SENATE FILE 176

BY  FEENSTRA

A BILL FOR

An Act relating to state student assistance for students enrolled in certain postsecondary institutions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 261.2, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  11.  Ensure that state financial aid awarded to a student under a program administered by the commission is not paid to any for-profit postsecondary institution under any program administered by the commission.
   Sec. 2.  Section 261.9, subsection 1, paragraphs b and c, Code 2011, are amended to read as follows:
   b.  Is accredited by the north central association of colleges and secondary schools accrediting agency based on their requirements, is exempt from taxation Qualifies under section 501(c)(3) of the Internal Revenue Code as an organization exempt from taxation, and annually provides a matching aggregate amount of institutional financial aid equal to at least seventy-five percent of the amount received in a fiscal year by the institution’s students for Iowa tuition grant assistance under this chapter. Commencing with the fiscal year beginning July 1, 2006, the matching aggregate amount of institutional financial aid shall increase by the percentage of increase each fiscal year of funds appropriated for Iowa tuition grants under section 261.25, subsection 1, to a maximum match of one hundred percent. The institution shall file annual reports with the commission prior to receipt of tuition grant moneys under this chapter. An institution whose income is not exempt from taxation under section 501(c) of the Internal Revenue Code and whose students were eligible to receive Iowa tuition grant money in the fiscal year beginning July 1, 2003, shall meet the match requirements of this paragraph no later than June 30, 2005.
   c.  Is a specialized college that is accredited by the north central association of colleges and secondary schools accrediting agency, qualifies under section 501(c)(3) of the Internal Revenue Code as an organization exempt from taxation, andwhich offers health professional programs that are affiliated with health care systems located in Iowa.
   Sec. 3.  Section 261.25, subsections 2 and 6, Code 2011, are amended by striking the subsections.
EXPLANATION
   This bill makes changes relating to state student assistance for students enrolled in certain postsecondary institutions.
   The bill directs the college student aid commission to ensure that state financial aid awarded to a student under a program administered by the commission is not paid to any for-profit postsecondary institution.
   The bill amends language defining “accredited private institutions” to provide that such institutions that offer health professional programs affiliated with Iowa-based health care systems, whose students are eligible for Iowa tuition grants, must be institutions that qualify as exempt from taxation under the federal Internal Revenue Code. 
   The bill also strikes standing limited appropriations for students attending certain defined for-profit accredited private institutions and makes conforming changes.