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Senate File 272 - IntroducedA Bill ForAn Act 1establishing the state of Iowa higher education bank and
2revolving loan program and fund and making appropriations
3to the fund of amounts certified due to the elimination of
4the deduction for federal taxes paid by certain individual
5income taxpayers and including retroactive applicability
6provisions.
7BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2creation of state of iowa higher education bank
3 Section 1. NEW SECTION. 525.1 Higher education revolving
4loan program.
51. The treasurer of state shall administer a higher
6education revolving loan program to provide loans to students
7or parents of a student to finance all or a portion of the
8cost of a student’s attendance at an institution of higher
9education. A loan provided by the bank under this section
10shall have a rate of interest fixed at one percent per year.
112. The treasurer, in consultation with the college student
12aid commission, shall adopt rules for the bank to provide loans
13pursuant to this section. The rules shall include student
14eligibility requirements, repayment terms, and any other rules
15necessary to properly administer the bank’s higher education
16revolving loan program.
17 Sec. 2. NEW SECTION. 525.2 Establishment of state of Iowa
18higher education bank.
19Subject to article VIII, section 6, of the Constitution of
20the State of Iowa, the state of Iowa higher education bank is
21created with the purpose of encouraging and promoting higher
22education in the state.
23 Sec. 3. NEW SECTION. 525.3 Definitions.
24As used in this chapter, unless the context otherwise
25requires:
261. “Bank” means the state of Iowa higher education bank
27established under this chapter.
282. “Institution of higher education” means any educational
29institution that offers a postsecondary educational degree,
30certificate, or program of study and is eligible to receive
31Tit.IV funds under the federal Higher Education Act of 1965,
32as amended, or state funding or assistance.
333. “Taxable income” means as defined in section 422.4.
34 Sec. 4. NEW SECTION. 525.4 Management of bank — duties of
35treasurer.
-1- 1The treasurer of state shall operate, manage, and control
2the bank, locate and maintain its places of business, and make
3and enforce orders, rules, regulations, and bylaws for the
4transaction of its business. The treasurer shall employ and
5fix the qualifications, duties, and compensation of employees
6of the bank and may enter into contracts for any services that
7may be required to conduct the business of the bank.
8 Sec. 5. NEW SECTION. 525.5 Advisory board of directors.
91. An advisory board of directors to the bank shall
10be appointed to provide recommendations to the treasurer
11regarding the bank. The advisory board shall consist of five
12members appointed by the governor and confirmed by the senate
13pursuant to section 2.32. Two members of the general assembly
14shall serve as ex officio, nonvoting members, one senator to
15be appointed by the majority leader of the senate and one
16representative to be appointed by the speaker of the house of
17representatives. The advisory board shall not be compensated.
18Each member shall serve a term of four years.
192. The advisory board of directors shall have the following
20duties:
21a. Meet regularly with the management of the bank to review
22the bank’s operations to determine whether recommendations
23should be provided to the treasurer relating to improved
24management performance, customer service, internal methods,
25procedures, and operating policies.
26b. Provide recommendations to the treasurer relating to the
27establishment of additional objectives for the operation of the
28bank.
29c. Provide recommendations to the treasurer relating to
30employment practices and personnel policies.
31d. Meet regularly with the treasurer to present any
32recommendations relating to the bank.
33e. Advise the treasurer with respect to the powers and
34functions of the bank.
35 Sec. 6. NEW SECTION. 525.6 Commencement of business.
-2- 1The bank shall not transact any business except such
2business as is incident to commencement of business until the
3treasurer determines that the bank has acquired the minimum
4capital necessary to operate and remain solvent. In doing so,
5the treasurer shall consult with the superintendent of the
6banking division to evaluate and determine the approximate
7amount of capital required to commence operations.
8 Sec. 7. NEW SECTION. 525.7 Acquisition of capital.
9The bank shall acquire capital to operate from any of the
10following sources:
111. Repayment of loans and accrued interest.
122. Appropriations from the general assembly or federal
13government.
143. Appropriations to the fund as provided in section 421.17,
15subsection 14.
164. Funds derived from the settlement of legal disputes
17subject to approval from the general assembly.
18 Sec. 8. NEW SECTION. 525.8 State of Iowa higher education
19bank revolving loan fund.
201. A state of Iowa higher education bank revolving loan
21fund is created in the state treasury under the control of
22the treasurer. The moneys in the fund shall be used by the
23treasurer for the purpose of operating the state of Iowa higher
24education bank.
252. The fund shall consist of moneys credited to the fund
26pursuant to section 525.7 and any other moneys available to
27and obtained or accepted by the treasurer for placement in the
28fund. Notwithstanding section 12C.7, subsection 2, interest or
29earnings on moneys in the fund shall be credited to the fund.
30Notwithstanding section 8.33, moneys that remain unencumbered
31or unobligated at the close of the fiscal year shall not
32revert but shall remain available for the same purpose in the
33succeeding fiscal year.
34DIVISION II
35FEDERAL DEDUCTIBILITY — APPROPRIATION TO STATE OF IOWA HIGHER
-3-1EDUCATION BANK REVOLVING LOAN FUND
2 Sec. 9. Section 421.17, Code 2017, is amended by adding the
3following new subsection:
4 NEW SUBSECTION. 14. a. Beginning in calendar year 2018,
5the director shall by October 15 of each year determine the
6difference between the net amount of individual income taxes
7due and paid for the fiscal year ending on the preceding June
830 and the net amount of individual income taxes that would
9have been due and payable during that fiscal year had the
10provisions of section 422.9, subsection 2, paragraph “b”,
11subparagraph (2), not been applicable, and shall certify such
12amount to the treasurer of state.
13b. There is appropriated from the general fund of the state
14to the state of Iowa higher education bank revolving loan fund
15created in section 525.8 for the fiscal year beginning July 1,
162018, and for each fiscal year thereafter, an amount equal to
17the amount certified during the fiscal year by the director of
18revenue to the treasurer of state pursuant to paragraph “a”.
19 Sec. 10. Section 422.9, subsection 2, paragraph b, Code
202017, is amended to read as follows:
21b. (1) Add the amount of federal income taxes paid or
22accrued, as the case may be, during the tax year and subtract
23any federal income tax refunds received during the tax year.
24Where married persons, who have filed a joint federal income
25tax return, file separately, such total shall be divided
26between them according to the portion of the total paid or
27accrued, as the case may be, by each. Federal income taxes
28paid for a tax year in which an Iowa return was not required
29to be filed shall not be added and federal income tax refunds
30received from a tax year in which an Iowa return was not
31required to be filed shall not be subtracted.
32(2) Notwithstanding subparagraph (1), federal income taxes
33paid for a tax year beginning on or after January 1, 2017,
34in which the taxpayer’s net income exceeds three hundred
35seventy-five thousand dollars in the case of a single person,
-4-1or seven hundred fifty thousand dollars in the case of a
2married couple, shall not be added, and federal income tax
3refunds received from a tax year beginning on or after January
41, 2017, in which the taxpayer’s net income exceeds three
5hundred seventy-five thousand dollars in the case of a single
6person, or seven hundred fifty thousand dollars in the case of
7a married couple, shall not be subtracted.
8 Sec. 11. RETROACTIVE APPLICABILITY. This division of this
9Act applies retroactively to January 1, 2017, for tax years
10beginning on or after that date.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
14This bill establishes the state of Iowa higher education
15bank and revolving loan program and fund and provides moneys
16for the fund by disallowing a deduction for federal taxes paid
17by certain taxpayers. The bill provides that the purpose of
18the bank is to promote and encourage higher education in the
19state.
20Division I provides the state treasurer with the authority
21to operate, manage, and control the public state bank,
22including locating and maintaining its places of business,
23adopting rules and regulations, and employing staff for any
24services that may be required for the bank to conduct its
25business.
26The bill establishes an advisory board of directors to
27provide recommendations to the treasurer regarding the bank.
28The board consists of five members appointed by the governor
29and confirmed by the senate. Two members from the general
30assembly shall serve as ex officio and shall be appointed by
31the majority leader of the senate and the speaker of the house
32of representatives. The board shall not be compensated and
33each member shall serve a term of four years. The board shall
34provide recommendations to the treasurer regarding the bank’s
35operations, additional objectives, the hire of employees, and
-5-1any other recommendations relating to the bank.
2The bill provides that the bank shall not commence its
3operations until the treasurer, after consulting with the
4superintendent of banking, determines that the bank has the
5minimum capital necessary to operate and maintain solvency.
6The bill provides that the bank shall acquire capital to
7operate from the repayment of loans and accrued interest,
8appropriations from the general assembly or federal government,
9revenue from disallowing a deduction for federal taxes paid
10for income taxpayers whose income exceeds $375,000 (single)
11or $750,000 (married) annually, and funds derived from legal
12settlements subject to approval from the general assembly.
13The bill establishes a state of Iowa higher education bank
14revolving loan fund in the state treasury and under the control
15of the treasurer. Moneys in the fund are to be used to operate
16the bank and the loan program and shall not revert to the
17general fund of the state.
18The bill provides that the bank shall establish a higher
19education revolving loan program to provide loans to students
20or parents of a student to finance the cost of attendance at
21an institution of higher education, as defined in the bill. A
22loan provided under this program shall have a fixed rate of
23interest at 1 percent per year. The treasurer, in consultation
24with the college student aid commission, is required to adopt
25rules to administer the program.
26Division II disallows the Iowa income tax deduction for
27federal income taxes paid for tax years beginning on or after
28January 1, 2017, if the taxpayer’s net income for the tax year
29exceeds $750,000 ($375,000 for a single person). Beginning
30in 2018, the bill requires the director of the department
31of revenue to calculate the additional Iowa income tax
32revenues collected as a result of the disallowance of federal
33deductibility for each fiscal year and certify that amount to
34the treasurer of state by October 15. For each fiscal year
35beginning on or after July 1, 2018, an amount equal to the
-6-1amount certified by the director of revenue during the fiscal
2year is appropriated from the general fund of the state to the
3state of Iowa higher education bank revolving loan fund created
4in the bill.
5Division II applies retroactively to January 1, 2017, for
6tax years beginning on or after that date.
-7-gh/sc
2revolving loan program and fund and making appropriations
3to the fund of amounts certified due to the elimination of
4the deduction for federal taxes paid by certain individual
5income taxpayers and including retroactive applicability
6provisions.
7BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2creation of state of iowa higher education bank
3 Section 1. NEW SECTION. 525.1 Higher education revolving
4loan program.
51. The treasurer of state shall administer a higher
6education revolving loan program to provide loans to students
7or parents of a student to finance all or a portion of the
8cost of a student’s attendance at an institution of higher
9education. A loan provided by the bank under this section
10shall have a rate of interest fixed at one percent per year.
112. The treasurer, in consultation with the college student
12aid commission, shall adopt rules for the bank to provide loans
13pursuant to this section. The rules shall include student
14eligibility requirements, repayment terms, and any other rules
15necessary to properly administer the bank’s higher education
16revolving loan program.
17 Sec. 2. NEW SECTION. 525.2 Establishment of state of Iowa
18higher education bank.
19Subject to article VIII, section 6, of the Constitution of
20the State of Iowa, the state of Iowa higher education bank is
21created with the purpose of encouraging and promoting higher
22education in the state.
23 Sec. 3. NEW SECTION. 525.3 Definitions.
24As used in this chapter, unless the context otherwise
25requires:
261. “Bank” means the state of Iowa higher education bank
27established under this chapter.
282. “Institution of higher education” means any educational
29institution that offers a postsecondary educational degree,
30certificate, or program of study and is eligible to receive
31Tit.IV funds under the federal Higher Education Act of 1965,
32as amended, or state funding or assistance.
333. “Taxable income” means as defined in section 422.4.
34 Sec. 4. NEW SECTION. 525.4 Management of bank — duties of
35treasurer.
-1- 1The treasurer of state shall operate, manage, and control
2the bank, locate and maintain its places of business, and make
3and enforce orders, rules, regulations, and bylaws for the
4transaction of its business. The treasurer shall employ and
5fix the qualifications, duties, and compensation of employees
6of the bank and may enter into contracts for any services that
7may be required to conduct the business of the bank.
8 Sec. 5. NEW SECTION. 525.5 Advisory board of directors.
91. An advisory board of directors to the bank shall
10be appointed to provide recommendations to the treasurer
11regarding the bank. The advisory board shall consist of five
12members appointed by the governor and confirmed by the senate
13pursuant to section 2.32. Two members of the general assembly
14shall serve as ex officio, nonvoting members, one senator to
15be appointed by the majority leader of the senate and one
16representative to be appointed by the speaker of the house of
17representatives. The advisory board shall not be compensated.
18Each member shall serve a term of four years.
192. The advisory board of directors shall have the following
20duties:
21a. Meet regularly with the management of the bank to review
22the bank’s operations to determine whether recommendations
23should be provided to the treasurer relating to improved
24management performance, customer service, internal methods,
25procedures, and operating policies.
26b. Provide recommendations to the treasurer relating to the
27establishment of additional objectives for the operation of the
28bank.
29c. Provide recommendations to the treasurer relating to
30employment practices and personnel policies.
31d. Meet regularly with the treasurer to present any
32recommendations relating to the bank.
33e. Advise the treasurer with respect to the powers and
34functions of the bank.
35 Sec. 6. NEW SECTION. 525.6 Commencement of business.
-2- 1The bank shall not transact any business except such
2business as is incident to commencement of business until the
3treasurer determines that the bank has acquired the minimum
4capital necessary to operate and remain solvent. In doing so,
5the treasurer shall consult with the superintendent of the
6banking division to evaluate and determine the approximate
7amount of capital required to commence operations.
8 Sec. 7. NEW SECTION. 525.7 Acquisition of capital.
9The bank shall acquire capital to operate from any of the
10following sources:
111. Repayment of loans and accrued interest.
122. Appropriations from the general assembly or federal
13government.
143. Appropriations to the fund as provided in section 421.17,
15subsection 14.
164. Funds derived from the settlement of legal disputes
17subject to approval from the general assembly.
18 Sec. 8. NEW SECTION. 525.8 State of Iowa higher education
19bank revolving loan fund.
201. A state of Iowa higher education bank revolving loan
21fund is created in the state treasury under the control of
22the treasurer. The moneys in the fund shall be used by the
23treasurer for the purpose of operating the state of Iowa higher
24education bank.
252. The fund shall consist of moneys credited to the fund
26pursuant to section 525.7 and any other moneys available to
27and obtained or accepted by the treasurer for placement in the
28fund. Notwithstanding section 12C.7, subsection 2, interest or
29earnings on moneys in the fund shall be credited to the fund.
30Notwithstanding section 8.33, moneys that remain unencumbered
31or unobligated at the close of the fiscal year shall not
32revert but shall remain available for the same purpose in the
33succeeding fiscal year.
34DIVISION II
35FEDERAL DEDUCTIBILITY — APPROPRIATION TO STATE OF IOWA HIGHER
-3-1EDUCATION BANK REVOLVING LOAN FUND
2 Sec. 9. Section 421.17, Code 2017, is amended by adding the
3following new subsection:
4 NEW SUBSECTION. 14. a. Beginning in calendar year 2018,
5the director shall by October 15 of each year determine the
6difference between the net amount of individual income taxes
7due and paid for the fiscal year ending on the preceding June
830 and the net amount of individual income taxes that would
9have been due and payable during that fiscal year had the
10provisions of section 422.9, subsection 2, paragraph “b”,
11subparagraph (2), not been applicable, and shall certify such
12amount to the treasurer of state.
13b. There is appropriated from the general fund of the state
14to the state of Iowa higher education bank revolving loan fund
15created in section 525.8 for the fiscal year beginning July 1,
162018, and for each fiscal year thereafter, an amount equal to
17the amount certified during the fiscal year by the director of
18revenue to the treasurer of state pursuant to paragraph “a”.
19 Sec. 10. Section 422.9, subsection 2, paragraph b, Code
202017, is amended to read as follows:
21b. (1) Add the amount of federal income taxes paid or
22accrued, as the case may be, during the tax year and subtract
23any federal income tax refunds received during the tax year.
24Where married persons, who have filed a joint federal income
25tax return, file separately, such total shall be divided
26between them according to the portion of the total paid or
27accrued, as the case may be, by each. Federal income taxes
28paid for a tax year in which an Iowa return was not required
29to be filed shall not be added and federal income tax refunds
30received from a tax year in which an Iowa return was not
31required to be filed shall not be subtracted.
32(2) Notwithstanding subparagraph (1), federal income taxes
33paid for a tax year beginning on or after January 1, 2017,
34in which the taxpayer’s net income exceeds three hundred
35seventy-five thousand dollars in the case of a single person,
-4-1or seven hundred fifty thousand dollars in the case of a
2married couple, shall not be added, and federal income tax
3refunds received from a tax year beginning on or after January
41, 2017, in which the taxpayer’s net income exceeds three
5hundred seventy-five thousand dollars in the case of a single
6person, or seven hundred fifty thousand dollars in the case of
7a married couple, shall not be subtracted.
8 Sec. 11. RETROACTIVE APPLICABILITY. This division of this
9Act applies retroactively to January 1, 2017, for tax years
10beginning on or after that date.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
14This bill establishes the state of Iowa higher education
15bank and revolving loan program and fund and provides moneys
16for the fund by disallowing a deduction for federal taxes paid
17by certain taxpayers. The bill provides that the purpose of
18the bank is to promote and encourage higher education in the
19state.
20Division I provides the state treasurer with the authority
21to operate, manage, and control the public state bank,
22including locating and maintaining its places of business,
23adopting rules and regulations, and employing staff for any
24services that may be required for the bank to conduct its
25business.
26The bill establishes an advisory board of directors to
27provide recommendations to the treasurer regarding the bank.
28The board consists of five members appointed by the governor
29and confirmed by the senate. Two members from the general
30assembly shall serve as ex officio and shall be appointed by
31the majority leader of the senate and the speaker of the house
32of representatives. The board shall not be compensated and
33each member shall serve a term of four years. The board shall
34provide recommendations to the treasurer regarding the bank’s
35operations, additional objectives, the hire of employees, and
-5-1any other recommendations relating to the bank.
2The bill provides that the bank shall not commence its
3operations until the treasurer, after consulting with the
4superintendent of banking, determines that the bank has the
5minimum capital necessary to operate and maintain solvency.
6The bill provides that the bank shall acquire capital to
7operate from the repayment of loans and accrued interest,
8appropriations from the general assembly or federal government,
9revenue from disallowing a deduction for federal taxes paid
10for income taxpayers whose income exceeds $375,000 (single)
11or $750,000 (married) annually, and funds derived from legal
12settlements subject to approval from the general assembly.
13The bill establishes a state of Iowa higher education bank
14revolving loan fund in the state treasury and under the control
15of the treasurer. Moneys in the fund are to be used to operate
16the bank and the loan program and shall not revert to the
17general fund of the state.
18The bill provides that the bank shall establish a higher
19education revolving loan program to provide loans to students
20or parents of a student to finance the cost of attendance at
21an institution of higher education, as defined in the bill. A
22loan provided under this program shall have a fixed rate of
23interest at 1 percent per year. The treasurer, in consultation
24with the college student aid commission, is required to adopt
25rules to administer the program.
26Division II disallows the Iowa income tax deduction for
27federal income taxes paid for tax years beginning on or after
28January 1, 2017, if the taxpayer’s net income for the tax year
29exceeds $750,000 ($375,000 for a single person). Beginning
30in 2018, the bill requires the director of the department
31of revenue to calculate the additional Iowa income tax
32revenues collected as a result of the disallowance of federal
33deductibility for each fiscal year and certify that amount to
34the treasurer of state by October 15. For each fiscal year
35beginning on or after July 1, 2018, an amount equal to the
-6-1amount certified by the director of revenue during the fiscal
2year is appropriated from the general fund of the state to the
3state of Iowa higher education bank revolving loan fund created
4in the bill.
5Division II applies retroactively to January 1, 2017, for
6tax years beginning on or after that date.
-7-gh/sc