HB 1799 — An Act amending the act of April 3, 1992 (P.L.28, No.11), known as the Tuition Account Programs and College Savings Bond Act, in tuition account programs, further providing for declaration of policy, for definitions, for Tuition Account Programs Bureau, for powers of department, for Tuition Account Guaranteed Savings Program, for Tuition Account Investment Program, for general provisions governing both tuition account programs and for Federal taxation; establishing the Keystone Scholars Grant Program and the Keystone Scholars Grant Program Account; and making a repeal.

PRINTER'S NO.     2213

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 1799
                                               Session of
                                                 2025

     INTRODUCED BY GALLAGHER, MARCELL, VENKAT, HILL-EVANS, WAXMAN,
        GIRAL, PROKOPIAK, CERRATO, GREINER, PICKETT, KENYATTA,
        SANCHEZ, PARKER, BOROWSKI, SCHLOSSBERG, HOHENSTEIN, NEILSON,
        DONAHUE, WARREN, DEASY AND K.HARRIS, AUGUST 11, 2025

     REFERRED TO COMMITTEE ON FINANCE, AUGUST 13, 2025


                                    AN ACT
 1   Amending the act of April 3, 1992 (P.L.28, No.11), entitled "An
 2      act providing for the establishment of two programs for
 3      postsecondary educational savings, a guaranteed savings
 4      program and an investment program; establishing the Tuition
 5      Account Programs Bureau within the Treasury Department and
 6      providing duties for the Treasury Department; establishing
 7      tuition account funds; providing for Tuition Account Program
 8      Contracts; providing for the establishment of scholarship
 9      programs; and further providing for duties of the
10      Pennsylvania Higher Education Assistance Agency," in tuition
11      account programs, further providing for declaration of
12      policy, for definitions, for Tuition Account Programs Bureau,
13      for powers of department, for Tuition Account Guaranteed
14      Savings Program, for Tuition Account Investment Program, for
15      general provisions governing both tuition account programs
16      and for Federal taxation; establishing the Keystone Scholars
17      Grant Program and the Keystone Scholars Grant Program
18      Account; and making a repeal.
19      The General Assembly of the Commonwealth of Pennsylvania
20   hereby enacts as follows:
21      Section 1.    Section 301(5)(iv) of the act of April 3, 1992
22   (P.L.28, No.11), known as the Tuition Account Programs and
23   College Savings Bond Act, is amended to read:
24   Section 301.    Declaration of policy.
25      The General Assembly finds and declares as follows:
 1          * * *
 2          (5)     The purposes of this chapter are to:
 3                * * *
 4                (iv)    Provide to the citizens of this Commonwealth
 5          means of saving for elementary, secondary and
 6          postsecondary education that provides them with the
 7          advantages of "qualified State tuition programs" as
 8          defined by section 529 of the Internal Revenue Code of
 9          1986 (Public Law 99-514, 26 U.S.C. § 529).
10      Section 2.    The definitions of "other educational expense
11   credits" and "Tuition Account Program Contract" in section 302
12   of the act are amended and the section is amended by adding
13   definitions to read:
14   Section 302.    Definitions.
15      The following words and phrases when used in this chapter
16   shall have the meanings given to them in this section unless the
17   context clearly indicates otherwise:
18      * * *
19      "Eligible elementary or secondary educational institution."
20   A day or residential school which provides kindergarten,
21   elementary or secondary education in this Commonwealth,
22   including both public and nonpublic schools, at which a resident
23   of this Commonwealth may legally fulfill the compulsory school
24   attendance requirements of Article XIII of the act of March 10,
25   1949 (P.L.30, No.14), known as the Public School Code of 1949,
26   and which meets the requirements of Title VI of the Civil Rights
27   Act of 1965 (Public Law 88-352, 42 U.S.C. § 2000d et seq.).
28      * * *
29      "Other educational expense credits."     Tuition credits that
30   are converted for payment of qualified higher education expenses

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 1   other than tuition for an eligible educational institution, as
 2   provided in section 309(h).
 3      * * *
 4      "Qualified education loan."     Indebtedness on behalf of a
 5   beneficiary or sibling of a beneficiary to pay qualified higher
 6   education expenses as defined in 26 U.S.C. § 221(d)(2) (relating
 7   to interest on education loans) as of the time the indebtedness
 8   was incurred, which are:
 9           (1)    paid or incurred within a reasonable period of time
10      before or after the indebtedness is incurred; and
11           (2)    attributable to education furnished during a period
12      during which the recipient was an eligible student.
13      * * *
14      "Registered apprenticeship program."     An apprenticeship
15   program registered and certified with the United States
16   Secretary of Labor under 29 U.S.C. § 50 (relating to promotion
17   of labor standards of apprenticeship).
18      "Sibling."    A brother, sister, stepbrother or stepsister.
19      * * *
20      "Tuition Account Program Contract."     A Tuition Account
21   Guaranteed Savings Program Contract or a Tuition Account
22   Investment Program Contract entered into by an account owner and
23   the department to provide for savings to meet the future
24   qualified [higher education expenses of a beneficiary attending
25   an eligible educational institution] education expenses.
26      * * *
27      Section 3.    Sections 303 and 305(4) of the act are amended to
28   read:
29   Section 303.    Tuition Account Programs Bureau.
30      The State Treasurer is directed to establish a bureau within

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 1   the Treasury Department, which shall be known as the Tuition
 2   Account Programs Bureau, for the purpose of establishing and
 3   administering two programs for [postsecondary] educational
 4   savings, a guaranteed savings program for postsecondary
 5   education and an investment program for elementary, secondary
 6   and postsecondary education. The guaranteed savings program
 7   shall provide that money may be contributed pursuant to a
 8   Tuition Account Guaranteed Savings Program Contract for the
 9   future payment of qualified higher educational expenses for
10   attendance at eligible educational institutions as described in
11   section 309. Money contributed pursuant to a Tuition Account
12   Guaranteed Savings Program Contract shall increase in value by,
13   at a minimum, the increase in the tuition at the tuition level
14   designated in the contract. The investment program shall provide
15   that money may be contributed pursuant to a Tuition Account
16   Program Investment Contract for the future payment of qualified
17   [higher] educational expenses for attendance at eligible
18   elementary or secondary educational institutions, or eligible
19   educational institutions as described in section 309.1. The
20   investment program shall have no guarantee. Money contributed
21   pursuant to a Tuition Account Guaranteed Savings Program
22   Contract may be withdrawn for the payment of the following:
23          (1)     Qualified educational expenses.
24          (2)     Qualified education loans.
25          (3)     Fees, books and supplies for participation in a
26      Registered Apprenticeship Program.
27          (4)     Attendance at an eligible elementary or secondary
28      educational institution under section 309.
29   Section 305.    Powers of department.
30      In addition to the powers granted by other provisions of this

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 1   chapter, the department shall have the powers necessary or
 2   convenient to carry out this chapter, including, but not limited
 3   to, the power to:
 4          * * *
 5          (4)     Pay directly to an eligible educational institution
 6      or an eligible elementary or secondary educational
 7      institution, an account owner, a beneficiary or a third party
 8      authorized by the account owner, upon the receipt of
 9      appropriate documentation, the funds due pursuant to a
10      Tuition Account Program Contract.
11          * * *
12      Section 4.    Section 309 of the act is amended by adding
13   subsections to read:
14   Section 309.    Tuition Account Guaranteed Savings Program.
15      * * *
16      (g.1)   Conversion of tuition credits for use at eligible
17   elementary or secondary educational institution.--Upon the
18   request of the account holder, the department shall permit the
19   use of tuition credits for the payment of qualified education
20   expenses at eligible elementary or secondary educational
21   institutions, subject to an appropriate conversion as determined
22   by the department.
23      (g.2)   Conversion of tuition credits for repayment of
24   qualified education loans.--Upon the request of an account
25   holder, the department shall permit the use of tuition credits
26   to repay qualified education loans, subject to appropriate
27   conversion as determined by the department.
28      (g.3)   Conversion of tuition credits for use in registered
29   apprenticeship program.--Upon the request of an account holder,
30   the department shall permit the use of tuition credits to pay

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 1   fees, books and supplies for participation in a registered
 2   apprenticeship program, subject to an appropriate conversion as
 3   determined by the department.
 4      * * *
 5      Section 5.    Sections 309.1, 309.2(b) and (d) and 317 of the
 6   act are amended to read:
 7   Section 309.1.   Tuition Account Investment Program.
 8      The department shall establish an investment plan that
 9   defines the Tuition Account Investment Program structure and
10   sets forth investment policies and guidelines to be utilized in
11   administering the program and may, in its discretion, obtain the
12   services of investment managers, program managers and trustees
13   as described in section 307(b) to assist in establishing and
14   administering the plan. The department, pursuant to a Tuition
15   Account Investment Program Contract, shall specify the minimum
16   and maximum amounts of contributions, the terms and conditions
17   for transferring the Tuition Account Investment Program Contract
18   to another account owner or substituting a beneficiary for the
19   originally named beneficiary, the terms and conditions for
20   withdrawing contributions or terminating the Tuition Account
21   Investment Program Contract, the method and procedures for
22   making payments pursuant to the Tuition Account Investment
23   Program Contracts for the payment of beneficiaries' qualified
24   [higher] education expenses and all other rights and obligations
25   of the account owner and the department.
26   Section 309.2.   General provisions governing both tuition
27               account programs.
28      * * *
29      (b)   Period of participation.--Notwithstanding any of the
30   provisions of this chapter, the following shall apply:

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 1            (1)   Except as provided in paragraph (2), a minimum
 2      period of one year must elapse between the time a
 3      contribution is made pursuant to a Tuition Account Program
 4      Contract and the time that contribution and any increase in
 5      its value may be used for payment of qualified [higher]
 6      education expenses pursuant to section 309 or 309.1.
 7            (2)   The board may prescribe an alternative minimum
 8      period of time which must elapse between a contribution and
 9      its use for payment of qualified [higher] education expenses.
10      * * *
11      (d)     Excess contributions.--The department shall institute
12   adequate safeguards to prevent contributions to an account or
13   multiple accounts that are in excess of those necessary to
14   provide for the qualified [higher] education expenses of the
15   beneficiary of that account or accounts, as specified in section
16   529 of the Internal Revenue Code of 1986 (Public Law 99-514, 26
17   U.S.C. § 529).
18      * * *
19   Section 317.    Federal taxation.
20      The department may take appropriate action in order to obtain
21   a determination from the Internal Revenue Service or the Federal
22   courts as to whether contributions made pursuant to a Tuition
23   Account Program Contract, the increase in value of such
24   contributions and payment of qualified [higher] education
25   expenses pursuant to a Tuition Account Program Contract shall be
26   a transaction which will subject account owners or the income of
27   either or both of the funds to Federal taxation and may respond
28   to such determination in any manner permitted under this
29   chapter.
30      Section 6.    The act is amended by adding a section to read:

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 1   Section 320.    Keystone Scholars Grant Program.
 2      (a)   Establishment.--The department shall establish a grant
 3   program as part of the Tuition Account Guaranteed Savings
 4   Program Fund established under section 306 to be known as the
 5   Keystone Scholars Grant Program. The purpose of the program
 6   shall be to promote access to postsecondary educational
 7   opportunities for each eligible child.
 8      (b)   Administration.--
 9            (1)   No later than 90 days following the birth of an
10      eligible child, the Department of Health shall transmit
11      information and record data to the department necessary to
12      administer the program and establish the eligibility of each
13      child born after December 31, 2018. Information under this
14      subsection shall include record data, such as the full name
15      and residential address of the child's parent or legal
16      guardian and birth date of the child.
17            (2)   Following receipt of the information under paragraph
18      (1), the department shall notify each parent or guardian of
19      each eligible child about the program.
20            (3)   The department shall provide an opportunity to be
21      excluded from the program.
22            (4)   The department shall ensure the security and
23      confidentiality of the information and record data provided
24      under paragraph (1).
25      (c)   Keystone Scholars Grant Program Account.--
26            (1)   The Keystone Scholars Grant Program Account is
27      established as a separate account within the Tuition Account
28      Guaranteed Savings Program Fund. Money contained in the
29      account shall be for the exclusive purpose of providing
30      scholarship grants to eligible children to pay for qualified

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 1    higher education expenses associated with the attendance at
 2    an eligible educational institution.
 3        (2)   The following apply to allocations and actuarial
 4    status:
 5              (i)    Subject to subparagraphs (ii) and (iii), at the
 6        end of each fiscal year, assets of the Tuition Account
 7        Guaranteed Savings Program Fund that are in excess of 10%
 8        of the actuarially determined liabilities of the Tuition
 9        Account Guaranteed Savings Program Fund shall be
10        allocated to the account.
11              (ii)    Annual allocations under subparagraph (i) may
12        not exceed an amount equal to $100 multiplied by the
13        number of children born in this Commonwealth in the
14        fiscal year.
15              (iii)    An allocation under subparagraph (i) may not
16        be made if the allocation would cause the actuarially
17        determined surplus of the Tuition Account Guaranteed
18        Savings Program Fund to fall below 10% of the Tuition
19        Account Guaranteed Savings Program Fund's actuarially
20        determined liabilities.
21              (iv)    The department may invest and reinvest money in
22        the account as provided for under section 307.
23              (v)    Annually, the State Treasurer shall report to
24        the Governor, the chairperson and minority chairperson of
25        the Appropriations Committee of the Senate and the
26        chairperson and minority chairperson of the
27        Appropriations Committee of the House of Representatives
28        the actuarial status of the Tuition Account Guaranteed
29        Savings Program Fund as required under section 306(b)(2).
30              (vi)    This paragraph shall expire December 31, 2030.

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 1            (3)   Money in the account shall be used for the purpose
 2      of providing grants for qualified higher education expenses
 3      associated with the attendance at an eligible educational
 4      institution and for costs associated with the administration
 5      of the program. Costs associated with the administration of
 6      the program shall be reported to the Governor, the
 7      chairperson and minority chairperson of the Appropriations
 8      Committee of the Senate and the chairperson and minority
 9      chairperson of the Appropriations Committee of the House of
10      Representatives in the same manner as required under
11      paragraph (2)(v).
12      (d)     Amount of grant.--To an eligible child for whom a
13   Tuition Account Program Contract has been entered into, and upon
14   application and the submission of documentation necessary to
15   establish the child's eligibility and enrollment as a student at
16   an eligible educational institution, the department shall
17   provide a scholarship grant in the amount of $100, plus
18   investment earnings attributed to the initial grant amount since
19   the birth date of the eligible child as calculated by the
20   department, for qualified higher education expenses associated
21   with attendance at an eligible educational institution.
22      (e)     Availability of account balances.--The department shall
23   make program account balances available to each parent or
24   guardian of an eligible child through a secured Internet
25   account.
26      (f)     Authorization of annual match of contributions.--
27            (1)   Subject to the availability of money under
28      subsection (g), the State Treasurer may establish an annual
29      match of contributions made by a parent or guardian of an
30      eligible child into an established Guaranteed Savings Plan

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 1      Account under section 309.
 2             (2)   Subject to the availability of money from
 3      contributions made under subsection (g), the State Treasurer
 4      may establish financial incentives, such as school
 5      attendance, for additional grants for an eligible child with
 6      an established Guaranteed Savings Plan Account under section
 7      309.
 8             (3)   Money from the Tuition Account Guaranteed Savings
 9      Program Fund may not be used for purposes under paragraphs
10      (1) and (2).
11      (g)    Contributions from persons and entities.--
12   Notwithstanding subsection (c)(2)(iii), the department may
13   receive contributions from a person or legal entity to the
14   account on behalf of, and make grants to, eligible children to
15   pay for qualified higher education expenses associated with
16   attendance at an eligible educational institution.
17      (h)    Monitoring of program by board.--In addition to the
18   duties under section 304, the board shall consider, study and
19   review the work of the program, advise the department on request
20   and make recommendations for the improvement of the program.
21      (i)    Definitions.--As used in this section, the following
22   words and phrases shall have the meanings given to them in this
23   subsection unless the context clearly indicates otherwise:
24      "Account."     The Keystone Scholars Grant Program Account
25   established under subsection (c).
26      "Eligible child."     An individual born after December 31,
27   2018, who is less than 29 years of age and is:
28             (1)   a resident of this Commonwealth at the time of birth
29      and at the time that the grant for qualified higher education
30      expenses is applied for or received; or

20250HB1799PN2213                     - 11 -
 1             (2)   an adoptee in receipt of a valid decree of adoption
 2      under 23 Pa.C.S. § 2902 (relating to requirements and form of
 3      decree of adoption), whose adopting parent or parents were
 4      residents of this Commonwealth at the time the decree of
 5      adoption was entered and who is a resident at the time that
 6      the grant for qualified higher education expenses is applied
 7      for or received.
 8      "Program."     The Keystone Scholars Grant Program established
 9   under subsection (a).
10      Section 7.     Repeals are as follows:
11             (1)   The General Assembly finds and declares that the
12      repeal under paragraph (2) is necessary to effectuate this
13      act.
14             (2)   Section 312 of the act of April 9, 1929 (P.L.343,
15      No.176), known as The Fiscal Code, is repealed.
16      Section 8.     This act shall take effect in 60 days.




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