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Senate Study Bill 226

Bill Text

PAG LIN
  1  1    Section 1.  Section 97A.8, subsection 1, paragraph i, Code
  1  2 1997, is amended to read as follows:
  1  3    i.  (1)  Notwithstanding paragraph "g" or other provisions
  1  4 of this chapter, beginning January 1, 1995, for federal income
  1  5 tax purposes, and beginning January 1, 1998, for state income
  1  6 tax purposes, member contributions required under paragraph
  1  7 "f" or "h" which are picked up by the department shall be
  1  8 considered employer contributions for federal and state income
  1  9 tax purposes, and the department shall pick up the member
  1 10 contributions to be made under paragraph "f" or "h" by its
  1 11 employees.  The department shall pick up these contributions
  1 12 by reducing the salary of each of its employees covered by
  1 13 this chapter by the amount which each employee is required to
  1 14 contribute under paragraph "f" or "h" and shall certify the
  1 15 amount picked up in lieu of the member contributions to the
  1 16 department of revenue and finance.  The department of revenue
  1 17 and finance shall forward the amount of the contributions
  1 18 picked up to the board of trustees for recording and deposit
  1 19 in the pension accumulation fund.
  1 20    (2)  Member contributions picked up by the department under
  1 21 subparagraph (1) shall be treated as employer contributions
  1 22 for federal and state income tax purposes only and for all
  1 23 other purposes of this chapter and the laws of this state
  1 24 shall be treated as employee contributions and deemed part of
  1 25 the employee's earnable compensation or salary.
  1 26    Sec. 2.  Section 97B.11A, Code 1997, is amended to read as
  1 27 follows:
  1 28    97B.11A  PICKUP OF EMPLOYEE CONTRIBUTIONS.
  1 29    1.  Notwithstanding section 97B.11 or other provisions of
  1 30 this chapter, beginning January 1, 1995, for federal income
  1 31 tax purposes, and beginning January 1, 1998, for state income
  1 32 tax purposes, member contributions required under section
  1 33 97B.11 which are picked up by the employer shall be considered
  1 34 employer contributions for federal and state income tax
  1 35 purposes, and each employer shall pick up the member
  2  1 contributions to be made under section 97B.11 by its
  2  2 employees.  Each employer shall pick up these contributions by
  2  3 reducing the salary of each of its employees covered by this
  2  4 chapter by the amount which each employee is required to
  2  5 contribute under section 97B.11 and shall pay the amount
  2  6 picked up in lieu of the member contributions as provided in
  2  7 section 97B.14.
  2  8    2.  Member contributions picked up by each employer under
  2  9 subsection 1 shall be treated as employer contributions for
  2 10 federal and state income tax purposes only and for all other
  2 11 purposes of this chapter and the laws of this state shall be
  2 12 treated as employee contributions and deemed part of the
  2 13 employee's wages or salary.
  2 14    Sec. 3.  Section 97B.42, Code 1997, is amended by adding
  2 15 the following new unnumbered paragraph:
  2 16    NEW UNNUMBERED PARAGRAPH.  Notwithstanding any other
  2 17 provision of this section, a member who is a publicly elected
  2 18 official of the state or any of its political subdivisions,
  2 19 excluding a member of the general assembly of Iowa, whose
  2 20 application for coverage under this chapter has been approved
  2 21 by the department and who is a member of the system pursuant
  2 22 to that coverage, but who, prior to or concurrent with the
  2 23 member's service in the elective office, is a member of the
  2 24 system pursuant to other covered employment, shall no longer
  2 25 be an active member of the system for the elective office as
  2 26 of the last day of the month preceding the member's first
  2 27 month of entitlement for a retirement allowance pursuant to
  2 28 the other covered employment.  To be excluded from coverage,
  2 29 the publicly elected official shall be serving in a part-time
  2 30 elective office covered under the system.
  2 31    Sec. 4.  Section 294.10A, Code 1997, is amended to read as
  2 32 follows:
  2 33    294.10A  PICKUP OF TEACHER ASSESSMENTS.
  2 34    1.  Notwithstanding section 294.9 or other provisions of
  2 35 this chapter, for federal income tax purposes beginning
  3  1 January 1 following the submission by a board of trustees of
  3  2 an application to the federal internal revenue service
  3  3 requesting qualification of a plan in accordance with the
  3  4 requirements of the Internal Revenue Code, as defined in
  3  5 section 422.3, and for state income tax purposes beginning
  3  6 January 1, 1998, or January 1 following an application for
  3  7 qualification, whichever is later, teacher assessments
  3  8 required under section 294.9 which are picked up by an
  3  9 employing school district shall be considered employer
  3 10 contributions for federal and state income tax purposes, and
  3 11 each employing school district establishing a pension and
  3 12 annuity retirement system pursuant to this chapter shall pick
  3 13 up the teacher assessments to be made under section 294.9 by
  3 14 its employees commencing on the January 1 following an
  3 15 application for qualification applicable date under this
  3 16 subsection.  Each employing school district shall pick up
  3 17 these teacher assessments by reducing the salary of each of
  3 18 the teachers covered by this chapter by the amount which each
  3 19 teacher is required to contribute through assessments under
  3 20 section 294.9 and shall pay to the board of trustees the
  3 21 amount picked up in lieu of the teacher assessments for
  3 22 recording and deposit in the fund.
  3 23    2.  Teacher assessments picked up by each employing school
  3 24 district under subsection 1 shall be treated as employer
  3 25 contributions for federal and state income tax purposes only
  3 26 and for all other purposes of this chapter and the laws of
  3 27 this state shall be treated as teacher assessments and deemed
  3 28 part of the teacher's wages or salary.
  3 29    Sec. 5.  Section 411.8, subsection 1, paragraph i, Code
  3 30 1997, is amended to read as follows:
  3 31    i.  (1)  Notwithstanding paragraph "g" or other provisions
  3 32 of this chapter, beginning January 1, 1995, for federal income
  3 33 tax purposes, and beginning January 1, 1998, for state income
  3 34 tax purposes, member contributions required under paragraph
  3 35 "f" or "h" which are picked up by the city shall be considered
  4  1 employer contributions for federal and state income tax
  4  2 purposes, and each city shall pick up the member contributions
  4  3 to be made under paragraph "f" or "h" by its employees.  Each
  4  4 city shall pick up these contributions by reducing the salary
  4  5 of each of its employees covered by this chapter by the amount
  4  6 which each employee is required to contribute under paragraph
  4  7 "f" or "h" and shall pay the amount picked up in lieu of the
  4  8 member contributions to the board of trustees for recording
  4  9 and deposit in the fund.
  4 10    (2)  Member contributions picked up by each city under
  4 11 subparagraph (1) shall be treated as employer contributions
  4 12 for federal and state income tax purposes only and for all
  4 13 other purposes of this chapter and the laws of this state
  4 14 shall be treated as employee contributions and deemed part of
  4 15 the employee's earnable compensation or salary.
  4 16    Sec. 6.  Section 422.7, subsections 29 through 31, Code
  4 17 1997, are amended by striking the subsections.  
  4 18    Sec. 7.  IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM –
  4 19 DIVIDEND ADJUSTMENT COMPUTATION.
  4 20    1.  For a retiree who received an increase in the retiree's
  4 21 monthly benefit effective January 1, 1997, pursuant to section
  4 22 97B.49, subsection 4, the dividend adjustment used to
  4 23 calculate the dividend payable to the retiree in November
  4 24 1997, pursuant to section 97B.49, subsection 13, paragraph
  4 25 "g", shall not be calculated pursuant to that paragraph but
  4 26 shall be calculated as provided in subsection 2.
  4 27    2.  The dividend adjustment for a retiree described in
  4 28 subsection 1 shall be calculated by multiplying the sum of the
  4 29 dividend payable to the retiree in November 1996 and an amount
  4 30 representing twice the total of the retiree's monthly benefit
  4 31 payments received by the retiree for the first six months of
  4 32 1997 by the applicable percentage as determined by section
  4 33 97B.49, subsection 13, paragraph "g".  To the extent not
  4 34 inconsistent with this subsection, the provisions of section
  4 35 97B.49, subsection 13, paragraph "g", shall apply in
  5  1 calculating the dividends payable in November 1997 to a
  5  2 retiree described in subsection 1.
  5  3    3.  This section shall only apply to the calculation of
  5  4 dividends for November 1997, and shall not apply to the
  5  5 calculation of dividends for any subsequent year.
  5  6    Sec. 8.  EFFECTIVE AND APPLICABILITY DATE.  Sections 1, 2,
  5  7 4, 5, and 6 of this Act take effect January 1, 1998, and apply
  5  8 to tax years beginning on or after January 1, 1998.  
  5  9                           EXPLANATION
  5 10    This bill provides that, beginning January 1, 1998, a
  5 11 member's contribution under the public safety peace officers'
  5 12 retirement, accident, and disability system, the Iowa public
  5 13 employees' retirement system (IPERS), and the statewide fire
  5 14 and police retirement system are considered employer
  5 15 contributions, and not part of the employee's salary, for
  5 16 state income tax purposes.  Current law provides, as of
  5 17 January 1, 1995, that these contributions for these systems
  5 18 are considered employer contributions for federal income tax
  5 19 purposes only.
  5 20    The bill also provides that member contributions to a
  5 21 pension and annuity retirement system for teachers established
  5 22 pursuant to chapter 294 are considered employer contributions
  5 23 for state income tax purposes, beginning January 1, 1998, or
  5 24 on the January 1 following submission of an application for
  5 25 qualification of the system to the internal revenue service,
  5 26 whichever is later.
  5 27    The provisions of this bill concerning pretax treatment of
  5 28 contributions take effect January 1, 1998, and apply to tax
  5 29 years beginning on or after that date.
  5 30    This bill also provides that a part-time elected official
  5 31 covered under IPERS who is also covered under IPERS for other
  5 32 employment ceases to be an active member of IPERS as an
  5 33 elected official on the last day of the month prior to the
  5 34 member's first month of entitlement to a retirement allowance
  5 35 pursuant to the other employment.
  6  1    This bill provides that the dividends otherwise payable in
  6  2 November 1997 for retirees under IPERS who received an
  6  3 increase in their monthly benefit in January 1997 based on the
  6  4 increase in the minimum monthly benefit shall be calculated
  6  5 based on the monthly benefits they are entitled to receive for
  6  6 this year and not on the total of the monthly benefits they
  6  7 received during 1996.  
  6  8 LSB 2678SC 77
  6  9 ec/sc/14
     

Text: SSB00225                          Text: SSB00227
Text: SSB00200 - SSB00299               Text: SSB Index
Bills and Amendments: General Index     Bill History: General Index

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