STATEMENT OF PURPOSE
RS27736 / H0551
This legislation reduces redundancies, clarifies definitions, recognizes the securities disclosure statement
or offering document as the official terms of the Program and brings Idaho law up-to-date with the
uniform requirements for state college savings programs under federal law. The changes benefit Idaho
families. Specifically: Removing the requirement for administrative rules reduces redundancies. The
Program's securities disclosure statement is the securities offering document containing all Program rules and
requirements. This document serves as the contract between the individual account owner and the Program.
As required by the securities laws, the disclosure statement is kept current with any changes to the Program.
Coordinating the definitions in Idaho law with federal tax changes allows Idaho families to benefit from
those changes. For example, Idahoans have missed out on tax exempt withdrawals in the situation where a
student attends a U.S. military academy and tax exempt recontributions of a refund from an eligible education
institution within 60 days of the refund. Instances where state and federal code differ on a topic causes
confusion and ultimately a negative tax consequence for the Idaho account owner.
FISCAL NOTE
The fiscal impact of this legislation is limited to treating military academy attendance congruent with the
exemptions for scholarships. There are no fiscal impacts for the other changes. Currently, federal law allows for
withdrawal of funds equal to the amount of a scholarship or cost of attendance that is waived by the institution
or academy. The Federal 10% penalty is waived and taxes are due on the growth portion of the investment only.
Idaho law does not recognize this type of withdrawal as qualified and therefore the withdrawal is subject to state
taxes on the entire amount. The fiscal impact would be the difference between taxing the entire withdrawal
versus taxing the growth portion of the withdrawal. It is estimated that the fiscal impact could be between $943
and $2,452 per year.
Contact:
Representative Paul Amador
(208) 332-1000
Christine Stoll, IDeal Executive Director
(208) 332-2935
DISCLAIMER: This statement of purpose and fiscal note are a mere attachment to this bill and prepared by a proponent
of the bill. It is neither intended as an expression of legislative intent nor intended for any use outside of the legislative
process, including judicial review (Joint Rule 18).
Statement of Purpose / Fiscal Note Bill SOP/FN INTRODUCED: 02/24/2020, 9:30 AM


Statutes affected:
Bill Text: 33-5401, 33-5404, 33-5405