FOR AN ACT ENTITLED, An Act to  revise certain provisions regarding the higher education savings plan.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
     Section  1.  That § 13-63-11 be amended to read as follows:
     13-63-11.   Account owners may withdraw all or part of the balance from an account on sixty days' notice, or a shorter period as may be authorized by the council, by policies, guidelines, or procedures, or under rules promulgated by the council pursuant to chapter 1-26. These rules shall include provisions that will generally enable the council or program manager to determine if a withdrawal is a nonqualified withdrawal. The rules may require one or more of the following:

             (1)      Account owners seeking to make a withdrawal other than a nonqualified withdrawal shall provide certifications, copies of bills for qualified higher education expenses, or other supporting material;

             (2)      Qualified withdrawals from an account shall be made only by a check payable jointly to the designated beneficiary and a higher education institution as designated by the account owner, except as expressly otherwise permitted by section 529 of the Internal

Revenue Code and related regulations;

             (3)      Withdrawals not meeting requirements established by the council shall be treated as nonqualified withdrawals by the program manager, and if these withdrawals are not nonqualified withdrawals, the account owner must seek refunds of penalties directly from the council.
     Section  2.  That § 13-63-18 be amended to read as follows:
     13-63-18.   No contributor to, account owner of, or designated beneficiary of, any account may , directly or indirectly, direct the investment of any contributions to an account or the earnings from the account , except to the extent permitted under section 529 of the Internal Revenue Code and related regulations.

     The council, as trustee, may offer participants a choice of several investment options, some of which may require investment counseling prior to participation. Any investment vehicle offered by the council shall be in accordance with policies of the council adopted pursuant to this chapter and shall be consistent with the investments of a prudent person with similar objectives and shall further be separate from, and not commingled with, other investment programs of the council .
     Section  3.  That § 13-63-21 be amended to read as follows:
     13-63-21.   The council shall adopt policies, guidelines, procedures, or rules pursuant to chapter 1-26 to prevent contributions on behalf of a designated beneficiary in excess of those necessary to pay the qualified higher education expenses of the designated beneficiaries and to satisfy the safe harbor requirements the maximum amounts permitted under section 529 of the Internal Revenue Code and related regulations.