House
File
835
-
Enrolled
House
File
835
AN
ACT
RELATING
TO
TRUSTS
FOR
PERSONS
WITH
DISABILITIES.
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
Section
1.
Section
12I.1,
subsection
2,
paragraphs
b
and
g,
Code
2021,
are
amended
to
read
as
follows:
b.
“Account
owner”
means
an
individual
who
enters
into
is
the
designated
beneficiary
under
a
participation
agreement
under
this
chapter
for
the
payment
of
qualified
disability
expenses
on
behalf
of
a
the
designated
beneficiary.
g.
“Participation
agreement”
means
an
agreement
between
the
account
owner
and
establishing
an
account
with
the
trust
entered
into
under
this
chapter
.
Sec.
2.
Section
12I.2,
subsection
7,
Code
2021,
is
amended
to
read
as
follows:
7.
Enter
into
participation
agreements
with
account
owners
.
Sec.
3.
Section
12I.3,
unnumbered
paragraph
1,
Code
2021,
is
amended
to
read
as
follows:
On
or
after
July
1,
2016,
the
trust
may
enter
into
participation
agreements
with
account
owners
pursuant
to
the
following
terms
and
agreements:
Sec.
4.
Section
12I.3,
subsection
1,
paragraph
b,
Code
2021,
is
amended
to
read
as
follows:
b.
Unless
otherwise
permitted
under
section
529A
of
the
Internal
Revenue
Code,
the
account
owner
must
also
be
the
designated
beneficiary
of
the
account.
However,
a
trustee
or
legal
guardian
may
be
designated
as
custodian
of
an
account
for
House
File
835,
p.
2
a
designated
beneficiary
who
is
a
minor
or
who
lacks
capacity
to
enter
into
a
participation
agreement
if
such
designation
is
not
prohibited
under
section
529A
of
the
Internal
Revenue
Code
.
A
person
other
than
the
account
owner
may
enter
into
a
participation
agreement
and
have
signature
authority
over
the
account
on
behalf
of
the
account
owner
in
accordance
with
section
529A
of
the
Internal
Revenue
Code
and
regulations
promulgated
under
that
section.
Sec.
5.
Section
12I.3,
subsection
1,
Code
2021,
is
amended
by
adding
the
following
new
paragraph:
NEW
PARAGRAPH
.
g.
Any
funds
retained
in
a
medical
assistance
special
needs
trust
pursuant
to
chapter
633C,
or
in
a
supplemental
needs
trust
pursuant
to
chapter
634A,
may
be
transferred
to
the
Iowa
ABLE
savings
plan
trust
account
of
a
designated
beneficiary
who
is
also
the
beneficiary
of
any
such
trust,
in
accordance
with
the
applicable
provisions
of
chapters
633C,
634A,
and
this
chapter.
Sec.
6.
Section
12I.4,
subsection
3,
Code
2021,
is
amended
to
read
as
follows:
3.
Moneys
in
the
account
of
a
designated
beneficiary
may
shall
not
be
claimed
by
the
Iowa
Medicaid
program
as
provided
authorized
in
section
529A(f)
of
the
Internal
Revenue
Code
and
subject
to
limitations
imposed
by
the
treasurer
of
state
unless
such
claim
is
required
to
maintain
qualified
ABLE
program
status
under
section
529A
of
the
Internal
Revenue
Code
.
Sec.
7.
Section
249A.53,
Code
2021,
is
amended
by
adding
the
following
new
subsection:
NEW
SUBSECTION
.
3.
a.
Following
the
death
of
an
individual
who
is
a
designated
beneficiary
of
an
account
established
under
a
participation
agreement
pursuant
to
chapter
12I,
all
of
the
following
shall
apply
to
the
extent
permitted
pursuant
to
chapter
12I
and
under
federal
law
including
section
529A
of
the
Internal
Revenue
Code:
(1)
The
department
shall
not
seek
recovery
of
any
account
balance
remaining
in
the
designated
beneficiary’s
account
for
medical
assistance
paid
to
or
on
behalf
of
the
designated
beneficiary
on
or
after
the
date
the
participation
agreement
was
entered
into
and
the
account
established
for
the
designated
beneficiary.
House
File
835,
p.
3
(2)
The
department
shall
not
file
a
claim
for
payment
under
section
529A(f)
of
the
Internal
Revenue
Code.
(3)
Any
account
balance
remaining
in
the
designated
beneficiary’s
account
may
be
transferred
to
an
account
for
another
eligible
individual
specified
by
the
designated
beneficiary,
or
if
another
eligible
beneficiary
is
not
so
designated,
then
the
account
balance
shall
be
transferred
to
the
estate
of
the
designated
beneficiary
or
to
the
successor
as
defined
in
section
633.356.
b.
For
the
purposes
of
this
section,
“designated
beneficiary”
,
“Internal
Revenue
Code”
,
and
“participation
agreement”
mean
the
same
as
defined
in
section
12I.1.
c.
For
the
purposes
of
this
section,
“eligible
individual”
means
the
same
as
defined
in
section
529A
of
the
Internal
Revenue
Code.
Sec.
8.
Section
633C.2,
Code
2021,
is
amended
to
read
as
follows:
633C.2
Disposition
of
medical
assistance
special
needs
trusts.
Any
income
or
assets
added
to
or
received
by
and
any
income
or
principal
retained
in
a
medical
assistance
special
needs
trust
shall
be
used
in
accordance
with
a
standard
that
is
no
more
restrictive
than
specified
under
federal
law.
All
distributions
from
a
medical
assistance
special
needs
trust
shall
be
for
the
sole
benefit
of
the
beneficiary
to
enhance
the
quality
of
life
of
the
beneficiary,
and
the
trustee
shall
have
sole
discretion
regarding
such
disbursements
to
ensure
compliance
with
beneficiary
eligibility
requirements.
Any
funds
retained
in
the
medical
assistance
special
needs
trust
of
a
beneficiary
who
is
also
a
designated
beneficiary
as
defined
in
section
12I.1
may
be
transferred
to
the
Iowa
ABLE
savings
plan
trust
account
of
the
designated
beneficiary
in
accordance
with
this
chapter
and
chapter
12I.
Any
distinct
disbursement
in
excess
of
one
thousand
dollars
shall
be
subject
to
review
by
the
district
court
sitting
in
probate.
The
department
shall
adopt
rules
pursuant
to
chapter
17A
for
the
establishment
and
disposition
of
medical
assistance
special
needs
trusts
in
accordance
with
this
section
.
Sec.
9.
Section
634A.2,
Code
2021,
is
amended
by
adding
the
House
File
835,
p.
4
following
new
subsection:
NEW
SUBSECTION
.
8.
Any
funds
retained
in
a
supplemental
needs
trust
of
a
beneficiary
who
is
also
a
designated
beneficiary
as
defined
in
section
12I.1
may
be
transferred
to
the
Iowa
ABLE
savings
plan
trust
account
of
the
designated
beneficiary
in
accordance
with
this
chapter
and
chapter
12I.
______________________________
PAT
GRASSLEY
Speaker
of
the
House
______________________________
JAKE
CHAPMAN
President
of
the
Senate
I
hereby
certify
that
this
bill
originated
in
the
House
and
is
known
as
House
File
835,
Eighty-ninth
General
Assembly.
______________________________
MEGHAN
NELSON
Chief
Clerk
of
the
House
Approved
_______________,
2021
______________________________
KIM
REYNOLDS
Governor