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House approves changes to Utah higher-education savings program, sends bill to Senate
Summary
The House passed amendments to the Utah Educational Savings Plan to require annual audits by the state auditor and to broaden disbursement flexibility to align state law with IRS Section 529; the bill passed the House 71-0 and was referred to the Senate.
Representative Kevin Garn, sponsor of House Bill 321, told the Utah House that the bill makes technical and operational improvements to the Utah Educational Savings Plan (UESP) and would require annual audits of the UESP Trust.
"What this does, representatives, is it just ensures that the financial statements of the Utah Educational Savings Plan Trust shall be audited annually by the state auditor or the state auditor's designee and report in accordance with generally accepted accounting principles," Garn said when he moved Amendment No. 1 under his name.
Garn said the UESP was initiated in 1996 and gave scale figures during his floor remarks, saying the program currently holds more than $2,500,000,000 in assets and has over 114,000 accounts, including about 22,000 accounts held by Utah residents. He described the program as family-friendly, noting that it has no minimum contribution and offers investment options such as the State Treasurer's Fund and certain Vanguard mutual funds. Garn also argued the program reduces reliance on student loans and supports a more educated workforce.
The amendment requiring annual audits was adopted on the floor. Garn also described substantive statutory changes in the bill: the removal of an administratively difficult provision that tied in‑state tuition eligibility to an eight‑year account-holding rule (current participants would be grandfathered) and elimination of statutory deadlines that previously required disbursements to begin by certain beneficiary ages or account ages. Garn said those changes are intended to align state law with Section 529 of the Internal Revenue Code and to allow account owners broader access to funds, subject to board approval.
During floor questions Representative Holdaway asked whether UESP funds could be used for the institutions referenced in the question; Garn replied, "Yes. They can be used for any accredited institution, whether it's a state institution or even a private institution as long as it's accredited," and affirmed the funds may be used in-state or out-of-state.
A fellow member on the floor characterized the policy as an economic development tool and complimented the bill sponsors for improving program access.
Voting was opened and closed on House Bill 321 as amended. The clerk announced the final tally: 71 yes, 0 no. The bill passed the House and was referred to the Senate for further consideration.
The House also approved Amendment No. 1 under Garn's name on the floor before final passage.
