Text: HSB00587                          Text: HSB00589
Text: HSB00500 - HSB00599               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

House Study Bill 588

Bill Text

PAG LIN
  1  1    Section 1.  Section 12D.1, Code 1999, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  0A.  "Account balance limit" means the
  1  4 maximum allowable aggregate balance of accounts established
  1  5 for the same beneficiary.  Account earnings, if any, are
  1  6 included in the account balance limit.
  1  7    Sec. 2.  Section 12D.3, subsection 1, paragraph a, Code
  1  8 Supplement 1999, is amended to read as follows:
  1  9    a.  Each participation agreement may require a participant
  1 10 to agree to invest a specific amount of money in the trust for
  1 11 a specific period of time for the benefit of a specific
  1 12 beneficiary.  A participant shall not be required to make an
  1 13 annual contribution on behalf of a beneficiary.  The minimum
  1 14 contribution per beneficiary per year, in a year in which a
  1 15 participant is making a contribution, shall be fifty dollars,
  1 16 and the.  The maximum contribution that may be deducted for
  1 17 Iowa income tax purposes shall not exceed two thousand dollars
  1 18 per beneficiary per year adjusted annually to reflect
  1 19 increases in the consumer price index.  However, the The
  1 20 treasurer of state may shall set a maximum, as necessary, an
  1 21 account balance limit to maintain compliance with section 529
  1 22 of the Internal Revenue Code.  A contribution shall not be
  1 23 permitted to the extent it causes the aggregate balance of all
  1 24 accounts established for the same beneficiary to exceed the
  1 25 applicable account balance limit.
  1 26    Sec. 3.  Section 12D.3, subsection 2, Code Supplement 1999,
  1 27 is amended to read as follows:
  1 28    2.  Beneficiaries designated in participation agreements
  1 29 may be designated from date of birth up to, but not including,
  1 30 their eighteenth birthday.  A substitute beneficiary may be
  1 31 older than age eighteen provided that the substitute
  1 32 beneficiary is not older than the original beneficiary when
  1 33 the substitution is made.
  1 34    Sec. 4.  Section 12D.3, subsection 5, paragraph a, Code
  1 35 Supplement 1999, is amended to read as follows:
  2  1    a.  A beneficiary under a participation agreement may be
  2  2 changed as permitted under rules adopted by the treasurer of
  2  3 state upon written request of the participant prior to the
  2  4 date of admission of the beneficiary to an institution of
  2  5 higher education as long as the substitute beneficiary is
  2  6 eligible for participation.
  2  7    Sec. 5.  Section 422.7, subsection 32, paragraph a, Code
  2  8 1999, is amended by striking the paragraph and inserting in
  2  9 lieu thereof the following:
  2 10    a.  Subtract the maximum contribution that may be deducted
  2 11 for Iowa income tax purposes as a participant in the Iowa
  2 12 educational savings plan trust pursuant to section 12D.3,
  2 13 subsection 1, paragraph "a".
  2 14    Sec. 6.  EFFECTIVE DATE.  This Act, being deemed of
  2 15 immediate importance, takes effect upon enactment.  
  2 16                           EXPLANATION
  2 17    This bill amends certain Code provisions relating to the
  2 18 Iowa educational savings plan trust.
  2 19    The bill defines an "account balance limit" to mean the
  2 20 maximum allowable aggregate balance of accounts and account
  2 21 earnings, established for the same beneficiary, and provides
  2 22 that the treasurer of state will establish an account balance
  2 23 limit for all accounts established for a designated
  2 24 beneficiary beyond which contributions will not be permitted,
  2 25 in order to maintain compliance with Internal Revenue Code
  2 26 section 529.  Currently, the maximum contribution limit is
  2 27 established at $2,000 per year, adjusted annually to reflect
  2 28 changes in the consumer price index.  The bill provides that
  2 29 regardless of the level of contributions made, the maximum
  2 30 contribution per contributor that will be deductible for state
  2 31 income tax purposes cannot exceed the annually adjusted $2,000
  2 32 per beneficiary amount.  The bill provides for corresponding
  2 33 language in Code section 422.7, subsection 32, paragraph "a",
  2 34 regarding the amount which can be deducted for Iowa income tax
  2 35 purposes.
  3  1    The bill additionally eliminates a provision which
  3  2 prohibited the substitution of beneficiaries after the
  3  3 original beneficiary has been admitted to college, and makes a
  3  4 technical correction eliminating the qualification that a
  3  5 substitute beneficiary not be older than the original
  3  6 beneficiary "when the substitution is made".
  3  7    The bill takes effect upon enactment.  
  3  8 LSB 5263DP 78
  3  9 rn/cls/14
     

Text: HSB00587                          Text: HSB00589
Text: HSB00500 - HSB00599               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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