Bill Text: IA SSB1210 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A study bill for an act creating an Iowa ABLE savings plan trust, providing deductions and exclusions from the individual income tax and inheritance tax relating to the trust, and including retroactive and other applicability provisions.
Spectrum: Unknown
Status: (Introduced - Dead) 2015-03-05 - Voted - Human Resources. [SSB1210 Detail]
Download: Iowa-2015-SSB1210-Introduced.html
Senate
Study
Bill
1210
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
HUMAN
RESOURCES
BILL
BY
CHAIRPERSON
MATHIS)
A
BILL
FOR
An
Act
creating
an
Iowa
ABLE
savings
plan
trust,
providing
1
deductions
and
exclusions
from
the
individual
income
tax
2
and
inheritance
tax
relating
to
the
trust,
and
including
3
retroactive
and
other
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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S.F.
_____
Section
1.
NEW
SECTION
.
12I.1
Purpose
and
definitions.
1
1.
The
general
assembly
finds
that
the
general
welfare
2
and
well-being
of
the
state
are
directly
related
to
the
3
health,
maintenance,
independence,
and
quality
of
life
of
its
4
disabled
residents,
and
that
a
vital
and
valid
public
purpose
5
is
served
by
the
creation
and
implementation
of
programs
that
6
encourage
and
make
possible
savings
to
secure
funding
for
7
disability-related
expenses
on
behalf
of
individuals
with
8
disabilities
that
will
supplement,
but
not
supplant,
other
9
benefits
provided
by
various
federal,
state,
and
private
10
sources.
The
creation
of
the
means
of
encouragement
for
11
citizens
to
invest
in
such
a
program
represents
the
carrying
12
out
of
a
vital
and
valid
public
purpose.
In
order
to
make
13
available
to
the
citizens
of
the
state
an
opportunity
to
fund
14
future
disability-related
expenses
of
individuals,
it
is
15
necessary
that
a
public
trust
be
established
in
which
moneys
16
may
be
invested
for
payment
of
future
disability-related
17
expenses
of
an
individual.
18
2.
As
used
in
this
chapter,
unless
the
context
otherwise
19
requires:
20
a.
“Account
balance
limit”
means
the
maximum
allowable
21
aggregate
balance
of
an
account
established
for
a
designated
22
beneficiary.
Account
earnings,
if
any,
are
included
in
the
23
account
balance
limit.
24
b.
“Account
owner”
means
an
individual
who
is
a
resident
of
25
this
state
and
who
enters
into
a
participation
agreement
under
26
this
chapter
for
the
payment
of
qualified
disability
expenses
27
on
behalf
of
a
designated
beneficiary.
28
c.
“Designated
beneficiary”
means
an
individual
who
is
a
29
resident
of
this
state
and
who
meets
the
definition
of
“eligible
30
individual”
in
section
529A
of
the
Internal
Revenue
Code.
31
d.
“Internal
Revenue
Code”
means
the
same
as
defined
in
32
section
422.3.
33
e.
“Iowa
ABLE
savings
plan
trust”
or
“trust”
means
the
trust
34
created
under
section
12I.2.
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f.
“Participation
agreement”
means
an
agreement
between
the
1
account
owner
and
the
trust
entered
into
under
this
chapter.
2
3.
“Qualified
disability
expenses”
means
the
same
as
defined
3
in
section
529A
of
the
Internal
Revenue
Code.
4
Sec.
2.
NEW
SECTION
.
12I.2
Creation
of
Iowa
ABLE
savings
5
plan
trust.
6
An
Iowa
ABLE
savings
plan
trust
is
created.
The
treasurer
of
7
state
is
the
trustee
of
the
trust,
and
has
all
powers
necessary
8
to
carry
out
and
effectuate
the
purposes,
objectives,
and
9
provisions
of
this
chapter
pertaining
to
the
trust,
including
10
the
power
to
do
all
of
the
following:
11
1.
Make
and
enter
into
contracts
necessary
for
the
12
administration
of
the
trust
created
under
this
chapter.
13
2.
Enter
into
agreements
with
the
state,
or
any
federal
or
14
other
state
agency,
or
other
entity
as
required
to
implement
15
this
chapter.
16
3.
Carry
out
the
duties
and
obligations
of
the
trust
17
pursuant
to
this
chapter.
18
4.
Accept
any
grants,
gifts,
legislative
appropriations,
19
and
other
moneys
from
the
state,
any
unit
of
federal,
state,
or
20
local
government,
or
any
other
person,
firm,
partnership,
or
21
corporation
which
the
treasurer
of
state
shall
deposit
into
the
22
administrative
fund
or
program
fund.
23
5.
Participate
in
any
federal,
state,
or
local
governmental
24
program
for
the
benefit
of
the
trust.
25
6.
Procure
insurance
against
any
loss
in
connection
with
the
26
property,
assets,
or
activities
of
the
trust.
27
7.
Enter
into
participation
agreements
with
account
owners.
28
8.
Make
payments
to
designated
beneficiaries
pursuant
to
29
participation
agreements.
30
9.
Make
refunds
to
account
owners
upon
the
termination
31
of
participation
agreements,
and
partial
nonqualified
32
distributions
to
account
owners,
pursuant
to
this
chapter
and
33
the
limitations
and
restrictions
set
forth
in
this
chapter.
34
10.
Invest
moneys
from
the
program
fund
in
any
investments
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_____
that
are
determined
by
the
treasurer
of
state
to
be
1
appropriate.
2
11.
Engage
investment
advisors,
if
necessary,
to
assist
in
3
the
investment
of
trust
assets.
4
12.
Contract
for
goods
and
services
and
engage
personnel
5
as
necessary,
including
consultants,
actuaries,
managers,
6
legal
counsel,
and
auditors
for
the
purpose
of
rendering
7
professional,
managerial,
and
technical
assistance
and
advice
8
to
the
treasurer
of
state
regarding
trust
administration
and
9
operation.
10
13.
Establish,
impose,
and
collect
administrative
fees
11
and
charges
in
connection
with
transactions
of
the
trust,
and
12
provide
for
reasonable
service
charges,
including
penalties
for
13
cancellations
and
late
payments
with
respect
to
participation
14
agreements.
15
14.
Administer
the
funds
of
the
trust.
16
15.
Prepare
and
file
reports
and
notices.
17
16.
Adopt
rules
pursuant
to
chapter
17A
for
the
18
administration
of
this
chapter.
19
Sec.
3.
NEW
SECTION
.
12I.3
Participation
agreements
for
20
trust.
21
The
trust
may
enter
into
participation
agreements
with
22
account
owners
pursuant
to
the
following
terms
and
agreements:
23
1.
a.
The
treasurer
of
state
shall
allow
only
one
24
participation
agreement
per
designated
beneficiary.
25
b.
The
account
owner
must
also
be
the
designated
beneficiary
26
of
the
account.
However,
a
trustee
or
legal
guardian
may
27
be
designated
as
custodian
of
an
account
for
a
designated
28
beneficiary
who
is
a
minor
or
who
lacks
capacity
to
enter
into
29
a
participation
agreement
if
such
designation
is
not
prohibited
30
under
section
529A
of
the
Internal
Revenue
Code.
31
c.
The
treasurer
of
state
shall
set
an
annual
contribution
32
limit
and
account
balance
limit
to
maintain
compliance
with
33
section
529A
of
the
Internal
Revenue
Code.
A
contribution
34
shall
not
be
permitted
to
the
extent
it
exceeds
the
annual
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_____
contribution
limit
or
causes
the
aggregate
balance
of
the
1
account
established
for
the
designated
beneficiary
to
exceed
2
the
applicable
account
balance
limit.
3
d.
The
maximum
amount
that
may
be
deducted
for
Iowa
income
4
tax
purposes
shall
not
exceed
the
maximum
deductible
amount
5
determined
for
the
year
pursuant
to
section
12D.3,
subsection
6
1,
paragraph
“a”
.
This
maximum
amount
applies
per
designated
7
beneficiary
per
year.
8
e.
Participation
agreements
may
be
amended
to
provide
9
for
adjusted
levels
of
contributions
based
upon
changed
10
circumstances
or
changes
in
disability-related
expenses.
11
f.
Any
person
may
make
contributions
pursuant
to
a
12
participation
agreement
on
behalf
of
a
designated
beneficiary
13
under
rules
adopted
by
the
treasurer
of
state.
14
2.
The
execution
of
a
participation
agreement
by
the
trust
15
shall
not
guarantee
in
any
way
that
future
disability-related
16
expenses
will
be
equal
to
projections
and
estimates
provided
by
17
the
trust
or
that
the
account
owner
or
designated
beneficiary
18
is
guaranteed
any
of
the
following:
19
a.
A
return
of
principal.
20
b.
A
rate
of
interest
or
other
return
from
the
trust.
21
c.
Payment
of
interest
or
other
return
from
the
trust.
22
3.
a.
A
designated
beneficiary
under
a
participation
23
agreement
may
be
changed
as
permitted
under
rules
adopted
by
24
the
treasurer
of
state
upon
written
request
of
the
account
25
owner
as
long
as
such
change
would
be
permitted
by
section
529A
26
of
the
Internal
Revenue
Code.
27
b.
Participation
agreements
may
otherwise
be
freely
amended
28
throughout
their
terms
in
order
to
enable
account
owners
to
29
increase
or
decrease
the
level
of
participation,
change
the
30
designated
beneficiary,
and
carry
out
similar
matters
as
31
authorized
by
rule.
32
4.
Each
participation
agreement
shall
provide
that
the
33
participation
agreement
may
be
canceled
upon
the
terms
and
34
conditions,
and
upon
payment
of
applicable
fees
and
costs
set
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forth
and
contained
in
the
rules
adopted
by
the
treasurer
of
1
state.
2
Sec.
4.
NEW
SECTION
.
12I.4
Program
and
administrative
funds
3
——
investment
and
payment.
4
1.
a.
The
treasurer
of
state
shall
segregate
moneys
5
received
by
the
trust
into
two
funds:
the
program
fund
and
the
6
administrative
fund.
7
b.
All
moneys
paid
by
account
owners
or
other
persons
8
on
behalf
of
a
designated
beneficiary
in
connection
with
9
participation
agreements
shall
be
deposited
as
received
into
10
separate
accounts
for
each
designated
beneficiary
within
the
11
program
fund.
12
c.
Contributions
to
the
trust
made
on
behalf
of
designated
13
beneficiaries
may
only
be
made
in
the
form
of
cash.
14
d.
An
account
owner
or
designated
beneficiary
is
not
15
permitted
to
provide
investment
direction
regarding
program
16
contributions
or
earnings
held
by
the
trust.
17
2.
Moneys
accrued
by
account
owners
in
the
program
fund
18
of
the
trust
may
be
used
for
payments
of
qualified
disability
19
expenses.
20
3.
Moneys
in
the
account
of
a
designated
beneficiary
may
21
be
claimed
by
the
Iowa
Medicaid
program
as
provided
in
section
22
529A(f)
of
the
Internal
Revenue
Code
and
subject
to
limitations
23
imposed
by
the
treasurer
of
state.
24
Sec.
5.
NEW
SECTION
.
12I.5
Cancellation
of
agreements.
25
An
account
owner
may
cancel
a
participation
agreement
at
26
will.
Upon
cancellation
of
a
participation
agreement,
an
27
account
owner
shall
be
entitled
to
the
return
of
the
account
28
owner’s
account
balance.
29
Sec.
6.
NEW
SECTION
.
12I.6
Repayment
and
ownership
of
30
payments
and
investment
income
——
transfer
of
ownership
rights.
31
1.
a.
An
account
owner
retains
ownership
of
all
32
contributions
made
on
behalf
of
a
designated
beneficiary
under
33
a
participation
agreement
up
to
the
date
of
utilization
for
34
payment
of
qualified
disability
expenses
of
the
designated
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_____
beneficiary.
1
b.
All
income
derived
from
the
investment
of
the
2
contributions
made
on
behalf
of
a
designated
beneficiary
shall
3
be
considered
to
be
held
in
trust
for
the
benefit
of
the
4
designated
beneficiary.
5
2.
In
the
event
the
program
is
terminated
prior
to
6
payment
of
qualified
disability
expenses
for
the
designated
7
beneficiary,
the
account
owner
is
entitled
to
a
refund
of
the
8
account
owner’s
account
balance.
9
3.
Any
amounts
which
may
be
paid
to
any
person
or
persons
10
pursuant
to
the
Iowa
ABLE
savings
plan
trust
but
which
are
not
11
listed
in
this
section
are
owned
by
the
trust.
12
4.
An
account
owner
may
transfer
ownership
rights
to
13
another
designated
beneficiary,
including
a
gift
of
the
14
ownership
rights
to
a
designated
beneficiary
who
is
a
minor,
in
15
accordance
with
rules
adopted
by
the
treasurer
of
state
and
the
16
terms
of
the
participation
agreement,
so
long
as
the
transfer
17
would
be
permitted
by
section
529A
of
the
Internal
Revenue
18
Code.
19
5.
An
account
owner
shall
not
be
entitled
to
utilize
any
20
interest
in
the
trust
as
security
for
a
loan.
21
Sec.
7.
NEW
SECTION
.
12I.7
Reports
——
annual
audited
22
financial
report
——
reports
under
federal
law.
23
1.
a.
The
treasurer
of
state
shall
submit
an
annual
24
audited
financial
report,
prepared
in
accordance
with
generally
25
accepted
accounting
principles,
on
the
operations
of
the
trust
26
by
November
1
to
the
governor
and
the
general
assembly.
27
b.
The
annual
audit
shall
be
made
either
by
the
auditor
28
of
state
or
by
an
independent
certified
public
accountant
29
designated
by
the
auditor
of
state
and
shall
include
direct
and
30
indirect
costs
attributable
to
the
use
of
outside
consultants,
31
independent
contractors,
and
any
other
persons
who
are
not
32
state
employees.
33
2.
The
annual
audit
shall
be
supplemented
by
all
of
the
34
following
information
prepared
by
the
treasurer
of
state:
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a.
Any
related
studies
or
evaluations
prepared
in
the
1
preceding
year.
2
b.
A
summary
of
the
benefits
provided
by
the
trust,
3
including
the
number
of
account
owners
and
designated
4
beneficiaries
in
the
trust.
5
c.
Any
other
information
deemed
relevant
by
the
treasurer
of
6
state
in
order
to
make
a
full,
fair,
and
effective
disclosure
7
of
the
operations
of
the
trust.
8
3.
The
treasurer
of
state
shall
prepare
and
submit
to
the
9
secretary
of
the
United
States
treasury
or
other
required
party
10
any
reports,
notices,
or
statements
required
under
section
529A
11
of
the
Internal
Revenue
Code.
12
Sec.
8.
NEW
SECTION
.
12I.8
Tax
considerations.
13
1.
For
federal
income
tax
purposes,
the
Iowa
ABLE
savings
14
plan
trust
shall
be
considered
a
qualified
ABLE
program
exempt
15
from
taxation
pursuant
to
section
529A
of
the
Internal
Revenue
16
Code.
The
Iowa
ABLE
savings
plan
trust
meets
the
requirements
17
of
section
529A(b)
of
the
Internal
Revenue
Code
as
follows:
18
a.
Pursuant
to
section
12I.3,
subsection
1,
paragraph
“a”
,
19
only
one
account
per
designated
beneficiary
is
allowed.
20
b.
Pursuant
to
section
12I.3,
subsection
1,
paragraph
“c”
,
21
a
maximum
contribution
level
and
account
balance
level
is
22
established.
23
c.
Pursuant
to
section
12I.3,
subsection
1,
paragraph
24
“f”
,
any
person
may
make
contributions
to
an
account
that
is
25
established
for
the
purpose
of
meeting
the
qualified
disability
26
expenses
of
the
designated
beneficiary
of
the
account.
27
d.
Pursuant
to
section
12I.4,
subsection
1,
paragraph
28
“b”
,
a
separate
account
is
established
for
each
designated
29
beneficiary.
30
e.
Pursuant
to
section
12I.4,
subsection
1,
paragraph
“c”
,
31
contributions
may
only
be
made
in
the
form
of
cash.
32
f.
Pursuant
to
section
12I.4,
subsection
1,
paragraph
“d”
,
33
an
account
owner
or
designated
beneficiary
is
not
permitted
to
34
provide
investment
direction
regarding
program
contributions
35
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or
earnings
held
by
the
trust.
1
g.
Pursuant
to
section
12I.6,
subsection
5,
an
account
owner
2
shall
not
pledge
any
interest
in
the
trust
as
security
for
a
3
loan.
4
2.
State
income
tax
treatment
of
the
Iowa
ABLE
savings
plan
5
trust
shall
be
as
provided
in
section
422.7,
subsections
34
and
6
34A.
7
3.
State
inheritance
tax
treatment
of
interests
in
Iowa
ABLE
8
savings
plans
shall
be
as
provided
in
section
450.4,
subsection
9
9.
10
Sec.
9.
NEW
SECTION
.
12I.9
Property
rights
to
assets
in
11
trust.
12
1.
The
assets
of
the
trust
shall
at
all
times
be
preserved,
13
invested,
and
expended
solely
and
only
for
the
purposes
of
the
14
trust
and
shall
be
held
in
trust
for
the
account
owners
and
15
designated
beneficiaries.
16
2.
Except
as
provided
in
section
12I.4,
subsection
3,
no
17
property
rights
in
the
trust
shall
exist
in
favor
of
the
state.
18
3.
Except
as
provided
in
section
12I.4,
subsection
3,
the
19
assets
of
the
trust
shall
not
be
transferred
or
used
by
the
20
state
for
any
purposes
other
than
the
purposes
of
the
trust.
21
Sec.
10.
NEW
SECTION
.
12I.10
Construction.
22
This
chapter
shall
be
construed
liberally
in
order
to
23
effectuate
its
purpose.
24
Sec.
11.
Section
422.7,
Code
2015,
is
amended
by
adding
the
25
following
new
subsections:
26
NEW
SUBSECTION
.
34.
a.
Subtract
the
maximum
contribution
27
that
may
be
deducted
for
Iowa
income
tax
purposes
for
a
28
contribution
on
behalf
of
a
designated
beneficiary
to
the
Iowa
29
ABLE
savings
plan
trust
pursuant
to
section
12I.3,
subsection
30
1,
paragraph
“d”
.
31
b.
Add
the
amount
resulting
from
the
cancellation
of
a
32
participation
agreement
refunded
to
the
taxpayer
as
an
account
33
owner
in
the
Iowa
ABLE
savings
plan
trust
to
the
extent
34
previously
deducted
by
the
taxpayer
or
any
other
person
as
a
35
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contribution
to
the
trust.
1
c.
Add
the
amount
resulting
from
a
withdrawal
made
by
a
2
taxpayer
from
the
Iowa
ABLE
savings
plan
trust
for
purposes
3
other
than
the
payment
of
qualified
disability
expenses
to
the
4
extent
previously
deducted
by
the
taxpayer
or
any
other
person
5
as
a
contribution
to
the
trust.
6
NEW
SUBSECTION
.
34A.
Subtract,
to
the
extent
included,
7
income
from
interest
and
earnings
received
from
the
Iowa
ABLE
8
savings
plan
trust
created
in
chapter
12I.
9
Sec.
12.
Section
450.4,
Code
2015,
is
amended
by
adding
the
10
following
new
subsection:
11
NEW
SUBSECTION
.
9.
On
the
value
of
any
interest
in
the
Iowa
12
ABLE
savings
plan
trust
created
in
chapter
12I.
13
Sec.
13.
APPLICABILITY.
This
Act
applies
to
contributions
14
to
the
Iowa
ABLE
savings
plan
trust
made,
and
qualified
15
disability
expenses
incurred,
on
or
after
July
1,
2015.
16
Sec.
14.
APPLICABILITY.
The
section
of
this
Act
amending
17
section
450.4
applies
to
estates
of
decedents
dying
on
or
after
18
July
1,
2015.
19
Sec.
15.
RETROACTIVE
APPLICABILITY.
The
section
of
this
20
Act
amending
section
422.7
applies
retroactively
to
January
1,
21
2015,
for
tax
years
beginning
on
or
after
that
date.
22
EXPLANATION
23
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
24
the
explanation’s
substance
by
the
members
of
the
general
assembly.
25
This
bill
creates
an
Iowa
ABLE
(Achieving
A
Better
Life
26
Experience)
savings
plan
trust
and
provides
for
various
Iowa
27
individual
income
tax
and
inheritance
tax
benefits.
28
BACKGROUND.
On
December
19,
2014,
the
federal
Achieving
29
A
Better
Life
Experience
Act
of
2014
(ABLE
Act)
was
enacted
30
as
part
of
the
federal
Tax
Increase
Prevention
Act
of
2014
31
(Pub.
L.
No.
113-295).
The
ABLE
Act
allows
states
to
create
32
programs
to
assist
individuals
in
saving
private
funds
for
33
the
purpose
of
supporting
individuals
with
disabilities.
34
Qualifying
state
programs
will
allow
for
the
establishment
35
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_____
of
accounts
into
which
eligible
disabled
individuals
or
1
others
may
make
contributions
for
the
payment
of
future
2
disability-related
expenses
of
the
eligible
disabled
3
individual.
Funds
and
earnings
in
accounts
established
4
under
qualifying
state
programs
are
afforded
federal
benefits
5
in
certain
circumstances,
including
federal
tax
exemption,
6
bankruptcy
protection,
and
exclusion
from
consideration
under
7
certain
means-tested
programs,
such
as
Medicaid
or
supplemental
8
security
income.
9
IOWA
ABLE
SAVINGS
PLAN
TRUST.
The
bill
creates
the
Iowa
10
ABLE
savings
plan
trust
(trust)
under
the
treasurer
of
state
11
(state
treasurer)
that
will
meet
the
requirements
of
§529A
of
12
the
Internal
Revenue
Code
(federal
ABLE
program).
The
state
13
treasurer
is
the
trustee
of
the
trust
and
has
numerous
powers,
14
as
specified
in
the
bill,
for
the
purpose
of
carrying
out
the
15
purpose
of
the
trust.
16
The
trust
is
authorized
to
enter
into
participation
17
agreements
with
individuals
for
the
payment
of
future
qualified
18
disability
expenses.
“Qualified
disability
expenses”
means
the
19
same
as
defined
under
the
federal
ABLE
program,
which
generally
20
defines
the
term
to
include
expenses
related
to
a
designated
21
beneficiary’s
education,
housing,
transportation,
employment
22
training
and
support,
assistive
technology
and
personal
support
23
services,
health,
prevention
and
wellness,
financial
management
24
and
administrative
services,
legal
fees,
expenses
for
oversight
25
and
monitoring,
funeral
and
burial
expenses,
and
other
expenses
26
approved
by
the
secretary
of
the
United
States
treasury
27
(secretary).
28
The
person
with
whom
the
state
treasurer
enters
into
a
29
participation
agreement
must
be
both
the
account
owner
and
30
designated
beneficiary.
However,
the
bill
allows
a
trustee
31
or
legal
guardian
to
be
designated
as
custodian
of
an
account
32
for
a
designated
beneficiary
who
is
a
minor
or
who
lacks
33
capacity
to
enter
into
a
participation
agreement,
provided
such
34
designation
would
be
allowed
under
the
federal
ABLE
program.
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_____
“Designated
beneficiary”
is
defined
in
the
bill
as
a
person
1
who
is
a
resident
of
Iowa
and
who
qualifies
as
an
eligible
2
individual
under
the
federal
ABLE
program,
which
includes
3
individuals
who
are
entitled
to
benefits
based
on
blindness
or
4
disability
under
Title
II
(disability
insurance)
or
Title
XVI
5
(supplemental
security
income)
of
the
federal
Social
Security
6
Act
if
such
blindness
or
disability
occurred
before
attaining
7
26
years
of
age,
and
if
such
individual
files
a
disability
8
certification
with
the
secretary.
9
The
bill
requires
the
state
treasurer
to
maintain
a
separate
10
account
in
the
trust
for
each
designated
beneficiary
of
a
11
participation
agreement.
Only
one
participation
agreement
12
shall
be
allowed
per
designated
beneficiary.
Any
person
is
13
allowed
to
make
contributions
in
the
form
of
cash
to
an
account
14
on
behalf
of
a
designated
beneficiary.
The
trust
is
required
15
to
maintain
limits
on
the
annual
contributions
to
an
account,
16
and
the
aggregate
balance
in
an
account,
matching
those
set
17
forth
in
the
federal
ABLE
program,
which
prohibits
annual
18
contributions
to
an
account
from
exceeding
the
annual
gift
tax
19
exclusion
amount
($14,000
for
2015),
and
prohibits
an
aggregate
20
account
balance
from
exceeding
the
limit
set
by
a
state
under
21
its
qualified
tuition
program
(currently
$320,000
for
Iowa).
22
The
bill
provides
other
various
terms
and
conditions
for
23
participation
agreements,
use
and
segregation
of
trust
funds,
24
cancellation
of
agreements
and
refund
of
account
balances,
25
and
ownership
rights
in
the
trust.
The
bill
provides
that
an
26
account
may
be
claimed
by
the
Iowa
Medicaid
program
upon
the
27
death
of
the
designated
beneficiary,
in
accordance
with
the
28
federal
ABLE
program.
The
bill
requires
the
state
treasurer
to
29
prepare
and
submit
audited
financial
reports
to
the
governor
30
and
general
assembly,
and
further
requires
the
state
treasurer
31
to
comply
with
any
reporting
requirements
of
the
federal
ABLE
32
program.
The
bill
applies
to
qualified
disability
expenses
33
incurred
on
or
after
July
1,
2015.
34
IOWA
TAX
BENEFITS.
The
bill
provides
several
tax
benefits
35
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_____
under
the
trust.
First,
the
value
of
any
interest
in
the
trust
1
of
a
decedent
dying
on
or
after
July
1,
2015,
is
excluded
2
from
the
Iowa
inheritance
tax.
Second,
contributions
to
the
3
trust
made
on
or
after
July
1,
2015,
on
behalf
of
a
designated
4
beneficiary
are
deductible
from
the
Iowa
individual
income
5
tax
up
to
the
maximum
amount
allowed
per
beneficiary
per
year
6
for
purposes
of
the
Iowa
educational
savings
plan
trust
in
7
Code
chapter
12D.
For
2015,
that
amount
is
set
at
$3,163.
8
Any
amounts
refunded
to
a
taxpayer
from
the
cancellation
of
9
a
participation
agreement
or
that
are
withdrawn
for
purposes
10
other
than
the
payment
of
qualified
disability
expenses
of
the
11
designated
beneficiary
must
be
included
in
Iowa
net
income
to
12
the
extent
they
were
previously
deducted
by
the
taxpayer
or
any
13
other
person
as
a
contribution.
Third,
income
and
earnings
14
from
the
trust
are
exempt
from
the
Iowa
individual
income
tax.
15
The
individual
income
tax
benefits
apply
retroactively
to
16
January
1,
2015,
for
tax
years
beginning
on
or
after
that
date.
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