House File 2667 - Introduced HOUSE FILE 2667 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 2537) (SUCCESSOR TO HSB 626) A BILL FOR An Act relating to the treasurer of state’s duties, including 1 Iowa educational savings plan trust and Iowa ABLE savings 2 plan trust requirements and disposition of unclaimed 3 property, and including retroactive applicability 4 provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5342HZ (1) 90 cm/jh

H.F. 2667 DIVISION I 1 IOWA EDUCATIONAL SAVINGS PLAN TRUST 2 Section 1. Section 12D.3, subsection 1, Code 2024, is 3 amended to read as follows: 4 1. Each participation agreement may require a participant 5 to agree to invest a specific amount of money in the trust 6 for a specific period of time for the benefit of a specific 7 beneficiary. A participant shall not be required to make an 8 annual contribution on behalf of a beneficiary. The maximum 9 contribution that may be deducted for Iowa income tax purposes 10 shall not exceed two five thousand five hundred dollars per 11 beneficiary per year adjusted annually to reflect increases 12 in the consumer higher education price index , rounded up to 13 the nearest fifty or hundred dollars . The treasurer of state 14 shall set an account balance limit to maintain compliance with 15 section 529 of the Internal Revenue Code. A contribution shall 16 not be permitted to the extent it causes the aggregate balance 17 of all accounts established for the same beneficiary under the 18 trust to exceed the applicable account balance limit. 19 Sec. 2. Section 422.7, subsection 22, paragraph c, 20 subparagraph (1), Code 2024, is amended by adding the following 21 new subparagraph division: 22 NEW SUBPARAGRAPH DIVISION . (g) A direct trustee-to-trustee 23 transfer to a Roth individual retirement account in accordance 24 with the rules under section 529(c)(3)(E) of the Internal 25 Revenue Code. 26 Sec. 3. RETROACTIVE APPLICABILITY. This division of this 27 Act applies retroactively to January 1, 2024, for tax years 28 beginning on or after that date. 29 DIVISION II 30 DISPOSITION OF UNCLAIMED PROPERTY 31 Sec. 4. Section 556.12, subsection 1, Code 2024, is amended 32 to read as follows: 33 1. If a report has been filed with the treasurer of state, 34 or property has been paid or delivered to the treasurer of 35 -1- LSB 5342HZ (1) 90 cm/jh 1/ 4

H.F. 2667 state, for the fiscal year ending on June 30 or, in the case of 1 unclaimed demutualization proceeds, for the preceding calendar 2 year as required by section 556.11 , the treasurer of state 3 shall provide may do any of the following: 4 a. Provide for the publication annually of at least 5 one notice not later than the following November 30. Each 6 notice shall may be published at least once each week for two 7 successive weeks in an English language newspaper of general 8 circulation in the county in this state in which is located the 9 last known address of any person to be named in the notice. 10 If an address is not listed or if the address is outside this 11 state, the notice shall may be published in the county in which 12 the holder of the abandoned property has its principal place 13 of business within this state. 14 b. Publish information to make the public aware of 15 the existence of unclaimed property and the treasurer of 16 state’s unclaimed property program in a newspaper in general 17 circulation in the state. 18 Sec. 5. Section 556.19, Code 2024, is amended to read as 19 follows: 20 556.19 Claim Procedure for abandoned property paid or 21 delivered. 22 1. Any person claiming an interest in any property delivered 23 to the state under this chapter may file a claim thereto or to 24 the proceeds from the sale thereof on the form prescribed by 25 the state treasurer. 26 2. Notwithstanding subsection 1, the treasurer of state 27 may waive the requirement of a claim form and pay or deliver 28 property directly to a person if the person receiving the 29 property or payment is shown to be the apparent owner included 30 on a report filed under section 556.11 and the treasurer of 31 state reasonably believes the person is entitled to receive 32 the property or payment. The treasurer of state may use state 33 tax information to assist in identifying the owner of property 34 that has been abandoned as provided under this chapter or in 35 -2- LSB 5342HZ (1) 90 cm/jh 2/ 4

H.F. 2667 verifying a claim filed under this chapter. 1 EXPLANATION 2 The inclusion of this explanation does not constitute agreement with 3 the explanation’s substance by the members of the general assembly. 4 This bill relates the treasurer of state’s duties, 5 including Iowa educational savings plan trust requirements and 6 disposition of unclaimed property. 7 DIVISION I —— IOWA EDUCATIONAL SAVINGS PLAN TRUST. The 8 bill increases the maximum contribution to a beneficiary’s 9 529 account that may be deducted for income tax purposes to 10 $5,500 per year. The maximum deduction for tax year 2023 is 11 $3,785. Additionally, under current law the maximum deduction 12 is adjusted annually to reflect increases in the consumer price 13 index. Under the bill, such adjustments will instead reflect 14 increases in the higher education price index rounded up to 15 the nearest $50 or $100. By operation of law, the bill also 16 increases the maximum deduction amount available in an Iowa 17 ABLE savings plan trust to the same amount for the current and 18 future years. 19 The bill also provides that a transfer made in a direct 20 trustee-to-trustee transfer from a 529 account to a Roth 21 individual retirement account in accordance with the rules 22 under the federal Internal Revenue Code section 529(c)(3)(E) 23 are exempt from state individual income taxation. 24 The division of the bill applies retroactively to January 1, 25 2024, for the tax year beginning on or after that date. 26 DIVISION II —— DISPOSITION OF UNCLAIMED PROPERTY. The bill 27 removes the requirement for publication of public notice by the 28 treasurer for abandoned property, instead making it optional 29 and at the discretion of the treasurer. 30 The bill provides that the treasurer may pay or deliver 31 property directly to a person if the person receiving the 32 property or payment is shown to be the apparent owner included 33 on a report for abandoned property and the treasurer reasonably 34 believes the person is entitled to receive the property or 35 -3- LSB 5342HZ (1) 90 cm/jh 3/ 4