Senate
File
2209
-
Introduced
SENATE
FILE
2209
BY
McCOY
A
BILL
FOR
An
Act
relating
to
higher
education
by
providing
for
the
1
establishment
of
the
state
of
Iowa
higher
education
bank
and
2
revolving
fund
and
eliminating
the
deduction
for
federal
3
taxes
paid
by
certain
individual
income
taxpayers
and
4
including
retroactive
applicability
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
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DIVISION
I
1
CREATION
OF
STATE
OF
IOWA
HIGHER
EDUCATION
BANK
2
Section
1.
NEW
SECTION
.
525.1
Higher
education
loan
3
program.
4
1.
The
treasurer
of
state
shall
administer
a
program
to
5
provide
loans
to
students
or
parents
of
a
student
to
finance
6
all
or
a
portion
of
the
cost
of
a
student’s
attendance
at
an
7
institution
of
higher
education.
A
loan
provided
by
the
bank
8
under
this
section
shall
have
a
rate
of
interest
fixed
at
one
9
percent
per
year.
10
2.
The
treasurer,
in
consultation
with
the
college
student
11
aid
commission,
shall
adopt
rules
for
the
bank
to
provide
loans
12
pursuant
to
this
section.
The
rules
shall
include
student
13
eligibility
requirements,
repayment
terms,
and
any
other
rules
14
necessary
to
properly
administer
the
bank’s
higher
education
15
loan
program.
16
Sec.
2.
NEW
SECTION
.
525.2
Establishment
of
state
of
Iowa
17
higher
education
bank.
18
Subject
to
article
VIII,
section
6,
of
the
Constitution
of
19
the
State
of
Iowa,
the
state
of
Iowa
higher
education
bank
is
20
created
with
the
purpose
of
encouraging
and
promoting
higher
21
education
in
the
state.
22
Sec.
3.
NEW
SECTION
.
525.3
Definitions.
23
As
used
in
this
chapter,
unless
the
context
otherwise
24
requires:
25
1.
“Bank”
means
the
state
of
Iowa
higher
education
bank
26
established
under
this
chapter.
27
2.
“Institution
of
higher
education”
means
any
educational
28
institution
that
offers
a
postsecondary
educational
degree,
29
certificate,
or
program
of
study
and
is
eligible
to
receive
30
Tit.
IV
funds
under
the
federal
Higher
Education
Act
of
1965,
31
as
amended,
or
state
funding
or
assistance.
32
3.
“Taxable
income”
means
as
defined
in
section
422.4.
33
Sec.
4.
NEW
SECTION
.
525.4
Management
of
bank
——
duties
of
34
treasurer.
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The
treasurer
of
state
shall
operate,
manage,
and
control
1
the
bank,
locate
and
maintain
its
places
of
business,
and
make
2
and
enforce
orders,
rules,
regulations,
and
bylaws
for
the
3
transaction
of
its
business.
The
treasurer
shall
employ
and
4
fix
the
qualifications,
duties,
and
compensation
of
employees
5
of
the
bank
and
may
enter
into
contracts
for
any
services
that
6
may
be
required
to
conduct
the
business
of
the
bank.
7
Sec.
5.
NEW
SECTION
.
525.5
Advisory
board
of
directors.
8
1.
An
advisory
board
of
directors
to
the
bank
shall
9
be
appointed
to
provide
recommendations
to
the
treasurer
10
regarding
the
bank.
The
advisory
board
shall
consist
of
five
11
members
appointed
by
the
governor
and
confirmed
by
the
senate
12
pursuant
to
section
2.32.
Two
members
of
the
general
assembly
13
shall
serve
as
ex
officio,
nonvoting
members,
one
senator
to
14
be
appointed
by
the
majority
leader
of
the
senate
and
one
15
representative
to
be
appointed
by
the
speaker
of
the
house
of
16
representatives.
The
advisory
board
shall
not
be
compensated.
17
Each
member
shall
serve
a
term
of
four
years.
18
2.
The
advisory
board
of
directors
shall
have
the
following
19
duties:
20
a.
Meet
regularly
with
the
management
of
the
bank
to
review
21
the
bank’s
operations
to
determine
whether
recommendations
22
should
be
provided
to
the
treasurer
relating
to
improved
23
management
performance,
customer
service,
internal
methods,
24
procedures,
and
operating
policies.
25
b.
Provide
recommendations
to
the
treasurer
relating
to
the
26
establishment
of
additional
objectives
for
the
operation
of
the
27
bank.
28
c.
Provide
recommendations
to
the
treasurer
relating
to
29
employment
practices
and
personnel
policies.
30
d.
Meet
regularly
with
the
treasurer
to
present
any
31
recommendations
relating
to
the
bank.
32
e.
Advise
the
treasurer
with
respect
to
the
powers
and
33
functions
of
the
bank.
34
Sec.
6.
NEW
SECTION
.
525.6
Commencement
of
business.
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The
bank
shall
not
transact
any
business
except
such
1
business
as
is
incident
to
commencement
of
business
until
the
2
treasurer
determines
that
the
bank
has
acquired
the
minimum
3
capital
necessary
to
operate
and
remain
solvent.
In
doing
so,
4
the
treasurer
shall
consult
with
the
superintendent
of
the
5
banking
division
to
evaluate
and
determine
the
approximate
6
amount
of
capital
required
to
commence
operations.
7
Sec.
7.
NEW
SECTION
.
525.7
Acquisition
of
capital.
8
The
bank
shall
acquire
capital
to
operate
from
any
of
the
9
following
sources:
10
1.
Repayment
of
loans
and
accrued
interest.
11
2.
Appropriations
from
the
general
assembly
or
federal
12
government.
13
3.
Revenue
from
annual
taxable
income
exceeding
three
14
hundred
seventy-five
thousand
dollars
in
the
case
of
a
single
15
person,
or
seven
hundred
fifty
thousand
dollars
in
the
case
of
16
a
married
couple,
as
provided
in
section
421.17,
subsection
14.
17
4.
Funds
derived
from
the
settlement
of
legal
disputes
18
subject
to
approval
from
the
general
assembly.
19
Sec.
8.
NEW
SECTION
.
525.8
State
of
Iowa
higher
education
20
bank
revolving
fund.
21
1.
A
state
of
Iowa
higher
education
bank
revolving
fund
22
is
created
in
the
state
treasury
under
the
control
of
the
23
treasurer.
The
moneys
in
the
fund
shall
be
used
by
the
24
treasurer
for
the
purpose
of
operating
the
state
of
Iowa
higher
25
education
bank.
26
2.
The
fund
shall
consist
of
moneys
credited
to
the
fund
27
pursuant
to
section
525.7
and
any
other
moneys
available
to
28
and
obtained
or
accepted
by
the
treasurer
for
placement
in
the
29
fund.
Notwithstanding
section
12C.7,
subsection
2,
interest
or
30
earnings
on
moneys
in
the
fund
shall
be
credited
to
the
fund.
31
Notwithstanding
section
8.33,
moneys
that
remain
unencumbered
32
or
unobligated
at
the
close
of
the
fiscal
year
shall
not
33
revert
but
shall
remain
available
for
the
same
purpose
in
the
34
succeeding
fiscal
year.
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DIVISION
II
1
FEDERAL
DEDUCTIBILITY
——
APPROPRIATION
TO
STATE
OF
IOWA
HIGHER
2
EDUCATION
BANK
REVOLVING
FUND
3
Sec.
9.
Section
421.17,
Code
2016,
is
amended
by
adding
the
4
following
new
subsection:
5
NEW
SUBSECTION
.
14.
a.
Beginning
in
calendar
year
2017,
6
the
department
shall
by
October
15
of
each
year
determine
7
the
difference
between
the
net
amount
of
individual
income
8
taxes
due
and
paid
for
the
fiscal
year
ending
on
the
preceding
9
June
30
and
the
net
amount
of
individual
income
taxes
that
10
would
have
been
due
and
payable
during
that
fiscal
year
had
11
the
provisions
of
section
422.9,
subsection
2,
paragraph
“b”
,
12
subparagraph
(2),
not
been
applicable,
and
shall
certify
such
13
amount
to
the
treasurer
of
state.
14
b.
There
is
appropriated
from
the
general
fund
of
the
state
15
to
the
state
of
Iowa
higher
education
bank
revolving
fund
16
created
in
section
525.8
for
the
fiscal
year
beginning
July
1,
17
2017,
and
for
each
fiscal
year
thereafter,
an
amount
equal
to
18
the
amount
certified
during
the
fiscal
year
by
the
department
19
of
revenue
to
the
treasurer
of
state
pursuant
to
paragraph
“a”
.
20
Sec.
10.
Section
422.9,
subsection
2,
paragraph
b,
Code
21
2016,
is
amended
to
read
as
follows:
22
b.
(1)
Add
the
amount
of
federal
income
taxes
paid
or
23
accrued,
as
the
case
may
be,
during
the
tax
year
and
subtract
24
any
federal
income
tax
refunds
received
during
the
tax
year.
25
Where
married
persons,
who
have
filed
a
joint
federal
income
26
tax
return,
file
separately,
such
total
shall
be
divided
27
between
them
according
to
the
portion
of
the
total
paid
or
28
accrued,
as
the
case
may
be,
by
each.
Federal
income
taxes
29
paid
for
a
tax
year
in
which
an
Iowa
return
was
not
required
30
to
be
filed
shall
not
be
added
and
federal
income
tax
refunds
31
received
from
a
tax
year
in
which
an
Iowa
return
was
not
32
required
to
be
filed
shall
not
be
subtracted.
33
(2)
Notwithstanding
subparagraph
(1),
federal
income
taxes
34
paid
for
a
tax
year
beginning
on
or
after
January
1,
2016,
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in
which
the
taxpayer’s
net
income
exceeds
three
hundred
1
seventy-five
thousand
dollars
in
the
case
of
a
single
person,
2
or
seven
hundred
fifty
thousand
dollars
in
the
case
of
a
3
married
couple,
shall
not
be
added,
and
federal
income
tax
4
refunds
received
from
a
tax
year
beginning
on
or
after
January
5
1,
2016,
in
which
the
taxpayer’s
net
income
exceeds
three
6
hundred
seventy-five
thousand
dollars
in
the
case
of
a
single
7
person,
or
seven
hundred
fifty
thousand
dollars
in
the
case
of
8
a
married
couple,
shall
not
be
subtracted.
9
Sec.
11.
RETROACTIVE
APPLICABILITY.
This
division
of
this
10
Act
applies
retroactively
to
January
1,
2016,
for
tax
years
11
beginning
on
or
after
that
date.
12
EXPLANATION
13
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
14
the
explanation’s
substance
by
the
members
of
the
general
assembly.
15
This
bill
establishes
the
state
of
Iowa
higher
education
16
bank
and
revolving
fund
and
provides
money
for
the
fund
by
17
disallowing
a
deduction
for
federal
taxes
paid
for
certain
18
taxpayers.
The
purpose
of
the
fund
is
to
promote
and
encourage
19
higher
education
in
the
state.
20
Division
I
provides
the
state
treasurer
with
the
authority
21
to
operate,
manage,
and
control
the
public
state
bank,
22
including
locating
and
maintaining
its
places
of
business,
23
adopting
rules
and
regulations,
and
employing
staff
for
any
24
services
that
may
be
required
for
the
bank
to
conduct
its
25
business.
26
The
bill
establishes
an
advisory
board
of
directors
to
27
provide
recommendations
to
the
treasurer
regarding
the
bank.
28
The
board
consists
of
five
members
appointed
by
the
governor
29
and
confirmed
by
the
senate.
Two
members
from
the
general
30
assembly
shall
serve
as
ex
officio
and
shall
be
appointed
by
31
the
majority
leader
of
the
senate
and
the
speaker
of
the
house
32
of
representatives.
The
board
shall
not
be
compensated
and
33
each
member
shall
serve
a
term
of
four
years.
The
board
shall
34
provide
recommendations
to
the
treasurer
regarding
the
bank’s
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operations,
additional
objectives,
the
hire
of
employees,
and
1
any
other
recommendations
relating
to
the
bank.
2
The
bill
provides
that
the
bank
shall
not
commence
its
3
operations
until
the
treasurer,
after
consulting
with
the
4
superintendent
of
banking,
determines
that
the
bank
has
the
5
minimum
capital
necessary
to
operate
and
maintain
solvency.
6
The
bill
provides
that
the
bank
shall
acquire
capital
to
7
operate
from
the
repayment
of
loans
and
accrued
interest,
8
appropriations
from
the
general
assembly
or
federal
government,
9
revenue
from
disallowing
a
deduction
for
federal
taxes
paid
10
for
income
taxpayers
whose
income
exceeds
$375,000
(single)
11
or
$750,000
(married)
annually,
and
funds
derived
from
legal
12
settlements
subject
to
approval
from
the
general
assembly.
13
The
bill
provides
that
the
bank
shall
establish
a
higher
14
education
loan
program
to
provide
loans
to
students
or
15
parents
of
a
student
to
finance
the
cost
of
attendance
at
an
16
institution
of
higher
education,
as
defined
in
the
bill.
A
17
loan
provided
under
this
program
shall
have
a
fixed
rate
of
18
interest
at
1
percent
per
year.
The
treasurer,
in
consultation
19
with
the
college
student
aid
commission,
is
required
to
adopt
20
rules
to
administer
the
program.
21
The
bill
establishes
a
state
of
Iowa
higher
education
bank
22
revolving
fund
in
the
state
treasury
and
under
the
control
of
23
the
treasurer
to
consist
of
moneys
acquired
by
means
specified
24
in
the
bill.
Moneys
in
the
fund
are
to
be
used
to
operate
the
25
bank
and
shall
not
revert
to
the
general
fund
of
the
state.
26
Division
II
disallows
the
Iowa
income
tax
deduction
for
27
federal
income
taxes
paid
for
tax
years
beginning
on
or
after
28
January
1,
2016,
if
the
taxpayer’s
net
income
for
the
tax
year
29
exceeds
$750,000
($375,000
for
a
single
person).
Beginning
in
30
2017,
the
bill
requires
the
department
of
revenue
to
calculate
31
the
additional
Iowa
income
tax
revenues
collected
as
a
result
32
of
the
disallowance
of
federal
deductibility
for
each
fiscal
33
year
and
certify
that
amount
to
the
treasurer
of
state
by
34
October
15.
For
each
fiscal
year
beginning
on
or
after
July
1,
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2017,
an
amount
equal
to
the
amount
certified
by
the
department
1
of
revenue
during
the
fiscal
year
is
appropriated
from
the
2
general
fund
of
the
state
to
the
state
of
Iowa
higher
education
3
bank
revolving
fund
created
in
Code
section
525.8.
4
Division
II
applies
retroactively
to
January
1,
2016,
for
5
tax
years
beginning
on
or
after
that
date.
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