Program" means the District of Columbia College Savings Program established under § 47-4502, including the Trust established therewith.
(9) "Qualified higher education expenses" shall have the same meaning as in section 529(e)(3) of the Internal Revenue Code.
(10) "Qualified withdrawal" means a withdrawal from an account to pay the qualified higher education expenses of the designated beneficiary of the account.
(11) "Trust" means the District of Columbia College Savings Program Trust established under § 47-4502.
(12) "Trustee" means the trustee of the District of Columbia College Savings Program Trust.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457; June 5, 2003, D.C. Law 14-307, § 2402(b), 49 DCR 11664.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-307, in par. (2), substituted "individual or organization" for "individual"; rewrote pars. (4), (5), (7), (8), and (9); and added pars. (11) and (12). Prior to amendment, pars. (4), (5), (7), (8), and (9) had read as follows:
"(4) 'Designated beneficiary' means an individual who is:
"(A) Eligible to apply college savings payments to undergraduate or graduate tuition at an eligible institution under this chapter; and
"(B) A resident of the District of Columbia when the account owner enters into a college savings agreement.
"(5) 'Eligible institution' means an institution of higher education as defined in § 481 of the Higher Education Act of 1965, approved October 3, 1980 (94 Stat. 1444; 20 U.S.C. § 1088)."
"(7) 'Nonqualified withdrawal' means a withdrawal from an account:
"(A) Other than a qualified withdrawal;
"(B) Made as the result of the death or disability of the designated beneficiary of an account; or
"(C) Made on account of a scholarship.
"(8) 'Program' means the District of Columbia College Savings Program established under § 47-4502.
"(9) 'Qualified higher education expenses' means:
"(A) Tuition, fees, and the costs of books, supplies, and equipment required for enrollment or attendance of a qualified beneficiary at an eligible institution; or
"(B) The costs of room and board of a qualified beneficiary incurred while attending an eligible institution; provided, that the amount of room and board shall not exceed the minimum room and board allowance determined in calculating costs of attendance for federal financial aid programs under § 472 of the Higher Education Act of 1965, approved October 17, 1986 (100 Stat. 1454; 20 U.S.C. § 1087 ll), or any successor legislation and implementing regulations."
Temporary Amendments of Section
For temporary (225 day) amendment of section, see 2(b) of College Savings Program Temporary Act of 2002 (D.C. Law 14-186, October 1, 2002, law notification 49 DCR 9244).
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 2402(b) of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).
For temporary (90 day) amendment of section, see § 2(b) of College Savings Program Emergency Act of 2002 (D.C. Act 14-374, May 20, 2002, 49 DCR 5114).
For temporary (90 day) amendment of section, see § 2402(b) of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).
For temporary (90 day) amendment of section, see § 2402(b) of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).
Legislative History of Laws
Law 13-212, the "College Savings Act of 2000", was introduced in Council and assigned Bill No. 13-542, which was referred to the Committee on Finance and Revenue. The Bill was adopted on first and second readings on July 11, 2000, and October 3, 2000, respectively. Signed by the Mayor on October 30, 2000, it was assigned Act No. 13-464 and transmitted to both Houses of Congress for its review. D.C. Law 13-212 became effective on March 31, 2001.
For Law 14-307, see notes following § 47-903.
References in Text
Section 529 of the Internal Revenue Code, referred to in pars. (4), (5), (7), and (9), is classified to 26 U.S.C.A. § 529.
There is established the District of Columbia College Savings Program, which authorizes the creation of college savings accounts to enable residents of the District of Columbia to benefit from the tax incentives provided for qualified tuition programs under the Internal Revenue Code. The Program shall be established as a trust and designated as the District of Columbia College Savings Program Trust. The District of Columbia College Savings Program Trust shall constitute an instrumentality of the District of Columbia. The Chief Financial Officer, or his or her designee, upon lawful delegation, shall serve as the Trustee of the District of Columbia College Savings Program Trust. The Trust shall continue in existence as long as it holds any deposits, payments, contributions, or other funds or has any obligations and until its existence is terminated by law. The Trust shall receive and hold all payments, deposits, and contributions intended for the Trust, gifts, bequests, endowments, federal and local grants, and any other funds from any public or private source, and all earnings thereon, until disbursed in accordance with this chapter. All amounts or funds deposited and held in the Trust shall constitute assets of the Trust and shall not be commingled with or revert to the general, special, emergency, or temporary funds of the District of Columbia at the end of any fiscal year or at any other time.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457; June 5, 2003, D.C. Law 14-307, § 2402(c), 49 DCR 11664.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-307 rewrote the section which had read as follows:
"There is established the District of Columbia College Savings Program, which authorizes the creation of college savings accounts to enable residents of the District of Columbia to benefit from the tax incentives provided for qualified state tuition programs under the Internal Revenue Code."
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 2402(c) of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).
For temporary (90 day) amendment of section, see § 2402(c) of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).
For temporary (90 day) amendment of section, see § 2402(c) of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
For Law 14-307, see notes following § 47-903.
(a) An account may be established by any person who desires to save money for the payment of qualified higher education expenses of a designated beneficiary by entering into a college savings agreement. An account shall not be held jointly.
(b) An application for an account shall be in the form prescribed by the Chief Financial Officer and contain the following information:
(1) The name, address, and social security number or employer identification number of the account owner;
(2) The designation of a designated beneficiary;
(3) The name, address, and social security number of the designated beneficiary;
(4) The certification relating to no excess contributions; and
(5) Such other information as the Chief Financial Officer may require.
(c) The Chief Financial Officer may establish a nominal fee for the application.
(d) Contributions to accounts shall be made only in cash.
(e) An account owner may withdraw all or part of the balance from an account upon 60 days notice or such shorter period as may be authorized by the Chief Financial Officer. The Chief Financial Officer shall promulgate regulations to determine whether a withdrawal is a nonqualified withdrawal or qualified withdrawal.
(f) An account owner may change the designated beneficiary of an account in accordance with procedures established by the Chief Financial Officer. A change in the designated beneficiary of an account shall not be treated as a withdrawal, if the new beneficiary is a member of the family of the former beneficiary.
(g) An account owner may transfer all or a portion of the balance of an account to another account under the Program or into another qualified tuition program for the benefit of the designated beneficiary or a member of the family of the designated beneficiary in accordance with procedures established by the Chief Financial Officer. A transfer to another qualified tuition program to the credit of the same designated beneficiary shall be treated as a withdrawal, if the transfer occurs within 12 months from the date of a previous transfer.
(h) Repealed.
(i) Repealed.
(j) Repealed.
(k) Repealed.
(l) The Program shall provide a separate accounting for each designated beneficiary.
(m) No account owner or designated beneficiary shall be permitted to direct the investment of contributions to an account or the earnings on the account. This restriction shall be interpreted in accordance with applicable guidance issued by the Internal Revenue Service under section 529 of the Internal Revenue Code.
(n) An account owner or a designated beneficiary shall not use an interest in an account as security for a loan. A pledge of an interest in an account shall be void.
(o) The Chief Financial Officer shall promulgate regulations to prevent contributions on behalf of a designated beneficiary in excess of the amount determined by actuarial estimates necessary to pay qualified higher education expenses. The regulations shall include a requirement that an excess balance with respect to a designated beneficiary be promptly withdrawn in a nonqualified withdrawal or transfer to another account.
(p) If there is a distribution from an account to an individual or for the benefit of an individual during a calendar year, the distribution shall be reported to the Internal Revenue Service by the account owner, the designated beneficiary, or the distributee to the extent required by federal law or regulation. Statements shall be provided to each account owner at least once each year within 60 days after the end of the 12-month period to which they relate. The statement shall identify the contributions made during a preceding 12-month period, the total contributions made to the account through the end of the period, the value of the account at the end of the period, distributions made during the period, and any other information that the Chief Financial Officer shall require to be reported to the account owner. Statements and information relating to accounts shall be prepared and filed to the extent required by federal and state tax law.
(q) A nonprofit organization described in § 501(c)(3) of the Internal Revenue Code may establish and become the account owner of an account to fund scholarships for persons whose identity will be determined upon disbursement. In the case of an account established under this subsection, the requirement that a designated beneficiary be designated when an account is opened shall not apply and each individual who receives an interest in the account as a scholarship shall be treated as a designated beneficiary with respect to the interest.
(r) An annual fee may be imposed upon the account owner for the maintenance of the account.
(s) The following information shall be disclosed to each account owner:
(1) The terms and conditions for an account;
(2) Restrictions on the substitution of designated beneficiaries;
(3) The person or entity entitled to terminate the college savings agreement;
(4) The terms and conditions under which money may be wholly or partially withdrawn from the Program, including charges and fees that may be imposed for withdrawal;
(5) The probable tax consequences associated with contributions to, and distributions from, accounts; and
(6) Other terms, conditions, and provisions considered necessary or appropriate by the Chief Financial Officer.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457; June 5, 2003, D.C. Law 14-307, § 2402(d), 49 DCR 11664.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-307, in subsecs. (a), (f), and (m), a new sentence was added to the end of each subsection; subsec. (g) was rewritten; and subsecs. (h) through (k) were repealed. Prior to amendment, subsecs. (g), (h), (i), (j), and (k) had read as follows:
"(g) An account owner may transfer all or a portion of an account to another account whose designated beneficiary is a member of the family.
"(h) Changes in designated beneficiaries and transfers shall not be permitted to the extent that they would constitute excess contributions or unauthorized investment choices.
"(i) In the case of a nonqualified withdrawal from an account, an amount equal to 10% of the portion of the withdrawal constituting income under § 529 of the Internal Revenue Code shall be withheld as a penalty and paid to the Program fund established by the Chief Financial Officer.
"(j) The penalty described in subsection (i) of this section may be adjusted by the Chief Financial Officer so that the penalty is not de minimis under § 529 of the Internal Revenue Code; provided, that the Chief Financial Officer shall adjust the penalty to an amount that is not greater than is required under § 529 of the Internal Revenue Code; provided further, that the penalty, when combined with other revenue generated under this chapter, shall produce more revenue than is required to meet the costs of operating the Program and recover any prior costs not previously recovered.
"(k) If an account owner makes a nonqualified withdrawal and no penalty is withheld under subsection (i) of this section, or the amount withheld was less than the penalty required to be paid, the account owner shall pay the unpaid portion of the penalty to the Program upon the earlier of:
"(1) The filing of the account owner's District of Columbia income tax return for the taxable year of the withdrawal (determined with respect for any authorized extensions); or
"(2) If the account owner does not file a return, the due date for the return."
Temporary Amendments of Section
For temporary (225 day) amendment of section, see 2(c) of College Savings Program Temporary Act of 2002 (D.C. Law 14-186, October 1, 2002, law notification 49 DCR 9244).
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 2402(d) of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).
For temporary (90 day) amendment of section, see § 2(c) of College Savings Program Emergency Act of 2002 (D.C. Act 14-374, May 20, 2002, 49 DCR 5114).
For temporary (90 day) amendment of section, see § 2402(d) of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).
For temporary (90 day) amendment of section, see § 2402(d) of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
For Law 14-307, see notes following § 47-903.
References in Text
Section 529 of the Internal Revenue Code, referred to in subsec. (m), is classified to 26 U.S.C.A. § 529.
(a) The District of Columbia College Savings Program Advisory Board is established to advise the Chief Financial Officer on the administration of the Program, including public information and outreach, implementing regulations, investment policy, and procedures governing applications, account management, and the disbursal of funds. After the Program begins accepting contributions by Account Owners, the Advisory Board, upon notification from the Chief Financial Officer, shall meet at least annually to advise the Chief Financial Officer on the administration of the Program.
(b) The Advisory Board shall consist of 9 members: 6 public members and 3 ex officio members. The Mayor shall appoint 3 of the public members and the Council shall appoint 3 of the public members. The Mayor shall appoint one of the public members of the Advisory Board as Chairperson. The public members shall be residents of the District of Columbia who have significant experience in finance, accounting, investment management, higher education, or other areas that relate to the duties of the Advisory Board. The public members shall serve for 3-year terms, except that for the first 3 individuals appointed by the Mayor and the Council, respectively, one shall serve a one-year term, one shall serve a 2-year term, and one shall serve a 3-year term. The 3 ex officio members shall be the Chairman of the Council's Committee on Finance and Revenue, the State Education Officer, and the president of the University of the District of Columbia, or their respective designees.
(c) A member of the Advisory Board shall not receive compensation, but shall be entitled to reimbursement for reasonable travel-related expenses.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457; June 5, 2003, D.C. Law 14-307, § 2402(e), 49 DCR 11664.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-307, in subsec. (a), added the last sentence.
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 2402(e) of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).
For temporary (90 day) amendment of section, see § 2402(e) of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).
For temporary (90 day) amendment of section, see § 2402(e) of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
For Law 14-307, see notes following § 47-903.
(a) The Chief Financial Officer shall take such action as may be necessary to effectuate the Trust, issue regulations with respect to the Program, and in connection therewith, the Trust, and otherwise initiate the implementation and administration of the Program consistent with this chapter. The Chief Financial Officer shall continue to administer and maintain the Program in a manner to ensure that the Program continues to qualify as a qualified tuition program under section 529 of the Internal Revenue Code of 1986.
(b) The Chief Financial Officer shall use the funds authorized in § 47- 4503(c), § 47-4503(j), § 47-4503(r), and § 47-4506(b)(9) to pay for the staff and non-personal services needed to administer the Program.
(c) The Chief Financial Officer shall develop and implement the Program in a manner consistent with this chapter. To administer the Program, the Chief Financial Officer may:
(1) Retain the services of consultants, administrators, and other personnel, as necessary, to administer the Program:
(2) Execute contracts, college savings agreements, and other necessary instruments;
(3) Enter into agreements with eligible institutions of higher education and other public or private entities for the administration or promotion of the Program;
(4) Solicit and accept gifts, grants, loans, or other aid from any source or participate in any government program for purposes consistent with this chapter;
(5) Impose and collect reasonable administrative fees for a transaction involving college savings agreements and transactions affecting the Program;
(6) Procure insurance against a loss of assets of the Program;
(7) Endorse insurance coverage written exclusively for the purpose of protecting a college savings agreement and the account owner or designated beneficiary of the account;
(8) Designate terms under which money may be withdrawn from the Program;
(9) Establish the methods by which the funds held in accounts are disbursed;
(10) Establish additional procedural and substantive requirements for participation in, and the administration and promotion of, the Program;
(11) Seek rulings and other guidance from the Internal Revenue Service and agencies of the federal government relating to the Program;
(12) Make changes to the Program required for the participants in the Program to obtain the federal income tax benefits or treatment provided by § 529 of the Internal Revenue Code, or successor legislation; and
(13) Delegate any and all duties, obligations, responsibilities, rights, and powers assigned and granted to the Chief Financial Officer under this chapter to the Trustee to be carried out and exercised in his or her capacity as Trustee.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457; June 5, 2003, D.C. Law 14-307, § 2402(f), 49 DCR 11664; Apr. 13, 2005, D.C. Law 15-354, § 73(p), 52 DCR 2638; Mar. 2, 2007, D.C. Law 16-191, § 48(h)(5), 53 DCR 6794.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-307, in the section name line, inserted "and initial implementation" after "Administration"; rewrote subsec. (a); in subsec. (c), made a nonsubstantive change in par. (12), and added par. (12). Prior to amendment, subsec. (a) had read as follows:
"(a) The Chief Financial Officer shall take such action as may be necessary to effectuate the Trust, issue regulations with respect to the Program, and in connection therewith, the Trust, and otherwise initiate the implementation and administration of the Program consistent with this chapter. The Chief Financial Officer shall continue to administer and maintain the Program in a manner to ensure that the Program continues to qualify as a qualified tuition program under section 529 of the Internal Revenue Code of 1986."
D.C. Law 16-191, in subsec. (c)(12), validated a previously made technical correction.
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 2402(f) of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).
For temporary (90 day) amendment of section, see § 2402(f) of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).
For temporary (90 day) amendment of section, see § 2402(f) of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
For Law 14-307, see notes following § 47-903.
For Law 16-191, see notes following § 47-2845.
References in Text
Section 529 of the Internal Revenue Code, referred to in subsec. (a), is classified to 26 U.S.C.A. § 529.
(a) The Chief Financial Officer shall implement the Program through use of one or more financial organizations as account depositories and managers. Under the Program, individuals may establish accounts directly with an account depository.
(b) The Chief Financial Officer shall solicit proposals from financial organizations to act as account depositories or managers of the Program. The Chief Financial Officer shall promulgate regulations that establish a procedure to, from time to time, review the method by which financial organizations are selected. Financial organizations submitting proposals shall describe the investment instrument which will be used in accounts. The Chief Financial Officer may select as account depositories or managers one or more financial organizations that demonstrate the most advantageous combination, both to potential program participants and the District of Columbia, from among the following factors:
(1) Financial stability and integrity of the financial organization;
(2) The safety of the investment instrument being offered;
(3) The ability of the investment instrument to track increasing costs of higher education;
(4) The ability of the financial organization to satisfy recordkeeping and reporting requirements;
(5) The financial organization's plan for promoting the Program and the investment it is willing to make to promote the Program;
(6) The fees, if any, proposed to be charged to persons for opening accounts;
(7) The minimum initial deposit and minimum contributions that the financial organization will require;
(8) The ability of banking organization to accept electronic withdrawals, including payroll deduction plans; and
(9) Other benefits to the District of Columbia or its residents included in the proposal, including fees payable to the District of Columbia to pay the expenses of the operation of the Program.
(c) Repealed.
(d) A management contract shall include terms requiring the financial organization to:
(1) Take any action required to keep the Program in compliance with requirements of § 47-4503 and not to take any action which would disqualify the Program as a qualified state tuition plan under § 529 of the Internal Revenue Code;
(2) Keep adequate records of each account, keep each account segregated from each other account, and provide the Chief Financial Officer with the information necessary to prepare the statements required by § 47-4503.
(3) Compile information contained in statements provided to account owners;
(4) If there is more than one program manager, provide the Chief Financial Officer with the information necessary to determine compliance with § 47- 4503.
(5) Provide the Chief Financial Officer, or its designee, access to the books and records of the program manager to the extent needed to determine compliance with the contract;
(6) Hold all accounts for the benefit of the account owner;
(7) Be audited at least annually by a firm of certified public accountants;
(8) Provide the Chief Financial Officer with copies of all regulatory filings and reports made by the financial organization during the term of the management contract or while it is holding any accounts, other than confidential filings or reports that will not become part of the Program. The program manger shall make available for review by the Chief Financial Officer the results of any periodic examination of the manager by a federal banking, insurance, or securities commission, except to the extent the report may not be disclosed under applicable law or the rules of the commission; and
(9) Ensure that any description of the Program, whether in writing or through the use of other media, is consistent with the marketing plan developed by the Chief Financial Officer.
(e) The Chief Financial Officer may provide that an audit may be conducted of the operations and financial positions of the program depository or manager at any time if the Chief Financial Officer has reason to be concerned about the financial position, the recordkeeping practices, or the status of accounts of the program depository and manager.
(f) During the term of a contract with a program manager, the Chief Financial Officer shall conduct an examination of the manager and its handling of accounts. The examination shall be conducted at least biennially if the manager is not otherwise subject to periodic examination by the Mayor, the Federal Deposit Insurance Corporation, or other similar entity.
(g) If selection of a financial organization as a program manager or depository is not renewed, after the end of its term:
(1) No new accounts may be placed with the financial organization;
(2) Accounts previously established and held in investment instruments at the financial organization shall be terminated;
(3) If accounts are not terminated, additional contributions may be made to the accounts; and
(4) Existing accounts held by the depository shall remain subject to all oversight and reporting requirements established by the Chief Financial Officer.
(h) If the Chief Financial Officer terminates a financial organization as a program manager or depository, the Chief Financial Officer shall cause the accounts to be transferred to another financial organization that is selected as a program manager or depository and into investment instruments as similar to the original instruments as possible.
(i) The Chief Financial Officer:
(1) Shall preserve, invest, and expend the assets of the Program solely for the purposes of this chapter; and
(2) Shall not loan, transfer, or use the assets of the Program for any other purpose than as provided in this chapter.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457; June 5, 2003, D.C. Law 14-307, § 2402(g), 49 DCR 11664.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-307 repealed subsec. (c) which had read as follows:
"(c) Until the Internal Revenue Service has provided guidance that the provision to a contributor of the choice of 2 or more investment instruments under a qualified state tuition program will not disqualify the program for favorable tax treatment under § 529 of the Internal Revenue Code, no management contract entered into by the Chief Financial Officer shall provide for more than one type of investment instrument."
Temporary Amendments of Section
For temporary (225 day) amendment of section, see § 2(d) of College Savings Program Temporary Act of 2002 (D.C. Law 14-186, October 1, 2002, law notification 49 DCR 9244).
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 2(d) of College Savings Program Emergency Act of 2002 (D.C. Act 14-374, May 20, 2002, 49 DCR 5114).
For temporary (90 day) amendment of section, see § 2402(g) of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).
For temporary (90 day) repeal of section, see § 2402(g) of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).
For temporary (90 day) amendment of section, see § 2402(g) of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
For Law 14-307, see notes following § 47-903.
(a) Nothing in this chapter shall be construed to:
(1) Confer upon a designated beneficiary rights or legal interest with respect to an account unless the designated beneficiary is the account owner;
(2) Guarantee that a designated beneficiary will be admitted to an institution of higher education;
(3) Create residency for an individual merely because the individual is a designated beneficiary; or
(4) Guarantee that amounts saved under the Program will be sufficient to cover the qualified higher education expenses of a designated beneficiary.
(b) Nothing in this chapter shall create, or be construed to create, an obligation or guarantee of the District of Columbia, its agencies or instrumentalities, or the Chief Financial Officer, for the benefit of an account owner or designated beneficiary with respect to:
(1) The rate of interest or other return on an account; and
(2) The payment of interest or other return on an account.
(c) Every contract, application, deposit slip, or other similar document that may be used in connection with a contribution to an account shall clearly indicate that the account is not insured by the District of Columbia and that the principal deposited to, or the investment return on, an account is not guaranteed by the District of Columbia.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457; June 5, 2003, D.C. Law 14-307, § 2402(h), 49 DCR 11664.)
HISTORICAL AND STATUTORY NOTES
Temporary Repeal of Section
For temporary (225 day) repeal of section, see § 2(e) of College Savings Program Temporary Act of 2002 (D.C. Law 14-186, October 1, 2002, law notification 49 DCR 9244).
Emergency Act Amendments
For temporary (90 day) repeal of section, see § 2402(h) of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).
For temporary (90 day) repeal of section, see § 2(e) of College Savings Program Emergency Act of 2002 (D.C. Act 14-374, May 20, 2002, 49 DCR 5114).
For temporary (90 day) repeal of section, see § 2402(h) of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).
For temporary (90 day) repeal of section, see § 2402(h) of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
For Law 14-307, see notes following § 47-903.
(a) An account owner who files an income tax return in the District of Columbia may claim a deduction in an annual amount not to exceed $4,000 for contributions made to all accounts under the Program. With respect to married individuals (or domestic partners registered under § 32-702) filing a joint return, each married individual (or domestic partner registered under § 32- 702) may claim a deduction in an annual amount not to exceed $4,000 for contributions made to all accounts under the Program for which the married individual (or domestic partner registered under § 32-702) is the account owner.
(b) If an amount greater than $4,000 is contributed to one or more accounts in a tax year, the excess may be carried forward as a deduction, subject to the annual limit, for 5 years.
(c) Any deduction taken under this section shall be subject to recapture with respect to a withdrawal or rollover taken within 2 years of the establishment of the account for any reason other than provided in subsection (d) of this section. In addition, notwithstanding the statute of limitations on assessments in § 47-912, any deduction taken under this section shall be subject to recapture in the taxable year in which the withdrawal or rollover is made after 2 years of the establishment of the account for any reason other than provided in subsection (d) of this section or to transfer to another qualified tuition program.
(d) Deductions taken under this section shall not be subject to recapture as provided in subsection (c) of this section if:
(1) The funds are used to pay for qualified higher education expenses;
(2) The beneficiary dies, develops a disability, or receives a scholarship;
(3) The beneficiary receives a scholarship; provided, that the exemption shall be limited to the amount of the scholarship; or
(4) The funds are transferred to another account maintained under the Program.
(e) Subject to subsection (f) of this section, earnings on accounts shall be exempt from District of Columbia income taxation.
(f) Qualified withdrawals shall be exempt from District of Columbia income taxation. The portion of any other withdrawal that is attributable to account earnings shall be subject to District of Columbia income taxation in the year in which the withdrawal is made.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457; June 5, 2003, D.C. Law 14-307, § 2402(i), 49 DCR 11664; Mar. 14, 2007, D.C. Law 16-292, § 2(i), 54 DCR 1080; Apr. 24, 2007, D.C. Law 16-305, § 73(j), 53 DCR 6198; May 13, 2008, D.C. Law 17-153, § 2, 55 DCR 3460; Mar. 25, 2009, D.C. Law 17-353, § 172(e)(3), 56 DCR 1117.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-307 rewrote the section which had read as follows:
"Contributions made by account owners to, and earnings on, accounts shall be exempt from District of Columbia income taxation."
D.C. Law 16-292, in subsec. (a), substituted "married individuals (or domestic partners registered under § 32-702)" for "married individuals" and "married individual (or domestic partner registered under § 32-702)" for "married individual".
D.C. Law 16-305, in subsec. (d)(2), substituted "has a disability" for "becomes disabled".
D.C. Law 17-153, in subsecs. (a) and (b), substituted "$4,000" for "$3,000".
D.C. Law 17-353 , in subsec. (d)(2), substituted "develops a disability" for "has a disability".
Temporary Amendments of Section
For temporary (225 day) amendment of section, see 2(b) of College Savings Program Temporary Act of 2002 (D.C. Law 14-186, October 1, 2002, 49 DCR 9244).
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 2402(i) of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).
For temporary (90 day) amendment of section, see § 2(f) of College Savings Program Emergency Act of 2002 (D.C. Act 14-374, May 20, 2002, 49 DCR 5114).
For temporary (90 day) amendment of section, see § 2402(i) of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).
For temporary (90 day) amendment of section, see § 2402(i) of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
For Law 14-307, see notes following § 47-903.
For Law 16-292, see notes following § 47-1801.04.
For Law 16-305, see notes following § 47-802.
Law 17-153 the "College Savings Program Increased Tax Benefit Act of 2008", was introduced in Council and assigned Bill No.17-235 which was referred to the Committee of the Whole. The Bill was adopted on first and second readings on February 5, 2008, and March 4, 2008, respectively. Signed by the Mayor on March 19, 2008, it was assigned Act No. 17-325 and transmitted to both Houses of Congress for its review. D.C. Law 17-153 became effective on May 13, 2008.
For Law 17-353, see notes following § 47-308.
Miscellaneous Notes
Section 3 of D.C. Law 17-153 provides:
"This act shall apply upon the inclusion of its fiscal effect in an approved budget and financial plan."
A person may not attach, execute, garnish, or otherwise seize a current or future benefit under a higher education tuition savings account or an asset of the Program.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
The District of Columbia and its agencies may agree, by contract or otherwise, to remit payments on behalf of an employee to an account through payroll deductions.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
(a) The Mayor shall audit the Program annually.
(b)(1) Within 90 days after the close of each fiscal year, the Chief Financial Officer shall submit to the Council and the Advisory Board a report, which shall include:
(A) The Mayor's audit report for the year;
(B) A financial accounting of the Program, including:
(i) The operating and administrative budget for the Program, which shall include a complete list of revenue sources and expenditures detailing the line-item expenditures;
(ii) The number of accounts entered into during the previous fiscal year;
(iii) Efforts by the Chief Financial Officer in marketing the Program; and
(iv) Any recommendations of the Chief Financial Officer concerning the operation of the Program.
(2) The Chief Financial Officer shall make available to each account owner a copy of a summary of the report and the option to purchase the full report at a nominal charge.
(Mar. 31, 2001, D.C. Law 13-212, § 2(b), 47 DCR 9457; June 5, 2003, D.C. Law 14-307, § 2402(j), 49 DCR 11664.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-307, in subsec. (b)(1), inserted "and the Advisory Board" after "Council".
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 2402(j) of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).
For temporary (90 day) amendment of section, see § 2402(j) of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).
For temporary (90 day) amendment of section, see § 2402(j) of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).
Legislative History of Laws
For Law 13-212, see notes under § 47-4501.
For Law 14-307, see notes following § 47-903.
