House Study Bill 600



                                       HOUSE FILE       
                                       BY  (PROPOSED COMMITTEE ON
                                            EDUCATION BILL BY
                                            CHAIRPERSON TYMESON)


    Passed House,  Date               Passed Senate, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act creating the Iowa proprietary tuition grant program and
  2    providing an appropriation.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  4 TLSB 6426YC 81
  5 kh/je/5

PAG LIN



  1  1    Section 1.  Section 261.2, subsection 2, Code Supplement
  1  2 2005, is amended to read as follows:
  1  3    2.  Administer the tuition grant program and proprietary
  1  4 tuition grant program under this chapter.
  1  5    Sec. 2.  Section 261.9, subsection 1, paragraph b, Code
  1  6 Supplement 2005, is amended to read as follows:
  1  7    b.  Is accredited by the north central association of
  1  8 colleges and secondary schools accrediting agency based on
  1  9 their requirements, is exempt from taxation under section
  1 10 501(c)(3) of the Internal Revenue Code, and annually provides
  1 11 a matching aggregate amount of institutional financial aid
  1 12 equal to at least seventy=five percent of the amount received
  1 13 in a fiscal year by the institution's students for Iowa
  1 14 tuition grant assistance under this chapter.  Commencing with
  1 15 the fiscal year beginning July 1, 2006, the matching aggregate
  1 16 amount of institutional financial aid shall increase by the
  1 17 percentage of increase each fiscal year of funds appropriated
  1 18 for Iowa tuition grants under section 261.25, subsection 1, to
  1 19 a maximum match of one hundred percent.  The institution shall
  1 20 file annual reports with the commission prior to receipt of
  1 21 tuition grant moneys under this chapter.  An institution whose
  1 22 income is not exempt from taxation under section 501(c) of the
  1 23 Internal Revenue Code and whose students were eligible to
  1 24 receive Iowa tuition grant money in the fiscal year beginning
  1 25 July 1, 2003, shall meet the match requirements of this
  1 26 paragraph no later than June 30, 2005.
  1 27    Sec. 3.  Section 261.9, Code Supplement 2005, is amended by
  1 28 adding the following new subsections:
  1 29    NEW SUBSECTION.  5A.  "Proprietary institution" means a
  1 30 for=profit institution of higher learning located in Iowa
  1 31 which is not exempt from taxation under section 501(c)(3) of
  1 32 the Internal Revenue Code, is operated privately and not
  1 33 controlled or administered by any state agency or any
  1 34 subdivision of the state, is accredited by the north central
  1 35 association of colleges and secondary schools accrediting
  2  1 agency based on its requirements, and annually provides a
  2  2 matching aggregate amount of institutional financial aid equal
  2  3 to at least seventy=five percent of the amount received in a
  2  4 fiscal year by the institution's students for proprietary
  2  5 tuition grant assistance under this chapter.  Commencing with
  2  6 the fiscal year beginning July 1, 2006, the matching aggregate
  2  7 amount of institutional financial aid shall increase by the
  2  8 percentage of increase each fiscal year of funds appropriated
  2  9 for proprietary tuition grants under section 261.25,
  2 10 subsection 1A, to a maximum match of one hundred percent.  The
  2 11 institution shall file annual reports with the commission
  2 12 prior to receipt of tuition grant moneys under this chapter.
  2 13 The institutions defined in this subsection shall meet the
  2 14 criteria in subsection 1, paragraphs "d" through "g".
  2 15    NEW SUBSECTION.  5B.  "Proprietary tuition grant" means an
  2 16 award by the state of Iowa to a qualified student who attends
  2 17 a proprietary institution as provided in section 261.18.
  2 18    Sec. 4.  Section 261.9, subsection 7, Code Supplement 2005,
  2 19 is amended to read as follows:
  2 20    7.  "Tuition grant" means an award by the state of Iowa to
  2 21 a qualified student under this division, but does not include
  2 22 a proprietary tuition grant awarded pursuant to section
  2 23 261.18.
  2 24    Sec. 5.  NEW SECTION.  261.18  PROPRIETARY TUITION GRANTS.
  2 25    1.  A proprietary tuition grant program is established to
  2 26 be administered by the commission.
  2 27    2.  A proprietary tuition grant may be awarded to a
  2 28 resident of Iowa who is admitted and in attendance as a full=
  2 29 time or part=time resident student at an accredited
  2 30 proprietary institution, establishes financial need, and, in
  2 31 accordance with the rules and regulations of the commission,
  2 32 meets the following conditions:
  2 33    a.  Completes and files an application for a proprietary
  2 34 tuition grant.
  2 35    b.  Provides for the submission of the parents'
  3  1 confidential statement for processing, the processed
  3  2 information to be returned both to the commission and to the
  3  3 proprietary institution in which the applicant is enrolling.
  3  4    c.  Reports promptly to the commission any information
  3  5 requested.
  3  6    d.  Files a new application and parents' confidential
  3  7 statement annually, on the basis of which the applicant's
  3  8 eligibility for a renewed proprietary tuition grant will be
  3  9 evaluated and determined.
  3 10    3.  A qualified full=time resident student may receive
  3 11 state financial aid in the form of proprietary tuition grants
  3 12 or Iowa tuition grants for not more than eight semesters of
  3 13 undergraduate study or the trimester or quarter equivalent.  A
  3 14 qualified part=time resident student may receive proprietary
  3 15 tuition grants or Iowa tuition grants for not more than
  3 16 sixteen semesters of undergraduate study or the trimester or
  3 17 quarter equivalent.
  3 18    4.  The amount of a proprietary tuition grant to a
  3 19 qualified full=time student for the fall and spring semesters,
  3 20 or the trimester or quarter equivalent, shall be the amount of
  3 21 the student's financial need for that period.  However, a
  3 22 proprietary tuition grant shall not exceed the lesser of the
  3 23 following:
  3 24    a.  The total tuition and mandatory fees for that student
  3 25 for two semesters or the trimester or quarter equivalent, less
  3 26 the base amount determined annually by the commission, which
  3 27 base amount shall be within ten dollars of the average tuition
  3 28 for two semesters or the trimester or quarter equivalent of
  3 29 undergraduate study at the state universities under the
  3 30 control of the board of regents, but in any event the base
  3 31 amount shall not be less than four hundred dollars.
  3 32    b.  For the fiscal year beginning July 1, 2006, and for
  3 33 each succeeding fiscal year, four thousand dollars.
  3 34    5.  The amount of a proprietary tuition grant to a
  3 35 qualified full=time student for the summer semester or
  4  1 trimester or quarter equivalent shall be one=half the amount
  4  2 of the proprietary tuition grant the student receives under
  4  3 subsection 4.
  4  4    6.  The amount of a proprietary tuition grant to a
  4  5 qualified part=time student enrolled in a course of study
  4  6 including at least three semester hours but fewer than twelve
  4  7 semester hours for the fall, spring, and summer semesters, or
  4  8 the trimester or quarter equivalent, shall be equal to the
  4  9 amount of a proprietary tuition grant that would be paid to a
  4 10 full=time student times a number which represents the number
  4 11 of hours in which the part=time student is actually enrolled
  4 12 divided by twelve semester hours, or the trimester or quarter
  4 13 equivalent.
  4 14    7.  A proprietary tuition grant shall be awarded on an
  4 15 annual basis.  Payments under the grant shall be allocated
  4 16 equally among the semesters, trimesters, or quarters and shall
  4 17 be paid at the beginning of each semester, trimester, or
  4 18 quarter upon certification by the accredited proprietary
  4 19 institution that the student is admitted and in attendance.
  4 20 If the student discontinues attendance before the end of any
  4 21 semester, trimester, or quarter after receiving payment under
  4 22 the grant, the entire amount of any refund due that student,
  4 23 up to the amount of any payments made under the annual grant,
  4 24 shall be paid by the proprietary institution to the state.
  4 25    8.  If a student receives financial aid under any other
  4 26 program, the full amount of such financial aid shall be
  4 27 considered part of the student's financial resources available
  4 28 in determining the amount of the student's financial need for
  4 29 that period.  In no case may the state's total financial
  4 30 contribution to the student's education, including financial
  4 31 aid under any other state program, exceed the tuition and
  4 32 mandatory fees at the proprietary institution the student
  4 33 attends.
  4 34    9.  The commission shall administer this program and shall
  4 35 do the following:
  5  1    a.  Provide application forms and parents' confidential
  5  2 statement forms.
  5  3    b.  Adopt rules and regulations for determining financial
  5  4 need, defining tuition and mandatory fees, defining residence
  5  5 for the purposes of this section, processing and approving
  5  6 applications for proprietary tuition grants, and determining
  5  7 priority of grants.  The commission may provide for proration
  5  8 of funds if the available funds are insufficient to pay all
  5  9 approved grants.  Such proration shall take primary account of
  5 10 the financial need of the applicant.  In determining who is a
  5 11 resident of Iowa, the commission's rules shall be at least as
  5 12 restrictive as those of the board of regents.
  5 13    c.  Approve and award proprietary tuition grants.
  5 14    d.  Make an annual report to the governor and general
  5 15 assembly, and evaluate the proprietary tuition grant program
  5 16 for the period.  The commission may require a proprietary
  5 17 institution to promptly furnish any information which the
  5 18 commission may request in connection with the proprietary
  5 19 tuition grant program.
  5 20    Sec. 6.  Section 261.25, subsection 1, Code Supplement
  5 21 2005, is amended to read as follows:
  5 22    1.  There is appropriated from the general fund of the
  5 23 state to the commission for each fiscal year the sum of forty=
  5 24 nine forty=four million six seven hundred seventy=three six
  5 25 thousand five two hundred seventy=five seventeen dollars for
  5 26 tuition grants.  From the funds appropriated in this
  5 27 subsection, an amount equal to ten percent of the funds
  5 28 appropriated in this subsection shall be reserved for
  5 29 distribution to students attending private institutions whose
  5 30 income is not exempt from taxation under section 501(c) of the
  5 31 Internal Revenue Code and whose students were eligible to
  5 32 receive Iowa tuition grant moneys in the fiscal year beginning
  5 33 July 1, 2003.  A for=profit institution which, effective March
  5 34 9, 2005, purchased an accredited private institution that was
  5 35 exempt from taxation under section 501(c) of the Internal
  6  1 Revenue Code, shall be an eligible institution under the Iowa
  6  2 tuition grant program.  In the case of a qualified student who
  6  3 was enrolled in such accredited private institution that was
  6  4 purchased by the for=profit institution effective March 9,
  6  5 2005, and who continues to be enrolled in the eligible
  6  6 institution in succeeding years, the amount the student
  6  7 qualifies for under this subsection shall be not less than the
  6  8 amount the student qualified for in the fiscal year beginning
  6  9 July 1, 2004.
  6 10    Sec. 7.  Section 261.25, Code Supplement 2005, is amended
  6 11 by adding the following new subsection:
  6 12    NEW SUBSECTION.  1A.  There is appropriated from the
  6 13 general fund of the state to the commission for each fiscal
  6 14 year the sum of four million nine hundred sixty=seven thousand
  6 15 three hundred fifty=eight dollars for proprietary tuition
  6 16 grants as provided in section 261.18.
  6 17                           EXPLANATION
  6 18    This bill creates the Iowa proprietary tuition grant
  6 19 program for students who are enrolled in and attending for=
  6 20 profit, proprietary postsecondary institutions.  The program
  6 21 is modeled after the Iowa tuition grant program, and the bill
  6 22 provides a standing annual appropriation from the general fund
  6 23 of the state of nearly $5 million to fund the program, while
  6 24 reducing the amount appropriated to the tuition grant program
  6 25 by the same amount.
  6 26    DEFINITIONS.  The bill defines "proprietary tuition grant"
  6 27 and changes the definition of "tuition grant" to provide that
  6 28 the term does not include a proprietary tuition grant.  The
  6 29 bill defines "proprietary institution" as a for=profit
  6 30 institution located in Iowa which is not tax=exempt, operated
  6 31 privately, is accredited by the north central association of
  6 32 colleges and secondary schools accrediting agency, and
  6 33 annually provides a matching aggregate amount of institutional
  6 34 financial aid in the same percentage amounts required of
  6 35 accredited private institutions whose students are eligible
  7  1 for the Iowa tuition grant.
  7  2    REQUIREMENTS.  The institutions must file annual reports
  7  3 with the commission and, like accredited private institutions,
  7  4 promote equal opportunity and affirmative action efforts in
  7  5 the recruitment, appointment, assignment, and advancement of
  7  6 personnel at the institution; adopt a policy that prohibits
  7  7 unlawful possession, use, or distribution of controlled
  7  8 substances by students and employees on property owned or
  7  9 leased by the institution or in conjunction with activities
  7 10 sponsored by the institution; develop and implement a written
  7 11 policy addressing sexual abuse; and adopt a policy to offer
  7 12 certain specified options to students who are members of the
  7 13 Iowa national guard or reserve forces of the United States and
  7 14 who are ordered to state military service or federal service
  7 15 or duty.
  7 16    STATE FINANCIAL AID LIMITATION.  The bill provides that a
  7 17 qualified full=time resident student may receive state
  7 18 financial aid in the form of proprietary tuition grants or
  7 19 Iowa tuition grants for not more than eight semesters of
  7 20 undergraduate study or the trimester or quarter equivalent.
  7 21 The bill also provides similar language limiting the amount of
  7 22 state financial aid qualified part=time resident students may
  7 23 receive to not more than 16 semesters of undergraduate study
  7 24 or the trimester or quarter equivalent.
  7 25 LSB 6426YC 81
  7 26 kh:rj/je/5