Senate File 527 - Introduced SENATE FILE 527 BY COMMITTEE ON HUMAN RESOURCES (SUCCESSOR TO SSB 1228) A BILL FOR An Act relating to trusts for persons with disabilities. 1 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 2 TLSB 1093SV (2) 89 pf/rh

S.F. 527 Section 1. Section 12I.1, subsection 2, paragraphs b and g, 1 Code 2021, are amended to read as follows: 2 b. “Account owner” means an individual who enters into is 3 the designated beneficiary under a participation agreement 4 under this chapter for the payment of qualified disability 5 expenses on behalf of a the designated beneficiary. 6 g. “Participation agreement” means an agreement between 7 the account owner and establishing an account with the trust 8 entered into under this chapter . 9 Sec. 2. Section 12I.2, subsection 7, Code 2021, is amended 10 to read as follows: 11 7. Enter into participation agreements with account owners . 12 Sec. 3. Section 12I.3, unnumbered paragraph 1, Code 2021, 13 is amended to read as follows: 14 On or after July 1, 2016, the trust may enter into 15 participation agreements with account owners pursuant to the 16 following terms and agreements: 17 Sec. 4. Section 12I.3, subsection 1, paragraph b, Code 2021, 18 is amended to read as follows: 19 b. Unless otherwise permitted under section 529A of the 20 Internal Revenue Code, the account owner must also be the 21 designated beneficiary of the account. However, a trustee or 22 legal guardian may be designated as custodian of an account for 23 a designated beneficiary who is a minor or who lacks capacity 24 to enter into a participation agreement if such designation 25 is not prohibited under section 529A of the Internal Revenue 26 Code . A person other than the account owner may enter into 27 a participation agreement and have signature authority over 28 the account on behalf of the account owner in accordance with 29 section 529A of the Internal Revenue Code and regulations 30 promulgated under that section. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 This bill relates to trusts for persons with disabilities. 35 -1- LSB 1093SV (2) 89 pf/rh 1/ 3

S.F. 527 The bill amends provisions under Code chapter 12I 1 (disabilities expenses savings plan trust), also known as the 2 Iowa ABLE savings plan trust, relating to persons eligible 3 to enter into a participation agreement and have signature 4 authority over an account on behalf of an eligible individual. 5 The Internal Revenue Code final regulations for qualified 6 ABLE programs published November 19, 2020, in part, broadened 7 the categories of people who may establish an ABLE account 8 for an eligible individual to provide greater flexibility 9 and reduce the burden on the eligible individual. The 10 final regulations permit an ABLE account to be established 11 by the eligible individual, a person selected by the 12 eligible individual, or if the eligible individual is 13 unable to establish the individual’s own account, by the 14 individual’s agent under a power of attorney or, if none, by 15 a conservator or legal guardian, spouse, parent, sibling, 16 grandparent, or a representative payee appointed by the 17 Social Security Administration, in that order. Additionally, 18 the final regulations allow the ABLE program to rely on 19 self-certification of the individual establishing the 20 account for their basis of authority and priority. The final 21 regulations also provide for signatory authority over the ABLE 22 account by the designated beneficiary, an individual other than 23 the designated beneficiary who establishes the account, or a 24 person selected by the beneficiary. 25 The bill provides that a person other than the account owner 26 may enter into a participation agreement and have signature 27 authority over the account on behalf of the account owner in 28 accordance with the Internal Revenue Code and regulations 29 promulgated under federal law. 30 The disabilities expenses savings plan trust is also known 31 as the Iowa ABLE savings plan trust which was established as 32 a qualified ABLE program under section 529A of the Internal 33 Revenue Code. The purpose of ABLE savings accounts is to 34 encourage and assist individuals and families in saving 35 -2- LSB 1093SV (2) 89 pf/rh 2/ 3

S.F. 527 private funds for the purpose of supporting individuals with 1 disabilities to maintain health, independence, and quality 2 of life and to provide secure funding for disability-related 3 expenses on behalf of designated beneficiaries with 4 disabilities that will supplement, but not supplant, benefits 5 provided through private insurance, the Medicaid program, 6 the federal supplemental security income program, and other 7 sources. ABLE savings accounts allow eligible individuals the 8 opportunity to save and fund a variety of qualified disability 9 expenses without endangering eligibility for certain benefits 10 such as Medicaid and supplemental security income. 11 -3- LSB 1093SV (2) 89 pf/rh 3/ 3