H.F. 531 Section 1. Section 8A.504, subsection 1, paragraph c, 1 subparagraph (2), Code 2013, is amended to read as follows: 2 (2) An amount that is due because of a default on a 3 guaranteed student or parental loan under chapter 261 . 4 Sec. 2. Section 8A.504, subsection 4, Code 2013, is amended 5 to read as follows: 6 4. The director shall have the authority to enter into 7 reciprocal agreements with the departments of revenue of other 8 states that have enacted legislation that is substantially 9 equivalent to the setoff procedure provided in this section 10 for the recovery of an amount due because of a default on a 11 guaranteed student or parental loan under chapter 261 . A 12 reciprocal agreement shall also be approved by the college 13 student aid commission. The agreement shall authorize the 14 department to provide by rule for the setoff of state income 15 tax refunds or rebates of defaulters from states with which 16 Iowa has a reciprocal agreement and to provide for sending 17 lists of names of Iowa defaulters to the states with which Iowa 18 has a reciprocal agreement for setoff of that state’s income 19 tax refunds. 20 Sec. 3. Section 261.12, subsection 1, Code 2013, is amended 21 to read as follows: 22 1. The amount of a tuition grant to a qualified full-time 23 student for the fall and spring semesters, or the trimester 24 equivalent, shall be the amount of the student’s financial need 25 for that period. However, a tuition grant shall not exceed the 26 lesser of: 27 a. The total tuition and mandatory fees for that student 28 for two semesters or the trimester or quarter equivalent, less 29 the base amount determined annually by the college student 30 aid commission, which base amount shall be within ten dollars 31 of the average tuition for two semesters or the trimester 32 equivalent of undergraduate study at the state universities 33 under the board of regents, but in any event the base amount 34 shall not be less than four hundred dollars ; or 35 -1- LSB 1202HV (2) 85 kh/sc 1/ 4

H.F. 531 b. For the fiscal year beginning July 1, 2000, and for each 1 following fiscal year, four thousand dollars . 2 Sec. 4. Section 261.37, subsection 7, Code 2013, is amended 3 to read as follows: 4 7. To establish an effective system for the collection 5 of delinquent loans, including the adoption of an agreement 6 with the department of administrative services to set off 7 against a defaulter’s income tax refund or rebate the amount 8 that is due because of a default on a guaranteed or parental 9 loan made under this division . The commission shall adopt 10 rules under chapter 17A necessary to assist the department of 11 administrative services in the implementation of the student 12 loan setoff program as established under section 8A.504 . 13 The commission shall apply administrative wage garnishment 14 procedures authorized under the federal Higher Education Act of 15 1965, as amended and codified in 20 U.S.C. § 1071 et seq., for 16 all delinquent loans, including loans authorized under section 17 261.38 , when a defaulter who is financially capable of paying 18 fails to voluntarily enter into a reasonable payment agreement. 19 In no case shall the commission garnish more than the amount 20 authorized by federal law for all loans being collected by the 21 commission, including those authorized under section 261.38 . 22 Sec. 5. Section 261.38, subsections 1, 3, and 4, Code 2013, 23 are amended to read as follows: 24 1. The commission shall establish a loan reserve account 25 and an agency operating account as authorized by the federal 26 Higher Education Act of 1965. The commission shall credit to 27 these accounts this account all moneys provided for the state 28 student loan program by the United States, the state of Iowa, 29 or any of their agencies, departments , or instrumentalities, 30 as well as any funds accruing to the program which are not 31 required for current administrative expenses. The commission 32 may expend moneys in the loan reserve and agency operating 33 accounts account as authorized by the federal Higher Education 34 Act of 1965. 35 -2- LSB 1202HV (2) 85 kh/sc 2/ 4

H.F. 531 3. Notwithstanding section 8.33 , funds on deposit in the 1 loan reserve and agency operating accounts account shall not 2 revert to the state general fund at the close of any fiscal 3 year. 4 4. The treasurer of state shall invest any funds , including 5 those in the loan reserve and agency operating accounts 6 account , and, notwithstanding section 12C.7 , the interest 7 income earned shall be credited back to the appropriate agency 8 operating account. 9 Sec. 6. Section 261.38, subsection 2, Code 2013, is amended 10 by striking the subsection. 11 Sec. 7. Section 261B.11, Code 2013, is amended by adding the 12 following new subsections: 13 NEW SUBSECTION . 4. The state of Iowa considers institutions 14 specified in subsection 1, paragraphs “j” and “l” , to be 15 authorized to lawfully operate in Iowa as a postsecondary 16 educational institution that grants a certificate, diploma, 17 or degree for the purpose of state authorization regulations 18 established by the United States department of education, 19 provided the institution meets the following conditions: 20 a. The institution is exempt from federal taxation under 21 section 501(c)(3) of the Internal Revenue Code on and after 22 July 1, 2013. 23 b. The institution originated in this state and undergoes no 24 change in ownership or control on or after July 1, 2011. 25 NEW SUBSECTION . 5. The commission shall, by administrative 26 rule, identify the name of each institution that is authorized 27 by this state to lawfully operate as a postsecondary 28 educational institution in the state pursuant to this chapter. 29 Sec. 8. REPEAL. Sections 261.39 and 261.41, Code 2013, are 30 repealed. 31 EXPLANATION 32 This bill removes the $4,000 cap on the amount of an Iowa 33 tuition grant which may be awarded by the college student aid 34 commission, and makes changes to Code chapter 261 in response 35 -3- LSB 1202HV (2) 85 kh/sc 3/ 4

H.F. 531 to recent changes in the federal Higher Education Act of 1965, 1 as amended. The bill eliminates references to guaranteed 2 student or parental loans and to the loan reserve account, and 3 repeals related Code provisions. 4 The bill also amends a provision in Code chapter 261B, under 5 which the commission is authorized to register postsecondary 6 schools that operate in this state, to provide that this state 7 considers higher education institutions that are located in 8 Iowa and meet the criteria established in statute for the Iowa 9 tuition grant or are affiliated with Iowa health care systems 10 and offer health professions programs that are accredited by an 11 agency recognized by the U.S. department of education, to be 12 authorized to lawfully operate in Iowa for the purpose of state 13 authorization regulations established by the U.S. department 14 of education, provided the institution is exempt from federal 15 taxation on and after July 1, 2013, and the institution 16 originated in this state and undergoes no change in ownership 17 or control on or after July 1, 2011. 18 The commission is also directed, by administrative rule, to 19 identify the name of each institution that is authorized by 20 this state to lawfully operate as a postsecondary educational 21 institution in the state. 22 -4- LSB 1202HV (2) 85 kh/sc 4/ 4