update the reference to the Internal Revenue Code to reflect current federal law for the administration of higher education savings plans.

26.556.13 101st Legislative Session 1033

2026 South Dakota Legislature
House Bill 1033
ENROLLED

AN ACT

ENTITLED An Act to update the reference to the Internal Revenue Code to reflect
current federal law for the administration of higher education savings plans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 13-63-1 be AMENDED:
13-63-1. Terms used in this chapter mean:
(1) "Account," an account established as prescribed in this chapter;
(2) "Account owner," the person who, under this chapter or rules promulgated by the
council pursuant to chapter 1-26, is entitled to select or change the designated
beneficiary of an account, to designate any person other than the designated
beneficiary to whom funds may be paid from the account, or to receive distributions
from the account if no such other person is designated;
(3) "Cash," currency, bills, and coins in circulation. A negotiable instrument may be
converted to cash if properly endorsed and presented to a financial institution for
deposit. An automatic transfer, cashier's check, certified check, money order,
payroll deposit, traveler's check, personal check, and wire transfer may also be
converted to cash if presented to a financial institution for deposit;
(4) "Contribution," any payment directly allocated to an account for the benefit of a
designated beneficiary or used to pay late fees or administrative fees associated
with an account, and that portion of any rollover amount treated as a contribution
under section 529 of the Internal Revenue Code;
(5) "Contributor," any person making a contribution to an account;
(6) "Council," the South Dakota Investment Council;
(7) "Designated beneficiary," except as provided in § 13-63-25, the individual
designated at the time the account is opened as the individual whose higher
education expenses are expected to be paid from the account or, if this designated
26.556.13 2 1033
HB1033 ENROLLED
beneficiary is replaced in accordance with § 13-63-12, 13-63-13, or 13-63-14, the
replacement beneficiary;
(8) "Eligible education institution," as defined in section 529(e)(5) of the Internal
Revenue Code;
(9) "Financial institution," any bank, commercial bank, national bank, savings bank,
savings and loan association, credit union, an insurance company, brokerage firm,
or other similar entity that is authorized to do business in this state;
(10) "Investment direction," specifying or attempting to specify the particular financial
instruments or ownership interests either individually, or within a fund family or
other group of financial instruments or ownership interests held as an investment
group, into which the contributions or earnings are invested. Selecting an initial
type of investment program if more than one program is offered does not constitute
an investment direction;
(11) "Internal Revenue Code," the United States Internal Revenue Code (January 1,
2026);
(12) "Member of the family," as defined in section 529(e)(2) of the Internal Revenue
Code;
(13) "Person," an individual, a corporation, a partnership, a trust or estate, a joint-stock
company, an association, or a syndicate, group, pool, joint venture, or other
unincorporated organization or group;
(14) "Program," the higher education savings program established under this chapter;
(15) "Program manager," any financial institution selected by the council to act as the
depository and manager for an account;
(16) "Qualified higher education expenses," as defined in section 529(e)(3) of the
Internal Revenue Code;
(17) "Qualified tuition program," as defined in section 529(b) of the Internal Revenue
Code; and
(18) "Rollover," a disbursement or transfer from an account of a designated beneficiary
that is transferred to or deposited within sixty days into an account of the same
designated beneficiary or another individual who is a member of the family of the
designated beneficiary, if the transferee account was created under this chapter or
under a qualified tuition program maintained by another state in accordance with
section 529 of the Internal Revenue Code, or any other rollover allowed by section
529 of the Internal Revenue Code.
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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