House
File
2452
-
Reprinted
HOUSE
FILE
2452
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
HF
2353)
(SUCCESSOR
TO
HSB
638)
(As
Amended
and
Passed
by
the
House
March
26,
2014
)
A
BILL
FOR
An
Act
providing
for
the
creation
of
first-time
homebuyer
1
savings
accounts
in
Iowa,
including
related
individual
2
income
tax
exemptions,
making
penalties
applicable,
and
3
including
effective
date
and
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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Section
1.
NEW
SECTION
.
421D.1
Short
title.
1
This
chapter
may
be
cited
as
the
“Iowa
First-time
Homebuyer
2
Savings
Account
Act”
.
3
Sec.
2.
NEW
SECTION
.
421D.2
Definitions.
4
As
used
in
this
chapter,
unless
the
context
otherwise
5
requires:
6
1.
“Account
holder”
means
a
first-time
homebuyer
who
is
a
7
resident
of
this
state
and
who
establishes,
either
individually
8
or
jointly
with
the
resident’s
spouse
who
is
also
a
first-time
9
homebuyer,
a
first-time
homebuyer
savings
account.
A
person
10
ceases
to
be
an
account
holder
following
the
purchase
of
a
11
principal
residence
after
the
establishment
of
a
first-time
12
homebuyer
savings
account.
13
2.
“Eligible
costs”
means
the
down
payment
and
allowable
14
closing
costs
for
the
purchase
of
a
principal
residence
in
Iowa
15
which
principal
residence
is
purchased
after
the
establishment
16
of
the
first-time
homebuyer
savings
account.
17
3.
“First-time
homebuyer”
means
an
individual
who
has
never
18
owned
or
purchased
under
contract
for
deed,
either
individually
19
or
jointly,
a
single-family,
owner-occupied
residence,
20
including
but
not
limited
to
a
manufactured
or
mobile
home
that
21
is
assessed
and
taxed
as
real
estate
or
taxed
under
chapter
22
435
or
taxed
under
other
similar
law
of
another
state,
or
a
23
condominium
unit.
24
4.
“First-time
homebuyer
savings
account”
means
an
account
25
established
with
a
state
or
federally
chartered
bank,
savings
26
and
loan
association,
credit
union,
or
trust
company
in
this
27
state
to
finance
the
purchase
of
a
principal
residence
in
this
28
state.
29
5.
“Principal
residence”
means
a
single-family,
30
owner-occupied
residence
in
the
state
that
will
be
the
31
principal
place
of
residence
of
the
account
holder,
whether
32
owned
or
purchased
under
contract
for
deed
by
the
account
33
holder,
individually
or
jointly.
“Principal
residence”
includes
34
but
is
not
limited
to
a
manufactured
home
or
mobile
home
that
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is
assessed
and
taxed
as
real
estate
or
taxed
under
chapter
1
435,
and
a
condominium
unit.
2
6.
“Resident”
means
the
same
as
defined
in
section
422.4.
3
Sec.
3.
NEW
SECTION
.
421D.3
First-time
homebuyer
savings
4
account.
5
1.
Establishment.
6
a.
A
first-time
homebuyer
who
is
a
resident
of
this
7
state
may
establish,
either
individually
or
jointly
with
8
the
resident’s
spouse
who
is
also
a
first-time
homebuyer,
a
9
first-time
homebuyer
savings
account
to
finance
the
purchase
10
of
a
principal
residence.
Married
taxpayers
electing
to
file
11
separate
tax
returns
or
separately
on
a
combined
tax
return
12
shall
not
establish
or
maintain
a
joint
first-time
homebuyer
13
savings
account.
14
b.
The
account
holder
who
establishes
the
first-time
15
homebuyer
savings
account,
individually
or
jointly,
is
the
16
owner
and
administrator
of
the
account.
17
c.
A
first-time
homebuyer
savings
account
shall
be
an
18
interest-bearing
savings
account.
19
d.
A
financial
institution
shall
not
be
responsible
for
20
the
use
or
application
of
funds
within
a
first-time
homebuyer
21
savings
account
solely
because
the
account
is
held
at
that
22
financial
institution.
23
2.
Use
and
administration
by
account
holder.
24
a.
The
account
holder
shall
use
the
money
in
the
first-time
25
homebuyer
savings
account
for
eligible
costs
related
to
the
26
purchase
of
a
principal
residence
within
ten
years
following
27
the
year
in
which
the
account
is
first
established.
28
b.
An
account
holder
shall
not
contribute
to
a
first-time
29
homebuyer
savings
account
for
a
period
exceeding
ten
years.
30
c.
There
is
no
limitation
on
the
amount
of
contributions
31
that
may
be
made
to
or
retained
in
a
first-time
homebuyer
32
savings
account.
33
d.
The
account
holder
shall
not
use
funds
held
in
a
34
first-time
homebuyer
savings
account
to
pay
expenses,
if
any,
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of
administering
the
account,
except
that
a
service
fee
may
be
1
charged
to
the
account
by
the
financial
institution
where
the
2
account
is
held.
3
e.
Documentation
regarding
the
segregation
of
funds
in
4
a
first-time
homebuyer
savings
account
from
other
funds
and
5
documentation
regarding
eligible
costs
for
the
purchase
of
a
6
principal
residence
shall
be
maintained
by
the
account
holder.
7
The
burden
of
proving
that
a
withdrawal
from
a
first-time
8
homebuyer
savings
account
was
made
for
eligible
costs
is
upon
9
the
account
holder.
10
f.
Within
thirty
days
of
being
furnished
proof
of
death
11
of
the
account
holder,
the
financial
institution
where
12
the
first-time
homebuyer
savings
account
is
held
shall
13
distribute
any
amount
remaining
in
the
first-time
homebuyer
14
savings
account
to
the
estate
of
the
account
holder
or
to
a
15
transfer
on
death
or
pay
on
death
beneficiary
of
the
account
16
properly
designated
by
the
account
holder
with
the
financial
17
institution.
18
g.
The
account
holder
shall
file
reports
with
the
department
19
of
revenue
as
reasonably
required
by
the
department
of
revenue.
20
h.
The
account
holder
is
required
to
remit
the
withdrawal
21
penalty
in
section
422.7,
subsection
57,
paragraph
“c”
,
22
subparagraph
(1),
if
assessed,
to
the
department
of
revenue
in
23
the
same
manner
as
provided
in
section
422.16,
subsection
2.
24
3.
Penalties.
A
person
who
knowingly
prepares
or
causes
to
25
be
prepared
a
false
claim,
statement,
or
billing
to
justify
the
26
withdrawal
of
money
from
a
first-time
homebuyer
savings
account
27
is
guilty
of
a
serious
misdemeanor
for
each
violation.
28
Sec.
4.
NEW
SECTION
.
421D.4
Tax
considerations.
29
The
state
income
tax
treatment
of
a
first-time
homebuyer
30
savings
account
shall
be
as
provided
in
section
422.7,
31
subsection
57.
32
Sec.
5.
NEW
SECTION
.
421D.5
Rules.
33
The
department
of
revenue
shall
adopt
rules
to
implement
and
34
administer
this
chapter.
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Sec.
6.
Section
422.7,
Code
2014,
is
amended
by
adding
the
1
following
new
subsection:
2
NEW
SUBSECTION
.
57.
a.
Subtract
the
amount
of
3
contributions
made
by
an
account
holder
to
the
account
holder’s
4
first-time
homebuyer
savings
account
during
the
tax
year,
not
5
to
exceed
three
thousand
dollars
per
individual
per
tax
year,
6
or
six
thousand
dollars
per
tax
year
for
a
married
couple
who
7
have
a
joint
first-time
homebuyer
savings
account
and
file
a
8
joint
return.
An
amount
of
contributions
made
during
a
tax
9
year
in
excess
of
three
thousand
dollars,
or
six
thousand
10
dollars,
as
applicable,
may
be
subtracted
by
an
account
holder
11
in
a
subsequent
tax
year,
provided
the
total
exemption
under
12
this
paragraph
for
the
subsequent
tax
year
does
not
exceed
13
three
thousand
dollars,
or
six
thousand
dollars,
as
applicable.
14
This
paragraph
shall
not
apply
to
an
account
holder
more
15
than
ten
years
after
the
account
holder
first
establishes
a
16
first-time
homebuyer
savings
account.
17
b.
Subtract,
to
the
extent
included,
income
from
interest
18
and
earnings
received
from
an
account
holder’s
first-time
19
homebuyer
savings
account.
This
paragraph
shall
not
apply
to
20
any
interest
and
earnings
received
by
an
account
holder
more
21
than
ten
years
after
the
account
holder
first
establishes
a
22
first-time
homebuyer
savings
account.
23
c.
(1)
Add,
to
the
extent
previously
subtracted
under
24
paragraph
“a”
,
the
amount
resulting
from
a
withdrawal
made
from
25
a
first-time
homebuyer
savings
account
for
purposes
other
than
26
the
payment
of
eligible
costs
of
the
account
holder.
Such
27
withdrawal
shall
also
be
assessed
a
penalty
in
an
amount
equal
28
to
ten
percent
of
the
amount
of
the
withdrawal
that
represents
29
interest
and
earnings
in
the
first-time
homebuyer
savings
30
account.
The
penalty
shall
not
apply
to
withdrawals
made
on
31
account
of
the
death
of
the
account
holder
or
for
the
purpose
32
of
paying
the
eligible
costs
of
the
account
holder.
33
(2)
For
purposes
of
this
paragraph
“c”
,
any
amount
remaining
34
in
a
first-time
homebuyer
savings
account
of
an
account
holder
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on
the
day
after
the
purchase
of
a
principal
residence
or
the
1
last
business
day
of
the
tenth
calendar
year
following
the
2
calendar
year
in
which
the
account
holder
first
establishes
a
3
first-time
homebuyer
savings
account,
whichever
occurs
first,
4
shall
be
considered
a
withdrawal
under
subparagraph
(1).
5
(3)
For
purposes
of
this
paragraph
“c”
,
the
following
shall
6
not
be
considered
a
withdrawal
under
subparagraph
(1):
7
(a)
Any
amount
transferred
between
different
first-time
8
homebuyer
savings
accounts
of
the
same
account
holder
by
a
9
person
other
than
the
account
holder.
10
(b)
Any
amounts
withdrawn
or
otherwise
transferred
from
a
11
first-time
homebuyer
savings
account
pursuant
to
an
order
in
12
bankruptcy.
13
d.
For
purposes
of
this
subsection,
“account
holder”
,
14
“eligible
costs”
,
and
“first-time
homebuyer
savings
account”
all
15
mean
the
same
as
defined
in
section
421D.2.
16
Sec.
7.
EFFECTIVE
DATE.
This
Act
takes
effect
January
1,
17
2015.
18
Sec.
8.
APPLICABILITY.
This
Act
applies
to
tax
years
19
beginning
on
or
after
January
1,
2015.
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