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Senate moves bill to equalize state tax treatment for 529 plans to third-reading calendar
Summary
SB177, which would give parity to residents investing in out-of-state or third-party 529 plans (UESP parity), was debated on the floor and moved to the third reading calendar after senators raised fiscal-note questions and policy concerns about preserving the Utah state plan.
Senate Bill 177, addressing parity for Utah Education Savings Plan (UESP) and other 529 plans, was discussed on the Senate floor on Feb. 22, 2007, and placed on the third reading calendar for continued consideration.
Sponsor Senator Niederhauser said the bill would create parity between Utah’s plan and other 529 plans administered by brokerages or other states so residents could choose the option that best suits them while still receiving a state tax deduction. 'We're trying to incentivize people to invest and save for their children's education,' Niederhauser said.
Floor questions focused on fiscal impacts and effects on Utah’s existing plan. Senators noted conflicting fiscal information — the sponsor and staff referenced an initial fiscal-note estimate of about $1,000,000 that they were working to verify. Senator Bill and others cautioned that competition could draw funds away from the state plan, which currently has substantial out-of-state assets and operates without state funding. The sponsor argued parity would increase choices and improve the plan by fostering competition.
Procedurally, the Senate agreed not to let the bill leave the chamber until an attached fiscal note was physically available. The motion to move SB177 to the third reading calendar passed, and the bill will return for further consideration once fiscal details are finalized.
