Brief⁽¹⁾

H.B. 2703, as amended, would enact the Education Savings Account Act. The bill would allow taxpayers to establish postsecondary education savings accounts beginning in tax year 1998 and deposit up to $2,000 for the account holder and up to $1,000 for each dependent child of the account holder. There would be no limit on deposits into such an account from earned income of a dependent child who is a recipient of Aid to Families with Dependent Children. All income earned on postsecondary education savings accounts would be exempt from the Kansas income tax. Taxpayers also would be allowed to subtract from their adjusted gross income the first $2,000 of contributions to such accounts for all tax years beginning in 1998.

The bill also would include in the definition of "Custodian" financial institutions, not only banks, trust companies, and savings and loan associations, but credit unions as well. The definition of "Custodian" in the Individual Development Account Act would be amended to add credit unions as a qualified financial institution for such accounts.

Background

H.B. 2703, as introduced, concerned electronic financial transactions and established limits of liability for failure to report the loss of an access device used to make an electronic transaction.

The House Committee of the Whole amendments strike the language of the original bill and insert provisions of the Educational Savings Account Act.

The fiscal impact of the amendment would be $1.4 million for FY 1999, $2.0 million for FY 2000, $2.1 million for FY 2001, $2.2 million for FY 2002, and $2.3 million for FY 2003.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.