Senate File 527 S-3136 Amend Senate File 527 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < Section 1. Section 12I.1, subsection 2, paragraphs b and g, 4 Code 2021, are amended to read as follows: 5 b. “Account owner” means an individual who enters into is 6 the designated beneficiary under a participation agreement 7 under this chapter for the payment of qualified disability 8 expenses on behalf of a the designated beneficiary. 9 g. “Participation agreement” means an agreement between 10 the account owner and establishing an account with the trust 11 entered into under this chapter . 12 Sec. 2. Section 12I.2, subsection 7, Code 2021, is amended 13 to read as follows: 14 7. Enter into participation agreements with account owners . 15 Sec. 3. Section 12I.3, unnumbered paragraph 1, Code 2021, 16 is amended to read as follows: 17 On or after July 1, 2016, the trust may enter into 18 participation agreements with account owners pursuant to the 19 following terms and agreements: 20 Sec. 4. Section 12I.3, subsection 1, paragraph b, Code 2021, 21 is amended to read as follows: 22 b. Unless otherwise permitted under section 529A of the 23 Internal Revenue Code, the account owner must also be the 24 designated beneficiary of the account. However, a trustee or 25 legal guardian may be designated as custodian of an account for 26 a designated beneficiary who is a minor or who lacks capacity 27 to enter into a participation agreement if such designation 28 is not prohibited under section 529A of the Internal Revenue 29 Code . A person other than the account owner may enter into 30 a participation agreement and have signature authority over 31 the account on behalf of the account owner in accordance with 32 section 529A of the Internal Revenue Code and regulations 33 promulgated under that section. 34 Sec. 5. Section 12I.3, subsection 1, Code 2021, is amended 35 -1- SF527.1773 (1) 89 (amending this SF 527 to CONFORM to HF 835) pf/rh 1/ 4 #1.

by adding the following new paragraph: 1 NEW PARAGRAPH . g. Any funds retained in a medical 2 assistance special needs trust pursuant to chapter 633C, or in 3 a supplemental needs trust pursuant to chapter 634A, may be 4 transferred to the Iowa ABLE savings plan trust account of a 5 designated beneficiary who is also the beneficiary of any such 6 trust, in accordance with the applicable provisions of chapters 7 633C, 634A, and this chapter. 8 Sec. 6. Section 12I.4, subsection 3, Code 2021, is amended 9 to read as follows: 10 3. Moneys in the account of a designated beneficiary may 11 shall not be claimed by the Iowa Medicaid program as provided 12 authorized in section 529A(f) of the Internal Revenue Code and 13 subject to limitations imposed by the treasurer of state unless 14 such claim is required to maintain qualified ABLE program 15 status under section 529A of the Internal Revenue Code . 16 Sec. 7. Section 249A.53, Code 2021, is amended by adding the 17 following new subsection: 18 NEW SUBSECTION . 3. a. Following the death of an individual 19 who is a designated beneficiary of an account established under 20 a participation agreement pursuant to chapter 12I, all of the 21 following shall apply to the extent permitted pursuant to 22 chapter 12I and under federal law including section 529A of the 23 Internal Revenue Code: 24 (1) The department shall not seek recovery of any account 25 balance remaining in the designated beneficiary’s account for 26 medical assistance paid to or on behalf of the designated 27 beneficiary on or after the date the participation agreement 28 was entered into and the account established for the designated 29 beneficiary. 30 (2) The department shall not file a claim for payment under 31 section 529A(f) of the Internal Revenue Code. 32 (3) Any account balance remaining in the designated 33 beneficiary’s account may be transferred to an account for 34 another eligible individual specified by the designated 35 -2- SF527.1773 (1) 89 (amending this SF 527 to CONFORM to HF 835) pf/rh 2/ 4

beneficiary, or if another eligible beneficiary is not so 1 designated, then the account balance shall be transferred to 2 the estate of the designated beneficiary or to the successor 3 as defined in section 633.356. 4 b. For the purposes of this section, “designated 5 beneficiary” , “Internal Revenue Code” , and “participation 6 agreement” mean the same as defined in section 12I.1. 7 c. For the purposes of this section, “eligible individual” 8 means the same as defined in section 529A of the Internal 9 Revenue Code. 10 Sec. 8. Section 633C.2, Code 2021, is amended to read as 11 follows: 12 633C.2 Disposition of medical assistance special needs 13 trusts. 14 Any income or assets added to or received by and any income 15 or principal retained in a medical assistance special needs 16 trust shall be used in accordance with a standard that is 17 no more restrictive than specified under federal law. All 18 distributions from a medical assistance special needs trust 19 shall be for the sole benefit of the beneficiary to enhance 20 the quality of life of the beneficiary, and the trustee shall 21 have sole discretion regarding such disbursements to ensure 22 compliance with beneficiary eligibility requirements. Any 23 funds retained in the medical assistance special needs trust of 24 a beneficiary who is also a designated beneficiary as defined 25 in section 12I.1 may be transferred to the Iowa ABLE savings 26 plan trust account of the designated beneficiary in accordance 27 with this chapter and chapter 12I. Any distinct disbursement 28 in excess of one thousand dollars shall be subject to review by 29 the district court sitting in probate. The department shall 30 adopt rules pursuant to chapter 17A for the establishment and 31 disposition of medical assistance special needs trusts in 32 accordance with this section . 33 Sec. 9. Section 634A.2, Code 2021, is amended by adding the 34 following new subsection: 35 -3- SF527.1773 (1) 89 (amending this SF 527 to CONFORM to HF 835) pf/rh 3/ 4

NEW SUBSECTION . 8. Any funds retained in a supplemental 1 needs trust of a beneficiary who is also a designated 2 beneficiary as defined in section 12I.1 may be transferred to 3 the Iowa ABLE savings plan trust account of the designated 4 beneficiary in accordance with this chapter and chapter 12I. > 5 ______________________________ MARK COSTELLO -4- SF527.1773 (1) 89 (amending this SF 527 to CONFORM to HF 835) pf/rh 4/ 4