SB-0544 Summary

• Establishes the Enhanced Michigan Education Savings Program, administered by the Department of Treasury through the State Treasurer, to allow parents and students to open education savings accounts for eligible K-12 education expenses.

• Creates the Enhanced Michigan Education Savings Program Fund and authorizes the Treasurer to contract with program managers to operate savings plans with different investment strategies and account distribution options.

• Allows distributions from accounts to pay for eligible services (courses, materials, supplies, and related fees) provided by public schools or other organizations, and for postsecondary education expenses incurred after account establishment.

• Provides tax exemptions for contributions, interest earned, and qualified withdrawals from accounts under the state income tax act; requires annual reporting to the IRS and account owners.

• Program managers are limited to charging no more than 2.0% of average daily net assets in annual administrative fees and must maintain adequate records, undergo annual audits, and disclose account terms and tax consequences to account owners.