H. R IN THE HOUSE OF REPRESENTATIVES

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1 I TH CONGRESS ST SESSION H. R. 0 To amend the Internal Revenue Code of to provide for the establishment of ABLE accounts for the care of family members with disabilities, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY, 00 Mr. CRENSHAW (for himself, Mr. MEEK of Florida, Mrs. MCMORRIS ROD- GERS, and Mr. KENNEDY) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of to provide for the establishment of ABLE accounts for the care of family members with disabilities, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION. SHORT TITLE. This Act may be cited as the Achieving a Better Life Experience Act of 00 or the ABLE Act of wwoods on PRODPC with BILLS 00. VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

2 0 0 SEC.. PURPOSES. The purposes of this Act are as follows: () To encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life. () To provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program under title XIX of the Social Security Act, the supplemental security income program under title XVI of such Act, the beneficiary s employment, and other sources. SEC.. ABLE ACCOUNTS. (a) ESTABLISHMENT. () IN GENERAL. Subchapter F of chapter of the Internal Revenue Code of (relating to exempt organizations) is amended by inserting after part VIII the following new part: PART IX SAVINGS FOR INDIVIDUALS WITH DISABILITIES Sec. 0A. ABLE Accounts. SEC. 0A. ABLE ACCOUNTS. wwoods on PRODPC with BILLS (a) GENERAL RULE. An ABLE account shall be exempt from taxation under this subtitle. Notwithstanding HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

3 wwoods on PRODPC with BILLS the preceding sentence, such account shall be subject to the taxes imposed by section (relating to imposition of tax on unrelated business income of charitable organiza- tions). (b) DEFINITIONS AND SPECIAL RULES. For pur- poses of this section () ABLE ACCOUNTS. The term ABLE ac- count means a trust created or organized in the United States (and designated as an ABLE account 0 at the time created or organized) exclusively for the purpose of paying qualified disability expenses of an individual who is an individual with a disability and who is the designated beneficiary of the trust, but only if the written governing instrument creating the trust meets the following requirements: (A) No contribution will be accepted (i) except in the case of rollover con- tributions described in subsection (c)() and sections (c)()(a)(ii), 0 0(d)()(A)(iii), (c)()(e), and 0(d)(), unless it is in cash, (ii) if such contribution would result in aggregate contributions for the taxable year and all preceding taxable years ex- ceeding $00,000, and HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

4 wwoods on PRODPC with BILLS (iii) after the date on which the ac- count holder attains the age of. (B) The trustee is (i) a bank (as defined in section 0(n)), (ii) the designated beneficiary, (iii) a parent or guardian of the des- ignated beneficiary, or (iv) a third-party appointed by the 0 designated beneficiary or a parent or guardian of the designated beneficiary (in- cluding a family member of the designated beneficiary or an organization that admin- isters pooled and special needs trusts) who demonstrates to the satisfaction of the Sec- retary that the manner in which that per- son will administer the trust will be con- sistent with the requirements of this sec- tion. 0 (C) No part of the trust assets will be in- vested in life insurance contracts. (D) The assets of the trust shall not be commingled with other property except in a common trust fund or common investment fund. HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

5 wwoods on PRODPC with BILLS (E) Except as provided in paragraph () or () of subsection (c), in the case that the designated beneficiary dies or ceases to be an individual with a disability, all amounts remain- ing in the trust not in excess of the amount equal to the total medical assistance paid for the designated beneficiary after the establish- ment of the trust under any State Medicaid plan established under title XIX of the Social 0 Security Act shall be distributed to such State. 0 () QUALIFIED DISABILITY EXPENSES. (A) IN GENERAL. The term qualified disability expenses means any expenses which (i) are made for the benefit of an individual with a disability who is a designated beneficiary of the trust, and (ii) approved under regulations established by the Secretary. (B) EXPENSES INCLUDED. The following expenses shall, to the extent provided under regulations established by the Secretary, be qualified disability expenses if made for the benefit of an individual with a disability who is a designated beneficiary of the trust: HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

6 wwoods on PRODPC with BILLS (iii) TRANSPORTATION. Expenses for transportation, including the use of mass transit, the purchase or modification of vehicles, and moving expenses. 0 (i) EDUCATION. Expenses for edu- cation, including tuition for preschool thru post-secondary education, books, supplies, and educational materials related to such education, tutors, and special education services. (ii) HOUSING. Expenses for hous- ing, including rent, mortgage payments, home improvements and modifications, 0 maintenance and repairs, real property taxes, and utility charges. (iv) EMPLOYMENT SUPPORT. Ex- penses related to obtaining and maintaining employment, including job-related training, assistive technology, and personal assistance supports. (v) HEALTH, PREVENTION, AND WELLNESS. Expenses for the health and wellness, including premiums for health insurance, medical, vision, and dental expenses, habilitation and rehabilitation serv- HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

7 0 0 ices, durable medical equipment, therapy, respite care, long term services and supports, and nutritional management. (vi) LIFE NECESSITIES. Expenses for life necessities, including clothing, activities which are religious, cultural, or recreational, supplies and equipment for personal care, community-based supports, communication services and devices, adaptive equipment, assistive technology, personal assistance supports, financial management and administrative services, expenses for oversight, monitoring, or advocacy, funeral and burial expenses. (vii) OTHER APPROVED EX- PENSES. Any other expenses which are approved by the Secretary under regulations and consistent with the purposes of this section. (viii) ASSISTIVE TECHNOLOGY AND PERSONAL SUPPORT SERVICES. Expenses for assistive technology and personal support with respect to any item described in clauses (i) through (vii). wwoods on PRODPC with BILLS HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

8 0 0 () INDIVIDUAL WITH A DISABILITY. An individual is an individual with a disability if such individual (A) would be eligible to receive supplemental security income benefits due to blindness or disability under title XVI of the Social Security Act, or disability benefits under Title II of the Social Security Act, notwithstanding (i) the income and assets tests and substantial gainful activity test required for eligibility for such benefits, and (ii) whether a determination has been made that such individual is blind or disabled, or (B) is eligible to receive or is deemed to be receiving supplemental security income benefits due to blindness or disability under title XVI of the Social Security Act, or disability benefits under title II of the Social Security Act. () RULES RELATING TO ESTATE AND GIFT TAX. Rules similar to the rules of paragraphs (), (), and () of section (c) shall apply for purposes of this section. wwoods on PRODPC with BILLS HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

9 wwoods on PRODPC with BILLS 0 0 HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0 () ONLY ACCOUNT PER QUALIFIED BENE- FICIARY. No individual may have more than ABLE account for an individual with a disability. (c) TAX TREATMENT OF DISTRIBUTIONS. () IN GENERAL. Except as otherwise provided in this subsection, any amount paid or distributed out of an ABLE account shall be included in gross income by the payee or distributee, as the case may be, for the taxable year in which received in the manner as provided in section. () DISTRIBUTIONS FOR BENEFIT OF DES- IGNATED BENEFICIARY. (A) IN GENERAL. No amount shall be includible in gross income under paragraph () if the qualified disability expenses of the designated beneficiary during the taxable year are not less than the aggregate distributions during the taxable year. (B) DISTRIBUTIONS IN EXCESS OF EX- PENSES. If such aggregate distributions exceed such expenses during the taxable year, the amount otherwise includible in gross income under paragraph () shall be reduced by the amount which bears the same ratio to the amount which would be includible in gross in-

10 wwoods on PRODPC with BILLS 0 come under paragraph () (without regard to this subparagraph) as the qualified disability expenses bear to such aggregate distributions. 0 0 (C) DISALLOWANCE OF EXCLUDED AMOUNTS AS DEDUCTION, CREDIT, OR EXCLU- SION. No deduction, credit, or exclusion shall be allowed to the taxpayer under any other section of this chapter for any qualified disability expenses to the extent taken into account in determining the amount of the exclusion under this paragraph. () ADDITIONAL TAX FOR DISTRIBUTIONS NOT USED FOR BENEFIT OF DESIGNATED BENE- FICIARY. (A) IN GENERAL. The tax imposed by this chapter for any taxable year on any taxpayer who receives a payment or distribution from an ABLE account shall be increased by 0 percent of the amount thereof which is includible in gross income under paragraph (). (B) EXCEPTION. Subparagraph (A) shall not apply if the payment or distribution is made to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary. HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

11 wwoods on PRODPC with BILLS 0 0 CERTAIN HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0 (C) CONTRIBUTIONS RETURNED BEFORE DATE. Subparagraph (A) shall not apply to the distribution of any contribution made during a taxable year if (i) such distribution is made before the 0th day after the date on which the contribution was made, and (ii) such distribution is accompanied by the amount of net income attributable to such excess contribution. Any net income described in clause (ii) shall be included in gross income for the taxable year in which such excess contribution was made. () ROLLOVERS. Paragraph () shall not apply to any amount paid or distributed from an ABLE account to the extent that the amount received is paid, not later than the 0th day after the date of such payment or distribution, into (A) another ABLE account for the benefit of (i) the same beneficiary, or (ii) an individual who (I) is the spouse of such individual with a disability, or bears a relationship to such individual with a

12 0 0 disability which is described in section (d)(), and (II) is also an individual with a disability, or (B) any trust which is described in subparagraph (A) or (C) of section (d)() of the Social Security Act and which is for the benefit of an individual described in clause (i) or (ii) of subparagraph (A). The preceding sentence shall not apply to any payment or distribution if it applied to any prior payment or distribution during the -month period ending on the date of the payment or distribution. () CHANGE IN BENEFICIARY. Any change in the beneficiary of an ABLE account shall not be treated as a distribution for purposes of paragraph () if the new beneficiary is an individual described in paragraph ()(A)(ii) as of the date of the change. (d) TAX TREATMENT OF ACCOUNTS. Rules similar to the rules of paragraphs () and () of section 0(e) shall apply to any ABLE account. (e) COMMUNITY PROPERTY LAWS. This section shall be applied without regard to any community property laws. wwoods on PRODPC with BILLS HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

13 0 0 (f) CUSTODIAL ACCOUNTS. For purposes of this section, a custodial account shall be treated as a trust if () the assets of such account are held by a bank (as defined in section 0(n)) or another person who demonstrates, to the satisfaction of the Secretary, that the manner in which he will administer the account will be consistent with the requirements of this section, and () the custodial account would, except for the fact that it is not a trust, constitute an account described in subsection (b)(). For purposes of this title, in the case of a custodial account treated as a trust by reason of the preceding sentence, the custodian of such account shall be treated as the trustee thereof. (g) REPORTS. The trustee of an ABLE account shall make such reports regarding such account to the Secretary and to the beneficiary of the account with respect to contributions, distributions, and such other matters as the Secretary may require. The reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required. (h) INFLATION ADJUSTMENT. wwoods on PRODPC with BILLS HR 0 IH VerDate Nov 00 0:0 Mar 0, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

14 wwoods on PRODPC with BILLS () IN GENERAL. In the case of any taxable year beginning after 00, the $00,000 dollar amount under subsection (b)()(a)(i)(ii) shall be in- creased by an amount equal to (A) such dollar amount, multiplied by (B) the cost of living adjustment deter- mined under section (f)() for the calendar year in which the taxable year begins, deter- mined by substituting calendar year 00 for 0 calendar year in subparagraph (B) thereof. () ROUNDING. If any amount as adjusted under paragraph () is not a multiple of $,000, such amount shall be rounded to the next lowest multiple of $,000. (i) REGULATIONS. The Secretary, in consultation with the Secretary of Health and Human Services, shall prescribe regulations to carry out the purposes of this sec- tion, including regulations 0 () to ensure that individuals do not have more than ABLE account, and () to prevent fraud and abuse with respect to amounts claimed as qualified disability expenses.. () CONFORMING AMENDMENTS. (A) TAX ON EXCESS CONTRIBUTIONS. HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

15 0 0 (i) IN GENERAL. Subsection (a) of section of the Internal Revenue Code of is amended by striking or at the end of paragraph (), by inserting or at the end of paragraph (), and by inserting after paragraph () the following new paragraph: () an ABLE account (within the meaning of section 0A),. (ii) EXCESS CONTRIBUTIONS. Sec- tion of such Code is amended by adding at the end the following new subsection: (h) EXCESS CONTRIBUTIONS TO ABLE AC- COUNTS. For purposes of this section, in the case of an ABLE account (within the meaning of section 0A), the term excess contributions means the sum of () the amount by which the sum of the amount contributed for the taxable year to such accounts plus such amounts contributed for all preceding taxable years exceeds the amount described in section 0A(b)()(A)(ii), and () the amount determined under this section for the preceding taxable year, reduced by the dis- wwoods on PRODPC with BILLS HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

16 0 0 tributions from such account which were includible in gross income under section 0A(c)(). For purposes of this section, an amount which is distributed out of an ABLE account in a distribution to which section 0A(c)()(C) applies shall be treated as an amount not contributed.. (B) TAX ON PROHIBITED TRANS- ACTIONS. (i) IN GENERAL. Paragraph () of section (e) of such Code (defining plan) is amended by redesignating subparagraph (G) as subparagraph (H), by striking or at the end of subparagraph (F), and by adding after subparagraph (F) the following: (G) an ABLE account described in section 0A, or. (ii) EXEMPTION. Subsection (d) of section of such Code (relating to exemptions) is amended by striking or at the end of paragraph (), by striking the period at the end of paragraph () and inserting ; or, and by inserting after paragraph () the following: wwoods on PRODPC with BILLS HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

17 wwoods on PRODPC with BILLS () in the case of an ABLE account, any transaction to provide housing or other services by a family member to or for the designated beneficiary of the trust to the extent that such transaction does not exceed the fair market value of the housing or service (as the case may be) provided (iii) SPECIAL RULE. Subsection (c) of section of such Code (relating to tax on prohibited transactions) is amended by adding at the end the following new paragraph: () SPECIAL RULE FOR ABLE ACCOUNTS. An individual for whose benefit an ABLE account is established and any contributor to such account shall be exempt from the tax imposed by this section with respect to any transaction concerning such account (which would otherwise be taxable under this section) if section 0A(d) applies with respect to such transaction.. (C) ROLLOVERS FROM CERTAIN OTHER TAX FAVORED ACCOUNTS. (i) QUALIFIED TUITION PROGRAMS. Paragraph () of section (c) of such Code is amended by adding at the end the following new subparagraph: HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

18 0 0 (E) CONTRIBUTIONS TO ABLE AC- COUNT. Subparagraph (A) shall not apply to that portion of any distribution which, within 0 days of such distribution, is contributed to an ABLE account for the benefit of the designated beneficiary.. (ii) EDUCATION SAVINGS AC- COUNTS. Subsection (d) of section 0 of such Code is amended by adding at the end the following new paragraph: (0) CONTRIBUTIONS TO ABLE ACCOUNT. Paragraph () shall not apply to any amount paid or distributed from a Coverdell education savings account to the extent that the amount received is paid, not later than the 0th day after the date of such payment or distribution, into an ABLE account for the benefit of the same beneficiary.. (iii) HEALTH SAVINGS ACCOUNTS. Subparagraph (A) of section (f)() is amended (I) by inserting (i) before into a health savings account, and (II) by inserting or (ii) into an ABLE account for the benefit of such wwoods on PRODPC with BILLS HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

19 0 0 beneficiary before not later than the 0th day. (iv) CERTAIN IRAS. Subparagraph (A) of section 0(d)() is amended by striking or at the end of clause (i), by striking the period at the end of clause (ii) and inserting ; or, and by inserting after clause (ii) the following new clause: (iii) the entire amount received (including money and other property) is paid into an ABLE account for the benefit of the child or grandchild of such individual not later than the 0th day after the day on which the payment or distribution is received.. (D) REPORTS. Paragraph () of section (a) of such Code is amended by striking and at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting and, and by inserting after subparagraph (E) the following new subparagraph: (F) section 0A(g) (relating to ABLE accounts).. wwoods on PRODPC with BILLS HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

20 0 0 (E) EXCLUSION FROM INCOME UNDER SSI. Subsection (b) of section of the Social Security Act ( U.S.C. a) is amended by striking or at the end of paragraph (), by striking the period at the end of paragraph () and inserting ; or, and by inserting after paragraph () the following: () any contribution to an ABLE account.. (F) CLERICAL AMENDMENT. The table of parts for subchapter F of chapter of such Code is amended by inserting after the item relating to part VIII the following new item: PART IX. SAVINGS FOR INDIVIDUALS WITH DISABILITIES. (b) ANNUAL REPORTS. wwoods on PRODPC with BILLS () IN GENERAL. The Secretary of the Treas- ury, in consultation with the Secretary of Health and Human Services, shall report annually to Con- gress on the usage of ABLE accounts under section 0A of the Internal Revenue Code of. () CONTENTS OF REPORT. Any report under 0 paragraph () shall include (A) the number of people with an ABLE accounts, (B) the total amount of contributions to such accounts, HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

21 wwoods on PRODPC with BILLS (C) the total amount and nature of dis- tributions from such accounts, (D) issues relating to the abuse of such ac- counts, if any, and (E) the amounts repaid from such ac- counts to State Medicaid programs established under title XIX of the Social Security Act. (c) EFFECTIVE DATE. The amendments made by this section shall apply to taxable years beginning after 0 the date of the enactment of this Act. 0 SEC.. DEDUCTION FOR CONTRIBUTIONS TO ABLE AC- COUNTS. (a) DEDUCTION. () IN GENERAL. Part VII of subchapter A of chapter of the Internal Revenue Code of is amended by redesignating section as section and inserting after section the following new section: SEC.. CONTRIBUTIONS TO ABLE ACCOUNTS. (a) ALLOWANCE OF DEDUCTION. In the case of a qualified individual, there shall be allowed as a deduction an amount equal so much of the qualified disability savings contributions made during the taxable year as do not exceed $,000. (b) LIMITATIONS. HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

22 0 0 () LIMITATION BASED ON MODIFIED AD- JUSTED GROSS INCOME. (A) IN GENERAL. The amount which would (but for this paragraph) be taken into account under subsection (a) for the taxable year shall be reduced (but not below zero) by the amount determined under subparagraph (B). (B) AMOUNT OF REDUCTION. The amount determined under this subparagraph is the amount which bears the same ratio to the amount which would be so taken into account as (i) the excess of (I) the taxpayer s modified adjusted gross income for the taxable year, over (II) the applicable amount, bears to (ii) the phaseout amount. (C) APPLICABLE AMOUNT; PHASEOUT AMOUNT. For purposes of subparagraph (B), the applicable amount and the phaseout amount shall be determined as follows: wwoods on PRODPC with BILLS HR 0 IH The applicable amount is: The phaseout amount is: In the case of a joint return... $0,000 $0,000 VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

23 The applicable amount is: The phaseout amount is: In the case of a head of household... $,000 $,00 In any other case... $0,000 $, (D) MODIFIED ADJUSTED GROSS IN- COME. For purposes of this paragraph, the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section,, or. (E) INFLATION ADJUSTMENT. In the case of any taxable year beginning in a calendar year after 00, each of the applicable amounts in the second column of the table in subparagraph (C) shall be increased by an amount equal to (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section (f)() for the calendar year in which the taxable year begins, determined by substituting calendar year 00 for calendar year in subparagraph (B) thereof. wwoods on PRODPC with BILLS HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

24 wwoods on PRODPC with BILLS Any increase determined under the preceding sentence shall be rounded to the nearest mul- tiple of $ () EARNED INCOME LIMITATION. The amount of any deduction allowed under subsection (a) with respect to any taxpayer shall not exceed the earned income (as defined by section (c)()) of such taxpayer for such taxable year. (c) QUALIFIED INDIVIDUAL. For purposes of this section, the term qualified individual means an individual with a disability (as defined in section 0A(b)) who is the designated beneficiary of an ABLE accounts (as defined by section 0A(a)). (d) QUALIFIED DISABILITY SAVINGS CONTRIBU- TIONS. The term qualified disability savings contributions means, with respect to any taxable year, the aggregate contributions made by the taxpayer to the ABLE account for an individual with a disability (as so defined) with respect to which such taxpayer is the qualified individual. (e) TREATMENT OF CONTRIBUTIONS BY DEPEND- ENT. If a deduction under section with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual s taxable year begins HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

25 0 () no deduction shall be allowed under subsection (a) to such individual for such individual s taxable year, and () any qualified disability savings contributions made by such individual during such taxable year shall be treated for purposes of this section as made by such other taxpayer.. () CONFORMING AMENDMENTS. The table of sections for part VII of subchapter A of chapter of the Internal Revenue Code of is amended redesignating the item relating to section as relating to section and by inserting after the item relating to section the following new item: Sec.. Contributions to ABLE accounts.. (b) STUDY. wwoods on PRODPC with BILLS () IN GENERAL. The Secretary of the Treas- ury (or the Secretary s delegate), in consultation with the Secretary of Health and Human Services, shall conduct a study on the use of ABLE accounts (as defined by section 0A(a) of the Internal Rev- 0 enue Code) and the effect of the deduction allowed under section of such Code for contributions to such accounts. Such study shall consider the effect that a tax credit or a refundable matching tax credit would have on the use of and contributions to such accounts. HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

26 wwoods on PRODPC with BILLS () REPORT. Not later than years after the date of the enactment of this Act, the Secretary of the Treasury shall report to Congress on the study conducted under paragraph (). (c) EFFECTIVE DATE. The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 0 0 SEC.. TREATMENT OF ABLE ACCOUNTS UNDER CERTAIN FEDERAL PROGRAMS. (a) TREATMENT AS A MEDICAID EXCEPTED TRUST. Paragraph () of section (d) of the Social Security Act ( U.S.C. p(d)()) is amended by adding at the end the following new subparagraph: (D) A trust which is an ABLE account described in section 0A(b)() of the Internal Revenue Code of.. (b) ACCOUNT FUNDS DISREGARDED FOR PURPOSES OF CERTAIN OTHER MEANS-TESTED FEDERAL PRO- GRAMS. Notwithstanding any other provision of Federal law that requires consideration of or more financial circumstances of an individual, for the purpose of determining eligibility to receive, or the amount of, any assistance or benefit authorized by such provision to be provided to or for the benefit of such individual, any amount (including earnings thereon) in any ABLE account of such HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0

27 individual, and any distribution for qualified disability expenses (as defined in section 0A(b)()) shall be disregarded for such purpose with respect to any period during which such individual maintains, makes contributions to, or receives distributions from such ABLE account. Æ wwoods on PRODPC with BILLS HR 0 IH VerDate Nov 00 0:00 Feb, 00 Jkt 000 PO Frm 000 Fmt Sfmt 0 E:\BILLS\H0.IH H0