Iowa Senate Bill SSB3128

Iowa 2023-2024 Regular Session

• Introduced: 1/30/24
• Refer: 1/30/24

Caption

A bill for an act relating to the Iowa educational savings plan trust by expanding the definition of qualified educational expenses and apprenticeship programs for purposes of withdrawals qualifying for an individual income tax exclusion, and including retroactive applicability provisions.(See SF 2259, SF 2440.)

Impact

If enacted, SSB3128 would redefine 'qualified education expenses' to encompass not only tuition fees but also the costs of career-related training that does not yield college credit. This change is expected to make educational savings plans more accessible and beneficial for those pursuing diverse career tracks, supporting state objectives for workforce development. The delineation of what constitutes an apprenticeship program would also include those recognized by the Iowa office of apprenticeship, thereby enhancing the relevance of state apprenticeship initiatives.

Summary

Senate Study Bill 3128 (SSB3128) proposes amendments to the Iowa educational savings plan trust, particularly concerning the categorization of qualified educational expenses and the inclusion of apprenticeship programs. The bill aims to broaden the scope of expenses that can be withdrawn from the educational savings plan (529 plan) to include costs associated with programs that do not necessarily qualify for college credit. This expansion is crucial for students pursuing vocational and non-traditional educational paths, enabling them to utilize their educational savings more flexibly.

Contention

Nonetheless, the bill has sparked some debate regarding its implications for tax revenue and the potential for creating a disparity in educational funding. Critics may argue that expanding withdrawals could affect the fiscal management of state education funding, particularly if a significant number of individuals utilize these exemptions. There may also be discussions on the adequacy of oversight for apprenticeship programs to ensure they meet quality standards, a concern that could arise among educational and labor organizations.