SB 460 - This act revises the MOSTARS Higher Education Savings Program. The act renames the program the Missouri Higher Education Savings Program. The act makes several technical changes to comply with the terms and conditions established for such savings programs by regulations of the Internal Revenue Service.

The act provides that the Speaker and Pro Tem shall each appoint one member to the Board of the savings program, rather than jointly appointing one member. These members shall serve 4 year terms. The act raises the membership from 6 to 7 and requires 4 members for a quorum, and the Board may take an action upon a vote of a majority of the members present.

The act requires the Board to establish a total contribution limit with regard to a beneficiary based on the projected cost for five years of undergraduate expenses at the highest cost eligible institution.

The act requires the Board to establish a minimum time that contributions and earnings must remain in the savings program to qualify for tax exempt status under Section 166.435, RSMo.

The act requires a cancellation penalty of at least 10% for any withdrawal not based upon specific causes specified in the act, such as death, disability, receipt of scholarship or rollover. Additionally, any tax-deductible contributions or earnings shall become taxable if they are not used for higher education expenses or held in the program for the minimum time.

State employees may have contributions to any qualified state tuition program automatically withheld from their paychecks.
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