Text: SF00383 Text: SF00385 Text: SF00300 - SF00399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 12D.1, unnumbered paragraph 1, Code 1 2 2003, is amended to read as follows: 1 3 The general assembly finds that the general welfare and 1 4 well-being of the state are directly related to educational 1 5 levels and skills of the citizens of the state, and that a 1 6 vital and valid public purpose is served by the creation and 1 7 implementation of programs which encourage and make possible 1 8 the attainment of higher education by the greatest number of 1 9 citizens of the state. The state has limited resources to 1 10 provide additional programs for higher education funding and 1 11 the continued operation and maintenance of the state's public 1 12 institutions of higher education and the general welfare of 1 13 the citizens of the state will be enhanced by establishing a 1 14 program which allows citizens of the state to invest money in 1 15 a public trust for future application to the payment of higher 1 16 education costs. The creation of the means of encouragement 1 17 for citizens to invest in such a program represents the 1 18 carrying out of a vital and valid public purpose. In order to 1 19 make available to the citizens of the state an opportunity to 1 20 fund future higher education needs, it is necessary that a 1 21 public trust be established in which moneys may be invested 1 22 for future educational use.It is also necessary to establish1 23an endowment fund which may be funded with public funds, among1 24other sources, the income from which will be made available to1 25participants in the trust to enhance their savings invested1 26for the payment of future higher education costs.1 27 Sec. 2. Section 12D.1, subsections 5 and 13, Code 2003, 1 28 are amended by striking the subsections. 1 29 Sec. 3. Section 12D.2, subsections 4, 8, and 12, Code 1 30 2003, are amended to read as follows: 1 31 4. Accept any grants, gifts, legislative appropriations, 1 32 and other moneys from the state, any unit of federal, state, 1 33 or local government, or any other person, firm, partnership, 1 34 or corporation which the treasurer of state shall deposit into 1 35 the administrative fund, the endowment fund,or the program 2 1 fund. 2 28. Solicit and accept for the benefit of the endowment2 3fund gifts, grants, and other moneys, including legislative2 4appropriations and grants from any federal, state, or local2 5governmental agency.2 6 12. Invest moneys fromthe endowment fund andthe program 2 7 fund in any investments which are determined by the treasurer 2 8 of state to be appropriate. 2 9 Sec. 4. Section 12D.3, subsections 2 and 3, Code 2003, are 2 10 amended to read as follows: 2 11 2. Beneficiaries designated in participation agreements 2 12 may be designated from date of birthup to, but not including,2 13their eighteenth birthday. A substitute beneficiarymay be2 14older than age eighteen provided that the substitute2 15beneficiary is notshall not be older than the original 2 16 beneficiary. 2 173. A participant's account balance shall be refunded to2 18the participant, less endowment fund earnings, and less a2 19refund penalty levied by the trust against account balance2 20earnings, if any, in the event an account balance remains in2 21the account for a thirty-day period following the2 22beneficiary's thirtieth birthday.2 23 Sec. 5. Section 12D.4, Code 2003, is amended by striking 2 24 the section and inserting in lieu thereof the following: 2 25 12D.4 PROGRAM AND ADMINISTRATIVE FUNDS – INVESTMENT AND 2 26 PAYMENTS. 2 27 1. The treasurer of state shall segregate moneys received 2 28 by the trust into two funds: the program fund and the 2 29 administrative fund. 2 30 2. All moneys paid by participants in connection with 2 31 participation agreements shall be deposited as received into 2 32 separate accounts within the program fund. 2 33 3. Contributions to the trust made by participants or 2 34 received in the form of gifts, grants, or donations may only 2 35 be made in the form of cash. 3 1 4. A participant or beneficiary shall not provide 3 2 investment direction regarding program contributions or 3 3 earnings held by the trust. 3 4 5. Moneys accrued by participants in the program fund of 3 5 the trust may be used for payments to any institution of 3 6 higher education. 3 7 Sec. 6. Section 12D.5, Code 2003, is amended by striking 3 8 the section and inserting in lieu thereof the following: 3 9 12D.5 CANCELLATION OF AGREEMENTS. 3 10 A participant may cancel a participation agreement at will. 3 11 Upon cancellation of a participation agreement, a participant 3 12 shall be entitled to the return of the participant's account 3 13 balance. 3 14 Sec. 7. Section 12D.6, subsections 1 and 2, Code 2003, are 3 15 amended to read as follows: 3 16 1. a. A participant retains ownership of all payments 3 17 made under a participation agreement up to the date of 3 18utilization for payment of higher education costs for3 19 distribution to the beneficiary. 3 20 b. All income derived from the investment of the payments 3 21 made by the participant shall be considered to be held in 3 22 trust for the benefit of the beneficiary. 3 23 2. In the event the program is terminated prior topayment3 24of higher education costs fordistribution to the beneficiary, 3 25 the participant is entitled to a refund of the participant's 3 26 account balance. 3 27No right to receive investment income shall exist in cases3 28of voluntary participant cancellation except as provided in3 29section 12D.5.3 30 Sec. 8. Section 12D.9, subsection 1, paragraphs c, d, and 3 31 e, Code 2003, are amended to read as follows: 3 32 c. Pursuant to section 12D.4, subsection1, paragraph "b"3 33 2, a separate account is established for each beneficiary. 3 34 d. Pursuant to section 12D.4, subsection1, paragraph "f"3 35 3, contributions may only be made in the form of cash. 4 1 e. Pursuant to section 12D.4, subsection1, paragraph "g"4 2 4, a participant or beneficiary shall not provide investment 4 3 direction regarding program contributions or earnings held by 4 4 the trust. 4 5 Sec. 9. Section 12D.9, subsection 1, paragraph f, Code 4 6 2003, is amended by striking the paragraph. 4 7 Sec. 10. Section 12D.9, subsection 2, Code 2003, is 4 8 amended to read as follows: 4 9 2. State income tax treatment of the Iowa educational 4 10 savings plan trust shall be as provided in section 422.7, 4 11 subsections 32,and 33, and 34, and section 422.35, subsection4 1214. 4 13 Sec. 11. Section 12D.10, subsection 1, Code 2003, is 4 14 amended to read as follows: 4 15 1. The assets of the trust, including the program fundand4 16the endowment fund, shall at all times be preserved, invested, 4 17 and expended solely and only for the purposes of the trust and 4 18 shall be held in trust for the participants and beneficiaries. 4 19 Sec. 12. Section 422.7, subsection 34, Code 2003, is 4 20 amended by striking the subsection. 4 21 Sec. 13. Section 422.7, Code 2003, is amended by adding 4 22 the following new subsection: 4 23 NEW SUBSECTION. 34A. For purposes of this subsection, 4 24 "out-of-state qualified state tuition program" or "program" 4 25 means a qualified state tuition program established in a state 4 26 other than Iowa which meets the requirements of section 529 of 4 27 the Internal Revenue Code. 4 28 a. Subtract the maximum contribution that may be deducted 4 29 for Iowa income tax purposes as a participant in the Iowa 4 30 educational savings plan trust pursuant to section 12D.3, 4 31 subsection 1, paragraph "a", for contributions made to an out- 4 32 of-state qualified state tuition program. 4 33 b. Add the amount resulting from the cancellation of a 4 34 participation agreement refunded to the taxpayer as a 4 35 participant in the out-of-state qualified state tuition 5 1 program to the extent previously deducted as a contribution to 5 2 the program. 5 3 c. Subtract, to the extent included, income from interest 5 4 and earnings received from the out-of-state qualified state 5 5 tuition program. 5 6 d. Subtract, to the extent not deducted for federal income 5 7 tax purposes, the amount of any gift, grant, or donation made 5 8 to the out-of-state qualified state tuition program for 5 9 deposit in the endowment fund, if any, of that program. 5 10 Sec. 14. Section 422.35, subsection 14, Code 2003, is 5 11 amended by striking the subsection. 5 12 Sec. 15. EFFECTIVE AND APPLICABILITY DATES. This Act, 5 13 being deemed of immediate importance, takes effect upon 5 14 enactment and applies retroactively to January 1, 2003, for 5 15 tax years beginning on or after that date. 5 16 SF 384 5 17 mg/cc/26
Text: SF00383 Text: SF00385 Text: SF00300 - SF00399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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