Illinois General Assembly - Full Text of HB4611
Illinois General Assembly

Previous General Assemblies

Full Text of HB4611  101st General Assembly




HB4611 EngrossedLRB101 17168 RJF 66569 b

1    AN ACT concerning State government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The State Treasurer Act is amended by changing
5Section 16.6 as follows:
6    (15 ILCS 505/16.6)
7    Sec. 16.6. ABLE account program.
8    (a) As used in this Section:
9    "ABLE account" or "account" means an account established
10for the purpose of financing certain qualified expenses of
11eligible individuals as specifically provided for in this
12Section and authorized by Section 529A of the Internal Revenue
14    "ABLE account plan" or "plan" means the savings account
15plan provided for in this Section.
16    "Account administrator" means the person or entity
17selected by the State Treasurer to administer the daily
18operations of the ABLE account plan and provide marketing,
19recordkeeping, investment management, and other services for
20the plan.
21    "Aggregate account balance" means the amount in an account
22on a particular date or the fair market value of an account on
23a particular date.



HB4611 Engrossed- 2 -LRB101 17168 RJF 66569 b

1    "Beneficiary" means the ABLE account owner.
2    "Contracting state" means a state without a qualified ABLE
3program which has entered into a contract with Illinois to
4provide residents of the contracting state access to a
5qualified ABLE program.
6    "Designated representative" means a person who is
7authorized to act on behalf of an account owner. An account
8owner is authorized to act on his or her own behalf unless the
9account owner is a minor or the account owner has been
10adjudicated to have a disability so that a guardian has been
11appointed. A designated representative acts in a fiduciary
12capacity to the account owner. The State Treasurer shall
13recognize the following as a designated representative without
14appointment by a court:
15        (1) The account owner's guardian of the person, plenary
16    guardian of the estate, limited guardian of financial or
17    contractual matters, or any other State-appointed
18    guardian. A guardian acting in this capacity shall not be
19    required to seek court approval for any ABLE account
20    activity.
21        (2) The agent named by the account owner in a property
22    power of attorney recognized as a statutory short form
23    power of attorney for property.
24        (3) Such individual or entity that the account owner so
25    designates in writing, in a manner to be established by the
26    State Treasurer.



HB4611 Engrossed- 3 -LRB101 17168 RJF 66569 b

1        (4) Such other individual or entity designated by the
2    State Treasurer pursuant to its rules.
3    "Disability certification" has the meaning given to that
4term under Section 529A of the Internal Revenue Code.
5    "Eligible individual" has the meaning given to that term
6under Section 529A of the Internal Revenue Code.
7    "Participation agreement" means an agreement to
8participate in the ABLE account plan between an account owner
9and the State, through its agencies and the State Treasurer.
10    "Qualified disability expenses" has the meaning given to
11that term under Section 529A of the Internal Revenue Code.
12    "Qualified withdrawal" or "qualified distribution" means a
13withdrawal from an ABLE account to pay the qualified disability
14expenses of the beneficiary of the account.
15    (b) Establishment of the ABLE Program. The "Achieving a
16Better Life Experience" or "ABLE" account program is hereby
17created and shall be administered by the State Treasurer. The
18purpose of the ABLE program is to encourage and assist
19individuals and families in saving private funds for the
20purpose of supporting individuals with disabilities to
21maintain health, independence, and quality of life, and to
22provide secure funding for disability-related expenses on
23behalf of designated beneficiaries with disabilities that will
24supplement, but not supplant, benefits provided through
25private insurance, federal and State medical and disability
26insurance, the beneficiary's employment, and other sources.



HB4611 Engrossed- 4 -LRB101 17168 RJF 66569 b

1Under the plan, a person may make contributions to an ABLE
2account to meet the qualified disability expenses of the
3designated beneficiary of the account. The plan must be
4operated as an accounts-type plan that permits persons to save
5for qualified disability expenses incurred by or on behalf of
6an eligible individual.
7    (c) Promotion of the ABLE Program. The State Treasurer
8shall promote awareness of the availability and advantages of
9the ABLE account plan as a way to assist individuals and
10families in saving private funds for the purpose of supporting
11individuals with disabilities.
12    (d) Availability of the ABLE Program. An ABLE account may
13be established under this Section for a designated beneficiary
14who is a resident of Illinois, a resident of a contracting
15state, or a resident of any other state.
16    Annual contributions to an ABLE account on behalf of a
17beneficiary are subject to the requirements of subsection (b)
18of Section 529A of the Internal Revenue Code. No person may
19make a contribution to an ABLE account if such a contribution
20would result in the aggregate account balance of an ABLE
21account exceeding the account balance limit authorized under
22Section 529A of the Internal Revenue Code. The Treasurer shall
23review the contribution limit at least annually. A separate
24account must be maintained for each beneficiary for whom
25contributions are made, and no more than one account shall be
26established per beneficiary. If an ABLE account is established



HB4611 Engrossed- 5 -LRB101 17168 RJF 66569 b

1for a designated beneficiary, no account subsequently
2established for such beneficiary shall be treated as an ABLE
3account. The preceding sentence shall not apply in the case of
4an ABLE account established for purposes of a rollover as
5permitted under Sections 529 and 529A of the Internal Revenue
7    (e) Administration of the ABLE Program. The State Treasurer
8shall administer the plan, including accepting and processing
9applications, maintaining account records, making payments,
10and undertaking any other necessary tasks to administer the
11plan, including the appointment of an account administrator.
12The State Treasurer may contract with one or more third parties
13to carry out some or all of these administrative duties,
14including, but not limited to, providing investment management
15services, incentives, and marketing the plan. The State
16Treasurer may enter into agreements with other states to either
17allow Illinois residents to participate in a plan operated by
18another state or to allow residents of other states to
19participate in the Illinois ABLE plan.
20    (f) Fees. The State Treasurer may establish fees to be
21imposed on participants to cover the costs of administration,
22recordkeeping, and investment management. The State Treasurer
23must use his or her best efforts to keep these fees as low as
24possible, consistent with efficient administration.
25    (g) The Illinois ABLE Accounts Administrative Fund. The
26Illinois ABLE Accounts Administrative Fund is created as a



HB4611 Engrossed- 6 -LRB101 17168 RJF 66569 b

1nonappropriated trust fund in the State treasury. The State
2Treasurer shall use moneys in the Administrative Fund to cover
3administrative expenses incurred under this Section. The
4Administrative Fund may receive any grants or other moneys
5designated for administrative purposes from the State, or any
6unit of federal, state, or local government, or any other
7person, firm, partnership, or corporation. Any interest
8earnings that are attributable to moneys in the Administrative
9Fund must be deposited into the Administrative Fund. Any fees
10established by the State Treasurer to cover the costs of
11administration, recordkeeping, and investment management shall
12be deposited into the Administrative Fund.
13    Subject to appropriation, the State Treasurer may pay
14administrative costs associated with the creation and
15management of the plan until sufficient assets are available in
16the Administrative Fund for that purpose.
17    (h) Privacy. Applications for accounts, account owner
18data, account data, and data on beneficiaries of accounts are
19confidential and exempt from disclosure under the Freedom of
20Information Act.
21    (i) Investment Policy. The Treasurer shall prepare and
22adopt a written statement of investment policy that includes a
23risk management and oversight program which shall be reviewed
24annually and posted on the Treasurer's website prior to
25implementation. The risk management and oversight program
26shall be designed to ensure that an effective risk management



HB4611 Engrossed- 7 -LRB101 17168 RJF 66569 b

1system is in place to monitor the risk levels of the ABLE plan,
2to ensure that the risks taken are prudent and properly
3managed, to provide an integrated process for overall risk
4management, and to assess investment returns as well as risk to
5determine if the risks taken are adequately compensated
6compared to applicable performance benchmarks and standards.
7To enhance the safety and liquidity of ABLE accounts, to ensure
8the diversification of the investment portfolio of accounts,
9and in an effort to keep investment dollars in the State, the
10State Treasurer may make a percentage of each account available
11for investment in participating financial institutions doing
12business in the State, except that the accounts may be invested
13without limit in investment options from open-ended investment
14companies registered under Section 80a of the federal
15Investment Company Act of 1940. The State Treasurer may
16contract with one or more third parties for investment
17management, recordkeeping, or other services in connection
18with investing the accounts.
19    (j) Investment restrictions. The State Treasurer shall
20ensure that the plan meets the requirements for an ABLE account
21under Section 529A of the Internal Revenue Code. The State
22Treasurer may request a private letter ruling or rulings from
23the Internal Revenue Service and must take any necessary steps
24to ensure that the plan qualifies under relevant provisions of
25federal law. Notwithstanding the foregoing, any determination
26by the Secretary of the Treasury of the United States that an



HB4611 Engrossed- 8 -LRB101 17168 RJF 66569 b

1account was utilized to make non-qualified distributions shall
2not result in an ABLE account being disregarded as a resource.
3    (k) Contributions. A person may make contributions to an
4ABLE account on behalf of a beneficiary. Contributions to an
5account made by persons other than the account owner become the
6property of the account owner. Contributions to an account
7shall be considered as a transfer of assets for fair market
8value. A person does not acquire an interest in an ABLE account
9by making contributions to an account. A contribution to any
10account for a beneficiary must be rejected if the contribution
11would cause either the aggregate or annual account balance of
12the account to exceed the limits imposed by Section 529A of the
13Internal Revenue Code.
14    Any change in account owner must be done in a manner
15consistent with Section 529A of the Internal Revenue Code.
16    (l) Notice. Notice of any proposed amendments to the rules
17and regulations shall be provided to all owners or their
18designated representatives prior to adoption. Amendments to
19rules and regulations shall apply only to contributions made
20after the adoption of the amendment. Amendments to this Section
21automatically amend the participation agreement. Any
22amendments to the operating procedures and policies of the plan
23shall automatically amend the participation agreement after
24adoption by the State Treasurer.
25    (m) Plan assets. All assets of the plan, including any
26contributions to accounts, are held in trust for the exclusive



HB4611 Engrossed- 9 -LRB101 17168 RJF 66569 b

1benefit of the account owner and shall be considered
2spendthrift accounts exempt from all of the owner's creditors.
3The plan shall provide separate accounting for each designated
4beneficiary sufficient to satisfy the requirements of
5paragraph (3) of subsection (b) of Section 529A of the Internal
6Revenue Code. Assets must be held in either a state trust fund
7outside the State treasury, to be known as the Illinois ABLE
8plan trust fund, or in accounts with a third-party provider
9selected pursuant to this Section. Amounts contributed to ABLE
10accounts shall not be commingled with State funds and the State
11shall have no claim to or against, or interest in, such funds.
12    Plan assets are not subject to claims by creditors of the
13State and are not subject to appropriation by the State.
14Payments from the Illinois ABLE account plan shall be made
15under this Section.
16    The assets of ABLE accounts and their income may not be
17used as security for a loan.
18    (n) Taxation. The assets of ABLE accounts and their income
19and operation shall be exempt from all taxation by the State of
20Illinois and any of its subdivisions to the extent exempt from
21federal income taxation. The accrued earnings on investments in
22an ABLE account once disbursed on behalf of a designated
23beneficiary shall be similarly exempt from all taxation by the
24State of Illinois and its subdivisions to the extent exempt
25from federal income taxation, so long as they are used for
26qualified expenses.



HB4611 Engrossed- 10 -LRB101 17168 RJF 66569 b

1    Notwithstanding any other provision of law that requires
2consideration of one or more financial circumstances of an
3individual, for the purpose of determining eligibility to
4receive, or the amount of, any assistance or benefit authorized
5by such provision to be provided to or for the benefit of such
6individual, any amount, including earnings thereon, in the ABLE
7account of such individual, any contributions to the ABLE
8account of the individual, and any distribution for qualified
9disability expenses shall be disregarded for such purpose with
10respect to any period during which such individual maintains,
11makes contributions to, or receives distributions from such
12ABLE account.
13    (o) Distributions. The account owner or the designated
14representative of the account owner may make a qualified
15distribution for the benefit of the account owner. Qualified
16distributions shall be made for qualified disability expenses
17allowed pursuant to Section 529A of the Internal Revenue Code.
18Qualified distributions must be withdrawn proportionally from
19contributions and earnings in an account owner's account on the
20date of distribution as provided in Section 529A of the
21Internal Revenue Code. Unless prohibited by federal law, upon
22the death of a designated beneficiary, proceeds from an account
23may be transferred to the estate of a designated beneficiary,
24or to an account for another eligible individual specified by
25the designated beneficiary or the estate of the designated
26beneficiary, or transferred pursuant to a payable on death



HB4611 Engrossed- 11 -LRB101 17168 RJF 66569 b

1account agreement executed by the designated beneficiary or
2designated representative. An agency or instrumentality of the
3State may not seek payment under subsection (f) of Section 529A
4of the federal Internal Revenue Code from the account or its
5proceeds for benefits provided to a designated beneficiary.
6    (p) Rules. The State Treasurer may adopt rules to carry out
7the purposes of this Section. The State Treasurer shall further
8have the power to issue peremptory rules necessary to ensure
9that ABLE accounts meet all of the requirements for a qualified
10state ABLE program under Section 529A of the Internal Revenue
11Code and any regulations issued by the Internal Revenue
13(Source: P.A. 100-713, eff. 8-3-18; 101-329, eff. 8-9-19.)
14    Section 99. Effective date. This Act takes effect upon
15becoming law.