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 offorty= 5 24 nineforty=four millionsixseven hundredseventy=threesix 5 25 thousandfivetwo hundredseventy=fiveseventeen 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