Bill Text: IA HF2251 | 2011-2012 | 84th General Assembly | Introduced
Bill Title: A bill for an act providing for a tax credit for the repayment of certain student loan debt and including applicability provisions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-02-16 - Subcommittee, Helland, Isenhart, and Sands. H.J. 289. [HF2251 Detail]
Download: Iowa-2011-HF2251-Introduced.html
House
File
2251
-
Introduced
HOUSE
FILE
2251
BY
ISENHART
A
BILL
FOR
An
Act
providing
for
a
tax
credit
for
the
repayment
of
certain
1
student
loan
debt
and
including
applicability
provisions.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
NEW
SECTION
.
261.113
Educational
Opportunities
1
Tax
Credit
Program.
2
1.
For
purposes
of
this
section,
unless
the
context
3
otherwise
requires:
4
a.
“Commission”
means
the
college
student
aid
commission.
5
b.
“Eligible
institution”
means
a
postsecondary
educational
6
institution
in
this
state
that
meets
the
requirements
of
the
7
provisions
of
the
federal
Higher
Education
Act
of
1965
for
8
student
participation
in
the
federal
interest
subsidy
program
9
and
the
requirements
prescribed
by
rule
of
the
commission.
10
c.
“Eligible
lender”
means
the
same
as
defined
in
section
11
261.35.
12
d.
“Eligible
student”
means
a
person
who
has
entered
into
a
13
program
agreement
that
meets
the
requirements
of
subsections
4
14
and
5.
15
e.
“Program”
means
the
educational
opportunities
tax
credit
16
program
established
in
this
section.
17
f.
“Program
agreement”
means
an
agreement
to
attend
an
18
eligible
institution
entered
into
between
the
commission
and
a
19
student
pursuant
to
subsections
4
and
5.
20
g.
“Qualified
student
debt”
means
the
maximum
amount
of
an
21
eligible
student’s
loan
principal
as
determined
pursuant
to
22
subsection
7.
23
2.
The
commission
shall
establish
and
administer
an
24
educational
opportunities
tax
credit
program
pursuant
to
this
25
section.
The
purpose
of
the
program
is
to
reimburse
eligible
26
students
who
agree
to
remain
Iowa
residents,
or
employers
27
of
such
students,
for
the
amount
of
qualified
student
debt
28
borrowed
and
repaid
in
order
to
attend
an
eligible
institution.
29
3.
The
commission
shall
coordinate
with
eligible
30
institutions,
eligible
students,
eligible
lenders,
and
the
31
department
of
revenue
in
the
administration
of
the
program.
32
4.
The
commission
shall
enter
into
a
program
agreement
with
33
a
student
wishing
to
enroll
at
an
eligible
institution
and
34
participate
in
the
program.
As
part
of
the
program
agreement,
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the
student
shall
covenant
and
agree
to
the
following:
1
a.
That
the
person
is
an
Iowa
resident,
will
remain
a
2
resident
while
pursuing
a
degree
from
an
eligible
institution,
3
and
will
be
for
the
entirety
of
each
tax
year
for
which
the
4
person
wishes
to
claim
a
tax
credit
under
the
program.
A
5
person
not
meeting
the
residency
requirements
of
this
paragraph
6
is
not
eligible
to
claim
the
tax
credit.
7
b.
To
enroll
in
a
degree
program
at
an
eligible
8
institution.
The
degree
to
be
pursued
and
the
time
allowed
9
for
its
completion
shall
be
determined
under
the
terms
of
10
the
agreement.
A
student
shall
not
be
required
to
complete
11
the
degree
at
the
eligible
institution
at
which
the
student
12
initially
enrolled
provided
all
coursework
for
the
degree
is
13
completed
at
eligible
institutions.
14
c.
To
keep
all
necessary
financial
and
educational
records
15
relating
to
the
degree
pursued
and
the
qualified
student
debt
16
incurred
for
a
period
of
not
less
than
three
years
after
the
17
last
tax
year
in
which
a
tax
credit
under
the
program
is
18
claimed.
19
d.
That
only
qualified
student
debt
is
eligible
to
be
20
claimed
as
a
tax
credit
under
the
program.
21
e.
That
any
acceleration
in
the
repayment
schedule
of
the
22
qualified
student
debt
will
result
in
a
forfeiture
of
the
tax
23
credit
in
that
tax
year
and
all
subsequent
tax
years.
24
f.
To
refinance
the
loans
comprising
qualified
student
debt
25
only
if
they
remain
separate
from
all
other
debt
and
if
both
26
the
annual
repayments
and
the
total
remaining
indebtedness
27
under
the
loan’s
amortization
schedule
will
be
reduced
by
such
28
refinancing.
29
5.
A
student
shall
not
enter
into
more
than
one
program
30
agreement
or
claim
the
tax
credit
available
under
the
program
31
more
than
once.
32
6.
An
eligible
institution
shall
notify
the
commission
33
when
an
eligible
student
has
completed
applicable
degree
34
requirements
contained
in
the
program
agreement’s
covenants
and
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shall
certify
to
the
commission
the
eligible
student’s
amount
1
of
qualified
student
debt.
2
7.
a.
An
eligible
student’s
qualified
student
debt
shall
3
be
the
lesser
of
the
following:
4
(1)
The
total
amount
of
principal
borrowed
from
an
eligible
5
lender
for
purposes
of
paying
the
amount
of
tuition
and
6
mandatory
fees
required
in
order
to
obtain
a
degree
from
an
7
eligible
institution.
8
(2)
The
standard
principal
amount.
For
purposes
of
this
9
section,
“standard
principal
amount”
means
the
total
average
10
annual
amount
of
in-state
tuition
and
mandatory
fees
charged
11
for
attendance
at
the
institutions
of
higher
learning
under
12
the
control
of
the
state
board
of
regents
during
the
time
the
13
eligible
student
attended
an
eligible
institution.
14
b.
Only
loans
included
as
part
of
a
financial
aid
package
15
awarded
to
the
eligible
student
by
an
eligible
institution
16
shall
be
included
in
the
amount
of
qualified
student
debt
17
determined
pursuant
to
this
subsection.
18
8.
After
verifying
the
fulfillment
of
the
program
19
agreement’s
covenants
and
certifying
the
amount
of
qualified
20
student
debt,
the
commission
shall
issue
to
the
eligible
21
student
a
tax
credit
certificate
which
shall
contain
the
22
eligible
student’s
name,
address,
tax
identification
number,
23
the
amount
of
the
tax
credit,
and
any
other
information
24
required
by
the
department
of
revenue.
25
9.
The
commission,
in
consultation
with
the
department
of
26
revenue,
shall
adopt
rules
pursuant
to
chapter
17A
for
the
27
implementation
and
administration
of
the
program.
28
10.
a.
(1)
An
educational
opportunities
tax
credit
shall
29
be
allowed
against
the
taxes
imposed
in
chapter
422,
divisions
30
II,
III,
and
V,
and
in
chapter
432,
and
against
the
moneys
and
31
credits
tax
imposed
in
section
533.329,
for
the
repayment
of
32
qualified
student
debt.
33
(2)
An
individual
may
claim
the
tax
credit
under
this
34
section
of
a
partnership,
limited
liability
company,
S
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corporation,
estate,
or
trust
electing
to
have
income
taxed
1
directly
to
the
individual.
The
amount
claimed
by
the
2
individual
shall
be
based
upon
the
pro
rata
share
of
the
3
individual’s
earnings
from
the
partnership,
limited
liability
4
company,
S
corporation,
estate,
or
trust.
5
b.
(1)
An
employer
may
claim
a
tax
credit
under
this
6
section
for
payments
made
directly
to
an
eligible
lender
on
7
behalf
of
an
eligible
student
with
qualified
student
debt
who
8
has
been
issued
a
tax
credit
certificate
pursuant
to
this
9
section.
10
(2)
Such
an
employer
may
claim
the
tax
credit
in
an
amount
11
equal
to
the
payments
made
by
the
employer
of
qualified
student
12
debt
that
came
due
during
the
eligible
student’s
period
of
13
employment
with
the
employer.
14
(3)
The
employer
may
require
a
person
to
provide
a
copy
of
15
the
program
agreement
and
a
copy
of
the
tax
credit
certificate
16
issued
pursuant
to
this
section
in
order
to
verify
that
a
17
person
is
an
eligible
student
with
qualified
student
debt.
18
(4)
The
employer
claiming
a
tax
credit
under
the
program
19
shall
retain
all
relevant
records
for
at
least
three
tax
years
20
following
the
last
tax
year
in
which
the
tax
credit
is
claimed.
21
c.
An
eligible
student
and
the
eligible
student’s
employer
22
may
both
claim
tax
credits
for
payments
of
qualified
student
23
debt,
but
the
same
payment
of
qualified
student
debt
shall
not
24
be
claimed
by
more
than
one
taxpayer.
25
d.
Any
tax
credit
in
excess
of
the
taxpayer’s
liability
26
for
the
tax
year
is
not
refundable
but
may
be
credited
to
the
27
tax
liability
for
the
following
ten
years
or
until
depleted,
28
whichever
is
earlier.
A
tax
credit
shall
not
be
carried
back
29
to
a
tax
year
prior
to
the
tax
year
in
which
the
taxpayer
first
30
receives
the
tax
credit.
31
e.
An
eligible
student
or
employer
may
claim
the
tax
credit
32
only
if
the
eligible
student
is
in
compliance
with
the
program
33
agreement,
is
an
Iowa
resident
while
working
for
the
employer
34
located
in
Iowa,
and
is
not
in
arrears
on
the
repayment
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schedule
for
the
qualified
student
debt.
1
11.
a.
(1)
To
claim
the
educational
opportunities
2
tax
credit,
an
eligible
student
must
attach
the
tax
credit
3
certificate
issued
by
the
commission
to
the
taxpayer’s
tax
4
return.
5
(2)
To
claim
the
educational
opportunities
tax
credit
for
6
payments
made
on
behalf
of
an
eligible
student,
a
taxpayer
7
shall
attach
a
copy
of
the
tax
credit
certificate
issued
to
the
8
eligible
student
and
any
information
required
by
the
department
9
of
revenue
pertaining
to
the
payments
made
to
an
eligible
10
lender.
11
b.
The
tax
credit
certificate
or
certificates
attached
12
to
the
taxpayer’s
tax
return
shall
be
issued
in
the
eligible
13
student’s
name,
expire
on
or
after
the
last
day
of
the
taxable
14
year
for
which
the
taxpayer
is
claiming
the
tax
credit,
and
15
show
a
tax
credit
amount
equal
to
or
greater
than
the
tax
16
credit
claimed
on
the
taxpayer’s
tax
return.
17
c.
The
tax
credit
certificate,
unless
rescinded
by
the
18
commission,
shall
be
accepted
by
the
department
of
revenue
as
19
payment
for
taxes
imposed
pursuant
to
chapter
422,
divisions
20
II,
III,
and
V,
and
in
chapter
432,
and
for
the
moneys
and
21
credits
tax
imposed
in
section
533.329,
subject
to
any
22
conditions
or
restrictions
placed
by
the
commission
upon
23
the
face
of
the
tax
credit
certificate
and
subject
to
the
24
limitations
of
this
section.
25
d.
Except
as
otherwise
provided
in
this
section,
a
tax
26
credit
certificate
is
not
transferable
to
any
person
or
entity.
27
12.
An
eligible
student
who
exercises
the
forbearance
28
or
deferment
provisions
of
a
loan
agreement
that
comprises
29
a
portion
of
the
student’s
qualified
student
debt
does
not
30
forfeit
the
right
to
claim
the
tax
credit
available
under
this
31
section.
The
department
of
revenue
shall
toll
the
carryforward
32
provisions
of
subsection
10,
paragraph
“d”
,
for
any
student
33
exercising
such
forbearance
or
deferment
provisions.
34
13.
The
department
of
revenue,
in
consultation
with
the
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commission,
may
adopt
rules
pursuant
to
chapter
17A
for
the
1
implementation
of
subsections
10
through
12.
2
Sec.
2.
NEW
SECTION
.
422.11R
Educational
opportunities
tax
3
credit.
4
The
taxes
imposed
under
this
division,
less
the
credits
5
allowed
under
section
422.12,
shall
be
reduced
by
an
6
educational
opportunities
tax
credit
authorized
pursuant
to
7
section
261.113.
8
Sec.
3.
Section
422.33,
Code
Supplement
2011,
is
amended
by
9
adding
the
following
new
subsection:
10
NEW
SUBSECTION
.
29.
The
taxes
imposed
under
this
division
11
shall
be
reduced
by
an
educational
opportunities
tax
credit
12
authorized
pursuant
to
section
261.113.
13
Sec.
4.
Section
422.60,
Code
Supplement
2011,
is
amended
by
14
adding
the
following
new
subsection:
15
NEW
SUBSECTION
.
14.
The
taxes
imposed
under
this
division
16
shall
be
reduced
by
an
educational
opportunities
tax
credit
17
authorized
pursuant
to
section
261.113.
18
Sec.
5.
NEW
SECTION
.
432.12N
Educational
opportunities
tax
19
credit.
20
The
taxes
imposed
under
this
chapter
shall
be
reduced
by
an
21
educational
opportunities
tax
credit
authorized
pursuant
to
22
section
261.113.
23
Sec.
6.
Section
533.329,
subsection
2,
Code
Supplement
24
2011,
is
amended
by
adding
the
following
new
paragraph:
25
NEW
PARAGRAPH
.
m.
The
moneys
and
credits
tax
imposed
under
26
this
section
shall
be
reduced
by
an
educational
opportunities
27
tax
credit
authorized
pursuant
to
section
261.113.
28
Sec.
7.
APPLICABILITY.
This
Act
applies
to
tax
years
29
beginning
on
or
after
January
1,
2013,
for
qualified
student
30
debt
incurred
on
or
after
that
date.
31
EXPLANATION
32
This
bill
provides
for
the
establishment
of
an
educational
33
opportunities
tax
credit
program
to
be
administered
by
the
34
college
student
aid
commission
and
the
department
of
revenue.
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The
purpose
of
the
program
is
to
provide
a
tax
credit
to
1
eligible
students
who
agree
to
remain
Iowa
residents
after
2
graduation,
or
their
employers,
for
payments
made
toward
the
3
student’s
qualified
student
debt.
For
purposes
of
the
bill,
4
qualified
student
debt
is
either
the
total
amount
of
principal
5
borrowed
by
the
student
or
the
total
average
annual
amount
of
6
in-state
tuition
charged
to
attend
one
of
the
institutions
7
of
higher
learning
under
the
control
of
the
state
board
of
8
regents,
whichever
is
less.
Only
those
loans
included
as
part
9
of
an
eligible
student’s
financial
aid
package
from
an
eligible
10
institution
may
be
included
in
the
amount
of
qualified
student
11
debt.
12
To
be
eligible
for
the
program,
a
student
must
be
an
Iowa
13
resident,
agree
to
remain
so
while
pursuing
a
degree
at
an
14
eligible
institution,
and
agree
to
be
an
Iowa
resident
for
15
the
entirety
of
any
tax
year
in
which
the
student
seeks
to
16
claim
the
tax
credit
available
under
the
program.
An
eligible
17
student
must
also
agree
to
pursue
a
degree
program
at
an
18
eligible
institution.
For
purposes
of
the
bill,
an
eligible
19
institution
is
a
postsecondary
educational
institution
in
this
20
state
which
meets
the
requirements
of
the
provisions
of
the
21
federal
Higher
Education
Act
of
1965
for
student
participation
22
in
the
federal
interest
subsidy
program
and
the
requirements
23
prescribed
by
rule
of
the
commission.
An
eligible
student
24
must
enter
into
an
agreement
with
the
college
student
aid
25
commission
for
the
completion
of
the
degree
program
and
the
26
certification
of
the
amount
of
qualified
student
debt
incurred
27
by
the
student.
28
The
commission
is
required
to
coordinate
with
eligible
29
institutions,
eligible
students,
eligible
lenders,
and
the
30
department
of
revenue
in
the
administration
of
the
program.
31
When
an
eligible
student
has
completed
the
degree
required
32
by
the
agreement,
the
eligible
institution
the
student
33
was
attending
must
notify
the
commission
and
certify
to
34
the
commission
the
amount
of
qualified
student
debt.
Upon
35
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84
mm/sc
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8
H.F.
2251
verification
of
the
completion
of
the
degree
and
certification
1
of
the
amount
of
qualified
student
debt,
the
commission
must
2
issue
a
tax
credit
certificate
to
the
student.
3
The
student
may
claim
the
amount
of
qualified
student
debt
as
4
a
credit
against
state
income
taxes,
and
may
carry
the
credit
5
forward
for
up
to
10
years.
An
employer
may
claim
the
portion
6
of
the
credit
for
payments
made
directly
to
eligible
lenders
7
on
the
student’s
behalf
to
the
extent
that
such
payments
are
8
due
under
the
terms
of
the
loan
during
the
student’s
period
of
9
employment
with
that
employer.
The
credit
is
not
refundable
10
or
transferable
and
may
not
be
carried
back
to
prior
tax
11
years.
The
credit
is
only
available
if
the
eligible
student
12
is
in
compliance
with
the
agreement
entered
into
with
the
13
college
student
aid
commission,
is
an
Iowa
resident
working
14
for
the
employer
located
in
Iowa,
and
is
not
in
arrears
on
the
15
repayment
schedule
for
the
qualified
student
debt.
16
The
bill
provides
for
rulemaking
by
both
the
college
17
student
aid
commission
and
the
department
of
revenue
for
the
18
administration
of
the
program.
19
The
bill
applies
to
tax
years
beginning
on
or
after
January
20
1,
2013,
for
qualified
student
debt
incurred
on
or
after
that
21
date.
22
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8
