House
File
2090
-
Introduced
HOUSE
FILE
2090
BY
HAGENOW
,
HIGHFILL
,
and
COWNIE
A
BILL
FOR
An
Act
providing
education
savings
grants
for
pupils
attending
1
a
nonpublic
school
or
receiving
competent
private
2
instruction,
establishing
an
education
savings
grant
fund,
3
making
appropriations,
providing
penalties,
and
including
4
applicability
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
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Section
1.
Section
12D.3,
subsection
1,
paragraph
a,
Code
1
2014,
is
amended
to
read
as
follows:
2
a.
Each
participation
agreement
may
require
a
participant
3
to
agree
to
invest
a
specific
amount
of
money
in
the
trust
4
for
a
specific
period
of
time
for
the
benefit
of
a
specific
5
beneficiary.
A
participant
shall
not
be
required
to
make
an
6
annual
contribution
on
behalf
of
a
beneficiary.
The
maximum
7
contribution
that
may
be
deducted
for
Iowa
income
tax
purposes
8
shall
not
exceed
two
thousand
dollars
per
beneficiary
per
year
9
adjusted
annually
to
reflect
increases
in
the
consumer
price
10
index.
Contributions
to
an
account
that
are
moneys
from
an
11
education
savings
grant
under
section
257.11B
shall
not
be
12
considered
a
contribution
that
may
be
deducted
for
Iowa
income
13
tax
purposes.
The
treasurer
of
state
shall
set
an
account
14
balance
limit
to
maintain
compliance
with
section
529
of
the
15
Internal
Revenue
Code.
A
contribution
shall
not
be
permitted
16
to
the
extent
it
causes
the
aggregate
balance
of
all
accounts
17
established
for
the
same
beneficiary
to
exceed
the
applicable
18
account
balance
limit.
19
Sec.
2.
Section
256.7,
Code
2014,
is
amended
by
adding
the
20
following
new
subsection:
21
NEW
SUBSECTION
.
33.
Adopt
rules
relating
to
applications
22
for
an
education
savings
grant
pursuant
to
section
257.11B,
23
including
application
processing
timelines
and
information
24
required
to
be
submitted
by
a
parent
or
guardian.
25
Sec.
3.
NEW
SECTION
.
257.11B
Education
savings
grant
26
program.
27
1.
Pupils
eligible
to
enroll
in
grades
kindergarten
through
28
twelve
and
attending
a
nonpublic
school
or
receiving
competent
29
private
instruction
under
chapter
299A
shall
be
eligible
to
30
receive
an
education
savings
grant
in
the
manner
provided
in
31
this
section
for
school
years
beginning
on
or
after
July
1,
32
2015.
Education
savings
grants
shall
be
made
available
to
33
parents
and
guardians
in
the
manner
authorized
under
subsection
34
4,
paragraph
“c”
,
for
the
payment
of
qualified
educational
35
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expenses
as
provided
in
this
section.
1
2.
a.
(1)
By
January
31
preceding
the
school
year
for
2
which
the
education
savings
grant
is
requested,
the
parent
3
or
guardian
of
the
pupil
requesting
to
receive
an
education
4
savings
grant
shall
submit
an
application
to
the
department
of
5
education,
on
application
forms
developed
by
the
department,
6
indicating
that
the
parent
or
guardian
intends
to
enroll
the
7
pupil
in
a
nonpublic
school
or
provide
competent
private
8
instruction
for
the
pupil
under
chapter
299A.
9
(2)
In
addition
to
such
information
deemed
appropriate
by
10
the
department
of
education,
the
application
shall
require
11
certification
from
the
nonpublic
school
of
the
pupil’s
12
enrollment
for
the
following
school
year
or
a
statement
13
indicating
the
parent
or
guardian’s
intent
to
provide
or
14
arrange
for
competent
private
instruction
for
the
pupil
for
the
15
following
school
year.
16
b.
By
March
1
preceding
the
school
year
for
which
the
17
education
savings
grant
is
requested,
the
department
of
18
education
shall
notify
the
department
of
management
of
the
19
number
of
pupils
in
each
school
district
designated
for
the
20
following
school
year
to
receive
an
education
savings
grant
21
and
the
amount
of
the
education
savings
grant
for
each
pupil.
22
The
department
of
education
shall
also
notify
the
parent
23
or
guardian
of
such
pupils
who
are
approved
to
receive
an
24
education
savings
grant.
25
c.
Education
savings
grants
shall
only
be
approved
for
one
26
school
year
and
applications
must
be
submitted
under
paragraph
27
“a”
for
education
savings
grants
in
subsequent
school
years.
28
3.
a.
The
department
of
management
shall
assign
each
pupil
29
an
education
savings
grant
in
an
amount
equal
to
the
statewide
30
average
state
foundation
aid
per
pupil
in
the
same
school
year.
31
b.
The
department
of
management
shall
on
July
1
following
32
the
determination
of
the
amount
of
the
education
savings
grant
33
for
each
approved
pupil
transfer
such
amounts
to
the
pupil’s
34
account
in
the
education
savings
grant
fund
established
under
35
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subsection
4.
Such
amount
shall
be
available
to
the
pupil’s
1
parent
or
guardian
in
the
manner
authorized
under
subsection
2
4,
paragraph
“c”
,
for
the
payment
of
qualified
educational
3
expenses
incurred
by
such
persons
for
the
pupil
during
that
4
school
year.
5
4.
An
education
savings
grant
fund
is
created
in
the
state
6
treasury
under
the
control
of
the
department
of
management
7
consisting
of
moneys
appropriated
to
the
department
for
the
8
purpose
of
providing
education
savings
grants
under
this
9
section.
For
the
fiscal
year
commencing
July
1,
2015,
and
10
each
succeeding
fiscal
year,
there
is
appropriated
from
the
11
general
fund
of
the
state
to
the
department
of
management
to
be
12
credited
to
the
fund
the
amount
necessary
to
pay
all
education
13
savings
grants
approved
for
that
fiscal
year.
The
director
of
14
the
department
of
management
has
all
powers
necessary
to
carry
15
out
and
effectuate
the
purposes,
objectives,
and
provisions
of
16
this
section
pertaining
to
the
fund,
including
the
power
to
do
17
all
of
the
following:
18
a.
Make
and
enter
into
contracts
necessary
for
the
19
administration
of
the
fund.
20
b.
Procure
insurance
against
any
loss
in
connection
with
the
21
assets
of
the
fund
or
require
a
surety
bond.
22
c.
Contract
with
a
private
financial
management
firm
to
23
manage
the
fund,
in
collaboration
with
the
treasurer
of
state,
24
including
providing
for
the
disbursement
of
education
savings
25
grants
in
the
form
of
an
electronic
debit
card
or
checks
that
26
are
payable
directly
from
the
pupil’s
account
within
the
fund.
27
d.
Conduct
audits
or
other
review
necessary
to
properly
28
administer
the
program.
29
e.
Adopt
rules
pursuant
to
chapter
17A
for
the
30
administration
of
the
fund
and
accounts
within
the
fund.
31
5.
a.
For
each
pupil
approved
for
an
education
savings
32
grant,
the
department
shall
establish
an
account
for
that
pupil
33
in
the
education
savings
grant
fund.
The
amount
of
the
pupil’s
34
education
savings
grant
determined
under
subsection
3
shall
be
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deposited
into
the
pupil’s
account
on
July
1
and
such
amount
1
shall
be
immediately
available
for
the
payment
of
qualified
2
educational
expenses
incurred
by
the
parent
or
guardian
for
3
the
pupil
during
that
fiscal
year
using
the
payment
method
4
authorized
under
subsection
4,
paragraph
“c”
.
5
b.
A
nonpublic
school
or
other
entity
that
accepts
payment
6
from
a
parent
or
guardian
using
funds
from
a
pupil’s
account
in
7
the
education
savings
grant
fund
shall
not
refund,
rebate,
or
8
share
any
portion
of
such
payment
with
the
parent,
guardian,
or
9
pupil.
10
c.
Moneys
remaining
in
a
pupil’s
account
upon
conclusion
11
of
the
fiscal
year
shall
remain
in
the
pupil’s
account
within
12
the
education
savings
grant
fund
for
the
payment
of
qualified
13
educational
expenses
in
future
fiscal
years
or
for
the
payment
14
of
higher
education
costs
under
subsection
8.
15
6.
For
purposes
of
this
section,
“qualified
educational
16
expenses”
includes
tuition
and
fees
at
a
nonpublic
school,
17
textbooks,
fees
or
payments
for
educational
therapies
including
18
tutoring
or
cognitive
skills
training,
curriculum
fees
and
19
materials
for
a
course
of
study
for
a
specific
subject
matter
20
or
grade
level,
tuition
or
fees
for
nonpublic
online
education
21
programs,
education
materials
and
services
for
pupils
with
22
disabilities
including
the
cost
of
paraprofessionals
and
23
assistants
who
are
trained
in
accordance
with
state
law,
24
standardized
test
fees,
fees
required
by
the
department
25
not
to
exceed
for
each
grant
recipient
five
percent
of
the
26
total
grant
amount
in
any
fiscal
year,
contributions
to
an
27
Iowa
education
savings
plan
trust
account
under
chapter
12D,
28
contributions
to
a
Coverdell
education
savings
account
under
26
29
U.S.C.
§530,
higher
education
expenses,
as
defined
in
section
30
12D.1,
excluding
room
and
board
expenses,
and
other
expenses
31
incurred
by
the
parent
or
guardian
that
are
directly
related
32
to
the
education
of
the
pupil
at
a
nonpublic
school,
including
33
a
nonpublic
school
accredited
by
an
independent
accrediting
34
agency
approved
by
the
department
of
education,
or
directly
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related
to
providing
competent
private
instruction
for
the
1
pupil
under
chapter
299A.
The
cost
of
one
computer
or
other
2
portable
computing
device
shall
be
allowed
as
a
qualified
3
educational
expense
for
a
pupil
if
such
a
purchase
has
not
been
4
made
using
funds
from
that
pupil’s
account
in
either
of
the
5
two
immediately
preceding
fiscal
years.
“Qualified
educational
6
expenses”
do
not
include
transportation
costs
for
the
pupil,
the
7
cost
of
food
or
refreshments
consumed
by
the
pupil,
the
cost
of
8
clothing
for
the
pupil,
or
the
cost
of
disposable
materials,
9
including
but
not
limited
to
paper,
notebooks,
pencils,
pens,
10
and
art
supplies.
11
7.
A
person
who
makes
a
false
claim
for
the
purpose
of
12
obtaining
an
education
savings
grant
provided
for
in
this
13
section
or
who
knowingly
receives
the
grant
or
makes
a
payment
14
from
an
account
within
the
education
savings
grant
fund
15
without
being
legally
entitled
to
it
is
guilty
of
a
fraudulent
16
practice.
The
false
claim
for
an
education
savings
grant
or
a
17
payment
from
an
account
shall
be
disallowed
and
if
amounts
from
18
the
grant
have
been
disbursed
from
the
applicable
account
in
19
the
education
savings
grant
fund,
the
department
of
management
20
shall
initiate
legal
proceedings
to
recover
such
amounts.
A
21
parent
or
guardian,
or
a
pupil
for
purposes
of
subsection
8,
22
who
violates
this
subsection
is
prohibited
from
participating
23
in
the
education
savings
grant
program
in
the
future.
24
8.
For
each
pupil
with
a
positive
balance
in
the
pupil’s
25
account
in
the
education
savings
grant
fund
upon
graduation
26
from
high
school
or
completion
of
an
equivalent
level
of
27
competent
private
instruction
under
chapter
299A,
the
28
department
of
management
shall
maintain
the
account
in
the
29
fund
until
the
pupil
is
twenty-five
years
of
age.
Following
30
graduation
from
high
school
until
the
pupil
is
twenty-five
31
years
of
age,
moneys
in
the
pupil’s
account
may
be
used
for
32
higher
education
costs,
as
defined
in
section
12D.1,
subsection
33
2,
incurred
by
the
pupil
while
attending
an
institution
of
34
higher
education
under
the
control
of
the
state
board
of
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regents,
a
community
college
located
in
this
state,
or
a
1
private
college
or
university
located
in
this
state.
Payments
2
from
a
pupil’s
account
for
higher
education
costs
shall
be
3
made
in
the
same
manner
as
payments
for
qualified
educational
4
expenses
under
subsection
5.
Moneys
in
a
pupil’s
account
when
5
the
pupil
turns
twenty-five
years
of
age
shall
be
transferred
6
by
the
department
for
deposit
in
the
general
fund
of
the
state.
7
9.
This
section
shall
not
be
construed
to
authorize
the
8
state
or
any
political
subdivision
of
the
state
to
exercise
9
authority
over
any
nonpublic
school
or
pupil
receiving
10
competent
private
instruction
under
chapter
299A
or
construed
11
to
require
a
nonpublic
school
to
modify
its
admissions
or
12
educational
program
in
order
to
receive
payment
from
a
parent
13
or
guardian
using
funds
from
a
pupil’s
account
in
the
education
14
savings
grant
fund.
A
nonpublic
school
or
entity
providing
15
competent
private
instruction
under
chapter
299A,
that
accepts
16
payment
from
a
parent
or
guardian
using
funds
from
a
pupil’s
17
account
in
the
education
savings
grant
fund
is
not
an
agent
of
18
this
state
or
other
political
subdivision
of
this
state.
Rules
19
adopted
by
the
department
to
implement
this
section
that
impose
20
an
undue
burden
on
a
nonpublic
school
or
entity
providing
21
competent
private
instruction
under
chapter
299A
are
invalid.
22
Sec.
4.
Section
422.7,
Code
2014,
is
amended
by
adding
the
23
following
new
subsection:
24
NEW
SUBSECTION
.
51.
Subtract,
to
the
extent
included,
the
25
amount
of
any
education
savings
grant
under
section
257.11B
26
received
during
the
tax
year
by
pupils
for
whom
the
taxpayer
is
27
the
parent
or
guardian
authorized
to
spend
such
grant
amounts
28
for
qualified
educational
expenses.
29
Sec.
5.
APPLICABILITY.
This
Act
applies
to
school
budget
30
years
and
fiscal
years
beginning
on
or
after
July
1,
2015.
31
Sec.
6.
APPLICABILITY.
The
following
provisions
of
this
Act
32
apply
to
tax
years
beginning
on
or
after
January
1,
2015:
33
1.
The
section
of
this
Act
amending
section
12D.3.
34
2.
The
section
of
this
Act
amending
section
422.7.
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2090
EXPLANATION
1
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
2
the
explanation’s
substance
by
the
members
of
the
general
assembly.
3
This
bill
provides
education
savings
grants
for
pupils
4
attending
a
nonpublic
school
or
receiving
competent
private
5
instruction
and
establishes
an
education
savings
grant
fund.
6
Under
the
bill,
pupils
eligible
to
enroll
in
grades
7
kindergarten
through
12
and
attending
a
nonpublic
school
or
8
receiving
competent
private
instruction
under
Code
chapter
9
299A
are
eligible
to
receive
an
education
savings
grant
for
10
school
years
beginning
on
or
after
July
1,
2015.
By
January
31
11
preceding
the
school
year
for
which
the
education
savings
grant
12
is
requested,
the
parent
or
guardian
of
the
pupil
requesting
to
13
receive
an
education
savings
grant
must
submit
an
application
14
to
the
department
of
education
indicating
that
the
parent
or
15
guardian
intends
to
enroll
the
pupil
in
a
nonpublic
school
or
16
provide
competent
private
instruction
for
the
pupil.
17
The
bill
requires
that
by
March
1
preceding
the
school
18
year
for
which
the
education
savings
grant
is
requested,
19
the
department
of
education
must
notify
the
department
of
20
management
of
the
number
of
pupils
in
each
school
district
21
designated
for
the
following
school
year
to
receive
an
22
education
savings
grant
and
the
amount
of
the
education
savings
23
grant
for
each
pupil.
Education
savings
grants
may
only
be
24
approved
for
one
school
year
and
applications
must
be
submitted
25
for
education
savings
grants
in
subsequent
school
years.
26
The
amount
of
each
education
savings
grant
is
equal
to
the
27
statewide
average
state
foundation
aid
per
pupil
in
the
same
28
school
year.
29
The
bill
creates
an
education
savings
grant
fund
in
the
state
30
treasury
under
the
control
of
the
department
of
management
31
consisting
of
moneys
appropriated
to
the
department
for
the
32
purpose
of
providing
education
savings
grants.
For
the
fiscal
33
year
commencing
July
1,
2015,
and
each
succeeding
fiscal
year,
34
there
is
appropriated
from
the
general
fund
of
the
state
to
the
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department
of
management
for
deposit
in
the
fund
the
amount
1
necessary
to
pay
all
education
savings
grants
approved
for
2
that
fiscal
year.
For
each
pupil
approved
for
an
education
3
savings
grant,
the
department
of
management
must
establish
an
4
account
for
that
pupil
in
the
education
savings
grant
fund.
5
The
amount
of
the
pupil’s
education
savings
grant
is
deposited
6
into
the
pupil’s
account
on
July
1
and
such
amount
is
available
7
for
use
by
parents
and
guardians
for
the
payment
of
qualified
8
educational
expenses,
as
defined
in
the
bill,
incurred
by
the
9
parent
or
guardian
for
the
pupil
during
that
fiscal
year.
10
The
bill
authorizes
the
department
of
education
to
11
contract
with
a
private
financial
management
firm
to
manage
12
the
education
savings
grant
fund,
in
collaboration
with
the
13
treasurer
of
state,
including
providing
for
the
disbursement
14
of
education
savings
grants
in
the
form
of
an
electronic
debit
15
card
or
checks
that
are
payable
directly
from
the
pupil’s
16
account
within
the
fund.
17
The
bill
provides
that
moneys
remaining
in
a
pupil’s
account
18
upon
the
conclusion
of
the
fiscal
year
shall
remain
in
the
19
pupil’s
account
within
the
education
savings
grant
fund
for
20
the
payment
of
qualified
educational
expenses
in
future
fiscal
21
years
or
for
higher
education
costs
as
authorized
in
the
bill.
22
Under
the
bill,
for
each
pupil
with
a
positive
balance
in
23
the
pupil’s
account
in
the
education
savings
grant
fund
upon
24
graduation
from
high
school
or
completion
of
an
equivalent
25
level
of
competent
private
instruction
under
Code
chapter
26
299A,
the
department
of
management
is
required
to
maintain
the
27
account
in
the
fund
until
the
pupil
is
25
years
old.
Until
28
the
pupil
is
25
years
old,
moneys
in
the
pupil’s
account
may
29
be
used
by
the
pupil
for
higher
education
costs,
as
defined
30
in
Code
section
12D.1.
Moneys
in
a
pupil’s
account
when
the
31
pupil
turns
25
years
old
are
transferred
by
the
department
of
32
management
for
deposit
in
the
general
fund
of
the
state.
33
The
bill
provides
that
a
person
who
makes
a
false
claim
for
34
the
purpose
of
obtaining
an
education
savings
grant
or
who
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knowingly
receives
the
grant
or
makes
a
payment
from
an
account
1
within
the
education
savings
grant
fund
without
being
legally
2
entitled
to
it
is
guilty
of
a
fraudulent
practice
and
is
3
subject
to
a
criminal
penalty.
The
bill
allows
the
department
4
of
management
to
initiate
legal
proceedings
to
recover
grants
5
and
amounts
improperly
awarded
or
paid
from
accounts
under
the
6
bill.
7
The
bill
provides
that
moneys
from
an
education
savings
8
grant
under
the
bill
are
not
taxable
income
under
Code
chapter
9
422.
In
addition,
the
bill
provides
that
contributions
to
an
10
Iowa
education
savings
plan
trust
account
under
Code
chapter
11
12D
that
are
moneys
from
an
education
savings
grant
under
the
12
bill
are
not
considered
a
contribution
that
may
be
deducted
for
13
Iowa
income
tax
purposes.
14
The
bill
applies
to
school
budget
years
and
fiscal
years
15
beginning
on
or
after
July
1,
2015.
16
The
provisions
of
the
bill
amending
Code
sections
12D.3
and
17
422.7
apply
to
tax
years
beginning
on
or
after
January
1,
2015.
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