SF 2301 (LSB 5838SV (2) 86)

SENATE FILE 2301

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SF 2100)

A BILL FOR

An Act relating to the Iowa educational savings plan trust and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 12D.1, subsection 2, paragraphs e and g, Code 2016, are amended by striking the paragraphs and inserting in lieu thereof the following:
   e.  “Higher education costs” means the same as “qualified higher education expenses” as defined in section 529(e)(3) of the Internal Revenue Code.
   g.  “Internal Revenue Code” means the same as defined in section 12I.1.
    Sec. 2.  Section 12D.1, subsection 2, paragraph i, Code 2016, is amended to read as follows:
   i.  “Participant” means an individual, individual’s legal representative, trust, or estate, or an organization described in section 501(c)(3) of the Internal Revenue Code and exempt from taxation under section 501(a) of the Internal Revenue Code, that has entered into a participation agreement under this chapter for the advance payment of higher education costs on behalf of a beneficiary.
    Sec. 3.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to the Iowa educational savings plan trust, also known as the Iowa college savings 529 plan. The bill adds tax-exempt, Internal Revenue Code §501(c)(3) nonprofit organizations as entities eligible to participate in the Iowa college savings 529 plan. These organizations will now be eligible to open accounts for individual beneficiaries and make contributions for the future payment of higher education costs on behalf of those beneficiaries. The bill also amends the definition of “higher education costs” and “Internal Revenue Code” under the Iowa college savings 529 plan.
   The bill takes effect upon enactment.