Tax-exempt accounts for qualified expenses incurred by individuals with disabilities and granting rule-making authority. (FE)

Under the bill, an individual may establish an account at a financial institution, contribute to an account, authorize any other person to contribute to such an account, and change the beneficiary to another family member who must be an eligible individual under federal law. The maximum amount that may be contributed to an account for a particular beneficiary each year is $14,000, and the maximum total amount of contributions that may be made to such an account for that beneficiary is $100,000. If a beneficiary or account owner incurs costs for qualified expenses and submits a claim to the financial institution at which the account has been established, the financial institution must pay the claim if there are sufficient funds in the account.

Any gain that accumulates in the account is exempt from taxation, and amounts contributed to the account, subject to the annual and lifetime contribution limits, are tax deductible. In addition, any assets accumulated in the account may not be used to determine a beneficiary's eligibility for various state programs, such as long-term care programs and the family care partnership program.

Because this bill relates to an exemption from state or local taxes, it may be referred to the Joint Survey Committee on Tax Exemptions for a report to be printed as an appendix to the bill.