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Senate Study Bill 3116 - IntroducedA Bill ForAn Act 1relating to the treasurer of state’s duties, including
2Iowa educational savings plan trust and Iowa ABLE savings
3plan trust requirements and disposition of unclaimed
4property, and including effective date and retroactive
5applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2IOWA EDUCATIONAL SAVINGS PLAN TRUST
3 Section 1. Section 12D.3, subsection 1, Code 2024, is
4amended to read as follows:
51. Each participation agreement may require a participant
6to agree to invest a specific amount of money in the trust
7for a specific period of time for the benefit of a specific
8beneficiary. A participant shall not be required to make an
9annual contribution on behalf of a beneficiary. The maximum
10contribution that may be deducted for Iowa income tax purposes
11shall not exceed two five thousand five hundred dollars per
12beneficiary per year adjusted annually to reflect increases
13in the consumer higher education price index, rounded up to
14the nearest fifty or hundred dollars. The treasurer of state
15shall set an account balance limit to maintain compliance with
16section 529 of the Internal Revenue Code. A contribution shall
17not be permitted to the extent it causes the aggregate balance
18of all accounts established for the same beneficiary under the
19trust to exceed the applicable account balance limit.
20 Sec. 2. Section 422.7, subsection 22, paragraph c,
21subparagraph (1), Code 2024, is amended by adding the following
22new subparagraph division:
23 NEW SUBPARAGRAPH DIVISION. (g) A direct trustee-to-trustee
24transfer to a Roth individual retirement account in accordance
25with the rules under section 529(c)(3)(E) of the Internal
26Revenue Code.
27 Sec. 3. RETROACTIVE APPLICABILITY. This division of this
28Act applies retroactively to January 1, 2024, for tax years
29beginning on or after that date.
30DIVISION II
31DISPOSITION OF UNCLAIMED PROPERTY
32 Sec. 4. Section 556.1, Code 2024, is amended by adding the
33following new subsection:
34 NEW SUBSECTION. 15. “Virtual currency” means a digital
35representation of value, other than a representation of the
-1-1United States dollar or a foreign currency, that functions
2as a unit of account, a store of value, and a medium of
3exchange that uses cryptography to secure transactions that
4are digitally recorded on a distributed ledger, such as a
5blockchain.
6 Sec. 5. NEW SECTION. 556.2D Unclaimed virtual currency.
71. The treasurer of state shall, in accordance with chapter
817A, adopt rules as are necessary for the method of delivery,
9transfer, maintenance, and sale of virtual currency that is
10presumed abandoned.
112. The treasurer of state may decline to accept virtual
12currency deemed abandoned if the treasurer of state determines
13that the virtual currency is not freely transferable, is of
14nominal value, or the value is less than the estimated expenses
15of maintenance, notice, or sale of the property.
163. The treasurer of state may direct a holder of virtual
17currency to sell virtual currency in conjunction with the
18holders’ reporting. A holder that sells virtual currency at
19the direction of the treasurer of state shall be entitled to
20the protections provided under section 556.13, provided that
21the holder has complied with the notice provisions of section
22556.2 and has otherwise acted in good faith.
23 Sec. 6. Section 556.11, subsection 5, Code 2024, is amended
24to read as follows:
255. a. If the holder of property presumed abandoned
26under this chapter knows the whereabouts of the owner and
27if the owner’s claim has not been barred by the statute of
28limitations, the holder shall, before filing the annual report,
29communicate with the owner and take necessary steps to prevent
30abandonment from being presumed. The holder shall exercise due
31diligence to ascertain the whereabouts of the owner.
32b. If the property presumed abandoned is securities, a
33brokerage account, or virtual currency, the holder of property
34shall provide notice to the owner that the owner’s holdings may
35be liquidated either prior to or subsequent to reporting to
-2-1the state, after which the owner will be entitled to claim the
2proceeds of sale only.
3c. A holder is not required to make a due diligence mailing
4to owners whose property has an aggregate value of less than
5fifty dollars.
6d. The treasurer of state may charge a holder that fails to
7timely exercise due diligence, as required in this subsection,
8five dollars for each name and address account reported if
9thirty-five percent or more of the accounts are claimed within
10the twenty-four months immediately following the filing of the
11holder report.
12 Sec. 7. Section 556.12, subsection 1, Code 2024, is amended
13to read as follows:
141. If a report has been filed with the treasurer of state,
15or property has been paid or delivered to the treasurer of
16state, for the fiscal year ending on June 30 or, in the case of
17unclaimed demutualization proceeds, for the preceding calendar
18year as required by section 556.11, the treasurer of state
19shall provide may do any of the following:
20a. Providefor the publication annually of at least
21one notice not later than the following November 30. Each
22notice shall may be published at least once each week for two
23successive weeks in an English language newspaper of general
24circulation in the county in this state in which is located the
25last known address of any person to be named in the notice.
26If an address is not listed or if the address is outside this
27state, the notice shall may be published in the county in which
28the holder of the abandoned property has its principal place
29of business within this state.
30b. Publish information to make the public aware of
31the existence of unclaimed property and the treasurer of
32state’s unclaimed property program in a newspaper in general
33circulation in the state.
34 Sec. 8. Section 556.19, Code 2024, is amended to read as
35follows:
-3- 1556.19 Claim Procedure for abandoned property paid or
2delivered.
31. Any person claiming an interest in any property delivered
4to the state under this chapter may file a claim thereto or to
5the proceeds from the sale thereof on the form prescribed by
6the state treasurer.
72. Notwithstanding subsection 1, the treasurer of state
8may waive the requirement of a claim form and pay or deliver
9property directly to a person if the person receiving the
10property or payment is shown to be the apparent owner included
11on a report filed under section 556.11 and the treasurer of
12state reasonably believes the person is entitled to receive
13the property or payment. The treasurer of state may use state
14tax information to assist in identifying the owner of property
15that has been abandoned as provided under this chapter or in
16verifying a claim filed under this chapter.
17EXPLANATION
18The inclusion of this explanation does not constitute agreement with
19the explanation’s substance by the members of the general assembly.
20This bill relates the treasurer of state’s duties,
21including Iowa educational savings plan trust requirements and
22disposition of unclaimed property.
23DIVISION I — IOWA EDUCATIONAL SAVINGS PLAN TRUST. The
24bill increases the maximum contribution to a beneficiary’s
25529 account that may be deducted for income tax purposes to
26$5,500 per year. The maximum deduction for tax year 2023 is
27$3,785. Additionally, under current law the maximum deduction
28is adjusted annually to reflect increases in the consumer price
29index. Under the bill, such adjustments will instead reflect
30increases in the higher education price index rounded up to
31the nearest $50 or $100. By operation of law, the bill also
32increases the maximum deduction amount available in an Iowa
33ABLE savings plan trust to the same amount for the current and
34future years.
35The bill also provides that a transfer made in a direct
-4-1trustee-to-trustee transfer from a 529 account to a Roth
2individual retirement account in accordance with the rules
3under the federal Internal Revenue Code section 529(c)(3)(E)
4are exempt from state individual income taxation.
5The division of the bill applies retroactively to January 1,
62024, for the tax year beginning on or after that date.
7DIVISION II — DISPOSITION OF UNCLAIMED PROPERTY. The bill
8creates regulations that are necessary for the methods of
9delivery, transfer, maintenance, and sale of virtual currency
10that is presumed abandoned. The bill allows the treasurer
11of state (treasurer) to decline to accept abandoned virtual
12currency if the treasurer of state determines that the virtual
13currency is (1) not freely transferable, (2) of nominal
14value, or (3) the value is less than the estimated expenses of
15maintenance, notice, or sale of the property. The bill allows
16the treasurer to sell abandoned virtual currency.
17The bill provides that the holder of property that are
18securities, brokerage accounts, or virtual currency shall
19provide notice to the owner that the holdings may be liquidated
20either prior to or subsequent to reporting to the state and
21will only be entitled to claim the proceeds of sale.
22The bill removes the requirement for publication of public
23notice by the treasurer for abandoned property, instead making
24it optional and at the discretion of the treasurer.
25The bill provides that the treasurer may pay or deliver
26property directly to a person if the person receiving the
27property or payment is shown to be the apparent owner included
28on a report for abandoned property and the treasurer reasonably
29believes the person is entitled to receive the property or
30payment. The treasurer may use state tax information to assist
31in identifying the owner of property.
-5-cm/jh
2Iowa educational savings plan trust and Iowa ABLE savings
3plan trust requirements and disposition of unclaimed
4property, and including effective date and retroactive
5applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2IOWA EDUCATIONAL SAVINGS PLAN TRUST
3 Section 1. Section 12D.3, subsection 1, Code 2024, is
4amended to read as follows:
51. Each participation agreement may require a participant
6to agree to invest a specific amount of money in the trust
7for a specific period of time for the benefit of a specific
8beneficiary. A participant shall not be required to make an
9annual contribution on behalf of a beneficiary. The maximum
10contribution that may be deducted for Iowa income tax purposes
11shall not exceed two five thousand five hundred dollars per
12beneficiary per year adjusted annually to reflect increases
13in the consumer higher education price index, rounded up to
14the nearest fifty or hundred dollars. The treasurer of state
15shall set an account balance limit to maintain compliance with
16section 529 of the Internal Revenue Code. A contribution shall
17not be permitted to the extent it causes the aggregate balance
18of all accounts established for the same beneficiary under the
19trust to exceed the applicable account balance limit.
20 Sec. 2. Section 422.7, subsection 22, paragraph c,
21subparagraph (1), Code 2024, is amended by adding the following
22new subparagraph division:
23 NEW SUBPARAGRAPH DIVISION. (g) A direct trustee-to-trustee
24transfer to a Roth individual retirement account in accordance
25with the rules under section 529(c)(3)(E) of the Internal
26Revenue Code.
27 Sec. 3. RETROACTIVE APPLICABILITY. This division of this
28Act applies retroactively to January 1, 2024, for tax years
29beginning on or after that date.
30DIVISION II
31DISPOSITION OF UNCLAIMED PROPERTY
32 Sec. 4. Section 556.1, Code 2024, is amended by adding the
33following new subsection:
34 NEW SUBSECTION. 15. “Virtual currency” means a digital
35representation of value, other than a representation of the
-1-1United States dollar or a foreign currency, that functions
2as a unit of account, a store of value, and a medium of
3exchange that uses cryptography to secure transactions that
4are digitally recorded on a distributed ledger, such as a
5blockchain.
6 Sec. 5. NEW SECTION. 556.2D Unclaimed virtual currency.
71. The treasurer of state shall, in accordance with chapter
817A, adopt rules as are necessary for the method of delivery,
9transfer, maintenance, and sale of virtual currency that is
10presumed abandoned.
112. The treasurer of state may decline to accept virtual
12currency deemed abandoned if the treasurer of state determines
13that the virtual currency is not freely transferable, is of
14nominal value, or the value is less than the estimated expenses
15of maintenance, notice, or sale of the property.
163. The treasurer of state may direct a holder of virtual
17currency to sell virtual currency in conjunction with the
18holders’ reporting. A holder that sells virtual currency at
19the direction of the treasurer of state shall be entitled to
20the protections provided under section 556.13, provided that
21the holder has complied with the notice provisions of section
22556.2 and has otherwise acted in good faith.
23 Sec. 6. Section 556.11, subsection 5, Code 2024, is amended
24to read as follows:
255. a. If the holder of property presumed abandoned
26under this chapter knows the whereabouts of the owner and
27if the owner’s claim has not been barred by the statute of
28limitations, the holder shall, before filing the annual report,
29communicate with the owner and take necessary steps to prevent
30abandonment from being presumed. The holder shall exercise due
31diligence to ascertain the whereabouts of the owner.
32b. If the property presumed abandoned is securities, a
33brokerage account, or virtual currency, the holder of property
34shall provide notice to the owner that the owner’s holdings may
35be liquidated either prior to or subsequent to reporting to
-2-1the state, after which the owner will be entitled to claim the
2proceeds of sale only.
3c. A holder is not required to make a due diligence mailing
4to owners whose property has an aggregate value of less than
5fifty dollars.
6d. The treasurer of state may charge a holder that fails to
7timely exercise due diligence, as required in this subsection,
8five dollars for each name and address account reported if
9thirty-five percent or more of the accounts are claimed within
10the twenty-four months immediately following the filing of the
11holder report.
12 Sec. 7. Section 556.12, subsection 1, Code 2024, is amended
13to read as follows:
141. If a report has been filed with the treasurer of state,
15or property has been paid or delivered to the treasurer of
16state, for the fiscal year ending on June 30 or, in the case of
17unclaimed demutualization proceeds, for the preceding calendar
18year as required by section 556.11, the treasurer of state
19shall provide may do any of the following:
20a. Providefor the publication annually of at least
21one notice not later than the following November 30. Each
22notice shall may be published at least once each week for two
23successive weeks in an English language newspaper of general
24circulation in the county in this state in which is located the
25last known address of any person to be named in the notice.
26If an address is not listed or if the address is outside this
27state, the notice shall may be published in the county in which
28the holder of the abandoned property has its principal place
29of business within this state.
30b. Publish information to make the public aware of
31the existence of unclaimed property and the treasurer of
32state’s unclaimed property program in a newspaper in general
33circulation in the state.
34 Sec. 8. Section 556.19, Code 2024, is amended to read as
35follows:
-3- 1556.19 Claim Procedure for abandoned property paid or
2delivered.
31. Any person claiming an interest in any property delivered
4to the state under this chapter may file a claim thereto or to
5the proceeds from the sale thereof on the form prescribed by
6the state treasurer.
72. Notwithstanding subsection 1, the treasurer of state
8may waive the requirement of a claim form and pay or deliver
9property directly to a person if the person receiving the
10property or payment is shown to be the apparent owner included
11on a report filed under section 556.11 and the treasurer of
12state reasonably believes the person is entitled to receive
13the property or payment. The treasurer of state may use state
14tax information to assist in identifying the owner of property
15that has been abandoned as provided under this chapter or in
16verifying a claim filed under this chapter.
17EXPLANATION
18The inclusion of this explanation does not constitute agreement with
19the explanation’s substance by the members of the general assembly.
20This bill relates the treasurer of state’s duties,
21including Iowa educational savings plan trust requirements and
22disposition of unclaimed property.
23DIVISION I — IOWA EDUCATIONAL SAVINGS PLAN TRUST. The
24bill increases the maximum contribution to a beneficiary’s
25529 account that may be deducted for income tax purposes to
26$5,500 per year. The maximum deduction for tax year 2023 is
27$3,785. Additionally, under current law the maximum deduction
28is adjusted annually to reflect increases in the consumer price
29index. Under the bill, such adjustments will instead reflect
30increases in the higher education price index rounded up to
31the nearest $50 or $100. By operation of law, the bill also
32increases the maximum deduction amount available in an Iowa
33ABLE savings plan trust to the same amount for the current and
34future years.
35The bill also provides that a transfer made in a direct
-4-1trustee-to-trustee transfer from a 529 account to a Roth
2individual retirement account in accordance with the rules
3under the federal Internal Revenue Code section 529(c)(3)(E)
4are exempt from state individual income taxation.
5The division of the bill applies retroactively to January 1,
62024, for the tax year beginning on or after that date.
7DIVISION II — DISPOSITION OF UNCLAIMED PROPERTY. The bill
8creates regulations that are necessary for the methods of
9delivery, transfer, maintenance, and sale of virtual currency
10that is presumed abandoned. The bill allows the treasurer
11of state (treasurer) to decline to accept abandoned virtual
12currency if the treasurer of state determines that the virtual
13currency is (1) not freely transferable, (2) of nominal
14value, or (3) the value is less than the estimated expenses of
15maintenance, notice, or sale of the property. The bill allows
16the treasurer to sell abandoned virtual currency.
17The bill provides that the holder of property that are
18securities, brokerage accounts, or virtual currency shall
19provide notice to the owner that the holdings may be liquidated
20either prior to or subsequent to reporting to the state and
21will only be entitled to claim the proceeds of sale.
22The bill removes the requirement for publication of public
23notice by the treasurer for abandoned property, instead making
24it optional and at the discretion of the treasurer.
25The bill provides that the treasurer may pay or deliver
26property directly to a person if the person receiving the
27property or payment is shown to be the apparent owner included
28on a report for abandoned property and the treasurer reasonably
29believes the person is entitled to receive the property or
30payment. The treasurer may use state tax information to assist
31in identifying the owner of property.
-5-cm/jh