SF 2276 (LSB 6005XS (5) 88)

SENATE FILE 2276

BY  RAGAN

A BILL FOR

An Act relating to savings for higher education and training including creating an Iowa educational savings kick start program and a hawkeye state matching grant program, and making appropriations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  12D.10A  Iowa educational savings kick start program —— fund —— appropriation.
   1.  As used in this section unless the context otherwise requires:
   a.  “Program” means the Iowa educational savings kick start program.
   b.  “Qualified education expenses” means the same as defined in section 12D.1, except shall not include elementary or secondary educational expenses for tuition described in section 529(c)(7) of the Internal Revenue Code.
   c.  “Qualified student” means the beneficiary designated to benefit from advance payments of qualified education expenses on behalf of the qualified student under this section.
   d.  “School” means a public elementary school located in this state.
   2.  a.  The Iowa educational savings kick start program is created. The purpose of the program is to promote access to postsecondary educational opportunities by creating a separate account funded by the state for each qualified student who is a resident of this state, upon commencement of the enrollment of the qualified student in kindergarten at a school, to alleviate the cost of qualified education expenses associated with attending a postsecondary educational institution.
   b.  (1)  The account shall be in addition to any other participation agreement established under this chapter, or to an account established in section 12D.10B. The treasurer shall encourage and promote parents and guardians of qualified students to enter into participation agreements under section 12D.3.
   (2)  Direct contributions shall not be made to the account established on behalf of the qualified student in this section, and the qualified student or the parent or guardian of the qualified student account shall not be able to affect the account, except as provided subsection 6.
   (3)  The treasurer shall make account balances within the kick start education fund established in subsection 5 available through a secured internet site to each parent or legal guardian of a qualified student or to a qualified student.
   3.  Within one hundred twenty days of the start of the school year, the department of education shall provide the treasurer of state with the total number of kindergarten students enrolled in schools for the school year beginning July 1, 2020, and in each succeeding school year thereafter.
   4.  Commencing with the fiscal year beginning July 1, 2020, and every year thereafter, there is annually appropriated from the general fund of the state to the kick start education fund established in subsection 5 an amount equal to the product of one hundred dollars multiplied by the total number of resident students enrolled in kindergarten in schools for the same school year.
   5.  a.  (1)  A kick start education fund is established in the state treasury under the control of the treasurer of state consisting of funds appropriated to the fund pursuant to subsection 4, any other funds appropriated to the fund, and other moneys received by the treasurer of state for deposit in the fund. The treasurer of state may accept gifts, grants, bequests, and other private contributions for deposit into the kick start education fund.
   (2)  The treasurer of state shall encourage and solicit philanthropic support of the fund.
   (3)  Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys deposited in the kick start education fund shall be credited to the scholarship fund. Notwithstanding section 8.33, moneys credited to the scholarship fund shall not revert at the close of a fiscal year.
   (4)  The treasurer of state shall invest the moneys in the kick start education fund in accordance with the public funds investment standards in section 12B.10.
   b.  The treasurer of state shall use the moneys in the scholarship fund to provide moneys to a qualified student for the purpose of paying qualified education expenses and to pay for the costs associated with the plan.
   6.  a.  To receive moneys under the plan, a qualified student must apply for the moneys with the treasurer of state on a form prescribed by the treasurer.
   b.  A one-time payment of moneys shall be awarded if all of the following apply at the time of the application:
   (1)  The qualified student is a resident of this state.
   (2)  The qualified student is not more than twenty-one years of age.
   (3)  The qualified student is enrolled at a postsecondary educational institution and incurs qualified education expenses.
   7.  a.  Upon qualifying under subsection 6, the treasurer of state shall provide the qualified student with a payment in the amount of one hundred dollars, plus the investment earnings attributable to the one-hundred-dollar amount since the enrollment of the qualified student as provided in subsection 2 as calculated by the treasurer of state, plus other investment income as calculated in paragraph “b”.
   b.  A qualified student shall also receive other investment income as calculated by the treasurer of state in an amount that equals a pro rata share of other unobligated moneys received by the treasurer of state for deposit in the kick start education fund including any gifts, grants, bequests, private contributions, and the investment earnings attributable to such moneys.
   8.  (1)  No property rights in the kick start education fund shall exist in favor of the qualified student.
   (2)  A payment pursuant to this section is not guaranteed and is subject to appropriations by the general assembly, future modifications, and investment gain or loss.
    Sec. 2.  NEW SECTION.  12D.10B  Hawkeye state matching grant program —— fund —— appropriation.
   1.  As used in this section unless the context otherwise requires:
   a.  “Annual household income threshold” means annual adjusted gross income that is less than seventy-five thousand dollars in the calendar year immediately preceding the year of application.
   b.  “Program” means the hawkeye state matching grant program.
   c.  “Qualified education expenses” means the same as defined in section 12D.1, except “qualified education expenses” shall include qualified educational expenses for qualifying training programs if such programs are not considered qualified educational institutions, but “qualified education expenses” does not include elementary or secondary education expenses for tuition described in section 529(c)(7) of the Internal Revenue Code.
   d.  “Qualified student” means the beneficiary designated to benefit from advance payments of qualified education expenses on behalf of the qualified student under this section, whose household meets the annual household income threshold.
   e.  “Qualifying training programs” means the pathways for academic career and employment in chapter 260H, the gap tuition assistance program in chapter 260I, and the skilled workforce shortage tuition grant program in section 261.130.
   2.  a.  The hawkeye state matching grant program is created. The purpose of the program is to promote access to postsecondary educational opportunities including qualifying training programs by entering into participation agreements with participants that contain matching funds from the state for each qualified student who is a resident of this state, to alleviate the cost of qualified education expenses associated with attending a postsecondary educational institution or qualifying training program.
   b.  (1)  The account shall be established in the same manner as a participation agreement under section 12D.3, and shall have the same attributes as such an account except as otherwise provided in this section.
   (2)  The treasurer shall encourage and promote entering into participation agreements pursuant to this section to parents and guardians of qualified students who are under the annual household income threshold limit, and shall encourage and solicit philanthropic support of the program.
   3.  a.  For each participation agreement entered into pursuant to this section, the state shall match dollar-for-dollar each dollar contributed by the participant to the account established pursuant to this section, up to three hundred matching dollars per year, not to exceed one thousand five hundred dollars in matching dollars in the aggregate per qualified student.
   b.  There shall be no matching contribution to an account created under this section after the qualified student turns thirteen years of age.
   4.  a.  If a parent or legal guardian chooses to enroll a child in the program, the parent or legal guardian shall return a completed application to the treasurer of state along with a copy of the parent’s or legal guardian’s tax returns in order to determine if the child qualifies for enrollment in the program.
   b.  Upon receipt of the application and tax returns pursuant to paragraph “a”, and if the annual household income thresholds have been met, the child shall be enrolled in the program.
   c.  If state matching funds have not been used by the qualified student by the twenty-first birthday of the student, the state matching funds shall be withdrawn from the account of the qualified student and used to match contributions of other qualified students.
   d.  The treasurer of state shall take measures to ensure the security and confidentiality of the information received under this subsection.
   5.  a.  A hawkeye state matching grant fund is established in the state treasury under the control of the treasurer of state consisting of funds appropriated to the fund and any other moneys received by the treasurer of state for deposit in the fund. The treasurer of state may accept gifts, grants, bequests, and other private contributions for deposit into the fund.
   b.  The moneys in the fund shall be used to match the contributions of participants who make contributions to an account as provided in this section.
   c.  Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys deposited in the fund shall be credited to the fund. Notwithstanding section 8.33, moneys credited to the fund shall not revert at the close of a fiscal year.
   d.  The treasurer of state shall invest the moneys in the scholarship fund in accordance with the public funds investment standards in section 12B.10.
   6.  It is the intent of the general assembly to appropriate moneys for deposit in the hawkeye state matching grant fund for the fiscal year beginning July 1, 2020, and for each fiscal year thereafter, in an amount sufficient to pay any matching dollars required by the program.
   7.  An account created under this section shall not be counted as an asset for purposes of the supplemental assistance program, the Medicaid program, the family investment program, or the children’s health insurance program.
   8.  a.  No property rights in the hawkeye state matching grant fund shall exist in favor of the qualified student.
   b.  A matching payment pursuant to this section is not guaranteed and is subject to appropriations by the general assembly, future modifications, and investment gain or loss.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to savings for higher education and training including creating an Iowa educational savings program and a hawkeye state matching grant program.
   KICK START EDUCATIONAL PROGRAM. The bill creates the Iowa educational savings kick start program. The purpose of the program is to promote access to postsecondary educational opportunities by providing for the creation of a separate account funded by the state for each qualified student who is a resident of this state, upon commencement of the enrollment of the qualified student in kindergarten at a public school in this state, to alleviate the cost of expenses associated with attending a postsecondary educational institution.
   Within 120 days of the start of the school year, the bill requires the department of education to provide the treasurer of state with the total number of kindergarten students enrolled in public schools in this state for the school year beginning July 1, 2020, and in each succeeding school year thereafter.
   The bill establishes a kick start education fund in the state treasury under the control of the treasurer of state consisting of funds appropriated to the kick start education fund, any other funds appropriated to the kick start education fund, and other moneys received by the treasurer of state for deposit in the fund. The bill permits the treasurer of state to accept gifts, grants, bequests, and other private contributions for deposit into the kick start education fund.
   Commencing with the fiscal year beginning July 1, 2020, the bill appropriates from the general fund of the state to the kick start education fund an amount equal to the product of $100 multiplied by the number of resident students who in enroll in kindergarten in public schools for the school year starting with the school year beginning July 1, 2020, and such an appropriation shall be annually made each fiscal year thereafter based upon the product of $100 multiplied by enrollment figures in succeeding school years.
   In order to receive moneys under the bill, a qualified student must apply for the moneys with the treasurer of state on a form prescribed by the treasurer.
   A one-time payment of moneys shall be awarded pursuant to the bill if all of the following apply at the time of the application: the qualified student is a resident of this state, the qualified student is not more than 21 years of age, and the qualified student is enrolled at a postsecondary educational institution and incurs qualified education expenses.
   Upon qualifying for the payment of moneys under the bill, the treasurer of state shall provide the qualified student with a payment in the amount of $100, plus the investment earnings attributable to the $100 amount since the enrollment of the qualified student in the program plus any other investment income as calculated by the treasurer.
   The bill provides that no property rights in the kick start education fund shall exist in favor of the qualified student.
   HAWKEYE STATE MATCHING GRANT FUND. The bill creates the hawkeye state matching grant program. The purpose of the program is to promote access to postsecondary educational opportunities including qualified training programs by entering into participation agreements under Code chapter 12D (529 plans) that contain matching funds from the state for each qualified student who is a resident of this state, to alleviate the cost of expenses associated with attending a postsecondary educational institution or qualifying training program.
   In addition to using funds in the account created in the bill to pay for educational expenses at a postsecondary educational institution, the bill specifies that educational expenses for the following programs also qualify: the pathways for academic career and employment in Code chapter 260H, the gap tuition assistance program in Code chapter 260I, and the skilled workforce shortage tuition grant program in Code section 261.130.
   The account shall have the same attributes as a 529 account except as otherwise provided in the bill.
   For each hawkeye state matching grant account created pursuant to the bill, the state shall match dollar-for-dollar each dollar contributed by the owner of the account, up to $300 matching dollars per year, not to exceed $1,500 in matching dollars in the aggregate per qualifying student. The bill discontinues matching contributions to an account created after the qualified student turns 13 years of age. A student whose annual household adjusted gross income is more than $75,000 is not eligible for the program.
   If a parent or legal guardian chooses to enroll a qualified student in the hawkeye state matching grant program, the parent or legal guardian shall return a completed application to the treasurer of state along with a copy of the parent’s or legal guardian’s tax returns in order to determine if the student qualifies for enrollment in the program.
   Upon receipt of the application and tax returns, and if the annual household income thresholds have been met, the student shall be enrolled in the program.
   If state matching funds have not been used by the qualified student by the 21st birthday of the student, the bill requires the state matching funds to be withdrawn from the account of the qualified student and used to match contributions of other qualified students.
   The bill creates a hawkeye state matching grant fund in the state treasury under the control of the treasurer of state consisting of funds appropriated to the fund and any other moneys received by the treasurer of state for deposit in the fund. The treasurer of state may accept gifts, grants, bequests, and other private contributions for deposit into the fund.
   The bill requires the moneys in the fund to be used to match the contributions of the owners of the hawkeye state matching grant account.
   The bill specifies it is the intent of the general assembly to appropriate moneys for deposit in the hawkeye state matching grant fund for the fiscal year beginning July 1, 2020, and for each fiscal year thereafter, in an amount sufficient to pay any matching dollars required by the program.
   The bill specifies that a hawkeye state matching account shall not be counted as an asset for purposes of the supplemental assistance program, the Medicaid program, the family investment program, or the children’s health insurance program.
   The bill provides that no property rights of the state matching funds exist in the hawkeye state matching grant account in favor of the qualified student.