Iowa Admin. Code [781] | Iowa Admin. Code — Treasurer of State [781]

Chapter 1 Organization and Procedures

Iowa Admin. Code r. 781—1.1 Treasurer of state

The treasurer of state is a constitutional officer of the state of Iowa, as provided by Article IV, Section 22 of the Constitution of Iowa, as amended in 1972. The treasurer of state is elected by the electorate of Iowa as provided by Article IV, Section 22 of the Constitution of Iowa.

Iowa Admin. Code r. 781—1.2 Duties of treasurer

Iowa Code chapter 12 prescribes the rights, duties and responsibilities of the treasurer.

Iowa Admin. Code r. 781—1.3 Location of office

The offices of the treasurer of state are located at Des Moines, Iowa 50319 at the seat of government. The office of the treasurer of state is available to the public during office hours 8:00 a.m.

to 4:30 p.m., Monday through Friday or in case of necessity by appointment.

Chapter 2 Public Records and Fair Information Practices

Iowa Admin. Code r. 781—2.1 Definitions

“Agency.” In lieu of the words “(official or body issuing these rules)”, insert “department of the treasurer of state”.

Iowa Admin. Code r. 781—2.3 Requests for access to records

Rescinded by 2026 Iowa Acts, Senate File 2463, section 4, effective July 1, 2026.

Iowa Admin. Code r. 781—2.6 Procedure by which a subject may have additions, dissents, or objections entered into the record

Rescinded by 2026 Iowa Acts, Senate File 2463, section 4, effective July 1, 2026.

Iowa Admin. Code r. 781—2.9 Disclosures without consent of the subject

Rescinded by 2026 Iowa Acts, Senate File 2463, section 4, effective July 1, 2026.

Iowa Admin. Code r. 781—2.10 Routine use

Rescinded by 2026 Iowa Acts, Senate File 2463, section 4, effective July 1, 2026.

Iowa Admin. Code r. 781—2.11 Consensual disclosure of confidential records

Rescinded by 2026 Iowa Acts, Senate File 2463, section 4, effective July 1, 2026.

Iowa Admin. Code r. 781—2.12 Release to the subject

Rescinded by 2026 Iowa Acts, Senate File 2463, section 4, effective July 1, 2026.

Iowa Admin. Code r. 781—2.13 Availability of records

Rescinded by 2026 Iowa Acts, Senate File 2463, section 4, effective July 1, 2026.

Iowa Admin. Code r. 781—2.14 Personally identifiable information

This rule describes the nature and extent of personally identifiable information which is collected, maintained, and retrieved by the agency by personal identifier in record systems as defined in rule 2.1(17A,22). Unless otherwise stated, the authority for this office to maintain the record is provided by Iowa Code chapter 12 and statutes governing the subject matter of the record. For each record system, this rule describes the legal authority for the collection of that information, the means of storage of that information and indicates whether a data processing system matches, collates, or permits the comparison of personally identifiable information in another record system. The record systems maintained by the agency are:

2.14(1) Unclaimed property—missing owner records. Records containing lists of names, addresses, city, and ZIP codes of persons who have abandoned cash, stock or safe deposit contents. The list contains the amount abandoned and the date such was reported to the treasurer. These records are available for viewing on microfiche in the treasurer’s office and on printouts at state and county fairs statewide. This personally identifiable information is collected under the authority of Iowa Code chapter 556 and is maintained on paper, microfiche, and an automated data processing system.

2.14(2) Unclaimed property-holder reports. These annual reports are filed by financial institutions, insurance companies, and corporations. The original report is filed by name and is available on paper only. These records are collected under the authority of Iowa Code chapter 556.

2.14(3) Pledging of public funds. Records containing the name of federally insured bank, bank office, or credit union approved by the treasurer of state to accept the deposits of public funds in excess of federal insurance. Also included are the approved custodians which act as a safekeeping agent for the treasurer of state in holding collateral pledged by a depository to secure deposits of public funds. These records contain personally identifiable information collected under the authority of Iowa Code chapter 453. The information is maintained on paper.

2.14(4) Linked deposit programs. Records containing linked deposits made by the treasurer of state under the horticulture and alternative crop program or the targeted small business program including information regarding the nature, terms, and amounts of the loans upon which the linked deposits were based and the names of the eligible borrowers to which the loans were made. The records include signed applications, agreements, correspondence, and program reports. These records contain personally identifiable information on the borrower and the lender, collected under the authority of Iowa Code section 12.43. The information is maintained on paper and on a word processor.

2.14(5) Records of disclosure of information from persons or financial institutions regarding their open-end credit, credit cards, and financial services. These records contain personally identifiable information, collected under the authority of Iowa Code section 12.27. The information on credit cards is kept on paper and in an automated data processing system. The financial services and open-end credit information is maintained on paper only. These records are filed by names of institutions or persons reporting.

2.14(6) Request for proposal (RFP). Records of solicitations to vendors to submit proposals for providing professional services. These records may contain personally identifiable information, collected under the authority of Iowa Code sections 12.30, 97A.7, and 602.9111. The information is maintained on paper and filed by vendor’s name. Sealed bids received prior to selection will be confidential under the authority of Iowa Code section 72.3. Also to be considered by the treasurer of state are requests from vendors who have submitted business information, desiring to have all or part of that information treated as confidential.

2.14(7) Report on state and local government bonding activities. Records of information regarding outstanding obligations. These records contain personally identifiable information collected under the authority of Iowa Code section 12.30. The information is filed by the name of political subdivisions, instrumentalities, agencies, and authorities of the state and is maintained on paper and in an automated data processing system.

2.14(8) South Africa-related investments and deposits. Records include a list of companies that do business in or with the Republic of South Africa maintained for the purpose of which state funds and funds administered by the state shall not be invested or deposited in financial institutions or companies making loans or doing business with or in the Republic of South Africa. These records contain personally identifiable information, collected under the authority of Iowa Code sections 12A.1 through 12A.5. The information is maintained on paper and a word processing system, filed by company name. The list is developed with reference to information obtained from the United States Department of Commerce and Arthur D. Little, Inc., and other authoritative sources.

2.14(9) Personnel files. These files contain information about employees, families and dependents, and applicants for positions with the agency. The files include payroll records, biological information, medical information relating to disability, performance reviews and evaluations, disciplinary information, information required for tax withholding, information concerning employee benefits, affirmative action reports; table of authorized positions, and other information concerning the employer-employee relationship. Some of this information is confidential under Iowa Code section 22.7(11).

2.14(10) Second injury fund records. Second injury fund records setting forth the balance, income, source of income, and payments out of the fund. Records include copies of notices of petition, industrial commissioner rulings, appeals filed, and appeal decisions all filed by claimant name. These records contain personally identifiable information, collected under the authority of Iowa Code sections 85.63 through 85.69. The information is maintained on paper and certain parts are included on a word processing system. Records which represent and constitute the work of an attorney, which are related to litigation or claim made by or against the fund are considered confidential under the authority of Iowa Code section 22.7(4). All final orders are open to the public.

2.14(11) Iowa centennial memorial scholarship. Records on persons applying for and receiving scholarships from the Iowa centennial memorial foundation. These records include applications, letters of recommendation, grade transcripts, statements of expenses and awards, and essays. The records contain personally identifiable information, collected under the authority of Iowa Code section 504.32. The information is maintained on paper only.

2.14(12) Clerk of court reports. Records of filing fees and court costs reported and remitted monthly by the clerk of court to the treasurer of state. These records may contain personally identifiable information, collected under the authority of Iowa Code sections 602.8105, 602.8106, and 602.8108. The information is maintained on paper only and is filed by county name.

2.14(13) Forgery files. Records concerning repayment for a forged state warrant investigated by the department of inspections and appeals. These records may include photocopies of forged warrants, correspondence, and copies of transmittal receipts to show repayment. These records are filed by claimant’s name. This information, collected under the authority of Iowa Code section 12.3, is maintained on paper only.

2.14(14) Financial reports. Financial reports of distributions to cities and counties of the dollar amounts distributed from road use tax, liquor tax, franchise tax, hotel-motel tax, local sales and services tax and flood control. These records may contain personally identifiable information and are filed by county or city name or by a code number. Road use tax information is collected under the authority of Iowa Code chapter 312, liquor tax under Iowa Code section 125.59, franchise tax under Iowa Code section 422.64, hotel-motel tax under Iowa Code section 422A.2, local sales and services under Iowa Code sections 422B.8 through 422B.10, and flood control under federal Code 33 USC 701c 3. These records are maintained on paper and in an automated data processing system.

2.14(15) Records of redeemed warrants filed by warrant number. Locating information is maintained so photocopies of warrants may be made when deemed necessary. These records are collected under the authority of Iowa Code section 12.3. These records are maintained on paper and an automated data processing system and filed by warrant number. Locating information is kept on microfiche. Microfilmed warrants which may contain personally identifiable information, such as to whom the warrant was issued, are kept at the state records center.

2.14(16) Records of invest-in-Iowa program. Records of Iowa banks, savings and loans, and credit unions which have certificates of deposit from the treasurer of state. These records contain personally identifiable information, collected under the authority of Iowa Code section 12.8. These records are maintained on paper and on a word processing system, filed by institution name.

2.14(17) Bank records. Records of bank statements on the general operating accounts, filed by bank name and date. These records contain personally identifiable information, collected under the authority of Iowa Code section 12.10. The records are maintained on paper only.

2.14(18) Loan agreements. Records of agreements executed with brokers in order for borrowing of securities, filed by broker name. These records contain personally identifiable information, collected under the authority of Iowa Code section 12.8. The records are maintained on paper only.

2.14(19) Receipts transmittal letters of moneys deposited by state agencies. These records are filed by agency name and by date, collected under the authority of Iowa Code section 12.10. These records are maintained on paper and on an automated data processing system.

2.14(20) Public bonds and obligations. Records of identity of owners of public bonds or obligations maintained as provided in Iowa Code section 76.10 or by the issuer of the public bonds or obligations. These records contain personally identifiable information, collected under the authority of Iowa Code sections 76.10 and 12.26 through 12.30. These records are confidential under Iowa Code section 22.7(17). However, the issuer of the bonds or a state or federal agency may obtain information as necessary under Iowa Code section 76.11.

2.14(21) Missing shareholders of liquidated corporation file. This file is a listing of last known name, address, city, ZIP code, and dollar amount owed for persons who are entitled to proceeds from closed corporations. The file lists names collected for the past 20 years. After 20 years, ownership reverts to the state and the file is abolished. The file is maintained on a word processor and is available on paper for review by appointment made with the unclaimed property division in the Hoover Building. The file is collected under Iowa Code section 496.101. This information is not maintained in an automated data processing system.

Iowa Admin. Code r. 781—2.15 Other groups of records routinely available for public inspection

This rule describes groups of records maintained by the agency other than record systems as defined in rule 2.1(17A,22). These records are routinely available to the public. However, the agency’s files of these records may contain confidential information as discussed in rule 2.13(17A,22). In addition, the records may contain information about the individuals. Unless otherwise designated, the authority for this office to maintain the record is provided by Iowa Code chapter 12 and the statutes governing the subject matter of the record. All records are stored both on paper and in automated data processing systems unless otherwise noted.

2.15(1) Rule making. Rule-making records may contain information about individuals making written or oral comments on proposed rules. This information is collected pursuant to Iowa Code section 17A.4. This information is not stored in an automated data processing system.

2.15(2) Council and commission records. Agendas, minutes, and materials presented to the Iowa centennial memorial foundation and rates set by the state rate setting committee are available from the office of treasurer of state, except those records concerning closed sessions which are exempt from disclosure under Iowa Code section 2.15 or are otherwise confidential by law. Council and commission records contain information about people who participate in meetings. This information is collected pursuant to Iowa Code section 21.3. This information is not retrieved by individual identifier and is not stored on an automated data processing system.

2.15(3) Publications. News releases, annual reports, project reports, agency newsletters, official statements, etc., are available from the office of the treasurer of state. Brochures describing various agency programs are available at the office of treasurer of state. Agency news releases, project reports, and newsletters may contain information about individuals, including agency staff or members of agency councils or committees. This information is not retrieved by individual identifier and is not stored in an automated data processing system.

2.15(4) Appeal decisions and advisory opinions. All final orders, decisions and opinions are open to the public.

2.15(5) Published materials. The agency uses many legal and technical publications in its work. The public may inspect these publications upon request. Some of these materials may be protected by copyright law.

2.15(6) Policy manuals. The agency employees’ manual, containing the policies and procedures for programs administered by the agency, is available from the office of treasurer of state. Policy manuals do not contain information about individuals.

2.15(7) Administrative records. This includes documents concerning budget, property, inventory, purchasing, yearly reports, office policies for employees, time sheets, printing and supply requisitions.

2.15(8) Other records. All other records that are not exempted from disclosure by law.

Iowa Admin. Code r. 781—2.16 Data processing systems

None of the data processing systems used by the agency permit the comparison of personally identifiable information in one record system with personally identifiable information in another record system as described in 2.14(17A,22).

Iowa Admin. Code r. 781—2.17 Applicability

Rescinded by 2026 Iowa Acts, Senate File 2463, section 4, effective July 1, 2026.

History

Content rescinded by 2026 Iowa Acts, Senate File 2463, section 4—editorially removed in IAC Supplement 7/8/26, effective 7/1/26

Chapter 4 Linked Investments for Tomorrow (lift)

Iowa Admin. Code r. 781—4.1 Definitions

The definitions found in Iowa Code section 12.32 as amended by 2006 Iowa Acts, House File 2661, are adopted by reference. In addition, the following definitions apply:

“Borrower” means a person, corporation, cooperative, partnership, or municipality located in Iowa that is qualified to participate in the linked investments for tomorrow program.

“Current market rate” means the one-year Treasury bill rate.

“Lender” means “eligible lending institution” as defined in Iowa Code section 12.32 and includes banks, savings and loans, converted savings banks, and credit unions that are located in Iowa and are in compliance with Iowa Code chapter 12C.

“Treasurer” means treasurer of the state of Iowa and members of staff carrying out duties delegated by the treasurer.

Iowa Admin. Code r. 781—4.2 Forms

The following forms are used in this program:

LIFT Lender/Borrower Application (Form 655-0142)

LIFT Renewal Application (655-0143)

LIFT Master Agreement (Form 655-0144)

Iowa Admin. Code r. 781—4.3 Procedures for submitting and processing a linked investment loan application

4.3(1) To participate in the linked investments for tomorrow program, a lender’s home office must complete and submit a LIFT Master Agreement (Form 655-0144) to the treasurer.

By filing Form 655-0144 with the treasurer, a home office agrees that it and all its branches, when participating in the LIFT program, shall comply with the following:

a. Iowa Code sections 12.31 through 12.43 as amended by 2006 Iowa Acts, House File 2661 (Linked Investments for Tomorrow Act),

b. Iowa Code chapter 12C (Deposit of Public Funds), and

c. Iowa Administrative Code 781—Chapters 3, 4, 13, and 14.

4.3(2) Any lender whose home office is in compliance with subrule 4.3(1) may submit a LIFT Lender/Borrower Application (Form 655-0142) to the treasurer.

4.3(3) The lender shall submit applications only for those borrowers and businesses which the lender believes are eligible.

4.3(4) Forms and correspondence relating to the linked investments for tomorrow program shall be mailed to:

Treasurer of State

LIFT Administration

State Capitol Building

Room 114

Des Moines, Iowa 50319

4.3(5) Upon receipt of a LIFT Lender/Borrower Application (Form 655-0142), the treasurer will determine whether the application meets the requirements of the LIFT program and whether sufficient funds will be available for the investment.

4.3(6) Within a reasonable time, the treasurer will notify the lender whether the application has been approved or denied.

4.3(7) Funds will be deposited with the lender on the fifteenth day of the month. If the fifteenth day of the month falls on a weekend or holiday, funds will be transferred the following business day.

4.3(8) The lender must make all funds available to the borrower by the end of the business day following the day the lender receives the funds from the treasurer.

4.3(9) At the beginning of each month, the treasurer will determine the rate of interest for LIFT certificates of deposit that are new or are being renewed that month.

4.3(10) After approval of the application, the lender shall notify the treasurer, in writing, if the loan is paid off, if the loan is in default, if the business closes, or if the business is sold.

4.3(11) At any time it is determined that a borrower or business does not meet the requirements of participation in the LIFT program, the treasurer shall notify the lender and withdraw the certificate of deposit with no penalty. The lender shall have ten days from the date of notification to remit the outstanding balance and accrued interest to the treasurer.

4.3(12) As a requirement for renewal of the certificate of deposit, the lender shall verify that the borrower and business are still eligible for this program.

Iowa Admin. Code r. 781—4.4 Qualifications on the certificate of deposit

4.4(1) The minimum rate for the certificate of deposit shall be 1 percent. The term shall not exceed one year but may be renewed at the option of the treasurer.

4.4(2) Interest must be calculated for the actual number of days on a 365-day basis, except during leap year, when it must be calculated for the actual number of days on a 366-day basis. Interest must be paid to the treasurer upon maturity of the certificate of deposit.

4.4(3) The certificate of deposit and accrued interest must be secured either by federal deposit insurance or must be collateralized pursuant to Iowa Code chapter 12C.

4.4(4) If the borrower pays the loan in full prior to the maturity date of the certificate of deposit, the lender shall, within ten days of the payment in full, remit the principal balance of the certificate of deposit and the accrued interest thereon to the treasurer.

4.4(5) Funds shall be transferred according to instructions from the treasurer.

4.4(6) When a certificate of deposit is issued or renewed, it shall be held in safekeeping by the lender. The lender shall provide the treasurer a safekeeping receipt or a photocopy of the certificate of deposit upon issuance and at the time of renewal of the certificate of deposit. The safekeeping receipt or photocopy must include:

a. Certificate of deposit number.

b. Certificate of deposit rate.

c. Certificate of deposit amount.

d. Term of the certificate of deposit.

e. Maturity date of the certificate of deposit.

4.4(7) The maximum period of eligibility for any borrower or business is five years from the issue date of the first certificate of deposit.

4.4(8) If the certificate of deposit is not renewed within ten days of the maturity date, the funds must be remitted to the treasurer. During the ten-day period, the funds shall continue to earn interest.

4.4(9) At renewal of the certificate of deposit, the lender shall certify that the certificate of deposit balance does not exceed the loan balance.

4.4(10) A certificate of deposit for the purposes of the LIFT program shall not be subject to a penalty for early withdrawal or to any other terms and conditions that a financial institution may otherwise place upon a certificate of deposit.

Iowa Admin. Code r. 781—4.5 Qualifications on the loan

4.5(1) The interest rate on the loan shall not exceed the rate of interest on the certificate of deposit by more than 4 percent. Points shall not supplement the loan rate, and a compensating balance shall not be required.

4.5(2) All other terms and conditions on the loan must be negotiated by the lender and the borrower. The lender is required by law to use usual and customary lending standards to determine the creditworthiness of the loan.

4.5(3) Neither the treasurer nor the state is liable for any payment of principal or interest on the loan or any late payments. The certificate of deposit is not collateral and shall not constitute security in any manner for the repayment of principal or any interest or charges thereon.

4.5(4) The amount and term of the loan may exceed the amount and term of the certificate of deposit. It is permitted for the interest rate on the loan to be variable based on adjustments in the rate of the certificate of deposit.

4.5(5) Loans are subject to the restrictions set forth in rule 781—4.6(12).

4.5(6) Loan proceeds shall not be used to refinance existing debt, including credit card debt. However, proceeds may be used to refinance a short-term bridge loan made in anticipation of the treasurer’s approval of an eligible LIFT participant.

4.5(7) The lender shall acquire sufficient information to verify that the applicant meets the requirements before the borrower or business may become eligible to participate in a LIFT program. The lender and borrower applying for a loan under this program shall verify on the LIFT Lender/Borrower Application (Form 655-0142) that the borrower, owner, and business qualify.

4.5(8) The lender must complete the LIFT Renewal Application (Form 655-0143) at the time of renewal and submit it to the treasurer to ensure that the borrower and business continue to be eligible to participate in the LIFT program.

Iowa Admin. Code r. 781—4.6 LIFT—small business program

4.6(1) New and existing small businesses are eligible for the LIFT small business program. An existing small business is defined as a business that has annual gross sales of $2 million or less at the time of application.

4.6(2) A borrower is ineligible if the borrower has received financial assistance from the LIFT program prior to July 1, 2006.

4.6(3) All owners of the business or borrowers must not have a combined net worth exceeding $975,000. Combined net worth, as defined by this program, shall equal assets less liabilities for each owner of the business and persons borrowing for the business combined. Married individuals may divide their total net worth and assign one half of the total to each individual. If both individuals are owners of the business or borrowers, then their combined net worth must be used to determine net worth requirements.

4.6(4) Proceeds of loans under this program shall be used for business expenses including land, improvements, fixtures, machinery, inventory, supplies, equipment, information technology, or licenses, or patent, trademark, or copyright fees and expenses.

4.6(5) The maximum amount that a borrower or business may borrow from this program is $200,000. Once the borrower or business has received LIFT funds totaling $200,000, the borrower or business is ineligible for additional LIFT proceeds.

4.6(6) Proceeds shall not be used to speculate in real estate or for real estate held for investment purposes. Proceeds shall not be used to buy real estate for the purposes of renting or leasing.

4.6(7) A home-based business qualifies as a LIFT small business only if the person whose home is used for operation of the small business qualifies for a tax deduction for that portion of a home used for business pursuant to regulations of the Internal Revenue Service. An applicant who wishes to borrow from the LIFT small business program, who otherwise qualifies, and who has a home-based business or wishes to begin a home-based business must establish to the satisfaction of the lender that the applicant qualifies for a tax deduction for that portion of the applicant’s home that the applicant uses or intends to use for the business pursuant to regulations of the Internal Revenue Service.

4.6(8) If the business holds a class “C” liquor license, sales of liquor, beer, and wine must not exceed 20 percent of annual sales.

History

ARC 9214B, IAB 11/3/10, effective 12/8/10

Chapter 6 Coordination of Bonding Activities

Iowa Admin. Code r. 781—6.1 Scope

Iowa Code chapter 12 grants authority to the treasurer of state to establish administrative procedures for the coordination of state bonding activities and selection of professional services for the issuance of obligations by an authority.

Iowa Admin. Code r. 781—6.2 Definitions

“Authority” means a department, agency, and public or quasi-public instrumentality of the state which has the power to issue obligations, except that “authority” does not include the state board of regents. “Authority” includes, but is not limited to, the authorities created under Iowa Code chapters 175 (Iowa Agriculture Development Authority), 175A (Economic Protective and Investment Authority), 220 (Iowa Finance Authority), 261A (Higher Education Loan Authority), 307B (Railway Finance Authority), 442A (Advance Funding Authority), and any other entity which has both of the following characteristics:

State officers or employees serve as members, officers, directors or employees of the entity or have the authority to appoint any of the above, and
The state has either a present or a future interest in any assets of the entity.

“Marketing activities” are those activities which are undertaken to promote the sale of obligations issued by an authority. These include, but are not limited to, presentation of oral or written information to sellers, buyers, underwriters, analysts, rating agencies, dealers and brokers.

“Obligations” means notes, bonds, including refunding bonds, and other evidences of indebtedness of an authority, including but not limited to private activity bonds as defined in section 141 of the Internal Revenue Code of 1986, notes and bonds issued by the authority pursuant to loan agreements with any other entity, and lease or installment purchase agreements between the authority and any entity other than the manufacturer of the property subject to the lease or installment purchase agreement.

“Professional services” are those services performed by persons other than employees of an authority which are undertaken in order to effectuate issuance of an obligation. These include, but are not limited to, the services of attorneys, accountants, financial advisors, banks, underwriters, and insurers.

“Project sponsor” is a person who enters into an agreement with an authority under which the authority issues obligations on behalf of the project sponsor but neither the authority nor the state assumes any liability for the repayment of the obligation.

“Rating agencies” are those entities which evaluate and rate obligations including, but not limited to, Moody’s Investors Service, Standard and Poors, and Fitch’s Investors Services.

“Request for proposal (RFP)” is a solicitation to vendors to submit proposals for providing professional services in connection with the proposed issuance.

“Vendor” means a person, firm, corporation, partnership, business, or other commercial entity offering to provide professional services.

Iowa Admin. Code r. 781—6.3 Intention to issue obligations

6.3(1) Treasurer’s status with an authority. The treasurer or the treasurer’s designee shall serve as an ex officio nonvoting member of each authority. The authority shall transmit to the treasurer all documents, notices, and materials which are distributed to any other member of the authority. The treasurer shall be permitted to attend all meetings, conferences or working sessions which any other member of the authority is permitted to attend.

6.3(2) Notice to treasurer. When members of an authority determine that the authority should prepare to issue obligations, the authority shall notify the treasurer of its intent to do so.

6.3(3) Consultation with authority. Upon determining that an authority intends to prepare to issue obligations, the treasurer or treasurer’s designee shall meet with the authority or its designee to discuss the following matters:

a. Proposed amount, terms, and conditions of the issue;

b. Documents, instruments, and other materials necessary to effectuate issuance and marketing;

c. Professional services necessary to effectuate issuance;

d. Proposed schedule for preparation, issuance, and marketing;

e. Whether the issue will be sold on a negotiated, competitive, or other basis;

f. Compensation for vendors of professional services;

g. Projected costs to the authority of vendor selection.

Iowa Admin. Code r. 781—6.4 Selection of vendors of professional services

6.4(1) Preparation of request for proposal. After consulting with the authority, the treasurer shall prepare or approve requests for proposal for all appropriate professional services.

6.4(2) List of vendors. The treasurer shall maintain a list of vendors of professional services who have requested to be notified of RFPs.

6.4(3) Review of proposals. The treasurer shall review all proposals submitted in response to an RFP. In evaluating the proposals submitted, the treasurer may consider any factors relevant to the vendor’s qualifications to render the services in question including, but not limited to, proposed compensation and expenses, vendor’s experience with similar issues, vendor’s ability to provide the services of individuals with specific knowledge in the relevant subject matter, length of the proposed engagement and scheduling needs of the authority. Regardless of the number of proposals submitted, the treasurer may eliminate from further consideration any vendor who is, in the treasurer’s opinion, unable to render the services specified in the RFP.

6.4(4) Selection of vendor. The treasurer shall review all information submitted by vendors and shall select a vendor to perform the services of the type requested in the RFP. In making this selection, the treasurer may consult with the authority and the treasurer shall employ the criteria set out in subrule 6.4(3).

6.4(5) Compensation of vendor selected. The treasurer shall fix the compensation of the vendor selected. The treasurer shall promptly advise the authority in writing of the vendor selected and the terms and conditions under which the vendor shall be employed. Upon receipt of notice of selection by the treasurer, the authority shall promptly employ the vendor subject to the terms and conditions specified by the treasurer. The vendor shall account to the authority for all expenses incurred and services rendered. The authority shall make appropriate payments directly to the vendor.

Iowa Admin. Code r. 781—6.5 Exceptions to vendor selection procedure

6.5(1) Waiver required by public interest. The treasurer may waive the procedures set out in subrules 6.4(1) to 6.4(3) if the treasurer determines that it is in the public interest to do so. The treasurer shall waive the above procedures by filing written notice with the executive council stating why the waiver is in the public interest. In the event that the treasurer waives the above procedures, the treasurer shall determine the procedures to be followed in selecting vendors of professional services for an authority.

6.5(2) Waiver for project sponsors. The treasurer may waive the provisions set out in subrules 6.4(1) to 6.4(5) if the treasurer determines that all of the following conditions exist:

a. The proposed obligation is being issued by the authority on behalf of a project sponsor;

b. Purchasers of the proposed obligation will have no recourse, directly or indirectly, to the authority or the state in the event of a default on the obligation; and

c. Vendors of professional services affected by the waiver will be employed and compensated by the project sponsor and not by the authority.

6.5(3) Competitive sale of obligations. In the event that obligations are to be issued by soliciting bids from several underwriters in a competitive sale, the treasurer shall supervise the bidding process in consultation with the authority. The treasurer shall prepare the necessary documents including, but not limited to:

a. Official notice of sale;

b. Advertising of official notice; and

c. Official bid form.

The treasurer shall establish a time and location for opening bids and shall notify the authority and the successful bidder upon awarding the successful bid. Selection of all other vendors of professional services shall be made according to the procedures set out in rule 6.4(12).

Iowa Admin. Code r. 781—6.6 Investment of proceeds

The treasurer shall direct the investment or deposit of the proceeds of all obligations issued on or after July 1, 1986, subject to the terms and conditions of the obligations, except that the authority shall direct the investment or deposit of proceeds necessary to fund its ongoing operations.

Iowa Admin. Code r. 781—6.7 Information to be provided to treasurer

Each authority shall, upon request, provide the treasurer with any statistical or financial information in the possession of the authority which, in the treasurer’s opinion, is needed to prepare, issue or market any obligations of the authority.

Iowa Admin. Code r. 781—6.8 Costs of vendor selection

The treasurer may submit to the authority accounts for all costs incurred in the selection of vendors for the authority, including general administrative costs incurred by the treasurer. The authority shall disburse the amounts presented in the treasurer’s accounts.

Chapter 7 Reporting on State and Local Government Bonding Activities

Iowa Admin. Code r. 781—7.1 Scope

Iowa Code chapter 12 requires the treasurer of state to gather information regarding outstanding obligations of each political subdivision, instrumentality, agency, and authority of the state.

Iowa Admin. Code r. 781—7.2 Definitions

As used in this chapter:

“Issuers” means an authority as defined in rule 781—6.2(12), the state board of regents, all political subdivisions of the state of Iowa, and any other entity which has both of the following characteristics:

Officers or employees of a political subdivision serve as members, officers, directors, or employees of the entity or have authority to appoint any of the above, and
The political subdivision has either a present or future interest in the assets of the entity.

“Obligations” means notes, bonds, including refunding bonds, and other evidences of indebtedness of an issuer, including but not limited to private activity bonds as defined in section 141 of the Internal Revenue Code of 1986.

Iowa Admin. Code r. 781—7.3 Form

The following form as promulgated by the treasurer of state, shall be used in conjunction with the operation of this chapter:

Form 655-0150, “Outstanding Obligations Disclosure Statement.”

Iowa Admin. Code r. 781—7.4 Filing procedures

The form required to be filed shall be available from the treasurer of state’s office. Form 655-0150 must be filed with the treasurer’s office no later than November 15 of each year.

Iowa Admin. Code r. 781—7.5 Who is required to file

All issuers, as defined in this chapter, who issue obligations are required to file the appropriate forms with the treasurer of state’s office.

Iowa Admin. Code r. 781—7.6 Publication procedures

The treasurer of state shall determine the most effective method of publicizing the availability of the information obtained to interested parties. In all cases, the information shall be available from the treasurer’s office upon request.

Chapter 8 Accepting Credit Card Payments

Iowa Admin. Code r. 781—8.1 Purpose

Iowa Code section 12.21 grants authority to the treasurer of state to enter into an agreement with a financial institution to provide credit card receipt processing for state departments and to establish administrative and other procedures as necessary to implement the acceptance of credit card payments by state departments that are authorized to accept such payments. The purpose of these rules is to provide for the administration and operation of credit card receipt processing for state departments.

History

ARC 9100B, IAB 9/22/10, effective 10/27/10

Iowa Admin. Code r. 781—8.2 Definitions

As used in this chapter:

“Acquiring bank” means a financial institution that receives credit card transactions and then settles with the card-issuing banks.

“Chargeback” means a transaction disputed by a cardholder or card issuer.

“Convenience fee” means a fee charged to the cardholder for the convenience to that cardholder of using a particular method of payment in a credit or debit card transaction in accordance with the network regulations governing that transaction.

“Credit card” means the same as defined in Iowa Code section 537.1301, subsection 17.

“Credit card associations” means Visa, MasterCard, American Express, Discover Network, Diners, JCB, and any other organization that issues or sponsors credit cards or signature-based debit cards that are accepted by state departments.

“Debit card” means a card used to purchase goods or services and to obtain cash in which the cardholder’s personal deposit account is reduced by the transaction amount. Debit card transactions that are processed on credit card association networks are typically called signature-based debit card transactions, while debit card transactions processed on electronic funds transfer networks are generally referred to as PIN-based transactions.

“Financial institution” means the same as defined in Iowa Code section 527.2 and includes any bank incorporated under the provisions of any state or federal law, any savings and loan association incorporated under the provisions of any state or federal law, any credit union organized under the provisions of any state or federal law, any corporation licensed as an industrial loan company under Iowa Code chapter 536A, and any affiliate of a bank, savings and loan association, credit union, or industrial loan company.

“Merchant” means the state department or subdivision that accepts credit card and debit card payments.

“Merchant guidelines” means the manual issued by the merchant services provider that prescribes the rules and procedures governing credit card and debit card transactions and a state department’s use of the credit card and debit card processing services.

“Merchant services provider” means a company that manages the processing of credit card and debit card transactions among merchants, credit card issuers, and acquiring banks.

“Payment card industry data security standards” or “PCI-DSS” means a set of comprehensive requirements for credit card data security developed by the Payment Card Industry Council, founded by American Express, Discover Financial Services, JCB International, MasterCard Worldwide and Visa Inc.

International.

“Treasurer” means the treasurer of the state of Iowa and staff members who carry out duties delegated by the treasurer.

History

ARC 9100B, IAB 9/22/10, effective 10/27/10

Iowa Admin. Code r. 781—8.3 State department requirements for accepting credit card payments

8.3(1) A state department shall notify the treasurer of its intent to accept credit card payments and provide the treasurer with the following information:

a. The type of goods and services it will offer for payment by credit card and debit card.

b. The estimated per-transaction amount, yearly transaction volume, and total yearly dollar volume to be collected.

c. The number and location of departmental sites that may accept credit card payments.

d. The method that the department will use to accept card payments, for example, through a Web site, a virtual terminal, a point-of-sale terminal, or a wireless terminal.

8.3(2) A state department shall purchase or lease any equipment or software required to accept credit card payments, or pay any fees charged for access to online virtual terminals used to process credit card and debit card payments.

8.3(3) A state department shall sign an agency participation agreement with the treasurer acknowledging its responsibilities under the credit card contract, including, but not limited to:

a. Following the procedures for accepting payments by credit card and debit card as outlined in the agreement between the financial institution, merchant services provider, and treasurer, and as specified in the merchant guidelines.

b. Following procedures issued by the treasurer to record receipts, corrections to receipts, refunds, chargebacks, expenses, and any other accounting transactions associated with accepting credit card and debit card payments.

c. The payment of all equipment and software costs, all processing fees and charges incurred in accepting card payments, including the costs of supplies, and all fees charged for annual PCI-DSS reviews.

d. Becoming compliant with PCI-DSS and maintaining that compliance as long as the department accepts credit card and debit card payments.

8.3(4) A state department shall receive authorization from the treasurer prior to accepting credit card and debit card payments.

8.3(5) A state department shall follow the procedures and rules for charging a convenience fee for credit card and debit card transactions as outlined in the agreement between the financial institution, merchant services provider, and treasurer, and as specified in the merchant guidelines, and by the credit card associations’ rules.

8.3(6) A state department shall follow the instructions provided by the treasurer for completing cash receipts documents to reflect credit card transactions that post to the treasurer’s account at the financial institution.

8.3(7) A state department shall be responsible for achieving and maintaining compliance with all applicable PCI-DSS.

8.3(8) A state department shall be responsible for completing an annual review of its compliance with PCI-DSS, as required by the treasurer’s credit card processing contract and by the PCI-DSS. At any time throughout the year, the state department shall promptly cure any instance of noncompliance of which it becomes aware.

8.3(9) A state department shall be responsible for any penalties, fees, fines, and other costs assessed against the department, the treasurer, or the state of Iowa, resulting from or arising out of the department’s violation of, or noncompliance with, PCI-DSS.

History

ARC 9100B, IAB 9/22/10, effective 10/27/10

Iowa Admin. Code r. 781—8.4 Procedures for administering the credit card receipt process

8.4(1) The treasurer shall enter into an agreement with a financial institution to provide credit card payment processing for state departments.

8.4(2) The treasurer shall specify which credit cards may be accepted by state departments.

8.4(3) The treasurer shall enter into an agency participation agreement with each state department authorized to accept credit card payments under the credit card processing contract.

8.4(4) The treasurer shall provide state departments with a copy of the merchant operating guidelines.

8.4(5) The treasurer shall provide state departments with information on costs for credit card and debit card processing, equipment, software, and supplies as specified under the credit card processing contract.

8.4(6) The treasurer shall provide state departments with instructions on creating cash receipts documents for credit card receipts.

8.4(7) The treasurer shall notify a state department that it is authorized to accept credit card and debit card payments and provide the department with its merchant identification number and other account information.

8.4(8) The treasurer shall terminate the agency participation agreement and a state department’s authority to accept credit card and debit card payments if a state department fails to comply with the requirements outlined in this chapter.

History

ARC 9100B, IAB 9/22/10, effective 10/27/10

Iowa Admin. Code r. 781—8.5 Adjustments for convenience fees

If a state department is allowed to charge its customers a convenience fee under the credit card processing contract, then the following shall apply:

The treasurer shall consult with the state department to assist in determining the amount by which the department’s fees may be adjusted to reflect the cost of credit card processing.
The state department shall follow all credit card associations’ rules on how and when a convenience fee may be charged.
The treasurer shall notify state departments of any changes in the credit card associations’ rules on convenience fees.

History

ARC 9100B, IAB 9/22/10, effective 10/27/10

Chapter 9 Unclaimed Property

Iowa Admin. Code r. 781—9.1 Purpose

Iowa Code chapter 556 authorizes the treasurer of state to establish administrative rules that are necessary for the purpose of carrying out the provisions of Iowa Code chapter 556, the uniform disposition of unclaimed property Act.

This rule is intended to implement Iowa Code chapter 556.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.3 Forms

9.3(1) Appropriate forms must be completed on paper or online (whichever is applicable for the requested actions) to perform the actions listed below. Current forms are available online at www.greatiowatreasurehunt.com or as supplied by the state treasurer’s office.

9.3(2) Forms required by the office include but are not limited to the following:

a. Claim Form.

b. Holder Reimbursement Form.

c. Affidavit of Administration.

This rule is intended to implement Iowa Code chapter 556.

History

ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.4 Definitions

In addition to the terms defined in Iowa Code section 556.1, the following words or terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

“Act” means the uniform disposition of unclaimed property Act, Iowa Code chapter 556.

“Aggregate property” means individual items of intangible property with a value of less than $50 each which have been aggregated by a holder and reported and delivered to the division in a lump sum.

“Book shares” means debt or equity securities which are maintained in book entry form only and for which no physical certificate was or is issued.

“Claimant” means a person or legal entity entitled to reclaim abandoned property in the possession of the division. A claimant may be an original owner, legal representative (other than a finder), or successor in interest.

“Contract auditor” means any person or entity engaged or hired by the treasurer or the division to provide unclaimed property examination services. “Contract auditor” includes agents, employees and any subcontractor engaged by a contract auditor or engaged by its subcontractors.

“Credits, advance payments, overpayments, refunds, or credit memoranda,” for purposes of Iowa Code section 556.1(12), means current accounts receivable of a business association that have not been reduced to a check or other form of payment. “Credits, advance payments, overpayments, refunds, or credit memoranda,” for purposes of Iowa Code section 556.1(12), shall not include uncashed checks or other unclaimed payments due and owing to a business association for its provision of goods or services, with respect to any other type of obligation.

“Custodial property” means property transferred to a custodian for a minor under the provisions of (1) the Iowa UTMA, (2) the Uniform Transfers to Minors Act, (3) the Uniform Gifts to Minors Act, or (4) a substantially similar Act of another state if, at the time of the transfer, the transferor, the minor, or the custodian is a resident of the designated state or the custodial property is located in the designated state.

“Division” means the unclaimed property division within the Iowa treasurer of state’s office that has the responsibility of administering the Act.

“Dormancy fee” means a service charge, dormancy charge, inactive account fee, escheat fee, minimum balance fee, maintenance fee, unclaimed property fee, or any other charge that results in the reduction of an account balance or property value and is not directly related to a transaction initiated by an owner.

“Dormancy period” means the statutorily specified span of time after which an owner’s failure to indicate an interest in property will result in the property’s being presumed abandoned and subject to reporting and delivery to the division.

“Due diligence” means the efforts required to be undertaken by a holder of unclaimed property to find the rightful owner of such property before the property is delivered to the division.

“Electronic authentication” means the use of an automated government or private sector database to confirm the identity of a claimant.

“Funds for liquidation” means unclaimed funds which are held by a holder on behalf of an owner of debt or equity securities and which are owing as a result of the liquidation of the securities issuer.

“Gift card” means an electronic gift card conspicuously designated as a gift card and generally purchased by a buyer for use by a person other than the buyer redeemable for goods or services from the issuing merchant or its affiliates.

“Gift certificate” means a merchandise certificate conspicuously designated as a gift certificate and generally purchased by a buyer for use by a person other than the buyer.

“Indication of interest” means an action by an owner with respect to the owner’s property which indicates that the owner is aware of the existence of the property and intends for the property not to be presumed abandoned. Examples of an owner’s indication of interest include, but are not limited to, the following: an owner-initiated deposit or withdrawal from an account; notification to a holder of a change of address specific to the account; an account balance or similar owner-initiated inquiry, including an account inquiry made electronically in which the owner has contemporaneously authenticated the owner’s identity; and any communication, such as written or electronic correspondence, telephone call or person-to-person conversation between an owner and a holder (or the agent of a holder), which can be documented and which reflects an owner’s awareness of the existence of the property. “Indication of interest” does not include recurring Automated Clearing House (ACH) transfers, automated postings to accounts, computer system conversions, the non-return of mail, and other actions that are not owner-initiated or do not require a direct owner response.

“Intangible property” means such property as described in Iowa Code section 556.1(12) as well as any other fixed and certain interest or right in an intangible that is held by, issued to, or owing to a holder except as otherwise expressly exempted by law.

“Iowa uniform transfers to minors Act” or “Iowa UTMA” means Iowa Code chapter 565B.

“Last activity date” means the last verifiable date of owner-initiated activity or contact with the holder with respect to unclaimed property.

“Locator” means a person hired or engaged to assist in the recovery of unclaimed property reported into the Act.

“Matured bond principal” means unclaimed funds which are held by a holder for a bond holder pending the bond holder’s redemption of debt securities.

“Non-freely transferable security” means a security that cannot be delivered to the administrator by the Depository Trust Clearing Corporation or a similar custodian of securities providing post-trade clearing and settlement services to financial markets or cannot be delivered because there is no agent to effect transfer. “Non-freely transferable security” includes a worthless security.

“Retained asset account” means any mechanism whereby the settlement of proceeds payable under a life insurance policy is accomplished by deposit by the insurer, or an entity acting on behalf of the insurer, depositing the proceeds into an account with check- or draft-writing privileges, where those proceeds are retained by the insurer pursuant to a supplementary contract not involving annuity benefits.

“Tangible property” means the physical contents of a safe deposit box or other safekeeping repository, or physical items held as collateral by a banking organization, financial organization, or business association, that are reportable and deliverable to the division.

“Treasurer” means the treasurer of the state of Iowa.

“Undelivered shares” means unclaimed physically issued debt or equity securities which were returned to the issuer by the post office as undeliverable or which were otherwise never delivered into the possession of the owner.

“Underlying shares” means unclaimed physically issued debt or equity securities which are presumably in the possession of an owner.

“Unexchanged shares” means unclaimed debt or equity securities which are held by a holder on behalf of an owner, pending the owner’s surrender of obsolete debt or equity securities in conjunction with an acquisition, merger, recapitalization, or similar mandatory corporate action.

This rule is intended to implement Iowa Code section 556.1.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.5 Dormancy fees and related charges

9.5(1) Iowa Code chapter 556 authorizes the following dormancy fees:

a. Lawful charges withheld from abandoned demand, savings, or matured time deposits held by a financial organization.

b. Charges on unpresented traveler’s checks and money orders, when a valid and enforceable contract to assess the charges exists, and the issuer regularly imposes such charges and does not regularly reverse or otherwise cancel such charges for the benefit of the owner.

c. Charges on unpresented checks, drafts, or similar instruments on which a financial organization is directly liable, when a valid and enforceable written contract to assess the charges exists, and the holder regularly imposes such charges and does not regularly reverse or otherwise cancel such charges for the benefit of the owner.

d. Deductions from the face value of a gift certificate or gift card resulting from untimely presentment or usage, when a valid and enforceable written contract was provided in conjunction with the issuance of the gift certificate or gift card, and the issuer of the gift certificate or gift card regularly imposes and does not regularly reverse or otherwise cancel the deduction for the benefit of the owner.

9.5(2) Dormancy fees not authorized by Iowa Code chapter 556, including but not limited to an escheat fee or other fee sought for the holder’s performance of the requirements of Iowa Code chapter 556, are prohibited.

9.5(3) Except for unclaimed accounts reported pursuant to Iowa Code section 556.11(1), all dormancy fees assessed against an unclaimed account must be disclosed in the report of unclaimed property filed with the division.

This rule is intended to implement Iowa Code section 556.2.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.6 Reporting and delivery of safe deposit box contents

9.6(1) Safe deposit boxes or other safekeeping depositories that have been abandoned shall be opened and inventoried in the presence of at least two employees of the holder.

9.6(2) The holder shall list the contents of each box inventoried and provide that list to the division. The Safe Deposit Box Inventory Form, or other form approved by the division, or any financial institution’s internal inventory form shall be used and provided to the division.

9.6(3) The property and a copy of the inventory shall then be sealed and maintained in safekeeping until delivered to the owner or to the division when required by the Act. The holder may not convert the property to cash or reduce cash property to check; all property is to be delivered in its original form and “as is” to the owner or, if required, to the division.

9.6(4) Property transferred to the division shall be packaged in a reasonably protective manner to prepare for transportation to the division. Property should be delivered to the division via certified mail or insured courier. The holder assumes all risk of loss pending receipt of the property by the division. In the case of hazardous materials or weapons, including handguns, holders shall contact the division and follow any special instructions for handling such items.

This rule is intended to implement Iowa Code section 556.2.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.7 Reporting of stocks—non-freely transferable and worthless securities

A holder shall not report or deliver to the division a security identified by the holder as a non-freely transferable security. Upon determination by the division or the holder that a security is no longer a non-freely transferable security, the security shall be subsequently reported and remitted on the next regular (annual) date prescribed for delivery of securities pursuant to the Act. The holder shall make a determination annually whether a security that has not been reported or delivered to the division on the basis that it is non-freely transferable is no longer non-freely transferable.

This rule is intended to implement Iowa Code section 556.5.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.8 Reporting of individual retirement accounts (IRAs) and other retirement accounts

9.8(1) Except as provided in subrule 9.8(2), the reporting and delivery of property in an individual retirement account, defined contribution plan, defined benefit plan, or other account or plan that is qualified for tax deferral under the income tax laws of the United States shall be extended until three years after the earliest of the following has occurred:

a. The date of unsuccessful distribution;

b. The date of the required distribution, as stated in agreements governing the account; or

c. The date specified in the income tax laws of the United States by which a distribution must occur in order to avoid a tax penalty, including where the owner has died.

9.8(2) The reporting and delivery of a property in a Roth IRA shall be extended until three years after the date specified in the income tax laws of the United States by which a distribution must occur in order to avoid a tax penalty following the death of the owner. In the absence of knowledge of the life status of a Roth IRA owner, the owner will be presumed to have died upon reaching 110 years of age.

9.8(3) In reporting individual retirement accounts and other retirement accounts, holders shall include the name, address, relationship to the owner, and social security number of the account beneficiary, to the extent such information is known.

9.8(4) In reporting individual retirement accounts and other retirement accounts, holders shall comply with the Internal Revenue Service Revenue Ruling 2018-17 and all other applicable tax withholding and reporting requirements.

This rule is intended to implement Iowa Code section 556.7.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.9 Reporting of certificates of deposit and other time deposits

If an automatically renewable time deposit or nonrenewable time deposit is deemed abandoned prior to its initial maturity, the time for the reporting and delivery of the time deposit to the division will be extended to the date of maturity or three years from the date on which the abandonment period commenced, whichever is later.

This rule is intended to implement Iowa Code section 556.7.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.10 Indication of interest by an owner in a certificate of deposit or other time deposit

9.10(1) The following acts by the owner of a time deposit shall rebut a presumption of abandonment of the time deposit:

a. Consent in writing to a renewal of the time deposit at or about the time of renewal and signed by the owner, given by delivery of the original or a signed copy in a format reasonably acceptable to the division, or demonstrated by the existence of a memorandum or other record on file with the holder made at the time of renewal; or

b. The owner, within three years after the earlier of the maturity date or the date of the owner’s last indication of interest in the deposit, has:

(1) Increased or decreased the amount or presented the passbook or other similar evidence of the deposit for the crediting of interest due;

(2) Communicated in writing with the financial organization concerning the time deposit, including requesting that the time deposit be redeemed;

(3) Otherwise demonstrated an indication of interest in the deposit as evidenced by a memorandum or other record on file prepared by an employee of the financial organization;

(4) Owned other property to which subparagraphs 9.10(1)“b”(1), (2), and (3) above apply and the financial organization communicates with the owner about the deposit that would otherwise be presumed abandoned under this subrule in writing at the address to which communications regarding the other property regularly are sent; or

(5) Had another relationship other than time or demand deposits, such as, but not limited to, a safe deposit box, mortgage, stocks, bonds, or other investments, with the financial organization concerning which the owner has:

Communicated in writing with the banking or financial organization; or
Demonstrated an indication of interest as evidenced by a memorandum or other record on file prepared by an employee of the financial organization.

9.10(2) Consent to renewal of a time deposit shall be presumed and the owner will be deemed to have demonstrated an indication of interest in a time deposit when the financial organization sends the owner notice of the renewal via first-class mail, address correction requested, and the notice is not returned to the financial organization by the post office for reason of nondelivery; provided, however, the financial organization must maintain a system for tracking and documenting return mail.

9.10(3) The date on which the owner has last demonstrated an indication of interest in and awareness of the owner’s time deposit, as defined in paragraph 9.10(1)“a” above, or the date of maturity if no conduct evidencing such interest is made, whichever is earlier, shall begin the three-year abandonment period. However, when a written communication mailed to an owner is returned marked “undeliverable” or “unclaimed,” the date of receipt by the financial organization of the returned mailing shall be deemed to begin the abandonment period. When periodic interest checks are issued on a time deposit, the abandonment period will commence on the date of an uncashed interest check, and the time deposit will be considered abandoned if all subsequent interest checks continue to remain uncashed through the entire statutory abandonment period, unless there is other conduct by the owner demonstrating an indication of interest in the time deposit as specified elsewhere in rule 781—9.10(556) and applicable statutory law.

This rule is intended to implement Iowa Code section 556.7.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.11 Reporting of retained asset accounts

Funds held in a retained asset account maintained by a life insurance company on behalf of a beneficiary shall be reported and delivered to the division if the beneficiary has failed to take such actions demonstrating an indication of interest in the account for a period of three years.

This rule is intended to implement Iowa Code section 556.9.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.12 Reporting of tax-advantaged accounts

9.12(1) Property held in a plan account described in Sections 223, 529 and 529A of the Internal Revenue Code or held in a nonretirement account or plan that qualifies for tax deferral under the income tax laws of the United States is presumed abandoned if it is unclaimed by the owner three years from the later of:

a. The date a second item sent to the owner by first-class mail was returned as undeliverable by the United States Postal Service (USPS), unless a later mailing by first-class mail to the apparent owner was not returned as undeliverable or, for an apparent owner not receiving communications from the holder by first-class mail, the date of the last indication to the holder by the apparent owner of interest in the property; or

b. Thirty years have elapsed after the date the account was opened.

9.12(2) Uncashed distribution checks issued from tax-advantaged accounts are reportable three years from the date the property became reportable pursuant to Iowa Code section 556.7. Uncashed distribution checks issued for a plan account described in Sections 529 and 529A of the Internal Revenue Code shall be reported in accordance with the IRS 1099-Q form issued at the time the distribution check was issued.

This rule is intended to implement Iowa Code section 556.7.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.13 Reporting of unused gift certificate and gift card balances

9.13(1) Except as provided in subrules 9.13(2) and 9.13(3), an unused balance on a gift certificate or gift card is reportable five years from the date of issuance of the gift certificate or gift card or last usage, whichever is later.

9.13(2) An unused balance on a gift certificate or gift card that is not redeemable for cash, which was issued prior to July 2, 2014, is reportable five years from the date of issuance of the gift certificate or gift card or last usage, whichever is later.

9.13(3) An unused balance on a gift certificate or gift card that is not redeemable for cash, which was issued after July 1, 2014, and is not subject to expiration or service fees, is not subject to reporting and delivery under Iowa Code chapter 556.

9.13(4) An unused balance on a gift certificate or gift card that is not redeemable for cash, which was issued after July 1, 2014, and is subject to expiration or service fees, is subject to reporting and delivery under Iowa Code chapter 556. A gift certificate or gift card is subject to expiration or service fees if the face of the gift certificate or gift card so indicates, regardless of whether the issuer of the gift certificate or gift card waives such expiration or fees.

This rule is intended to implement Iowa Code section 556.9.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.14 Unclaimed Property

to 9.17Reserved.

Iowa Admin. Code r. 781—9.18 Information required to be included in report

9.18(1) Every holder report form submitted to the division must include, to the extent such information is available to the holder, the following information:

a. The owner’s (and as applicable/available, the beneficiary’s) name;

b. The owner’s (and as applicable/available, the beneficiary’s) last-known address;

c. The owner’s (and as applicable/available, the beneficiary’s) social security number or Federal Tax Identification Number;

d. Account number, policy number, or other similar account relationship identifier;

e. Check number, certificate number, or other similar property identifier;

f. Date of owner’s last indication of interest;

g. Date the property became payable or distributable;

h. In the case of joint owners, the relationship of the owners (joint owners, sole owner, etc.); and

i. As applicable and as known to the holder, an indication that the owner is deceased, as well as the date of death of the owner and the source of decedent information.

9.18(2) The division may determine that the information included in the holder report form is nonconforming and may require that a holder revise its report in circumstances where the holder report form:

a. Does not include complete information;

b. Does not reconcile to the property remittance;

c. Is not verified;

d. Is not verified by the appropriate individual as required by statute;

e. Reflects unauthorized service or other owner charges assessed by the holder;

f. Includes property which is not subject to Iowa Code chapter 556; or

g. Was not filed electronically or has been filed electronically and cannot be read or converted by the division.

This rule is intended to implement Iowa Code section 556.11.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.19 Early reporting of unclaimed property

9.19(1) A holder may request permission to report and deliver property to the division before it is presumed abandoned by sending a written request to the division.

9.19(2) The request must identify the property to be reported and delivered and the reasons for requesting permission to report and deliver the property prior to the date it is presumed abandoned.

9.19(3) The division may, at its sole discretion, consent to early reporting and delivery according to terms and conditions prescribed by the division.

9.19(4) A retirement plan administrator or other responsible fiduciary terminating a retirement plan may, following a diligent search for missing participants, report and remit any unclaimed benefits contemporaneous with the termination of the plan and is neither required to wait for three years to elapse pursuant to Iowa Code section 556.7 nor obtain written permission from the division for early reporting.

This rule is intended to implement Iowa Code section 556.11.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.20 Owner notification and holder due diligence

9.20(1) Holders shall exercise reasonable and necessary due diligence consistent with good business practice in attempting to reactivate dormant accounts and to locate owners of unclaimed property.

9.20(2) If a holder fails to perform due diligence as required by Iowa Code section 556.11(5), the treasurer may charge five dollars for each name and address account reported if 35 percent or more of the accounts are claimed within 24 months immediately following the filing of a holder report.

9.20(3) If a holder fails to perform due diligence as required by Iowa Code section 556.11, the holder will not have met the good-faith reporting standard of Iowa Code section 556.14 and the division will not be obligated to defend the holder against any claim of liability.

This rule is intended to implement Iowa Code section 556.11.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.21 Reporting aggregate amounts to the division

Holders may report in the aggregate property with a value under $50, but holders are discouraged from doing so since it impedes the ability of the division to expeditiously pay claims. For this reason, holders are encouraged not to aggregate, regardless of item value. If a holder chooses to report in the aggregate, the holder shall be responsible to provide information required to verify and validate a claim made to aggregated properties.

This rule is intended to implement Iowa Code section 556.11.

History

ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.22 Property held by a third party

A holder may contract with a third party to hold property, provide payment services and report unclaimed property; however, such arrangements shall not relieve the holder from complying with all requirements of this chapter and Iowa Code chapter 556. The holder remains at all times responsible for the complete, accurate and timely reporting and delivery of property presumed abandoned and other duties as provided for under this chapter and Iowa Code chapter 556.

This rule is intended to implement Iowa Code chapter 556.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.23 Regulation of locators

9.23(1) Pursuant to Iowa Code section 556.11(10), agreements or contracts between locators and owners to pay compensation to recover or assist in the recovery of abandoned property are unenforceable if made within 24 months of the date the property was received by the division. Additionally, if a holder is in possession of property that has been deemed abandoned but has not yet been timely reported and delivered to the division, an agreement to pay compensation to recover or assist in the recovery of such property is unenforceable. In no case shall the locator fees or compensation exceed 15 percent of the amount of the property subject to claim.

9.23(2) A claim form signed by a locator shall not be reviewed by the division. The apparent owner or owner’s legal representative shall make direct contact with the division and sign the claim form. All communication regarding the claim will be sent to the claimant. A signed, dated and notarized copy of any original agreement or contract between a locator and an owner shall be included with the filing of any claim. Handwritten agreements will not be accepted. To be valid, the agreement must disclose the nature and value of the property and the name and address of the person in possession.

9.23(3) The division shall not release to a locator information deemed confidential pursuant to Iowa Code section 22.7(59), even where a claimant has authorized such release.

9.23(4) Certain publicly releasable information about owners shall be reproduced at least annually in a format to be determined by the treasurer and shall be provided to anyone requesting the information. The treasurer may assess a fee of $20 per copy. The fee shall be paid in the form of an official check or money order and made payable to the State of Iowa. All fees for owner information shall be received by the division before the owner information is made available.

This rule is intended to implement Iowa Code sections 22.7(59) and 556.11.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.24 Disposition of safe deposit box contents

9.24(1) Except as stated in subrules 9.24(2) and 9.24(3), the contents of safe deposit boxes and other tangible property received by the division shall be held by the division for not less than one year, after which time the property may be sold, held, or destroyed.

a. No employee, person related to an employee of the Iowa treasurer of state living in the same household, or contractor that provided auction or appraisal services may directly or indirectly bid on safe deposit box contents or other tangible property offered for sale by the division.

b. For purposes of this subrule, “related to an employee” shall mean the employee’s spouse, child, stepchild, grandchild, parent, stepparent, sibling, stepsibling, or spouse of any of the foregoing persons.

9.24(2) Medals awarded for military service in the armed forces of the United States shall not be auctioned.

9.24(3) If the treasurer determines, after investigation and after an attempt to dispose of the unclaimed property in accordance with the Act, that the probable cost of sale exceeds the value of the property, the treasurer may destroy or otherwise dispose of the property at any time.

This rule is intended to implement Iowa Code section 556.17.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.25 Filing of owner claims

9.25(1) All claims for abandoned property shall be filed with the division on the division’s claim form or through such other means or process as the division finds acceptable.

9.25(2) The claim form shall be completed in its entirety and must include the following information:

a. Social security number or Federal Tax Identification Number, or both, of every claimant;

b. Name, complete mailing address, telephone number and email address, if applicable, of every claimant;

c. Signature of claimant(s). The treasurer may set through policy a cash claim limit, stock estimated value, and safe deposit box contents that require a signature to be notarized.

9.25(3) The treasurer shall consider any claim filed under the Act.

9.25(4) The treasurer may waive the filing of a claim form pursuant to Iowa Code section 556.19.

This rule is intended to implement Iowa Code section 556.19.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.26 Documentation of claims by individuals

A claimant may be required to provide the following supporting documentation with claims, as applicable, if the claim is being made by the person that is set forth as the apparent owner of the unclaimed property in the report filed with the division:

9.26(1) A copy of the claimant’s driver’s license or other government-issued identification.

9.26(2) A copy of a document verifying the claimant’s social security number. Examples include a social security card and a federal Form W-2.

9.26(3) A document showing the claimant’s address as it was reported to the division may be required if the holder did not report the social security number to the division. Examples of relevant documentation include a federal Form W-2, pay stub, bank statement, expired driver’s license, stock certificate, college transcript, report card, marriage certificate, divorce decree, birth certificate, or an original (not a copy) of a postmarked envelope addressed to the claimant.

9.26(4) If the claimant’s name has changed, copies of supporting documentation showing the name change.

9.26(5) If the property subject to claim is a joint account, each surviving claimant may be required to provide:

a. The information in subrules 9.26(1) to 9.26(4) for each joint owner, or such alternative documentation as the division may at its sole discretion deem acceptable; or

b. Where one or more joint owners are deceased, an official copy of the deceased joint owner’s death certificate.

9.26(6) If the property subject to claim is being claimed in the capacity of a guardian or conservator or under a power of attorney, the claimant may be required to provide:

a. A copy of the letter of appointment;

b. Documentation identifying the guardian/custodian and the owner; and

c. If the owner is a minor, an official copy of the owner’s birth certificate and a document verifying the owner’s social security number. No power of attorney filed by a finder will be recognized by the division for the purpose of making a claim.

9.26(7) If the property subject to claim is a security, in addition to the documentation required by this rule, the claimant may be required to provide the original stock certificate(s), a surety bond that is acceptable to the division, or an affidavit of lost certificate.

9.26(8) If the owner of the property subject to claim is deceased, an Affidavit of Administration must be completed by the claimant.

a. If the property subject to claim is being claimed in the capacity of an executor or administrator, the claimant may be required to submit evidence as outlined in the Affidavit of Administration as provided by the treasurer of state. In this situation, the payment will be made to the estate of the rightful owner.

b. If the property subject to claim is being claimed by an heir (either under a valid will or under Iowa probate law), the claimant(s) may be required to submit evidence outlined in the Affidavit of Administration as provided by the division. Each heir will be paid separately. At the discretion of the division, one heir can accept payment for all heirs.

This rule is intended to implement Iowa Code section 556.19.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.27 Documentation of claims by business entities

9.27(1) A business may, in addition to providing other evidence of entitlement, be required to provide the following supporting documentation with its claim:

a. Proof, as deemed suitable by the division, that the person signing the claim form is an officer of the business and has the authority to conduct business on behalf of the entity, such as corporate resolution or other documentation deemed suitable by the treasurer.

b. Documentation setting forth the claimant’s federal Employer Identification Number (EIN).

c. A copy of the claimant’s biennial report as filed with the office of the secretary of state or a copy of a current corporate tax return.

9.27(2) Claimants filing on behalf of businesses that are no longer in existence must additionally provide documentation that the claimant is the bona fide successor in interest to the rights of the discontinued business entity with respect to the property being claimed.

This rule is intended to implement Iowa Code section 556.19.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.28 Claims for which the apparent owner of property is an unincorporated nonprofit association that has been dissolved

A claim to property for which the apparent owner is an unincorporated nonprofit association that has been dissolved may be made by a person authorized to claim the property in accordance with the dissolved association’s bylaws or governing principles or as proven by other documentation as deemed suitable by the division.

This rule is intended to implement Iowa Code section 556.20.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.29 Certification of entitlement by claimant

The claimant shall affirmatively certify that the claimant is the true owner of the unclaimed property and agree to hold harmless and indemnify the division, its employees, and the state in the event of a superior claim to such property by another claimant or person.

This rule is intended to implement Iowa Code section 556.19.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.30 Claims by holders for owner reimbursements

A holder may request payment from the division under the circumstances set forth below. Regardless of whether the holder is represented by a bona fide third party, the claim must be signed by an officer of the holder. A third party may not act on behalf of the holder to request payment from the division unless such third party provides evidence satisfactory to the division in its sole discretion that such third party is acting as the holder’s bona fide representative through general power of attorney, court designation, or similar legal authority. The division may, in its sole discretion, establish a policy that allows a transfer agent or a reporting agent to sign a holder reimbursement subject to meeting all the requirements set forth by the division under that policy. The establishment of such a policy shall not be construed as creating any right or entitlement of transfer or of reporting agents to sign holder reimbursements, and any such policy may be rescinded or modified at any time at the sole discretion of the division.

9.30(1) The holder has made payment to the apparent owner and filed proof of payment with the division for such a reclaimed asset. As a condition precedent to receiving reimbursement from the division, the holder shall assume liability for the reclaimed assets and indemnify and hold harmless the division from all future claims related to the reclaimed assets.

9.30(2) The holder reported the asset in error. As a condition for receiving reimbursement from the division, the holder shall assume liability for the reclaimed asset and indemnify and hold harmless the division from all future claims related to the reclaimed asset.

This rule is intended to implement Iowa Code section 556.19.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.31 Claims to custodial property under the Iowa UTMA or similar Acts

9.31(1) A claim to custodial property may be made by the custodian of the property, or the legal representative thereof, provided that the minor has not yet reached the age of 21 years.

9.31(2) Upon reaching the age of 21 years, a minor may file a claim to custodial property.

This rule is intended to implement Iowa Code section 556.19.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.32 Claim of another state to property in the custody of the treasurer of state

9.32(1) If property is received by the division and the division is aware that the property is subject to a superior claim of another state, the division may:

a. Report and deliver the property to the other state; or

b. Return the property to the holder so that the property may be paid or delivered to the other state.

9.32(2) Except for an agreement to indemnify the state of Iowa, no formal agreement shall be required of the division to undertake such transfer to the correct state.

This rule is intended to implement Iowa Code section 556.20.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.33 Claimant interest in unclaimed property

9.33(1) The division shall have the exclusive authority to determine a claimant’s interest in unclaimed property.

9.33(2) Absent an order of a court of competent jurisdiction or by operation of the Iowa probate code or other applicable law, an owner’s interest in unclaimed property held by the division may not be transferred to a third party except in the following circumstances:

a. As a remnant asset in bankruptcy;

b. Under an agreement that assigns the apparent owner’s interest in the unclaimed property where the agreement is otherwise valid and meets the following criteria:

(1) The agreement is made at least 24 months after the date payment or delivery is made under Iowa Code section 556.13;

(2) The agreement is in writing and signed by the apparent owner; and

(3) The agreement discloses the nature and value of the property and the name and address of the person in possession of the property.

9.33(3) For the purposes of the Act, a money or similar judgment against an apparent owner does not create an interest in the specific property held by the division on behalf of the apparent owner.

This rule is intended to implement Iowa Code section 556.19.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.34 Approval of claims

Each claim submitted to the division is subject to the approval process outlined below. Claims with a cash value of greater than $5,000 must undergo electronic authentication or undergo such other or additional approval process as may be determined by the division. The treasurer may enter into a contract with a suitable third party that provides identity authentication. Claims over a cash value of $5,000 must receive an additional level of approval from a division manager.

9.34(1) Cash claims that pass electronic authentication will be considered approved. The treasurer may implement a dollar threshold which would require a review by a division staff person.

9.34(2) Cash claims not subject to the dollar limit threshold that do not pass electronic authentication will be subject to one level of approval by division staff authorized to approve claims at this level. If the claimant does not provide adequate documentation, division staff will communicate with the claimant explaining what documentation is missing. Level One approval shall then be applied only if all required documentation is subsequently submitted by the claimant.

9.34(3) Cash claims subject to the dollar limit threshold, claims involving the transfer of stock or mutual fund share, or claims involving the delivery of safe deposit box contents will be subject to two levels of approval by division staff authorized to approve claims. If the claimant does not provide adequate documentation, division staff will communicate with the claimant explaining what documentation is missing. Level One approval shall then be applied only if all required documentation is subsequently submitted by the claimant. Level Two approval shall be obtained from the division staff person(s) designated to approve claims at this level.

This rule is intended to implement Iowa Code section 556.19.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.35 Process for payment of claims

9.35(1) Claims shall be paid as follows:

a. In the case of cash claims, final approval shall cause the claim to become part of the settlement process. The settlement file will be submitted to the department of administrative services for payment. State warrants will be mailed or may be obtained from the treasurer’s office. At the treasurer’s discretion, the division may electronically deliver funds to a claimant’s financial institution account. Fees associated with the electronic delivery of funds may be assessed to the claimant.

b. In the case of a claim requiring the transfer of securities, final approval shall result in the division’s sending a notification to a third-party agent responsible for the transfer of ownership of the stocks/mutual funds, instructing the agent to have ownership of the appropriate number of shares of the property reregistered in the name of the claimant.

9.35(2) In the case of safe deposit box contents that have not been liquidated, the claimant may assume physical custody of the contents from the division. The claimant may also request that the contents be mailed to the claimant. Any contents mailed to claimants will be sent via the United States Postal Service (USPS) or other suitable delivery service. The division is not responsible for items lost, damaged, or not delivered by the delivery service.

9.35(3) Payment for all claims made to an owner who has been assisted by a finder shall be made only to the owner and in no instance to the finder.

This rule is intended to implement Iowa Code section 556.19.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.36 Surety bonds

If the property subject to claim is a security and the original stock certificate is not available, in addition to the documentation required by rules 781—9.25(556) and 781—9.26(556), the claimant may be required to complete the Affidavit of Lost Certificate. The treasurer of state may require the claimant to furnish the treasurer with a surety bond containing terms and provisions acceptable to the treasurer and issued by a corporate surety. The claimant shall be responsible for all premiums, costs, fees or other expenses associated with any such surety bond.

This rule is intended to implement Iowa Code section 556.20.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.37 Examination of holders

The division may conduct an examination of a holder if the division has reason to believe a holder has failed to report or has underreported unclaimed property pursuant to the Act.

9.37(1) Examination and review. The treasurer may authorize employees of the treasurer and contract auditors to conduct examinations and review records in the course of an examination.

9.37(2) Examination entrance letter. The division shall send an examination entrance letter to holders selected for examination.

9.37(3) Examination records request. Holders subject to examination are required to comply with any and all requests for records that are made by the division or any contract auditor conducting an examination.

9.37(4) Examination entrance conference. The division, at its option, shall conduct an examination entrance conference with a holder prior to the commencement of an examination, at which the division shall identify the examination period and describe the general examination methods that will be used including, but not limited to, any estimation techniques that may be utilized.

9.37(5) Report of the examination findings and demand for delivery. Upon completion of an examination, the division shall provide a written report reflecting the total unclaimed property reporting liability and, pursuant to the Act, any interest due on amounts due and owing for failure to report and deliver property due and payable for prior years. The division has the discretion to hold an audit exit conference with the holder to provide the written report.

9.37(6) Informal conference. During the course of an examination, the holder may request an informal conference within the division and its representatives.

9.37(7) Delivery of examination findings by the holder. The holder shall deliver to the division within 30 calendar days of issuance of a report of examination and demand for delivery any unclaimed property and interest due, if any, to the division.

9.37(8) Examination closure letter. Upon receipt of the examination report and delivery of unclaimed property resulting from the examination, the division or its agent shall issue an examination closure letter informing the holder that the examination is closed.

This rule is intended to implement Iowa Code section 556.23.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.38 Estimation

The division may use estimation techniques where no holder records exist or the records are insufficient to determine the holder’s obligation due pursuant to the Act.

This rule is intended to implement Iowa Code section 556.23.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.39 Appeal of examination findings

A holder may appeal the examination findings of the division.

9.39(1) The holder may utilize the appeals process after receipt of the examination report from the division.

9.39(2) Failure to submit the appeal request within 30 calendar days shall constitute an acceptance of the total unclaimed property reporting liability findings.

9.39(3) The holder shall submit to the division a written request for an appeal along with all supporting documentation.

9.39(4) The division shall contact the holder and schedule an appeal meeting within 20 calendar days of receipt of the holder’s appeal request.

9.39(5) An appeal review shall be conducted at which time the holder shall present evidence supporting the holder’s basis for the appeal.

9.39(6) Based on the evidence and additional information presented during the appeal, the division will render a decision. Such final decision will be written and sent to the holder within 30 calendar days of the appeal meeting.

9.39(7) The holder shall file a report with the division and deliver unclaimed property to the division reflecting the unclaimed property reporting liability and interest due on amounts due and owing as determined by the division within 30 calendar days.

This rule is intended to implement Iowa Code section 556.23.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.40 Entering into contracts with contract auditors

The treasurer may enter into contracts with persons, pursuant to procedures prescribed by the treasurer, for the sole purpose of examining the records of holders to determine compliance with the Act. The treasurer may consider any relevant factors when entering into a contract for services requested in the performance of an unclaimed property examination.

This rule is intended to implement Iowa Code chapter 556.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.41 Guidelines

Contract auditors shall adhere to the following guidelines.

9.41(1) Contract auditors shall not participate in examinations in which such participation could be construed or perceived as a conflict of interest. Should the contract auditor believe that the contract auditor could not conduct an assigned examination due to a conflict of interest or for any other reason, the contract auditor shall notify the division. The division shall then determine whether recusal of the contract auditor from the assignment is appropriate or necessary. If the contract auditor is recused from conducting the examination of a holder, another contract auditor may be assigned.

9.41(2) Contract auditors shall maintain strict confidentiality of any nonpublic records or documents gathered during the course of an examination in accordance with the auditors’ contract.

9.41(3) Contract auditors shall properly document their review and make their working papers gathered during examinations available on demand for review by the treasurer and the attorney general’s office.

9.41(4) Upon request, contract auditors shall provide the holder with relevant copies of working papers supporting any calculation made of unclaimed property reportable and deliverable to the treasurer.

9.41(5) Contract auditors shall maintain working papers for a minimum of seven years following the completion of the examination assignment, the delivery of unclaimed property, the resolution of any appeal, or the finality of judgment in any litigation, whichever is later.

9.41(6) Contract auditors shall conduct examinations consistent with the Act and other applicable law, policies of the treasurer, generally accepted accounting principles, generally accepted auditing standards, and any relevant examination rules promulgated pursuant to the Act as they relate to the reporting and delivery of unclaimed property from holders or persons.

This rule is intended to implement Iowa Code chapter 556.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16

Iowa Admin. Code r. 781—9.42 Confidentiality of holder data

All information provided by a holder in the form of any report, record, claim, or other document submitted to the division or its agents, with the exception of the name and last-known address of a person appearing to be entitled to unclaimed property actually delivered to the division, shall be confidential and not subject to public release or disclosure.

This rule is intended to implement Iowa Code section 22.7(59).

History

ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.43 Holder voluntary disclosure of unreported property

9.43(1) The division may offer a holder Voluntary Compliance Self-Audit (VCSA) program in order to facilitate compliance by holders that have never reported unclaimed property or have substantially underreported unclaimed property.

9.43(2) The operation of the VCSA program process will be conducted as follows. The division will promulgate terms, conditions and forms for the VCSA program. A holder shall provide all required information in the format determined by the division in order to participate in the VCSA program. The division will have the discretion to approve or reject a VCSA submission. An incomplete VCSA submission will result in disapproval of the submission.

9.43(3) The division will not impose any interest or penalties for property reported under an approved VCSA submission.

This rule is intended to implement Iowa Code chapter 556.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—9.44 Holder amnesty program

The division may offer a holder amnesty program in order to facilitate compliance by holders that have never reported unclaimed property or have not reported in the last three years. The treasurer may provide notification of an amnesty program via the treasurer’s website. The treasurer may waive interest and penalties for the amnesty program.

This rule is intended to implement Iowa Code chapter 556.

History

ARC 2809C, IAB 11/9/16, effective 12/14/16; ARC 8844C, IAB 1/22/25, effective 2/26/25

Chapter 10 Informal Claims for Second Injury Fund

Iowa Admin. Code r. 781—10.1 Benefits of second injury fund

If an employee who has previously lost, or lost the use of, one hand, one arm, one foot, one leg, or one eye, becomes permanently disabled by a compensable injury which has resulted in the loss of, or loss of use of, another such member or organ, the employer shall be liable only for the degree of disability which would have resulted from the latter injury if there had been no preexisting disability. In addition to this compensation, and after the expiration of the full period provided by law for payments by the employer, the employee shall be paid out of the second injury fund the remainder of compensation payable for the degree of permanent disability involved after first deducting the compensable value of the previously lost member or organ. Any benefits received by the employee, or to which the employee may be entitled, by reason of increased disability from any state or federal fund or agency, to which the employee has not directly contributed, shall be regarded as a credit to any award made against the second injury fund.

10.1(1) Informal claims. Employees with second injuries as covered in Iowa Code sections 85.63 to 85.69 and rule 10.1(85) may file claims for informal settlements of controversies arising in connection with the second injury fund. An informal claim may be filed under these rules if the claimant has not previously filed a contested case with the industrial commissioner under Iowa Code section 86.14 and 343—4.1(1) and 4.1(2). An informal settlement of a pending contested case is governed by 343—6.1(85,86).

10.1(2) Tolling of claim. A claimant’s filing of an informal claim under these rules shall not toll the applicable statute of limitations and filing for informal settlement is not a prerequisite to filing a contested case proceeding for second injury fund benefits with the industrial commissioner under Iowa Code section 86.13.

10.1(3) Filing an informal claim. The claimant shall initiate the procedure if an informal settlement is desired by filing a notarized claim for an informal determination with the treasurer within two years from the date of the occurrence of the injury for which benefits are claimed. The claim shall be filed on the second injury fund claim form which is available at the Office of the Treasurer, Capitol Building, Des Moines, Iowa 50319. This form must be complete and contain all exhibits as specified in subrule 10.1(4). The treasurer may require additional documentation. If the treasurer requests additional documentation, it must be provided within 60 days of the treasurer’s request. The treasurer shall issue a written decision to the claimant within 90 days after the day that all necessary claim documentation is received by the treasurer.

If a claimant is not satisfied with the decision of the treasurer on an informal claim, the claimant may then file a contested case proceeding as per Iowa Code section 86.14, if the statute of limitations has not tolled for the filing under Iowa Code section 85.26.

10.1(4) Required claim documentation. Documents required to be filed with the second injury fund claim form shall include:

a. All medical records and reports concerning the first injury;

b. All medical records and reports concerning the second injury;

c. All records reflecting any payment of social security benefits for the first or second injury;

d. All employer’s records concerning the second injury including, but not limited to, documents reflecting workers’ compensation payments and weekly rates of compensation following the second injury;

e. All records of workers’ compensation insurance carriers which covered the second injury; and

f. All employer’s records concerning claimant’s employment following the second injury.

10.1(5) Rescission of informal claim. A claimant may at any time rescind the informal claim and file a contested case proceeding as per Iowa Code section 86.14. Filing a contested case will automatically terminate consideration of an informal claim filing.

10.1(6) Payment on claim by treasurer. If the treasurer determines that the claim should be paid, the treasurer shall submit recommendation to the industrial commissioner for authorization and for a written order in accordance with Iowa Code section 85.67. This recommendation shall indicate the amount of the weekly compensation to be paid, number of weeks to be paid, the date when payment shall begin, and the length of time payments shall be paid.

This rule is intended to implement Iowa Code section 17A.10.

Chapter 11 Deposit of Public Funds by State Agencies

Iowa Admin. Code r. 781—11.1 Scope

Iowa Code section 12C.1 grants authority to the treasurer of state to act as the public officer for depositing public funds of the state. Iowa Code chapter 12C also requires that all public funds of the state deposited in a financial institution be secured, either by a pledge of collateral by that financial institution or by the state sinking fund. These rules outline the requirements that state agencies shall follow to ensure that public funds of the state are secured as required by Iowa Code chapter 12C.

History

ARC 1217C, IAB 12/11/13, effective 1/15/14

Iowa Admin. Code r. 781—11.2 Definitions

As used in this chapter:

“Agency” or “state agency” means a unit of state government, which can be an authority, board, commission, council, department, examining board, or independent agency as defined in Iowa Code section 7E.4, and includes the office of an elective constitutional or statutory officer, the general assembly and any office or unit under its administration, and the judicial branch.

“Depository” means a financial institution into which public funds are deposited under Iowa Code chapter 12C.

“Financial institution” means a corporation or limited liability company engaged in the business of banking and organized under the laws of this state, another state, or the United States, as well as a savings bank organized under the laws of another state or the United States. “Financial institution” also means a cooperative or a nonprofit association incorporated under Iowa Code chapter 533 or the federal Credit Union Act and that is ensured by the National Credit Union Administration and includes an office of a credit union.

“Public funds” or “public deposits” means the moneys of the state deposited by or on behalf of a state agency. “Moneys of the state” includes moneys credited to a depository for the purpose of completing an electronic financial transaction created by the federal government, a business, a consumer, or any other public or private entity, and a transaction created pursuant to 2013 Iowa Acts, Senate File 396, section 23.

“Treasurer” means the treasurer of the state of Iowa and members of staff carrying out duties delegated by the treasurer.

History

ARC 1217C, IAB 12/11/13, effective 1/15/14

Iowa Admin. Code r. 781—11.3 Treasurer’s procedures for administering the depository process

11.3(1) The treasurer shall enter into an agreement with one or more financial institutions located in the state to serve as a depository.

11.3(2) The treasurer shall specify which depositories may be used by state agencies and any third party hired by an agency to collect receipts and make deposits of public funds on the agency’s behalf.

11.3(3) The treasurer shall provide state agencies with the proper instructions for receiving electronic financial transactions at a depository.

11.3(4) The treasurer shall provide state agencies with instructions on creating cash receipt accounting documents reflecting the deposit of public funds into a depository.

11.3(5) Before an agency hires a third party to collect receipts and make deposits of public funds on the agency’s behalf, the treasurer shall review the collection process being considered by the agency and third party to ensure that public funds are being deposited directly into a depository.

History

ARC 1217C, IAB 12/11/13, effective 1/15/14

Iowa Admin. Code r. 781—11.4 State agency requirements for depositing public funds

11.4(1) A state agency shall make deposits of public funds with the treasurer’s cashier or directly into an account owned by the treasurer at a depository located in the state.

11.4(2) A state agency shall notify the treasurer of the agency’s intent to use a third party to collect receipts and make deposits of public funds on the agency’s behalf to allow the treasurer to review the process to ensure that receipts of public funds are being deposited directly into a depository.

11.4(3) A state agency shall require any third party collecting public funds on the agency’s behalf to make deposits directly into the depository and account specified by the treasurer.

11.4(4) A state agency shall comply with the treasurer’s instructions on creating cash receipt accounting documents reflecting the deposit of public funds into a depository.

History

ARC 1217C, IAB 12/11/13, effective 1/15/14

Chapter 12 Technical Investment Information and Assistance

Iowa Admin. Code r. 781—12.1 Definitions

The terms contained in Iowa Code section 12.62 are defined as follows:

“Assistance” is defined as the communication of technical information to those public entities requesting the information. The treasurer of state’s investment division will assist those public entities who request help by providing them with technical information regarding investment or deposits of public funds. Assistance will be provided to the requester in written form or by telephone. Assistance does not include the actual investment of a public entity’s funds by the treasurer of state’s investment division.

“Public entities” is defined as political subdivisions, the state board of regents, instrumentalities, and agencies of the state authorized to invest funds.

“Technical information” includes any information in the possession of the investment division of the treasurer of state’s office pertaining to: how a type of investment is normally structured and if a particular type of investment is permitted by the Iowa Code; how interest and yields are computed by the industry; how to make yield comparisons when different interest calculation methods are used for different securities; the market liquidity of particular classes of investment securities; general risk and return tradeoffs of particular security types; how investments rank in terms of safety, liquidity and return characteristics; procedures for depositing public funds in Iowa financial institutions; key provisions to include in investment policies and agreements to ensure the safety of public funds; and any other information in the possession of the treasurer of state’s investment division which pertains to investments or deposits of public funds. Technical information does not include legal advice or the making of investment decisions by the treasurer of state’s investment division for public entities, nor does it include information regarding requirements of the Iowa Code which do not pertain to the investment or deposit of public funds.

Iowa Admin. Code r. 781—12.2 Availability of technical investment information

The treasurer of state will provide assistance and technical information to public entities in one or more of the following ways:

12.2(1) Written form. A public entity may request technical investment information and assistance by writing to: Treasurer of State, Attention: Investment Assistance, State Capitol, Des Moines, Iowa 50319.

12.2(2) By telephone. A public entity may request technical investment information and assistance by telephoning the state treasurer’s investment division at (515)281-5369 or (515)281-5084. The treasurer of state reserves the right to require a public entity to request technical investment information and assistance in written form.

12.2(3) Newsletter. The treasurer of state may provide technical investment information and assistance to public entities by producing a newsletter which contains answers to frequently asked questions or other information which the treasurer of state believes will be useful to them. Any newsletter will be mailed to those public entities which regularly receive the minimum interest rates on deposits notice from the treasurer of state’s office. The treasurer of state will also make any newsletter available to the various associations and leagues which provide services to public entities.

12.2(4) Workshops or seminars. The treasurer of state will provide investment personnel to speak at investment workshops or seminars for public treasurers when requested to do so.

12.2(5) Requests for legal advice or opinions. The treasurer of state will not provide legal advice to public entities. However, the treasurer of state may direct public entities to existing legal opinions or rulings which may be applicable to the question raised.

Chapter 13 Deposit and Security of Public Funds in Banks

Iowa Admin. Code r. 781—13.1 Scope and transition procedures

13.1(1) Iowa Code chapter 12C grants authority to the treasurer of state to establish administrative rules and procedures to implement a system for securing deposits of public funds in banks, savings and loans, and credit unions through the pledge of eligible collateral. This chapter shall apply to the system for securing certain deposits of public funds in Iowa banks as defined by Iowa Code section 12C.1, subsection (2a).

13.1(2) Any form, communication, or transaction contemplated by this chapter may be completed and signed by wire transfer or other electronic means authorized by this chapter or as otherwise permitted or accepted by the treasurer. The treasurer may require that communications from an approved custodian to the treasurer be electronic.

Iowa Admin. Code r. 781—13.2 Definitions

As used in this chapter:

“Approved custodian” means a financial institution that has facilities for the safekeeping of securities and that has been approved under this chapter by the treasurer of state to serve as the treasurer’s agent in safekeeping collateral pledged to the treasurer of state to secure uninsured deposits of public funds.

“Bank” means “bank” as defined in Iowa Code section 12C.1, subsection (2a).

“Control,” including controlling, controlled by, and under common control, shall be presumed to exist if a pledging bank, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10 percent or more of the voting securities of any approved custodian. Control, including controlling, controlled by, and under common control, shall also be presumed to exist if an approved custodian, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10 percent or more of the voting securities of any pledging bank.

“Eligible collateral” means any one or any combination of the securities or other forms of collateral as described in Iowa Code section 12C.22, subsection 6, and acceptable to the treasurer. Cash shall be considered eligible collateral.

“Excess public funds” means:

For a bank, the amount by which the public funds deposited by a public unit having an aggregate market value plus accrued interest that exceeds the total capital of the bank as defined in Iowa Code section 12C.22, subsection 2.
For an out-of-state bank, the amount by which the public funds deposited by a public unit in an Iowa branch of the out-of-state bank having an aggregate market value plus accrued interest that exceeds the Iowa branch capital of the out-of-state bank as determined under Iowa Code section 12C.22, subsection 3.

“Letter of Credit” means an irrevocable and nontransferable Letter of Credit, upon which the payment of principal and interest is fully secured or guaranteed by the United States of America or an agency or instrumentality of the United States of America or in the form prescribed by the treasurer as provided on the treasurer’s Web site at www.treasurer.state.ia.us or in the treasurer’s office pursuant to rule 781—13.3(12C). Letters of Credit will be held in the treasurer’s vault.

“Market value” means the value of a pledged security calculated by the treasurer or the treasurer’s designee using the average of the closing bid and ask price from a nationally recognized pricing source (including but not limited to the Wall Street Journal, Bloomberg Financial Markets, Telerate, Reuter’s, or a nationally recognized broker dealer). If no nationally recognized pricing source is available, the market value shall mean pricing in a commercially reasonable manner or manner consistent with standard industry practices. Market value does not include accrued interest.

“Minimum collateral market value amount” means the minimum dollar amount of eligible collateral required to be pledged by a pledging bank to the treasurer to secure all uninsured public funds which shall at all times equal or exceed excess public funds.

“Out-of-state bank” means a bank that is chartered in a state other than Iowa and operates one or more branches in Iowa.

“Pledged collateral” or “pledged securities” means eligible collateral pledged by the pledging bank under the Master Custodial Agreement for the Deposit of Public Funds in Banks, the Pledge and Security Agreement, and any collateral additions or substitutions thereto evidenced by a joint receipt of custody or other evidence of control acceptable to the treasurer.

“Pledging bank” means a bank that is required to pledge eligible collateral pursuant to Iowa Code section 12C.22 and this chapter.

“Public funds” or “public deposits” means “public funds” or “public deposits” as defined in Iowa Code section 12C.1, subsection (2e).

“Public units” means the state or a political subdivision or instrumentality of the state including a county, school corporation, special district, drainage district, unincorporated town or township, municipality, or municipal corporation or any agency, board, or commission of the state or a political subdivision; any court or public body; an electric power agency; federal and state grant moneys of a quasi-public state entity under Iowa Code section 12C.1, subsection (2e), and this chapter. Public units additionally include, but are not limited to:

Transit authorities.
Municipal housing programs.
Solid waste agencies.
Waterworks.
City cemeteries.
County fair boards.
Regional planning agencies.
County care facilities.
County conservation boards.
Sanitary districts.
Iowa family farm development authority.
Iowa railway finance authority.
State board of regents.
State fair board.
State racing and gaming commission.
Iowa college student aid commission.
Iowa higher education loan authority.
Area education agencies.
Community action programs.
Community colleges.

Federal agencies, or political subdivisions thereof, are not public units under this chapter. Cooperatives, police and fire pension funds deposited for the benefit of the beneficiaries and fully covered by federal insurance, and bond sinking funds deposited pursuant to a bond covenant and which are fully covered by federal insurance are not public units.

“Rate-setting notice” means the monthly electronic posting of minimum deposit rates to public units by the rate-setting committee.

“Superintendent” means the superintendent of banking of the state of Iowa.

“Treasurer” means the treasurer of the state of Iowa.

“Uninsured public funds” or “uninsured public deposits” means any amount of public funds of a public funds depositor on deposit in an account at a financial institution that exceeds the amount of public funds in that account that are insured by the Federal Deposit Insurance Corporation.

Iowa Admin. Code r. 781—13.3 Forms

The following forms are required for compliance with Iowa Code chapter 12C and this chapter. Current versions of each form utilized by banks, pledging banks and approved custodians are available on the treasurer’s Web site at www.treasurer.state.ia.us and in the treasurer’s office.

Master Custodial Agreement for the Deposit of Public Funds in Banks.
Pledge and Security Agreement.
Letter of Credit.
Electronic Mail Protocol.
Securities Account Control Agreement.
Certificate and Approval for Withdrawal, Substitution or Addition of Collateral.
Statement of Accounts.
Public Depositor Claim Form.
Release by Public Deposit.

Iowa Admin. Code r. 781—13.4 Duties and responsibilities of a pledging bank

13.4(1) A pledging bank shall complete, sign, and submit to the treasurer an executed Pledge and Security Agreement.

13.4(2) A savings and loan shall calculate and certify to the superintendent of banking the amount of public funds on deposit at the savings and loan on or before the tenth day of February, May, August, and November of each year as of the end of the previous calendar quarter. An out-of-state bank that has one or more branches in Iowa shall calculate and certify to the superintendent of banking the amount of public funds on deposit at each such branch of the out-of-state bank on or before the tenth day of February, May, August, and November of each year as of the end of the previous calendar quarter.

13.4(3) A pledging bank shall deposit and maintain eligible collateral with the treasurer’s approved custodian which at all times has a total market value of not less than the minimum collateral market value amount.

13.4(4) A pledging bank shall at all times be eligible to accept public deposits as required by Iowa Code sections 12C.6A and 12C.23A, subsection 1.

13.4(5) A pledging bank shall grant a perfected security interest to the treasurer in all pledged collateral to secure the repayment of uninsured public funds deposited in a pledging bank and for satisfying any future assessments made against the pledging bank by the treasurer pursuant to Iowa Code chapter 12C. The pledging bank shall take all steps necessary to ensure that the treasurer has a valid, perfected, enforceable, first priority security interest in any pledged collateral. This security interest shall be perfected by entering into a Pledge and Security Agreement with the treasurer and by transferring the eligible collateral to the treasurer’s approved custodian. By accepting public funds for deposit, a pledging bank agrees to waive any defenses it may have with respect to any failure of the Pledge and Security Agreement to effect a viable, perfected, enforceable, first priority security interest.

13.4(6) A pledging bank shall promptly and in a timely manner remit to the treasurer’s approved custodian payment for fees associated with the treasurer’s approved custodian’s services as safekeeping agent upon receipt of a statement from the treasurer’s approved custodian.

13.4(7) A pledging bank shall not utilize the services of an approved custodian in which the pledging bank or an affiliate has control with the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an approved custodian, including but not limited to the ownership of voting securities. In addition, a pledging bank shall not utilize the services of an approved custodian which is an office of the pledging bank or an affiliate or a subsidiary of the same bank holding company of which the pledging bank is a subsidiary or affiliate as defined in Iowa Code section 12C.22, subsection 1.

13.4(8) A pledging bank shall not use the safekeeping services of more than one approved custodian for the purposes of meeting the requirements of Iowa Code chapter 12C and this chapter.

13.4(9) A pledging bank shall notify the treasurer and the treasurer’s approved custodian, in writing or via the treasurer’s Web site, of any change in its name or charter location prior to the effective date of such change.

13.4(10) A pledging bank shall provide the treasurer’s approved custodian with proper instructions for the delivery of cash and collateral which the treasurer’s approved custodian has authorized for the release of collateral to the pledging bank.

Iowa Admin. Code r. 781—13.5 Requirements for becoming an approved custodian

13.5(1) An approved custodian shall complete, sign, and submit to the treasurer an executed Master Custodial Agreement for the Deposit of Public Funds in Banks.

13.5(2) To become an approved custodian, a financial institution chartered outside the state of Iowa must submit a legal opinion acceptable to the treasurer prepared by counsel licensed to practice in the state in which the financial institution is principally located regarding the compatibility of Iowa Code chapter 554 with the uniform commercial code of the state in which the financial institution is principally located.

13.5(3) To be designated as an approved custodian, a financial institution must be capable of maintaining book-entry accounts with a Federal Reserve Bank and must be capable of safekeeping eligible collateral.

13.5(4) An approved custodian shall not hold pledged collateral for any pledging bank in which the approved custodian or an affiliate has control with the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a pledging bank, including but not limited to the ownership of voting securities. In addition, an approved custodian shall not hold pledged collateral for any pledging bank which is an office of the approved custodian or an affiliate or a subsidiary of the same bank holding company of which the approved custodian is a subsidiary or affiliate as defined in Iowa Code section 12C.22, subsection 1.

Iowa Admin. Code r. 781—13.6 Duties and responsibilities of an approved custodian

13.6(1) An approved custodian shall accept only eligible collateral as defined in Iowa Code section 12C.22. Cash shall be considered eligible collateral.

13.6(2) An approved custodian shall segregate all collateral, maintaining open, notorious, continuous, active and exclusive possession of the collateral for the sole and exclusive benefit of the treasurer as an agent for public units.

13.6(3) An approved custodian shall permit the withdrawal, substitution, and addition of eligible pledged securities and other eligible pledged collateral upon receipt of the Certificate and Approval for Withdrawal, Substitution or Addition of Collateral form from the pledging bank. However, before the approved custodian may act upon the written request of the pledging bank, the approved custodian shall verify that the pledging bank has completed and signed the above form and that the calculation of its total collateral market value, after the current withdrawals, substitutions, or additions, is equal to or exceeds its current total excess public funds.

13.6(4) An approved custodian shall issue to the treasurer, by regular mail on the same day, a joint receipt specifically describing and identifying any substituted or additional securities or other collateral pledged to the treasurer.

13.6(5) An approved custodian shall establish a fee schedule for its services. Any and all such fees shall be the sole responsibility of, and be billed directly to, the respective pledging bank. Under no circumstances will the treasurer be responsible or liable for any fees, charges, or expenses of an approved custodian.

13.6(6) In the event that the treasurer notifies an approved custodian of the default of a pledging bank, the approved custodian shall thereafter act only upon the treasurer’s instructions with regard to any pledged collateral, cash, and Letters of Credit.

13.6(7) An approved custodian shall, no later than the twentieth day following the end of a calendar quarter, provide a written report to the treasurer in a format approved by the treasurer. The following items shall be provided for each pledging bank for which it serves as approved custodian:

a. The pledging bank’s name and its location.

b. An inventory of all pledged collateral, as of the last day of the calendar quarter, which provides the CUSIP (the industry’s numerical identification code given to each class and issue of security), description, coupon, maturity date, par amount, and market value of each security pledged by each pledging bank.

c. The total par amount and the total market value of all pledged collateral as of the last day of the calendar quarter for each pledging bank.

d. A history providing the CUSIP, description, coupon, maturity date, par amount, market value and date of all additions, substitutions and withdrawals of pledged collateral during the calendar quarter for each pledging bank.

13.6(8) The approved custodian shall also provide such additional information and reports to the treasurer and the superintendent as they or either of them shall request at any time.

Iowa Admin. Code r. 781—13.7 Withdrawals, substitutions, and additions of pledged collateral

13.7(1) A pledging bank shall pledge and maintain eligible collateral with the treasurer’s approved custodian, the market value of which at all times equals or exceeds the amount by which the public funds deposits in the pledging bank exceed the total capital of the pledging bank.

13.7(2) A pledging bank shall complete, sign, and submit to the approved custodian a Certificate and Approval for Withdrawal, Substitution or Addition of Collateral form for all withdrawals, substitutions or additions of eligible pledged collateral. Any withdrawals, substitutions or additions of eligible pledged collateral are conditional upon the pledging bank’s correct calculation that its total collateral market value amount, after the current withdrawals, substitutions, or additions, is equal to or exceeds its current total excess public funds.

13.7(3) The approved custodian will issue its joint receipt of custody to the treasurer and to the pledging bank evidencing the substitution for or the addition of pledged collateral under the Master Custodial Agreement for the Deposit of Public Funds in Banks.

13.7(4) If a pledged security matures, then the principal amount of the cash shall be held in trust by the approved custodian for the treasurer until the pledging bank completes, signs, and submits a Certificate and Approval for Withdrawal, Substitution or Addition of Collateral form to the approved custodian to release the cash. Any withdrawal of cash is conditional upon the pledging bank’s correct calculation that its total collateral market value amount, after the current withdrawal of cash, is equal to or exceeds its current total excess public funds.

13.7(5) Any request by a pledging bank to an approved custodian for the withdrawal or substitution of pledged collateral is conditional upon the approved custodian’s receiving proper delivery instructions from the pledging bank for the pledged collateral being released. Furthermore, the release of pledged collateral in a transaction in which substituted collateral is to be pledged in lieu of pledged collateral which is being withdrawn is conditional upon the approved custodian’s receiving the substituted collateral before releasing the pledged collateral.

13.7(6) Under no circumstance shall the treasurer be liable for any loss incurred to a pledging bank for failing to release pledged collateral. The treasurer is not liable for any loss incurred by a pledging bank as a result of the pledging bank’s failure to substitute new collateral for any pledged collateral which matures.

Iowa Admin. Code r. 781—13.8 Eligible collateral provisions

13.8(1) Pledged collateral shall be one or more of those securities or other items of collateral specified in 781—13.2(12C), definition of “eligible collateral,” and shall be acceptable to the treasurer.

13.8(2) The acceptance of a security or other items as collateral by the approved custodian does not prevent the treasurer from requiring substitution of such security or other items at a later time as a result of statutory amendment or other changes or circumstances which affect the valuation, marketability, liquidity, ownership, or perfectibility.

Iowa Admin. Code r. 781—13.9 Suspension or termination of approved custodian designation

13.9(1) An approved custodian may request in writing that the treasurer remove its designation as an approved custodian. Following such a written request, the Master Custodial Agreement for the Deposit of Public Funds in Banks shall terminate pursuant to the terms of those agreements provided; however, no such agreement shall terminate until the pledging bank(s) has secured the services of another approved custodian and all pledged collateral has been properly withdrawn and placed in safekeeping with the successor custodian.

13.9(2) If the treasurer determines that an approved custodian has violated any provisions of Iowa Code chapter 12C, or any other documents or agreements as prescribed by the treasurer, or has failed to fulfill its duties or otherwise committed a breach or default as set out in the Master Custodial Agreement for the Deposit of Public Funds in Banks, the treasurer may immediately suspend or terminate an approved custodian’s designation as an approved custodian. The treasurer shall provide the suspended or terminated approved custodian with written notice of its suspension or termination. Upon suspension or termination, each pledging bank utilizing the services of the suspended or terminated approved custodian shall immediately secure the services of another approved custodian, and all pledged collateral shall be immediately withdrawn and placed in safekeeping with the successor approved custodian.

Iowa Admin. Code r. 781—13.10 Sale or merger of an approved custodian

If a pledging bank acquires control, direct or indirect, or ownership of its approved custodian, or the approved custodian acquires control, direct or indirect, or ownership of a pledging bank for which it is holding pledged collateral, or if a holding company will become owner of both the approved custodian and the pledging bank, the approved custodian shall immediately notify the treasurer in writing. Each pledging bank that utilizes the services of the approved custodian over which it has acquired control or that is now controlled by the approved custodian shall immediately secure the services of another approved custodian, and all pledged collateral shall be immediately withdrawn and placed in safekeeping with the successor approved custodian.

Iowa Admin. Code r. 781—13.11 Suspension or termination

13.11(1) If the treasurer determines that a pledging bank has violated any provisions of Iowa Code chapter 12C, or any other documents or agreements as prescribed by the treasurer, or has failed to fulfill its duties or otherwise committed a breach or default as set out in the Pledge and Security Agreement or the Securities Account Control Agreement, or applicable federal deposit insurance coverage is suspended or terminated, the treasurer may immediately suspend or terminate a pledging bank’s ability to accept uninsured public funds. The treasurer shall provide the suspended or terminated bank and the superintendent with written notice of its suspension or termination. Upon suspension or termination, all uninsured public funds held by the suspended or terminated pledging bank in excess of federal deposit insurance coverage shall be immediately remitted, with interest, to the applicable public unit(s).

13.11(2) Public units having public funds on deposit at a terminated or suspended pledging bank shall be notified of the termination or suspension of a pledging bank by notices included in the monthly rate-setting notice posted on the treasurer’s Web site.

Iowa Admin. Code r. 781—13.12 Sale or merger of a pledging bank

13.12(1) The responsibility of a pledging bank to pledge collateral for the security of the uninsured public funds in banks shall not be altered by any merger, takeover, or acquisition, except to the extent that such duty is assumed by the successor entity. No assets shall be released to the successor entity until collateral of an equal value is substituted or all excess public funds are withdrawn from the successor entity.

13.12(2) A pledging bank shall notify the treasurer and the approved custodian, in writing, of its merger, takeover or acquisition by a successor entity prior to the effective date of such an event.

Iowa Admin. Code r. 781—13.13 Procedures upon default or closing of a bank

13.13(1) The acceptance of public funds by a bank constitutes agreement by the bank to pledge collateral as required by Iowa Code section 12C.22, consent by the bank to the disposition of the collateral, consent by the bank to assessments by the treasurer, and agreement by the bank to provide accurate information and to otherwise comply with the requirements of Iowa Code chapter 12C and this chapter.

13.13(2) The treasurer may liquidate the eligible collateral pledged by a pledging bank, including, without limitation, drawing on any Letter of Credit pledged as collateral to the treasurer by a pledging bank, if the treasurer verifies that any of the following have occurred:

a. A public unit notifies the treasurer, or the treasurer determines that said pledging bank has failed to pay a check, draft or warrant drawn by a public officer.

b. A pledging bank has acted contrary to or otherwise breached a term or condition of any agreement which it has entered into with a public unit, the treasurer or an approved custodian.

c. The pledging bank has failed to pay an assessment ordered by the treasurer as required in Iowa Code chapter 12C, or has, as determined by the treasurer, otherwise violated these rules or Iowa Code chapter 12C.

13.13(3) In the event that a pledging bank is closed by any state or federal regulatory officials, the treasurer may proceed to liquidate the collateral pledged by the closed pledging bank, including drawing on any Letters of Credit pledged to the treasurer by the closed pledging bank, notwithstanding the purchase and assumption of the closed pledging bank, and without the necessity of notice to the closed pledging bank, a successor receiver or an assuming entity. When a pledging bank accepts public funds, the pledging bank acknowledges and agrees that in the event of its closure or default, any eligible collateral is subject to unconditional sale or liquidation by the treasurer, with this condition and covenant inuring to and binding any receiver or successor in interest to the closed pledging bank.

13.13(4) In the event the deposits of a closed bank are not purchased and assumed by another bank, the public units with uninsured deposits in the pledging bank shall notify the treasurer of the amount of any claim within 30 days of the closing. The treasurer shall implement the following procedures:

a. The treasurer shall take such steps as are necessary to ensure that the approved custodian acts only upon the treasurer’s instructions with regard to any pledged collateral.

b. The treasurer shall provide each public unit which has contacted the treasurer with a Statement of Accounts, a Public Depositor Claim Form, and a Release by Public Depositor. Included with these forms shall be instructions for completing and filing them and the estimated date when the treasurer will pay claims.

c. It shall be the duty and responsibility of each public unit with a potential claim to complete the above forms in cooperation with regulatory officials handling the closing of the pledging bank and to receive the signed confirmation of such officials as to the amount of the claim. The Statement of Accounts shall include the balances of all accounts on the date of closing, any amounts reimbursed by federal insurance coverage, and all interest accrued, at the applicable rate, on unreimbursed balances to the date of payment of claims and the amount of uninsured public funds on deposit. The Statement of Accounts and the Public Depositor Claim Form must be returned to the treasurer within 30 days of the date of the closing of the bank or from the date of receipt from the treasurer.

d. In cooperation with the responsible regulatory officials for the closed bank and the receipt of all Statements of Accounts and Public Depositor Claim Forms, the treasurer shall validate the amount of public funds deposit insurance coverage applicable to the public funds deposits of the closed bank. The treasurer may request that warrants be drawn on the state sinking fund for public funds deposits in banks to reimburse each public unit that has a verified claim.

e. Upon the specified date of payment of claims, warrants for the amounts of verified claims shall be delivered to the public units to the extent funds in the sinking fund are sufficient to cover public funds depositors’ claims and expenses of the treasurer including, but not limited to, legal and administrative expenses. The public unit shall sign and deliver the Release by Public Depositor to the treasurer prior to receiving a warrant.

13.13(5) If the applicable deposit insurance, the liquidation of pledged collateral, or the funds received from drawing on any Letters of Credit, and the assets of the bank which are liquidated within 30 days of the closing of the bank are not sufficient to satisfy the loss to public units, then the treasurer shall obtain the additional amount needed to satisfy all remaining claims from the state sinking fund for public deposits in banks to the extent funds in the sinking fund are sufficient to cover public funds depositors’ claims and expenses of the treasurer including, but not limited to, legal and administrative expenses.

13.13(6) If the funds in the sinking fund for public deposits in banks are inadequate to cover the remaining loss, the treasurer shall make assessments against all remaining banks whose public funds deposits exceed federal deposit insurance coverage to satisfy the remaining loss. The assessment against each bank shall be calculated pursuant to Iowa Code chapter 12C and shall be paid by each bank to the treasurer within three business days of the bank’s receipt of the treasurer’s written assessment notice. If a pledging bank refuses or fails to pay its assessment when due, the treasurer shall satisfy the assessment in whole or in part by liquidating the collateral pledged by any pledging bank or drawing on any Letters of Credit which were pledged as collateral by that pledging bank.

13.13(7) If a pledging bank refuses or fails to pay any assessment and the liquidation of collateral pledged by that pledging bank or the funds received from drawing upon any Letters of Credit pledged as collateral by the pledging bank are not sufficient to satisfy the assessment, the treasurer shall make additional assessments as necessary against other banks which hold uninsured public funds deposits to satisfy any unpaid assessment. Additional assessments shall be determined, collected and satisfied in the same manner as the first assessment.

Iowa Admin. Code r. 781—13.14 Fees of the treasurer

The treasurer shall be entitled to reimbursement of all of the treasurer’s actual and necessary costs and expenses incurred in the administration of Iowa Code chapter 12C and these rules including, but not limited to, legal expenses and administrative expenses. Such costs and expenses shall be reimbursed by withdrawal from the state sinking fund for public deposits in banks wherein a balance, acceptable to the treasurer and sufficient to meet legal and administrative expenses, shall be maintained. In the event at any time funds in the state sinking fund for public deposits in banks are not sufficient to pay any such reimbursement, the treasurer may make an assessment in the manner provided by Iowa Code section 12C.23A, subsection (3d), provided that no such assessment shall exceed the anticipated costs and expenses in the administration of Iowa Code chapter 12C and these rules for a period greater than one year after the assessment is made.

Chapter 14 Deposit and Security of Public Funds in Credit Unions

Iowa Admin. Code r. 781—14.1 Scope and transition

Iowa Code chapter 12C grants authority to the treasurer of state to establish administrative rules and procedures to implement a system for securing deposits of public funds in banks, savings and loans and credit unions. This chapter contains rules which shall apply to the system for securing deposits of public funds in credit unions. Rules pertaining to securing public funds in savings and loans or federal savings banks are contained in 781—Chapter 3. Rules pertaining to the securing of public funds in banks are contained in 781—Chapter 13.

Iowa Admin. Code r. 781—14.2 Definitions

As used in this chapter:

“Approved custodian” means the Federal Home Loan Bank of Des Moines, Iowa, or the U.S. Central Credit Union.

“Credit union” means a credit union as defined in Iowa Code section 12C.1(2)“e.”

“Eligible collateral” means any of the securities specified in Iowa Code section 12C.16(1)“b” provided that the securities are acceptable to the public unit and to the approved custodian.

“Letter of credit” means an irrevocable, nontransferable, standby letter of credit issued directly to the public unit by the U.S. Central Credit Union or the Federal Home Loan Bank of Des Moines, Iowa.

“Market value” means the value of a pledged security calculated by using the average of the closing bid and ask price from a nationally recognized pricing source including, but not limited to, the Wall Street Journal, Bloomberg Financial Markets, Telerate, Reuter’s, or a nationally recognized broker dealer.

“Pledged collateral” or “pledged securities” means eligible collateral pledged by a credit union to a public unit to secure uninsured public deposits.

“Public units.” The state of Iowa, its cities, counties, school districts and all other political subdivisions of the state are public units under this chapter including but not limited to the following entities:

Cities.
Transit authorities.
Municipal utilities, including jointly owned.
Public libraries, city and regional.
Municipal housing programs.
Solid waste agencies.
Waterworks.
City cemeteries.
County offices including treasurers, recorders, clerks of court, sheriffs and auditors.
Townships.
County fair boards.
Regional planning agencies.
County care facilities.
County hospitals.
County conservation boards.
Sanitary districts.
Treasurer of state.
Iowa beer and liquor control department.
Iowa department of transportation.
Judicial district department of correctional services.
Iowa finance authority.
Iowa family farm development authority.
Iowa railway finance authority.
State board of regents.
State fair board.
State commerce commission.
State racing commission.
Iowa college aid commission.
Iowa higher education loan authority.
School districts.
Area education agencies.
Community action programs.
Community colleges.

“Treasurer” as used in this chapter shall mean the treasurer of the state of Iowa.

“Uninsured public funds” or “uninsured public deposits” means the funds of a public unit deposited in a credit union which are not federally insured, together with any accrued interest thereon.

Iowa Admin. Code r. 781—14.3 Forms

Forms utilized by credit unions in connection with the operation of this chapter shall be approved by the treasurer.

Iowa Admin. Code r. 781—14.4 Uninsured public deposits in credit unions

Uninsured public deposits in a credit union shall be secured by a letter of credit and a deposit agreement between the public unit and the credit union. (The credit union will only be allowed to aggregate funds deposited by the same public unit. Prior to accepting an uninsured public deposit, a credit union must secure the deposit according to requirements contained in this chapter.)

Iowa Admin. Code r. 781—14.5 Securing uninsured public deposits in credit unions using a letter of credit

14.5(1) A credit union shall secure the uninsured public time deposits of a public unit with a letter of credit as defined in these rules and Iowa Code section 12C.16.

14.5(2) The public unit shall have in its possession, prior to or simultaneously at the time of deposit of uninsured public deposits, a letter of credit issued by the U.S. Central Credit Union or by the Federal Home Loan Bank of Des Moines, Iowa, to the public unit in an amount that is not less than 110 percent of the amount of public funds deposits to be secured thereby. The letter of credit shall have an expiration date which is at least ten business days later than the maturity date of the time deposit.

14.5(3) The public unit shall keep the letter of credit in a vault or a safe-deposit box in a financial institution other than the credit union until such time as the letter of credit expires or is presented for payment to the U.S. Central Credit Union or to the Federal Home Loan Bank of Des Moines, Iowa.

14.5(4) In the event that the public unit decides to extend the maturity of its deposit after the issuance of the letter of credit, the public unit shall obtain a new letter of credit. The new letter of credit must be obtained by the public unit prior to the original maturity date of the deposit.

14.5(5) If the credit rating of the U.S. Central Credit Union or the Federal Home Loan Bank of Des Moines, Iowa is lowered to a rating not within the two highest classifications of prime as established by at least one of the standard rating services approved by the superintendent of banking by rule pursuant to Iowa Code chapter 17A, then the U.S. Central Credit Union or the Federal Home Loan Bank of Des Moines, Iowa, shall immediately notify each credit union which is securing uninsured public deposits by use of a letter of credit issued by the U.S. Central Credit Union or the Federal Home Loan Bank of Des Moines, Iowa, and the treasurer. Each credit union, upon notification of the U.S. Central Credit Union or the Federal Home Loan Bank of Des Moines, Iowa, downgrade, shall immediately return the deposits, with interest accrued to that date, to the public units which are secured by a letter of credit.

Iowa Admin. Code r. 781—14.6 Securing public funds in a credit union with a pledge of eligible collateral

14.6(1) Prior to accepting an uninsured public deposit, a credit union shall secure the uninsured public deposit in accordance with Iowa Code chapter 12C and these rules. The credit union must:

a. Enter into a Security and Custodial Agreement for the Deposit of Public Funds in credit unions with the public unit and the approved custodian.

b. Enter into a deposit agreement with the public unit.

c. Deliver to the approved custodian eligible collateral with a market value of not less than 110 percent of the uninsured public deposits.

14.6(2) A credit union shall grant a security interest to the public unit in all pledged securities to secure the uninsured public funds of that public unit. The credit union shall take all steps necessary to ensure that the public unit has a valid, perfected, enforceable, first priority security interest in the pledged collateral. The credit union shall enter into a security agreement with the public unit and the approved custodian, and shall transfer pledged collateral to the approved custodian which shall hold the pledged collateral in safekeeping for the public unit.

14.6(3) The credit union shall maintain eligible collateral with the approved custodian with a total market value of not less than 110 percent of a public unit’s total deposits which are not otherwise secured by a letter of credit.

14.6(4) A credit union shall promptly forward to the approved custodian payment for fees associated with the approved custodian’s services as safekeeping agent for the public unit upon receipt of a statement from the approved custodian.

14.6(5) A credit union shall not attempt to withdraw pledged collateral from the approved custodian if such action will cause the total market value of pledged collateral to fall below 110 percent of a public unit’s total uninsured deposits which are not otherwise secured by a letter of credit.

14.6(6) A credit union shall notify the public unit and the approved custodian in writing and 30 days prior to any change in its name or home office location.

14.6(7) A credit union shall receive written approval from the public unit for the withdrawal or substitution of any pledged collateral by completing the Certification and Approval Form for the Withdrawal, Substitution or Addition of Pledged Securities and delivering it to the public unit with the request for the public unit’s written approval to withdraw or substitute pledged securities. The public unit, if it approves of the withdrawal or substitution of pledged securities, shall forward the completed form to the approved custodian.

14.6(8) Any request by a credit union to withdraw pledged securities or to substitute securities which will result in a total market value of less than 110 percent of the public unit’s public deposits, which are not otherwise secured by a letter of credit, shall be denied by the public unit.

14.6(9) The approved custodian shall comply with a credit union’s request for the withdrawal, substitution or addition of pledged collateral when it receives a completed Certification and Approval Form for the Withdrawal, Substitution or Addition of Pledged Securities containing the authorized signatures of the public unit and the credit union.

14.6(10) The approved custodian will issue a Joint Receipt of Custody to the public unit and to the credit union evidencing the pledge of any securities under the security agreement between the public unit and the credit union. In the event of substitution or exchange of securities, the approved custodian shall forward by mail to the public unit a Joint Receipt of Custody.

14.6(11) If a pledged security matures, then the principal amount of the cash must be held in trust by the approved custodian for the public unit until the public unit has determined that releasing the cash will not cause the total market value of all pledged securities by the credit union to fall below the 110 percent requirement.

14.6(12) The securities used to secure the uninsured public deposits in credit unions shall be acceptable to the public unit and the approved custodian and shall be one or more of those securities specified in rule 14.2(12C) of this chapter under the definition of “eligible collateral.”

14.6(13) The public unit or the approved custodian has the right to refuse any security offered as collateral, notwithstanding its inclusion in Iowa Code section 12C.16(1)“b” or these rules, for reasons relating to difficulty of valuation, uncertainty as to the ability to sell a security in the event of default, questions as to ownership, or impossibility of creating a valid and perfected security interest in favor of the public unit.

14.6(14) The acceptance of a security as collateral by the approved custodian or the public unit does not prevent the public unit from requiring substitution of said security at a later time as a result of statutory or regulatory amendment or other changes which affect the valuation, marketability, liquidity, ownership, or perfectibility of the security or the enforceability of the public unit’s security interest.

14.6(15) Securities which are issued in certificated or definitive form are eligible collateral only if they are registered in the name of the public unit’s approved custodian or are in otherwise negotiable form acceptable to the public unit.

14.6(16) No security which requires any additional endorsement, assignment or power of attorney for liquidation is eligible collateral.

Iowa Admin. Code r. 781—14.7 Duties of the approved custodian

14.7(1) An approved custodian shall enter into a Security and Custodial Agreement for the Deposit of Public Funds in credit unions with the public unit and the credit union.

14.7(2) An approved custodian shall accept only collateral which is eligible to be pledged under these rules.

14.7(3) An approved custodian shall segregate all collateral, maintaining open, notorious, continuous, active and exclusive possession of the collateral for the benefit of the public unit.

14.7(4) An approved custodian shall permit the withdrawal or substitution or addition of pledged securities only upon receipt of a Certification and Approval Form for the Withdrawal, Substitution or Addition of Pledged Securities, which contains the signatures of authorized persons representing the credit union and the public unit. Receipt of the authorization by facsimile transmission shall be adequate documentation to allow the approved custodian to release or accept pledged securities. The approved custodian shall implement procedures for documenting signatures of authorized persons of a credit union and the public unit.

14.7(5) An approved custodian shall issue a Joint Receipt of Custody to the public unit and the credit union each time a credit union substitutes new securities for pledged securities or a credit union pledges additional pledged securities.

14.7(6) An approved custodian shall establish a fee schedule for its services. Any and all such fees shall be the responsibility of, and be paid by, the respective credit union.

14.7(7) In the event that the public unit notifies an approved custodian of the default of a credit union, it shall thereafter act only upon the public unit’s instructions with regard to any pledged securities.

14.7(8) An approved custodian shall, no later than the twentieth day of each month, provide a written report to those public units for which it serves as approved custodian. The following items shall be provided in the report.

a. The name of the credit union which has pledged securities to secure the uninsured public funds of the public unit.

b. An inventory of all pledged securities as of the last day of the preceding month which provides a description of the pledged securities and the par amount, maturity date, and market value of each.

c. The total par value and market value of all pledged securities as of the last day of the preceding month.

14.7(9) An approved custodian shall determine the market values of pledged securities as of the last day of the month for purposes of reporting to the public unit.

Iowa Admin. Code r. 781—14.8 Termination of credit union’s federal insurance

In the event that a credit union’s applicable federal deposit insurance is suspended or terminated, the credit union must notify the public unit immediately and shall immediately return all deposits to the public unit with accrued interest.

Iowa Admin. Code r. 781—14.9 Sale or merger of a credit union

The responsibility of a credit union to secure public deposits by a letter of credit shall not be altered by any merger, takeover or acquisition, except to the extent that such duty is assumed by the successor entity. A credit union shall immediately notify the public unit, in writing, of its merger, takeover or acquisition by a successor entity.

Iowa Admin. Code r. 781—14.10 Procedure upon default

14.10(1) The acceptance of public funds by a credit union constitutes consent by the credit union to assessments to cover losses of public funds in other credit unions by the treasurer in accordance with Iowa Code section 12C.23 and the rules contained in this chapter.

14.10(2) The treasurer, upon notification from a public unit that a public unit has not been completely repaid its principal and interest for a deposit and that funds are not available from a letter of credit securing such deposit, shall assess all credit unions in the state with public deposits as provided in Iowa Code section 12C.23.

14.10(3) A credit union and any security given for the public funds in its possession are liable for payment if the credit union fails to pay a check, draft, or warrant drawn by the public officer or to account for a check, draft, warrant, order or certificates of deposit, or any public funds entrusted to it if, in failing to pay, the credit union acts contrary to the terms of an agreement between the credit union and the public body treasurer or, if the credit union fails to pay an assessment by the treasurer of state, when due.

Chapter 15 Required Public Funds Custodial Agreement Provisions

Iowa Admin. Code r. 781—15.1 Scope

15.1(1) Iowa Code section 12B.10C requires the treasurer of state to adopt rules requiring the inclusion in public funds custodial agreements of any provisions necessary to prevent loss of public funds. As used in this chapter, “public funds custodial agreement” means any public funds custodial agreement as defined in Iowa Code section 12B.10C.

15.1(2) This chapter shall apply to any public unit, as defined in 781—Chapter 13, which uses a public funds custodial agreement for or relating to the investment of public funds. As used in this chapter, “public funds” means public funds as defined in Iowa Code section 12C.1(2).

15.1(3) A public unit may only enter into a public funds custodial agreement if the custodian is the trust or safekeeping department of a national or state bank located in the state of Iowa that lawfully possesses and exercises fiduciary powers under applicable federal laws or the laws of the state of Iowa. Notwithstanding the foregoing, the treasurer of state may exercise its discretion under Iowa Code section 12C.4 to enter into public funds custodial agreements with a custodian located outside the state of Iowa. Each public unit that enters into a public funds custodial agreement shall require the inclusion in the public funds custodial agreement those provisions contained in rule 781—15.2(12B) of this chapter or substantially equivalent provisions.

15.1(4) Public funds that are invested under the provisions of a resolution or indenture for the issuance of bonds, notes, certificates, warrants, or other evidences of indebtedness are not subject to this chapter.

15.1(5) This chapter does not apply to those entities described in Iowa Code section 12B.10C(4) or to any other entities that may otherwise be exempted by law. This chapter does not apply to public funds custodial agreements entered into by the treasurer of state when such agreements are on behalf of the aforementioned entities.

15.1(6) This chapter does not apply to custodial agreements between an open-end management investment company registered with the federal Securities and Exchange Commission under the federal Investment Company Act of 1940, 15 U.S.C. Sec.

80(a) and a custodian bank.

15.1(7) This chapter does not apply to any custodial agreements entered into by a public unit or the treasurer of state for the purposes of securing public funds deposits under Iowa Code chapter 12C.

15.1(8) This chapter does not apply to Treasury Direct accounts established by a public unit with a federal reserve bank for the purpose of making direct purchases of United States Treasury bills, notes or bonds.

History

ARC 1464C, IAB 5/14/14, effective 6/18/14; see Delay note at end of chapter; ARC 1709C, IAB 10/29/14, effective 12/3/14

Iowa Admin. Code r. 781—15.2 Required provisions for inclusion in public funds custodial agreements

All public funds custodial agreements shall be in writing and shall include the following provisions:

15.2(1) The custodian shall represent and warrant that it lawfully possesses and exercises fiduciary powers under applicable federal laws or the laws of the state of Iowa, unless such custodian is located out of state and is used by the treasurer of state for purposes permitted in Iowa Code section 12C.4, and that it has the resources and expertise to act as the custodian of public funds or any security or document of ownership or title evidencing public funds investments and to perform its responsibilities under the public funds custodial agreement.

15.2(2) The scope of duties and services to be performed by the custodian shall be described in detail satisfactory to the public unit and shall include, as applicable, custodial, settlement, collection of income and investment proceeds, reporting, and securities valuation services.

15.2(3) The custodian shall agree to provide the public unit with written confirmation of its custody, on behalf of the public unit, of all assets subject to the public funds custodial agreement.

15.2(4) The custodian shall agree to segregate the public fund’s assets from the custodian’s own assets and to maintain records adequate to describe the public unit’s ownership of or beneficial interest in the assets held by the custodian.

15.2(5) The custodian shall agree to maintain adequate records regarding a description of the assets, all receipts, deliveries and locations of assets, together with a current inventory thereof, all purchases and sales, all receipts and disbursements of cash and all debits and credits pertaining to transactions relating to the assets, including but not limited to interest payments. The custodian shall agree to conduct periodic inspections in order to verify the accuracy of the inventory, including the securities, if any, held by a subcustodian.

15.2(6) The custodian shall agree that all records of investment transactions relating to the public funds custodial agreement and the services provided thereunder, regardless of who performs the services, shall be considered records of the public unit and open to inspection and examination by the public unit, its employees and its designees. To the extent records of investment transactions are maintained by affiliates of the custodian, the custodian shall agree to be responsible to obtain any such records that are in the possession of its affiliates upon reasonable request of the public unit. The custodian shall agree to make all records of investment transactions relating to the public funds custodial agreement and the services provided thereunder available upon reasonable request for inspection and audit by the public unit, its employees or designees, and to allow these records or excerpts of these records to be copied and removed to facilitate the audit or to comply with public records requirements.

15.2(7) If the custodian proposes to use an affiliated subcustodian or other affiliated agent to perform any services in connection with the public funds custodial agreement, the custodian shall agree that it shall be responsible for the acts and omissions of such affiliates as though the acts and omissions of the affiliates were the acts and omissions of the custodian.

15.2(8) The custodian shall agree that it will receive all assets purchased by or for the public unit from the persons through or from whom the same were purchased, and only upon receipt thereof (delivery versus payment basis) pay, out of the assets held on account of the public unit, the total amount payable for the purchase as set forth in the instructions received by the custodian. The custodian shall agree to secure possession of all investment instruments that are the subject of or are the underlying obligations for any repurchase agreement.

15.2(9) The custodian shall agree that it will transfer assets for sale pursuant to instructions delivered to the custodian only upon receipt of the total amount payable to the public unit in connection with the settlement of the transaction, provided that the same conforms to the total amount payable to the public unit as shown in the instructions with respect to such sale. No assets may be delivered out of the account of the public unit without full payment (no “free deliveries” of investment securities shall be permitted).

15.2(10) If a public unit has engaged an investment advisor or investment manager, the public funds custodial agreement must limit the authority of the investment manager or advisor to authorizing a sale or purchase of an investment on a delivery versus payment basis pursuant to an instruction procedure which is consistent with the requirements of the public funds custodial agreement and the internal control policies of the public unit. The public funds custodial agreement shall not permit an investment manager or investment advisor to deliver, transfer, or move cash or securities to another account, location or entity.

15.2(11) The delivery, transfer or movement of cash or securities held in custody for the public unit (except for trades on a delivery versus payment basis) shall only be made pursuant to instructions given to the custodian by the public unit, its employees or designees, consistent with the internal controls established by the public unit.

15.2(12) The public funds custodial agreement shall specify in satisfactory detail the procedures for instructions to be furnished to the custodian in connection with the sales or purchases of securities and the delivery, transfer or movement of cash or securities held in the custody account. The instruction provisions must be consistent with the internal control policies established by the public unit. These procedures must specify the individual or individuals authorized to issue instructions, the scope of their authority, require current specimen signatures of authorized individuals to be maintained by the custodian and require written instructions to be furnished to the custodian. If oral instructions are permitted, the procedures or protocol for them must be specified in detail and must address verification and confirmation procedures and follow-up written instructions required by the custodian and the public unit.

15.2(13) The public funds custodial agreement shall require the custodian to furnish a monthly report describing in satisfactory detail the inventory of the account and transaction history during the preceding month and other reports at such times as may be adequate to satisfy the public unit’s internal control procedures for reconcilement. In addition, the custodian shall, to the extent not prohibited by law, provide written notice to the public unit within 30 days of the custodian’s receipt of an audit by an independent or internal auditor or regulatory authority which indicates that there is a material weakness in the custodian’s internal control structure or receipt of a regulatory order or sanction which relates to the type of work performed under the public funds custodial agreement. The custodian shall include in the written notice a detailed description of the comment or sanction and any curative measures which the custodian proposes to take in response thereto.

15.2(14) The public funds custodial agreement shall not provide for the compensation of the custodian based on investment performance.

15.2(15) The custodian shall agree to comply with all applicable federal, state, and local laws and rules when performing within the scope of the public funds custodial agreement.

15.2(16) At a minimum, the custodian shall agree to exercise the standard of care expected of a professional custodian of public funds in holding, maintaining and servicing the public fund’s assets and cash and in performing the custodian’s duties and obligations under the public funds custodial agreement.

History

ARC 1464C, IAB 5/14/14, effective 6/18/14; see Delay note at end of chapter; ARC 1709C, IAB 10/29/14, effective 12/3/14

Iowa Admin. Code r. 781—15.3 Optional provisions which public units should consider

The provisions set forth in rule 781—15.2(12B) are minimum requirements and are not exclusive. A public unit should determine whether the services performed by the custodian (except for any custodian hired by the treasurer of state pursuant to Iowa Code section 12C.4) pursuant to the public funds custodial agreement will be performed in the safekeeping department or the trust department and, based upon the advice of its counsel, should also consider other appropriate or more favorable provisions that may customarily be included in a public funds custodial agreement. Such things include, but are not limited to: additional representations and warranties; agreements or covenants pertaining to insurance and fidelity bond of the custodian and its employees; permitted use of subcustodians; adequate description of fees and expenses and billing procedures; the requirement of additional reports, including advices of transactions; conditions to the effectiveness of the public funds custodial agreement regarding deliveries of related documents and certificates; a higher standard of care; the ability of the public unit to terminate the public funds custodial agreement on a short-term basis without cause; and indemnification and default provisions, including recovery of attorneys’ fees.

History

ARC 1464C, IAB 5/14/14, effective 6/18/14; see Delay note at end of chapter

Iowa Admin. Code r. 781—15.4 Custodial functions

The required provisions contained in rule 15.2(12B) address only custodial functions and do not purport to address discretionary authority pertaining to the investments which shall be set forth in a separate written contract with the investment manager or advisor.

Iowa Admin. Code r. 781—15.5 Implementation deadline

Public units shall have until July 1, 2015, to incorporate the required provisions contained in rule 781—15.2(12B) into existing public funds custodial agreements. Any new public funds custodial agreement executed after the effective date of these rules shall contain the provisions of rule 781—15.2(12B).

[Filed ARC 1464C (Notice ARC 1383C, IAB 3/19/14), IAB 5/14/14, effective 6/18/14]1

June 18, 2014, effective date of ARC 1464C [15.1 to 15.3, 15.5] delayed 70 days by the Administrative Rules Review Committee at its meeting held June 10, 2014.

History

ARC 1464C, IAB 5/14/14, effective 6/18/14; see Delay note at end of chapter

Chapter 16 Iowa Educational Savings Plan Trust

Iowa Admin. Code r. 781—16.1 Purpose

The purpose of these rules is to provide for the administration and operation of the Iowa educational savings plan trust.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19

Iowa Admin. Code r. 781—16.2 Definitions

In addition to the terms defined in Iowa Code section 12D.1, the following terms apply to this chapter:

“ABLE account” means an account as defined in Section 529A of the Internal Revenue Code.

“Account” means an account established and maintained under the Iowa educational savings plan trust for a beneficiary.

“Account balance” means the fair market value of an account.

“Account balance limit” means the amount determined periodically by the program administrator as necessary to provide for the qualified higher education expenses of a beneficiary in accordance with Section 529. The account balance limit shall apply to the total of all accounts in the plans for the benefit of a beneficiary.

“Account owner” means the same as “participant” as defined in Iowa Code section 12D.1.

“Adjusted maximum annual amount” means the amount that an account owner may annually contribute to an account for a beneficiary and deduct from Iowa income taxes pursuant to Iowa Code chapter 422.

“Beneficiary” means the individual designated as the beneficiary of an account.

“Contractor” means any party retained by the program administrator to assist in the day-to-day operations of a plan, including record-keeping, investment advisory and administrative services. The program administrator may delegate any responsibilities with respect to day-to-day operations of a plan to one or more contractors.

“Contribution” means an amount contributed to an account in accordance with the Internal Revenue Code, these rules and the applicable program description.

“Eligible educational institution” means an eligible educational institution as defined in Section 529.

“ IAdvisor 529 plan” means the name and logo registered to represent the advisor-sold plan under the Iowa educational savings plan trust.

“Internal Revenue Code” means the Internal Revenue Code as effective on July 1, 2024.

“ISave 529” means the name and logo registered under Iowa law to represent the direct-sold plan under the Iowa educational savings plan trust.

“K-12 institution” means any elementary or secondary public, private, or religious school as defined in Section 529 of the Internal Revenue Code.

“Member of the family” means a member of the family as defined in Section 529, except that for a qualified rollover to an ABLE account, “member of the family” shall mean as defined in Section 529A of the Internal Revenue Code.

“Nonqualified withdrawal” means a withdrawal from an account that is not a qualified withdrawal or a qualified rollover.

“Participation agreement” means the form that the account owner submits to the plan to identify the account owner, beneficiary, plan, and other information that may be requested by the plan.

“Plan” means either (1) ISave 529, (2) IAdvisor 529 plan, or (3) any other college savings plan established by the program administrator under the Iowa educational savings plan trust.

“Program administrator” means the treasurer of state.

“Program description” means the description of each plan provided to account owners setting forth information with respect to the plan.

“Qualified higher education expenses” means qualified higher education expenses as defined in Section 529. Any reference to qualified higher education expenses includes a reference to expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private or religious school as defined in Section 529.

“Qualified rollover” means a distribution of amounts from a plan, which, within 60 days of such distribution, is transferred: (1) to another qualified tuition program for the benefit of the same beneficiary, provided that it has been at least 12 months from the date of a previous transfer to a qualified tuition program for that beneficiary; (2) to another qualified tuition program (or an account in another plan) for the benefit of a member of the family of the beneficiary; or (3) to an ABLE account for the beneficiary or member of the family of the beneficiary, subject to ABLE account contribution limits. “Qualified rollover” also means a distribution from a plan made in a direct transfer-to-trustee transfer to a Roth IRA in accordance with the rules under 529(c)(3)(E) of the Internal Revenue Code.

“Qualified withdrawal” means a withdrawal from an account used to pay qualified higher education expenses.

“Section 529” means Section 529 of the Internal Revenue Code.

“Successor account owner” means a successor to the ownership of an account designated as such in accordance with rule 781—16.10(12D) and the applicable program description.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—16.3 Participation agreement and program description

The following material shall be used to administer the Iowa educational savings plan trust.

16.3(1) Each account owner shall submit a participation agreement in order to open an account. The participation agreement shall be signed and dated by the account owner to verify that the account owner agrees to the terms and conditions of the program. For online applications, the account owner must confirm that the account owner has read the terms and conditions prior to submitting the application.

16.3(2) Each plan will have a program description setting forth the terms of the plan and describing the investments, procedures and fees applicable to that plan. Each program description shall also set forth the privacy policy adopted by the program administrator for that plan. Persons interested in a plan should consult the program description. A program description may be changed at any time by the program administrator, and any such change may impact the rights of account owners and beneficiaries under the plan.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—16.4 Forms

16.4(1) Appropriate forms must be completed on paper, online or via telephone (whichever is applicable for the requested actions) to perform the actions listed below. Current forms are available online at ISave529.com for ISave 529 and at www.iowaadvisor529.com for the IAdvisor 529 plan. Actions that require the completion of an appropriate form include the following:

a. Participation.

(1) Open or close an account.

(2) Reserved.

b. Account changes.

(1) Update the account owner or beneficiary contact information.

(2) Change the beneficiary.

(3) Add, change or remove a successor or interested party.

(4) Transfer ownership rights of an account to another person.

c. Investment changes.

(1) Exchange existing investments.

(2) Change the direction of future contributions.

d. Contribution changes.

(1) Establish, delete or change automatic investments or payroll deduction.

(2) Establish, delete or change banking information.

(3) Establish or make an electronic bank transfer or an additional purchase by check.

(4) Transfer funds from a qualified U.S. savings bond, education savings account or another 529 plan (directly or indirectly).

e. Withdrawals.

(1) Request a full or partial withdrawal.

(2) Request a qualified rollover.

f. Authorization.

(1) Establish, delete or change an authorized agent, limited power of attorney or power of attorney on an account.

(2) Authorize or change a financial advisor or agent who can obtain information regarding the account.

(3) Identify the current trustee of a trust.

(4) Identify officers of an organization who can act upon an account.

16.4(2) The contractor may from time to time provide additional forms for use by account owners and beneficiaries in connection with actions involving a plan and will make those forms available online and in paper format and may authorize substitute forms for a plan or a process in lieu of existing forms.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—16.5 Account owner eligibility

Account owners must meet the following requirements:

16.5(1) The account owner must be an individual, individual’s legal representative, trust, estate, or an organization described in Section 501(c)(3) of the Internal Revenue Code and exempt from taxation under Section 501(a) of the Internal Revenue Code.

16.5(2) An individual account owner must be at least 18 years old and a United States citizen or resident alien with a valid social security number or tax identification number.

16.5(3) An account owner shall execute a participation agreement that specifies the plan selected by the account owner and the terms and conditions under which the account owner shall participate in the trust.

16.5(4) An account owner shall, on signing a participation agreement, provide the plan with the account owner’s social security number or tax identification number and the other information required on the participant agreement.

16.5(5) Account owners that are trusts must submit evidence that the individual trustee is so authorized and agrees to the terms and conditions of the participation agreement and must provide the information requested by the program administrator. Account owners that are described in Section 501(c)(3) of the Internal Revenue Code must provide their tax identification number and any other information requested by the program administrator.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—16.6 Beneficiary eligibility

A beneficiary of a participation agreement may be designated at any time after birth and assignment of a social security number. This rule establishes the eligibility criteria for a beneficiary.

16.6(1) A beneficiary may be a resident of any state.

16.6(2) An account owner shall, on signing a participation agreement, provide the contractor a valid social security number for the beneficiary.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—16.7 Program administrator rights and responsibilities

16.7(1) The program administrator reserves the right to:

a. Freeze an account or suspend account services or do both when a plan has received reasonable notice of a dispute regarding the assets in an account, including notice of a dispute in account ownership or when the plan reasonably believes a fraudulent transaction may occur or has occurred;

b. Freeze an account or suspend account services or do both upon the notification to the plan of the death of an account owner until the plan receives required documentation in good order and reasonably believes that it is lawful to transfer the account ownership to the successor account owner;

c. Redeem an account, without the account owner’s permission, in cases of threatening conduct or suspicious, fraudulent, or illegal activity; and

d. Reject a contribution for any reason, including contributions that the plan believes are not in the best interests of the plan, a portfolio, or the account owners.

16.7(2) The risk of market loss, tax implications, penalties, and any other expenses, as a result of such an account freeze, account redemption, or contribution rejection, will be solely the account owner’s responsibility.

16.7(3) The contractor will provide each account owner a fourth-quarter statement. In addition, the program administrator will provide each account owner that had an account with either contributions or withdrawals in the first, second, or third quarter with a quarterly statement for that account.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—16.8 Contributions

Contributions are deductible in accordance with Iowa income tax laws and administrative rules of the department of revenue. Participation agreements shall be for the benefit of a specific beneficiary. This rule provides for implementation of this provision.

16.8(1) Account owners are allowed to make contributions at any time during the calendar year provided that each contribution is made in accordance with the minimum contribution and other requirements set forth in the program description.

16.8(2) The program administrator shall actuarially determine the account balance limit. No additional contributions may be made on behalf of a beneficiary if the total of the account balances of all accounts held for the beneficiary exceeds the applicable account balance limit.

16.8(3) The program administrator shall determine the adjusted maximum annual amount that an account owner may contribute and deduct from Iowa income taxes pursuant to Iowa Code chapter 422 on behalf of a beneficiary for the calendar year by applying the applicable inflation adjustment. The adjusted annual maximum amount shall be communicated to participants in the plans and to the public in any reasonable manner determined by the program administrator.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—16.9 Substitution or change of beneficiary

Beneficiaries may be changed subject to the rules and regulations of the program administrator. This rule establishes the criteria for substituting one beneficiary for another. Beneficiary changes shall also be subject to the procedures set forth in the applicable program description.

16.9(1) At the time of the substitution, the substitute beneficiary must be an eligible beneficiary pursuant to rule 781—16.6(12D) and must be a member of the family of the beneficiary being replaced.

16.9(2) An account owner may request that a beneficiary be substituted by submitting the appropriate form to the contractor.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—16.10 Change of account owner

The account owner is the owner of the account and, as such, has the exclusive right to cancel the participation agreement or change the designated beneficiary in accordance with these rules and the applicable program description.

16.10(1) An account owner may transfer the account owner’s current ownership rights in an account to another eligible individual, an individual’s legal representative, a trust, an estate, or an organization described in Section 501(c)(3) of the Internal Revenue Code and exempt from taxation under Section 501(a) of the Internal Revenue Code or to a beneficiary. To do so, the account owner shall complete the appropriate form.

16.10(2) An account owner may also designate a successor on the participation agreement. An account owner may change the designated successor by completing the appropriate form. The designated successor shall succeed to the ownership of the account in the event of the death of the account owner. Upon the death of the account owner, the successor account owner must notify the plan by submitting a completed participant agreement form and a certified copy of the death certificate. The change in ownership of the account will become effective for the successor account owner once this paperwork has been received and processed.

16.10(3) In the event an account owner dies and has not designated a successor to the account, the following criteria will be used.

a. The designated beneficiary, if 18 years of age or older, shall become the owner of the account as well as remain the beneficiary upon filing the appropriate forms.

b. If the designated beneficiary is under the age of 18, account ownership will be transferred to a surviving parent or other legal guardian of the beneficiary upon the filing of the appropriate forms.

16.10(4) The account owner may name a successor to the account even though the successor may already have established or may have plans to establish a plan account.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—16.11 Qualified withdrawals

This rule establishes the procedures for the payment of qualified withdrawals.

16.11(1) The account owner must initiate a withdrawal for qualified or nonqualified withdrawals. The account owner must file the appropriate form with the contractor.

16.11(2) Qualified withdrawals will be paid in one of three ways once the form has been received by the contractor:

a. Directly to the eligible educational institution or K-12 institution only.

b. Directly to the account owner.

c. Directly to the beneficiary at eligible educational institutions only.

16.11(3) Withdrawals for the payment of tuition in connection with enrollment or attendance at a K-12 institution may not exceed a maximum of $20,000 per taxable year per beneficiary from all 529 plans.

16.11(4) Each qualified withdrawal will be comprised partly of contributions and partly of earnings, based upon the same proportion that contributions and earnings comprise the account owner’s account at the time of the withdrawal.

16.11(5) Funds that are distributed to an account owner pursuant to this rule shall be reported to the IRS on a 1099-Q in the tax year in which the withdrawal is made. The account owner will receive the 1099-Q for any withdrawal paid to the account owner. The beneficiary will receive the 1099-Q for any withdrawal paid to the beneficiary or institution of higher education. The individual receiving the 1099-Q must determine whether the withdrawal was qualified or nonqualified.

16.11(6) An account owner may transfer any remaining balance in one account to an existing or new account for another designated beneficiary by completing a new participation agreement with the contractor.

16.11(7) The Iowa state income tax treatment of contributions to and withdrawals from an account shall be as set forth in Iowa Code chapter 422.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25; ARC 9774C, IAB 11/26/25, effective 12/31/25

Iowa Admin. Code r. 781—16.12 Nonqualified withdrawals and cancellation

Iowa Code section 12D.5 provides that any account owner may cancel a participation agreement at will. This rule establishes the criteria for nonqualified withdrawals from an account or for the cancellation of a participation agreement.

16.12(1) A nonqualified withdrawal is one in which the funds are used for a purpose other than the payment of or reimbursement for qualified educational expenses. An account owner may at any time make a nonqualified withdrawal of a portion of the amount in an account or cancel a participation agreement, without cause, by submitting to the contractor the appropriate form. A nonqualified withdrawal will be paid only to the account owner.

16.12(2) If the participation agreement is canceled, the account owner is entitled to the amount in the account, subject to any applicable fees and expenses. The balance shall be mailed or otherwise sent to the account owner after receipt by the contractor of the appropriate form.

16.12(3) Funds that are distributed to an account owner in a nonqualified withdrawal pursuant to this rule shall be reported to the IRS on a 1099-Q in the tax year in which such withdrawal is made. The account owner will receive the 1099-Q for any nonqualified withdrawals. The individual receiving the 1099-Q must determine whether the withdrawal was qualified or nonqualified. Nonqualified withdrawals may be subject to state and federal taxes and penalties.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19; ARC 8845C, IAB 1/22/25, effective 2/26/25

Iowa Admin. Code r. 781—16.13 Qualified rollover

This rule establishes the procedures for the payment of a qualified rollover.

16.13(1) The account owner must initiate a rollover and must file the appropriate form with the contractor.

16.13(2) Qualified rollovers will be paid in one of the following ways once the form has been received by the contractor:

a. Directly to the account owner, provided that within 60 days of such distribution, the funds are recontributed from the account owner as described in paragraph 16.13(2)“b,” “c” or “d.”

b. Directly to another qualified tuition program for the benefit of the designated beneficiary.

c. Directly to another account designated beneficiary under a qualified tuition program who is a member of the family of the designated beneficiary with respect to which the distribution as made.

d. Directly to an ABLE account of the designated beneficiary or a member of the family of the designated beneficiary.

e. Notwithstanding any of the foregoing, any qualified rollover to a Roth IRA under Section 529 must be paid in a direct trustee-to-trustee transfer to a Roth IRA maintained for the benefit of such designated beneficiary.

16.13(3) Rollovers to a Roth IRA with respect to a designated beneficiary for such taxable year and all prior taxable years may not exceed thresholds set out in Section 529.

16.13(4) Each qualified rollover will be comprised partly of contributions and partly of earnings, based upon the same proportion that contributions and earnings comprise the account owner’s account at the time of the rollover.

16.13(5) Funds that are distributed to an account owner pursuant to this rule shall be reported to the IRS on a 1099-Q in the tax year in which the rollover or withdrawal is made. The beneficiary will receive the 1099-Q for any withdrawal or rollover paid to the beneficiary. The individual receiving the 1099-Q must determine whether the rollover was qualified or nonqualified.

16.13(6) The Iowa state income tax treatment of a qualified rollover from an account shall be as set forth in Iowa Code chapter 422. A rollover that is not a qualified rollover shall be treated as a nonqualified withdrawal.

History

ARC 8845C, IAB 1/22/25, effective 2/26/25; ARC 9774C, IAB 11/26/25, effective 12/31/25

Iowa Admin. Code r. 781—16.14 Garnishment

Pursuant to Iowa Code section 642.2, funds held by the program administrator under the trust are not subject to garnishment.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19

Iowa Admin. Code r. 781—16.15 Appeal of decisions

An account owner may appeal any decision of the program administrator under these rules and with respect to the plan.

16.15(1) An account owner may utilize the appeals process after receipt of the decision from the program administrator.

16.15(2) Failure to submit the appeal request within 30 calendar days of receipt of the decision from the program administrator shall constitute an acceptance of the decision.

16.15(3) The account owner shall submit to the program administrator a written request for an appeal along with all supporting documentation.

16.15(4) The program administrator shall contact the account owner and schedule an appeal meeting within 30 calendar days of receipt of the account owner’s appeal request.

16.15(5) An appeal review shall be conducted at which time the account owner shall present evidence supporting the account owner’s basis for the appeal.

16.15(6) Based on the evidence and additional information presented during the appeal, the program administrator will render a final decision. Such final decision will be written and sent to the account owner within 30 calendar days of the appeal meeting.

History

ARC 4463C, IAB 5/22/19, effective 6/26/19

Chapter 20 Iowa Able Savings Plan Trust

Iowa Admin. Code r. 781—20.1 Purpose

The purpose of these rules is to provide for the administration and operation of the Iowa ABLE savings plan trust.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19

Iowa Admin. Code r. 781—20.2 Definitions

In addition to the terms defined in Iowa Code section 12I.1, the following terms apply to this chapter:

“Account” means an account in the plan opened by the account owner or authorized individual on behalf of the account owner to receive contributions and to provide funds for qualified disability expenses.

“Account balance” means the fair market value of an account.

“Account balance limit” means the amount set as such by the plan as set forth in the plan addendum. When the fair market value of an account reaches the account balance limit, no additional contributions will be accepted by the plan. Assets in an account can continue to accrue earnings beyond the account balance limit.

“Account owner” means the account owner as defined in Iowa Code section 12I.1. An account owner must be an eligible individual. References herein to an account owner include an authorized individual acting on behalf of an account owner.

“Annual contribution limit” means the annual limit on contributions from all sources to an account in a qualified ABLE program under Section 529A.

“Authorized individual” means a person or entity authorized to act on the account owner’s behalf with respect to the account in accordance with these rules and Section 529A. The authorized individual may neither have nor acquire any beneficial interest in the account during the account owner’s lifetime and must administer the account for the benefit of the account owner.

“Beneficiary” or “designated beneficiary” means the eligible individual who is the owner of the account.

“Contractor” means any party retained by the plan administrator to assist in the day-to-day operations of the plan, including record-keeping, investment advisory and administrative services. The plan administrator may delegate any responsibilities with respect to day-to-day operations of the plan to one or more contractors.

“Contribution” means an amount contributed to an account in accordance with the Internal Revenue Code, these rules and the plan disclosure documents.

“Eligible individual” means an eligible individual as defined in Section 529A.

“Federal penalty tax” means the additional federal tax imposed on the earnings portion of certain nonqualified withdrawals.

“Fund” means the underlying investments that are mutual funds, exchange-traded funds, bank products and any other investments in which assets of the plan are invested through the investment options.

“IAble” means the name and logo registered under Iowa law to represent the Iowa ABLE savings plan trust.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, and regulations promulgated or proposed thereunder.

“Investment options” means the investment choices offered by the plan. Account owners can choose to invest in any number of investment options.

“IRS” means the Internal Revenue Service.

“Member of the family” means a sibling of the eligible individual, whether by blood or by adoption, including a brother, sister, stepbrother, stepsister, half-brother, and half-sister.

“Nonqualified withdrawal” means any withdrawal that does not meet the requirements of being a qualified withdrawal or a rollover. Expenses will not be qualified disability expenses if they are incurred at a time when an account owner is not an eligible individual.

“NYSE” means the New York Stock Exchange, Inc.

“Participation agreement” means the agreement between the account owner and the plan that governs the account owner’s use of the plan.

“Plan” means the Iowa ABLE savings plan trust.

“Plan addendum” means the plan-specific disclosure document which contains substantive disclosure of the terms and conditions of an investment in the plan. The plan addendum is intended to be read with the plan disclosure statement.

“Plan administrator” means the treasurer of state as trustee and administrator of the plan.

“Plan disclosure documents” means the plan disclosure statement and the plan addendum applicable to the plan, including any supplements or amendments thereto.

“Plan disclosure statement” means the document adopted by the plan administrator which is intended to provide a description of the program and disclosure of the terms and conditions of an investment in the plan, including any supplements thereto distributed from time to time.

“Qualified disability expenses” means qualified disability expenses as defined in Section 529A.

“Qualified withdrawal” means any withdrawal from an account used to pay for qualified disability expenses of the account owner.

“Resident” means someone living in one location with the intent to remain there permanently or for a definite, indefinite or indeterminable length of time.

“Rollover” means a contribution to an account of an account owner (or of an eligible individual who is a member of the family of the account owner) of all or a portion of an amount withdrawn from the account owner’s account, provided the contribution is made within 60 days of the date of the withdrawal and, in the case of a rollover to the account owner’s ABLE account, no rollover has been made to an ABLE account of the account owner within the prior 12 months.

“Secretary” means the Secretary of the Treasury of the United States.

“Section 529A” means Section 529A of the Internal Revenue Code and regulations promulgated or proposed thereunder.

“Social Security Act” means the Social Security Act of 1935, as amended.

“State” means the state of Iowa.

“Treasurer” means the treasurer of the state of Iowa.

“Underlying investments” means the mutual funds, exchange-traded funds, bank products and any other investments in which assets of the plan are invested through the investment options.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.3 Creation of Iowa ABLE savings plan trust

The plan is created as a trust pursuant to Iowa Code chapter 12I. The treasurer is the trustee of the plan and, pursuant to Iowa Code chapter 12I, has all powers necessary to carry out and effectuate the purposes, objectives, and provisions of Iowa Code chapter 12I pertaining to the plan.

The plan provides for the establishment of accounts under the plan by eligible individuals in order to provide a means to save for qualified disability expenses. The eligible individual is the account owner. The treasurer shall segregate moneys received by the plan into two funds: the program fund and the administrative fund. Contributions to the plan made on behalf of an eligible individual may only be made in the form of cash. An account owner is not permitted to provide investment direction regarding contributions or earnings held by the plan.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19

Iowa Admin. Code r. 781—20.4 Participation agreement and plan disclosure documents

The following material shall be used to administer the plan.

20.4(1) The plan shall have a form of participation agreement which must be used to establish an account. The participation agreement shall be signed and dated in accordance with the requirements of the plan disclosure documents by the account owner to verify that the account owner agrees to the terms and conditions of the plan.

20.4(2) The plan will have plan disclosure documents setting forth the terms of the plan and describing the investment options, procedures, fees and costs applicable to the plan. The plan disclosure documents shall also set forth the privacy policy adopted by the plan administrator for the plan. Persons interested in the plan should consult the plan disclosure documents. The plan disclosure documents may be changed at any time by the plan administrator, and any such change may impact the rights of the account owner under the plan.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.5 Eligible individual

An account owner must be an eligible individual. This rule establishes the following other requirements for opening an account:

20.5(1) An account owner may be a resident of any state.

20.5(2) An account owner must be a U.S. citizen or resident alien.

20.5(3) An account owner must have a valid social security number or tax identification number.

20.5(4) An account owner must have a valid permanent U.S. street address.

20.5(5) No eligible individual may have more than one account in an ABLE plan in existence at the same time. A prior ABLE account that has been closed does not prohibit the subsequent creation of another ABLE account for the same account owner. As part of the enrollment process, the person establishing the account will be required to certify under penalties of perjury that the eligible individual for whom the account is being established has no other ABLE account (except in the case of a rollover from an account that will terminate with the completion of the rollover).

20.5(6) If an individual desires to open an account based on benefits eligibility, the individual must make the following certifications under penalties of perjury that:

a. The individual is entitled to benefits based on blindness or disability under Title II or XVI of the Social Security Act and has received a benefit verification letter from the Social Security Administration and agrees to retain and provide the letter (or a genuine copy of the letter or other evidence) to the plan, the plan administrator, the IRS, or the U.S. Department of the Treasury upon request; and

b. The individual’s disability meets the qualifications set forth in Section 529A.

20.5(7) If an individual desires to open an account based on certification eligibility, the individual must certify under penalties of perjury that the individual:

a. Has a medically determinable physical or mental impairment which results in marked or severe functional limitations and which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months;

b. Is blind (within the meaning of the Social Security Act); or

c. Has a condition listed in the “List of Compassionate Allowances Conditions” maintained by the Social Security Administration.

The individual must also certify that the disability, blindness, or compassionate allowances condition meets the qualifications set forth in Section 529A, and that the individual has a copy of the individual’s diagnosis relating to the relevant impairment(s), signed by a physician meeting the criteria of Social Security Act Section 1861(r)(1). The individual must also agree to retain and provide a copy of the diagnosis and related information to the plan upon request.

20.5(8) By maintaining an account, the account owner is making a continuing certification that the account owner is an eligible individual. It is the account owner’s responsibility to notify the plan in writing if the account owner ceases to be an eligible individual. It is also the account owner’s responsibility to notify the plan in writing if the account owner subsequently requalifies as an eligible individual.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.6 Authorized individual

20.6(1) An eligible individual may establish an account. If an eligible individual (whether a minor or adult) is unable to establish the individual’s own account, an account may be established on behalf of the eligible individual by the eligible individual’s agent under a power of attorney or, if none, by a conservator or legal guardian, spouse, parent, sibling, grandparent of the eligible individual, or a representative payee appointed for the eligible individual by the Social Security Administration, in that order, or as otherwise provided in Section 529A.

20.6(2) The plan may accept a certification, made under penalties of perjury, from the person seeking to establish an account (1) as to the basis for the person’s authority to establish the account, and (2) that there is no other person with a higher priority, set forth in Section 529A, to establish the account.

20.6(3) An authorized individual may make investment decisions for the account owner. An authorized individual may neither have nor acquire any beneficial interest in the account during the account owner’s lifetime and must administer the account for the benefit of the account owner. Whenever an action is required to be taken by an account owner in connection with an account, the authorized individual may take such action on behalf of the account owner.

20.6(4) An adult account owner with legal capacity may appoint an individual as an authorized individual.

20.6(5) An authorized individual may be required to provide supporting documentation to the plan, including documentation of the authority of the individual to establish the account, in accordance with the plan disclosure documents. The plan may freeze an account until the plan receives the required documentation.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.7 Interested party

An account owner with legal capacity or an authorized individual may designate an interested party to receive information on the account.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.8 Forms

20.8(1) Appropriate forms must be completed on paper, online or via telephone (whichever is applicable for the requested actions) to perform the actions set forth in and in accordance with the plan disclosure documents. Current forms are available online at IAble.gov. Among the actions which require the completion of an appropriate form are opening and closing an account, transferring ownership rights of an account to another person, changing investments, requesting a full or partial withdrawal, requesting a rollover, and assigning an authorized individual.

20.8(2) The plan administrator may from time to time provide additional forms for use by account owners in connection with actions involving the plan and will make those forms available online and in paper format and may authorize substitute forms for the plan or a process in lieu of forms except when not permitted by Iowa Code chapter 12I.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.9 Plan administrator rights and responsibilities

20.9(1) The plan administrator reserves the right to:

a. Freeze an account, suspend account services or do both: (1) if the plan administrator receives notice of a dispute regarding account assets or account ownership, including notice of the death of an account owner (until appropriate documentation is received and the plan administrator reasonably believes that it is lawful to transfer account ownership); (2) if the plan administrator reasonably believes a fraudulent transaction may occur or has occurred; (3) in the event of a challenge to the authority of an individual to establish or act on an account; or (4) when a minor account owner reaches the age of majority (until appropriate documentation is received);

b. Close an account, without the account owner’s permission, in cases of threatening conduct or suspicious, fraudulent or illegal activity;

c. Terminate or refuse to establish an account if the plan administrator determines that it is in the best interest of the plan or required by law;

d. Close an account if the plan administrator determines that the account owner provided false or misleading information to the plan in establishing or maintaining an account or that the account owner is restricted by law from participating in the plan; and

e. Reject a contribution for any reason, including contributions to the plan that the plan administrator believes are not in the best interests of the plan, an investment option or the account owners.

20.9(2) The risk of market loss, tax implications, penalties, and any other expenses as a result of the above will be solely the account owner’s responsibility.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.10 Contributions

The participation agreement and plan disclosure documents will provide for limits on the annual and total contributions to an account. This rule provides for implementation of such provisions.

20.10(1) Section 529A mandates an annual contribution limit for qualified ABLE programs. The account limit is subject to adjustment as provided in Section 529A. The limit may change from time to time, and any change will be set forth in the plan disclosure documents.

20.10(2) Anyone is allowed to make a contribution at any time during the calendar year to an account provided that the total of all annual contributions may not exceed the annual contribution limit and that all contributions are in compliance with the other requirements set forth in the plan disclosure documents.

20.10(3) The plan administrator shall actuarially determine an account balance limit applicable to the account of an account owner. No additional contributions may be made to an account when the fair market value of the account exceeds the account balance limit listed in the plan addendum. Accounts that have reached the account balance limit may continue to accrue earnings, although future contributions may not be made to such accounts. If, however, the market value of an account falls below the account balance limit due to market fluctuations and not as a result of withdrawals from the account, additional contributions will be accepted.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.11 Substitution or change of beneficiary; balance transfer

Iowa Code section 12I.3(3)“a” provides that beneficiaries may be changed subject to the rules and regulations of the treasurer. This rule establishes the criteria for substituting one beneficiary for another. Beneficiary changes shall also be subject to the procedures set forth in the plan disclosure documents.

20.11(1) The beneficiary must be the account owner. At the time of the substitution, the substitute beneficiary must be an eligible beneficiary pursuant to rule 781—20.5(12I) and must be a member of the family of the beneficiary being replaced.

20.11(2) An account owner has the right to change the beneficiary of an account. An account owner may request that a beneficiary be substituted by submitting the appropriate form to the plan administrator.

20.11(3) All or a portion of an account owner’s account balance may be transferred to another account within the plan but only during the life of the account owner. At the time of the transfer, the transferee must be an eligible individual and a member of the family of the transferor-account owner.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.12 Transfer of account on death

The account owner has the right to designate a successor account owner in the event of the death of the account owner in accordance with these rules and the plan disclosure documents.

20.12(1) An account owner may designate a successor account owner to succeed to the ownership of the account upon the death of the account owner provided that the successor account owner must be another eligible individual who is a member of the family of the account owner. To designate a successor account owner at death, the account owner shall complete the appropriate form and provide any requested documentation.

20.12(2) Upon the death of the account owner, the successor account owner must notify the plan by submitting a completed participant enrollment form and a certified copy of the death certificate. The change in ownership of the account will become effective for the successor participant once this paperwork has been received and processed. The amount to be transferred is subject to payment of certain expenses as set forth in the Internal Revenue Code.

History

ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.13 Qualified withdrawals

This rule establishes the procedures for the payment of qualified withdrawals. A qualified withdrawal is a withdrawal from an account that is used to pay for any qualified disability expenses of the account owner.

20.13(1) The account owner must initiate the withdrawal for qualified disability expenses. The account owner must file the appropriate form with the plan administrator.

20.13(2) Qualified withdrawals will be paid as provided in the plan disclosure documents.

20.13(3) Each qualified withdrawal will be comprised partly of contributions and partly of earnings, based upon the same proportion that contributions and earnings comprise the account owner’s account at the time of the withdrawal.

20.13(4) Funds that are distributed to or for the benefit of an account owner shall be reported to the IRS on a 1099-Q in the tax year in which the withdrawal is made. The account owner will receive the 1099-Q for any withdrawals made to or as instructed by the account owner. The account owner receiving the 1099-Q must determine whether the withdrawal was made for a qualified disability expense or was a nonqualified withdrawal.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.14 Nonqualified withdrawals and participation agreement cancellation

An account owner has the exclusive right to cancel a participation agreement and may do so at will. This rule establishes the criteria for nonqualified withdrawals from an account or for the cancellation of a participation agreement.

20.14(1) The earnings portion of a nonqualified withdrawal is subject to federal income taxation and the federal penalty tax except in certain limited circumstances.

20.14(2) An account owner may at any time make a nonqualified withdrawal of a portion of the amount in an account or cancel a participation agreement, without cause, by submitting the appropriate form to the plan administrator. A nonqualified withdrawal will be paid only to the account owner.

20.14(3) Upon cancellation of a participation agreement, an account owner shall be entitled to the return of the account owner’s account balance. If the participation agreement is canceled, the account owner is entitled to the amount in the account, subject to any applicable fees and expenses. The balance shall be mailed or otherwise sent to the account owner after receipt of the appropriate form by the plan administrator.

20.14(4) Funds that are distributed to an account owner in a nonqualified withdrawal shall be reported to the IRS on a 1099-Q in the tax year in which the withdrawal is made. The account owner will receive the 1099-Q for any withdrawal. Nonqualified withdrawals may be subject to state and federal taxes and penalties. Withdrawals may be requested online or by calling the plan. In certain instances, additional documentation may be required before a withdrawal may be processed. Only the account owner may direct withdrawals from the account. Withdrawals will be sent as provided in the plan disclosure documents.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.15 Account statements

Account owners will receive quarterly account statements, which will include the total value of the account and a list of transactions within the account for that quarterly period. Account owners will receive account statements, transaction conﬁrmations, and other personal correspondence in paper format unless the account owner signs up for electronic delivery. Fees may vary as provided in the disclosure documents depending on the method of delivery selected.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.16 State tax treatment

The maximum amount that may be deducted per year for Iowa income tax purposes by an individual who is a resident of this state for contributions to an account shall not exceed the maximum deductible amount determined for the year pursuant to Iowa Code section 12D.3(1). The adjusted annual maximum shall be communicated to account owners in the plans and to the public in any reasonable manner determined by the plan administrator. State inheritance tax treatment of interests in the plan shall be as provided in Iowa Code section 450.4(9).

History

ARC 4464C, IAB 5/22/19, effective 6/26/19; ARC 7040C, IAB 6/28/23, effective 8/2/23

Iowa Admin. Code r. 781—20.17 Security

An account owner shall not be entitled to utilize any interest in the plan as security for a loan.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19

Iowa Admin. Code r. 781—20.18 Garnishment

Pursuant to Iowa Code section 642.2, funds held by the plan administrator under the plan are not subject to garnishment.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19

Iowa Admin. Code r. 781—20.19 Reports—annual audited financial report—reports under federal law

20.19(1) The plan administrator shall submit an annual audited financial report, prepared in accordance with generally accepted accounting principles, on the operations of the plan by November 1 to the governor and the general assembly. The annual audit shall be made either by the auditor of state or by an independent certified public accountant designated by the auditor of state and shall include direct and indirect costs attributable to the use of outside consultants, independent contractors, and any other persons who are not state employees.

20.19(2) The annual audit shall be supplemented by any of the following information prepared by the treasurer.

a. Any related studies or evaluations prepared in the preceding year;

b. A summary of the benefits provided by the plan, including the number of account owners in the plan; and

c. Any other information deemed relevant by the plan administrator in order to make a full, fair, and effective disclosure of the operations of the plan.

20.19(3) The plan administrator or contractor shall prepare and submit to the Secretary or other required party any reports, notices, or statements required under Section 529A.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19

Iowa Admin. Code r. 781—20.20 Federal tax treatment

For federal income tax purposes, the plan shall be considered a qualified ABLE program exempt from taxation pursuant to Section 529A and shall be operated so that it meets the requirements of Section 529A.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19

Iowa Admin. Code r. 781—20.21 Appeal of decisions

An account owner may appeal any decision of the plan administrator under these rules and with respect to the plan.

20.21(1) An account owner may utilize the appeals process after receipt of the decision from the plan administrator.

20.21(2) Failure to submit the appeal request within 30 calendar days of receipt of the decision from the plan administrator shall constitute an acceptance of the decision.

20.21(3) The account owner shall submit to the plan administrator a written request for an appeal along with all supporting documentation.

20.21(4) The plan administrator shall contact the account owner and schedule an appeal meeting within 30 calendar days of receipt of the account owner’s appeal request.

20.21(5) An appeal review shall be conducted, at which time the account owner shall present evidence supporting the account owner’s basis for the appeal.

20.21(6) Based on the evidence and additional information presented during the appeal, the plan administrator will render a final decision. Such final decision will be written and sent to the account owner within 30 calendar days of the appeal meeting.

History

ARC 4464C, IAB 5/22/19, effective 6/26/19