Text: HSB00207                          Text: HSB00209
Text: HSB00200 - HSB00299               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

House Study Bill 208

Bill Text

PAG LIN
  1  1    Section 1.  Section 261.38, subsection 1, Code 1999, is
  1  2 amended to read as follows:
  1  3    1.  The commission shall establish a loan reserve account
  1  4 from which any default on a guaranteed student loan shall be
  1  5 paid and an agency operating account as authorized by the
  1  6 federal Higher Education Act of 1965.  The commission shall
  1  7 credit to this account these accounts all moneys designated
  1  8 exclusively for the reserve fund provided for the state
  1  9 student loan program by the United States, the state of Iowa,
  1 10 or any of their agencies, departments or instrumentalities, as
  1 11 well as any funds accruing to the program which are not
  1 12 required for current administrative expenses.  The department
  1 13 of management shall determine the actuarially sound reserve
  1 14 requirement for the amount of guaranteed loans outstanding
  1 15 commission may expend moneys in the loan reserve and agency
  1 16 operating accounts as authorized by the federal Higher
  1 17 Education Act of 1965.
  1 18    Sec. 2.  Section 261.38, subsection 2, Code 1999, is
  1 19 amended by striking the subsection.
  1 20    Sec. 3.  Section 261.38, subsections 3, 4, and 5, Code
  1 21 1999, are amended to read as follows:
  1 22    3.  The payment of any funds for the default on a
  1 23 guaranteed student loan shall be solely from the loan reserve
  1 24 account and agency operating accounts.  The general assembly
  1 25 shall not be obligated to appropriate any moneys to pay for
  1 26 any defaults or to appropriate any moneys to be credited to
  1 27 the loan reserve account.  The commission shall not give or
  1 28 lend the credit of the state of Iowa.
  1 29    4.  Funds Notwithstanding section 8.33, funds on deposit in
  1 30 the loan reserve account or in the administrative account and
  1 31 operating accounts shall not revert to the state general fund
  1 32 at the close of any fiscal year.
  1 33    5.  The treasurer of state shall invest any funds,
  1 34 including those in the loan reserve account and operating
  1 35 accounts, and, notwithstanding section 12C.7, the interest
  2  1 income earned shall be credited back to the loan reserve
  2  2 appropriate account.
  2  3    Sec. 4.  Section 261.38, subsection 6, Code 1999, is
  2  4 amended by striking the subsection.
  2  5    Sec. 5.  Section 261.38, subsection 7, unnumbered paragraph
  2  6 1, Code 1999, is amended to read as follows:
  2  7    The commission may expend funds in the reserve account and
  2  8 enter into agreements with the Iowa student loan liquidity
  2  9 corporation in order to increase access for students to
  2 10 education loan programs that the commission determines meet
  2 11 the education needs of Iowa residents.  The agreements shall
  2 12 permit the establishment, funding, and operation of
  2 13 alternative education loan programs, as described in section
  2 14 144(b)(1)(B) of the Internal Revenue Code of 1986 as amended,
  2 15 as defined in section 422.3, in addition to programs permitted
  2 16 under the federal Higher Education Act of 1965.  In accordance
  2 17 with those agreements, the Iowa student loan liquidity
  2 18 corporation may issue bonds, notes, or other obligations to
  2 19 the public and others for the purpose of funding the
  2 20 alternative education loan programs.  This authority to issue
  2 21 such bonds, notes, or other obligations shall be in addition
  2 22 to the authority established in the articles of incorporation
  2 23 and bylaws of the Iowa student loan liquidity corporation.  
  2 24                           EXPLANATION 
  2 25    This bill reflects a change in federal law that prohibits
  2 26 the state from asserting control over the loan reserve account
  2 27 of the state student loan program, which is currently funded
  2 28 with federal moneys.  Current Code language provides that the
  2 29 general assembly appropriates moneys from the loan reserve
  2 30 account to the commission for state student loan program
  2 31 operating costs.
  2 32    The federal Higher Education Amendments of 1998, Pub. L.
  2 33 No. 105-244, states that the guaranty agency, and the college
  2 34 student aid commission, shall deposit all assets contained in
  2 35 the current loan reserve account into a federal student loan
  3  1 reserve fund.  This fund, according to the federal law, is the
  3  2 sole property of the federal government and the guaranty
  3  3 agency may use moneys from the fund to pay lender claims or
  3  4 pay into the agency operating fund.
  3  5    The bill authorizes the college student aid commission to
  3  6 establish a loan reserve account and an agency operating
  3  7 account for the deposit of moneys provided by the state
  3  8 student loan program by the United States and the state of
  3  9 Iowa or any of their agencies, departments or
  3 10 instrumentalities, as well as any funds accruing to the
  3 11 program which are not required for current administrative
  3 12 expenses.  The bill permits the commission to expend moneys in
  3 13 the loan reserve and agency operating accounts as authorized
  3 14 by the federal Higher Education Act of 1965.
  3 15    The bill strikes a subsection that permits the commission
  3 16 to exceed the full-time equivalent positions authorized and
  3 17 expend moneys in the loan reserve account in excess of the
  3 18 amounts appropriated by the general assembly, in order to
  3 19 maintain loan guarantee operations.  The subsection stricken
  3 20 also requires the commission to notify the chairpersons and
  3 21 ranking members of the standing appropriations committees of
  3 22 the general assembly and the co-chairpersons and ranking
  3 23 members of the education appropriations subcommittee of the
  3 24 proposed adjustment or transfer.  
  3 25 LSB 1276DP 78
  3 26 kh/gg/8.2

Text: HSB00207                          Text: HSB00209
Text: HSB00200 - HSB00299               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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