House File 2322 - Introduced HOUSE FILE 2322 BY JONES and WHEELER A BILL FOR An Act relating to the elimination of the college student 1 aid commission and transferring the commission’s duties 2 and responsibilities to the office of the treasurer of 3 state, eliminating obsolete or unfunded programs, making 4 appropriations, and providing for related matters, and 5 including effective date provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 5745YH (7) 87 kh/jh

H.F. 2322 DIVISION I 1 TRANSFER OF COMMISSION DUTIES 2 Section 1. Section 7A.4, subsection 4, Code 2018, is amended 3 by striking the subsection. 4 Sec. 2. Section 7E.7, subsection 1, Code 2018, is amended 5 to read as follows: 6 1. The Iowa higher education loan authority shall be 7 attached to the college student aid commission office of the 8 treasurer of state . 9 Sec. 3. Section 8A.504, subsections 3 and 4, Code 2018, are 10 amended to read as follows: 11 3. In the case of multiple claims to payments filed under 12 this section , priority shall be given to claims filed by the 13 child support recovery unit or the foster care recovery unit, 14 next priority shall be given to claims filed by the clerk of 15 the district court, next priority shall be given to claims 16 filed under chapter 261 by the college student aid commission 17 office of the treasurer of state , next priority shall be 18 given to claims filed by the investigations division of the 19 department of inspections and appeals, and last priority shall 20 be given to claims filed by other public agencies. In the 21 case of multiple claims in which the priority is not otherwise 22 provided by this subsection , priority shall be determined in 23 accordance with rules to be established by the director. 24 4. The director shall have the authority to enter into 25 reciprocal agreements with the departments of revenue of other 26 states that have enacted legislation that is substantially 27 equivalent to the setoff procedure provided in this section 28 for the recovery of an amount due because of a default on a 29 loan under chapter 261 . A reciprocal agreement shall also 30 be approved by the college student aid commission office of 31 the treasurer of state . The agreement shall authorize the 32 department to provide by rule for the setoff of state income 33 tax refunds or rebates of defaulters from states with which 34 Iowa has a reciprocal agreement and to provide for sending 35 -1- LSB 5745YH (7) 87 kh/jh 1/ 59

H.F. 2322 lists of names of Iowa defaulters to the states with which Iowa 1 has a reciprocal agreement for setoff of that state’s income 2 tax refunds. 3 Sec. 4. NEW SECTION . 12.11 Postsecondary financial 4 assistance for students —— registration of postsecondary schools 5 —— rules. 6 The treasurer shall adopt rules in accordance with chapter 7 17A for the administration of postsecondary state financial 8 assistance programs under chapter 261 and the registration of 9 postsecondary schools under chapter 261B. 10 Sec. 5. Section 15F.401, subsection 1, paragraph c, Code 11 2018, is amended to read as follows: 12 c. The authority, by rule, shall define “accredited colleges 13 and universities” , in consultation with the college student aid 14 commission office of the treasurer of state . 15 Sec. 6. Section 35A.13, subsection 7, paragraph c, 16 subparagraph (2), Code 2018, is amended to read as follows: 17 (2) A child eligible to receive state educational 18 assistance under this paragraph “c” shall begin postsecondary 19 education prior to reaching age twenty-six, shall not receive 20 more than an amount equal to five times the highest resident 21 undergraduate tuition rate established per year for an 22 institution of higher learning under the control of the state 23 board of regents during the child’s lifetime, and shall, to 24 remain eligible for assistance, meet the academic progress 25 standards of the postsecondary educational institution. 26 Payments for state educational assistance for a child under 27 this paragraph “c” shall be made to the applicable postsecondary 28 educational institution. The college student aid commission 29 office of the treasurer of state may, if requested, assist the 30 commission in administering this paragraph “c” . 31 Sec. 7. Section 84A.6, subsection 4, Code 2018, is amended 32 to read as follows: 33 4. The department of workforce development, in consultation 34 with the college student aid commission office of the treasurer 35 -2- LSB 5745YH (7) 87 kh/jh 2/ 59

H.F. 2322 of state , shall issue a quarterly report identifying industries 1 in which the department finds a shortage of skilled workers in 2 this state for the purposes of the skilled workforce shortage 3 tuition grant program established in section 261.130 . 4 Sec. 8. Section 135.107, subsection 3, unnumbered paragraph 5 1, Code 2018, is amended to read as follows: 6 The center for rural health and primary care shall establish 7 a primary care provider recruitment and retention endeavor, to 8 be known as PRIMECARRE. The endeavor shall include a health 9 care workforce and community support grant program and a 10 primary care provider loan repayment program. The endeavor 11 shall be developed and implemented in a manner to promote 12 and accommodate local creativity in efforts to recruit and 13 retain health care professionals to provide services in the 14 locality. The focus of the endeavor shall be to promote 15 and assist local efforts in developing health care provider 16 recruitment and retention programs. The center for rural 17 health and primary care may enter into an agreement with the 18 college student aid commission office of the treasurer of state 19 for the administration of the center’s grant and loan repayment 20 programs. 21 Sec. 9. Section 232.2, subsection 4, paragraph f, 22 subparagraph (5), Code 2018, is amended to read as follows: 23 (5) If the child is interested in pursuing higher education, 24 the transition plan shall provide for the child’s participation 25 in the college student aid commission’s office of the treasurer 26 of state’s program of assistance in applying for federal and 27 state aid under section 261.2 . 28 Sec. 10. Section 256.7, unnumbered paragraph 1, Code 2018, 29 is amended to read as follows: 30 Except for the college student aid commission, the 31 commission of libraries and division of library services , and 32 the public broadcasting board and division, the state board 33 shall: 34 Sec. 11. Section 256.9, unnumbered paragraph 1, Code 2018, 35 -3- LSB 5745YH (7) 87 kh/jh 3/ 59

H.F. 2322 is amended to read as follows: 1 Except for the college student aid commission, the 2 commission of libraries and division of library services , and 3 the public broadcasting board and division, the director shall: 4 Sec. 12. Section 261.2, Code 2018, is amended to read as 5 follows: 6 261.2 Duties of commission treasurer of state . 7 The commission treasurer of state shall do all of the 8 following : 9 1. a. Prepare and administer a state plan for a state 10 supported state-supported and administered state-administered 11 scholarship program and grant programs . The state plan shall 12 provide for scholarships and grants to deserving students of 13 Iowa, matriculating in Iowa universities, colleges, community 14 colleges, or schools of professional nursing. Eligibility of 15 a student for receipt of a scholarship shall be based upon 16 academic achievement and completion of advanced level courses 17 prescribed by the commission. 18 b. Approve and award scholarships and grants under the state 19 plan. 20 2. Administer the tuition grant program under this chapter 21 Provide application forms and parents’ confidential statement 22 forms as necessary for programs administered under this 23 chapter . 24 3. Develop and implement, in cooperation with the state 25 board of regents, an educational program and marketing 26 strategies designed to inform students and parents about the 27 options available for financing a college education and the 28 need to accumulate the financial resources necessary to pay for 29 a college education. The educational program shall include 30 but not be limited to distribution of informational material 31 to public and nonpublic elementary schools for distribution 32 to parents and guardians of five-year and six-year old 33 six-year-old children. 34 4. Approve Administer and approve transfers from the 35 -4- LSB 5745YH (7) 87 kh/jh 4/ 59

H.F. 2322 scholarship and tuition grant reserve fund under section 261.20 1 261.4 . 2 5. Develop and implement, in cooperation with the 3 judicial district departments of correctional services and 4 the department of corrections, a program to assist criminal 5 offenders in applying for federal and state aid available for 6 higher education. 7 6. Develop and implement, in cooperation with the 8 department of human services and the judicial branch, a program 9 to assist juveniles who are sixteen years of age or older and 10 who have a case permanency plan under chapter 232 or 237 or are 11 otherwise under the jurisdiction of chapter 232 in applying for 12 federal and state aid available for higher education. 13 7. a. Adopt rules to establish reasonable registration 14 standards for the approval, pursuant to section 261B.3A , of 15 postsecondary schools that are required to register with 16 the commission treasurer of state in order to operate in 17 this state. The registration standards established by the 18 commission treasurer of state shall ensure that all of the 19 following conditions are satisfied: 20 (1) The courses, curriculum, and instruction offered by 21 the postsecondary school are of such quality and content as 22 may reasonably and adequately ensure achievement of the stated 23 objective for which the courses, curriculum, or instruction are 24 offered. 25 (2) The postsecondary school has adequate space, equipment, 26 instructional material, and personnel to provide education and 27 training of good quality. 28 (3) The educational and experience qualifications of 29 the postsecondary school’s directors, administrators, and 30 instructors are such as may reasonably ensure that students 31 will receive instruction consistent with the objectives of the 32 postsecondary school’s programs of study. 33 (4) Upon completion of training or instruction, students 34 are given certificates, diplomas, or degrees as appropriate by 35 -5- LSB 5745YH (7) 87 kh/jh 5/ 59

H.F. 2322 the postsecondary school indicating satisfactory completion of 1 the program. 2 (5) The postsecondary school is financially responsible and 3 capable of fulfilling commitments for instruction. 4 b. The commission shall post Post an application for 5 registration as a school operating as a postsecondary 6 educational institution or providing postsecondary 7 instructional programs on the commission’s treasurer of state’s 8 internet site and shall render a decision on an application for 9 registration within one hundred eighty days of the filing of 10 the application. 11 8. Submit by January 15 annually a report to the governor 12 and the general assembly which that provides information on 13 the activities of the office of the treasurer in administering 14 this chapter, including , by program, the number of individuals 15 who received scholarships, grants, and loan forgiveness or 16 loan repayment in the previous fiscal year, the amounts paid 17 to or on behalf of individuals under sections 261.73 , 261.112 , 18 and 261.116 the programs , and the institutions from which the 19 individuals graduated , and that includes any proposed statutory 20 changes and the commission’s treasurer of state’s findings and 21 recommendations. 22 9. Require any postsecondary institution whose students 23 are eligible for or who receive assistance under programs 24 administered by the commission treasurer of state under this 25 chapter and who were enrolled in a school district in Iowa to 26 include in its student management information system the unique 27 student identifiers assigned to the institution’s students 28 while the students were in the state’s kindergarten through 29 grade twelve system. 30 10. Ensure that students receiving state-funded 31 scholarships and grants are attending institutions of higher 32 education that meet all of the following conditions: 33 a. The institutions are not required to register under 34 chapter 261B or the institutions are participating resident 35 -6- LSB 5745YH (7) 87 kh/jh 6/ 59

H.F. 2322 institutions as defined in section 261G.2 that volunteer to 1 register under section 261B.11B . 2 b. The institutions are eligible to participate in a federal 3 student aid program authorized under Tit. IV of the federal 4 Higher Education Act of 1965, as amended. 5 11. Require any postsecondary institution whose students 6 are eligible for or who receive financial assistance under 7 programs administered by the commission treasurer of state 8 under this chapter to transmit annually to the commission 9 treasurer of state information about the numbers of minority 10 students enrolled in and minority faculty members employed 11 at the institution. The commission treasurer of state shall 12 compile and report the information collected to the general 13 assembly, the governor, and the legislative services agency by 14 March 1 annually. 15 12. Enter into and administer, or recognize, an interstate 16 reciprocity agreement for the provision of postsecondary 17 distance education by a postsecondary institution pursuant 18 to chapter 261G . The commission In accordance with section 19 12.11, the treasurer of state shall adopt rules pursuant to 20 chapter 17A establishing application procedures and criteria 21 for the authorization of postsecondary institutions providing 22 postsecondary distance education under interstate reciprocity 23 agreements pursuant to chapter 261G and for the review and 24 approval of interstate reciprocity agreements the commission 25 treasurer of state may enter into or recognize pursuant to 26 this subsection and chapter 261G . The commission treasurer of 27 state may accept an authorization granted by another state to 28 a postsecondary institution under an interstate reciprocity 29 agreement to deliver postsecondary distance education. 30 13. Enter into any agreements with the United States 31 secretary of education or other federal agency as are necessary 32 to provide programs and services administered pursuant to this 33 chapter to current and future Iowa postsecondary students, to 34 the students’ school counselors, parents, and guardians, and 35 -7- LSB 5745YH (7) 87 kh/jh 7/ 59

H.F. 2322 to the elementary, secondary, and postsecondary institutions 1 the students attend. 2 14. Negotiate and contract with private and government 3 agencies for the establishment of financial aid programs; 4 receive gifts of any type for the purpose of establishing, 5 continuing, and increasing financial aid; and administer 6 any form of financial aid submitted to and accepted for 7 administration by the treasurer of state. 8 Sec. 13. Section 261.3, Code 2018, is amended by striking 9 the section and inserting in lieu thereof the following: 10 261.3 Duties of the treasurer of state —— decisions final. 11 1. The treasurer of state shall adopt rules for the 12 administration of this chapter in accordance with section 13 12.11, including but not limited to rules for standards, 14 guidelines, and procedures for each individual program 15 administered by the state treasurer under this chapter. The 16 rules adopted pursuant to this subsection shall provide 17 for the receipt, processing, and administration of student 18 applications and loans; interest rates for student loans 19 administered under this chapter; determining financial need 20 and the priority of grants awarded based on financial need; 21 defining tuition and mandatory fees; processing and approving 22 applications for scholarships, grants, and loans; determining 23 eligibility requirements for eligible borrowers; determining 24 priority for grants and loans; awarding tuition grants; 25 establishing procedures for the repayment of loans and for 26 the deferral of loan repayment for purposes including but not 27 limited to fulfillment of obligations such as military service 28 obligations; and defining residence and determining who is a 29 resident of Iowa. The treasurer of state may provide for the 30 proration of funds if the available funds are insufficient to 31 pay all approved scholarships or grants. Such proration shall 32 take primary account of the financial need of the applicant. 33 The rules for determining who is a resident of Iowa shall be at 34 least as restrictive as those of the state board of regents. 35 -8- LSB 5745YH (7) 87 kh/jh 8/ 59

H.F. 2322 2. The treasurer of state may enter into an agreement with 1 the department of revenue or other state agency to administer 2 administrative wage garnishment to collect defaulted debt owed 3 to the treasurer of state under this chapter. 4 3. For purposes of this chapter, a decision of the treasurer 5 of state is final agency action under chapter 17A. 6 Sec. 14. Section 261.4, Code 2018, is amended by striking 7 the section and inserting in lieu thereof the following: 8 261.4 Scholarship and grant reserve fund. 9 1. A scholarship and grant reserve fund is created to assure 10 that financial assistance will be available to all students 11 who are awarded scholarships or grants through programs funded 12 under this chapter. The fund is created as a separate fund in 13 the state treasury, and moneys in the fund shall not revert to 14 the general fund unless, and then only to the extent that, the 15 funds exceed the maximum allowed balance. 16 2. The maximum balance of the scholarship and grant 17 reserve fund is an amount equal to one percent of the funds 18 appropriated to the scholarship and grant programs under 19 section 261.25 during the preceding fiscal year. The moneys 20 in the fund shall be placed in separate accounts within the 21 fund, according to the source and purpose of the original 22 appropriation. Moneys in the various accounts shall only 23 be used to alleviate a current fiscal year shortfall in 24 appropriations for scholarship or grant programs that have 25 the same nature as the programs for which the moneys were 26 originally appropriated. At the conclusion of a fiscal year, 27 any surplus appropriations made to the treasurer of state 28 for scholarship or grant programs are appropriated to the 29 scholarship and grant reserve fund in an amount equal to the 30 amount of the surplus or the amount necessary to achieve the 31 maximum balance, whichever amount is less. 32 3. Transfers of moneys from the scholarship and grant 33 reserve fund to appropriation accounts in which there is a 34 current fiscal year shortfall may be made only with the prior 35 -9- LSB 5745YH (7) 87 kh/jh 9/ 59

H.F. 2322 written approval of the governor. At least two weeks before 1 moneys are transferred from the fund, the treasurer of state 2 shall notify the chairpersons of the standing appropriations 3 committees of the general assembly and the co-chairpersons 4 of the education appropriations subcommittee of the proposed 5 transfer. The notice shall include information concerning 6 the amount of and reason for the proposed transfer. The 7 chairpersons shall be given at least two weeks to review and 8 comment on the proposed transfer before the transfer can be 9 made. 10 4. The treasurer of state shall annually report to the 11 general assembly the methodology and manner in which the 12 treasurer of state makes the determination of awards for 13 programs for which funds are appropriated under section 261.25. 14 Sec. 15. Section 261.5, subsection 2, unnumbered paragraph 15 1, Code 2018, is amended to read as follows: 16 Notwithstanding any other provision of this chapter , in the 17 event of a national emergency declared by the president of the 18 United States by reason of terrorist attack, the commission 19 treasurer of state may waive or modify any statutory or 20 regulatory provision applicable to state financial aid programs 21 established pursuant to this chapter to ensure, with regard to 22 affected individuals, that the following occurs: 23 Sec. 16. Section 261.5, subsections 3 and 4, Code 2018, are 24 amended to read as follows: 25 3. Notwithstanding any other provision of this chapter , in 26 the event of a national emergency declared by the president 27 of the United States by reason of terrorist attack, the 28 commission treasurer of state may grant temporary relief from 29 requirements rendered infeasible or unreasonable, including 30 due diligence requirements and reporting deadlines, by the 31 national emergency, to an institution of higher education under 32 the state board of regents, a community college, an accredited 33 private institution as defined in section 261.9 , eligible 34 lenders, and other entities participating in the state student 35 -10- LSB 5745YH (7) 87 kh/jh 10/ 59

H.F. 2322 assistance programs in accordance with this chapter , that are 1 located in, or whose operations are directly affected by, areas 2 that are declared disaster areas by any federal, state, or 3 local official in connection with the national emergency. If 4 the commission treasurer of state issues a waiver in accordance 5 with this section , the report prepared by the commission 6 treasurer of state pursuant to section 17A.9A, subsection 7 5 , shall include examples of measures that a postsecondary 8 institution may take in the appropriate exercise of discretion, 9 as provided in 20 U.S.C. §1087tt, to adjust financial need and 10 aid eligibility determinations for affected individuals. 11 4. This section shall not be construed as a requirement 12 that the commission treasurer of state exercise the waiver or 13 modification authority provided pursuant to this section on a 14 case-by-case basis. 15 Sec. 17. Section 261.7, subsection 3, Code 2018, is amended 16 to read as follows: 17 3. The college student aid commission treasurer of state is 18 directed to convey the legislative intent and recommendation 19 contained in this section to every institution of higher 20 education in the state registered pursuant to chapter 261B at 21 least once a year. 22 Sec. 18. Section 261.9, subsection 1, paragraphs b and d, 23 Code 2018, are amended to read as follows: 24 b. Is accredited by the higher learning commission, is 25 exempt from taxation under section 501(c)(3) of the Internal 26 Revenue Code, and annually provides a matching aggregate 27 amount of institutional financial aid equal to at least 28 seventy-five percent of the amount received in a fiscal year by 29 the institution’s students for Iowa tuition grant assistance 30 under this chapter . Commencing with the fiscal year beginning 31 July 1, 2006, the matching aggregate amount of institutional 32 financial aid shall increase by the percentage of increase each 33 fiscal year of funds appropriated for Iowa tuition grants under 34 section 261.25, subsection 1 , to a maximum match of one hundred 35 -11- LSB 5745YH (7) 87 kh/jh 11/ 59

H.F. 2322 percent. The institution shall file annual reports with the 1 commission treasurer of state prior to receipt of tuition grant 2 moneys under this chapter . An institution whose income is 3 not exempt from taxation under section 501(c) of the Internal 4 Revenue Code and whose students were eligible to receive Iowa 5 tuition grant money in the fiscal year beginning July 1, 2003, 6 shall meet the match requirements of this paragraph no later 7 than June 30, 2005. 8 d. Promotes equal opportunity and affirmative action efforts 9 in the recruitment, appointment, assignment, and advancement of 10 personnel at the institution and provides information regarding 11 such efforts to the commission treasurer of state upon request. 12 Sec. 19. Section 261.9, subsection 2, Code 2018, is amended 13 by striking the subsection. 14 Sec. 20. Section 261.12, subsection 1, paragraph a, Code 15 2018, is amended to read as follows: 16 a. The total tuition and mandatory fees for that student 17 for two semesters , or the trimester or quarter equivalent, less 18 the base amount determined annually by the college student 19 aid commission treasurer of state , which base amount shall be 20 within ten dollars of the average tuition for two semesters , or 21 the trimester equivalent , of undergraduate study at the state 22 universities under the board of regents, but in any event the 23 base amount shall not be less than four hundred dollars; or 24 Sec. 21. Section 261.15, Code 2018, is amended to read as 25 follows: 26 261.15 Administration by commission treasurer of state —— 27 rules report . 28 The commission treasurer shall administer this program and 29 shall : 30 1. Provide application forms and parents’ confidential 31 statement forms. 32 2. Adopt rules and regulations for determining financial 33 need, defining tuition and mandatory fees, defining residence 34 for the purposes of this subchapter , processing and approving 35 -12- LSB 5745YH (7) 87 kh/jh 12/ 59

H.F. 2322 applications for tuition grants, and determining priority of 1 grants. The commission may provide for proration of funds 2 if the available funds are insufficient to pay all approved 3 grants. Such proration shall take primary account of the 4 financial need of the applicant. In determining who is a 5 resident of Iowa, the commission’s rules shall be at least as 6 restrictive as those of the board of regents. 7 3. Approve and award tuition grants. 8 4. Make make an annual report to the governor and general 9 assembly, and evaluate the tuition grant program for the 10 period. The commission treasurer of state may require the 11 accredited private institution to promptly furnish any 12 information which the commission treasurer of state may request 13 in connection with the tuition grant program. 14 Sec. 22. Section 261.16, unnumbered paragraph 1, Code 2018, 15 is amended to read as follows: 16 Each applicant, in accordance with the rules and regulations 17 of the commission treasurer of state , shall: 18 Sec. 23. Section 261.16, subsections 2 and 3, Code 2018, are 19 amended to read as follows: 20 2. Be responsible for the submission of the parents’ 21 confidential statement for processing, the processed 22 information to be returned both to the commission treasurer of 23 state and to the college in which the applicant is enrolling. 24 3. Report promptly to the commission treasurer of state any 25 information requested. 26 Sec. 24. Section 261.16A, subsections 5 and 7, Code 2018, 27 are amended to read as follows: 28 5. Commission Treasurer of state’s responsibilities. The 29 commission’s treasurer of state’s responsibilities for 30 administering tuition grants under this section shall be 31 the same as provided under section 261.15 . The commission 32 treasurer of state may require an eligible institution to 33 promptly furnish any information which the commission treasurer 34 may request in connection with the tuition grant program. 35 -13- LSB 5745YH (7) 87 kh/jh 13/ 59

H.F. 2322 7. Reports to commission treasurer of state . An eligible 1 institution shall file annual reports with the commission 2 treasurer of state , as required by the commission treasurer and 3 under section 261.9 , prior to receipt of tuition grant moneys 4 under this chapter . 5 Sec. 25. Section 261.17, subsection 4, paragraph b, Code 6 2018, is amended to read as follows: 7 b. The amount of a vocational-technical tuition grant to 8 a qualified part-time student enrolled in a course of study 9 including at least three semester hours but fewer than twelve 10 semester hours , or the trimester or quarter equivalent , shall 11 be equal to the amount of a vocational-technical tuition 12 grant that would be paid to a full-time student, except that 13 the commission treasurer of state shall prorate the amount 14 in a manner consistent with the federal Pell grant program 15 proration. 16 Sec. 26. Section 261.17, subsection 7, unnumbered paragraph 17 1, Code 2018, is amended to read as follows: 18 The commission treasurer of state shall administer this 19 program and shall: 20 Sec. 27. Section 261.17, subsection 8, unnumbered paragraph 21 1, Code 2018, is amended to read as follows: 22 Each applicant, in accordance with the rules established by 23 the commission treasurer of state , shall: 24 Sec. 28. Section 261.17, subsection 8, paragraphs b and c, 25 Code 2018, are amended to read as follows: 26 b. Be responsible for the submission of the financial 27 information required for evaluation of the applicant’s need for 28 a grant, on forms determined by the commission treasurer of 29 state . 30 c. Report promptly to the commission treasurer of state any 31 information requested. 32 Sec. 29. Section 261.25, subsections 1, 2, and 3, Code 2018, 33 are amended to read as follows: 34 1. There is appropriated from the general fund of the 35 -14- LSB 5745YH (7) 87 kh/jh 14/ 59

H.F. 2322 state to the commission treasurer of state for each fiscal 1 year the sum of forty-six million six hundred thirty thousand 2 nine hundred fifty-one dollars for tuition grants to qualified 3 students who are enrolled in accredited private institutions. 4 2. There is appropriated from the general fund of the state 5 to the commission treasurer of state for each fiscal year the 6 sum of one million five hundred thousand dollars for tuition 7 grants for qualified students who are enrolled in eligible 8 institutions. 9 3. There is appropriated from the general fund of the state 10 to the commission treasurer of state for each fiscal year the 11 sum of one million seven hundred fifty thousand one hundred 12 eighty-five dollars for vocational-technical tuition grants. 13 Sec. 30. Section 261.35, subsection 1, Code 2018, is amended 14 by striking the subsection. 15 Sec. 31. Section 261.35, subsections 2, 3, and 4, Code 2018, 16 are amended to read as follows: 17 2. “Eligible borrower” means a person, or the parent of 18 a person, who is enrolled or will be enrolled at an eligible 19 institution. All eligible borrowers must meet the eligibility 20 requirements established by the commission treasurer of state . 21 3. “Eligible institution” means any postsecondary 22 educational institution which meets the requirements of the 23 provisions of the Higher Education Act of 1965 for student 24 participation in the federal interest subsidy program and the 25 requirements prescribed by rule of the commission treasurer of 26 state . 27 4. “Eligible lender” means a financial or credit 28 institution, insurance company or other approved lender which 29 meets the standards prescribed by the commission treasurer of 30 state and has executed a lender participation agreement with 31 the commission treasurer of state . 32 Sec. 32. Section 261.36, unnumbered paragraph 1, Code 2018, 33 is amended to read as follows: 34 The commission treasurer of state shall have necessary 35 -15- LSB 5745YH (7) 87 kh/jh 15/ 59

H.F. 2322 powers to carry out its purposes and duties under this 1 subchapter , including but not limited to the power to: 2 Sec. 33. Section 261.36, subsections 2, 4, 5, and 6, Code 3 2018, are amended to read as follows: 4 2. Incur and discharge debts including the payment of any 5 defaulted loan obligations which have been guaranteed by the 6 commission treasurer of state . 7 4. Guarantee loans made by eligible lenders to eligible 8 borrowers who are, or whose children are, enrolled or will 9 be enrolled at eligible institutions as at least half-time 10 students as defined by the commission treasurer of state . 11 5. Approve educational institutions as eligible 12 institutions upon their meeting the requirements established by 13 the commission treasurer of state . 14 6. Approve financial or credit institutions, insurance 15 companies or other lenders as eligible lenders upon their 16 meeting the standards established by the commission treasurer 17 of state for making guaranteed loans. 18 Sec. 34. Section 261.37, unnumbered paragraph 1, Code 2018, 19 is amended to read as follows: 20 The duties of the commission treasurer of state under this 21 subchapter shall be as follows: 22 Sec. 35. Section 261.37, subsections 3, 6, 7, and 8, Code 23 2018, are amended to read as follows: 24 3. Collect an insurance premium of not more than the amount 25 authorized by the federal Higher Education Act of 1965. The 26 premium shall be collected by the lender upon the disbursement 27 of the loan and shall be remitted promptly to the commission 28 treasurer of state . 29 6. To reimburse eligible lenders for the amount authorized 30 by the federal Higher Education Act of 1965 on defaulted loans 31 guaranteed by the commission treasurer of state upon receipt 32 of written notice of the default accompanied by evidence that 33 the lender has exercised the required degree of diligence in 34 efforts to collect the loan. 35 -16- LSB 5745YH (7) 87 kh/jh 16/ 59

H.F. 2322 7. To establish an effective system for the collection of 1 delinquent loans, including the adoption of an agreement with 2 the department of administrative services to set off against a 3 defaulter’s income tax refund or rebate the amount that is due 4 because of a default on a loan made under this subchapter . The 5 commission treasurer of state shall adopt rules under chapter 6 17A necessary to assist the department of administrative 7 services in the implementation of the student loan setoff 8 program as established under section 8A.504 . The commission 9 treasurer of state shall apply administrative wage garnishment 10 procedures authorized under the federal Higher Education Act of 11 1965, as amended and codified in 20 U.S.C. §1071 et seq., for 12 all delinquent loans, including loans authorized under section 13 261.38 , when a defaulter who is financially capable of paying 14 fails to voluntarily enter into a reasonable payment agreement. 15 In no case shall the commission treasurer of state garnish more 16 than the amount authorized by federal law for all loans being 17 collected by the commission treasurer of state , including those 18 authorized under section 261.38 . 19 8. To develop and disseminate informational and educational 20 materials to lenders, postsecondary institutions and borrowers. 21 The commission treasurer of state shall provide applicants, 22 as deemed necessary by the commission treasurer of state , 23 with information about the past default rates of borrowers, 24 enrollment, and placement statistics by postsecondary 25 institution. 26 Sec. 36. Section 261.38, subsection 1, Code 2018, is amended 27 to read as follows: 28 1. The commission treasurer of state shall establish an 29 agency operating account as authorized by the federal Higher 30 Education Act of 1965. The commission treasurer of state shall 31 credit to the agency operating account all moneys provided 32 for the state student loan program by the United States, the 33 state of Iowa, or any of their agencies, departments, or 34 instrumentalities, as well as any funds accruing to the program 35 -17- LSB 5745YH (7) 87 kh/jh 17/ 59

H.F. 2322 which are not required for current administrative expenses. 1 The commission treasurer of state may expend moneys in the 2 agency operating account as authorized by the federal Higher 3 Education Act of 1965. 4 Sec. 37. Section 261.38, subsection 4, paragraph a, Code 5 2018, is amended to read as follows: 6 a. The commission treasurer of state may enter into 7 agreements with the Iowa student loan liquidity corporation 8 in order to increase access for students to education loan 9 programs that the commission treasurer of state determines meet 10 the education needs of Iowa residents. The agreements shall 11 permit the establishment, funding, and operation of alternative 12 education loan programs, as described in section 144(b)(1)(B) 13 of the Internal Revenue Code of 1986 as amended, as defined 14 in section 422.3 , in addition to programs permitted under the 15 federal Higher Education Act of 1965. In accordance with those 16 agreements, the Iowa student loan liquidity corporation may 17 issue bonds, notes, or other obligations to the public and 18 others for the purpose of funding the alternative education 19 loan programs. This authority to issue bonds, notes, or other 20 obligations shall be in addition to the authority established 21 in the articles of incorporation and bylaws of the Iowa student 22 loan liquidity corporation. 23 Sec. 38. Section 261.43, Code 2018, is amended to read as 24 follows: 25 261.43 Actions not barred. 26 No lapse of time shall be a bar to any action to recover on 27 any loan guaranteed by the commission treasurer of state . 28 Sec. 39. Section 261.62, Code 2018, is amended to read as 29 follows: 30 261.62 Iowa state fair scholarship. 31 The Iowa state fair scholarship fund is established in 32 the office of treasurer of state to be administered by the 33 commission. The commission treasurer of state, who shall 34 adopt rules pursuant to chapter 17A for the administration of 35 -18- LSB 5745YH (7) 87 kh/jh 18/ 59