House File 188 - Introduced



                                       HOUSE FILE       
                                       BY  LUKAN


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

                                      A BILL FOR

  1 An Act allowing the use of moneys in the Iowa educational savings
  2    plan trust to be used for payment of a beneficiary's student
  3    loans, excluding such payments from individual income tax, and
  4    including effective and retroactive applicability date
  5    provisions.
  6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  7 TLSB 1813HH 83
  8 mg/rj/8

PAG LIN



  1  1    Section 1.  Section 12D.4, Code 2009, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  3.  Moneys accrued by participants in the
  1  4 program fund of the trust may be used for repayments of a
  1  5 beneficiary's loans made for qualified education expenses.
  1  6 The payments can be made to the entity that owns the loan, the
  1  7 participant, or the beneficiary.
  1  8    Sec. 2.  Section 12D.9, subsection 2, Code 2009, is amended
  1  9 to read as follows:
  1 10    2.  State income tax treatment of the Iowa educational
  1 11 savings plan trust shall be as provided in section 422.7,
  1 12 subsections 32, and 33, and 34.
  1 13    Sec. 3.  Section 422.7, Code 2009, is amended by adding the
  1 14 following new subsection:
  1 15    NEW SUBSECTION.  34.  Subtract, to the extent included, the
  1 16 amount of withdrawals from the Iowa educational savings plan
  1 17 trust which are used for repayments of a beneficiary's loans
  1 18 made for qualified education expenses.
  1 19    Sec. 4.  EFFECTIVE AND RETROACTIVE APPLICABILITY DATES.
  1 20 This Act, being deemed of immediate importance, takes effect
  1 21 upon enactment and applies retroactively to January 1, 2009,
  1 22 for tax years beginning on or after that date.
  1 23                           EXPLANATION
  1 24    This bill allows participants in the Iowa educational
  1 25 savings plan trust to withdraw funds from a beneficiary's
  1 26 account to repay the beneficiary's loans made for qualified
  1 27 education expenses.  Because these withdrawals are not
  1 28 currently considered qualified education expenses for income
  1 29 tax purposes, these withdrawals would be included in gross
  1 30 income.  The bill provides that to the extent of such
  1 31 inclusion, these withdrawals would not be included in net
  1 32 income for state tax purposes.
  1 33    The bill takes effect upon enactment and applies
  1 34 retroactively to tax years beginning on or after January 1,
  1 35 2009.
  2  1 LSB 1813HH 83
  2  2 mg/rj/8