An Act To
Maine Legislature, Session 129, LD 1999
Committee Amendment CA_A_S430 (Senate)
Amends: 20-A MRSA §11471, 20-A MRSA §11472, 20-A MRSA §11475, 20-A MRSA §11476, 20-A MRSA §11478, 20-A MRSA §11479, 20-A MRSA §11483, 20-A MRSA §11485

COMMITTEE AMENDMENT " A " to S.P. 701, L.D. 1999, Bill, "An Act To 
Amend the Maine Education Savings Program" 
Amend the bill by inserting after the title and before the enacting clause the 
following: 
'Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, the Legislature established the Maine Education Savings Program, also 
known as NextGen 529, as Maine's Section 529 plan, so-called after Section 529 of the 
federal Internal Revenue Code of 1986, to be administered by the Finance Authority of 
Maine;and 
Whereas, the Maine Education Savings Program provides account owners and 
beneficiaries the opportunity to realize potential tax advantages if assets are used for 
qualified higher education expenses; and 
Whereas, the United States Congress has recently expanded the federal definition of 
qualified higher education expenses to include certain expenses related to registered and 
certified apprenticeship programs and limited repayments of qualified education loans; 
and 
Whereas, under the Maine Revised Statutes, Title 20-A, section 11483, the 
authority is authorized to take necessary action to ensure that the Maine Education 
Savings Program complies with federal law, and the authority considers it prudent to 
make statutory changes to conform with the expanded federal definition and to make 
certain other amendments to the law; and 
Whereas, in order to avoid confusion in the application and use of the program, it is 
necessary that these conforming changes take effect as soon as possible; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" )I'.\ "to S.P. 701, L.D. 1999 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore,' 
Amend the bill by inserting after the enacting clause and before section 1 the 
following: 
'Sec. 1. 20-A MRSA §11471, as amended by PL 2017, c. 474, Pt. F, §§2, 3 and 9, 
is further amended to read: 
§11471. Defmitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Advisory committee. "Advisory committee" means the Advisory Committee on 
Education Savings established in this chapter. 
2. Authority. "Authority" means the Finance Authority of Maine, which serves as 
administrator of the Maine Education Savings Program. 
3. 
Beneficiary. 
"Beneficiary" means any person designated by a participation 
agreement to benefit from payments for higher education expenses at aa institution of 
higher education. 
4. Benefits. "Benefits" meaas the payment of higher edacation eKpenses on behalf 
of a beneficiary by the Maine Edacation Savings Program daring the beneficiary's 
atten.daace at an. instimtion of higher edacation. 
5. Board. "Board" means the board of directors of the Finance Authority of Maine. 
6. Contributions. "Contributions" means amounts deposited by a participant to an 
account within the program fund. 
7. Higher education expenses. "Higher education expenses" means the certified 
expenses for attendance at an institution of higher education as those expenses are 
defined by rule of the authority consistent with applicable provisions of the federal 
Internal Revenue Code of 1986 and its regulations addressing qualified state tuition 
programs. 
Beginning January 1, 2018, "higher education expenses" has the same 
meaning as "qualified higher education expenses" as defmed in Section 529 of the federal 
Internal Revenue Code of 1986 and amendments to that Code and its regulations 
addressing qualified state tuition programs. 
8. Institution of higher education. "Institution of higher education" means an 
institution of higher education that meets the requirements established by rule of the 
authority consistent with applicable provisions of the Internal Revenue Code and its 
regulations addressing qualified state tuition programs. 
9. Participant. "Participant" means any person who has entered into a participation 
agreement pursuant to this chapter. 
10. 
Participation agreement. 
"Participation agreement" means an agreement 
between a participant and the authority providing for the establishment by the participant 
of one or more accounts within the program fund and for the administration of those 
accounts for the benefit of the participant and of one or more beneficiaries. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A "to S.P. 701, L.D. 1999 { S • 
11. 
Program earnings. 
"Program earnings" means all interest, dividends, 
premiums, fees, profits upon disposition of assets and other revenue actually received by 
or on behalf of the program with respect to any assets held within the program fund to 
which that asset may be credited, less all administrative costs of the program and the 
program fund, as periodically determined by the authority. 
12. Tuition. "Tuition" meaas the oharges imposed to attend aB: institution of higher 
education and required as a condition of enrollment. 
Sec. 2. 20-A MRSA §11472, as amended by PL 2017, c. 474, Pt. F, §4, is further 
amended to read: 
§11472. Maine Education Savings Program 
The Maine Education Savings Program, referred to in this chapter as the "program," 
is established to encourage the investment of funds to be used for higher education 
expenses at institutions of higher education aad, beginning Jaaua-ry 1, 2018, aad as long 
as p0ffl'l:itted by provisions of Section 529 of the federal Internal Re';enue Gode of 1986, 
e*penses for tuition in connection 1.vith enrollment or attendaace at aB: elementary or 
secondary public, private or religious school. The authority shall administer the program 
and act as administrator of the program fund.' 
Amend the bill by inserting after section 1 the following: 
'Sec. 2. 20-A MRSA §11475, sub-§11, as enacted by PL 1997, c. 732, §4, is 
amended to read: 
11. No guaranty of admission. The execution of a participation agreement by the 
authority does not guarantee in any way that higher education expenses will be equal to 
projections and estimates provided by the authority or that the beneficiary named in any 
participation agreement will: 
A. Be admitted to ffi½ any elementary or secondary school. apprenticeship program or 
institution of higher education; 
B. Be allowed to continue attendance at the any elementary or secondary school. 
apprenticeship program or institution of higher education following admission; or 
C. Graduate from the any elementary or secondary school. apprenticeship program 
or institution of higher education. 
Sec. 3. 20-A MRSA §11476, as amended by PL 2011, c. 150, §4 and affected by 
§9, is further amended to read: 
§11476. Investment options and parameters 
The authority, with the advice of the advisory committee, may provide investment 
options for a participant within the program fund to the extent permitted by Internal 
Revenue Code provisions addressing qualified state tuition programs. The authority, with 
the advice of the advisory committee, shall invest, or cause to be invested, the amounts on 
deposit in the program fund in a reasonable manner to achieve the objectives of each 
fund, exercising the discretion and care of a prudent person in similar circumstances with 
similar objectives. A participant or designated beneficiary may not direct the investment 
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COMMITTEE AMENDMENT" A" to S.P. 701, L.D. 1999 
of any amounts on deposit in the program fund, except to the extent allowed pursuant to 
provisions of the Internal Revenue Code addressing qualified state tuition programs. The 
authority shall give due consideration to rate of return, term or maturity, diversification 
and liquidity of investments within the program fund or any account in the program fund 
pertaining to the projected disbursements and expenditures from the program fund and 
the expected payments, deposits, contributions and gifts to be received. 
Sec. 4. 20-A MRSA §11478, sub-§1, as enacted by PL 1997, c. 732, §4, is 
amended to read: 
1. 
Participant retains ownership. 
The participant retains ownership of all 
contributions and all program earnings credited to a participant's account under a 
participation agreement up to the date of utilization for payment of higher education 
expenses for the benefieia-ry and, notwithstanding any other provision of law, an amount 
credited to any account is not susceptible to levy, execution, judgment or other operation 
of law, garnishment or other judicial enforcement and the amount is not an asset or 
property of either the participant or the beneficiary for purposes of any state insolvency 
laws. Notwithstanding this subsection, an amount credited to the participant's account 
may not be included in any gross estate of the participant for purposes of state tax law, 
except to the extent that the amount may be includable in any gross estate for pm-poses of 
federal tax law. 
Sec. 5. 20-A MRSA §11479, as amended by PL 2017, c. 474, Pt. F, §6, is further 
amended to read: 
§11479. Tax exemption 
The assets of the program fund, all program earnings and any income from operations 
are exempt from all taxation by the State or any of its political subdivisions. A deposit to 
any account, transfer of that account to a successor participant, designation of a successor 
beneficiary of that account, credit of program earnings to that account or qualified 
distribution from that account used for the purpose of paying higher education expenses 
of the designated benefieiary of that aeeount pursuant to this chapter, as long as that 
distribution does not exceed the limits established in Section 529 of the federal Internal 
Revenue Code of 1986, as amended. or rollover distributions permitted under Section 529 
of the federal Internal Revenue Code of 1986, as amended, does not subject that 
participant, the estate of that participant or any beneficiary to any state income or estate 
tax liability. In the event of cancellation or termination of a participation agreement and 
distribution of funds to a participant, the increase in value over the amount deposited in 
the program fund by that participant may be taxable to that participant in the year 
distributed. 
Sec. 6. 20-A MRSA §11483, as enacted by PL 1997, c. 732, §4, is amended to 
read: 
§11483. Compliance with federal law 
The authority may take any action necessary to ensure that the program complies 
with the federal Internal Revenue Code of 1986, Section 529, as amended, and any 
successor provisions and other applicable laws, rules and regulations adopted pursuant to 
that provision to the extent necessary for the program fund to constitute a qualified state 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" fr" to S.P. 701, L.D. 1999 ( ) 
tuition program with the benefits of eligibility under provisions of the federal Internal 
Revenue Code addressing qualified state tuition programs. 
Sec. 7. 20-A MRSA §11485, as enacted by PL 1997, c. 732, §4, is amended to 
read: 
§11485. Rulemaking 
The authority Hl:HSt shall establish rules for the implementation of the program 
established by this chapter, including rules establishing fees and penalties and rules 
necessary to ensure treatment as a qualified state tuition program for federal tax purposes. 
Rules adopted pursuant to this section, including those setting fees and penalties, are 
routine technical rules as defined by Title 5, chapter 375, subchapter II-A 2-A. The 
aathority shall submit a report to the joint standing oommittee of the Legislate.re having 
jurisdiotioa over eduoatioa and oultaral affairs by January 30, 1999 on the rnles and rnle 
making prooess to implement a program providing limits Oll :fu-tw.,e iRoreases in the easts 
of eduoatioll of partioipatiRg institutions of higher eduoatiofl: pursuant to seotion 114 74, 
subseotion 8. 
Emergency clause. 
In view of the emergency cited in the preamble, this 
legislation takes effect when approved.' 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively. 
SUMMARY 
This amendment, which is the majority report of the committee, retains the change 
from mandatory to permissive the investment of fund dollars by the Finance Authority of 
Maine in state-based financial institutions. 
This amendment also amends certain 
provisions of the law in order to conform elements of the Maine Education Savings 
Program to recent changes to federal law affecting so-called Section 529 programs. This 
amendment also adds an emergency preamble and emergency clause to the bill. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Fiscal Detail and Notes 
Approved: 03/09/20 feac.. 
LD 1999 
LR 3035(02) 
An Act To Amend the Maine Education Savings Program 
Fiscal Note for Bill as Amended by Committee Amendment 'it' 
Committee: Education and Cultural Affairs 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Finance Authority of Maine 
Additional costs to the Finance Authority of Maine associated with the implementation of this legislation can be 
absorbed within existing budgeted resources. 
LR3035(02) - Fiscal Note - Page 1 of 1