SF 2491 (LSB 6114SV (1) 91)

SENATE FILE 2491

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SF 2460)

A BILL FOR

An Act providing for the rural veterinarian loan repayment program, including by allowing a loan repayment recipient to exclude net income attributable to loan payments received under the program.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 256.226, subsection 4, paragraph c, Code 2026, is amended to read as follows:
   c.  (1)  Secure Subject to subparagraph (2), secure an offer of employment or establish and maintain a practice in a veterinary shortage situation or rural service commitment area and engage in the full-time practice of veterinary medicine for a period of four consecutive years after entering into the agreement in the veterinary shortage area or rural service commitment area, unless the loan repayment recipient receives.
   (2)  (a)  The loan repayment recipient may notify the commission that the loan repayment recipient will complete the years of full-time practice required under the agreement by securing new employment, or establishing and maintaining a new practice, in the same veterinary shortage area or rural service commitment area, according to rules adopted by the commission.
   (b)  The commission may grant the loan repayment recipient a waiver from the commission to complete the years of full-time practice required under the agreement in another veterinary shortage area or rural service commitment area pursuant to subsection 7.
    Sec. 2.  Section 422.7, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  46.  a.  Subtract, to the extent included, loan repayments received under a program agreement entered into between a taxpayer who is a loan repayment recipient and the college student aid commission pursuant to section 256.226, if the taxpayer fulfills the obligation to engage in the practice of veterinary medicine according to terms of that section including the program agreement.
   b.  The subtraction in paragraph “a” shall not exceed the following limits:
   (1)  For any tax year, fifteen thousand dollars.
   (2)  For the aggregate of all tax years, sixty thousand dollars.
   (3)  In any case, the amount of the outstanding eligible loan.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   BACKGROUND. Code section 256.226 establishes a rural veterinarian loan repayment program (program) administered by the college student aid commission (commission). The purpose of the program is to provide for the repayment of a student loan (eligible loan) to an individual who is either enrolled in the final year of a college of veterinary medicine in order to receive a doctor of veterinary medicine degree or who is a licensed veterinarian who received a degree within five years of applying to participate in the program. The individual must enter into a program agreement (agreement) with the commission in which the commission assumes the payment of the eligible loan and the loan repayment recipient (recipient) agrees to engage in the practice of veterinary medicine (practice) for four years in a rural service commitment area or a veterinary shortage area (rural area). The commission assumes eligible loan payments each year of the recipient’s eligible practice for a period of four consecutive years. An eligible loan payment amount cannot exceed $15,000 annually and cannot exceed a total of either $60,000 or the amount of the outstanding eligible loan.
   BILL’S PROVISIONS. Currently, the commission may grant a recipient a waiver to complete the years of practice required under the agreement in another rural area. This bill provides that the recipient may notify the commission that the loan recipient will complete the years of practice required under the agreement by securing new employment, or establishing and maintaining a new practice, in the same rural area, according to rules adopted by the commission. The bill allows the recipient to exclude net income attributable to eligible loan payments received under the program, subject to the restrictions provided in the program. The amount subject to the income exclusion cannot exceed $15,000 per tax year, and an aggregate of $60,000 for all tax years. However, in any case, the total excluded amount cannot exceed the amount of the recipient’s outstanding eligible loan.