House Study Bill 659 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON ECONOMIC GROWTH/REBUILD IOWA BILL BY CHAIRPERSON GRASSLEY) A BILL FOR An Act establishing a lifelong learning accounts program in 1 the department of workforce development, creating an income 2 tax credit, and including effective date and retroactive 3 applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5353YC (2) 84 je/sc

H.F. _____ Section 1. NEW SECTION . 84A.12 Lifelong learning accounts 1 program —— tax credit. 2 1. For purposes of this section, unless the context 3 otherwise requires: 4 a. “Administrator” means a nonprofit organization or other 5 business contracted with by the department to administer and 6 implement the lifelong learning accounts program. 7 b. “Approved institution” means an institution of higher 8 learning under the control of the state board of regents, a 9 community college established under chapter 260C, an accredited 10 private institution as defined in section 261.9, or other 11 entity providing career training and education in targeted 12 industries, which has been approved by the department for 13 participation in the program. 14 c. “Department” means the department of workforce 15 development. 16 d. “Lifelong learning account” means an account held on 17 behalf of an individual by a trustee, custodian, or fiduciary 18 approved by the department to be used for the deposit of 19 funds to pay for the individual’s qualified expenses relating 20 to career training and education in targeted industries at 21 approved institutions. 22 e. “Targeted industries” means industries designated by 23 the department which the department, in consultation with the 24 workforce development board, the regional advisory boards, and 25 the economic development authority, finds most necessary to 26 promote growth in established regional economies in this state. 27 2. The department shall establish a lifelong learning 28 accounts program to encourage employed individuals to seek 29 further career training and education in targeted industries. 30 The program shall facilitate the establishment of lifelong 31 learning accounts in accordance with this section. The 32 department shall contract with an administrator to administer 33 and implement the program. The administrator shall be 34 qualified to carry out the requirements of this section, as 35 -1- LSB 5353YC (2) 84 je/sc 1/ 4

H.F. _____ determined by the department. 1 3. The administrator, in consultation with the department, 2 shall provide education and career advising and other support 3 services available to individuals participating in the 4 program in accordance with the purpose of encouraging employed 5 individuals to seek further career training and education in 6 targeted industries. 7 4. a. An individual may establish a lifelong learning 8 account upon application to the department, approval by 9 the administrator, and entering into an agreement with the 10 department to comply with the requirements of this section. 11 b. An individual is allowed an income tax credit for the 12 individual’s contributions to a lifelong learning account. 13 The amount of the credit shall not exceed the lesser of the 14 individual’s total contributions to the lifelong learning 15 account during the tax year or five hundred dollars. Any 16 credit in excess of the individual’s tax liability is 17 refundable. 18 5. The department shall by December 31 each year conduct 19 a regional skills gap analysis for the purpose of determining 20 targeted industries for the following year. 21 6. The department shall seek out additional local, state, 22 federal, and private resources to incorporate into the lifelong 23 learning accounts program to further the purpose of encouraging 24 employed individuals to seek further career training and 25 education in targeted industries. 26 7. The department shall submit a report to the governor and 27 the general assembly, annually by January 15, regarding the 28 lifelong learning accounts program, including recommendations 29 for improving the program to further the purpose of encouraging 30 employed individuals to seek further career training and 31 education in targeted industries. 32 8. The department, in consultation with the administrator 33 after the department has contracted with an administrator, 34 shall adopt rules necessary to carry out this section. 35 -2- LSB 5353YC (2) 84 je/sc 2/ 4

H.F. _____ Sec. 2. NEW SECTION . 422.12A Lifelong learning account tax 1 credit. 2 The taxes imposed by this division, less the credits allowed 3 under section 422.12, shall be reduced by a lifelong learning 4 account tax credit allowed under section 84A.12. 5 Sec. 3. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 6 immediate importance, takes effect upon enactment. 7 Sec. 4. RETROACTIVE APPLICABILITY. The following provision 8 or provisions of this Act apply retroactively to January 1, 9 2012, for tax years beginning on or after that date: 10 1. The section of this Act enacting section 422.12A. 11 EXPLANATION 12 This bill directs the department of workforce development 13 to establish a lifelong learning accounts program to encourage 14 employed individuals to seek further career training and 15 education in targeted industries. The program shall facilitate 16 the establishment of lifelong learning accounts. A “lifelong 17 learning account” is defined as an account held on behalf of an 18 individual by a trustee, custodian, or fiduciary approved by 19 the department to be used for the deposit of funds to pay for 20 the individual’s qualified expenses relating to career training 21 and education in targeted industries at approved institutions. 22 “Targeted industries” are defined as industries designated by 23 the department which the department, in consultation with the 24 workforce development board, the regional advisory boards, and 25 the economic development authority, finds most necessary to 26 promote growth in established regional economies in the state. 27 An “approved institution” is defined as a regents institution, 28 a community college, an accredited private institution, or 29 another entity providing career training and education in 30 targeted industries, which has been approved by the department 31 for participation in the program. 32 The bill directs the department to contract with a qualified 33 administrator to administer and implement the lifelong learning 34 accounts program. The bill directs the administrator, in 35 -3- LSB 5353YC (2) 84 je/sc 3/ 4

H.F. _____ consultation with the department of workforce development, 1 to provide education and career advising and other support 2 services available to individuals participating in the program. 3 An “administrator” is defined as a nonprofit organization or 4 other business contracted with by the department to administer 5 and implement the lifelong learning accounts program. 6 The bill provides that an individual may establish a 7 lifelong learning account upon application to the department 8 of workforce development, approval by the administrator, and 9 entering into an agreement with the department to comply with 10 the requirements of the bill. An individual is allowed a 11 refundable income tax credit in an amount up to $500 per tax 12 year for the individual’s contributions to a lifelong learning 13 account. 14 The bill directs the department of workforce development 15 to conduct a regional skills gap analysis by December 31 each 16 year for the purpose of determining targeted industries for 17 the following year. The bill directs the department to seek 18 out additional local, state, federal, and private resources 19 to incorporate into the lifelong learning accounts program to 20 further the purpose of encouraging employed individuals to seek 21 further career training and education in targeted industries. 22 The bill directs the department to submit a report to the 23 governor and the general assembly, annually by January 15, 24 regarding the program, including recommendations for improving 25 the program to further the purpose of encouraging employed 26 individuals to seek further career training and education in 27 targeted industries. The bill directs the department, in 28 consultation with the administrator after the department has 29 contracted with an administrator, to adopt rules necessary to 30 carry out the bill. 31 The bill takes effect upon enactment and the income tax 32 credit applies retroactively to January 1, 2012, for tax years 33 beginning on or after that date. 34 -4- LSB 5353YC (2) 84 je/sc 4/ 4