House File 456 - Introduced



                                       HOUSE FILE       
                                       BY  T. OLSON and RAECKER


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

                                      A BILL FOR

  1 An Act concerning tax=sheltered investment contracts and
  2    including an effective date.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  4 TLSB 2154HH 83
  5 ec/rj/5

PAG LIN



  1  1    Section 1.  Section 260C.14, subsection 9, paragraphs a and
  1  2 b, Code 2009, are amended to read as follows:
  1  3    a.  (1)  The board may establish a plan, in accordance with
  1  4 section 403(b) of the Internal Revenue Code, as defined in
  1  5 section 422.3, for employees, which plan shall consist of one
  1  6 or more investment contracts, on a group or individual basis,
  1  7 acquired from a company, or a salesperson for that company,
  1  8 that is authorized to do business in this state.
  1  9    (2)  The plan shall ensure that local tax=sheltered
  1 10 investment contract providers be employed by companies
  1 11 selected to offer investment contracts within the plan to
  1 12 advise employees concerning the plan.  Local tax=sheltered
  1 13 investment contract providers shall consist of individuals,
  1 14 otherwise authorized to offer plans in accordance with section
  1 15 403(b), who provided eligible employees with tax=sheltered
  1 16 investment contracts prior to establishing the plan, are
  1 17 located within the jurisdiction of the applicable community
  1 18 college, and otherwise consent to comply with the requirements
  1 19 of the plan established pursuant to this subsection.
  1 20    b.  The selection of investment contracts to be included
  1 21 within the plan established by the board shall be made either
  1 22 pursuant to a competitive bidding process conducted by the
  1 23 board, in coordination with employee organizations
  1 24 representing employees eligible to participate in the plan,
  1 25 pursuant to a process whereby no more than five companies
  1 26 authorized to issue investment contracts shall be selected by
  1 27 the applicable employer and no more than three companies
  1 28 authorized to issue investment contracts shall be selected by,
  1 29 and in the sole discretion of, the employee organizations
  1 30 representing the applicable employer's employees, or pursuant
  1 31 to an agreement with the department of administrative services
  1 32 to make available investment contracts included in a deferred
  1 33 compensation or similar plan established by the department
  1 34 pursuant to section 8A.438, which plan meets the requirements
  1 35 of this subsection.  The determination of whether how to
  2  1 select investment contracts for the plan pursuant to a
  2  2 competitive bidding process or by agreement with the
  2  3 department of administrative services shall be made by
  2  4 agreement between the board and the employee organizations
  2  5 representing employees eligible to participate in the plan.
  2  6    Sec. 2.  Section 273.3, subsection 14, paragraphs a and b,
  2  7 Code 2009, are amended to read as follows:
  2  8    a.  (1)  The board may establish a plan, in accordance with
  2  9 section 403(b) of the Internal Revenue Code, as defined in
  2 10 section 422.3, for employees, which plan shall consist of one
  2 11 or more investment contracts, on a group or individual basis,
  2 12 acquired from a company, or a salesperson for that company,
  2 13 that is authorized to do business in this state.
  2 14    (2)  The plan shall ensure that local tax=sheltered
  2 15 investment contract providers be employed by companies
  2 16 selected to offer investment contracts within the plan to
  2 17 advise employees concerning the plan.  Local tax=sheltered
  2 18 investment contract providers shall consist of individuals,
  2 19 otherwise authorized to offer plans in accordance with section
  2 20 403(b), who provided eligible employees with tax=sheltered
  2 21 investment contracts prior to establishing the plan, are
  2 22 located within the jurisdiction of the applicable area
  2 23 education agency, and otherwise consent to comply with the
  2 24 requirements of the plan established pursuant to this
  2 25 subsection.
  2 26    b.  The selection of investment contracts to be included
  2 27 within the plan established by the board shall be made either
  2 28 pursuant to a competitive bidding process conducted by the
  2 29 board, in coordination with employee organizations
  2 30 representing employees eligible to participate in the plan,
  2 31 pursuant to a process whereby no more than five companies
  2 32 authorized to issue investment contracts shall be selected by
  2 33 the applicable employer and no more than three companies
  2 34 authorized to issue investment contracts shall be selected by,
  2 35 and in the sole discretion of, the employee organizations
  3  1 representing the applicable employer's employees, or pursuant
  3  2 to an agreement with the department of administrative services
  3  3 to make available investment contracts included in a deferred
  3  4 compensation or similar plan established by the department
  3  5 pursuant to section 8A.438, which plan meets the requirements
  3  6 of this subsection.  The determination of whether how to
  3  7 select investment contracts for the plan pursuant to a
  3  8 competitive bidding process or by agreement with the
  3  9 department of administrative services shall be made by
  3 10 agreement between the board and the employee organizations
  3 11 representing employees eligible to participate in the plan.
  3 12    Sec. 3.  Section 294.16, subsections 1 and 2, Code 2009,
  3 13 are amended to read as follows:
  3 14    1.  a.  The school district may establish a plan, in
  3 15 accordance with section 403(b) of the Internal Revenue Code,
  3 16 as defined in section 422.3, for employees, which plan shall
  3 17 consist of one or more investment contracts, on a group or
  3 18 individual basis, acquired from a company, or a salesperson
  3 19 for that company, that is authorized to do business in this
  3 20 state.
  3 21    b.  The plan shall ensure that local tax=sheltered
  3 22 investment contract providers be employed by companies
  3 23 selected to offer investment contracts within the plan to
  3 24 advise employees concerning the plan.  Local tax=sheltered
  3 25 investment contract providers shall consist of individuals,
  3 26 otherwise authorized to offer plans in accordance with section
  3 27 403(b), who provided eligible employees with tax=sheltered
  3 28 investment contracts prior to establishing the plan, are
  3 29 located within the jurisdiction of the applicable school
  3 30 district, and otherwise consent to comply with the
  3 31 requirements of the plan established pursuant to this section.
  3 32    2.  The selection of investment contracts to be included
  3 33 within the plan established by the school district shall be
  3 34 made either pursuant to a competitive bidding process
  3 35 conducted by the school district, in coordination with
  4  1 employee organizations representing employees eligible to
  4  2 participate in the plan, pursuant to a process whereby no more
  4  3 than five companies authorized to issue investment contracts
  4  4 shall be selected by the applicable employer and no more than
  4  5 three companies authorized to issue investment contracts shall
  4  6 be selected by, and in the sole discretion of, the employee
  4  7 organizations representing the applicable employer's
  4  8 employees, or pursuant to an agreement with the department of
  4  9 administrative services to make available investment contracts
  4 10 included in a deferred compensation or similar plan
  4 11 established by the department pursuant to section 8A.438,
  4 12 which plan meets the requirements of this section.  The
  4 13 determination of whether how to select investment contracts
  4 14 for the plan pursuant to a competitive bidding process or by
  4 15 agreement with the department of administrative services shall
  4 16 be made by agreement between the school district and the
  4 17 employee organizations representing employees eligible to
  4 18 participate in the plan.
  4 19    Sec. 4.  2008 Iowa Acts, chapter 1171, section 67,
  4 20 subsection 1, is amended to read as follows:
  4 21    1.  The department of administrative services shall
  4 22 establish, by January 1, 2010, a plan, as authorized pursuant
  4 23 to section 8A.438 and in accordance with section 403(b) of the
  4 24 Internal Revenue Code, as defined in section 422.3, for
  4 25 employees, which plan shall consist of one or more investment
  4 26 contracts, on a group or individual basis, acquired from a
  4 27 company, or a salesperson for that company, that is authorized
  4 28 to do business in this state, that is eligible to be utilized
  4 29 as a vendor of investment contracts for plans established
  4 30 pursuant to section 260C.14, subsection 9, section 273.3,
  4 31 subsection 14, or section 294.16, and otherwise meets the
  4 32 requirement relative to local tax=sheltered investment
  4 33 contract providers as provided in section 260C.14, subsection
  4 34 9, section 273.3, subsection 14, and section 294.16.
  4 35    Sec. 5.  EFFECTIVE DATE.  This Act, being deemed of
  5  1 immediate importance, takes effect upon enactment.
  5  2                           EXPLANATION
  5  3    This bill modifies the requirements relative to
  5  4 tax=sheltered investment plans offered by community colleges,
  5  5 area education agencies, and school districts.
  5  6    The bill provides that investment contracts in
  5  7 tax=sheltered investment plans can be selected by having the
  5  8 employer select up to five, and the applicable employee
  5  9 organization select up to three, investment contracts for the
  5 10 plan.  Current law provides that selection of investment
  5 11 contracts shall only be through a competitive bidding process
  5 12 or by using the plan established by the department of
  5 13 administrative services.
  5 14    The bill also provides that plans established shall ensure
  5 15 that local tax=sheltered investment contract providers be
  5 16 employed by companies selected to offer investment contracts
  5 17 within the plan to advise employees concerning the plan.  The
  5 18 bill provides that local tax=sheltered investment contract
  5 19 providers shall consist of individuals, otherwise authorized
  5 20 to offer plans in accordance with Code section 403(b), who
  5 21 provided eligible employees with tax=sheltered investment
  5 22 contracts prior to establishing the plan, are located within
  5 23 the jurisdiction of the applicable employer, and otherwise
  5 24 consent to comply with the requirements of the plan.  The bill
  5 25 further provides that the plan established by the department
  5 26 of administrative services for potential adoption by community
  5 27 colleges, area education agencies, and school districts comply
  5 28 with the requirement relative to local tax=sheltered
  5 29 investment contract providers.
  5 30    The bill takes effect upon enactment.
  5 31 LSB 2154HH 83
  5 32 ec/rj/5