Text: HF02356 Text: HF02358 Text: HF02300 - HF02399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 12D.1, subsection 6, Code 2001, is 1 2 amended to read as follows: 1 3 6. "Higher education costs" means the certified costs of 1 4 tuition, fees, books, supplies, and equipment required for 1 5 enrollment or attendance at an institution of higher 1 6 education.Reasonable room and board expenses, based on the1 7minimum amount applicable for the institution of higher1 8education during the period of enrollment, shall be included1 9as a higher education cost for those students enrolled on at1 10least a half-time basis.Room and board expenses shall be 1 11 included as a higher education cost for those students 1 12 enrolled on at least a half-time basis in an amount applicable 1 13 to the student in calculating costs of attendance for federal 1 14 financial aid programs pursuant to section 472 of the federal 1 15 Higher Education Act of 1965, 20 U.S.C. } 1088, or for 1 16 students living in housing owned or operated by an institution 1 17 of higher education the actual amount, if greater, charged by 1 18 the institution for room and board. Expenses of a special 1 19 needs beneficiary which are necessary in connection with the 1 20 beneficiary's enrollment or attendance shall be considered a 1 21 higher education cost. 1 22 Sec. 2. Section 12D.1, subsection 13, Code 2001, is 1 23 amended by striking the subsection. 1 24 Sec. 3. Section 12D.2, subsection 15, Code 2001, is 1 25 amended to read as follows: 1 26 15. Establish, impose, and collect administrative fees and 1 27 charges in connection with transactions of the trust, and 1 28 provide for reasonable service charges, including penalties 1 29 forcancellations andlate payments with respect to 1 30 participation agreements. 1 31 Sec. 4. Section 12D.3, subsection 1, paragraph a, Code 1 32 2001, is amended to read as follows: 1 33 a. Each participation agreement may require a participant 1 34 to agree to invest a specific amount of money in the trust for 1 35 a specific period of time for the benefit of a specific 2 1 beneficiary. A participant shall not be required to make an 2 2 annual contribution on behalf of a beneficiary. The minimum 2 3 contribution per beneficiary per year, in a year in which a 2 4 participant is making a contribution, shall be fifty dollars. 2 5 The maximum contribution that may be deducted for Iowa income 2 6 tax purposes shall not exceedtwothree thousand dollars per 2 7 beneficiary per year adjusted annually to reflect increases in 2 8 the consumer price index. The treasurer of state shall set an 2 9 account balance limit to maintain compliance with section 529 2 10 of the Internal Revenue Code. A contribution shall not be 2 11 permitted to the extent it causes the aggregate balance of all 2 12 accounts established for the same beneficiary to exceed the 2 13 applicable account balance limit. 2 14 Sec. 5. Section 12D.3, subsection 3, Code 2001, is amended 2 15 to read as follows: 2 16 3. A participant's account balance shall be refunded to 2 17 the participant, less endowment fund earnings, and less a2 18refund penalty levied by the trust against account balance2 19earnings, if any, in the event an account balance remains in2 20the account for a thirty-day period following the2 21beneficiary's thirtieth birthday. 2 22 Sec. 6. Section 12D.5, subsection 1, Code 2001, is amended 2 23 to read as follows: 2 241.A participant may cancel a participation agreement at 2 25 will. Upon cancellation of a participation agreement, a 2 26 participant shall be entitled to the return of the 2 27 participant's account balance, less endowment fund investment 2 28 earnings, and less a refund penalty levied by the trust2 29against the participant's account balance earnings, if any. 2 30The penalty shall be deposited into the administrative fund.2 31 Sec. 7. Section 12D.5, subsection 2, Code 2001, is amended 2 32 by striking the subsection. 2 33 Sec. 8. Section 12D.9, subsection 1, paragraph f, Code 2 34 2001, is amended by striking the paragraph. 2 35 Sec. 9. Section 422.7, Code Supplement 2001, is amended by 3 1 adding the following new subsection: 3 2 NEW SUBSECTION. 34A. For purposes of this subsection, a 3 3 "qualified tuition program" is a program which provides that 3 4 amounts contributed in exchange for tuition credits or 3 5 certificates at an eligible education institution are held in 3 6 a qualified trust, and which receives a ruling or 3 7 determination from the internal revenue service that the 3 8 program meets the requirements of section 529 of the Internal 3 9 Revenue Code. 3 10 a. Subtract the contribution to a qualified tuition 3 11 program up to the maximum amount that may be deducted for Iowa 3 12 income tax purposes pursuant to section 12D.3, subsection 1, 3 13 paragraph "a". 3 14 b. Add the amount resulting from the cancellation of a 3 15 participation agreement refunded to the taxpayer as a 3 16 participant in a qualified tuition program to the extent 3 17 previously deducted as a contribution to the program. 3 18 c. Subtract, to the extent included, income from interest 3 19 and earnings received from the qualified tuition program. 3 20 Sec. 10. EFFECTIVE AND APPLICABILITY DATES. This Act, 3 21 being deemed of immediate importance, takes effect upon 3 22 enactment and applies retroactively to January 1, 2002, for 3 23 tax years beginning on or after that date. 3 24 EXPLANATION 3 25 This bill provides for qualified state tuition program 3 26 modifications to maintain consistency with federal law 3 27 changes. 3 28 The bill provides that higher education costs shall include 3 29 room and board expenses in an amount applicable to the student 3 30 in calculating costs of attendance for federal financial aid 3 31 programs pursuant to section 472 of the federal Higher 3 32 Education Act of 1965, 20 U.S.C. } 1088, or, for students 3 33 living in housing owned or operated by an institution of 3 34 higher education, the actual amount, if greater, charged by 3 35 the institution for room and board. Formerly, reasonable room 4 1 and board expenses based on the minimum amount applicable for 4 2 an institution of higher education were permitted. The bill 4 3 also adds expenses of a special needs beneficiary which are 4 4 necessary in connection with the beneficiary's enrollment or 4 5 attendance as a higher education cost. 4 6 The bill provides for an increase in the maximum 4 7 contribution which is deductible for Iowa income tax purposes 4 8 from $2,000 to $3,000 per beneficiary per year. 4 9 The bill provides that a refund penalty formerly applicable 4 10 upon cancellation of a participation agreement shall not be 4 11 levied. 4 12 The bill provides that the provisions applicable to the 4 13 education savings plan trust regarding contributions to and 4 14 interest and earnings from the trust for Iowa income tax 4 15 purposes shall also apply with regard to a qualified tuition 4 16 program. The bill provides that a "qualified tuition program" 4 17 is a program providing that amounts contributed in exchange 4 18 for tuition credits or certificates at an eligible education 4 19 institution are held in a qualified trust, and which receives 4 20 a ruling or determination from the internal revenue service 4 21 that the program meets the requirements of section 529 of the 4 22 Internal Revenue Code. 4 23 The bill takes effect upon enactment and applies 4 24 retroactively to January 1, 2002, for tax years beginning on 4 25 or after that date. 4 26 LSB 5541YH 79 4 27 rn/pj/5
Text: HF02356 Text: HF02358 Text: HF02300 - HF02399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
© 2002 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Fri Feb 22 03:35:28 CST 2002
URL: /DOCS/GA/79GA/Legislation/HF/02300/HF02357/020214.html
jhf