The amendment updated the Internal Revenue Code reference date from January 1, 2025 to January 1, 2026 in the higher education savings plan statute. This is a technical update to ensure the law continues to reference current federal tax law as it evolves.
26.556.12 26.556.13 101st Legislative Session 1033 2026 South Dakota Legislature House Bill 1033 Introduced by: The Chair of the Committee on State Affairs at the request of the State Investment Council Underscores indicate new language. Overstrikes indicate deleted language. ENROLLED AN ACT ENTITLED An Act to update the reference to the Internal Revenue Code to reflect current 1 federal law for the administration of higher education savings plans. 2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3 Section 1. That § 13-63-1 be AMENDED: 4 13-63-1. Terms used in this chapter mean: 5 (1) "Account," an account established as prescribed in this chapter; 6 (2) "Account owner," the person who, under this chapter or rules promulgated by the 7 council pursuant to chapter 1-26, is entitled to select or change the designated 8 beneficiary of an account, to designate any person other than the designated 9 beneficiary to whom funds may be paid from the account, or to receive distributions 10 from the account if no such other person is designated; 11 (3) "Cash," currency, bills, and coins in circulation. A negotiable instrument may be 12 converted to cash if properly endorsed and presented to a financial institution for 13 deposit. An automatic transfer, cashier's check, certified check, money order, 14 payroll deposit, traveler's check, personal check, and wire transfer may also be 15 converted to cash if presented to a financial institution for deposit; 16 (4) "Contribution," any payment directly allocated to an account for the benefit of a 17 designated beneficiary or used to pay late fees or administrative fees associated 18 with an account, and that portion of any rollover amount treated as a contribution 19 under section 529 of the Internal Revenue Code; 20 (5) "Contributor," any person making a contribution to an account; 21 (6) "Council," the South Dakota Investment Council; 22 (7) "Designated beneficiary," except as provided in § 13-63-25, the individual 23 designated at the time the account is opened as the individual whose higher 24 education expenses are expected to be paid from the account or, if this designated 25 26.556.12 26.556.13 2 1033 Underscores indicate new language. Overstrikes indicate deleted language. HB1033 ENROLLED beneficiary is replaced in accordance with § 13-63-12, 13-63-13, or 13-63-14, the 1 replacement beneficiary; 2 (8) "Eligible education institution," as defined in section 529(e)(5) of the Internal 3 Revenue Code; 4 (9) "Financial institution," any bank, commercial bank, national bank, savings bank, 5 savings and loan association, credit union, an insurance company, brokerage firm, 6 or other similar entity that is authorized to do business in this state; 7 (10) "Investment direction," specifying or attempting to specify the particular financial 8 instruments or ownership interests either individually, or within a fund family or 9 other group of financial instruments or ownership interests held as an investment 10 group, into which the contributions or earnings are invested. Selecting an initial 11 type of investment program if more than one program is offered does not constitute 12 an investment direction; 13 (11) "Internal Revenue Code," the United States Internal Revenue Code (January 1, 14 2025 2026); 15 (12) "Member of the family," as defined in section 529(e)(2) of the Internal Revenue 16 Code; 17 (13) "Person," an individual, a corporation, a partnership, a trust or estate, a joint-stock 18 company, an association, or a syndicate, group, pool, joint venture, or other 19 unincorporated organization or group; 20 (14) "Program," the higher education savings program established under this chapter; 21 (15) "Program manager," any financial institution selected by the council to act as the 22 depository and manager for an account; 23 (16) "Qualified higher education expenses," as defined in section 529(e)(3) of the 24 Internal Revenue Code; 25 (17) "Qualified tuition program," as defined in section 529(b) of the Internal Revenue 26 Code; and 27 (18) "Rollover," a disbursement or transfer from an account of a designated beneficiary 28 that is transferred to or deposited within sixty days into an account of the same 29 designated beneficiary or another individual who is a member of the family of the 30 designated beneficiary, if the transferee account was created under this chapter or 31 under a qualified tuition program maintained by another state in accordance with 32 section 529 of the Internal Revenue Code, or any other rollover allowed by section 33 529 of the Internal Revenue Code. 34 26.556.13 3 1033 HB1033 ENROLLED An Act to update the reference to the Internal Revenue Code to reflect current federal law for the administration of higher education savings plans. I certify that the attached Act originated in the: House as Bill No. 1033 Chief Clerk of the House Speaker of the House Attest: Chief Clerk of the House President of the Senate Attest: Secretary of the Senate House Bill No. 1033 File No. ____ Chapter No. ______ Received at this Executive Office this _____ day of _____________, 2026 at ____________M. By for the Governor The attached Act is hereby approved this ________ day of ______________, A.D., 2026 Governor STATE OF SOUTH DAKOTA, ss. Office of the Secretary of State Filed ____________, 2026 at _________ o'clock __M. Secretary of State By Asst. Secretary of State