Bill Text: IA HF313 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act providing education savings grants for pupils attending a nonpublic school or receiving competent private instruction, establishing an education savings grant fund, making appropriations, providing penalties, and including applicability provisions.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2015-02-19 - Subcommittee, Highfill, Byrnes, and Winckler. H.J. 363. [HF313 Detail]
Download: Iowa-2015-HF313-Introduced.html
House File 313 - Introduced HOUSE FILE BY HIGHFILL A BILL FOR 1 An Act providing education savings grants for pupils attending 2 a nonpublic school or receiving competent private 3 instruction, establishing an education savings grant fund, 4 making appropriations, providing penalties, and including 5 applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 2204YH (2) 86 md/sc PAG LIN 1 1 Section 1. Section 12D.3, subsection 1, paragraph a, Code 1 2 2015, is amended to read as follows: 1 3 a. Each participation agreement may require a participant 1 4 to agree to invest a specific amount of money in the trust 1 5 for a specific period of time for the benefit of a specific 1 6 beneficiary. A participant shall not be required to make an 1 7 annual contribution on behalf of a beneficiary. The maximum 1 8 contribution that may be deducted for Iowa income tax purposes 1 9 shall not exceed two thousand dollars per beneficiary per year 1 10 adjusted annually to reflect increases in the consumer price 1 11 index. Contributions to an account that are moneys from an 1 12 education savings grant under section 257.11B shall not be 1 13 considered a contribution that may be deducted for Iowa income 1 14 tax purposes. The treasurer of state shall set an account 1 15 balance limit to maintain compliance with section 529 of the 1 16 Internal Revenue Code. A contribution shall not be permitted 1 17 to the extent it causes the aggregate balance of all accounts 1 18 established for the same beneficiary to exceed the applicable 1 19 account balance limit. 1 20 Sec. 2. Section 256.7, Code 2015, is amended by adding the 1 21 following new subsection: 1 22 NEW SUBSECTION. 33. Adopt rules relating to applications 1 23 for an education savings grant pursuant to section 257.11B, 1 24 including application processing timelines and information 1 25 required to be submitted by a parent or guardian. 1 26 Sec. 3. NEW SECTION. 257.11B Education savings grant 1 27 program. 1 28 1. Pupils eligible to enroll in grades kindergarten through 1 29 twelve and attending a nonpublic school or receiving competent 1 30 private instruction under chapter 299A shall be eligible to 1 31 receive an education savings grant in the manner provided in 1 32 this section for school years beginning on or after July 1, 1 33 2016. Education savings grants shall be made available to 1 34 parents and guardians in the manner authorized under subsection 1 35 4, paragraph "c", for the payment of qualified educational 2 1 expenses as provided in this section. 2 2 2. a. (1) By January 31 preceding the school year for 2 3 which the education savings grant is requested, the parent 2 4 or guardian of the pupil requesting to receive an education 2 5 savings grant shall submit an application to the department of 2 6 education, on application forms developed by the department, 2 7 indicating that the parent or guardian intends to enroll the 2 8 pupil in a nonpublic school or provide competent private 2 9 instruction for the pupil under chapter 299A. 2 10 (2) In addition to such information deemed appropriate by 2 11 the department of education, the application shall require 2 12 certification from the nonpublic school of the pupil's 2 13 enrollment for the following school year or a statement 2 14 indicating the parent or guardian's intent to provide or 2 15 arrange for competent private instruction for the pupil for the 2 16 following school year. 2 17 b. By March 1 preceding the school year for which the 2 18 education savings grant is requested, the department of 2 19 education shall notify the department of management of the 2 20 number of pupils in each school district designated for the 2 21 following school year to receive an education savings grant 2 22 and the amount of the education savings grant for each pupil. 2 23 The department of education shall also notify the parent 2 24 or guardian of such pupils who are approved to receive an 2 25 education savings grant. 2 26 c. Education savings grants shall only be approved for one 2 27 school year and applications must be submitted under paragraph 2 28 "a" for education savings grants in subsequent school years. 2 29 3. a. The department of management shall assign each pupil 2 30 an education savings grant in an amount equal to the statewide 2 31 average state foundation aid per pupil in the same school year. 2 32 b. The department of management shall on July 1 following 2 33 the determination of the amount of the education savings grant 2 34 for each approved pupil transfer such amounts to the pupil's 2 35 account in the education savings grant fund established under 3 1 subsection 4. Such amount shall be available to the pupil's 3 2 parent or guardian in the manner authorized under subsection 3 3 4, paragraph "c", for the payment of qualified educational 3 4 expenses incurred by such persons for the pupil during that 3 5 school year. 3 6 4. An education savings grant fund is created in the state 3 7 treasury under the control of the department of management 3 8 consisting of moneys appropriated to the department for the 3 9 purpose of providing education savings grants under this 3 10 section. For the fiscal year commencing July 1, 2016, and 3 11 each succeeding fiscal year, there is appropriated from the 3 12 general fund of the state to the department of management to be 3 13 credited to the fund the amount necessary to pay all education 3 14 savings grants approved for that fiscal year. The director of 3 15 the department of management has all powers necessary to carry 3 16 out and effectuate the purposes, objectives, and provisions of 3 17 this section pertaining to the fund, including the power to do 3 18 all of the following: 3 19 a. Make and enter into contracts necessary for the 3 20 administration of the fund. 3 21 b. Procure insurance against any loss in connection with the 3 22 assets of the fund or require a surety bond. 3 23 c. Contract with a private financial management firm to 3 24 manage the fund, in collaboration with the treasurer of state, 3 25 including providing for the disbursement of education savings 3 26 grants in the form of an electronic debit card or checks that 3 27 are payable directly from the pupil's account in the fund. 3 28 d. Conduct audits or other review necessary to properly 3 29 administer the program. 3 30 e. Adopt rules pursuant to chapter 17A for the 3 31 administration of the fund and accounts in the fund. 3 32 5. a. For each pupil approved for an education savings 3 33 grant, the department shall establish an account for that pupil 3 34 in the education savings grant fund. The amount of the pupil's 3 35 education savings grant determined under subsection 3 shall be 4 1 deposited into the pupil's account on July 1 and such amount 4 2 shall be immediately available for the payment of qualified 4 3 educational expenses incurred by the parent or guardian for 4 4 the pupil during that fiscal year using the payment method 4 5 authorized under subsection 4, paragraph "c". 4 6 b. A nonpublic school or other entity that accepts payment 4 7 from a parent or guardian using funds from a pupil's account in 4 8 the education savings grant fund shall not refund, rebate, or 4 9 share any portion of such payment with the parent, guardian, or 4 10 pupil. 4 11 c. Moneys remaining in a pupil's account upon conclusion 4 12 of the fiscal year shall remain in the pupil's account in the 4 13 education savings grant fund for the payment of qualified 4 14 educational expenses in future fiscal years or for the payment 4 15 of higher education costs under subsection 8. 4 16 6. For purposes of this section, "qualified educational 4 17 expenses" includes tuition and fees at a nonpublic school, 4 18 textbooks, fees or payments for educational therapies including 4 19 tutoring or cognitive skills training, curriculum fees and 4 20 materials for a course of study for a specific subject matter 4 21 or grade level, tuition or fees for nonpublic online education 4 22 programs, education materials and services for pupils with 4 23 disabilities including the cost of paraprofessionals and 4 24 assistants who are trained in accordance with state law, 4 25 standardized test fees, fees required by the department 4 26 not to exceed for each grant recipient five percent of the 4 27 total grant amount in any fiscal year, contributions to an 4 28 Iowa education savings plan trust account under chapter 12D, 4 29 contributions to a Coverdell education savings account under 26 4 30 U.S.C. {530, higher education expenses, as defined in section 4 31 12D.1, excluding room and board expenses, and other expenses 4 32 incurred by the parent or guardian that are directly related 4 33 to the education of the pupil at a nonpublic school, including 4 34 a nonpublic school accredited by an independent accrediting 4 35 agency approved by the department of education, or directly 5 1 related to providing competent private instruction for the 5 2 pupil under chapter 299A. The cost of one computer or other 5 3 portable computing device shall be allowed as a qualified 5 4 educational expense for a pupil if such a purchase has not been 5 5 made using funds from that pupil's account in either of the 5 6 two immediately preceding fiscal years. "Qualified educational 5 7 expenses" do not include transportation costs for the pupil, the 5 8 cost of food or refreshments consumed by the pupil, the cost of 5 9 clothing for the pupil, or the cost of disposable materials, 5 10 including but not limited to paper, notebooks, pencils, pens, 5 11 and art supplies. 5 12 7. A person who makes a false claim for the purpose 5 13 of obtaining an education savings grant provided for in 5 14 this section or who knowingly receives the grant or makes a 5 15 payment from an account in the education savings grant fund 5 16 without being legally entitled to it is guilty of a fraudulent 5 17 practice. The false claim for an education savings grant or a 5 18 payment from an account shall be disallowed and if amounts from 5 19 the grant have been disbursed from the applicable account in 5 20 the education savings grant fund, the department of management 5 21 shall initiate legal proceedings to recover such amounts. A 5 22 parent or guardian, or a pupil for purposes of subsection 8, 5 23 who violates this subsection is prohibited from participating 5 24 in the education savings grant program in the future. 5 25 8. For each pupil with a positive balance in the pupil's 5 26 account in the education savings grant fund upon graduation 5 27 from high school or completion of an equivalent level of 5 28 competent private instruction under chapter 299A, the 5 29 department of management shall maintain the account in the 5 30 fund until the pupil is twenty=five years of age. Following 5 31 graduation from high school until the pupil is twenty=five 5 32 years of age, moneys in the pupil's account may be used for 5 33 higher education costs, as defined in section 12D.1, subsection 5 34 2, incurred by the pupil while attending an institution of 5 35 higher education under the control of the state board of 6 1 regents, a community college located in this state, or a 6 2 private college or university located in this state. Payments 6 3 from a pupil's account for higher education costs shall be 6 4 made in the same manner as payments for qualified educational 6 5 expenses under subsection 5. Moneys in a pupil's account when 6 6 the pupil turns twenty=five years of age shall be transferred 6 7 by the department for deposit in the general fund of the state. 6 8 9. This section shall not be construed to authorize the 6 9 state or any political subdivision of the state to exercise 6 10 authority over any nonpublic school or pupil receiving 6 11 competent private instruction under chapter 299A or construed 6 12 to require a nonpublic school to modify its admissions or 6 13 educational program in order to receive payment from a parent 6 14 or guardian using funds from a pupil's account in the education 6 15 savings grant fund. A nonpublic school or entity providing 6 16 competent private instruction under chapter 299A, that accepts 6 17 payment from a parent or guardian using funds from a pupil's 6 18 account in the education savings grant fund is not an agent of 6 19 this state or other political subdivision of this state. Rules 6 20 adopted by the department to implement this section that impose 6 21 an undue burden on a nonpublic school or entity providing 6 22 competent private instruction under chapter 299A are invalid. 6 23 Sec. 4. Section 422.7, Code 2015, is amended by adding the 6 24 following new subsection: 6 25 NEW SUBSECTION. 51. Subtract, to the extent included, the 6 26 amount of any education savings grant under section 257.11B 6 27 received during the tax year by a taxpayer authorized to spend 6 28 such grant amounts for qualified educational expenses. 6 29 Sec. 5. APPLICABILITY. This Act applies to school budget 6 30 years and fiscal years beginning on or after July 1, 2016. 6 31 Sec. 6. APPLICABILITY. The following provisions of this Act 6 32 apply to tax years beginning on or after January 1, 2016: 6 33 1. The section of this Act amending section 12D.3. 6 34 2. The section of this Act amending section 422.7. 6 35 EXPLANATION 7 1 The inclusion of this explanation does not constitute agreement with 7 2 the explanation's substance by the members of the general assembly. 7 3 This bill provides education savings grants for pupils 7 4 attending a nonpublic school or receiving competent private 7 5 instruction and establishes an education savings grant fund. 7 6 Under the bill, pupils eligible to enroll in grades 7 7 kindergarten through 12 and attending a nonpublic school or 7 8 receiving competent private instruction under Code chapter 7 9 299A are eligible to receive an education savings grant for 7 10 school years beginning on or after July 1, 2016. By January 31 7 11 preceding the school year for which the education savings grant 7 12 is requested, the parent or guardian of the pupil requesting to 7 13 receive an education savings grant must submit an application 7 14 to the department of education indicating that the parent or 7 15 guardian intends to enroll the pupil in a nonpublic school or 7 16 provide competent private instruction for the pupil. 7 17 The bill requires that by March 1 preceding the school 7 18 year for which the education savings grant is requested, 7 19 the department of education must notify the department of 7 20 management of the number of pupils in each school district 7 21 designated for the following school year to receive an 7 22 education savings grant and the amount of the education savings 7 23 grant for each pupil. Education savings grants may only be 7 24 approved for one school year and applications must be submitted 7 25 for education savings grants in subsequent school years. 7 26 The amount of each education savings grant is equal to the 7 27 statewide average state foundation aid per pupil in the same 7 28 school year. 7 29 The bill creates an education savings grant fund in the state 7 30 treasury under the control of the department of management 7 31 consisting of moneys appropriated to the department for the 7 32 purpose of providing education savings grants. For the fiscal 7 33 year commencing July 1, 2016, and each succeeding fiscal year, 7 34 there is appropriated from the general fund of the state to the 7 35 department of management for deposit in the fund the amount 8 1 necessary to pay all education savings grants approved for 8 2 that fiscal year. For each pupil approved for an education 8 3 savings grant, the department of management must establish an 8 4 account for that pupil in the education savings grant fund. 8 5 The amount of the pupil's education savings grant is deposited 8 6 into the pupil's account on July 1 and such amount is available 8 7 for use by parents and guardians for the payment of qualified 8 8 educational expenses, as defined in the bill, incurred by the 8 9 parent or guardian for the pupil during that fiscal year. 8 10 The bill authorizes the department of education to 8 11 contract with a private financial management firm to manage 8 12 the education savings grant fund, in collaboration with the 8 13 treasurer of state, including providing for the disbursement 8 14 of education savings grants in the form of an electronic debit 8 15 card or checks that are payable directly from the pupil's 8 16 account within the fund. 8 17 The bill provides that moneys remaining in a pupil's account 8 18 upon the conclusion of the fiscal year shall remain in the 8 19 pupil's account within the education savings grant fund for 8 20 the payment of qualified educational expenses in future fiscal 8 21 years or for higher education costs as authorized in the bill. 8 22 Under the bill, for each pupil with a positive balance in 8 23 the pupil's account in the education savings grant fund upon 8 24 graduation from high school or completion of an equivalent 8 25 level of competent private instruction under Code chapter 8 26 299A, the department of management is required to maintain the 8 27 account in the fund until the pupil is 25 years old. Until 8 28 the pupil is 25 years old, moneys in the pupil's account may 8 29 be used by the pupil for higher education costs, as defined 8 30 in Code section 12D.1. Moneys in a pupil's account when the 8 31 pupil turns 25 years old are transferred by the department of 8 32 management for deposit in the general fund of the state. 8 33 The bill provides that a person who makes a false claim for 8 34 the purpose of obtaining an education savings grant or who 8 35 knowingly receives the grant or makes a payment from an account 9 1 within the education savings grant fund without being legally 9 2 entitled to it is guilty of a fraudulent practice and is 9 3 subject to a criminal penalty. The bill allows the department 9 4 of management to initiate legal proceedings to recover grants 9 5 and amounts improperly awarded or paid from accounts under the 9 6 bill. 9 7 The bill provides that moneys from an education savings 9 8 grant under the bill are not taxable income under Code chapter 9 9 422. In addition, the bill provides that contributions to an 9 10 Iowa education savings plan trust account under Code chapter 9 11 12D that are moneys from an education savings grant under the 9 12 bill are not considered a contribution that may be deducted for 9 13 Iowa income tax purposes. 9 14 The bill applies to school budget years and fiscal years 9 15 beginning on or after July 1, 2016. 9 16 The provisions of the bill amending Code sections 12D.3 and 9 17 422.7 apply to tax years beginning on or after January 1, 2016. LSB 2204YH (2) 86 md/sc
